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On Paul Krugman's Irrational Attack On Bitcoin

Tyler Durden's picture





 

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The last aggressive anti-Bitcoin tirade I recall from Paul Krugman was written on April 14th of this year. It was such an irrational piece of drivel that I decided to respond to his Op-ed nearly paragraph by paragraph in my piece, Paul Krugman Goes on the Attack: Calls Bitcoin “Antisocial,” which I strongly suggest you read if you haven’t already.

What is most interesting about that previous article in hindsight is that he wrote it right after Bitcoin experienced its first major crash of 2013 (there have been two thus far, both after greater than 10-fold increases in the price). While I know Krugman periodically attacks Bitcoin, it’s interesting that this latest Bitcoin hit piece also came directly after the second crash. For those who are holders of Bitcoin, this should be taken as a very positive price signal going forward. Krugman’s prior article was written the day before the absolute low price for the decline was reached at $50/btc on April 15th. It seems that Krugman becomes particularly comfortable slamming Bitcoin only after a price crash.

In any event, his latest Op-ed is almost as bad as the first one, and so I thought it’d be worthwhile to highlight his ignorance, irrationality and blatant use of statist propaganda once again. So let’s go.

From the New York Times:

This is a tale of three money pits. It’s also a tale of monetary regress — of the strange determination of many people to turn the clock back on centuries of progress.

 

The first money pit is an actual pit — the Porgera open-pit gold mine in Papua New Guinea, one of the world’s top producers. The mine has a terrible reputation for both human rights abuses (rapes, beatings and killings by security personnel) and environmental damage (vast quantities of potentially toxic tailings dumped into a nearby river). But gold prices, while down from their recent peak, are still three times what they were a decade ago, so dig they must.

 

The second money pit is a lot stranger: the Bitcoin mine in Reykjanesbaer, Iceland. Bitcoin is a digital currency that has value because … well, it’s hard to say exactly why, but for the time being at least people are willing to buy it because they believe other people will be willing to buy it. It is, by design, a kind of virtual gold. And like gold, it can be mined: you can create new bitcoins, but only by solving very complex mathematical problems that require both a lot of computing power and a lot of electricity to run the computers.

In the three paragraphs above, Krugman in employing a strategy that anti-gold people have used for years if not decades. That it is wasteful and environmentally destructive to mine for gold since it has no real purpose. Interesting. What purpose do diamonds have Paul? Did you buy your wife a diamond ring for your engagement? Did you make sure it wasn’t a blood diamond? Aren’t people likely raped and exploited in the mining of diamonds? I wonder how many articles Krugman has written on the destructiveness of diamond mining, a gem that isn’t even rare to begin with.

I tend to notice a huge hypocrisy from statists that in reality hate gold because it is a competing monetary asset, but then attempt to explain away their disdain using another, more publicly palatable rationale such as environmental destruction. After all, gold should get some credit for having at least has two hugely significant historical purposes. It has been valued for both its beauty and durability as jewelry, as well as for its monetary attributes. Diamonds have one primary purpose only recently established due to extensive marketing efforts (also in drills but you get the point), which is as a status or wealth symbol, so you’d think Krugman and other statists would get far more hot and bothered about blood diamonds than gold; but do they? No, they don’t. The hypocrisy is obvious.

The second thing Krugman does in the latest Op-Ed is to take this faux criticism and then attach it to Bitcoin. See the following paragraph:

Hence the location in Iceland, which has cheap electricity from hydropower and an abundance of cold air to cool those furiously churning machines. Even so, a lot of real resources are being used to create virtual objects with no clear use.

No clear use? Really, Krugman? There is nothing useful about essentially costless transfers of value on a peer-to-peer basis? There is no value to monetary transfers that eliminate expensive and parasitic middlemen? There is no value to using a public key as a way to ask for payment, thus reducing  enormous security concerns caused by providing all your private information to hundreds of merchants using credit cards? No value to being able to send millions of dollars across the globe in minutes rather than days? No value to free market currencies competing with state currencies? No value to economic freedom?

There are plenty of valid criticisms of Bitcoin, and a clear and thoughtful expression of those criticisms can only help the marketplace improve free-market crypto currencies in the future. Yet the irrational, ramblings of a statist who clearly hasn’t taken two minutes to objectively analyze Bitcoin is of no use to anyone and a disgrace to a supposedly highbrow newspaper like the New York Times.

His full Op-Ed is here if you have the stomach.

 


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Mon, 12/23/2013 - 20:48 | Link to Comment BandGap
BandGap's picture

Who is this Krugman?

Mon, 12/23/2013 - 20:50 | Link to Comment CH1
CH1's picture

The statist Satan.

Mon, 12/23/2013 - 20:50 | Link to Comment Rainman
Rainman's picture

Keynesian sock puppet

Mon, 12/23/2013 - 20:56 | Link to Comment Pure Evil
Pure Evil's picture

Douche-bag Extraordinaire!

Mon, 12/23/2013 - 21:03 | Link to Comment Arius
Arius's picture

Krugman is correct in many of his observations .... you will be better served of reading carefully what he has to say, before jumping the gun .... just sayin'

Mon, 12/23/2013 - 21:16 | Link to Comment EscapeKey
EscapeKey's picture

What?

No, he fucking isn't. He cherrypicks timelines to suit his arguments. He deliberately words himself in ways, where he has an "exit" in the event his prediction goes wrong, and he - poorly - attempts to distance himself when he is trapped. And he carefully positions himself on BOTH sides on the fence, so he can claim he was "right" whatever the outcome (and claim he was "misunderstood" for the incorrect calls).

He supposedly predicted the housing crash - but takes no responsibility for saying that a housing bubble was required to take the US out of the 2001-02 slump, and WHEN the final crash lands, it will - according to him - be either because the Fed didn't print enough, OR because the Treasury took on too much cheap debt, but either way, he predicted it (but takes no responsibility for recommending either)!

He's a fucking charlatan.

 

Mon, 12/23/2013 - 21:24 | Link to Comment Pure Evil
Pure Evil's picture

Arius is just filling in for Million Douche Bags, Harry Canker Sore, etc, etc.

Mon, 12/23/2013 - 21:37 | Link to Comment Arius
Arius's picture

its the holidays ... got to settle with replacements ... sorry guys.

really, i mean it there is smt to Krugman, after all he is a member of the Group of 30

http://www.group30.org/members.shtml

Disclosure: this message is sponsored by the campaign to rehabilitate Krugman

Mon, 12/23/2013 - 22:15 | Link to Comment willwork4food
willwork4food's picture

Disclosure: this message is sponsored by the campaign to rehabilitate Krugman

HEY KRUGMAN!

http://24.media.tumblr.com/eba292c69df30d594948bc9698aa2b6f/tumblr_mv886qPazS1qjgp6yo1_400.gif

Mon, 12/23/2013 - 23:48 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I withdraw all of my past criticisms of bitcoin that I've made to date (they were all in good conscience & genuine).

