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Russia's Largest Bank Proposes Bitcoin Alternative

Tyler Durden's picture




 

Hot on the heels of JPMorgan's "web cash" developments in the virtual currency arena, the CEO of Russia largest bank - Sberbank - appears to be looking for alternatives...

  • *SBERBANK CEO GREF SAYS FUTURE BELONGS TO VIRTUAL CURRENCIES
  • *GREF SAYS DEVELOPMENT OF VIRTUAL CURRENCIES 'CAN'T BE STOPPED'
  • *SBERBANK CEO CALLS FOR GREATER REGULATION OF VIRTUAL CURRENCIES
  • *SBERBANK MAY FORM OWN VIRTUAL CURRENCY ON BASIS OF YANDEX MONEY

When a pseudonymous 'Japanese' coder creates a crypto-currency that gains acceptance among thousands of vendors, it's dismissed by the powers-that-be and called a ponzi scheme by the MSM. One wonders what happens when the largest banks of the US and Russia sanction the 'idea' of a decentralized, unregulated, 'money' transfer system.

Via Bloomberg,

“We are at a new stage of technological development. I can’t imagine how it can be stopped,” Sberbank CEO Herman Gref tells reporters in Moscow.

 

Gref says virtual currencies need greater regulation

 

“These experiments must end in one or two crashes” before virtual currencies become firmly established, Gref says

 

Says Yandex Money isn’t “a currency but it’s a first step in that direction”

 

Of course, the difference is - the banks want to own it...

 

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Fri, 12/13/2013 - 10:57 | 4243204 fonestar
fonestar's picture

BITCOIN!!

(The banks want to own it, they can't own it)

Fri, 12/13/2013 - 10:56 | 4243212 Dear Infinity
Fri, 12/13/2013 - 10:59 | 4243222 CH1
CH1's picture

More legitimacy for BTC. :)

Fri, 12/13/2013 - 11:01 | 4243232 Pladizow
Pladizow's picture

CommiCoin, RedCoin, RuskyCoin, PutinCoin, KGBCoin?

Fri, 12/13/2013 - 11:02 | 4243238 CH1
CH1's picture

Maybe, but they'll have to compete for users.

Fri, 12/13/2013 - 11:18 | 4243280 Occident Mortal
Occident Mortal's picture

This guy doesn't want Bitcoin, he wants their own virtual currency. YANDEX money, whatever the hell that is.

 

Therein lies the problem.

 

It is the same as the dotcom problem, the cost of competing with an incumbent is extremely low.

 

Soon there will be thousands, millions of different virtual currencies all competing with each other, all equally worthless.

 

The only value Bitcoin has is it's brand. That is it. That's the only thing that makes it more valuable than Litecoin, or namecoin or YANDEX money.

Fri, 12/13/2013 - 11:25 | 4243326 Prisoners_dilemna
Prisoners_dilemna's picture

Respectfully  I disagree,

Value of an object relates to the utility of an object.

We value air, water, blow jobs, and muscle cars differently based on how much we need it.

Price reflects utility combined with scarcity.

Air is everywhere so we don't pay for it, yet. Same with water.

Muscle cars and BJ's       well we know those can command a high and a UBER-HIGH price.

 

Whats the brand of water and blowjob you use?

Fri, 12/13/2013 - 11:36 | 4243356 Occident Mortal
Occident Mortal's picture

You are confusing value with price.

 

The value of water is high it has extremely high utility, yet the price is low.

Same with air.

 

How much you value something and what you are willing to pay for it are not really connected.

 

How much do you value your watch? More than you value the air you breath?

Which are you willing to pay more for?

 

 

Fri, 12/13/2013 - 12:05 | 4243450 i-dog
i-dog's picture

No matter how many xxxCoins are launched, here is where the focus of the BIS (and eBay, etc) will be:

*SBERBANK CEO CALLS FOR GREATER REGULATION OF VIRTUAL CURRENCIES

Problem...reaction...solution.

Fri, 12/13/2013 - 13:31 | 4243756 Oracle of Kypseli
Oracle of Kypseli's picture

Lots of noise about digital cryptocurrencies. My take is that now that most people realize how the curent currencies work, the banks want to jump on the digital currencies which are only understood by the few to muddy the waters and continue their cleptocracy.

PM's, rare earths, fertilizer, water, arrable land and self sustaining communities have the best chance to thrive. Everything else is fudgeable.  

Fri, 12/13/2013 - 16:03 | 4244321 dark pools of soros
dark pools of soros's picture

get off the internet and I will take your stance more seriously

Fri, 12/13/2013 - 12:32 | 4243537 fonestar
fonestar's picture

Worst case scenarios for spending $20 on Bitcoin:

 

- You help break the bankster's monopoly on money

- You learn about cryptography and p2p networking

- You own the strongest currency on Earth

- You own more Bitcoin than almost everyone on Earth

- You screw it up or have your BTC stolen and lose $20

Fri, 12/13/2013 - 12:40 | 4243572 snr-moment
snr-moment's picture

Couldn't agree more.

 

And once it gets down to realistic value, I'll buy 4 or 5 for 20$

But in the meantime, hell yeah, let all the fools rush out and buy up the competitors  Morons!

Fri, 12/13/2013 - 13:37 | 4243761 DoChenRollingBearing
DoChenRollingBearing's picture

Here is some of the math behind Bitcoin, it is extraordinarliy complicated (and since the inventors evidently gave their BTC Ecosystem a lot of thought), but I provide an overview.

Thanks very much to three people I do not even pesonally know: "Bitcoin Insider", and ZH-ers "zaphod" and "Prisoners_dilemna" (latter wrote a Comment just above).

"Fun With Bitcoin for Beginners: Part Four"

(Note: tinyurl's service uses a "hash function" to reduce the size of a link!)

http://tinyurl.com/lq667xz

Fri, 12/13/2013 - 13:48 | 4243809 fonestar
fonestar's picture

Great blog, thanks!

Fri, 12/13/2013 - 13:58 | 4243850 DoChenRollingBearing
DoChenRollingBearing's picture

The thanks, really, go to Zero Hedge and those who encouraged me to look into BTC.  Your envangelizing, "Original Donor's" gift to me, "Bitcoin Insider's" help as well as the two Zero Hedge members I mentioned above.

And even CH1, who has long suffered the slings & arrows of tough attacks.

Also tmosley, whom I have long "known", he is a scientist and I have NEVER caught him in a lie or untruth that I noted.  

I have long been a gold stacker (since the 1980s).

Fri, 12/13/2013 - 14:05 | 4243875 fonestar
fonestar's picture

It sounds like you are having fun with BTC and that's what it should be about.  After a few centuries of central banking tedium we could all do with some levity.  I really enjoy the humour of the Bitcoin and open source communities.

Fri, 12/13/2013 - 16:09 | 4244333 dark pools of soros
dark pools of soros's picture

ZH purged all the old comments (probably to comply with the new anti-anti-whatever) but you would of had plenty of good posts on bitcoin last spring to peruse

 

 

 

Sat, 12/14/2013 - 12:02 | 4246397 funthea
funthea's picture

If half of all bitcoins are held by less thatn 1000 people, doesn't that inherently make for a very scetchy and caotic environment? What happens if a large holder spends a very large chunk? Seems a bit dangerous. Seams for it to be most stable would require much less concentration among so few.

