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Bitcoin Versus Gold

Tyler Durden's picture





 

Submitted by John Browne via Euro Pacific Capital,

Ever since President Nixon broke the US dollar's last link to gold, the world has been set adrift on a sea of fiat currencies that have been increasingly debased, serving the interests of governments and financial elites. For the last five years, central banks have imposed near-zero rates of interest that have helped push up stock, bond, and real estate prices, but have made it nearly impossible for savers to receive meaningful returns on bank deposits.

To make matters worse, the apparatus of national security has turned financial transactions into a massive exercise in government surveillance. Under the camouflage of 'protective' measures, such as the USA PATRIOT Act, governments have invaded the privacy of citizens and compromised banking secrecy in an unprecedented and often unconstitutional manner. Despite huge potential transaction-cost reductions achievable through advances in digital technology, banks continue to charge exorbitant transaction fees while maintaining transfer delays that reflect a pre-digital age. In addition, bank regulators, led by the IMF, have shown a willingness, in the case of Cyprus, to make depositors liable for poor banking decisions. Many private citizens may naturally see the status quo as a deliberate policy to crush middle-class savers and pave the way for centralized socialism. Some have sought a way out.

Gold 2.0?

Traditionally, investors have turned to precious metals such as gold to help protect and privately transfer their wealth. However, ever-increasing regulation, monitoring, and physical searches have eroded some of the key protections afforded by gold. Gold's weakness over the past 24 months has also spooked many former adherents. In such an environment, many have seen the recent arrival of digital crypto-currencies as the means to restore the monetary independence that has been co-opted by big governments. Currencies like the now-famous Bitcoin offer the potential for a store of value, low transaction costs, free movement, and anonymity. It's no wonder that Bitcoin has taken the world by storm. But all that glitters is not gold.

Wikipedia defines a crypto-currency as, "a peer-to-peer, decentralized, digital currency [or medium of exchange] whose implementation relies on the principles of cryptology to validate the transaction and the generation of the currency itself." In short, it is a virtual currency traded by private, unregulated internet exchanges. Despite the recent fame of Bitcoin, there are actually a number of other crypto-currencies that have been created in recent years. Names include Litecoin, Peercoin, Namecoin, and Primecoin. Bitcoin, established in 2009, is undoubtedly the most successful, and it became a breakout news story in 2013.

Bitcoin Pros & Cons

Bitcoin offers a few distinct advantages over conventional currencies: it allows almost instantaneous peer-to-peer transactions that completely avoid the expensive and cumbersome bank-run electronic payment systems, and it allows for fast international movement of funds outside foreign exchange controls.

Many investors are also betting that Bitcoin will offer a better store of value over time than serially printed fiat currencies. That's because the Bitcoin protocol automatically, and apparently irrevocably, limits the number of bitcoins that will be created to 21 million. In this sense, they are immeasurably more honest than US dollars. However, unlike US dollars, pounds sterling, or euros, bitcoins do not carry legal tender status, but rather rely on the network of merchants and individuals to continue to accept them as payment for goods and services.

Finally, by utilizing anonymous wallets, some users may think that crypto-currencies like Bitcoin offer increased financial privacy. I believe that this is largely an illusion. Governments have shown a great ability to crack any code no matter how well planned (just look at the British government's success against the Germans in the Second World War). I have full faith that the US Federal government can, over time, develop techniques to map all cyber transactions.

A Volatile Elephant in the Room

But it is Bitcoin's volatility that will likely be its immediate undoing. In recent months, as more speculators have moved into the market, prices have been unstable to say the least. On November 29th, Bitcoin reached $1,242 in Tokyo just as gold dipped to $1,240 an ounce. When those two values crossed, many began to speculate that Bitcoin had replaced gold as the premier alternative to fiat money. With relatively high transaction costs and delivery delays, precious metals are expensive to store and transport. In contrast, Bitcoin transactions are fast, cheap, and transnational. But little, if any, store of value is offered. That reality has been demonstrated in recent weeks as Bitcoin has dropped by some 50 percent in market value.

While crypto-currencies remain insulated from central bank manipulation, governments have thus far been tolerant, perhaps because their capability to track transactions is more advanced than Bitcoin believers admit.

