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One "Big" Problem With Bitcoin...
Submitted by Simon Black of Sovereign Man blog,
At this point, you’d pretty much have to be living under a rock to have not heard of Bitcoin.
I actually asked this question (‘have you been living under a rock?) to someone recently who proudly proclaimed that he had never heard of Bitcoin, almost expressing gratification in his ignorance of a game-changing model.
Bitcoin is on fire. Mainstream media coverage is everywhere.
Today, in fact, the Forex Industry Conference kicks off at the W Hotel here in Santiago. And the lunchtime workshop is featuring an hour-long panel on Bitcoin, including the folks behind Coin4ce.com, Chile’s largest Bitcoin trader.
No doubt, digital currency is a growing trend in Latin America… particularly in neighboring Argentina where the government has been nationalizing everything that isn’t nailed down.
The Argentine government has imposed a series of desperate capital controls and price controls, including severe restrictions on purchasing gold and foreign currencies.
Most Argentines have been left to suffer the terrible inflation and erosion of purchasing power that comes with holding a rapidly depreciating paper currency.
But for some Argentines, Bitcoin has been a salvation. And demand for the digital currency has soared in the country as people have realized that Bitcoin cannot be controlled or nationalized by the Argentine government.
As a result, Bitcoins in Argentina frequently trade for more than 30% higher than in neighboring countries… presenting a rather interesting arbitrage opportunity.
With all the mainstream attention, though, Bitcoin has been building its share of detractors. I read an article on Forbes recently entitled something like “Why Bitcoin is doomed to fail”.
Most of these pieces roll out the same tired points– that nobody knows anything about the mysterious programmer who put it together… that it’s too volatile… etc.
True, Bitcoin is incredibly volatile. A lot of this is based solely on momentum and speculation.
Think about it– the premise behind Bitcoin is that it is an alternative to fiat currency. So is gold. Yet while Bitcoin has soared in the last few months by practically an order of magnitude, the nominal gold price has remained flat.
This suggests to me that a lot of the new Bitcoin buyers are speculators– people that are trading paper currency for Bitcoin, hoping to trade their Bitcoins back into even more paper currency at a later date.
This approach defeats the purpose of holding a fiat currency alternative. And it raises a rather interesting problem that is unique to Bitcoin: with such a huge runup in the nominal price of Bitcoin, how is it supposed to be taxed?
The capital gain rules for precious metals are very clear, especially if you’re a US taxpayer. But the IRS has literally issued ZERO guidance on Bitcoin.
If, for example, Bitcoin is considered a ‘currency’ by the IRS, then Bitcoin gains should be taxed as ordinary income according to IRC section 988(a)(1)(A).
But if Bitcoins are considered to be a long-term investment, such as shares of Google that you hold for more than a year, than it should be taxed at lower capital gains rates.
And what about if your Bitcoins are stolen? Are such losses deductible like other investment losses? Or would it be treated like personal property as if your car was stolen?
And what if you’re a US taxpayer holding Bitcoins at an overseas-based brokerage? Would this ‘account’ need to be reported on foreign financial disclosure forms?
Everything is up in the air. And while the IRS has issued fairly clear guidance on precious metals, they haven’t made a peep about Bitcoin… leaving, once again, the onus on the taxpayer to figure everything out.
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YES !! I BEAT FONESTAR !!
Not by far...
These questions are silly, the answers will all be in favor of the corrupt govs!
My god, you people's programming runs deep doesn't it? Your "laws" are a big joke. Everyone just laughs at them.
I think BTC is an NSA invention designed to track the finances of various organisations which are hostile to the USA.
Which building in the whole world has the most cryptologists sitting around twiddling their thumbs?
http://tinyurl.com/qbahafr
No problem here, the bitcoin laws will be very lax. That way TPTB can easily herd more people from one virtual currency to another with people believing that bitcoin is for the people by the people.
From Bitcoincharts.com:
The adoption of Bitcoin bears ever new fruits as now the world's first University (Cyprus) is accepting Bitcoin from students to pay their tuition and other fees. In addition to accepting Bitcoin they offer a master's degree in "digital currency".
I can't believe anyone would fall for this shit. Cyprus was the test bed for bailins, now you think this free and unfettered digital currncy is migrating to Cyprus because of merit? It's allowed to flourish because it's anti-banker and totally free? You're a fool if you think that Bitcoin is not being steered by the banksters.
Most ppl today have serious ADD, so chasing something new like this, since AAPL hasn't introduced anything of late, seems plausible. I can't believe anyone would put their faith into something like this, but hey, who am I to judge?
Is the University a private instittution? Does the government of Cyprus pay professors? Yes or no?
For crying out loud.... this is a bankster initiative! Can't you see it? lol.
Satoshi tries to explain Bitcoin to Zerohedge posters:
http://www.youtube.com/watch?v=ML1OZCHixR0
satoshi came to see me last night. Bent over my bed, whispered in my ear, and said: Build it and they will come. The entire investing community is hyper for yield.
Unsurprisingly, Simple Simon misses the main attraction of Bitcoin, and why it's probably been on a tear recently.
Name any other globally recognized currency through which you can transfer wealth completely electronically from one part of the world to the other without government intervention.
Notwithstanding the (likely) possibility that Bitcoin is yet another device of the PTB to manifest their will in a New World Order, for now it is a very powerful tool for skirting capital controls of any jurisdiction with absolute impunity. I think a lot of people are missing this ultimate (especially in this day and age) utility value.
I am Chumbawamba.
Ordinary personal computers need to be at least somewhat competitive to decentralize bitcoin mining over the globe. Mining has gone from CPUs to GPUs to now custom purpose mining hardware. Whereas before govts could arguably not buy enough general computing power to outcompete the rest of the world, now they can.
Another thorn in the decentralization of bitcoin is 512-qubit quantum computers that can solve 21048 possibilities in minutes and are already being sold.