In utopian bitcoinland, how is this reconciled? Or has no one given it much thought? Rather dangerous to have individuals with more wealth than entire countries. This is why it won't happen. When the price rises to a certain limit, as to bar the entry for most, the top holders will facilitate an exidous that will in like way facilitate a cascade that will redistribute the bitcoin among the masses once the fall and discussion have run their course. Then and only then will their be stability in bitcoin and will it find a legitimate grounding.

Fri, 12/13/2013 - 13:55 | 4243836 TwoCats
TwoCats's picture

Good luck with that.  Last crash bottomed at $50, I expect the next one to bottom above $200.  In the early stages, BTC price is driven by adoption/acceptance, which has only grown over the last 12 months worldwide.

If bitcoin is ever under $100 again (excepting possible flash crashes due to lack of liquidity in a particular exchange), it will be dying, TPTB will have beaten it underground.

Fri, 12/13/2013 - 14:21 | 4243965 fonestar
fonestar's picture

I don't know how many "dollars" Bitcoin should be worth.  I don't care too much about dollars.  I don't remember my name before I was born either.

Sat, 12/14/2013 - 12:10 | 4246415 funthea
funthea's picture

Bitcoin could find a legitimate hold that TPTB could not touch. However, as mentioned above, it would need to crash hard enough to break up the concentrations that exist to be good for the people. For if it doesn't crash and redistribute, the concentration of power over time would be worse than what we have now. No, I am no socialist by any means, but if bitcoin is to survive for the people, and the good of the people, it can not have these levels of concentration. It would need to be distributed. Failure to see this, will have dire consequences.

Fri, 12/13/2013 - 13:47 | 4243805 silverserfer
silverserfer's picture

you could have bought an oz of silver and slept better at night knowing your not one of the dumbfuck bitcoin brigade marching their way to the slaughterhouse. 

that is the worst case sceneario for wasting $20 on bitcoin thinking you are investing or saving.  

Fri, 12/13/2013 - 13:58 | 4243847 fonestar
fonestar's picture

Face it, you don't understand what the hell you are talking about.  You don't know what a "Bitcoin" even is.  Is it a thing?  Is it a network?  Is it a program?  Is it a currency?  Is it a protocol?  You are far out of your depth but rather than invest the time in learning you'd rather spread FUD.

Fri, 12/13/2013 - 14:41 | 4244038 silverserfer
silverserfer's picture

I know exactly what the bicoin system is. It is a manuifestation of new money being introduced into the system to distract the masses and soak up wealth. We differ on the view that these digital currencies are in a free market from central banks. Its just all new QE that is drawing in people. 

Only a fool believes that a digital currency is going to free them from fiat ponzi's. They are fiat ponzis!

Fri, 12/13/2013 - 14:00 | 4243848 ElvisDog
ElvisDog's picture

Seriously, I could make a better argument for spending that $20 on lottery tickets. 

I love analogies, so here's another one. Bitcoin is like Netscape (you youngsters probably never heard of it). They came out first, were gonna take over the world, then the establishment (Microsoft) moved in and used their greater resources to squeeze the life out of Netscape. Same thing will happen with bitcoin vis-a-vis all the central bank created digital currency replicas. 

Fri, 12/13/2013 - 14:00 | 4243857 fonestar
fonestar's picture

How would you know how old I am?  You think that Bitcoin users are young?  ROTFL!

I guess you are a dog so I can pardon you not understanding.

Fri, 12/13/2013 - 14:08 | 4243889 NidStyles
NidStyles's picture

It seems only the young and Socialists are the ones that in support of it. The rest of the people are aware that Bitcoin is nothing new, and that it like Beanie Babies is only a fad.

Fri, 12/13/2013 - 14:30 | 4243930 fonestar
fonestar's picture

Socialists?  Are you f*cking kidding me idiot?  Bitcoin is the embodiment of anarcho-capitalism and FYI here in Canada members on cbc.ca (which is very much a socialist website) are scared of Bitcoin, one user even commenting "Bitcoin could become the currency of freemen and the American Tea Party".

And most Bitcoin users are very old like myself.

Sat, 12/14/2013 - 12:19 | 4246431 funthea
funthea's picture

fonestar, what is your take on the notion of the massive concentration of bitcoin among so few? How do you see that playing out?

Fri, 12/13/2013 - 14:11 | 4243913 ElvisDog
ElvisDog's picture

Well, not you fonestar, but there is another bitcoin-ista on ZH who is constantly laying down age-related smack on how old people can't understand the unicorn-crapping-skittles that is bitcoin.

Fri, 12/13/2013 - 14:20 | 4243959 fonestar
fonestar's picture

fonestar is dated back close to UNIX epoch time, outdates the first BBSs and even he grasps Bitcoin.

Fri, 12/13/2013 - 14:30 | 4244000 Prisoners_dilemna
Prisoners_dilemna's picture

PD's word choice was poor to be sure

What PD should've said was

Some dogs cant learn new tricks, so they bark out what they know

Fri, 12/13/2013 - 14:12 | 4243920 outamyeffinway
outamyeffinway's picture

Netscape=Firefox

BTC=FutureCoin

Apples=Oranges

Fri, 12/13/2013 - 15:12 | 4244149 BitStorm
BitStorm's picture

Sad panda.

How does it feel that the bastard stepchild crypto "Litecoin" passed silver, and is now over 30$?

All negative ratings for you, sad panda.

Fri, 12/13/2013 - 13:45 | 4243801 Skin666
Skin666's picture

Marginal Utility.

 

Utility is determined at the margin.

 

See Carl Menger for further reading

Fri, 12/13/2013 - 14:34 | 4243975 Prisoners_dilemna
Prisoners_dilemna's picture

I dont think you included the concept of scarcity in your calculation though.

Water has high utility but it is not scarce. And I suggest that if water is scarce then it will command a higher price relative to prices where water is plentiful.

Value and price are connected but the 3rd factor is how scarce is the item.

Rolexs are more scarce than air and water. So I will pay more for my watch. Anyone can get air. Why would I pay you for air. But I will pay you for that rare rolex watch that not every one else can have.

And I'll pay for the model that comes with the rolex and get bj's!

I'll pay for that!

Fri, 12/13/2013 - 11:55 | 4243425 oddjob
oddjob's picture

The price of muscle cars has nothing to do with use and more to do with cheap HELOC's.

Fri, 12/13/2013 - 11:27 | 4243327 Bunga Bunga
Bunga Bunga's picture

So the number of nodes and the hashing power of the network doesn't matter? It's like saying in 1875, we would get millions of competing phone networks.

Fri, 12/13/2013 - 11:41 | 4243371 Occident Mortal
Occident Mortal's picture

Actually the greater the hashing power of the Bitcoin network the more WORTHLESS Bitcoins are.

 

Fri, 12/13/2013 - 11:43 | 4243376 fonestar
fonestar's picture

Wrong.  If Bitcoin was worthless we would see the price in dollars falling.

