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Fact, Fiction, And 11 Bitcoin Myths

Tyler Durden's picture




 

Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. In an effort to separate fact from fiction, ConvergEx's Nick Colas reviews 11 bitcoin myths (and dispels them). Still, there’s no doubt that the public is entranced: there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”.  We started writing about bitcoin back in February because it was – and still is – a fascinating invention (for better or worse). How it plays out, we will just have to wait and see.

Via ConvergEx's Nick Colas,

In the spirit of the old high school essay question about the Holy Roman Empire, consider the following query: bitcoin is often described as an online crypto-currency, even though it is none of these things – discuss.  The Cliff Notes suggested essay outline might go something like this:

Bitcoin doesn’t have to be just “Online.”  There are meetups in parks around the world where you can bring your cash, hand it over to a guy or gal with a smartphone, and watch your Benjamins get deposited to an online bitcoin wallet.

 

The “crypto” part is also only partially correct.  Yes, at its core the bitcoin system runs as a piece of open-source puzzles which individuals and businesses try to solve.  The winner gets 25 new bitcoins for their trouble, currently worth about $23,000.  Not bad, but the genius of the system is that everyone playing the puzzle must also register all bitcoin transactions that occur in the 10 minutes it typically takes to solve the puzzle.  Those are also all visible to the system, but by forcing everyone to keep track and reconcile at the end of the 10 minute window, the chance of double-spending the same bitcoin is very low. Bottom line: you don’t need to know how to code to use bitcoins.

 

“Currency”… This is actually the hardest part of the question.  Currencies exist primarily as a way for societies to avoid having to barter goods and services.  It is much more efficient to hand over a $10 bill for dinner rather than contract with the restaurant owner to wash dishes for your meal.  There are some places to spend bitcoin – a simple web search will find them.  But the most accurate thing you can say about bitcoin as truly useful currency is ‘Not yet’.

We’ve been writing about bitcoin since February 2013 because we thought it was a remarkable and intellectually elegant solution to one key social problem: it simply costs too much money to move money.  Want to send $100 to a friend in Argentina by Western Union?  That will set you back $12.  How about paying for a $1 bag of chips with a credit card in the US?  Good luck with that – you’ll likely have to buy a 10 pack to meet the card minimum at the store.  We had no idea the value of a bitcoin would skyrocket from our first report at $31 to about $900 today.  We just thought it was cool.

Still, with all that capital appreciation comes a lot of misinformation.  Part of that is understandable – bitcoin is new and very different from traditional notions of “Money”.  Still, in the rush to understand what bitcoin is – and isn’t – the public discussion on the topic has gotten a bit muddy.

Today we offer up 11 bitcoin myths and our interpretation of the reality under the hype and confusion.

Myth #1: Bitcoin is huge

Reality: By any objective measure, bitcoin is tiny at a total value of $10.8 billion.  Since one of the complaints about bitcoin is that it can enable hard-to-trace criminal activity, let’s compare that amount to the real enabler of drug sales, tax evasion, and even more heinous crimes the world over: the U.S. $100 bill.  There are about $400 billion of those floating around the world.  Total stock of cash money in the U.S.:  about $800 billion.  And when you look at total cash around the world, the number is about $3.8 trillion.  Bottom line: bitcoin at current valuation is 0.3% of the world’s cash money.  That is not huge.

Myth #2: Bitcoin is a major problem in dealing with drugs and terrorism

Reality: Bitcoin is way too volatile at the moment for any serious criminal element.  These are not people that take capital risks where they don’t have to.  Seriously – go try to steal 10% of a dealer’s cash and tell him it is frictional losses due to an illiquid market.  I have heard enough Biggie Smalls raps to tell you how that story ends…  Yes, some enterprising dealers clearly use bitcoin.  But a serious problem?  Bitcoin would be $10,000 or higher if it had any real share of the global drug trade.  Consider that the UN Office on Drugs and Crime estimates the heroin trade into Europe is worth $20 billion on its own. 

Now, it is entirely true that bitcoin businesses will have to develop the same anti-money laundering and know-your-customer rules as any other money transfer enterprise.  And, as we will discuss briefly, that is very good for bitcoin.

Myth #3: Bitcoin is a currency.

Reality: Bitcoin really is a cross between a mutually held company or large partnership and a money transfer business.  Its utility is that the bitcoin miners – those trying to solve the puzzles to get the 25 bitcoin reward – manage the transaction stack (blockchain, in bitcoin-speak) essentially for free.  You want to be part of the partnership? Great – buy some bitcoins and hold on.  But if you just want to send that friend in Buenos Aires money cheaply, you and she might both own bitcoins for a fraction of a second.  You drop dollars in, she gets pesos out.  Bitcoin is a system much more than it is a “Currency”.  Maybe one day she will buy a beer with bitcoins, but the entire system has tremendous utility even without that functionality.

Myth #4: Bitcoin has never been more volatile than now, with all the attention it is getting.

Reality: Check out the two charts we’ve included after this note.  They show trailing one month returns for bitcoin back to August 2010 as well as the standard deviation of those returns.  May 2011 was the peak for trailing 28 day returns at 853%.  The last peak was 11/30/2013 at 479%.

Myth #5: Chinese citizens are shut out of buying bitcoins by government regulation of the banking system.

Reality: According to data aggregator bitcoincharts.com, yuan-based bitcoin demand is still greater than dollar based transactions. Over the past 24 hours, 85,588 bitcoins changed hands on BTC China, while only about 56,000 traded on dollar-based exchanges.

Myth #6: Bitcoin is a store of value.

Reality: The phrase “Store of value” should be used very carefully and only with specific historical proof. It implies that when social or political floodwaters come, the asset in question will allow you to buy shelter, clothing and food.  Gold has that history, as does silver.  Perfect one-carat diamonds also make the grade, albeit only in the last 50-100 years.  Bitcoin may one day prove it deserves to sit alongside those assets.  It isn’t there yet.

Myth #7: Bitcoin is untraceable.

Reality: Bitcoin transactions flow through an open-source piece of software, so everyone sees every trade.  No, there are no name/address identifiers, but Forbes magazine showed how easy it is to trace bitcoins through the system back in September. Methods to “Launder” bitcoins certainly exist, but so do the risks of handing over your coins to an online thief.  Bottom line: after hearing about what the NSA can do with your computer and phone records, if you think anything you do online is secret, I can’t help you.  OK, if you have mad hacking and crypto-skills, maybe.  But chances are pretty good that you’d just screw it up.  And get caught.

Myth #8: Loss of anonymity will make bitcoin worthless.

Reality: Remember, as long as banks and money transfer businesses have to maintain expensive data centers to run their businesses, bitcoin will always be a cheaper way to transfer money.  Now, how many business build attractive and secure consumer and business offerings on the core bitcoin system – that is an interesting question and is certainly the most important issue regarding its long term price.

Myth #9: It’s a Ponzi scheme!

Reality: A Ponzi scheme is one that has no use other than to defraud later victims into giving money to earlier participants.  Again, bitcoin has a potentially significant positive social value.  Two regional Federal Reserve papers, published in the last month, agree with that statement.  But if you still think bitcoin is a Ponzi scheme, you should probably get rid of your Federal Reserve notes as well.  They aren’t “Backed” by anything either.  Please remit them directly to: Nick Colas, ConvergEx, 1633 Broadway, NY NY 10019.  I will forward them to one of my favorite charities – the USO - where they will do a world of good.

Myth #10: Bitcoin is ready for prime time.