Govts will always be way ahead of the people in technology.
Superficial stuff. This piece would have us believe that because Gold is flat and BTC is flying, that confirms that BTC is all speculation? IMHO the reason Gold is flat is because it is being manipulated in paper form by the CB's and BIS. A more compelling conclusion would have been that, as of now, BTC is beyond manipulation by any sovereign or CB?
You have it backwards. When bitcoins were mined on CPUs, one .gov supercomputer could 51% attack the whole network. Now, the network is 20,000 times faster than the fastest supercomputer in the world.
Source for quantum computers for sale?
TPTB will get their chance again. It already takes over a day to load the 12GB blockchain. Catching up takes a few percent of the time the computer has been off. Mining doesn't work unless the blockchain is up to date. Transactions can be botched if coins are spent with an incomplete blockchain. If BTC's exponential growth continues, then sometime next year, the average PC will not be able to keep up with BitCoin. Little people will have to do off-blockchain transactions through intermediaries. This will allow Corzining, fractional reserve scams legal confiscation, etc.
Eventually, if BTC becomes a major world currency, there will be only one supercomputer capable of digesting the blockchain. THEY will control it. One supercomputer to rule them all, one supercomputer to find them, one supercomputer to bring them all and in the darkness bind them. In the land of Rothschild where the shadows lie.
Chaos, Sounds like you have the basic story for a new movie...
Am thinking that out of work math PHD's are busy designing/building their own crypto curriencies, and loading up on the latest greatest computer gear.
Also thinking that KC, Kansas houses with high speed Google fiber installed may be better suited to mine btc than cook meth.
They don't even have to write a cryptocurrency program from scratch. Most people start with the BitCoin code, change the hashing function and the mining reward, mine the shit out of it in their mom's basement, advertise to Chinese bagholders, and rake in millions!
<<Also thinking that KC, Kansas houses with high speed Google fiber installed may be better suited to mine btc than cook meth.>>
Why not both? ;) divirsify, bitchez.
The MultiBit wallet staves this off for a while, but BitCoin cannot remain fully decentralized forever. The geeks would have to agree on a way to ignore small, old transactions, and that won't happen because some coins would become unspendable. The final cryptocurrency must be based on a new algorithm.
Chemistry? Atoms and Molecules? Matter?
Ah the future, brought to by pony express. Well paid yet still disgruntled security guards. Paying all the transit insurance and petrol. Sitting around waiting for payments to arrive, weighing it all, detecting for tungsten, etc, etc, etc.
in the future's virtual paradise, matter doesn't matter anymore...
I said arguably because I don't doubt the govt had more computing power in bitcoin's early days. The global financial mafia that runs the govt can cough up the money to buy the latest gizmo to put itself in a controlling position.
"Don’t tell that to Eric Ladizinsky, co-founder and chief scientist of a company called D-Wave. Because Ladizinsky’s team has already built a 512-qubit quantum computer. And they’re already selling them to wealthy corporations, too..."
http://www.infowars.com/skynet-rising-google-acquires-512-qubit-quantum-...
The problem is that the term "quantum computer" does not have a single specific meaning. In this case, the "Quantum Computer" simply uses a different transistor design, and is built to run calculations with the ability for bits to be both on and off at the same time. This is entirely different than quantum entanglement. What kinds of specific problems it is really good at solving, I do not know.
No need for that. Bitcoin is based on SHA-2, which is designed by the... NSA! There is probably a backdoor build in. This means the NSA can probably mine as much bitcoins as they want. Remember DES, the encryption algorithm that IBM designed in the 70's. It was altered by the NSA to create a backdoor. http://en.wikipedia.org/wiki/SHA-2
I'm sure the NSA wouldn't release anything into the wild without a backdoor. They always have multiple backup backdoors.
starting to wonder if 90% of the comments here are from bored NSA fucks
This was definitely not one of Simon's better articles. Personally, since switching to the First Anti-Nationalist Non-Bank of Satoshi my life has become much simpler. No transaction fees, no line-ups, no customer service, no low-interest cards, no nothing. They didn't even offer me a free Spiderman towel.
I am not Chumbawamba but I wish I was.
None of Simon's articles are better. His material is pedestrian at best.
If you are all BTC all the time, how do you buy, say, gas? Or toilet paper? In other words, how do you get something spendable in the 99.999999% of establishments that still do not accept Bitcoin as payment? I'm sincerely interested.
I am Chumbawamba.
Well right now you either need to sell on an exchange to convert back to fiat or use localbitcoins. So currently, despite all of its gains BTC is more of a holding vehicle than a usable currency.
You can live your life only using BitCoins, but it's news when you do it (http://lifeonbitcoin.com).
In the near future it may be commonplace.
Remeber the Dot.Com guy?
now we're all that guy... see a pattern?
@chumba
"For now it is a very powerful tool for skirting capital controls". Perhaps. Another caveat might be, "until you need to put BTC to use". The problem starts the moment you leave the limited confines of the BTC exclusive suppliers and vendors. The act of conversion to a government currency or invoicing entity makes that action a taxable concern as Simon alluded to, and puts the BTC holder in the sights of agencies like the IRS, Customs & Excise.
Sure, but it depends on the jurisdiction in which you land your Bitcoins, and the currency into which you convert. Outside the US and with currencies other than the FRN, I wish the IRS much luck in tracking you. If you're in the US and you convert to US currency, you can accept them as lawful money per 12 USC 411 and avoid tax issues. The ultimate conversion would be from Bitcoin to bullion (not minted coins), retaining the sovereignty of your wealth in any jurisdiction (that recognizes property rights).
I am Chumbawamba.
actually, if you aren't scared to peak your head out you can meet up with folks and trade btc for cash and skirt it all. But of course you could get mugged, shot, followed, etc.. but that's just being paranoid right?
HAHAHAHAHA
Good one :)
---
Fake currency !!! ... Fake moon landings !!!