Fri, 12/13/2013 - 11:47 | 4243390 Occident Mortal
Occident Mortal's picture

Then you must believe fiat money is not worthless either.

Fri, 12/13/2013 - 12:01 | 4243433 Buckaroo Banzai
Buckaroo Banzai's picture

Of course not. As long as people keep using it, it has real value. Of course, it has much MORE value to the people who print it. And LESS value to the people who are forced to accept it.

Remember: the more they print, the more it is worth to the printers, because they use it to steal from you.

Fri, 12/13/2013 - 12:19 | 4243505 fonestar
fonestar's picture

Because I don't agree with it does not make it worthless.  It will become worthless but in the meantime you can still trade it for things of value.

Fri, 12/13/2013 - 13:36 | 4243766 Kirk2NCC1701
Kirk2NCC1701's picture

fonestar, I'm somewhat puzzled at your ardent and almost incessant "promotion" of bitcoin, but not in your response to me in wanting to buy some from you.

Where exactly is your angle or profit in all this "Jelling" if you're not literally "Selling"?  Kindly RSVP.  You have my email address.

Fri, 12/13/2013 - 14:06 | 4243879 fonestar
fonestar's picture

Hey sorry for not getting back to you!   I have multiple emails and don't check that one often....

Fri, 12/13/2013 - 11:51 | 4243402 chemystical
chemystical's picture

the salient difference is that a million competing phone networks have significant barrier to entry.  for practical purposes cryptocurrency has none.  perhaps the OP might have temporarily satisfiued you by adding that Btc's value rests primarily on brand but also on network. 

The value of the network, however, is practically nil because it is not proprietary.  A million competing phone companies cannot build or lease the required infrastructure network for free (else you'd have your own, and I'm quite certain that you do not own a satellite or thousands of cell towers or relays etc). 

Cryptocurrency networks, on the other hand, rely almost solely on the end users to establish a network.  (A network without nodes is a voice in the wilderness).  Hence, non-proprietary, hence no barrier to entry when competing for YOU to participate in and thusly enhance THEIR network.  Well, no barrier except for...brand aka hype aka marketing. 

The winner that emerges in the near term (if indeed one emerges) will be the one that has the most sucessful marketing.  The OP was spot on.

Fri, 12/13/2013 - 12:01 | 4243438 Buckaroo Banzai
Buckaroo Banzai's picture

Nope. Your premise is faulty. The internet is not proprietary, yet we can all agree it is incredibly valuable to those that use it.

Fri, 12/13/2013 - 22:06 | 4245527 chemystical
chemystical's picture

with all due respect, your reading of my post was faulty. 

nowhere did i mention the internet.  the network to which i referred (and stated more than once) is the network of users.  HOW they network is irrelevant to the thesis.  Merchants and buyers can use carrier pigeons and smoke signals for all I care.  That was not the point.

Your argument requires that I implied or stated that the internet is the ONLY way for them to network. 

What IS non-proprietary is cryptocurrencies themselves on a practicable level.   THAT was my argument.  Apologies if that was not clearer.  

Yes, I'm aware that some cryptos have been granted patent.  I've read a few of the patents, and don't see anything that excludes other cryptos from imitating Btc dowen to the finest detail.  In fact I lunched last week with one of our IP counsel and she didn't believe that the patents I showed her were even enforceable.  As the holder of significant IP from a previous life, the licensee of a few more, and the assignor (regretably for my wallet) of dozens more, I'm well aware that being granted a patent is one thing, and that prevailing in an infringement case is another thing altogether.

 

Fri, 12/13/2013 - 14:42 | 4244037 Prisoners_dilemna
Prisoners_dilemna's picture

Marketing will play a role to be sure.

But won't utility as well.

You are free to choose which coin you want to use as money. No one can force you to use any particular coin.

At this point in time anyway. What are TPTB capable of in this realm? That's unknown to us because it hasn't happened yet.

What we do know is the bitcoin protocol anyway is open source and in todays reality uses secure encryption. For today we have a usable payment network/currency that isn't controlled by any central issuer. It is virtually akin to gold.

And for today you are free and at liberty to choose for yourself which one you will use.

Maybe that will be the deciding factor in which coin rises to the top.

I believe BTC will rise and lead to liberty in the physical, not virtual realm.

Fri, 12/13/2013 - 11:49 | 4243392 daemon
daemon's picture

" Soon there will be thousands, millions of different virtual currencies all competing with each other, all equally worthless. "

Possible, but one of them may be created and privileged by "high level" actors outside the US and replace the dollar . And "keep it's value" .

Fri, 12/13/2013 - 14:43 | 4244053 Prisoners_dilemna
Prisoners_dilemna's picture

DollarCoin

 

The Daemon Prohpecies

Fri, 12/13/2013 - 15:10 | 4244125 daemon
daemon's picture

 

 

" DollarCoin "

I don't know . But if had to imagine a name reflecting the origin of such a currency, I would more likely bet on a hybridization of some "DigitalRuble" and "DigitalRenminbi", for example . 

 

" The Daemon Prohpecies "

Uh ..., let 's simply say that the time is ripe for some change , and there may be some possibility in that direction .

Fri, 12/13/2013 - 12:31 | 4243515 TeamDepends
TeamDepends's picture

Complimentary virtual toaster or Spiderman towel with every new account.

Fri, 12/13/2013 - 13:36 | 4243769 debtor of last ...
debtor of last resort's picture

Everyone's afraid for a new Crypto reserve currency....

Fri, 12/13/2013 - 11:06 | 4243250 kralizec
kralizec's picture

GazpromCoin

Fri, 12/13/2013 - 11:15 | 4243282 SWRichmond
SWRichmond's picture

Bare-chested, rifle-toting coin.

Fri, 12/13/2013 - 11:30 | 4243342 Groundhog Day
Groundhog Day's picture

I guess i'll have to take a loss on my gold and silver and just convert it to a crypto currency cuz it's safer and can never be meddled with....ok fonestar you win.  we'll have to let all the .gov agencies just track everything we do and tax us to death.....BUT al least they won't be able to dilute our virtual wallet...ppphhhewww

Fri, 12/13/2013 - 11:37 | 4243353 fonestar
fonestar's picture

Right, because you need to choose between throwing your life savings all into gold or throwing your life savings all into Bitcoin.  Any more dumb ideas?

Fri, 12/13/2013 - 12:54 | 4243642 BitStorm
BitStorm's picture

Gold reacts to wallet.dat the same way matter reacts with anti-matter. Didn't you know that? I keep my paper wallets and USB drives in a lead box so that a stray atom of gold won't collide with item.

Oh, and EMP's. I learned that here too.

Fri, 12/13/2013 - 13:00 | 4243667 Non Passaran
Non Passaran's picture

I have no need to hold ANY crypto coin until such time that I need to spend it... which is very rare.
Coins are plentiful and can be obtained at will.

Fri, 12/13/2013 - 14:59 | 4244069 Prisoners_dilemna
Prisoners_dilemna's picture

Or if you need to transfer mass wealth from Wisconsin to Panama.

"I have no need to hold ANY virtual gold until such time that I need to spend it... which is very rare."