I now throw my full support behind bitcoin.

My one golden rule in life is that I am for whatever Paul "When Mars Attacks" Krugman is against, and I am against what he is for (trust me, that rule, as simple as it may be, works well).

Tue, 12/24/2013 - 00:11 | Link to Comment Dick Buttkiss
Dick Buttkiss's picture

I said pretty much the same thing in an email to friends earlier today:

I'm not sure anything could validate Bitcoin more forcefully than Paul Krugman coming out against it.  I mean, if ever there were an economic crank and a monetary quack, he is it. That said, I'm the first to admit that the jury is still out on Bitcoin and that only time will tell. Even so, I think that the genie is out of the bottle so far as crypto-currencies in general are concerned and that there's no stopping them from eventually winning out over government fiat currencies, especially since the latter are doomed either way. After all, governments have essentially entered into a suicide pact to see which of them can devalue the fastest in order to promote exports, as this is obviously self-defeating.  And since crypto-currencies (whether Bitcoin or improvements on it) don't recognize national boundaries, nor can they be issued ad infinitum, their tendency, once they get beyond the speculation stage, will be to appreciate as their algo-restricted releases progress toward their designated limits. Thus will their purchasing power increase in contradistinction to fiat, which of course does the exact opposite . . . like this one:
http://grahamkozak.files.wordpress.com/2012/01/dollar-depreciation.jpg

 

Tue, 12/24/2013 - 01:26 | Link to Comment zaphod
zaphod's picture

Krugman is the anti-christ.

If he is against bitcoin, then I'd think everyone on ZH would be for it.

Tue, 12/24/2013 - 02:31 | Link to Comment Victorio
Victorio's picture

As if that lying peice of krug is some kind of litmus.  I wish evaluation was that easy.

I have yet to find an intelligent rebuttal to the points made in the following article....   

http://freeyourselffrommicrosoftandthensa.org/2-uncategorised/44-december-2013-update-connecting-the-dots-between-microsoft-backdoors-nsa-corruption-and-the-bitcoin-ponzi-scheme

Make me a believer, please.  

 

 

 

Tue, 12/24/2013 - 02:41 | Link to Comment The Devil
The Devil's picture

Stop all the "Krugman is this, Krugman is that" nonsense.

 

Krugman is my lawn gnome.  There, now you know.

Tue, 12/24/2013 - 05:33 | Link to Comment malikai
malikai's picture

Did you buy your wife a diamond ring for your engagement?

Silly me, I didn't know he was into women. And I thought I was pretty good at sensing that for a straight guy.

Tue, 12/24/2013 - 03:07 | Link to Comment Scarlett
Scarlett's picture

 

 

Attention, XenoFrog below.

 

Also, XenoFrog is also that douchebag who promotes bitcoin like a maniac.  At any rate, both are epic failures.

Tue, 12/24/2013 - 11:30 | Link to Comment sleigher
sleigher's picture

It may appear on the surface the NSA was involved, but recent movements show something else that is surprising.  Old bitcoin moving from

a wallet thought to be controlled by Satoshi to DPR.   Strange world we live in...

http://bits.blogs.nytimes.com/2013/11/23/study-suggests-link-between-dread-pirate-roberts-and-satoshi-nakamoto/

 

http://www.vocativ.com/11-2013/dread-pirate-roberts-invent-bitcoin/

 

http://www.infoworld.com/t/cyber-crime/did-satoshi-nakamoto-transfer-1000-bitcoins-silk-road-231540

 

EDIT:  Looks like the researchers were wrong and the guy moved the coins to mtgox. 

 

Tue, 12/24/2013 - 02:43 | Link to Comment 401K of Dooom
401K of Dooom's picture

Cant...Stop...Laughing!... Hey Tyler, we need a rating system here at ZH.  Good post!  This captures the essence of Krug, other than animals eating their young!

Tue, 12/24/2013 - 02:27 | Link to Comment 401K of Dooom
401K of Dooom's picture

Wow, you just encapsulated the whole curriculum for every journalist school and the secret agenda of the media.  Good job, here's a bitcoin cookie.

Mon, 12/23/2013 - 21:29 | Link to Comment 20834A
20834A's picture

"By 2005, it will be clear that the Internet’s impact on the economy has been no greater than the fax machine’s." Paul Krugman

Mon, 12/23/2013 - 21:58 | Link to Comment Pairadimes
Pairadimes's picture

The irony in Krugman's attack on bitcoin is so thick you could walk on it. Bitcoin and other currency alternatives would not be necessary risks to take if he and his Keynsian bankster buddies in central banks everywhere had not hijacked the people's current medium of exchange. Somebody needs to knock that effeminate little pile of Daddy issues right out of his footed pajamas.

Don't like bitcoin? End the Fed.

Mon, 12/23/2013 - 22:38 | Link to Comment Jack's Digestib...
Jack's Digestible Ideas's picture

"Don't like bitcoin? End the Fed."

 

+1000^100 for the most succinct suggestion to those who fear/demonize alternative mediums of exchange.

Mon, 12/23/2013 - 21:36 | Link to Comment nmewn
nmewn's picture

Krugman is an elitist snob & an enabler of anything & everything that destroys the value of an individuals labor & liberties.

I'm surprised at you Arius, we are not pawns to be moved about on these assholes chess boards.

Mon, 12/23/2013 - 21:46 | Link to Comment Arius
Arius's picture

"we are not pawns to be moved about on these assholes chess boards."

I suppose you mean we might not want to be, but as far as their thinking goes we do not count even as pawns ... i am sure not sayin' anything you dont already know

Mon, 12/23/2013 - 21:49 | Link to Comment nmewn
nmewn's picture

You already know why I take exception to Krugman, the same as why I would hope you would too.

Socio-economics is a bastard "science" and not worth any attempts at rehabilitation...its how we are constantly used by elites & .gov.

Tue, 12/24/2013 - 09:25 | Link to Comment kill switch
kill switch's picture

Hey anus,

One of the down arrows.

Just sayin'

 

Don't you hate it when people say

 

just sayin

Mon, 12/23/2013 - 21:02 | Link to Comment ElvisDog
ElvisDog's picture

I'm conflicted. I'm skeptical of bitcoin but think Krugman is an idiot. Screw it, I'm in bitcoin's corner on this one. Can't support anything the ivy-league, statist douchebag says. 

Mon, 12/23/2013 - 22:41 | Link to Comment Jack's Digestib...
Jack's Digestible Ideas's picture

"I'm conflicted. I'm skeptical of bitcoin but think Krugman is an idiot."

 

This is a false dichotomy; you'd be foolish to think anything else.

Mon, 12/23/2013 - 21:21 | Link to Comment EscapeKey
EscapeKey's picture

It's a little known fact that people with cash or gold never get robbed. --Cliff Clavin

Mon, 12/23/2013 - 21:29 | Link to Comment XenoFrog
XenoFrog's picture

If only it were always so easy.