How Stanley Kubrick faked the moon landingshttp://www.youtube.com/watch?v=BBJUyYuzivo
Banksters are about the last people on Earth who would ever be smart enough to come up with a cryptographic currency. Sure, they will assuredly try and co-opt BitCoin, but there is absolutely no way they're responsible for creating it.
Long story short, criminals rely upon control of legal systems in order to exploit, they have no capacity to actually create value.
The NSA was exploring virtual currencies as early as 1996.
http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsa...
that is why the blockchain is a game changer.. and elegantly resolves so many of the questions in that paper
perhaps the stackers should focus on understanding that
nope-1004 - i have to agree. nothing good gets this much coverage or Ron Paul would be president.
Your thoughts are worth nothing. They do however make you look like a fool when you pull conspiracies out of your ass with no proof to back them.
Those people who had their suspicions about Libor rigging were also full of shit.
Which has absolutely nothing to do what we are talking about.
When are you going to get it?
The main problem right now is lack of trust. People are fed up with all the BS that goes on behind the financial curtains.
The number one rule people should go by these days is trust no one
Trusting one’s wealth in a virtual cloud? Seriously??? I could give a crap how sophisticated the code & scheme is.
The tax is simple. Just report it as income and pay the rate for your bracket.
...yeah if you feel like it I guess?
here, let me rephrase that for you:
getting taken advatage of by a bully at school is easy. when he demands you hand over your lunch money, just give it to him.
Welcome to the IRS. There is no "fighting" them. You give them what they want or they leave you thrashed and bloody mess twitching on the ground.
and what do they want?
they can't take what i don't have.
you don't have to fight anyone, to win.
Well you are right in one sense but it does your premise no favour. Bitcoin eliminates the need for trust in humans and puts the power back in people's hands. That's supposing you can understand the function and the theory of course...
dryam wants us to be servants of the government for the rest of humanity. He's a secret agent working for the NSA.
Fonestar, answer my questions you weasel:
What if someone leaks the encryption key (which I'm sure will never happen because when it comes to money everyone is always so honest) or a quantum computer which exists today, breaks the encryption? How would that play out if it happens?
What's to stop local govenerments from passing laws making it illegal to accept bitcoins into your account? What happens if they start treaing bitcoin like say child porn? Or better yet what's to stop them from taxing the crap out of it?
Since the currency is backed by computers solving math problems (mining), and it is totally digital, what happens if the computers break, like say in an EMP or a hack attack. Or say China or Russia wakes up one day, decides they have had enough of US imperialism and launches nukes. How would I get my money?
Could I store my bitcoin wallet on a memory chip implanted in my skin, mark of the beast like? That sounds cool.
How does this give more freedom than say cash or gold/silver as every Bitcoin transaction is stored?
blah blah blah mark of the 666 yeast EMP FUDing Beast...
You didn't answer my questions, are you afraid of the truth?
Here since you won't I will:
What if someone leaks the encryption key (which I'm sure will never happen because when it comes to money everyone is always so honest) or a quantum computer which exists today, breaks the encryption? How would that play out if it happens?
24 Million bitcoins will suddenly cry out in horror, and then be silenced.
What's to stop local govenerments from passing laws making it illegal to accept bitcoins into your account? What happens if they start treaing bitcoin like say child porn? Or better yet what's to stop them from taxing the crap out of it?
Nothing, and better yet since all the transactions are stored they can use that info to squeeze even more out of you.
Since the currency is backed by computers solving math problems (mining), and it is totally digital, what happens if the computers break, like say in an EMP or a hack attack. Or say China or Russia wakes up one day, decides they have had enough of US imperialism and launches nukes. How would I get my money?
You can't your screwed. Your also screwed if the hard drive you store it on breaks and you don't have a backup.
Could I store my bitcoin wallet on a memory chip implanted in my skin, mark of the beast like? That sounds cool.
Yes and you will like it peasant.
How does this give more freedom than say cash or gold/silver as every Bitcoin transaction is stored?
It doesn't.
There's no single key to leak. I have 10s of keys and they'd have to break each one individually if they want the money sitting on each "account".
I welcome a Gov't crackdown.
Scenario 1: they flub it and look like fools. This will give the fearful people the impetus to leave fiat and head for the life boats.
Scenario 2: they succeed in killing Bitcoin. If so, I would like this information as soon as possible. Maybe shoot for Bitcoin2.0?
Gov't has no control over Bitcoin "accounts". Anybody on planet earth is free to make millions of them. Anybody with internet access can send money to any other account with no other 3rd party involved. Mixing services exist and are improving to hide where coins came from and where they are going.
Bitcoin is immune to drone strikes and nuclear bombs. Not so with gold. They can atomize my house but the coins are backup up 500k times around the globe. As long as a copy of the ledger somewhere is shielded from a worldwide EMP strike, Bitcoin carries on as if nothing happened.
If you own Bitcoin, you are responsible for them. Like forgeting the location to your secret gold stash or the combination to your safe. Make backups and keep them secure.
congrats ! you've successfully silenced the mighty fonestar (for now) ! found his achilles ?
"fonestar" is that you, Felice? Former telecom hotshot? Live in a cold place, north of the 'Rio San Lorenzo'?
"The encryption key" implies that there is a single point of failure, as if there was one key that would open every wallet in the world. That is extraordinarily ignorant.
Quantum computers aren't magic, and they don't break encryption (prove otherwise if you have evidence for this).
A government passing a law banning bitcoins in wallets (there is no such thing as a "bitcoin account"), it would be like them banning private messages. Everyone would ignore such a ban, and it would be largely unenforcable. It took ages for them to get at Silk Road, and that had a single point of failure. No such single point of failure exists for bitcoin. Kiddie porn is banned to, it just drives it underground. How are they going to tax something that isn't even connected to a name or address? Wallets can be generated anonymously.