If we think of bitcoin as virtual gold, just imagine for a second, virtual gold, then the above sentence strikes us as odd.

 

We do hold honest money, physical gold, until we need to spend it. We spend our dollars before we spend our gold right?

 

The way gold and btc (theoretically right) are supposed to work or can work is as a store of value, because theyre scarce right? And they can act as a store of value especially if we choose to use them as such and a violent government is preventing our free choice.

I agree completely PHYZZ BITCHES!

But I also believe that BTC is Virtual PhyzzTM, that will find parity against all other monies, and that it is a great form of money to possess early. Even if for no other reason that to sit on it while the world adopts it as the most useful and efficient form of free market voluntarily chosen money to ever exist.

Sat, 12/14/2013 - 03:52 | 4246075 TheHound73
TheHound73's picture

I have no need to hold ANY gold coin until such time that I need to spend it... which is very rare.
Gold is plentiful and can be obtained at will.

Fri, 12/13/2013 - 11:06 | 4243242 Ying-Yang
Ying-Yang's picture

good luck with virtual currencies of any kind

I will stick with food, guns and energy

bitchcoin is a stupid idea, barter will win in bad times.

Fri, 12/13/2013 - 11:16 | 4243291 Sam Clemons
Sam Clemons's picture

Aren't all fiat currencies already virtual currencies?

Fri, 12/13/2013 - 11:19 | 4243301 SWRichmond
SWRichmond's picture

Exactly.  See my below.

Fri, 12/13/2013 - 11:18 | 4243300 SWRichmond
SWRichmond's picture

As a transaction medium, Bitcoin is a good concept.  Bitcoin itself has too many glaring flaws, including being too closely held.  Bitcoin isn't money, though it certainly can be and is being used as currency.

It hides behind its digital identify, giving itself the same aura of mysterious value which is the hallmark of central bank debt notes.  Next there will be TV shows on Discovery channel showing us how "special" Bitcoins are and how hard it is tito "mine" them.  Bitcoin fools the masses who don't understand the difference between currency and money, people who think the crap in their wallet is also "money", which it is not.. 

Fri, 12/13/2013 - 12:38 | 4243575 Silver Bully
Silver Bully's picture

"Bitcoin isn't money, though it certainly can be and is being used as currency."

Out of the entire thread of comments on this post, that sentence is the ONLY intelligent thing I have read. NO ONE is paying attention to why bitcoin will not replace the dollar, or in fact, any other fiat currency . . . it isn't money.

So, for those not in the know (again) let's review, class.

What is money?

1. A medium of exchange

2. A store of value

Bitcoin is an extreme actor. It is an incredible medium of exchange since it is pure information. I don't see any other currency that has the potential flexibility that cryptocurrency has.

But it has the equally opposite weakness as a store of value. Sure, you can speculate with it (who isn't these days), but save money with it? Separate the blow off top of bitcoins valued in US dollars for a moment.

What will a bitcoin buy in 5 years?

How about 20 years?

How about when you retire?

Bitcoin is in the middle of a parabolic blow off top. You put your savings in something that is safe, reliable, and maintains its value. A rally like this WILL eventually correct to -5 to -10% of where it started. That is what bubbles do. The only question is when. Are you willing to put your SAVINGS into something that will eventually do this? This is why bitcoin, currently, is a horrendous store of value. And it is constantly ignored and/or missed by many ZHers. Or at least carefully glossed over as they try to get more suckers, er speculators to take their hot little tokens off their hands.

Keep this in mind as you speculate on your interwebz.

Fri, 12/13/2013 - 12:49 | 4243630 Buckaroo Banzai
Buckaroo Banzai's picture

BitCoin isn't a store of value...yet. The market is still trying to put a price on it. It doesn't help that the thing it is being priced against-- dollars-- are, in fact, a shitty store of value.

Frankly, it's the BitCoins that have the real value in this equation. The market is trying to figure out exactly how shitty dollars are in comparison.

Right now, the market is deciding that dollars are very, very shitty compared to BitCoin.

Calling BitCoins a "bubble" obscures the real truth: that dollars are a negative bubble that is finally getting exposed.

I can easily imagine a BitCoin finding a stable price at, say, a million dollars not because BitCoins are so great, but because dollars are really, really fucking worthless as a store of value.

Fri, 12/13/2013 - 12:56 | 4243655 Non Passaran
Non Passaran's picture

Why not any other coin?

Fri, 12/13/2013 - 13:12 | 4243701 Buckaroo Banzai
Buckaroo Banzai's picture

Network effect. BitCoin is the biggest, and the one everyone uses.

That could change, but every day that goes by makes it less and less likely.

Fri, 12/13/2013 - 14:23 | 4243923 dracos_ghost
dracos_ghost's picture

To be fair, BTC are priced in a number of currencies.

It doesn't help that the thing it is being priced against-- dollars-- are, in fact, a shitty store of value.

 I think the Dollar Sucks(it does but so does all the others, see JPY) hyperbole needs a rest even with the reserve currency status argument. The Whole IMF/BIS system is what is at issue here. And I'm not sure the BTC isn't playing right into the hands of an IMF SDR vehicle. Go look up Bretton Woods II proposals since 2008, a BTC like currency system is at the heart of the "New World Financial System". Joke is, it was Greece's LPap calling for immediate implementation.

 

Fri, 12/13/2013 - 14:36 | 4244025 sessinpo
sessinpo's picture

Store of value and medium of exchange are both subject to ones opinion.

For instance, I could be on the side of the road with a flat tire and in great need to get to some other location. You come along with a spare tire that fits my vehicle. Someone else comes along with some bitcoins or even an ounce of gold. Guess what, I will try to trade with you, the one with the spare tire.

As for store of value, again, that requires that others see the same value and thus in present times and future times, that store of value can be used to your benefit. What would happen if you corned the market on bitcoins but then no one wanted them? Your bitcoins become worthless and no store of value and no medium of exchange. This is the same argument for fiat currencies.

 

Bitoins are easily manipulated. EVen the creaters said that the design of bitcoins is deflationary, thus forcing its price to go up. But as history has shown, that also ends in collapse.

Fri, 12/13/2013 - 12:56 | 4243648 Non Passaran
Non Passaran's picture

I've been saying that here for many moons

Sat, 12/14/2013 - 04:53 | 4246092 TheHound73
TheHound73's picture

Cheers, here's to you saying that here for many more.  

Fri, 12/13/2013 - 14:08 | 4243890 ElvisDog
ElvisDog's picture

It is an incredible medium of exchange

I could not disagree with you more. It is a terrible medium of exchange because it is dependent on a specific techology (the Internet) that is controlled by world governments. 

One of my favorite restaurants is a Japanese ramen house in Mountain View, CA. They only accept cash. Any digitial currency, including debit cards, is worthless there. If there is a power outage and you want to go to the store to buy some batteries for your flashlight, what will you spend? Cash. An "incredible" medium of exchange has to be accepted in all circumstances, which bitcoin is not.

Fri, 12/13/2013 - 11:22 | 4243305 Balvan
Balvan's picture

Why not make some money on speculation in the meantime?