Reality: I don’t own any bitcoin (I lost the 0.10 someone gave me in a demo) and I won’t be using them any time soon.  The reason?  I am afraid that there is simply no safe place to hold them.  Hackers attack bitcoin “Wallets” with disturbing regularity.  As the price continues to rise, their incentives to up. Their game goes higher as well. I don’t think I am alone in this sentiment.  I want a company I recognize to start a bitcoin storage site.  It could be a bank, or Paypal, or Apple.  I don’t care which.  There are plenty – they call me regularly – bitcoin millionaires out there.  How about some of you start reinvesting in the system that has made you so wealthy?

Myth #11: Something better will come along and wipe bitcoin off the map.

Reality: Of course something better will come along.  That’s what happens in technology.  I personally think a charity-based bitcoin product would be huge.  Donate bitcoin in New York, and let the charity redeem them at very close to 100 cents on the dollar where they are needed.  Somalia, as one example, is facing almost total isolation as Barclay’s - the last foreign bank in the country - threatens to leave at the end of the year.  The $100 million remitted by Somalis working abroad will then have to pay even higher fees to send their money home.  What if a famine or other calamity occurs?  And how will the economy have a chance with no access to outside capital?

 

 

At the same time, I simply do not see why a competing product will wipe out the utility of bitcoin.  It has a first mover advantage and a large existing network of miners to support it.  There are scores of early adopters with eight and even nine figure net worths to reinvest and build the system.  There are other online money transfer products out there, of course, and more to come.  The challenges will be the same for all of them: security, utility and legal compliance.

Let me sum up with a final thought: I absolutely understand why there are so many bitcoin haters out there.  But don’t hate the player, hate the game.  Technology is a tremendously disruptive force in society, and it knows no boundaries.   It disturbs every status quo.  That’s what is does.  Just don’t make the mistake of thinking that you can reverse it by calling it a bubble.  Sticks and stones, that…

Now, if someone hacks the entire bitcoin system just to crash it (there’d be no actual value in the effort, since bitcoin would be worthless), then of course will go to zero.  But that won’t be the end – something else will come along.  Technology doesn’t stop.  Get used to it.

 

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Thu, 12/12/2013 - 10:34 | 4239389 Debugas
Thu, 12/12/2013 - 10:41 | 4239410 Dear Infinity
Dear Infinity's picture

CEO of PayPal is curating his virtual stack. Bitcoin:Gold ratio is tightening again.

Thu, 12/12/2013 - 10:47 | 4239421 fonestar
fonestar's picture

The next time Bitcoin crosses gold it should blast right through it like silly putty and remain there.

Thu, 12/12/2013 - 11:00 | 4239454 bitcoinbear
bitcoinbear's picture

Not if the thermonuclear arms race bubble bursts first. Then the all the goldbugs will ride brand new donkeys right past you and your tesla. 

Thu, 12/12/2013 - 11:57 | 4239663 Chain Gun Smoke
Chain Gun Smoke's picture

All these bitcoin bastards are polluting this site. Bitcoin won't go up forever. Take profits and move on before you all get fucked by a big black swan. It's coming. 

I like to skim the comments to gain other peoples insight, but damn, the average IQ of ZH is crashing. You all read like a get rich quick scheme. 

Thu, 12/12/2013 - 12:20 | 4239748 TeamDepends
TeamDepends's picture

Let them enjoy their Kool-Aid.  We do agree though that some of them are beyond tedious.

Thu, 12/12/2013 - 12:48 | 4239907 foodisgood
foodisgood's picture

Fonestar-

Why the heck are you not in on the develoment stages of the new bitCoin wallet that will TRULY decentralize the currency?

http://youtu.be/r5_hFHHJhd4

You are missing out man.

Thu, 12/12/2013 - 21:01 | 4241743 mmanvil74
mmanvil74's picture

Look folks, Bitcoin belongs in the same sentence as electricity, automobile, telegraph, the computer and the Internet.  It is the most important invention of this decade and maybe even of this century.  And you can't un-invent something.  

Doubters will wake up eventually.  That doesn't mean Bitcoin isn't the commodore 64 of computers or the My Space of social media - we don't know if it will be the leading or best coin of its kind.  What we do know is that crypto currency is world changing, it is here to stay, and unless you want the lights to turn off so we can go back to living in caves and tribes, you should embrace it (and get some while still cheap)!

Thu, 12/12/2013 - 22:59 | 4242100 Ayr Rand
Ayr Rand's picture

Please, everybody, please BUY BITCOIN!! Since the NSA invented it, there is every reason to believe that the mysterious core of users who own but rarely trade most of the bitcoins are either NSA employees, former NSA employees, or the NSA itself. This is your contribution to their pension plans. They have done their job. Do yours. Thank you.

BTW, this article correctly pointed out that Bitcoin is not anonymous. In fact, it was engineered to be 100% traceable if you have the tools and resources.

With all that, it still has enormous potential value as a medium of exchange.

Thu, 12/12/2013 - 12:27 | 4239794 tmosley
tmosley's picture

You do realize that you are, in fact, in a bitcoin thread?

Or are you saying Tyler is a bitcoin bastard?  

If the latter, we can agree that they seem like clickbait.  It does have the possibility to become a new paradigm that could reshape the financial system and end central banking once and for all, but it seems like any story that has the word "bitcoin" in it gets reposted here so we can argue about it.

Thu, 12/12/2013 - 13:05 | 4239987 fonestar
fonestar's picture

Exactly.  Why are they posting on Bitcoin threads?  Maybe because it pisses off the conspiratards to learn millions of people are actually buying and using Bitcoin?  Kinda blows all of their stupid cries of conspiracy, pump-and-dump and pyramids out of the water?

Thu, 12/12/2013 - 10:59 | 4239455 Stackers
Stackers's picture

Myth #10: Writer does not understand how wallets work. No need for 3rd part secure wallet storage. You can create a wallet on your own hard drive and short of someone hacking your personal pc and installing malware keystroke logging software on your PC it is un-hackable.

Thu, 12/12/2013 - 11:03 | 4239470 outamyeffinway
outamyeffinway's picture

Right. Don't store them on your primary pc. Also you could get an ipod, download a wallet, put your BTC on it when you get them and put it in a fire proof safe. Many options.

Thu, 12/12/2013 - 11:03 | 4239478 fonestar
fonestar's picture

I like SSDs.  I don't trust hard drives and USB sticks.

Thu, 12/12/2013 - 11:28 | 4239563 Balvan
Balvan's picture

Bitcoin is dead, Quarkcoin is next big thing

Thu, 12/12/2013 - 11:34 | 4239582 Ignatius
Ignatius's picture

Bill Still, is that you?!

Thu, 12/12/2013 - 11:34 | 4239587 fonestar
fonestar's picture

Haha, yeah that certainly made me wonder.  I enjoyed his shows but he attacks Bitcoin for two years and then jumps onboard with this scam coin?  WTF?

Thu, 12/12/2013 - 11:39 | 4239602 fiftybagger
fiftybagger's picture

Maybe because he's a statist shill fraud?

Thu, 12/12/2013 - 11:42 | 4239605 Balvan
Balvan's picture

It's not a scam, here's a video that explains Quark (3:50 mark Quark-Bitcoin comparison)

https://www.youtube.com/watch?v=gYQH9pNMnk8

Fri, 12/13/2013 - 19:57 | 4245181 Scarlett
Scarlett's picture

it's a complete scam with 99% of coins already mined

Thu, 12/12/2013 - 11:43 | 4239609 Ignatius
Ignatius's picture

I like Bill Still.  Sometimes it takes awhile for people to come around.  Bill Fleckenstein really ragged on bitcoin in a KWN interview.  I think he'll be wrong.  When one knows a lot it can be a hinderance to new developments.

Thu, 12/12/2013 - 13:19 | 4240064 fonestar
fonestar's picture

I still enjoy listening to Fleckenstein's interviews and I don't think he's really part of the Wall Street crowd.