Mon, 12/23/2013 - 22:31 | Link to Comment fiftybagger
fiftybagger's picture

Xenofraud, statist moron extraordinaire strikes again.  Putting a QR code containing your private keys on a HD screencap is evidence of Bitcoin's weakness?  It's the equivalent of giving your Chase account number, password, and verification code out to the public and then being surprised when your account gets drained.  Turn the pot down frog, your brain cells are dying.

The Bitcoin Channel

Tue, 12/24/2013 - 03:35 | Link to Comment Cap Matifou
Cap Matifou's picture

These people could tell a word or two on the cash issue.
http://imgur.com/srOljnq

Mon, 12/23/2013 - 21:22 | Link to Comment WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Bloomduche boy doesn't understand bitcoin.

Mon, 12/23/2013 - 23:16 | Link to Comment greenbear
greenbear's picture

Scratch any gift card to reveal your secret code, and then flash it on national television.  Any guesses about the outcome, you pathetic shill?

Tue, 12/24/2013 - 03:19 | Link to Comment Pseudonymous
Pseudonymous's picture

The viewer promptly posted publicly about it, offered it back, was told to keep it and eventually donated it.

http://www.reddit.com/r/Bitcoin/comments/1tjvy4/sent_the_0029_bitcoin_i_stole_to_seans_outpost/

Tue, 12/24/2013 - 04:01 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@XenoTwiddler

I guess you didn't read the story, the person who did it was trying to teach an object lesson in private security - you don't leave a 20 dollar bill on a park bench, and you shouldn't broadcast your private key in glorious HD on a major news program.

But of course, you're two cents short and perpetually late on the subject.

Mon, 12/23/2013 - 20:48 | Link to Comment Jump The Shark
Jump The Shark's picture

He won a peace prize like our president. They are suppose to help the world

Mon, 12/23/2013 - 20:56 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

So anyone anti-bitcoin is a Krugmanite? Works for me!

< cue krugmanites >

Mon, 12/23/2013 - 21:21 | Link to Comment XenoFrog
XenoFrog's picture

What if you're anti-bitcoin and anti-Krugman?

 

If Krugman said that he liked eating lasagna, would you automatically be anti-lasagna?

 

Even a broken clock is occasionally right.

Mon, 12/23/2013 - 21:27 | Link to Comment nmewn
nmewn's picture

"What if you're anti-bitcoin and anti-Krugman?"

Apparently, an infidel to Satoshi disciples ;-)

Tue, 12/24/2013 - 04:05 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@XenoTwiddler

Hey, just like a random avatar pic eventually shows someone twiddling their snatch on google reverse search?

What an object lesson in identity theft.

Tue, 12/24/2013 - 04:53 | Link to Comment SAT 800
SAT 800's picture

No, a broken clock is not occasionally right; which seems to imply that it is struggling, and sometimes functions; a broken clock is right twice a day; inevitably, because it is broken. Try thinking sometime; it won't really give you a headache like your friends told you it would.

Mon, 12/23/2013 - 21:13 | Link to Comment just-my-opinion
just-my-opinion's picture

Church....lady

He is Satan

I hate to put this for the dumb-asses

Thats sarc

Mon, 12/23/2013 - 22:11 | Link to Comment ultimate warrior
ultimate warrior's picture

OT

Jim Grant interview. Enjoy!

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

Mon, 12/23/2013 - 20:47 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Fuck you Krugman!  

Oh, and Merry Christmas.

Mon, 12/23/2013 - 21:21 | Link to Comment Troll Magnet
Troll Magnet's picture

It's Happy Hannukah or some shit.

Mon, 12/23/2013 - 21:55 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Whether you're an adherent or not it's actually much more gratifying if you give it to 'ole Krugman with a big "New Testament" smirk, like you don't know any better.

Sort of like a passive-aggressive Ned Flanders.

Mon, 12/23/2013 - 20:52 | Link to Comment NoDebt
NoDebt's picture

BitCoin is destructive to the environment?  Wow.  That's really reaching.  Those damned hydroelectric plants spewing toxic waste everywhere!

 

Mon, 12/23/2013 - 21:00 | Link to Comment GoldSilverWolf
GoldSilverWolf's picture

Just to be pedantic, Iceland is geothermal.

Mon, 12/23/2013 - 22:39 | Link to Comment NoDebt
NoDebt's picture

Point taken.  That sounds even worse than hydroelectric.  Think of all the pollution from using naturally occurring sources of energy, regardless of what type!  Somewhere, there is an indian with a tear slowly rolling down his cheek.

 

Mon, 12/23/2013 - 21:00 | Link to Comment nmewn
nmewn's picture

The only time Krugman gives a flying fuck about the enviorment is when he has to walk out of his posh New York apartment into the cold.

Mon, 12/23/2013 - 21:14 | Link to Comment EscapeKey
EscapeKey's picture

Of course he doesn't give a fuck about the environment. He's the class idiot, who recommended "preparing for an alien invasion", as it'd "boost GDP".

Never mind all the atrociously invested resources. But then, what do you expect from an idiot who believes in the Ricardian theory of value?

Mon, 12/23/2013 - 21:42 | Link to Comment nmewn
nmewn's picture

Be great for someone heavilly invested in shovels with no one left to use them wouldn't it?...why, he could corner the shovel market...lol.

Mon, 12/23/2013 - 21:13 | Link to Comment XenoFrog
XenoFrog's picture

Most power is generated by coal, not hydroelectric.

Mon, 12/23/2013 - 21:33 | Link to Comment granolageek
granolageek's picture

Not in Iceland it isn't. Even Krugman managed to see the advantage of inexpensive power and free cooling which you managed to miss.

Mon, 12/23/2013 - 21:33 | Link to Comment XenoFrog
XenoFrog's picture

Only relevant if bitcoins were only ever mined in Iceland.

Mon, 12/23/2013 - 22:33 | Link to Comment Mine Is Bigger
Mine Is Bigger's picture

Printing paper money uses far more resources, if you want to argue about the impact on the environment.

Mon, 12/23/2013 - 22:48 | Link to Comment Jack's Digestib...
Jack&#039;s Digestible Ideas's picture

True, but we don't really print much more than usual (printing being used in the literal sense of the word here, buggers).

 

 

However those electrons have to come from somewhere. Bitcoin: the world's most complicated and inefficient antioxidant.

Mon, 12/23/2013 - 22:51 | Link to Comment fiftybagger
fiftybagger's picture

More and more mining is moving there because of relative costs, but then costs would not be something you're concerned with as you pound away at your state provided shill PC.  The sooner you and your parasite controllers fade away the better.

The Bitcoin Channel

Mon, 12/23/2013 - 23:42 | Link to Comment greenbear
greenbear's picture

Now bitcoin mining is free.  Free power, and free cooling.  Leave it to ZenoFraud to find something wrong with that. 