Fri, 12/13/2013 - 13:46 | 4243795 Oracle of Kypseli
Oracle of Kypseli's picture

If 50 % of people make money on bitcoin, the other 50% must lose. Or some combination with amounts and players. If you say you will make money when you get in early, you then accept that it's a Ponzi scheme.

Sat, 12/14/2013 - 05:38 | 4246124 TheHound73
TheHound73's picture

PONZI PONZI PONZI SCAM! Hide you kids! Hide yo wife! Tulips! burp.

 

1) nobody forced anybody to buy a bitcoin.

2) nobody forced anybody to sell a bitcoin.

3) if somebody sells a bitcoin for less then they bought it, let's agree to call them losers.

4) my "fair value" reading for 1 bitcoin is north of $10k

Fri, 12/13/2013 - 11:31 | 4243339 fonestar
fonestar's picture

"bitchcoin is a stupid idea, barter will win in bad times."

You guys are freaking dumb as hell.  You focus all of your energy on the weeks and months following a dollar collapse scenario (most, never having lived through a currency collapse).  So what about after your SHTFing movie?  Do you think the public internet is going away?  Do you think people are suddenly going to trust sending their cash through banks again?  Do you think people are going to wait weeks or months to get paid in gold and silver bars?  Do you think the world is going to trust a new US currency whether they say it is gold-backed or not?

Fri, 12/13/2013 - 11:42 | 4243374 Groundhog Day
Groundhog Day's picture

Fonestar,

Do you think a desperate broke government is going to let you off the hook on the amassed debt?

Do you think the world is going to trust a internet based system to preserve their hard earned money when it swings back and forth like a penny stock?

Do you think everyone in the world has access to the internet?

Do you think virtrual currencies are ponzi schemes designed to make the early entrants extremely wealthy at the expense of the late comers?

Fri, 12/13/2013 - 14:16 | 4243943 TwoCats
TwoCats's picture

I feel like answering, though I am not fonestar.

1) Desparate broke government can kiss my ass.  I have no problem hiding my actual store of wealth and acting like every other broke peasant until such time as I find a suitable way to escape the asylum.

2) Some (miniscule) portion of the world already does trust Bitcoin.  The more distributed it gets, the more underground ties back into the (currently) real economy, the less volatility there will be.  I personally think most of the volatility is due to people who got a lot of BTC when it was very cheap and are throwing it around now like there's no tomorrow.  When 100x the current number of participants are using BTC, it will be much more stable.

3) Nope, sucks to be them.  The internet provides knowledge, knowledge is a very powerful form of capital.  And now the Internet is providing an escape from the centrally governed monetary system.  I'm sure we will eventually come up with a means to serve those who don't themselves have direct Internet access.

4) Every paradigm shift benefits the early adopters and penalizes the old guard.  The adoption of the automobile was not very good for anyone with a business in horses, but look what it did for the automobile producers.  Same goes for airplanes vs. railroads and ocean liners.  The early airplanes and automobiles didn't look like a risk-free investment opportunity either.  There are also plenty of inventions that attracted lots of investment capital and then went nowhere, leaving the investors holding the bag.  This is the risk of BTC.  Bitcoin supporters (including fonestar) simply see the potential to revolutionize the world and have decided they are willing to accept (or ignore) the risks.

Fri, 12/13/2013 - 12:03 | 4243445 IridiumRebel
IridiumRebel's picture

Why hold the currency when you can just hold the gold?

Fri, 12/13/2013 - 12:54 | 4243646 Buckaroo Banzai
Buckaroo Banzai's picture

Gold is a good store of value but in a world that is driven by electronic commerce, it is not a particularly good medium of exchange.

The dollar (and its idiot cousins, the yen, the euro, and all other fiat currencies) is the only electronic medium of exchange we had. Until BitCoin came along.

You need currency to get around every day; that's why they call it currency. That's why you need to own some. And now, there is an alternative.

Fri, 12/13/2013 - 12:59 | 4243663 fonestar
fonestar's picture

Even an idea like Peter Schiff's gold backed debit card would still be susceptible to having its backing confiscated and it would piggy back on the cartel's existing infrastructure we are trying to escape.

Fri, 12/13/2013 - 13:11 | 4243694 Buckaroo Banzai
Buckaroo Banzai's picture

Plus, you have to trust that Peter Schiff won't actually abscond with the gold.

Fri, 12/13/2013 - 13:54 | 4243832 Oracle of Kypseli
Oracle of Kypseli's picture

The dollar will always be there. Just like the Zimbabawe dollar. They will just starting taking zeros out. So we do have a currency to work with what we do need is a store of value with no decay. So far nothing else come close to the PM's.

And once the manipulation stops sooner or later as people and gov. turn to physical, then gold silver and other PM's will be the only game.

 

Fri, 12/13/2013 - 14:03 | 4243862 NidStyles
NidStyles's picture

I think some of you need to read more on the differences between currencies and money and how to tell what constitutes the definition of each.

 

You might learn that the only thing that constitutes either currency or money in the present day are gold and silver. Fiat "currencies" really do not qualify as currencies as they are not truly fungible. The dollar you have today will not be worth the same as the dollar tomorrow, or the credit denominated dollar of today.The same goes for Bitcoins, and even more so that the value of the Bitcoin is only measurable in dollars...

 

 

Fri, 12/13/2013 - 12:54 | 4243641 Non Passaran
Non Passaran's picture

Yea yea yea....
Explain how is Bitcoin different to all other coins

Sat, 12/14/2013 - 04:55 | 4246102 TheHound73
TheHound73's picture

Not much technical difference. Bitcoin has a huge lead in terms of market cap, hash strength and merchant acceptance.  These are the indicators to watch.

Sat, 12/14/2013 - 12:53 | 4246476 11b40
11b40's picture

The same way that Nike is different from other tennis shoes or Starbucks is dfferent from other coffee.  It is THE franchise.  Bitcoin is becoming like a Kleenex....kind of like a generic, friendly, easy to understand, universal brand name.

Fri, 12/13/2013 - 11:39 | 4243363 outamyeffinway
outamyeffinway's picture

Throughout history, that stance has always been steamrolled. Good luck with that. Watcher.

Fri, 12/13/2013 - 12:59 | 4243659 BitStorm
BitStorm's picture

Having great luck with virtual currencies, thanks!

I can get food, guns, energy, gold, silver, etc. too....

at a fraction of a fraction of what you're paying....

Enjoy fiat purchases until your Mad Max dreams come true!

Fri, 12/13/2013 - 11:08 | 4243260 Winston Churchill
Winston Churchill's picture

Triple witching day on 17th.That will prolly be the bottom.

 

Fri, 12/13/2013 - 11:00 | 4243220 css1971
css1971's picture

Of course they can own Bitcoin should they choose to. They don't actually need to though.

Banks create credit. They don't have to own the underlying currency or commodity to create credit on top of it. They can manipulate it better if they do though.

Fri, 12/13/2013 - 11:02 | 4243228 nmewn
nmewn's picture

Its the same thing they accept & trade in now, so why wouldn't they?

Its created out of nothing.

Fri, 12/13/2013 - 11:01 | 4243234 fonestar
fonestar's picture

The energy used to create Bitcoin is not "nothing".