Nevertheless, the advent of crypto-currencies represents the increasing popular demand for a currency insulated from political debasement and bank profiteering. Crypto-currencies represent a legitimate attempt by private citizens to reassert their sovereignty over such government actions. I appreciate the effort, and I believe it holds much promise. But for now, I will stay with the traditional store of value, gold.

 


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Fri, 01/03/2014 - 22:15 | Link to Comment Uncle Sugar
Uncle Sugar's picture

I'm partial to goldcoin

Fri, 01/03/2014 - 22:30 | Link to Comment lickspitler
lickspitler's picture

yer yer yer Gold going into a giant rally "again" and bitcoin is finished "again".

Fri, 01/03/2014 - 22:43 | Link to Comment Stackers
Stackers's picture

Gold is money. Bitcoin is a finite supply currency competing against infinite supply currencies.

Comparing the two is pointless.

Fri, 01/03/2014 - 23:11 | Link to Comment wintermute
wintermute's picture

Obviously gold is an excellent store of wealth. The problem with it is that modern economies require fast long-distance transactions. Gold is not suited for that, in fact its transactional shortcomings were felt in the 1600s when goldsmith's receipts became early paper money.

Bitcoin has a huge intrinsic value because it is the currency native to the world's most advanced payment system. Someone sitting in a grass hut in the Congo can easily move $100 million to someone climbing Mt Everest, in 1 second, irrevocably confirmed in 1 hour, for 5 cents of fees, no third party involved, no government permission needed.

This is a financial revolution and those that ignore it are going to be on the wrong-side of one of the greatest wealth transfers in history. The next decade will see an tidal wave of money go from fiat to crypto.

Fri, 01/03/2014 - 23:30 | Link to Comment hmmtellmemore
hmmtellmemore's picture

Bingo.  I had to send a couple thousand usd to Hong Kong recently.  It was a pain in the ass even with Western Union or Bank Transfer.  If I had to actually airmail a gold coin to China it would be even harder (how do I get change if the price is not exact for the coin?).  Gold has basically never been a real currency, aside for kings and the ultra wealthy.  On the other hand, sending btc is a breeze, its almost free, and if done correctly is near anonymous.  Nothing comes close for sending money long distances.

Fri, 01/03/2014 - 23:34 | Link to Comment fonestar
fonestar's picture

Yes, Bitcoin is pure awesomeness rolled in a blanket of bliss.

Fri, 01/03/2014 - 23:39 | Link to Comment CrazyCooter
CrazyCooter's picture

Still waiting a response Fonestar ...

ZH: 2013-12-30 : Bitcoin as an Alternative Currency?

Regards,

Cooter

Sat, 01/04/2014 - 01:04 | Link to Comment nope-1004
nope-1004's picture

Fone has made it clear:  He's not in it for profit <check out Bitcoin as it passes gold you metalhead losers>.  He's in it for spiritual and philosophical reasons <hey idiots, Bitcoin rules and will be 6 digits in a few years>  because he has the utmost respect for his fellow man <you losers will be left behind because Bitcoin is going vertical>

 

Sat, 01/04/2014 - 01:36 | Link to Comment fonestar
fonestar's picture

Satoshi came to free you and instead you people chose to attack him and his most supreme creation.  I can only imagine the terror that will be struck into the hearts of those who opposed Bitcoin during the coming of the cyberchrist.  You have been warned.

Sat, 01/04/2014 - 06:56 | Link to Comment malikai
malikai's picture

I have a lot of respect for Schiff. I know he's real smart.

But he and his people have been real blockheads by making the binary either-or argument WRT gold/bitcoin.

As the spiritual leader of the guns, gold, and beans cult, he would do his community a great service to realize that it's not one or the other. One can have many tools in their toolbox.

Sat, 01/04/2014 - 08:07 | Link to Comment Supernova Born
Supernova Born's picture

Bitcoin devalues Zero Hedge.