Mon, 12/23/2013 - 20:52 | Link to Comment Seize Mars
Seize Mars's picture

I don't read Fuckman, and reading about him is bad too.

Mon, 12/23/2013 - 20:59 | Link to Comment i-dog
i-dog's picture

 

"in reality hate gold because it is a competing monetary asset"

That's not the main reason. They really hate gold because they can't fractionally reserve it.

I was told more than 30 years ago, by the chairman-to-be of HSBC, that the banks would try to eliminate even cash withdrawals and were doing everything in their power to bring forth a cashless society. They've nearly achieved it now.

Mon, 12/23/2013 - 21:06 | Link to Comment Arius
Arius's picture

respectfully disagree....you seem to have moved into high places, and i am writing from my office which happened to be free internet cafe.

i dont hink "they" hate gold.  au contraire, "they" most probably own most of it.  they just move in and out assets, bring team A, B or C depending on the time and situation.  right now, is not the time for gold and thats about it as simple as that.  no hate or anything personal, simple business decisions.  gold time might be next century who knows....

Mon, 12/23/2013 - 21:11 | Link to Comment nmewn
nmewn's picture

"...that the banks would try to eliminate even cash withdrawals and were doing everything in their power to bring forth a cashless society."

Zactly right, thats the ultimate goal of banks & governments.

Even after taxation they would then control your past saved labor or make you spend it on "stuff" (in true Keynesian style) to keep their paws off it. Either way, heavy "stuff" & legal "stuff" can be confiscated very easily.

And your EasyBuyAnythingTheFuckYouWantPlatinumBit card will be cutoff with a simple phone call or mouse click.

Mon, 12/23/2013 - 20:57 | Link to Comment Seize Mars
Seize Mars's picture

FWIW, here is my criticism of BTC, catalyzed by fellow ZH-er Occident Mortal.

*********************
In 1989 the NSA released cryptography hash MD2, but it was found to have a mathematical backdoor.
So in 1990 the NSA released cryptography hash MD4, but it was found to have a mathematical backdoor.
Following this revelation in 1992 the NSA released cryptography hash MD5, but by 1996 it was found to have a mathematical backdoor.
SHA-0 was published by the NSA in 1993, but was shortly withdrawn as it was found to have a significant flaw.
SHA-1 was published by the NSA in 1995, and was used by everyone until 2010 when it transpired a weakness in the hash had been the subject of various attacks since 2005.
The latest NSA published cryptography hash is SHA-2, which is what Bitcoin is based on.
Good luck with that.

Satoshi Nakamoto is a pseudonym of the NSA cryptologist Tatsuaki Okamoto who wrote about a dozen papers on digital crypto currencies from 1991 to 1995.

Satoshi Nakamoto is a pseudonym of the NSA cryptologist Tatsuaki Okamoto who wrote about a dozen papers on digital crypto currencies from 1991 to 1995.
e.g.

1. Tony Eng and Tatsuaki Okamoto, Single-Term Divisible Electronic Coins, Advances in Cryptology EUROCRYPT '94, Springer-Verlag, pp. 311-323.

2. Tatsuaki Okamoto, An Efficient Divisible Electronic Cash Scheme, Advances in Cryptology - CRYPTO '95, Springer-Verlag, pp. 438-451.

3. Tatsuaki Okamoto and Kazuo Ohta, Universal Electronic Cash, Advances in Cryptology - CRYPTO '91, Springer-Verlag, pp. 324-337.

Patents:
Okamoto also owns a string of patents which cover Bitcoin and are still valid for another 3-5 years...

Electronic cash implementing method using an anonymous public key license (1996)

Electronic cash implementing method with a surveillance institution, and user apparatus and surveillance institution apparatus for implementing the same (1997)

Method and apparatus for implementing hierarchical electronic cash (1997)

Electronic cash implementing method for issuer having electronic cash balance counters, corresponding issuer equipment and recording medium having recorded thereon a program for execution of the method (1998)

*********************

-----------> BTC is an NSA invention.

Mon, 12/23/2013 - 20:58 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@Seize cut-n-paste

Yeah, we get it, you're a Krugmanite. Or someone who doesn't realize that by saying Bitcoin is compromised, so is every electronic method to store your fiat balance on bank servers.

Go ahead, pick one.

 

Mon, 12/23/2013 - 21:50 | Link to Comment Seize Mars
Seize Mars's picture

Exponere

Yes, I cut and pasted that info. I attributed it correctly.

I found it to be illuminating, so I wanted to share it. I realize everything electronic is compromised. Do you disagree?

I think bitcoin is a great idea. But it is obviously an NSA invention. That's my view, for what it's worth. Make up your own mind. I'm no expert. Just a skeptical guy is all.

Mon, 12/23/2013 - 21:57 | Link to Comment Andre
Andre's picture

"...every electronic method to store your fiat balance on bank servers."

Precisely. We do realize it.

And it is compromised.

All of it.

Have a peachy day!

Mon, 12/23/2013 - 21:29 | Link to Comment EscapeKey
EscapeKey's picture

some of this is factual, some is pure speculation.

it should be rather obvious to even the casual, uninformed observer which is which.

 

Mon, 12/23/2013 - 21:33 | Link to Comment Urban Roman
Urban Roman's picture

While we are at it we should close down the Internet, because it was either an evil DARPA experiment or it was the invention of Al Gore, globalist extraordinaire.

Mon, 12/23/2013 - 21:44 | Link to Comment seek
seek's picture

1) The bigcoin hash function for mining is based on SHA-2, run twice, on blocks to be included in the blockchain. The number of leading zeros of the hash determines the difficulty in mining. To be of use the weakness would have to allow the hash to be reversed -- twice, and this would have to be done in approximately 6 minutes, in order to beat legitimate miners to the correct nonce of the block being mined. If successful it would allow the attacker to claim the mining award.

In a nutshell, not only would SHA-256 have to be broken, but it would have to be reversed, twice, at very rapid speed, and in doing so it still wouldn't enable an attacker to do anything other than mine faster. It is possible that it would also allow an attacker to do a replay attack on a specific address, if they could craft the right type of transaction, but it's far from certain they'd be able to do this in every case, and they'd still require additional information about their target.

To spend bitcoins you don't own, you'd need to break the signing algorithm, which is secp256k1 elliptic curve cryptography. Break secp256k1, and you own bitcoin. It's notable that parts of standardized elliptic curve algorithms provided by the NSA specifically were not used in bitcoin.

2) No one knows who Satoshi is. If you claim otherwise, the burden on is you to provide proof. The idea of cryptocurrency is quite old, and the existence of patents by anyone doesn't establish any identity or connection to bitcoin.

3) Who Satoshi is and bitcoin's origin is ultimately irrelevant. Bitcoin exists as a network of peers running a common open-source algorithm. The peers collectively control bitcoin and no one else. If enough peers agree on a code change, the change gets made; this is key because it implies control of bitcoin is democratic and renders the origin argument moot, as well as arguments about specific technologies somehow compromising bitcoin's systemic integrity.