Bitcoin is pretty far out and abstract for a lot of people to grasp.  It's also really interesting to see how far divided technically our society has become.  A few are able to grasp and understand these new creations while others are able to discount world-wide global networks as being not "real"?  Thinking about that astounds me and frightens me.  The people bitching and moaning the most about technology would be the first ones going crazy if all the creature comforts that software provides them were taken away.  They don't notice it in their daily lives but they'd certainly notice it if it were gone (it's not going anywhere).

Thu, 12/12/2013 - 15:04 | 4240516 Bay of Pigs
Bay of Pigs's picture

What happened to fiatleak.com? It doesn't work anymore. Why?

Thu, 12/12/2013 - 13:28 | 4240129 edotabin
edotabin's picture

Just wait till Bling coin is introduced.

Thu, 12/12/2013 - 16:16 | 4240749 BigJim
BigJim's picture

I'm waiting for CntCoin, a crypto-currency backed by the International Legion of Harlots and redeemable for specie* on demand.

*hot, slavering poontang.

Thu, 12/12/2013 - 13:21 | 4240081 tmosley
tmosley's picture

UBS sticks are SSDs, though.  Just in a small form factor.  They are damn tough too.  I must have put one through the wash (and the dryer) 10 times and the data read fine afterwards each time, no problem.

Thu, 12/12/2013 - 13:39 | 4240187 fonestar
fonestar's picture

True but it depends on quality.  I've had several USB cards smoke on me.

Thu, 12/12/2013 - 16:19 | 4240758 BigJim
BigJim's picture

USB sticks (hey, what this 'UBS' stick? Did you get it from a Swiss bank?) usually fail at the card/interface level, ie, where the card is soldered to the USB connector. I've seen this quite a few times and it's usually a fairly easy fix.

Thu, 12/12/2013 - 14:50 | 4240444 Sonic the porcupine
Sonic the porcupine's picture

USB sticks use flash memory, so do most SSDs. So if you don't like USB sticks, why do you like SSDs?

Thu, 12/12/2013 - 16:06 | 4240721 Mike Hunt III
Mike Hunt III's picture

Wow, your getting massively down voted for liking SSD's. Tough crowd.

Thu, 12/12/2013 - 13:51 | 4240236 Duke of Earl
Duke of Earl's picture

I disagree.  The 3rd party secure storage is not for those who can responsibly backup and protect PC's.  The storage is for everyone else who doesn't understand or makes regular mistakes.  Think of small storefronts who want to take the currency, but none of the overhead of being a bank.  All they want to have is an address for people to send money and some sort of insurance if it gets stolen.

This is why you are seeing startups like Coinbase get $25MM rounds of financing.

Thu, 12/12/2013 - 11:00 | 4239459 outamyeffinway
outamyeffinway's picture

Technology, get used to it bitchez!

Thu, 12/12/2013 - 11:33 | 4239577 fonestar
fonestar's picture

Has anyone else experienced a much harder time sending money (EMT) through legacy banks lately?  I certainly have and my bank has been making me jump through hoops to do anything now.  My EMT was blocked by Interac due to "suspicious activity" (buying Bitcoin from Bitcoin sellers) so I don't know if it's related to that or not.  I've been reading online about many others having trouble and some have said the banks are now getting hacked left, right and center.

Just one more reason to avoid and ignore legacy banks and one more selling point for Bitcoin.

Thu, 12/12/2013 - 11:41 | 4239612 fiftybagger
fiftybagger's picture

I'm not sure Fone.  But I'm pretty sure these banks are very close to going POOF, and then the bailins start.

Allocation:

gold/silver/bitcoin/altcoins/food/preps 99.9%

cash .01%

Thu, 12/12/2013 - 12:55 | 4239937 foodisgood
foodisgood's picture

You really are an idiot.

I bougut at $11in 2011 and was locked out when it crashed after $37. Cause I am a whining nagger I got my coins back. 

Why do you remind me of myself. Just wait till you find your senses

http://youtu.be/OD1BpR_1z3s

Thu, 12/12/2013 - 15:24 | 4240584 greenbear
greenbear's picture

Clever.

Thu, 12/12/2013 - 16:23 | 4240770 BigJim
BigJim's picture

 My EMT was blocked by Interac due to "suspicious activity" (buying Bitcoin from Bitcoin sellers)

Dude, of course you've been tagged for "suspicious activity" - you're probably the most prolific poster on one of the world's greatest dissident sites.

Thu, 12/12/2013 - 19:40 | 4241550 gallistic
gallistic's picture

WTF! Hyperbole much?

Sorry to burst your little bubble, but Zero hedge is decidedly not "one of the world's greatest dissident sites". Anyone who believes that is severely deluded.

Zero hedge is neither dissident nor subversive. It is a multitude of fears mixed with the collective illusions of faux rebels which fills a particular human need. It is tragically trapped in a very narrow range of views and "discussion". It is the spectacle, nothing more.

If there was a true "Marla Singer" foil with equal power to the Tylers engaging in the dialectical method and demolishing hackneyed paradigms, Zero Hedge might actually threaten to reach the exalted position of Petri dish.

Thu, 12/12/2013 - 10:48 | 4239426 Pseudonymous
Pseudonymous's picture

Child Labor in Bitcoin Mines Exposed

</sarc> I know I post this link with the risk of adding even more confusion, but it is just worth the laugh.

Thu, 12/12/2013 - 10:51 | 4239428 BLOTTO
BLOTTO's picture

'Again, bitcoin has a potentially significant positive social value.  Two regional Federal Reserve papers, published in the last month, agree with that statement.'

Thu, 12/12/2013 - 10:56 | 4239437 fonestar
fonestar's picture

I do not believe the Fed is endorsing Bitcoin as some do.  I think Bernanke was just stating the obvious that they have no control or jurisdiction over Bitcoin.  And their paper is right, Bitcoin offers tremendous positive social value.

Thu, 12/12/2013 - 11:19 | 4239531 Sixdeuce062
Sixdeuce062's picture

the fed isnt endorsing fiatcoin they are creaming their panties over it is moar worthless then what they "digitize" if anything they are looking to move and take over so they can "manage"  and i use this term only from the perspective of the FED "currency" . fiatcoin is just a cenntrall planners wet dream

Thu, 12/12/2013 - 11:33 | 4239583 fonestar
fonestar's picture

Bull.  All currencies are digital currencies and have been for many, many years.

Thu, 12/12/2013 - 12:57 | 4239954 foodisgood
foodisgood's picture

You have to be a moron of the highest order to believe that fonehomestar

http://youtu.be/OD1BpR_1z3s

Thu, 12/12/2013 - 13:43 | 4240206 fonestar
fonestar's picture

I can totally believe that Bitcoin makes no sense to you (or people like you).

Thu, 12/12/2013 - 13:08 | 4240004 giggler321
giggler321's picture

My internet goes down all the time, since it's decision making is all network based, it would seem this is a weak point, I mean if I want to spend something, I take a coin from my pocket, so now the shop owner says, sorry you can't buy that soda because internet down due to collapse of xxxx (make up what you like here).  However my metal coin still works...

Thu, 12/12/2013 - 13:33 | 4240160 fonestar
fonestar's picture

Actually that's not correct.  Many times I have been in businesses during a power failure.  The cashiers do not even do cash transactions because they do not show up in their systems.  I have asked the cashiers, "well why not write it down and enter it later?".  They just say no can do.

Thu, 12/12/2013 - 15:41 | 4240639 giggler321
giggler321's picture

You're mistaken - so then they're not gonna take coin or bitcoin then?

Thu, 12/12/2013 - 16:24 | 4240775 BigJim
BigJim's picture

Actually, for most stores now this is true - all the till operations are based on scanning the barcodes of the products. No can scan? No can sell.