Sat, 01/04/2014 - 08:24 | Link to Comment Popo
Popo's picture

What was that nonsense in the article about Bitcoin's value being "insulated" from the prying hands of governments?  The problem with crypto-currency douchebags is they never stop and question their own quasi-religious tenets.  Not only did China send Bitcoin reeling with one stroke of a pen, BTC is the most traceable currency in the world.  It's more traceable than fiat currency.  By definition, the ownership chain must be stored and recorded for BTC to even work.   Anyone who thinks Bitcoin is free from the hands of governments is logically challenged.  And when you make this argument, you then get into the whole "but I hide my identity, and use base-64 bazillion encryptomumbojumbo on my transactionz" arguments.  As if the past year of revelations about encryption, identity and network infiltration never occurred.   Bitcoin is *nothing* compared to gold.  In fact, its so incredibly prone to the all-seeing eye of government, it almost makes me wonder if that's not the whole idea.   But carry on ye penny-stock cheerleaders.  Sink your cash into something that records every transaction and chain of ownership for your government to see -- if that sounds smart to you.  

Sat, 01/04/2014 - 09:11 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

 

6000 years....and counting.

Sat, 01/04/2014 - 13:26 | Link to Comment secured_party-c...
secured_party-creditor's picture

There's no wiser wisdom than that just stated... China knows it ... That's why they've went on a gold buying and hoarding spree... Signs and symbols are for the conscious mind...

Sat, 01/04/2014 - 14:37 | Link to Comment dracos_ghost
dracos_ghost's picture

I believe China said don't be converting BTC into Yuan. We forget that China has been printing(internally) like Bernanke on steroids and generating huge excess utility capacity. Why not have citizens create BTC with the excess -- but convert them into foreign currencies, not yuan. If they convert into yuan it would defeat the purpose of distributing the excess utility capacity and inflation associated with it. It's better to capture foreign wealth via BTC transactions outside the mainland.

Who needs to float the yuan when there is BTC. BTC is China QE4Eva. Don't be fooled.

Sat, 01/04/2014 - 09:15 | Link to Comment fiftybagger
fiftybagger's picture

Just because you know how to use the word encryption doesn't mean your not a blockhead.  It's as anonymous as you make it.  Now tell me who does this address belong to that received 150 million dollars in one transaction? 

12sENwECeRSmTeDwyLNqwh47JistZqFmW8

Look, I even gave you a link to the blockchain site.  Now you just need to figure out what you are looking at blockhead.

The Bitcoin Channel

Sat, 01/04/2014 - 09:32 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

So - you are on the record as stating that nobody outside of the two parties involved can identify them? Based on what... your own inability to do so?


Sat, 01/04/2014 - 11:41 | Link to Comment 13thWarrior
13thWarrior's picture

HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH Laurie Law, Susan Sabett, Jerry Solinas National Security Agency Office of Information Security Research and Technology Cryptology Division 18 June 1996 http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsa...

Sat, 01/04/2014 - 16:58 | Link to Comment Popo
Popo's picture

And just because you've got a black box algo that's supposed to encrypt something doesn't mean it's not readable.

See ultimately you're employing faith and not logic.

Here's what we know with certainty:

1) The NSA has compromised numerous encryption technologies.
2) The NSA currently earmarks 100's of millions in congressional funding for the influence of commercial security and encryption systems.
3) Bitcoin uses an elliptical encryption algo.
4) the original creator of Bitcoin (you call that entity "Satoshi" because you were told to, and like all believers the belief starts with dogma) has never cashed in or spent any of the original 200 million in Bitcoin value it owns.

Now you're proudly pasting in a long meaningless alphanumeric string and like a jackass you're prancing around and challenging me to decipher it.

Seriously?

Is that actually how limited your understanding of the issue is? By that argument, why not just paste something in Hungarian, Finnish, or encoded with a primitive 1 to 1 cypher.

The reality is you don't have the foggiest idea whether or not your Bitcoin is safe. And virtually all of the evidence we now have regarding compromised encryption technologies would suggest that it is probably not safe -- and at the very least *may* not be safe.

But you have your faith.

As to your other inane arguments about the current price point, you sound just like an idiot homeowner in 2007 rejecting the idea that homes are overvalued because you're in the black.

How smart you are.

I actually understand encryption extremely well. You on the other hand sound like he kind of person who knows how to slap a button marked "encrypt". And when the result is unreadable, you're happy.