Mon, 12/23/2013 - 21:55 | Link to Comment Seize Mars
Seize Mars's picture

Fine, you sound knowledgeable. But clearly the fact that something is open source does not mean it's secure - that's fundamental. ALL of those old algorithms were open source.

Anyways I am not anti Bitcoin, just asking the right questions.

Mon, 12/23/2013 - 22:42 | Link to Comment geewhiz
geewhiz's picture

It is the opinions if people with deep technical knowlege that I take note of. Their criticisms and inputs will make crytocurrencies evolve stronger, even if I understand less than 5% of what they say. I might be largely technically ignorant but I'm not joining no ignorant btc lynch mob.

Mon, 12/23/2013 - 23:45 | Link to Comment dark pools of soros
dark pools of soros's picture

I tried to explain btc last April but the usual fucktards here just drown it out with their caveman fear & loathing

 

fuckem - they are just a bunch of gutless cowards that save their own hide while they hide.  They will never ever stand up to authority of any kind.. sheep of the purest breed, comfort within their collective

 

 

 

 

 

 

Tue, 12/24/2013 - 05:09 | Link to Comment SAT 800
SAT 800's picture

Excellent analysis. I would also add, that if you break elliptic curve cryptography; you're probably going to win the Fields Medal and collect more than a million dollars worth of free publicity; book offers, etc. and job offers at major Universitys. In other words, it's not very likely.

Mon, 12/23/2013 - 22:27 | Link to Comment geewhiz
geewhiz's picture

NSA could have built the SHA256 algo solid because its what they use. Every worthy crytologist on the planet has dug that algo up and found nothing wrong yet. The btc creator would have liked to use a proven and tested algo no matter where it came from, enemies copy each others weapons all the time. Every statist and planetary slaver fears the idea of a crytocurrency gold supplement that could support underground economies. It the world of deception it is no problem for the NSA to use its own shitty reputation to discredit btc by planting rumors is that they made it. The pathetic tribal shill is trying his hand at spreading tripe, for the good of the tribe. To me so far they can't find a technical way to kill btc so they are managing perceptions to slow down its adoption. I buy btc as a small percentage of my worth for two reasons; to support its growth and to have a shot at getting rich quick. Only time will tell the true story about btc. If it connects I get rich and the world gets freer and if it crashes I lose a few bucks, no big deal. Every free man should hope the btc or some cryptocurrecy supplement to gold and silver becomes a global mainstream currency. Because if it does that is going to be a major telephone pole up the banksters ass. A lot of smart people are sincerely and passionately trying to warn that btc is a trap. It might have a fatal flaw, only time will tell. Meantine get in lightly, support it and criticize it constructively with a view to making it succeed, because if you want to remain free from becoming a globalist slave crytocurrencies are a mighty weapon in the fight for freedom.

Tue, 12/24/2013 - 04:51 | Link to Comment Simplifiedfrisbee
Simplifiedfrisbee's picture

An enemy who copies an enemies weapon is an enemy.

You can teach about nothing more than what is a virtual image and so you serve no purpose for Love by doing so. Suffering can not be escaped.

In the world of deception which built the foundation to a deceptive "crypto currency" and which the founder is deceptive represents a deceptive inception.

Only death provides desolation a home to dwell and all who live their are among the believers of deceit.

In small amounts of my wealth I buy b-coin to support its growth and to possibly get rich quick. If it connects, I get richer and the world gets freer, it it crashes I lose a few bucks.

A network has never been free and was never created to be free. Every human law is bound to inequity. Every Law under God is bound to Love. Blessed CHRISTmas. Slavery is your wealth to earthly objects. Destruction is your wealth to fantasy.

A free man today is a rare man who is at peace far from the city, far from a phone, far from a computer, and far from his earthly wealth. No free man will arrive from B-coin becoming currency.

Everything man creates is flawed. Everything men create is less flawed. Put a panel of top cryptologists together and you will find the needle that has been stashed in the haystack.

It is true that leaders must learn how to follow. And a wise man does not follow a flock of birds when he can not fly.

I understand now. Yet you all must recognize that this a prelude for what you Love. If you truly Love your family you will detest what is occurring to assist the future. If you love yourself first then you do not love yourself, you do not share your neighbors residence, and you do not care for the suffering of the future people, let alone your family. So the prelude is your demise or liberation. This is heading to a sweet revelation and it will be a smooth transition.

Tue, 12/24/2013 - 05:09 | Link to Comment SAT 800
SAT 800's picture

There must be a church page somwhwere you could rant on.

Mon, 12/23/2013 - 20:58 | Link to Comment chump666
chump666's picture

He is f*cking mental

Mon, 12/23/2013 - 20:59 | Link to Comment Mad Mohel
Mad Mohel's picture

I'm no fan of BTC, but if Krugman is trying to take a Krug on it, then count me as a supporter of the coin.

Mon, 12/23/2013 - 20:57 | Link to Comment GoldSilverWolf
GoldSilverWolf's picture

I tried reading Krugman's piece, I really did. But the self-evident hypocrisy everywhere turned my stomach worse than a plate of McDonalds poutine.

Let's say we have these commodities, gold & silver on one hand, and bitcoin (and other crypto-currencies) on the other. Gold & silver will find their use in the post-fiat world as a store of value (like a savings account), while bitcoin will be used for transactions like a chequing account.  (Or at least that's my view on how the dust will settle.)

Mon, 12/23/2013 - 20:59 | Link to Comment Atomizer
Mon, 12/23/2013 - 22:20 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

We've already tried that.  The "Aliens" are called Likud and a name that sounds like "Aypak", and we know how well that worked out.

Mon, 12/23/2013 - 22:23 | Link to Comment chump666
chump666's picture

He is so f*cking annoying that academic moron.  Aliens?  Ha, they would just blow humanity into nothing, either that are release a super virus, kill us all in days.

Mon, 12/23/2013 - 21:02 | Link to Comment i-dog
i-dog's picture

 

"free-market crypto currencies"

While the NSA monitors every single electronic communication - and use their own backdoors into the algorithms - "free-market" and "crypto-currency" is an oxymoron.

Mon, 12/23/2013 - 21:05 | Link to Comment Yen Cross
Yen Cross's picture

         Krugman needs to lay of the late night scotch induced financial epiphanies. Then again, if I was married to that bush pig Robin Wells I'd probably want to live in bottle of scotch as well.

Mon, 12/23/2013 - 21:04 | Link to Comment disabledvet
disabledvet's picture

Gold backs...or I should say BACKED...the Keynesian dream. Paul Krugman can't have it both ways, he knows this and thus sees bitcoin exactly as it is: a direct assault on the social welfare State. Who created this monster again? Don't tell me it was the banks or Wall Street. A grand DELUSION created this reality. anti-social? REALLY? money itself is by definition "anti-social." go ahead and ban it...or better yet GOOGLE IT...see what happens.