Thu, 12/12/2013 - 10:56 | 4239443 firstdivision
firstdivision's picture

...and how many Fed papers agree with QE?

Thu, 12/12/2013 - 11:01 | 4239468 WarPony
WarPony's picture

Most trustworthy indeed, but seriously, you can't pay the UPS a COD with a BC, it'll trip the NSA.

Thu, 12/12/2013 - 10:41 | 4239411 fonestar
fonestar's picture

Yes we see that, people do not want to own Bitcoin because they are paranoid.  And if Bitcoin collapsed they do not want to be seen as gullible.  So they would rather miss the boat than be seen as stupid.  No loss to us.

Thu, 12/12/2013 - 10:59 | 4239448 Sixdeuce062
Sixdeuce062's picture

so you are saying bitcoin is like a magic unicorn every one secretly wants one but nobody wants to come out of the closet to say they want one ,........    well at least they are in the same plane of fantasy

Thu, 12/12/2013 - 11:04 | 4239472 fonestar
fonestar's picture

What a stupid assertion.  While I do not support the dollar system, I cannot disagree with the fact that this system is very much real and used every day.  So if you want to say that the Bitcoin system is a "fantasy" you can do so but it just makes you look like an idiot with no base in reality.

Thu, 12/12/2013 - 11:11 | 4239492 Sixdeuce062
Sixdeuce062's picture

bitcoin is just like the dollar the only reason it has any value is beause some one believes it does and actually it has moar value because at the very least i can roll ia dollar an smoke it or whipe my ass with it bitcoins is mearly a couple of ones and zeros that wont be there if theres no electricity  or a team of hacker decide a cusade against bitcoin gold and silver is best especially when backed by lead and brass

Thu, 12/12/2013 - 11:16 | 4239515 outamyeffinway
outamyeffinway's picture

Seriously dude and any other thick head out there, if the electricity goes out gold and silver aren't going to help you.

Thu, 12/12/2013 - 11:29 | 4239551 quasimodo
quasimodo's picture

I could not agree more, kind of like they didn't help out back BEFORE they had electricity.

Any questions? Didn't think so

 

Next?

Thu, 12/12/2013 - 11:44 | 4239625 Skateboarder
Skateboarder's picture

It's amazing how one hundred years of electromagnetic conveniences tends to situate one's head very far up their arse.

Thu, 12/12/2013 - 14:23 | 4240360 Prisoners_dilemna
Prisoners_dilemna's picture

yeah cuz we all have horses, and metal armor, and catalpults, and gardens, and...

 

 

yeah we will all adopt to no electricity overnight.  Just like a day trip to the ren fair.

 

Shit I love the ren fair. I might just get rid of my electricity now. And start paying for food at walmart with silver!

 

You are tarded.

Thu, 12/12/2013 - 15:41 | 4240658 WOAR
WOAR's picture

You are a moron.

Have you ever heard of this?

http://en.wikipedia.org/wiki/Galalith

That's plastic, made out of simple components, developed in 1913. You probably didn't even know it existed, and that's the point.

Well educated people could get by very, very well if an apocalypse happened. Most of the things you take for granted can still be made in some form, by smart people, who actually create things. All it takes is knowledge.

Also, Luty SMG. Look it up.

Thu, 12/12/2013 - 13:24 | 4240102 Exponere Mendaces
Exponere Mendaces's picture

Exactly outamyeffinway, I didn't see anyone in the Phillipines saving the day by selling some gold coins for food. That's because the price of clean water and food were higher than the price of metals. Disasters aren't the big magic mystery market that the PMers make it out to be.

Thu, 12/12/2013 - 15:49 | 4240678 Bay of Pigs
Bay of Pigs's picture

What the fuck does owning gold have to do with natural disasters?

You are a moron of the highest order. Congrats as ZH's latest and best Gold Troll. That takes some Full Retard talent.

Thu, 12/12/2013 - 16:36 | 4240807 akak
akak's picture

This exponentially mendacious fool does not realize that possibly the BEST reason for owning precious metals is to carry one's savings and wealth THROUGH a financial and/or monetary disaster, not just to hopefully allow oneself to make transactions DURING such a disaster.

And even if gold and silver were of relatively little value during a particular disaster, that means next to nothing --- does anyone actually invest and/or save based on what might be of value in a lifeboat?

Thu, 12/12/2013 - 17:22 | 4241014 Skateboarder
Skateboarder's picture

For fucking serious akak. Our ancestors fought hard to carry through their wealth through the ages. Within three or four generations of propaganda, now we have fools defending all kinds of atrocious nonexistent temporary ideas as real wealth.

Don't worry, a billion Chinese and Indians (especially while the last of the old people who lived without electricity are still alive and about to pass out) still know the meaning of passing real wealth on.

Thu, 12/12/2013 - 11:49 | 4239649 fiftybagger
fiftybagger's picture

"bitcoin is just like the dollar the only reason it has any value is beause some one believes it does"

No, the dollar has value because the government says it does.  Bitcoin has value because the market says it does.  The government will ultimately be proven wrong.  Bitcoin will go to infinity and the dollar to zero, which really are the same thing :-)

The Bitcoin Channel

Thu, 12/12/2013 - 13:33 | 4240164 DebtSlaveZombie
DebtSlaveZombie's picture

And the market doesn't place value on the dollar?  You do realize the bitcoins you own are priced in dollars right?  The dollar's value is based on more factors than just "the govenment says it does".  The government will be proven wrong?  lol.  These posts are exhausting.

Thu, 12/12/2013 - 14:26 | 4240369 Prisoners_dilemna
Prisoners_dilemna's picture

I'm confused..

Are you calling the federal reserve note a dollar?

Cuz I'm pretty sure the dollar is a weight of silver.

 

 

Thu, 12/12/2013 - 16:31 | 4240792 BigJim
BigJim's picture

The dollar has value because if you don't pay your tribute to our glorious overlords in dollars, you'll get thrown in a cage. THAT is what 'fiat' currency means.

Thu, 12/12/2013 - 13:02 | 4239971 foodisgood
foodisgood's picture

You don't support the dollar system yet you base the doubling value of bitCon on that very currency.

You realize you are a joke - you know this - yes?

Thu, 12/12/2013 - 13:34 | 4240172 DebtSlaveZombie
DebtSlaveZombie's picture

haha... you beat me to it.

Thu, 12/12/2013 - 11:09 | 4239494 outamyeffinway
outamyeffinway's picture

Interesting imagery but shallow in substance.

Thu, 12/12/2013 - 16:06 | 4240720 jomama
jomama's picture

i really, really want to like bitcoin.  but you're just such a fucking asshole, that it makes it really difficult for me.

Thu, 12/12/2013 - 10:46 | 4239420 GoldenDragon
GoldenDragon's picture

The idea of having an alternative currency is great, especially given the amount of money printing going on.  However, BitCoin has one serious flaw that WILL prevent its widespread adoption:  Hyperinflation of the Block Chain.

While its true that there is ~20M limit on the amount of Bitcoins that will be produced - thus preventing the "currency" of BitCoin from hyperinflating - there is no limit to how big the Block Chain can grow.  Every time Bitcoins are transferred, the block chain grows.  Currently, it already a couple of GB in size - and that is with only a very minute percentage of people using it.

If BitCoin gains widespread adoption, the size of the Block Chain will hyperfinflate eventually becoming several terabytes - and beyond - in size.  Unless there are some new advances in storage and bandwidth technologies working with BitCoin will eventually become unmanagable.

So while I like the idea of a non-centralized currency, BitCoin won't be it.  It is doomed to hyperinflation just like USD - only a different type of hyperinlation.

 

Thu, 12/12/2013 - 10:49 | 4239429 fonestar
fonestar's picture

That's not true, there's clients that do not need to download the entire Blockchain.  Plus there's ways of truncating and compacting the blockchain as well (while still being able to view the entire blockchain).  This is not a serious threat to Bitcoin's future at all.