Trust no one. Especially someone else's tech. (Never mind tech produced by a body with no identity, no real world contacts, and a nebulous motive which is decidedly not wealth.)

Sat, 01/04/2014 - 10:00 | Link to Comment malikai
malikai's picture

Popo, have you heard of this date? April 5, 1933.

Also, that whole China 'stroke of a pen, reeling' nonsense you spew, did little more than cause a lovely dip that many of us were able to use to 'restock' our 'shelves'.

I'm having a hard time seeing who the 'douchebags' are. Are they the cryptoanarchists, who are actively trying to solve the problems you speak of, or the people doing fuckall about it and praying for a new gold standard so that days like 5/4/33 can happen again?

Also, last I checked, bitcoin was valued at $884. That hardly sounds like a penny stock to me, but you can go ahead and call it what you want.

Sat, 01/04/2014 - 13:18 | Link to Comment secured_party-c...
secured_party-creditor's picture

Not to mention the State Compact Act that followed up and was implemented the following year... Nothing secure in digital/crypto land.. Every server in the world is plugged in to the prying eyes of government.. Just check out the east and west coast where our "Am3riKa" s' international internet cables run in/under the ocean... Them lines don't go straight to our homes or the local 7/11.. They go through government sponsored corporations... I.E., phone companies, google...etc

Sat, 01/04/2014 - 17:25 | Link to Comment SeattleBruce
SeattleBruce's picture

And the government can't pull a 1933 on bitcoin or the Internet? I'm not against BC. We need to be ready for all contingencies.

Sat, 01/04/2014 - 18:31 | Link to Comment malikai
malikai's picture

They certainly could fuck the internet up real good.

Arguably, they already have.

But be sure, if they do, it'll be time to switch to the end game.

Sat, 01/04/2014 - 11:02 | Link to Comment gafgroocK
gafgroocK's picture

 

 

 

" In fact, its so incredibly prone to the all-seeing eye of government, it almost makes me wonder if that's not the whole idea."

 

BINGO , Popo, BINGO

Sat, 01/04/2014 - 11:52 | Link to Comment funthea
Sat, 01/04/2014 - 08:33 | Link to Comment negative rates
negative rates's picture

You can take ur warning and stick it where the sun don't shine!

Sat, 01/04/2014 - 09:31 | Link to Comment Bindar Dundat
Bindar Dundat's picture

Or is it the mark of the beast?  

Relax fonestar, like you, I am a big fan of BTC but -- some clergy friends have been asking me about the one world currency and the 6 number hat shows up 3 times in the definition....mmmm they have a point and is the cyberchrist the antichrist?

Religion aside there is the question of which we should invest in -- gold or digital currencies ?

I think the anwser to BTC or Gold is simple -- BOTH should be held at 10% gold and 5% didital currencies made up of BTC , Litecoin and peercoin.

Sat, 01/04/2014 - 11:16 | Link to Comment Papasmurf
Papasmurf's picture

I can only imagine the terror that will be struck into the hearts of those who opposed Bitcoin during the coming of the cyberchrist.  You have been warned.

Before, I just thought you were a bitcoin zealot.  Now I know you're a loon.

Sat, 01/04/2014 - 01:36 | Link to Comment Deacon Frost
Deacon Frost's picture

How does bitcoin encryption fit in with the coming NSA quantum computers that can break encryptions?

Sat, 01/04/2014 - 01:45 | Link to Comment wintermute
wintermute's picture

That is many years away and Bitcoin can be modified to use different algorithms which are QC immune.

 

Sat, 01/04/2014 - 09:40 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

Ahhh, so Bitcoin can be modified? How do you know there will only be 21 million produced? Who is the gate keeper to enforce that? And even if that's true, there are an infinite number of "coins" that can be produced (litecoin etc.)

Also, if gold was at its real price in terms of dollars, you wouldn't have to move very much gold at all to move a lot of wealth. That's why they want to keep a lid on it.