If there is an emp attack, most everyone's dead and you get your mad max. Whoopidy-doo. No-one is telling you to put EVERYTHING in bitcoin. That's retarded. You might as well be saying that ZH just shouldn't exist because there might be an EMP attack some day. In any event, your wallet would be unaffected even in a worldwide nuclear war so long as a copy of the blockchain survived somewhere and you managed to hold on to your key. After things calm down, you could go to an exchange to get your "money" (implying that fiat currency is money, ffs).
No, you shouldn't store it on you. That would be retarded. You keep it hidden, just like you would your PMs.
Every transaction is stored, but it is extraordinarily difficult to figure out what is going where and what belongs to who without having people's wallets. You are, however, freed from having to give money to bankers to make transactions. But God knows we can't have that, I guess. Those bankers are real stand up people and we should support them. That's why when I hold dollars I put some KY on my ass, make things easier on both of us.
How do I know the creator didn't slip a back door in there.? The Oligarchs already have backdoors to all the RSA encryption?
As to quantum computers:
http://blog.kaspersky.com/quantum-computers-and-the-end-of-security/
The government can do whatever they want as long as the people lie down and take it.
Bitcoin is vulnerable, and one day they could just turn it off.
I believe a form of digital currency will be the NWO currency, why look here's none other than Larry Summers promoting it
http://www.vulgartrader.com/post/67688830700/establishment-makes-intellectual-push-for-electronic
And that's why I hate it, it's fiat, and it's got NWO establishment written all over it.
Quantum Computing would allow a decentralized network of point-to-point communications that are completely immune to interception. That would lead to even greater anonymity, since any one node would only "know" the nodes it is directly connected to. If you wanted to exchange data directly with another person, you would just need to have a shared pair of entangled particles.
You know because A. there are a bunch of different cryptocurrencies made by many different people, B. Bitcoin is open source so people can see if there is a back door or not, and C. again, there is no single point of failure. Literally the worst thing that could happen would be for the feds to magic up a huge amount of processing power to perform a DOS attack on the blockchain, which would have no effect on existing bitcoins, and would only prevent transaction for the duration of the attack. Considering they would have to have more processing power than has EVER been put into bitcoin to succeed, the costs simply far outweigh the benefits.
You believe lots of stuff. You would do better to KNOW.
As far as quantum computing, literally nothing has been demonstrated. If it becomes a problem, then you only need to update bitcoin to account for the new attack vector. Even with the encryption broken, offline copies of the blockchain exist, and will be used to restore the system once a solution is found.
SMG: I classify myself as bitcoin - ignorant but there are a couple of arguments I don't like.
Quantum computers: When they get invented, won't that be the end of security for EVERYTHING digital? If bitcoin won't be secure then your standard bank account will be even less secure.
Same with EMP. I'd give bitcoin an advantage over your standard bank account, esp. since the bankers would love to have an "excuse" as to why they can't return your money.
So that leaves BTC vs AuAg. I don't think the two should compete. They both have their place, one does one thing, the other does the other. After the drones follow you back to your gold / silver / gun stash, then what are you going to do? TPTB will manufacture some "evidence" about you being a terrorist ("Gasp! Lookit all the guns!") and all your stuff will disappear and J6P won't even give a shit.
Okay, back to everyone else's regular arguments ...
If the government wants to stop Bitcoin, they can simply pass a law saying that everyone who exchanges money, goods, or services for a digital currency must report the transaction and the name and social security number of the payer to the IRS. This extra overhead would kill Bitcoins for retail transactions. And they could add a 50% tax to the transaction for good measure. The government doesn't need to crack the encryption in order to make it impossible to use bitcoins for purchases.
And I wouldn't underestimate the government's ability to track bitcoins. By monitoring and recording internet traffic as the NSA currently does, they can trace bitcoin transaction requests to computers. And unless one is very careful, they can probably trace the computer to an owner. A lot of Napster users thought their music uploads and downloads were untraceable, but ultimately found out that they were.
At the moment, there are a grand total of 1392 retail establishments in the world that accept bitcoins. So virtually everyone who is purchasing them is doing so in hopes of selling them for a big profit. Some may be successful if they get in early enough, but ultimately it is a zero sum game. So for everyone who makes a profit someone else will lose money.
With Bitcoin, we see the power of Ponzi. Early investors like fonestar go around telling everyone how they have made spectacular profits. Causing more people to invest until finally the greatest fool has put his money down. And then the scheme collapses.
American problems for American slaves. Sucks to be you guys.
Europe, Japan, China, Russia all have fiat currencies and I doubt that they will sit around and allow them to be replaced by Bitcoin.
Bring it. You and I know the emperor wears no clothes. A heavy crackdown on bitcoin now would awaken the masses.
If the government wants to stop drugs, they can simply pass a law banning drugs. If they want to stop tax evasion, they can simply pass a law banning tax evasion.
Why do people seem to think that passing legislation is like editing the laws of physics? The same people who understand that banning guns won't stop gun crime much less crime in general still seem to default to this idiot line of thinking whenever they see something unfamiliar.
If you think bitcoin is a ponzi, then you are a FUCKING IDIOT who doesn't know what a ponzi scheme is, and whom no-one should pay attention to. There is a difference between a speculative bubble and a ponzi. Someone who wasn't an idiot would be able to see that.
If you think bitcoin is a ponzi, then you are a FUCKING IDIOT who doesn't know what a ponzi scheme is, and whom no-one should pay attention to.
Said the person who predicted silver would go from $50 to $75 in 2011. But please, please, sell all of your $47 silver now in order to buy Bitcoins. If all of the PM speculators sell in order to buy Bitcoins, it should create some really nice bargains.