Thu, 12/12/2013 - 11:05 | 4239479 GoldenDragon
GoldenDragon's picture

Your solutions are just ideas at this point.  It is my understanding that they have yet been implemented. 

In fact, there is currently a limit of 7 trans / sec to avoid the block chain from getting to big to fast.  The idea is that this limit will be increased as the community grows. (By who?  Is this centrally controlled?  Hmm?)

Visa handles around 2000 tps and can burst up to 10000.  Of course, this also represents only a fraction of actual transactions.

So, while it may be possible to address this scaling problem, it has not been done yet and I do believe this will be one of the significant inhibitors to widespread adoption.

 

Thu, 12/12/2013 - 11:07 | 4239496 fonestar
fonestar's picture

They are currently implemented.  This is a client-side issue and not a design/network flaw.

Thu, 12/12/2013 - 14:09 | 4240309 aardvarkk
aardvarkk's picture

Actually, as a developer I can say that this is the first issue I've seen as a con for bitcoin that IS grounded in fact and WILL limit its usefulness.  There will be improvements in computing, but those improvements are already beginning to slow down vis-a-vis Moore's law, and the block chain issue can only grow.  What can't go on forever won't, dude.

I hadn't thought of it, but an infinitely growing block chain WILL make big problems for any of these currencies that rely on the same type of thing.  That's like a log file that never gets cleared and only gets added to...and gets added to more and faster the more bitcoin gets adopted and used.  I have an old laptop that I tried to use to pull things down to the local hard drive, and it already had trouble getting caught up doing the synchronization.

Even with compression and the like, that still doesn't address that the block chain MUST grow as long as these things change hands.  They'll either have to figure out how to cut the chain or else ditch the currency for something that doesn't have that achilles heel.

Thu, 12/12/2013 - 14:39 | 4240392 Prisoners_dilemna
Prisoners_dilemna's picture

Please read the Bitcoin white paper before acting like this has not been considered from the beginning.

http://bitcoin.org/bitcoin.pdf

Surely since you are a developer you've read the white paper and know this is a non-issue with multiple solutions ready to be implemented in about 50 years from now.

 

nce the latest transaction in a coin is buried under enough blocks, the spent transactions before

it can be discarded to save disk space. To facilitate this without breaking the block's hash, transactions are hashed in a Merkle Tree [7][2][5], with only the root included in the block's hash. Old blocks can then be compacted by stubbing off branches of the tree. The interior hashes do not need to be stored. A block header with no transactions would be about 80 bytes. If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in memory. Just as you suggested....  they cut the chain.  "Pruning"
Thu, 12/12/2013 - 14:54 | 4240460 aardvarkk
aardvarkk's picture

I'll stipulate that at those accumulation rates RAM shouldn't be a problem for some millenia to come...assuming that there aren't details there that haven't yet become apparent.  I'd still be more comfortable if it had some sort of theoretical maximum memory/disk footprint, which it doesn't seem to.  If we're going to create a lasting digital currency, it would be nice to get it right straight out the gate.

Thu, 12/12/2013 - 11:13 | 4239511 TheHound73
TheHound73's picture

Various versions of bitcoin wallets currently run on Android phones and they certainly do not carry the full blockchain even at 9GB.  Sending and receiving BTC is no problem.  Mycelium Wallet

Thu, 12/12/2013 - 11:24 | 4239539 Atlasshruggedme
Atlasshruggedme's picture

The size of the harddrive wont mater... we are safe regarding that. 

http://wiki.r1soft.com/pages/viewpage.action?pageId=3016608

 

Thu, 12/12/2013 - 15:53 | 4240687 greenbear
greenbear's picture

Furthermore, technological advancements in hard drive capacity will far outpace the increase in the blockchain size.

Bitcoin Report Volume 64 (Blockchain FUD)

http://www.youtube.com/watch?v=AdIfjJrm6Ow

Hard drive capacity over time: http://upload.wikimedia.org/wikipedia/commons/a/a1/Hard_drive_capacity_o...

60 TB drives could be a reality in 2016 http://www.computerworld.com/s/article/9227382/60TB_disk_drives_could_be...

Thu, 12/12/2013 - 11:02 | 4239451 One And Only
One And Only's picture

This was one of my only concerns and I did lots of research on the topic. The blockchain can in fact be pruned of old transactions that are several years old. Miners have built in incentive to run full nodes (the entire block chain) There is also Murphy's law. You can run micro nodes which are smaller compressed versions of the blockchain. BTW you can get a 1 TB hard drive for $100.

Thu, 12/12/2013 - 11:14 | 4239506 my_nym
my_nym's picture

Unless there are some new advances...

 

There is that.

Thu, 12/12/2013 - 15:44 | 4240664 greenbear
greenbear's picture

"If BitCoin gains widespread adoption, the size of the Block Chain will hyperfinflate eventually becoming several terabytes - and beyond - in size.  Unless there are some new advances in storage and bandwidth technologies working with BitCoin will eventually become unmanagable."

That is pure malarkey.

Bitcoin Report Volume 64 (Blockchain FUD)

http://www.youtube.com/watch?v=AdIfjJrm6Ow

Hard drive capacity over time: http://upload.wikimedia.org/wikipedia/commons/a/a1/Hard_drive_capacity_o...

60 TB drives could be a reality in 2016 http://www.computerworld.com/s/article/9227382/60TB_disk_drives_could_be...

Thu, 12/12/2013 - 11:13 | 4239505 swmnguy
swmnguy's picture

OK, HH.  You got me.

Thu, 12/12/2013 - 13:19 | 4240076 Exponere Mendaces
Exponere Mendaces's picture

@hedgeless_horseman

Seal Troll Rating: -1

Issues: Subject, while not busy tending to rabbits and stacking ammo, thinks adding "conversational value" means linking to pithy definitions in an online dictionary. One must wonder if the fumes from his personal smelting of precious metals is starting to build up in his system, to his detriment. At least it isn't some show-and-tell of dinnertime.

Thu, 12/12/2013 - 14:12 | 4240320 xxxxx
xxxxx's picture

I just hope all these ratings are entered into the "blockchain"

Thu, 12/12/2013 - 13:26 | 4240123 acetinker
acetinker's picture

Jackass;)  Ya got me good!

Thu, 12/12/2013 - 10:39 | 4239409 fonestar
fonestar's picture

There's a difference between Bitcoins and Addresses.  Also, what percent of people own all dollars?  One group owns 100% + interest.

Thu, 12/12/2013 - 14:12 | 4240312 xxxxx
xxxxx's picture

fonestar come clean. Do you own all of them?

Thu, 12/12/2013 - 10:59 | 4239447 YHC-FTSE
YHC-FTSE's picture

I suspect that figure of 927 individuals owning half of all btcs was calculated by counting accounts.  Since an individual can (and is recommended to) have multiple accounts,  that figure is likely to be much lower. Maybe as low as even a couple of organisations owning half of all btcs (pure conjecture on my part) which would be reflective of the bigger financial markets that are currently dominated,  monopolised and manipulated by the biggest players connected to the government. Again,  pure conjecture but based on experience and typical behaviour of the squids.

Thu, 12/12/2013 - 16:39 | 4240817 BigJim
BigJim's picture

Yes! We know that many of the original researchers into cryptocurrencies work(ed) for the NSA.

We don't know who 'Satoshi' is (or are).

It seems quite likely to me that many of the original bitcoins were mined by the organisation that 'owns' the crypotcurrency researchers - the US government security apparatus.

This 'anonymity' works both ways... actually, no, it's asymmetrical, because the average BTC holder hasn't a fucking clue who else owns them, but the NSA probably has a very good idea.