Mon, 12/23/2013 - 21:06 | Link to Comment Debeachesand Je...
Debeachesand Jerseyshores's picture

Another douche-bag of the so-call "Progressive Left".

Mon, 12/23/2013 - 21:10 | Link to Comment q99x2
q99x2's picture

I'll see your Krugman and raise you a Bernanke.

Mon, 12/23/2013 - 21:18 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

Damn, you have a full bearded flush!

Mon, 12/23/2013 - 21:15 | Link to Comment I Write Code
I Write Code's picture

Krugman is an idiot who posts charts from Fred2 that are invalid, and would get an undergraduate flunked out of the major if not out of school.

His only remaining theory seems to be to print money until it goes out of style.  Thus, his big complaints about bitcoin can only be (1) that it is finite, and (2) that he did not think of it first.

Mon, 12/23/2013 - 21:23 | Link to Comment Reaper
Reaper's picture

Is Krugman sure about electronic bank balances? Aren't they really a pit from which the government, NSA or bankers can draw from at will, secretly or openly? What controls the numbers in the electronic balances in accounts at banks? Are accountants,auditors and bankers beyond corruption? Does Krugman trust bankers as trustees of electronic value? Isn't easier to change a number in a computer than create a gold coated tungsten bar or solve a complex math problem?
Are you, Krugman, a banker trusting fool?

Mon, 12/23/2013 - 21:38 | Link to Comment rsnoble
rsnoble's picture

What's the diff between bitcoin and digital zeros??? The FEDS not in complete control over it.

Mon, 12/23/2013 - 21:54 | Link to Comment JuicedGamma
JuicedGamma's picture

Q: What's the difference between Krugman and a monkey?

A: The monkey given a typewriter might actually type something worth reading.

Mon, 12/23/2013 - 22:04 | Link to Comment Spungo
Spungo's picture

And the monkey has a better understanding of economics.

Mon, 12/23/2013 - 22:08 | Link to Comment Blame Crash
Blame Crash's picture

"highbrow newspaper like the New York Times"!

You got be fuckin kidding!  They're a pack of liars who hate the living guts of their readers. Why else would those journalistic frauds be so dishonest?

Tue, 12/24/2013 - 05:13 | Link to Comment SAT 800
SAT 800's picture

You beat me to it. That was the line that got my attention, too. What a joke. The whole thing is just a .gov shill site.

Mon, 12/23/2013 - 22:15 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

I think that my suggestion to Krugie a year ago, that he base a new currency on a unit of a universal precious metal/substance and unit of hi-grade energy, is better than his idea of the Trillion-dollar coin.

Latinum and Dilithium crystals might not make sense yet to you Earthlings of 2014, but a basket of PMs plus Joules of energy would make sense.  The PM provides the stable baseline (with small, 2% growth to parallel mining rates and stable GDP growth), and the Energy portion of the currency allows for the expansion or shrinkage (adaption) to economic growths and declines. 

Only currency that reflects real assets, labor and energy is present in the monetary system.  No more, no less.  No more "money making money".  People (Assets + labor + energy + information) makes wealth.  And you fucking SAVE for retirement, just like a bear or squirrel.

I realize that this is not how the 0.01%-0.10% gets filthy rich (no more paper Ponzi!), but it works like a Gaelic charm on the rest of the 99.9%, and like a gay-lick charm on the 5-10%.

Mon, 12/23/2013 - 22:20 | Link to Comment fiftybagger
fiftybagger's picture

When dinosaurs die they tend to screech and flail around a bit.  Not to worry.  After long they are nothing but fossils.

The Bitcoin Channel

Mon, 12/23/2013 - 23:01 | Link to Comment Geruda
Geruda's picture

How the fuck would you know WHAT the fuck dinosaurs did when they died.  You sure as fuck never saw one die.   Stupid fuck.

Mon, 12/23/2013 - 23:49 | Link to Comment Mr Pink
Mr Pink's picture

Easy killer...

Tue, 12/24/2013 - 04:07 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@Geruda

Yeah, I'm sure those bones in the La Brea tarpits are just from them having a good soak. It was so good, they never left!

Mon, 12/23/2013 - 22:29 | Link to Comment discopimp
discopimp's picture

Do the opposite of Kurgman = make money

Mon, 12/23/2013 - 22:41 | Link to Comment One World Mafia
One World Mafia's picture

Yes ZH there are as you say "plenty of valid criticisms of Bitcoin"

However, people invested in Bitcoin don't want to hear criticism of Bitcoin.

Bitcoin comes with at least two NSA backdoors for the govt to mine Bitcoins and do whatever else they can do with their backdoors.

1. It uses elliptic curves systems for public-key cryptography. As a cryptographer said, "Prefer conventional discrete-log-based systems over elliptic-curve systems; the latter have constants that the NSA influences when they can."

http://www.theguardian.com/world/2013/sep/05/nsa-how-to-remain-secure-su...

2. NSA designed SHA-256, the Bitcoin cryptographic hash function and it can't be replaced in a backwards compatible way.

The NSA does not release anything cryptographic into the wild without a backdoor.  Double hash, triple hash, qudruple hash -it won't protect it from the NSA. They already thought of that.

http://motherboard.vice.com/blog/what-do-the-latest-nsa-leaks-mean-for-b...

Bitcoin ATMs being rolled out use palm scanning:
http://www.wired.com/wiredenterprise/2013/10/bitcoin_atm_gallery/

Mon, 12/23/2013 - 23:00 | Link to Comment fiftybagger
fiftybagger's picture

Scrypt and many others already exist.  Take a stroll over to Cryptsy and see 109 Active Markets.  It's all over but the shouting. But Zero Head readers can be a little slow on the uptake.  That's okay.  The Tylers may be coming along kicking and screaming, but they are coming along nonetheless.  An idea whose time has come is a bit hard to fight no?  Spin the wheel and try again.  Try not to fail again.

The Bitcoin Channel

Mon, 12/23/2013 - 23:54 | Link to Comment One World Mafia
One World Mafia's picture

I have read litecoin, which uses scrypt, uses SHA-256 for the calculation of merkel roots and that it also uses elliptic curves for transaction signing.

Tue, 12/24/2013 - 00:11 | Link to Comment TheHound73
TheHound73's picture

Actually I'm thinking this is a good time to increase the FUD, keep certain types of characters out, and keep prices suppressed for now.

Tue, 12/24/2013 - 04:16 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@One World Cut-n-Paste Tinfoil Theory

1. Bitcoin uses an elliptic curve system that wasn't recommended by NIST or NSA. But don't let facts get in the way of your little tirade.

2. SHA-256 is used in a way that would make it very difficult for an attacker to backsolve in time to beat, Bitcoin in fact does this operation twice, which is irreversible. But again, keep on trying to spread fear. Also, if they have this one beat - then your fiat pile of paper tokens is compromised as well.