Last time I looked, there wasn't any heroin or cocaine for sale in my local drug store.
for under $50, you can get a laptop on craigslist, use it anonymously at internet cafes, and never log on to it with any identifying info. use this laptop only for bitcoin transactions. this is not difficult, even someone like yourself can understand this.
your comment about ponzi is ridiculous, and it shows that you have no real understanding of the value of bitcoin.
it doesn't matter if bitcoin goes to $10,000 or to $10. its real value is in circumventing theivery by governments and financial institutions. the btc:usd exchange rate will stabilize over time, as well.
Excellent synopsis Pancho Villa
calling fonestar, the poster that never sleeps... you're the unrelenting Bitcoin champion. Care to jump in here for a rebuttal since you are always challenging others to rebut you.
And fonestar, To frame things. Here's your response to someone earlier in this article asking if one should report bitcoin transactions:
..."yeah if you feel like it I guess".
Dude, your intent is obvious. You don't report and think others are a fool to do so.
So answer this, Do you engage in Bitcoin dealings with your everyday computer or a computer especially rigged to evade tracking? And do you do so from a special anonymous location?
(Dude, you aren't so lazy as to rely on TOR from your home are you? If so, are you that STUPID. TOR which was conceived by the U.S. gov). hahaha
And if it's acknowledged that a requirement is for all bitcoin users to set up a special linux box solely for bitcoin use (and woe to you if you ever ever slip up and expose yourself to gov revenue agencies). Because then you're dead meat as they enforce (their interpretation) of present laws, or will implement future laws to clip your ass in every way. And you've exposed yourself bigtime by accruing irrefutable digital transactions that don't go away. EVER.
And this is the next generation currency that's going to improve our collective lives?
Is Bitcoin something to be used by your mother/grandmother? ... like she is linux/Tail/anonymous internet savvy and capable of defending herself from being fleeced by amoral, ravenous governments controlled by banksters. And if it's not feasible for the masses, then what good is it.
Initially, I wasn't inclined to view bitcoin as a NSA offering, however the more I see and learn, the more that changes.
Think about it, the PowersThatBe are ever so keen to institute a digital currency that they can track,tax and selectively (individual level) revoke. (The issue with the current paper fiat scheme from their perspective is that it allows anonymous transactions, and also that the currency can't be revoked in a granular manner). What better way to achieve their goals than to offer up a TRANSnational solution that the sheeple willingly embrace. That would be such an elegant solution. Think about it, TRANS-national.
That as always a sticking point. Instituting digital currency in one country by fiat would be challenging. Many countries would be downright hard. Getting this to a critical mass would be monumentally difficult, especially having the e-currency uniform across countries. And yet, bitcoin nicely circumvents it all. I'm in awe, this is more than two birds with one stone, more like three or four.
Friggin brillant!
The hungry sheeple come streaming in for 'nooky' in the form of wild appreciation and the apparent prospect of evading government tracking & taxation (little do they know that the lion lays in wait).
Bitcoin relies on the internet. NSA is master and controller of internet activity (and for those outside the U.S. ... still naive enough to think they're exempt, need I point out how the intelligence agencies of Australia, N.Z., Canada, UK & euro countries are merely branch offices of the same beast).
Bitcoin relies on a select few clearing houses (e.g. Mt Gox) NSA lies in wait, like a lion at a watering hole, for all those who come close. It WILL TRACK you. And RECORD . ForEVER.
Sorry, the more I learn of Bitcoin, the more problematic it becomes.
At least in it's present form.
I wish to see a further iteration of a digital currency with more peer to peer capability and less reliance on central clearing houses which are an obvious, easily compromised choke point. Better obfuscation, also, something based on something physical would be good too. The present embryonic offerings in the egold respect are a joke. That doesn't mean someone can't improve.
Bitcoin reliance on mining public/private keys (coins) doesn't seem that kosher either.
Let's put this into perspective, the initial easy mining is done by the insiders, the subsequent more difficult mining gets done by those with the big bucks to set up ASIC farms. That doesn't strike me as egalitarian
ok, so say you just pay taxes? Is your fear and loathing finished against bitcoin?
are you someone who has lied on their taxes for 10 years and so won't touch bitcoin since that may get someone looking at you?
Why are you guys so fucking hostile toward this thing ... I know one thing - freedom means the abilty to hold a different viewpoint without fear or favor. No one is trying to coerce you ( other than your own greed perhaps which wants in on th current action)
Every one of these articles misses an obvious point that explains is current rapid rise.... esp if you believe the gold price is manipulated by the PTB
Fiat is bad as it is printed at will and thus diluted continually.
Gold should go up as result but it doesn't because it is manipulated via the paper derivatives - we hold phys long term knowing it will break free one day.
Bitcoin skyrockets as they print fiat which is what it should do when paper money is created at a rate of the entire Bitcoin supply every month or so given it's supply is fixed and we are talking in terms of its fiat coversion rate ?
They can track the transactions just like every other form of payment you use - so what ? It will be a lot easier for someone to come up with an annonymising process than it would be for any other electronic transfer. Only cash fiat, nuggets of bullion or barter are off the grid and they have physical limitations of distance, bulk etc..
Put some lunch money into it and get on board ... it COULD be what we were all looking for - time will tell. The more people that understand and support it the stronger it becomes.
My guess is the encryption key was broken months ago by NSA, and that's why there were hearings to determin what if anything to do in the immediate future.
I'll answer that one!
1. Breaking the key -
This is technically possible, but if you're the US Gov't, it's cheaper and easier to just print a shit-load of money and buy all the bitcoins so that you can use that quantum computer for it's intended purpose - porn.
2. Laws -
Bitcoins can be traded anonymously. There's absolutely no way to verify who paid if the payor doesn't want you to know. This makes taxing it impossible (who do you tax) - same concept as using cash for everything. Child porn is not stopped by laws now, so I don't know what makes you think bitcoin laws would stop it.
3. Computer problems -
ALL computers for the entire planet with Bitcoin info would have to be wiped out simultaneously. If even one survives, all bitcoin accounts will be saved and replicated as new computers come online. If all computers are destroyed... well we got bigger problems than currency, bubba.