I like the whole idea of free-market currencies, of which BTC could be a part. But I am deeply suspicious of BTC... there are just too many hints at US government involvement.

Thu, 12/12/2013 - 11:07 | 4239485 AvoidingTaxation
AvoidingTaxation's picture

927 people owns half of all fiat?

927 people owns half of all assets?

Thu, 12/12/2013 - 12:42 | 4239881 antaresteleko
antaresteleko's picture

There is no way to know "how many bitcoins are lost". Therefore I can't give any credibility to the site.

No comment.

Thu, 12/12/2013 - 13:14 | 4240050 InspectorBird
InspectorBird's picture

No No, dont look at reality...   pretty please, belive that bitcoin is not centrilized!!

Thu, 12/12/2013 - 14:01 | 4240280 xxxxx
xxxxx's picture

47 individuals own nearly one-third of all Bitcoins. About 927 people control half the entire currency. There are just over 1 million Bitcoin holders — the vast majority of them own mere crumbs.

Sounds more like a cartel than a free market to me.

Thu, 12/12/2013 - 10:34 | 4239391 fonestar
fonestar's picture

BITCOIN?

Thu, 12/12/2013 - 10:47 | 4239422 bitcoinbear
bitcoinbear's picture

BITCOIN?

Thu, 12/12/2013 - 11:01 | 4239457 forwardho
forwardho's picture

Article posted at 9:34

Fonestar comment 9:34.

Inside information?

Or just a mad obsession?

 

Thu, 12/12/2013 - 11:02 | 4239473 Sixdeuce062
Sixdeuce062's picture

the answer to that would be yes

Thu, 12/12/2013 - 11:07 | 4239486 fonestar
fonestar's picture

Mad obsession.  Bitcoin is the most exciting of all disruptive technologies.  It's hard to understate that fact.

Thu, 12/12/2013 - 11:25 | 4239549 GoldenDragon
GoldenDragon's picture

Not sure it's the most disruptive.  In fact, it doesn't seem to have disrupted anything yet.

But how's this for disruption:  A significant part of the economy is transacted using BitCoins and we have a Carrington event, knocking out power in widespread areas for days, weeks, months or even years.

Transactions grind to halt.  Wallets are wiped out.

Of course this would be disruptive regardless of any currency we use, but using a digital one will compound the problem.

Thu, 12/12/2013 - 12:44 | 4239882 tmosley
tmosley's picture

That is why you save in PMs and transact over long distances with bitcoins.

Why do people think you can only do one or the other?  Bitcoin isn't a gold killer, it's the DOLLAR killer, and dollars are just as vulnerable to a Carrington event as the bitcoin network.  Actually, that's not true.  Bitcoins are more robust than dollars, because every copy of the blockchain can reseed the entire system, so long as you have a hard copy of your wallet (you DID make a printout of your keys, right?).

As for being the most disruptive, yeah, it will be.  Bitcoin as it is has removed the need for finanical intermediaries for most transactions.  Bitcoin as it could be (ie colored coins/bitcoinx) could REMOVE THE GOVERNMENT FROM ALL MARKETS NOW AND FOREVER.  Yes, that is a real possibility.  Stocks, bonds, wills, property deeds, patents, contracts, practically every type of transaction between two or more people can be carried out using colored coins, at practically zero cost.

Thu, 12/12/2013 - 14:05 | 4240289 Non Passaran
Non Passaran's picture

Dude, none of those things are unique to bitcoin. Any virtual coin can do it. 

Thu, 12/12/2013 - 12:56 | 4239946 jomama
jomama's picture

failstar?

Thu, 12/12/2013 - 10:52 | 4239431 WeekendTrader
WeekendTrader's picture

On bitcoins, gold and fiat:

http://1839assetmanagement.blogspot.com/

 

Thu, 12/12/2013 - 10:54 | 4239436 Madcow
Madcow's picture

Alphacoin, Bitcoin, Litecoin, Feathercoin, Globalcoin ... and a few dozen other cryptocurrencies will no doubt revolutionize the way commerce is conducted on Earth. 

Like any technology revolution, i expect all of these to disappear when they are displaced by a "second generation" of cryptocurrencies.  The technology will get better and better. 

Thu, 12/12/2013 - 11:02 | 4239475 firstdivision
firstdivision's picture

What it will usher in is a clampdown on data transfer between countries as sovereignty is threatened. 

Thu, 12/12/2013 - 11:14 | 4239507 mess nonster
mess nonster's picture

Something tells me that sovereignity is threatened by the 938 people who own all the bitcoin.

How long will it take for 1% to own 90% of bitcoin? Or has that happenned already? 

I'm waiting to hear about the first big bitcoin heist.

Humans are human.

Thu, 12/12/2013 - 13:25 | 4240114 Prisoners_dilemna
Prisoners_dilemna's picture

maybe if you wait another 5 years for faux news to catch up you'll get your list.

Or you can, you know, use google.

https://bitcointalk.org/index.php?topic=83794.0  List of major Bitcoins Heists, Thefts, hacks, Scams, and Losses

 

We track this shit in the community.  Welcome to financial liberty.

Thu, 12/12/2013 - 16:30 | 4240520 Pseudonymous
Pseudonymous's picture

The nice thing about cryptocurrencies is that, like many other voluntary cooperative efforts, and unlike all coercive schemes, they allow for easy, in some cases seamless improvement and transition.

Within organizations such as governments and corporations you have politics, conflicting interests, fear of existing laws and rules and change is slow, and mostly for the worse. You have phenomenons such as seeing people follow the laws or rules, but no way to tell whether they do it out of genuine and fullhearted support for the status quo or simply out of fear of the laws or rules or rulers.

In cooperative efforts, on the other hand, if someone proposes something objectively beneficial and fair, everyone has the incentive to participate in it and so improvements get accepted more easily. You can also have genuine competition.

With cryptocurrencies each user, be it a wallet holder or a miner, has the freedom to make some modifications to the source code or protocol that would still have to be compatible with other users' software in order to participate in the same blockchain that the majority recognizes. That allows for adding some relatively minor features (not related to major aspects such as how fast can bitcoins be produced) that are not supported by the reference client (e.g. ability to include a refund address or other useful information to a transaction, which will hopefully soon be officially supported according to this and this without the need for an inefficient workaround hack).

Some alternative cryptocurrencies and other blockchain based projects, a.k.a. alternative chains (e.g. NameCoin, a peer-to-peer, alternative distributed DNS) utilize the computing power that powers Bitcoin, thanks to so-called merged mining. This means that alternatives to Bitcoin can theoretically start off with all the mining infrastructure that already exists and works for Bitcoin. This includes benefits such as, most importantly, security against a 51% attack and a bunch of other threats, and also interconnectedness, global distribution of the newly mined currency units, if any, etc. Miners would take the rewards from all currencies that they mine at the same time with merged mining. So anyone who is thinking of investing in Bitcoin mining but is worried about a new cryptocurrency replacing Bitcoin, shouldn't be, because chances are future competitors will want to utilize the existing infrastructure by supporting merged mining. Merged mining is mutually beneficial.

It is possible to have an alternative currency support secure peer to peer exchange transactions with other cryptocurrencies. For example, alternative currency A can have in its design the ability for users to securely exchange units of currency A for bitcoins. One way it can be done that comes to mind is to have in the alternative currency A a transaction type called "Exchange", and a rule that transactions of type "Exchange" are considered valid conditional on another transaction in the Bitcoin blockchain being completed. This is not hard to do technically. So you can have crypto-to-crypto exchanges that are fully peer-to-peer, which means distributed, decentralized, pseudonymous (potentially anonymous) and totally out of the reach of fascists.