Sat, 01/04/2014 - 10:10 | Link to Comment tmosley
tmosley's picture

Bitcoin can only be "modified" if more than half of its users agree.  In reality, it isn't a modification, but a fork.  Bitcoin continues to exist with its current rules, but there is now a "bitcoin-q" that is safe against quantum attack.  If someone forks a "bitcoin-inf" no-one will accept it, because it goes against the first principles of the currency.

When there is a fork, people who owned bitcoin prior to the fork will now own both types of bitcoins.  The market will select one over the other, or allow both to continue operating if there is a need/desire for both.

As to the fact that there can be more cryptocurrencies--so what?  There can be more fiat currencies.  That doesn't stop you from using them.  You can use metals other than gold to store wealth, that doesn't make gold less valuable.

Bitcoin IS money.  It's just not as good of a form of money as gold, but with more adoption and a longer history, it could surpass gold on an absolute basis.  But it has DIFFERENT PROPERTIES, which means that there is, and always will be, a need for both.  Gold reigns supreme for long term deep storage of wealth, and will continue to do so until we start mining asteroids, at which point you will want to own space miners and other prodctive capital, and use the proceeds from that to vacuum up all that new gold supply.

Sat, 01/04/2014 - 01:50 | Link to Comment fonestar
fonestar's picture

Nothing can stop Bitcoin and you should buy Bitcoin.

Sat, 01/04/2014 - 01:55 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

If you know the blockchain well, gmail me sometime or comment then delete at my blog (I get the email even if you delete a comment on an old article, hint, hint).

I am working on "Part Six" and can use all the help I can get (subject: blockchain).

Sat, 01/04/2014 - 02:05 | Link to Comment fonestar
fonestar's picture

I enjoy your blog and I will do that.

Sat, 01/04/2014 - 01:53 | Link to Comment Tinky
Tinky's picture

You are such a bore.

Sat, 01/04/2014 - 02:12 | Link to Comment fonestar
fonestar's picture

Rest now, for Satoshi has revealed himself to me in a dream but a fortnight ago.  Satoshi emerged from a blazing red sun to find the neishin buried up to their necks in sand.  He removed his jewel encrusted Katana from the sheath and began to slice through the necks of his doubters.  Their heads were collected and used to construct a temple near a waterfall.

I take this as a sign that there will be retribution coming for all those that doubted Bitcoin and Satoshi's might.  Soon you will wish you had listened.

Sat, 01/04/2014 - 08:35 | Link to Comment negative rates
negative rates's picture

That was a nightmare, the same kind which you will experience trying to get that kink out of your neck.

Sat, 01/04/2014 - 02:01 | Link to Comment akak
akak's picture

Fonestarcoin, bitecoin my bitcoin.

Sat, 01/04/2014 - 02:08 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

as I've said before just as facebook replaced myspace which is fading - what stops bitcoin from being if not supplanted, then joined by guntcoin, aidscoin or fartcoin?

 

either way it's a welcome nuisance to tptb.

 

p.s. what does this new nsa quantum computer bode for cryptocurrencies? Every government from here to vietnam should be mining these things with reckless abandon, on the taxpayer dime.

Sat, 01/04/2014 - 09:14 | Link to Comment jimmytorpedo
jimmytorpedo's picture

I like Neal Stephenson's solution in Cryptonomicon.

We just need to find all the Nazi gold in the Philipines first.

Anyone up for a trip?

Sat, 01/04/2014 - 11:03 | Link to Comment chemystical
chemystical's picture

Do you mean Japanese gold?  (aka Yamashita's gold*).  Or were you using this as a snipe hunt metaphor?

The Commonwealth of the Philipines actually gave sanctuary to Jews who left Nazi Germany.  You'd be hard-pressed to find significant Nazi activity there much less a military presence there or near there.

* the Marcos' vast wealth (and Imelda's collection of > 1200 pairs of shoes) reportedly came from finding some of that gold (USA patronage and Marcos' oppression and corruption notwithstanding)

Sat, 01/04/2014 - 06:45 | Link to Comment Reptil
Reptil's picture

good question

did anyone check the latest Chaos Computer Club conference?
I think it's informative
here's one of the presentations: https://www.youtube.com/watch?v=b0w36GAyZIA
some radical stuff at the end

Sat, 01/04/2014 - 08:26 | Link to Comment Popo
Popo's picture

The encryption protects only your ownership -- it does not conceal ownership or transactions.   The issue really, is the latter when it comes to the long arm of the law.