4. Cybernetic implant -
This functionally is easier to do than installing a pacemaker, so yes - this is something you could theorhetically do. RFID that shit or something.
5a. Freedom: You can attach papework to each Bitcoin trade (of an unlimited size). This means you don't need contract lawyers, accountants, brokers, and other such pencil pushers. You can appoint a third party to arbitrate if you think there might be a dispute and the Bitcoin trade doesn't complete until either both parties click the "it's ok" button, or the arbitrator awards the coins to one or the other party. This provides access to dispute resolution that doesn't cost a ton (in effect - free market courts).
5b. Trading cash and/or gold/silver requires a physical exchange. This means you have to have your currency in one specific location where it can be stolen, or as the gov't likes to call it - confiscated. You also have to do a physical exchange, which means either you do it yourself or you hire a third party to do it (like a broker). With Bitcoin there is no such thing as "distance" and you only exchange them personally. The storing of the transaction information is encrypted and only made public if you choose to have it be public. If you're still scared about the encryption breaking - see #1 again.
#1 is so We Todd Ed
so you are just going to make bitcoin owners billionaires and that won't just topple the house of cards right then? And if that actually did happen, no doubt people would play along, take the money and move to the next coin while being a lot richer.
They won't leave bitcoin now since there is no reason too....
Serious dryam, now you're stretching reality a bit eh?
The difference being that they had actual concerns based on market movements, rather than just making up shit on the spot to justify their sour grapes.
Occams razor says that BTC came from the NSA.
Simply because most cryptology students end up working for intelligence agencies.
Your belief that BTC is the product of a lone amateur who has succeeded in remaining anonymous, is just naive.
But Shamir wrote a paper! And, and, and Satoshi is just a nice guy....
Shamir did write a paper that wound up proving........ nothing.
You wouldn't know Occam's razor if it took off every one of your zits shaving in the morning.
You people have mixed conspiracy theory with paranoia with blind submission to authority with doomsday prepper idiocy.
Conspiracy theories? moi? I don't think so.
Remind me why you are fleeing the USD...
It stands to reason that the latest thing in cryptology is most likely to have come from the place that contains the most cryptologists. The fact that the origin of Bitcoin remains a secret simply adds a large dollop of "aha!" to this reasoning.
Of course it came from the NSA (cryptology mecca), of course that's why the US government and various central banks constantly keep it in the news cycle. It's just the latest and greatest tool of surveillance. It is a means of tracking illicit funds across the world. From Columbia, to Iran, to Saudi Arabia, to Yemen, to North Korea, to Syria, to Lybia, to Somalia, to China.
They have code on your cell phone kernel FFS and the BTC transaction log is a public document.
So, you feel that the NSA is an extremely competant and capable organization? How do you feel about other government organizations?
You mean other government organisations like the SAS?
Contrary to widespread beliefs there are some things that government organisations are good at, spying on people is one of them. So is organised violence and taking people hostage.
The government is generally bad at anything that requires efficiency but very good at exercising a monopoly of violence, subversion, manipulation, espionage. All the stuff that me and you are not allowed to do lest we get picked up off the streets and locked up in some prison.
Yes spying on people is something the USG is good at, they are also good at dropping bombs on people too. Oh and telling lies. They are also good at raising incredible spending power to achieve their warped objectives.
Whether they are good at violence, bombing, espionage, etc is pretty subjective, since there is no private sector to directly compare to. I bet on a Dollar-per-kill basis, a Barrels-of-oil-per-kill basis, or a man-hours-per-kill basis, they would actually stack up pretty poorly.
"You people have mixed conspiracy theory with paranoia with blind submission to authority with doomsday prepper idiocy."
THIS coming from a Canuckistani toilet paper receptacle for the Queen, who dissolves Canada's parliament EVERY time the peasants get uppity.
Look fuckstick, if you're trying to convert people to your ponzi scheme you will catch more flies with honey than with vinegar. So if you're trying the 'greater fool' approach then your tactics will fail you miserably.
Here's a word for you to look up in the dictionary: IRONY. The fact that you're using appeals to technical 'authority' to justify your preaching while talking shit about others who don't agree with you 'submitting to authority' is laughable in the extreme...
Ponzi: guaranteed rate of return, assumed unlimited product.
Bitcoin: no guaranteed return at all - that is not what it was designed for, everyone knows it has a limit.
Call bitcoin what you like, but it is not a Ponzi. Okay, okay, I do agree that people are encouraging brainless speculation, or at the very least, "stake your claim while you still can".
If bitcoin is secure then one day it will be used for the 21 000 000 most expensive transactions in the world (Whoops!, Sorry. I forgot that it is divisible. I also agree that at any point TPTB could use their fiat printing skills to buy as many BTC as they want.) If it is not secure, then one day it will fall over.
Sometimes I can not watch YouTube videos because my computer tells me that the video "is not allowed to be shown in your country". If I can't bypass YouTube blocks, how would I bypass bitcoin blocks? As I'm on the subject, does anyone know how to bypass YouTube blocks?
And why does my computer continually "need" to update itself? All I do with it is exchange / transfer / view text, pictures and audiovisuals and all that technology is "old" now. What more could my computer possibly need to know?
BTW, while I am here, has anyone got a link to the bitcoin source code? Why argue theoretical BS when I can just have a look?
There are some sites where you can mirror YT videos, as well you can always buy a VPN (usually pretty cheap, mine's only $40/yr) and I can be in any country I want.
Either they built or the pwn it now.
Occum's razor also says "God did it" for everything we don't understand.
I don't really understand why people use this "tool". Explinations for things should be as simple as possible, AND NO SIMPLER. "NSA did it" is a cop out, and I think you know it, but are just afraid to accept it.
I don't think you understand Occam's Razor: it states that among competing hypotheses, the hypothesis with the fewest assumptions should be selected.