An alternative cryptocurrency can use the latest state of the Bitcoin blockchain for its initial distribution of currency. You see, when Bitcoin was created, there was the challenge (one of many) of how to distribute the new currency units fairly, and so the mixed mining reward scheme was invented - miners initially were rewarded solely with the newly created currency units, very slowly transitioning towards transaction fees as the sole reward and end to currency creation. If that problem of fair initial distribution didn't exist, transaction fees could have been used from the beginning. If a proposed future alternative currency deems that a state of the Bitcoin blockchain, present or past, represents a fair distribution of currency, that state can be used for the initial distribution of the alternative currency (after which the two chains take on different paths). To give you an example, if I have 1 bitcoin today and if alternative currency A uses this scheme and starts tomorrow, in effect tomorrow I will have both 1 bitcoin and 1 A unit. I could then keep the balances in both currencies, or exchange the 1 bitcoin into units of A (or vice versa). Users will use the same private key that they already have with their Bitcoin wallet also with their currency A wallet. Even Bitcoin users who don't know or care about currency A will have coins waiting for them in the blockchain of currency A. That's one more way you can have seamless transition between cryptocurrencies.

Those are some ways in which Bitcoin can be fully replaced with something better and very different, with the early adopters potentially keeping most or all of the benefit that they have rightfully deserved by recognizing and supporting a valuable cooperative effort early on.

Thu, 12/12/2013 - 10:58 | 4239452 Agent P
Agent P's picture

"May 2011 was the peak for trailing 28 day returns at 853%.  The last peak was 11/30/2013 at 479%."

If you want to know why people are so interested in bitcoin, look no further than the statement above.  The general public could give two shits about an "alternate currency", all they're looking for is a winning lottery ticket, and bitcoin returns have been getting a lot of mainstream airplay recently.  This too shall pass. 

 

Thu, 12/12/2013 - 11:26 | 4239557 my_nym
my_nym's picture

You mean like the people investing in the "lottery ticket" aspects of gold while fantasizing about the apocalypse/revelation of the value of the dollar?  I'd like to invest in tumult, calamity, despair and starvation too.  Just kidding. 

I guess you're right to contrast people that don't want to make money with those that do, as many ZHers seem to be losing money while saying "FU" to the banksters all the way down.  You can fantasize about the next inevitable collapse as you like.  But that's an increasingly expensive "FU" to the banksters in the meantime.  Shrug.  If you can afford that form of entertainment then knock yourself out, I guess.    

I actually own PM.  But I don't look forward to apocalyptic scenarios as a result or expect to make much of a profit on it if those scenarios ever did come about.  In contrast, it's been relatively easy to make a profit on Bitcoin and I don't have to hope for apocalyptic events, tumult, despair and starvation in order to do it.  Shrug.  Perspectives vary... I guess.    

Thu, 12/12/2013 - 11:45 | 4239623 Agent P
Agent P's picture

I said nothing of collapse nor precious metals.  My comment was solely focused on the recent wave of public interest in bitcoin, and that is the endless desire to effortlessly get rich quick in this country.  Way too much time spent on fantasy outcomes such as this vs. applying real effort toward build long-term wealth and security in this country IMHO.  

Thu, 12/12/2013 - 16:38 | 4240826 Pseudonymous
Pseudonymous's picture

Not necessarily. Bitcoin can be (and indeed has been so far) valuable to society while it exists and seamlessly transition to something better whenever its time passes and that better thing emerges, all with no drama, bankruptcies, finger-pointing, hyperinflation or destruction of trust.

Thu, 12/12/2013 - 11:00 | 4239456 itchy166
itchy166's picture

Not a bad article, yet I still don't understand why everyone believes bitcoin transactions are so traceable. 

Could I not have a paper wallet with 1 Bitcoin in it and just give it to you? Or fax it? 

A Bitcoin transaction does not need to hit the blockchain if you don't want it to. 

Also, could you not set up an online wallet, and then give your password to someone else? Untraceable that ownership changed hands. 

 

Thu, 12/12/2013 - 11:15 | 4239516 mess nonster
mess nonster's picture

What you're saying makes sense. I could print out the bitcoin transaction with the private key code and give that peice of paper to someone else as a payment. All they wold have to do is type in the infop and the bitcoin would be theirs, untraceable. Or, they could trade the peice of paper again to someone else, and so forth... this is how bitcoin could become currency.

Thu, 12/12/2013 - 11:43 | 4239621 TheHound73
TheHound73's picture

I would secretly keep a copy of the private key and broadcast a transaction to one of my other addresses once you were out of rifle range.

Thu, 12/12/2013 - 11:54 | 4239654 Debugas
Debugas's picture

you can give to me your bitcoin written on paper (as a number) but I, in order to check if you have not given the same bitcoin to someone else a moment ago, I will have to connect to the bitcoin community and ask them to share bitcoin transactions ledger with me and then register our bitcoin transfer into that ledger

Thu, 12/12/2013 - 12:33 | 4239830 itchy166
itchy166's picture

If you dont know me, or trust me yes.  But a simple check of the wallet balance would be sufficient if you know me. Use your imagination, I can think of many scenorios where you wouldn't need to register the transaction.

 

Thu, 12/12/2013 - 13:58 | 4240276 Non Passaran
Non Passaran's picture

Offline wallet doesn't tell you how many good bitcoins/satoshis you have in it.

Thu, 12/12/2013 - 11:01 | 4239463 YHC-FTSE
YHC-FTSE's picture

You know there's something afoot when pension fund managers start waxing lyrical about bitcoin. Enough said.

Thu, 12/12/2013 - 11:19 | 4239526 Ness.
Ness.'s picture

They are looking for +ROI, that is all.  If UST provided a reasonable return pension funds wouldn't need to look for yield outside of their traditional investment strategies.

 

 

Thu, 12/12/2013 - 13:30 | 4240146 Prisoners_dilemna
Prisoners_dilemna's picture

+1

 

rats jumping ship onto whatever floats is the correct answer.

in my fantasy anyway.

Thu, 12/12/2013 - 13:27 | 4240125 Exponere Mendaces
Exponere Mendaces's picture

Love the double-standard here.

When the financial markets don't recognize Bitcoin, that's because its a "fraud" or a "ponzi". But when say, Fidelity decides to place Bitcoins in IRAs, then it means they're "in bed" with Bitcoin, and it was a big 'ol conspiracy all along.

Make up your minds, you barking seal trolls. You can't have it both ways and not look like complete idiots.

Thu, 12/12/2013 - 13:44 | 4240211 xxxxx
xxxxx's picture

Wallstreet embracing bitcoin means nothing. Those whores would package hourseshit and bring it to market if they could, Remember pets.com.

Thu, 12/12/2013 - 19:35 | 4241533 YHC-FTSE
YHC-FTSE's picture

I don't know why you replied to me with that shit. I have NOT ONCE called BTC a ponzi, in fact the very first time I ever posted on the subject I wrote that it does not look like one. 

My criticism has been consistent: That it may have technical limitations and that it may be open to manipulation.  If you have to lie and exaggerate to make your point, people will soon tag you for the nasty little bullshitter you personify online. 

You obviously haven't a clue about the history of incredible ineptitude in the pension funds and the shortfalls many of them are facing.  BTC could be the "computer glitch" excuse they are all looking for to explain their failures, geddit?

Thu, 12/12/2013 - 11:04 | 4239474 Hanging Harry
Hanging Harry's picture

If hackers don't kill bitcoin then the world governments will.  Does anybody really think that the Fed would allow anything other than the dollar to function as legal tender.  At some point bitcoin will get big enough to worry the Government (Fed, Treasury, law enforcement, Commerce, etc) and they'll do the same that happened to holding gold in the '30s.  AND, in this case unlike gold, nobody will be around to buy them from you at a reasonable price.