Sat, 01/04/2014 - 11:44 | Link to Comment imbtween
imbtween's picture

The idea of using bitcoin to evade taxes  or hide from the law is misguided, and anyone who participates in a cryptocurrency scheme with that goal will be disappointed and probably end up in jail in whatever country they reside.

Unless you are willing to meet people in dark alleys and exchange BTC for cash using your smartphones, the record of you wiring money between your mtgox/btc-e/cryptsy account and bank account will be on both the blockchain's record and your bank statement.

BTC and it's crypto peers are brilliant as a conveyance of capital. They will probably develop into a useful alternative to costly - and obsolete - traditional finance mechanisms (like international wire transfers and credit cards).

I really don't understand the active antipathy some people have for cryptocurrencies. If you don't like them, think they're a ponzi, think they're an NSA project or some Rothschild scheme to implement one world currency, just stay away. Problem solved.

Sat, 01/04/2014 - 09:34 | Link to Comment Bindar Dundat
Bindar Dundat's picture

What makes you think they are not already using it?

Sat, 01/04/2014 - 02:07 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

If you have to only pick one (too poor to own both), then pick gold.  If you do not understand Bitcoin, then pick gold.

If you decide that holding both BTC and gold is right (like me), hold more gold.

Gold and BTC complement each other, but have more in gold.

 

YMMV

Sat, 01/04/2014 - 10:12 | Link to Comment tmosley
tmosley's picture

EXACTLY.  Gold is savings, bitcoin is a free market checking account.  You don't keep all your money in a checking account.

Sat, 01/04/2014 - 12:43 | Link to Comment Rubbish
Rubbish's picture

Ok I'm an old man and BTC may be a new trick, but I'm not investing $10 bucks in it. I'm trying to get off this fucking grid not marry it. Besides I've seen more than my share of pyramid schemes. The early pumpers did well, I applaud their ingenuity.

Sat, 01/04/2014 - 17:08 | Link to Comment Popo
Popo's picture

"I'm trying to get off this fucking grid not marry it. "

I believe we have a thread winner.

Sat, 01/04/2014 - 17:19 | Link to Comment akak
akak's picture

Unfortunately, it seems that the bulk of the sheep are moving in the opposite direction, and that most Westerners and East Asians will not be happy until they can have their Borg implants installed and surrender their individuality to the collective hive mind.

Which I might not mind so much, except that they are forcibly dragging the sane minority of us along for the ride.

Sat, 01/04/2014 - 08:29 | Link to Comment negative rates
negative rates's picture

Correction, bliss of ignorance!

Fri, 01/03/2014 - 23:52 | Link to Comment disabledvet
disabledvet's picture

John Browne is on the wrong side of the trade. Gold is legal in China...but not bitcoin. Why? Here's why: http://en.wikipedia.org/wiki/Barings_Bank "exclusive agent to the US Government." how big is that shadow banking system in China again? and the Yen might lose its reserve currency status? the British Pound is like 5%. Does it move up to like...8%? While the dollar moves up to 70%? I mean the USA does more trading with Korea than it does with Great Britain. and their next door neighbor "just wants to hang out with Dennis Rodman." Send Madonna over there...maybe that will get the North to understand "the Unity Concept of Being" and bring all those families back together again. Executing a 90 year old Uncle? dude...for real? http://www.youtube.com/watch?v=N1uvmh75xxs

Sat, 01/04/2014 - 00:39 | Link to Comment Handful of Dust
Handful of Dust's picture

People seem desperate to bypass the usd.

Sat, 01/04/2014 - 00:59 | Link to Comment nope-1004
nope-1004's picture

No, those in power are using the USD as a financial weapon.  The rest of the world just wants freedom from bankster slavery.

 

Fri, 01/03/2014 - 23:36 | Link to Comment Missiondweller
Missiondweller's picture

"The problem with it is that modern economies require fast long-distance transactions. Gold is not suited for that"

 

This is the solution: Goldbulliondebitcard.com

The key will be having a trusted third party holding the gold outside of the banking system.