Fri, 12/13/2013 - 11:05 | 4243246 nmewn
nmewn's picture

And you can hold it in your hand when you're done expending real energy?

Sure.

Fri, 12/13/2013 - 11:08 | 4243262 krispkritter
krispkritter's picture

I want to see him pay his power bill with it....

Fri, 12/13/2013 - 11:11 | 4243277 nmewn
nmewn's picture

lol...can you imagine.

ITS UP!!!...ITS DOWN!!!...wait...dammit I knew I should have paid last week...no wait...its coming back, I'll wait!!!

(CLICK...there goes the lights)...ROTFL!!!

Fri, 12/13/2013 - 11:25 | 4243316 krispkritter
krispkritter's picture

He'll be mining using his mom's exercise bike with a generator attached and all his hamsters(previous use unknown) running in their wheels making power... ;)

Fri, 12/13/2013 - 11:40 | 4243368 outamyeffinway
outamyeffinway's picture

What are you talking about, Apple stock?

Fri, 12/13/2013 - 14:30 | 4243998 BitStorm
BitStorm's picture

Thought you were talking about PMs until I saw the bit about the lights.

Fri, 12/13/2013 - 11:11 | 4243271 One And Only
One And Only's picture

Yes. You can hold physical bitcoin.

Fri, 12/13/2013 - 11:32 | 4243346 fonestar
fonestar's picture

Why do I need to hold something in my hands?  What is your obsession with fondling things?

I wake up every morning trusting there's still enough oxygen, hydrogen, ozone, etc, etc, etc.

Fri, 12/13/2013 - 11:54 | 4243420 nmewn
nmewn's picture

You're going all mystical Satoshi again...lol.

"Why do I need to hold something in my hands?"

You transact BitCoin trades fondeling something very real with your ifnger tips all the time according to you, unless you've moved on to some other spiritual cosmic plane. Then the question becomes, why do you need BitCoins or i-shit?

"I wake up every morning trusting there's still enough oxygen, hydrogen, ozone, etc, etc, etc."

The fact that you woke up alive proves they are still there.

Fri, 12/13/2013 - 13:00 | 4243662 Buckaroo Banzai
Buckaroo Banzai's picture

Try actually holding all the dollars you own in your hand. If you have any kind of wealth, you will find the task difficult (if not impossible), because very few of the dollars in existence are actually paper. The vast majority are just numbers on a ledger somewhere.

The dollar is, for all intents and purposes, a virtual currency.

And this is why you complain about BitCoin?

Fri, 12/13/2013 - 14:33 | 4244008 BitStorm
BitStorm's picture

I'm holding your idiotic posts in my hand.

Fri, 12/13/2013 - 12:07 | 4243459 tmosley
tmosley's picture

Can you hold a program in your hand?  A website?  The internet?

Well, I guess none of those things have any value.

And you do hold your wallet, in a USB thumbdrive, on your computer, or on a printout.

The only real value of gold is its use as a trade token.  The same goes for bitcoin.  Both facilitate trade in their own (completely different and complimentary) ways.  OWN BOTH.  A little bitcoin, and a lot of gold.

Fri, 12/13/2013 - 12:40 | 4243585 Non Passaran
Non Passaran's picture

Right, except that I have no need for Bitcoin at this price.
I'll wait and buy whatever coin later on when I need it.

Sat, 12/14/2013 - 06:28 | 4246151 TheHound73
TheHound73's picture

At what price would Bitcoin be attractive to you and what was your methodology to come up with that price?  You do know that Bitcoin is divisible? 1 full BTC is not the minimum purchase amount.

Fri, 12/13/2013 - 16:01 | 4244310 Mike Hunt III
Mike Hunt III's picture

The public/private keys can be printed out on paper or engraved in aluminum, tungsten or stainless steel for enhanced durability. You can hold these in your hand. They can then be sold for cash or traded for gold or bartered for someone's goods or labor. Of course the INTERWEBS could go down right? Right. Have a backup plan. Cash and PM's.

Fri, 12/13/2013 - 14:11 | 4243877 NidStyles
NidStyles's picture

See there in lies another issue, you are applying the labor theory of value to something without noting that value is subjective and determined by open auction on markets.

 

In other words you are promoting Communism and Keynesianism in your advocancy of Bitcoin. Your premises are flawed and thusly your conclusions are misguided and equally flawed.

 

Bitcoin is only successful as long as the Fiat currency regime dominates. The moment the governments stop having controlling over the financialization of the economies is the moment Bitcoin end's it's usefulness, and goes to 0.

 

 

Fri, 12/13/2013 - 14:42 | 4244043 xxxxx
xxxxx's picture

Yeah, I have him pegged as a no good commie to. Trying to subvert the American way of life. Just a goddam bolshevik!

In fact this Russion currency sounds like a commie plot too.

Fri, 12/13/2013 - 14:45 | 4244071 silverserfer
silverserfer's picture

bicoin is a fart in the wind of fiat ponzi's.

Fri, 12/13/2013 - 11:05 | 4243245 CH1
CH1's picture

Its created out of nothing.

Either learn something or stop using the Fawkes mask.

Fri, 12/13/2013 - 11:05 | 4243252 nmewn
nmewn's picture

How very, ummm, dictatorial of you CH ;-)

Fri, 12/13/2013 - 11:12 | 4243272 CH1
CH1's picture

Look, you're not a stupid guy. You have to know by now that BTC is difficult to mine: it requires equipment, electricity and skill. You KNOW that's not "nothing." So what's your goal here?

Here's the one thing that has a chance of killing the Fed, and you're trying to trash it.

That ain't Fawkesian.

Fri, 12/13/2013 - 11:16 | 4243292 nmewn
nmewn's picture

No, you look.

What does every central/government bank on the planet want? Control of access to money & credit. You better think about what you're promoting as an internet panacea.

And V wasn't about money or credit or fucking BitCoin, he was about fighting tyranny.

Fri, 12/13/2013 - 11:24 | 4243312 CH1
CH1's picture

V wasn't about money or credit or fucking BitCoin, he was about fighting tyranny.

And you are bloody-mindedly attacking the one tool that can destroy tyranny.

Emotional commitment's a bitch.

Fri, 12/13/2013 - 11:40 | 4243364 Sam Clemons
Sam Clemons's picture

I suspect as circulation of BTCs goes down, supply restricts, and price goes up, "they" will be forced to "devalue" it like every other currency has been.  

Fri, 12/13/2013 - 11:44 | 4243385 outamyeffinway
outamyeffinway's picture

Enter, Litecoin (LTC).

Fri, 12/13/2013 - 12:16 | 4243486 tmosley
tmosley's picture

And who, EXACTLY, is "they"?  Bitcoin's rules are set in stone.  Bitcoin can be forked, but both versions will still exist, and people who own bitcoin now will automatically hold it in the other version.  The market will then choose which version it wants.

Honestly, why the living FUCK can't you people be assed to read just a tiny bit of history?  Cryptocurrency is the natural evolution of free banking, seperated from its acestor by a hundred years of central bank idiocy.  Free banking was exceptionally stable, much more so than government issued currency ever thought of being, because there was a huge amount of COMPETITION.  But they could still debase if they wanted to.  This is not the case with cryptocurrency.  The rules are known beforehand.  This makes it VERY GOOD MONEY, because there are no surprises, unlike with central banks.