3. Ah, the Bitcoin ATM with palm scanner - of course, you fail to mention the scanner is REQUIRED IN THE REGION IT WAS DEPLOYED by the laws of that region. That is a failing of the paranoid legacy financial system, not Bitcoin.

The barking seal trolls just cut-n-paste the same tired old thing over and over, hoping it will get some traction. Listen, if any of this shit was even remotely true, everyone would dump their coins and it would be game over.

So, until you see an announcement on the forms/reddit/elsewhere of it being done, please take your keyboard, wrap the cord around it, and stuff it somewhere dark.

 

Mon, 12/23/2013 - 23:00 | Link to Comment monad
monad's picture

The only news I care to know about Paul Krugman is his obituary. He's an intellectual parasite. That eclipses the possibility that he might steal or otherwise repeat anything worthwhile. If he did it would come out all bent like Alex Jones spin; useless.

Tue, 12/24/2013 - 05:17 | Link to Comment SAT 800
SAT 800's picture

Obituary would be good.

Mon, 12/23/2013 - 23:01 | Link to Comment Geruda
Geruda's picture

The general rule is this:

 

Any time a conclave of morons gathers to vent their pent up frustrations, you will find liberal use of the word "fuck" used to supplant their inability to express more meaningful or intelligent thoughts.

Reading the fucking constant fucking flow of fucking drivel that the fuckers who fucking hang the fuck out here all the fucking time will make you go fucking crazy.

 

Fucking bitcoins.  Who the fuck wants to fuck around with bitcoins?

 

Mon, 12/23/2013 - 23:34 | Link to Comment monad
monad's picture

You know gertrude, the only people who complain all the time about everything are losers at everything they attempt. Often as a consequence of their failure, the inability to handle their failure leads them to project the blame for their failure on others. Those they envy, hate, want to be.

Otherwise you might be a socratic provocateur, a shill, an asshole plant to stir up stats, allegations and bullshit. If you're that shallow I hope you reap what you sow. Loser.

The way you change the world is to change yourself. You don't like thieves? Then don't be one. Don't steal, don't trade stolen goods. Can you imagine what Bill Gates could have done if his software wasn't ripped off wholesale by  commercial vendors, businesses?

Don't tell me to do anything you yourself don't do. It exposes you as the clueless parasite you are. Shut up and you might be able to fool those more witless than yourself.

Merry Christmas. 

Tue, 12/24/2013 - 00:00 | Link to Comment Geruda
Geruda's picture

You know gertrude, the only people who complain all the time about everything are losers at everything they attempt. 

 

I wonder if that is really true?  I'm mostly a winner and only complain once in a while, so hard to know from personal experience.  

 

I know this forum is awash in complainers so I'm inclined to give your theory some credibility but universal statements are pretty difficult to support rigorously.  

Tue, 12/24/2013 - 00:40 | Link to Comment monad
monad's picture

you're a liar. First if you are successful, why would you haunt this blog, if you see only losers? Second all you do is deride others; here. You aren't going to fish me to elaborate here, because I am successful so I'm not going to do your work for you for free.

I hate lawyers

Tue, 12/24/2013 - 04:33 | Link to Comment Geruda
Geruda's picture

monad -that was kind of confusing but it appears you are saying -  If you hang out on this blog then you can't be successful.  

I think you overstate it.  

 

Most of what I say paints with a wide brush but there are clearly some bright people here who one can't help respect for the intelligence of their words whether or not I agree with them.

 

What frustrates is having to wade through so much garbage to find the few things worthwhile.  

 

Tue, 12/24/2013 - 05:44 | Link to Comment WTFx10
WTFx10's picture

You seemed to have taken command of the english language pretty well now.

No more writing like a retard. Those night schools classes have paid of Geruda.

Are you still jerking off to pictures of Obama?

Tue, 12/24/2013 - 07:39 | Link to Comment geewhiz
geewhiz's picture

Geruda, you're back! We missed you. In this reason for the season I would like to wish you all the peace and wisdom our Lord and Savior Jesus Christ, the true Messiah, can infuse into your being.

Mon, 12/23/2013 - 23:12 | Link to Comment kchrisc
kchrisc's picture

I am hereby making a New Years resolution to not read one article about Krugman's "look at me, I'm Sandra Dee" views. In both 2014 and going forward.

He’s a shyster. Let him ferment in the land of one hand clapping.

 

"The guillotine is listening."

Mon, 12/23/2013 - 23:13 | Link to Comment Decimus Lunius ...
Decimus Lunius Luvenalis's picture

"Bitcoin is a digital currency that has value because … well, it’s hard to say exactly why, but for the time being at least people are willing to buy it because they believe other people will be willing to buy it."

Bitcoin, stock market, a $5,000 purse, a $114 million dollar penthouse sold for $45 million 2 years ago or whatever have value because people are willing to buy it because they believe other people will buy it or envy it or affix some value to it.  To criticize a made up currency in order to protect a made up currency proves T.S. Elliot right about wanting to feel important.  It's all fucking made up.  Whether you think a price of a stock matches what you guess the future value of its cash flows will be or you think your new suit will get you laid, the value you place in it is an arbitrary choice.  To take it further, whether you stay on this earth or take the noble road in Aokigahara, its a choice devoid of any real significance.  In the end, most of us are just killing time trying to see who can piss the farthest and feel well of ourselves.  I admit, I've been drinking some Woodford, but I sometimes wonder how we muddle through our endless tediums.  I guess Woodford and porn do pretty well.  So endeth the rant.

Tue, 12/24/2013 - 01:02 | Link to Comment Vooter
Vooter's picture

"...I sometimes wonder how we muddle through our endless tediums.  I guess Woodford and porn do pretty well..."

Gee...aim high!

Mon, 12/23/2013 - 23:18 | Link to Comment ZH11
ZH11's picture

Two bald men fighting over a comb.

The libertarians trust no one and just want to be left alone so to assert their ideology they abandon one highly manipulated medium of exchange value for another. Their hubris dictates they do this whilst hectoring everyone that the newly embraced medium is better than the other one because it is even more phantasmagorical and thus purer, hey, just like their ideology. 

The circuit ends exactly where it began, the medium means shit because they're all manipulated, it is only in magnitude that they may be differentiated.

 

Mon, 12/23/2013 - 23:25 | Link to Comment One And Only
One And Only's picture

Paul Krugman has an inferiority complex. 

He has a shriveled penis hidden under a deep nest of knotted curly pubic hair.

Who cares what he says?

Mon, 12/23/2013 - 23:34 | Link to Comment MedicalQuack
MedicalQuack's picture

Bitcoin story of the day...your sides will hurt on this one...news broadcaster gives the gift of bitcoin to his co-workers...shows the certification on the screen with the QR code..gets robbed:)  All anyone had to do was get their cell phone out and scan it:)

http://blogs.marketwatch.com/themargin/2013/12/23/tv-anchors-bitcoin-gif...