Thu, 12/12/2013 - 11:09 | 4239491 TheHound73
TheHound73's picture

Yeah, you should probably just stick with your winning strategy. Ever thought of leaving the States while you still have a chance?

Thu, 12/12/2013 - 11:15 | 4239510 TheFreeLance
TheFreeLance's picture

Again, competing currencies are illegal in the US right NOW. US Treas views Bitcoin as a "money service" exactly like ZH described a Money Gram, not a currency.

Go ready the DOJ press release in the Liberty Dollar prosecution -- seigniorage is a sovereign right of the federal government not to be usurped by anyone with a printing press or a Bitcoin rig.

Thu, 12/12/2013 - 13:35 | 4240171 xxxxx
xxxxx's picture

As long as bitcoin can say it's a money transmission service ok. Bitcoin is saying it's a currency. The SHTF if physical encrypted coins like they show pictures of start circulating in the economy. Clear physical evidence of seigniorage. Perhaps they could get away with calling them tokens not sure how that would go over.

Thu, 12/12/2013 - 13:33 | 4240153 Prisoners_dilemna
Prisoners_dilemna's picture

If people can't secure their own money then they will cry for world governments to do it for them.   There fixed it for ya...

 

Many people aren't prepared for the responsibility that comes with liberty.

They will be slaughtered.

Thu, 12/12/2013 - 11:05 | 4239483 TheHound73
TheHound73's picture
U.S. Government Nastygram Shuts Down One-Man Bitcoin Mint

http://www.wired.com/wiredenterprise/2013/12/casascius/

Evidently, sending him bitcoin in return for a physical bitcoin constitutes Money Transmitting/Laundering or some such bullshit.

Thu, 12/12/2013 - 11:57 | 4239662 itchy166
itchy166's picture

His "coins" are untraceable if they circulate (like I was saying above), is that not true? Maybe that is why they are worried.  An indication that they want every transaction to be registered on the blockchain perhaps?

 

Thu, 12/12/2013 - 14:44 | 4240429 Prisoners_dilemna
Prisoners_dilemna's picture

With that kind of wanton speculation....

I'd of thought you'd be all about buying some BTC.

 

Have you been checked for bi-polarity?

Thu, 12/12/2013 - 11:05 | 4239484 Kina
Kina's picture

Bitcoin is far too volatile to a too large degree to be considered a safe anything....AND it would be totally irresponsible to advise somebody to 'invest' in bitcoin, especially given it short and unproven history...and its added complexity in comparison to fiat or bullion.

Or are the fans here telling me to drop a few hundred grand into bitcoin, because it will be a great money maker no sweat?

Also too little attention is paid to its fundamental weakness in being platform computer electricity network data dependent. It does no good to not take this into account.

 

To be used as an alternate way to buy and sell things it has to stabalise and not have people worry that 5 minutes after buying or accepting bitcoin it drops $200 in value. It may become an additional way to hold money, in some small percentage.

Love to see the strongest fans put ALL their money into bitcoin if they are so damn sure of it...then put your money all in.

 

Even in all my investments I only have at the moment have 18% in bullion.

Thu, 12/12/2013 - 11:11 | 4239500 TheHound73
TheHound73's picture

Nah, just drop some lunch money on it.  Whatever YOU are comfortable with, or nothing if that floats your boat.  Nobody cares.

Thu, 12/12/2013 - 11:17 | 4239519 rustymason
rustymason's picture

Bitcoin to an outsider looks like the equivalent of buying and selling some crazy stock that has no intrinsic value. Such as Facebook. Or General Motors.

Thu, 12/12/2013 - 11:32 | 4239581 my_nym
my_nym's picture

Value is contextual. 

Gold has no intrinsic value without the context of the yellow brick road that leads to the Wizard of Oz.

Or look at the poppy fields next to the yellow brick road... how much is gold worth to a heroin addict that needs some hopium?  Nothing.  Unless it can be exchanged for what they want, then it might be worth the world.  

Thu, 12/12/2013 - 12:45 | 4239891 tmosley
tmosley's picture

An outsider who never had to use Western Union or bypass currency controls, I guess.

Thu, 12/12/2013 - 12:47 | 4239892 firstdivision
firstdivision's picture

Corporate Paper : Equities :: Gold/Silver : BitCoin

Thu, 12/12/2013 - 11:19 | 4239532 swmnguy
swmnguy's picture

I wonder if, in 30 years, Bitcoin will be remembered as the Tandy 1000 or Commodore 64 of electronic currencies.  I don't doubt this is the way we are heading, at all.  But I do wonder if an alternate currency can catch on when it's so complicated for the average person, who is the one whose faith is required for it to succeed.

And having grown up on a farm, I don't fully trust anything that doesn't work when the power goes out.

Thu, 12/12/2013 - 11:39 | 4239607 my_nym
my_nym's picture

And having grown up on a farm, I don't fully trust anything that doesn't work when the power goes out.

 

Fair enough.

Although banks and ATMs won't work if the power goes out, yet most people store their money there in digital form.  If you're actually beginning to make investment decisions based on scenarios in which the power is on or off in a nation then it's probably time to take another look at things.  Given how likely it is that people will continue to figure out ways of keeping their lights on for the foreseable future. 

Thu, 12/12/2013 - 12:33 | 4239829 swmnguy
swmnguy's picture

Oh, I'll grant you all that.  People store their money in those ways because it's been made pretty easy.  It used to be easier, but it's still easier if only by experience than Bitcoin is for the average person.  I'm capable of figuring out some pretty complex things if I need to, but I still feel more comfortable with the various forms of physical, analog money I can access and use in a blackout, should I need to.  If I couldn't go a month or two without access to those digital storage methods, and still maintain my household, I'd be pretty nervous.  Once an alternative digital currency can do that for me, I for one would be more comfortable with it.  In our current global economy, it's quite possible the idea of national units of currency will be seen as inconveniently outdated.  Kind of like national laws are for those with enough clout and supranational presence.

And I can't believe Bitcoin is any less susceptible to manipulation than any form of fiat currency.  I realize Bitcoin is more on the order of a currency than actual money and I don't think that's a problem.  I find the US Dollar to be heavily manipulated, and that's right out in the open where I can see it (as is the price of Au, Ag, oil, etc.).   If and when Bitcoin or another alternative digital currency really takes hold among a critical mass of users, I can't imagine we won't hear about ways that too is being manipulated.  An issue not unfamiliar to Roman citizens 1800 years ago, who didn't even use digits much less a decimal point or zero; hence nothing digital.  That's not Bitcoin's flaw.  But I can't believe human mischievous ingenuity couldn't pull it off.

Thu, 12/12/2013 - 13:32 | 4240149 dark pools of soros
dark pools of soros's picture

then get off the internet ....   seems all these 1817 waybackers hate all tech except their little comment blocks

Thu, 12/12/2013 - 13:45 | 4240209 Prisoners_dilemna
Prisoners_dilemna's picture

It seems you've done an awesome job of comprehending ZH comments on BTC.

No wonder you're confused and "can't believe".

https://en.bitcoin.it/wiki/Main_Page

or

Bitcointalk.org

Go read that instead of ZH for a while. Ask questions on that forum when you don't understand.

Come back in a week and tell us about your conversion.

Right now your learning about sex from your under age peers. Go talk to some adults.

 

Thu, 12/12/2013 - 13:27 | 4240134 Exponere Mendaces
Exponere Mendaces's picture

@symnguy

Better throw out your computer then, because that doesn't work when the pwoer goes out, you luddite.

Thu, 12/12/2013 - 15:52 | 4240681 akak
akak's picture

You are such a fucking arrogant idiot.

Recognizing the limitations of something does not automatically equate to "hating" it.

What are you, 14 years old?

Go pop some zits and shut the fuck up.

Do NOT follow this link or you will be banned from the site!