Fri, 12/13/2013 - 12:58 | 4243654 Sam Clemons
Sam Clemons's picture

I know "they" is overused, but essentially I mean the same cocksuckers that have been ruling the earth for the last few millenia.  Those that gave us religion and central banking probably will not go down to Bitcoin without a fight unless they already own Bitcoin - or just change the algorithm.  If they can create fiat currencies ad infinitum, why not just buy every Bitcoin at every price crowding out everyone else and maybe enriching a few?  The power is worth the price.

 

 

Fri, 12/13/2013 - 13:07 | 4243678 Buckaroo Banzai
Buckaroo Banzai's picture

You can't buy "every BitCoin" because there are still a lot of them out there to mine. If you try to buy all the ones in existence TODAY, you will drive the price up massively-- thus drawing a lot of unwanted attention to what you are trying to do, and making a lot of "undesirable" people rich in the process.

This is a real conundrum for those invested in the central banking system. That's why they are talking about creating their own cryptocurrencies.

The problem is, anybody who is smart enough to want a cryptocurrency, is smart enough to NOT want one created by a central bank.

Fri, 12/13/2013 - 14:20 | 4243956 NidStyles
NidStyles's picture

Ah the old only the Progressive approach is intelligent argument. Good luck making friends wth that one douchebag.

Fri, 12/13/2013 - 13:59 | 4243846 xxxxx
xxxxx's picture

I think you are refering to the time before the creation of the FED. In the 19th century private banks issued their own currency, backed by the Gold in their vaults. There were problems with this system of free money, as many banks abused this privilege. This led to bank runs culminating in the Panic of 1907.

Only JPM stepping in to provide liquidity 

http://en.wikipedia.org/wiki/Panic_of_1907

This led to the creation of the FED as a lender of last resort to add liquidity to the system.

There are striking similarities today with the issue of competing private crypto currencies. Without a single agreed upon medium of exchange, confusion and panics reign.

 

Fri, 12/13/2013 - 12:32 | 4243536 Non Passaran
Non Passaran's picture

Of course. It's pointless to use it as store of value.
And as a currency it has dozens of "me too" competitors.
(Edit: "they" won't devalue it, but the incentive to hold it will diminish.)

Sat, 12/14/2013 - 04:08 | 4246080 TheHound73
TheHound73's picture

If I wanted to store value over a 3 year period, it certainly would not have been pointless to store that value in the best performing asset for the past 3 years in a row.  Since gold's blow off top, it has been a rather poor store of value for me.  It all comes down to time frames.

Fri, 12/13/2013 - 11:43 | 4243382 nmewn
nmewn's picture

I've been absolutely clear on what I think it is, while BitSters have been all over the damned map on what they think it is.

Again, for the umpteenth time...real money does not rely on anything (except the presence of itself) to be described as money. It does not require nor is it encumbered by, internet, i-shit, electricty, debt issuance, passwords, encryption, accounts, emotion, trust, favors or love.

BitCoin is a conduit FOR money. All you have to do now is hope nothing happens to that conduit to access/convert your money back to reality.

As a TOOL for moving money around its fine, at least before the specs got hold of it.

The ones who "bash it" are critiquing this for your own good, at least that is my purpose. You can take it or leave it CH.

Fri, 12/13/2013 - 12:24 | 4243511 Sam Clemons
Sam Clemons's picture

Solar flare... vaporizes bitcoin and electronic fiat currencies until recovered.  Still have gold and even physical FRN.  

 

I'm not saying I like central banks or fiat money.  I've read how the supply of BTC is restricted by an algorithm.  I get it - it's not really tough to understand.  What is tough to understand is how people think this algorithm cannot and will not be co-opted by TPTB in the event it begins taking their power from them.

Fri, 12/13/2013 - 11:37 | 4243359 Sam Clemons
Sam Clemons's picture

So is the value of BTC almost directly related to the price of oil, gas and coal?

Fri, 12/13/2013 - 12:07 | 4243451 Seer
Seer's picture

That BitCoin could "kill the Fed" is nothing more than a hyperbolic statement.  For those watching all the "episodes," the Fed is killing itself.

I do not believe that the Fed is "problem."  The "problem" lies with our absolute requirement for growth. "Interest," "fractional banking," "debt creation" etc., these are the mechanisms by which we abuse it all.  What, I ask, will abolishing the Fed do about these?  And what about the other central banks around the world?

The Fed is a symptom of the "problem." REAL physical scarcity is the issue.  I'd cautioned it with PMs and I'll do the same with virtual currencies- if TPTB are threatened by them they will program the masses to believe that they are bad, which will provide a LARGE amry of folks to out the threats to their economic system.  And when we're well in to collapse I'd be more caught walking around with some hand-held computing device than I'd be out driving some fancy, high-end vehicle; I also wouldn't be out tossing around PM coins...

As much as I support the notion of rectifying all the ills out there I'm afraid that statements of salvation via some change in the money changers or in a "currency" is an extreme over-exaggeration.  The amount of power and its concentration is nothing but staggering.

This is all WAY beyond a currency issue.  This is a major turning point in all of humanity.  Humans, well, the more affluent (which uncludes us here) will get a better understanding of scarcity.  A world of increasing scarcity would, IMO, tend to contradict a system based on high-tech.

Fri, 12/13/2013 - 12:14 | 4243485 Non Passaran
Non Passaran's picture

But why are early Bitcoins (when you could mine them at will) worth the same as those mined today?

Sat, 12/14/2013 - 04:15 | 4246084 TheHound73
TheHound73's picture

Because they are fungible. Why is a 1oz gold nugget found in a stream worth the same as gold mined at industrial cost of $1100/oz?

Fri, 12/13/2013 - 12:17 | 4243491 Sean7k
Sean7k's picture

CH1, I realize you're emotionally and financially invested in btc, however, is the dollar value derived from the printing presses and ink and electricity to produce them? Or are they "supposed" to reflect the value of goods and services produced in an economy?

Btc value is based on the currencies paid to purchase the coins. This also is its' weakness. 

Btc will never bring down the Fed, it wll be assimilated, which is the import of this article and every other recently. Now, you may feel it is not a conspiracy of the NSA, CIA, etc. We won't know that perhaps forever, but to ignore historical practice, DAARPA and every other action by the Illuminati is a kind of blindness.

For now, btc is a speculative play, just like gold, silver, equities and bonds. It is not a messiah.

Fri, 12/13/2013 - 15:24 | 4244199 silverserfer
silverserfer's picture

the blood sweat and tears of 1000 nerds drinking big gulps. Bitcoin mining is hard! I'm seroisus!

Fri, 12/13/2013 - 11:43 | 4243313 Dr. Engali
Dr. Engali's picture

I'm a bitcoin skeptic as a digital currency, however I'm not stupid and I do own some I bought a while back purely on speculation. There is one comment a Hedger made that sticks out in my head....Bitcoin is no denominated in the doomed U.S dollar. I don't recall who said it, but it made me think. I believe that most of us agree the dollar as a reserve currency is doomed. It only makes sense to me to hold a variety of assets when that happens. So I hold precious metals, ammo, guns, and now bitcoin is included in that mix. Sure TPTB will try and squash it, but I'm sure they will try and squash every other competator to the FRN. For me it's just a prudent to be spreading the risk.