That an omnipotent and omniscient supernatural entity did something is a hypotheses consisting entirelly of assumptions: there is no proof of the existence of such an entity, of his/her characteristics or creation powers or his/her will to actually do the something - the entire thing is assumed, from the existence of a divine being to that being's powers and that he/she has actually used those powers to do something.
As such, "God did it" would be the last hypotheses to be picked if following Occam's Razor.
As opposed to, "In the beginning there was nothing. Which then exploded."
I like you. I always found the babble surrounding the birth of the universe (big bang) to be the most anti-scientific junk I've ever heard.
as I said: bitcoin encryption is SHA-2, which is designed by the NSA: http://en.wikipedia.org/wiki/SHA-2
@Occident Mortal: "Occams razor says that BTC came from the NSA."
What kind of a stupid remark is that? Clearly you know shit about scientific principles, but just love to throw around some buzzwords -- play Buzzword Bingo. Reminds me of some Marketing assholes I know, who don't know WTF they are really saying half the time.
Sorry to sound harsh, but that one was well-deserved. It's Fight Club.
Technically it's not an "NSA" invention. But it may be an invention that DOD's APL (Applied Physics Laboratories) foresaw and sponsored.
Both APL and NSA are under the DOD. And we know who DOD really works for: The Fed and its hidden shareholders. Dimon, Bankfine, Buffet, Gates... Rottenchild tribe.
Cyber-currencies are fine in and of themselves. For now. While they still manage to suck Currency and VoM out of the fiat Ponzi. But eventually, TPTB will stop pretending to try to "beat them". They will come out with their own version and "join them".
When that happens, the ultimate threat will be that we will have ONLY cyber-currencies, all over the planet. With their cyber-activity somehow linked to 'Persons'*, in real time. When that happens, Gold & Silver will have only industrial and cosmetic uses. --> "Barbaric Relics" of physical currency. So, you goldbugs, don't go getting a "Gold-member erection" just yet.
* A Person = A legal, uniquely identifiable and taxable entity, i.e. any Individual or Company.
Whatever, it's a product of the federal government.
That's why they arranged a congressional hearing to help keep it in the new cycle. That's why Bernanke and other central bankers talk about it in public.
They are trying to encourage acceptance of BTC because they are all over it like a cheap suit. The have code on every cellphone and control the DNS system, they have access to every ISP, they have hardwired taps on subsea fibres, they own the fucking domain servers.
They know exactly who is online, where they are and what they are doing.
They record everything.
BTC was released by the federal government because the transaction log is public and it allows them to track illicit financing of hostile organisations.
It's a tool of surveillance.
They were involved with the process of developing encryption, they use it to secure their own shit as well.
The 'beauty' is that its not even fucking 'spying' when its all PUBLIC, by definition.
Soon we'll all be putting camera's in the toilet room and making our shit public,...
The BTC block chain is fucking brilliant, if they can get everyone to adopt, then collecting taxes will not require anything other than a machine, WASH-DC can pick a number, they just take what they need,
Private WEALTH 100% fucking gone.
Wealth? ... remember everyone will be in DEBT
the kings will end up with all the bitcoins just like the kings end up with all the gold... best to make your gains now
Those cryptologists you are referring to are actually busy cracking their career rivals' relatives' encrypted sext pictures and porn webcam streams or perusing decrypted or unencrypted ones.
Get a girlfreind, asshole.
You don't think much of women, do you?
ask Irwin Schiff if he is laughing. or the millions of other americans who have lives destroyed by the IRS.
Well sucks to be in America I guess. If they decide to throw me in a virtual prison for virtual crimes I will have one of the virtual boys smuggle me in a virtual revolver.
Revenue Canada will be giving it to you guys the same as the IRS gives it out down here. Are you even allowed revolvers?
We've got .50 BMG bullpups...we just don't parade around with them hanging out of our pants..and yes the CRS are just as devillish as your pesky little IRS
Problem is, they end up throwing your ass in real prison. Ask Pirate Dread Roberts, Kim Dotcom, or Aaron Swartz' estate.
Until their in PRISON. Then they CRY!
In 1944, under the Bretton Woods Agreement, Corp. U.S. is quit claimed to the International Monetary Fund, and becomes a foreign controlled private corporation.
.
Yep, when they come to put you in prison, and they swipe 100% of all your 'bank accounts' there will be fone-star beside you to protect you from the cops, jails, and system that doesn't exist.
FUNNY to fone-star BTC is real, but the cops, prisons, and BTC lies are not real, .. fucking hilarious.
Dorks.
Clitboing
I'm saying this with respect fonestar, not to be a smarass but what do you do for a living that allows you to post so much on ZH. I post a lot lately too, but you are everywhere. Good job on you Bitcoin gains by the way.
You're too much a fanatic, fakestar. Like the pm waterfalls.
Made for you BITCOIN IS THE NEW SELFIE
http://www.offgridminds.com/misinformation-blog/2013/12/3/bitcoin-is-the...
Uhhhh, it is the iRS. How much more clearer can they get? You PAY them. End of story.
http://goldsilverbitcoin.com
Fuck you, pay me.
http://www.youtube.com/watch?v=5ydqjqZ_3oc
got 14 bitcoins? Get this nearly 8 ounce gold nugget almost the size of a cell phone! yum...fake digital crap for real gold!
https://www.goldsilverbitcoin.com/products/antiques/24k-alaskan-gold-nugget/
the photos at the link of the nuggest are very cool
I've always been a little concerned about guntcoin and the like for this reason - if they are super crypto secure then there should exist a record of each part of each coinc from the time it was mined, bought, spend, sold, bought for eternity, which would provide hours of entertainment for a pre-rogue edward snowden type tasked with helping the tax man.
"And what about if your Bitcoins are stolen? Are such losses deductible like other investment losses? Or would it be treated like personal property as if your car was stolen?"