No the world is really not ready for bitcoin:)  I think it may have a future as a transaction methodology but not all the way to being a currency

Tue, 12/24/2013 - 04:10 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

@MedicalQuack

Yes, amazingly you need a brain to manage your money. Digital money doubly so. Just like you shouldn't leave your cash on a park bench, you shouldn't flash your private key on a HD televised news show.

Mon, 12/23/2013 - 23:32 | Link to Comment kodachrome
kodachrome's picture

Krugman - you have single handedly found a way to get most of the Zerohedge bitcoin haters on bitcoin's side. Well done.

Mon, 12/23/2013 - 23:38 | Link to Comment chindit13
chindit13's picture

Those who champion gold make unfair assumptions about those who lack the faith, such as that heretics fear a "competing monetary asset" or some such drivel, or are statist lackeys.  Actually, there are those who are just befuddled that such a religion has developed around something that has little to no inherent value.  Such is the case with anything that acts as a store of value between the exchange of one useful asset for another, whether it be fiat, gold or pukka shells.  Those who like to fancy themselves objective accept that any means of exchange is based on some combination of faith and democracy, and that irrationality plays a necessary role in anything called "money".  They'll use whatever the majority uses, albeit tongue in cheek.  Yes, they understand "history" and "finiteness" and all those things that believers use to substantiate their faith, but not being caught up in the madness of crowds, they just can never get passed the reality that no matter the history, no matter the rarity (rhodium is also rare, but that didn't stop it from tumbling 90+%), there is no or minimal inherent value, and the world would still turn if every last grain disappeared.

That skepticism is perhaps what allows some to applaud those who have made a killing on BTC, even if they didn't participate, just as quickly and easily as they can applaud those who bought yellow metal in 1999 and sold in 2011, especially if they did participate.  They always applaud success, and it doesn't have to be their own. Jealousy and schadenfreude only poison the soul.

Yes, there's a lot of tired arguments on the side of the gold agnostics, but their arguments are no more tired than those of the Golden Horde.  Everybody now knows everything, and everyone is voting.  For two years the votes have favored the sellers.  That may well change in the next year or two.  The asset class might rise again.  It seems unlikely, however, ever to become the backing of an official currency, unless faith and belief in government is about to soar.  Nobody believes much of what governments say or do now, so it is foolish to think the masses would believe governments later, just as it is foolish to think a government such as the CP in China would ever allow its citizens to exchange supposedly gold-backed yuan for ticals or ounces of yellow metal.  If gold has any value going forward, it is as insurance, not as backing to a currency.

Those who leave the party, before the cops arrive to break it up, get it.  They are not dreaming pie-in-the-sky dreams.  They aren't Walter Mitty types.  They see the direction of the wind, adjust their sails accordingly, and go to mast before the wind changes.  They also mark-to-market everyday, and don't let ego convince them to champion their acquisition price.  They don't make excuses nor search for scapegoats, because they know the fault ultimately lies in only one place:  within.

Mon, 12/23/2013 - 23:43 | Link to Comment monad
monad's picture

success has many fathers, failure is an orphan

Tue, 12/24/2013 - 12:35 | Link to Comment xxxxx
xxxxx's picture

Excellent Post. I particularly like

"They also mark-to-market everyday, and don't let ego convince them to champion their acquisition price.  They don't make excuses nor search for scapegoats, because they know the fault ultimately lies in only one place:  within."

So true. You can rail on and on that your favored investment is unappreciated, undervalued, manupulated etc. You can say that other investments that are rising and you don't own are in a bubble to make yourself feel better.

Price is the market, everything else is just talk.

Tue, 12/24/2013 - 00:21 | Link to Comment wcvarones
wcvarones's picture

What purpose do broken windows have, Paul?

Tue, 12/24/2013 - 04:21 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

broken windows force currency out of savings accounts

and into circulation

Tue, 12/24/2013 - 01:12 | Link to Comment Audacity17
Audacity17's picture

<Long Bitcoin

<Short Krugman

Tue, 12/24/2013 - 03:05 | Link to Comment compound interest
compound interest's picture

Krugman bashing Bitcoin? That must be bullish, I might have to get back in position in BTC.

Tue, 12/24/2013 - 03:35 | Link to Comment e_goldstein
e_goldstein's picture

"Yet the irrational, ramblings of a statist who clearly hasn’t taken two minutes to objectively analyze Bitcoin is of no use to anyone and a disgrace to a supposedly highbrow newspaper like the New York Times."

Not to mention the Committee for the Prize in Economic Sciences in Memory of Alfred Nobel.

Tue, 12/24/2013 - 04:53 | Link to Comment Laretes
Laretes's picture

My biggest worry for the future of BTC is the seemingly inevitable deflationary scenario once the last bitcoin has been mined. If everybody knows that its value can only go up, nobody will spend it anymore.

Tue, 12/24/2013 - 06:48 | Link to Comment Mike Hunt III
Mike Hunt III's picture

"Nobody"? I hear this argument often. I have been spending bitcoin since it was under $15 until present. Retailers accepting bitcoins are increasing, number of transactions are increasing. People who own bitcoin need to buy food, gas, pay rent and utilities.

Tue, 12/24/2013 - 09:26 | Link to Comment Laretes
Laretes's picture

You did not read my post correctly. I am not talking atm or even in the near future, I am talking when no more bitcoins can be mined. The value of the currency can only go up from that moment on and spending will stop because people will wait until they can get even more for their money.

Tue, 12/24/2013 - 07:34 | Link to Comment TheWildEagle
TheWildEagle's picture

One can view the process of mining cryptocurrencies as "wasteful" or they can see it as a highly efficient process which can actually provide free heating: http://www.scribd.com/doc/193477626/Cryptocurrency-Mining-as-a-Form-of-F...

Unlike gold mining which leaves toxic byproducts (cyanide, mercury, arsenic compounds etc), the residual heat of mining can be exploited for good use.

 

Tue, 12/24/2013 - 09:12 | Link to Comment L_Conquistador
L_Conquistador's picture

Are any resources expended coining and printing USD?  Any electricity expended?

Tue, 12/24/2013 - 10:22 | Link to Comment TheABaum
TheABaum's picture

Is there anything more antosocial than Krugman?

He's a detestable sort.

 

Tue, 12/24/2013 - 10:34 | Link to Comment PTR
PTR's picture

In mentioning gold bugs, he forgot to refer to the colonization and plundering of the Americas to satisfy 16th-century Spain and Portugal's lust for tooth fillings.

 

Shill.

Tue, 12/24/2013 - 14:54 | Link to Comment Prisoners_dilemna
Prisoners_dilemna's picture

Where is Seer?

He's been in the "business" a long time and nodoubt has some wisdom to share?

Seer where you at grandpa?

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