Fri, 12/13/2013 - 11:46 | 4243393 outamyeffinway
outamyeffinway's picture

A prudent approach.

 

The reason why many will be left out in the cold is they adopt ONE world view and really, really hope it comes true.

 

Gold and silver as money again? Not looking good. They still and will always have value though. Not preparing for several certain eventualities though is myopic and dangerous. No one knows who will win this race so a wise man will bet on several horses.

Fri, 12/13/2013 - 12:14 | 4243475 viahj
viahj's picture

gold and silver have been "money" for thousands of years and will continue to again.  what you're thinking of is whether gold and silver will be "currency", just as BTC is a "currency".

Fri, 12/13/2013 - 13:22 | 4243728 Seer
Seer's picture

"Not preparing for several certain eventualities though is myopic and dangerous"

Sure, but...

As I (quite) often say: just about anything is possible, which is why I concentrate on probabilities.  "Probabilities" help reduce one's over-exposure to placing bad/wasteful bets.

"Gold and silver as money again? Not looking good."

Did they STOP being money?

I would ask what it is that you know as to be "certain" (other than death and taxes).

It's hard to tell whether TPTB are stacking BitCoins or not.  I do, however, believe we can see them doing prepper stuff, and, they've been known to deal in PMs.

Fri, 12/13/2013 - 12:10 | 4243467 Non Passaran
Non Passaran's picture

I owed them and I'm out.
There is no need to own those now except for speculative purposes (at this point of hype cycle I'd rather "speculate" by buying phyzz, but each to his own).
There are so many different coins you can acquire them at will and they all work more or less the same. Why would you park significant value in that shit?

Sat, 12/14/2013 - 05:52 | 4246094 TheHound73
TheHound73's picture

Because I believe in the technology and anticipate the scarce accounting units running on top of this technology will become worth much more as the technology grows and spreads.  It has also been convenient to park some of my wealth in an asset that has increased 900% in value since I invested while waiting for gold to finish getting the crap knocked out of it.

Fri, 12/13/2013 - 12:14 | 4243482 PeakOil
PeakOil's picture

Ah yes... amazing what happens when one stops and actually THINKS once in a while.

When I first heard of bitcoin, a couple of years ago, I dismissed it out of hand. Why? Pure prejudice and emotional commitment to another store of value that I (still!?) believe in. Gold & Silver. This is curious because I had heard of cryptocurrencies much earlier, although did not investigate closely because I knew of problems such as the double spend issue. I kinda forgot about them and lumped them into the "anonymous remailer" mental filing cabinet which was trendy around the same time as I first recall hearing of crytpocurrencies.(the late 80s I believe)

In hindsight, it is amazing how well prejudice and ignorance can color my perceptions! Ego is a stupid thing.

Anyway, long story short, this March I STOPPED and actually sat down and read up on bitcoin in detail. In short order I recognized the genius of Satoshi. Although cryptocurrencies didn't spring into existence from nothing - the groundwork has taken decades. The potential to turn the financial universe upside down is easy to see if you stop and look. Folks this isn't going away. Sure bitcoin is risky, sure it is young, but the cryptocurrency cat is out of the bag. Centralized fiat money is doomed. Further the "nation-state" is waaaay overdue for a big ass overhaul. There aren't the resources anymore - big states have too much "friction" and are unsustainable in our current world.(hence the moniker)

And if you're a PM holder - what is not to like about bitcoin? Imitation is the sincerest form of flattery - where do you think Satoshi looked for inspiration? Gold and Silver will still be stores of value in a crytpo-currency world. It is fiat that is threatened NOT PMs!

Crytpo-currency and PMs are natural allies. Why the hate? I don't get it. 

 

Fri, 12/13/2013 - 13:41 | 4243779 xxxxx
xxxxx's picture

It is interesting that a crypto currency backed by Gold [E Gold] was shut down and the owners went to jail.

But start any crypto currency backed by nothing, well no problem.

Fri, 12/13/2013 - 16:13 | 4244348 Buckaroo Banzai
Buckaroo Banzai's picture

If there was an "owner" of the BitCoin system, you can bet your ass they would have thrown him (or her) in jail by now.

The next best thing they could do was throw the highest-profile user of BitCoins in jail: the Dread Pirate Roberts. That worked-- for about a week.

That's the genius of BitCoin: completely decentralized. There are hundreds of thousands--maybe millions?-- of "owners" of BitCoin. Can't throw them all in jail.

Fri, 12/13/2013 - 16:40 | 4244431 Mike Hunt III
Mike Hunt III's picture

E Gold was shut down because it was centralized and an easy target.

Backing a crypto currency with something like gold (as Peter Schiff suggests) is just introducing a counter party risk and potential point of failure.

Fri, 12/13/2013 - 13:44 | 4243791 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1, a big fat 1

Fri, 12/13/2013 - 13:51 | 4243812 Seer
Seer's picture

"Although cryptocurrencies didn't spring into existence from nothing - the groundwork has taken decades. The potential to turn the financial universe upside down is easy to see if you stop and look."

Not sure if it matter that I admit it, but nearly 12 years ago I worked with a company that was developing electronic currencies: it got sold off and a portion of it got used for onl-line gift certificate stuff.  The main project was eternally locked down by our primary funder, which was one of the world's largest banks.  I say "locked down" because I'm convinced that their intent was to just sit on us and not allow us to get picked up by a predator.  At one point we realized that this was all pretty much anathema to the banking system.  So... I'm pretty sure that the BIG banks have had contingency plans in place for this for quite some time.  Those succeeding to conquer either completely wipe out their opponents or they assimilate them.

"Crytpo-currency and PMs are natural allies. Why the hate? I don't get it."

You really think so?  I don't believe so.  If one has only so much money to "invest" with then you better believe that those with the larger chunks of one of these is going to pump that currency over the other.  This is, after all, about attracting fiat: and if you believe, such as I do, that TPTB are in the process of recalling fiat (and shitty assets), then all of this (crypto-currency AND PMs) helps them in this cause.

EVERYTHING has its downsides.  What I find troubling is the apparent cognative dissonance of relying on TPTB's computing infrastructure to be "free" of TPTB.  Maybe I'm too paranoid, but given the leaks on the NSA I'm thinking that there's a support in reality for such paranoia.  Again, the reliance on a complex system would not be a good strategy if one is expecting to be facing a collapsing enivronment (social and economic, not to mention physical): I'm no techno-phobe, so one can toss that attack out the window.

I didn't get to where I am today by being opposed to change.  I also didn't get here by taking bad risks.  For me, so far, I've done pretty good at assessing things around me.  Over the longer-term I don't see something like crypto-currencies being viable other than within the spheres of highly controlled, centralized environments (cities): complexities and growing populations tend to require greater control and the reliance on more complex systems.  That's what I "see," and it just doesn't look like "freedom" to ME...

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