But what about if this happens? Are you taxed for being an idiot?
< Cue barely computer-literate comments about precious metals stacking, ammo hoarding, conspiracy theories based on whatever they smoked/ate last, tinfoil rants, all CAPS declarations of Bitcoin being "dead", a "scam" and... whatever their addled brains can come up with. >
< Cue continued yield appreciation as compared to every other asset class, causing lots of sore feelings among the ones who thought their little pile of atoms was "it". >
Bitcoin November Performance: (+$916.25) +450.15%
Bitcoin Year-to-Date Performance: (+$1,046.88) +7,979.26%
< Cue reaction to unheard of performance statistics and personal wealth creation. >
That there's some nice Cue'ing Tex!
So should I be Bullish ? Or just a little Heifer.
Milk it just a little while longer, I says.
Either the gubmint will make BitCoin illegal, claiming it can be used for money laundering and other evil purposes, or they will tax the crap out of it.
Which do you think they'll do?
I was on the edge of dumping a few buck into Bitcoin @ $20.00/ea - but decided against it based upon the fact that we're currently working on starting a new business, and we have house rules prohibiting engaging in pure speculation and investing in anything we don't have a very solid working knowledge of.
Having said that - as I've watched this ramp-up - I think that Bitcoin's currently unstable valuation means that it is not yet acting as a true currency. Bitcoin will breach true alternative currancy status only when employees can generally elect to get paid in Bitcoins and when Bitcoin finally stablizes in relation to the price of physical gold and barrels of oil. Put another way, focusing on pricing Bitcoins in fiat shows that it is not quite there yet. This is where PMs still show their strength: in the consistancy of purchasing power in terms of real goods and commodities.
Of course this process will take a while (if it happens at all) as the global banking cabal will not take this outright assault on its foundation sitting down. . .
They are going to take it sitting down and they are going to take it up the ass.
Be careful you don't underestimate your opponent.
The cryptocurrencies are the planned future. Only they are going to be issued by goverment, and the competition will be outlawed. The bitcoin is serving its purpose, and for that reason it is allowed to be used.
We all hope you are right. Very few seem to actually believe you are. Having said that, I wish I had speculated early and sold at the high. Could have bought a lot of oz of gold with that.
Did anyone find the nerd's hard drive yet?
So Bitcoin is gonna fuck the worldwide banking system huh?
You just proved you're a delusional psychotic fool (aside from any merit Bitcoin has) .
Sort of like how the government either made file sharing illegal or taxed the crap out of it? Hint: Neither option was feasible.
"Either the gubmint will make BitCoin illegal, claiming it can be used for money laundering and other evil purposes, or they will tax the crap out of it."
So did you just miss the hearings or what? Maybe deaf or watching UFO videos on YT? They just said the have no jurisdiction over Bitcoin.
Of course, the gubmint never ever changes their minds, do they? Just give 'em a little time. Right now, they probably think it's a fad that will blow away, but if it catches on, look out!
It's all Kabuki theater, for now. Pretending to wanna control it, etc. Meanwhile, behind the Curtain... the real action is going on.
Eventually, the curtains will be pulled back, and they'll come out with their own version that is totally traceable and will not accept competitors, w/o them identifying themselves -- for National Security and Taxation reasons, of course.
I don't expect BTC to collapse, but I do expect it to crest eventually, and find its natural level when the G20 force it to link up to the GovCoin of each member country. The other (non-G20) members have no say and no global power, so they will just play the CB game of "Simon says".
Till then, this will be known as the "Good Old Days" of BTC Wealth-rush. The Early Adopters are monetizing their BTC for fantastic rags-to-riches profits (bit by bit -- pun intended), and present adopters are speculating on potential gains on standard "Pump & Dump" games. Late Adopters will give an "Eeyore" response: "Poor me, I knew I would not get lucky..." And the Goldbugs will gloat with their usual Schadenfreude that they are not the only ones who got screwed by TPTB. Gold-misery will love miserable BTC-company. Even though, deep inside, I hope for TPTB to lose and Gold+BTC to win.
/ The Feudal Masters of old are back! And the Fed is celebrating its 100 year Anniversary in a few (3) weeks, Sheeple! Can ewe say "Baah!"? /sarc
NIce summary.
I think that saying that BItcoins are imune to outlawing is forgeting that there are various levers available to make it really hard to do use it. Companies have to obey the Laws, and making it illegal to receive Bitcoins would affect its value.
The various new Botcoins also can be created at very low cost, which makes me doubt its value.
Either the gubmint will make BitCoin illegal, claiming it can be used for money laundering and other evil purposes, or they will tax the crap out of it.
Which do you think they'll do?
If you like your Bitcoins, you can keep your Bitcoins.
Simon got me again
You've been .... SIMONIZED!!!
Simon says: another huge problem with bitcoin, is that you can't shove it up an alpaca's wooly bung hole and smuggle it over the Andes via Inca caravan.
FYI, Simon was pro-BTC at his Offshore Workshop, in Santiago Chile, last April. Even had a Bitcoin speaker.
He liked how you could use it to buy & sell zee Precious, w/o having to carry it from country to country. Most (myself included) agreed.
Sooo...what was this article about again?
It's about three dimensional flies trying to land on four dimensional poop.
Amazon octocopters?
I heard today on Progressive Radio that more Americans die every year in minivans than in Afghanistan
I'll leave this for fonestar and simonblack to unravel.
I'm concentrating on Alpaca butts
Seems like OnStar could have more info on the minivan problem than phonestar.
Now I'm eyeing the minivan in the driveway, asking myself if we're just one cell call away from a flaming disaster of IED proportions.
Just to be safe, I'm not driving the family to any more wedding parties in the damned thing. It's probably too risky now.
Before said 4D-poop hits some 3D-propellers. ;-)
Its about how most Argentines have been left to suffer the terrible inflated ego and douchiness of Simon Black, or somethin'.