Fri, 01/03/2014 - 23:38 | Link to Comment AgentZeroM
AgentZeroM's picture

Fuck trusted third parties. I don't trust anyone with my gold, nor my bitcoins.

Sat, 01/04/2014 - 01:26 | Link to Comment wintermute
wintermute's picture

Missiondweller. It has been tried,  e-gold was brilliant but closed down by bankster stormtroopers. Only a decentralized peer-to-peer solution will work long-term.

Sat, 01/04/2014 - 18:27 | Link to Comment Missiondweller
Missiondweller's picture

Wintermute: Thanks for pointing this out, but I think you'll see GoldBullionDebitCard overcomes E-Gold's shortcomings by using banking infra structure to be compliant with the USA Patriot Act.

In fact, to the bank and the merchant, its just another transaction in local currency (clearly compliant in a way neither E-Gold nor GoldMoney was) but allows an account holder to store his wealth in gold, converting just a small amount to local currency to offset the debit card ransaction. The best part, is you can keep most of your gold to yourself as this is purely for transactions (not long term gold storage).

I'll continue to move forward both with my patent application and the development of this new, novel payment system. I hope you'll wish me luck.

Sat, 01/04/2014 - 00:04 | Link to Comment Dick Buttkiss
Dick Buttkiss's picture

"The key will be having a trusted third party holding the gold outside of the banking system."

Good luck with that.

Cryptos don't need, don't want, and by definition don't involve third parties and the trust required.

Hence the beauty thereof.

Precious metals are for backup if/when the Internet switch is flipped and should be stored accordingly, along with hard cash, given that every digital dollar is a claim on a physical one. And since the former vastly outnumber the latter, the value of hard cash will skyrocket in the near-term mayhem.

But only the near term.

Sat, 01/04/2014 - 01:15 | Link to Comment hmmtellmemore
hmmtellmemore's picture

"Cryptos don't need, don't want, and by definition don't involve third parties and the trust required."

Bullseye.  People forget what happens when a gold backed alt-currency get's too popular.  The State where the gold is held simply flashes a few badges at the doors to their vault and takes their gold.  Gold has to be stored in a company's safe; bitcoin doesn't.  Heck, you could even use a brain wallet to store it in your head if you trust you memory enough.

Sat, 01/04/2014 - 06:04 | Link to Comment dark pools of soros
dark pools of soros's picture

bitcoins aren't stored anywhere except the blockchain..  your access credentials can be stored under a rock in Alaska or whatever, but there aren't any bitcoins under that rock

 

 

Sat, 01/04/2014 - 08:31 | Link to Comment Popo
Popo's picture

And there's the rub.  Your ACCESS may be protected, but the knowledge of your ownership and your transactions relies on many things outside your control. 

Sat, 01/04/2014 - 08:37 | Link to Comment negative rates
negative rates's picture

A vault is empty, until proven full.

Fri, 01/03/2014 - 23:43 | Link to Comment dwayne elizando
dwayne elizando's picture

99.99% of my transactions are done locally. Who the fuck would send money to mount everest and why? Gold should be tier 1 and the store of value regardless of what is used as a transactional currency.

Sat, 01/04/2014 - 01:18 | Link to Comment hmmtellmemore
hmmtellmemore's picture

No one disagrees that gold is the best money.  Although what if/when someone tows an asteroid to orbit and floods the market with gold?  http://www.reuters.com/article/2013/11/21/us-space-mining-asteroids-idUS...

Sat, 01/04/2014 - 07:45 | Link to Comment Cast Iron Skillet
Cast Iron Skillet's picture

towing asteroids to earth sounds about as good as building more fukushima-style nuclear power plants. I'm sure it will be really, really safe ...

Sat, 01/04/2014 - 00:30 | Link to Comment chemystical
chemystical's picture

"Bitcoin has a huge intrinsic value because it is the currency native to the world's most advanced payment system." 

 

 That is patently absurd.  You've confused "intrinsic" with "imputed", "artificially conferred", etc.

Many things GIVE Btc value, but to say that it has intrinsic value is laughable and an abuse of reality and the English language.

 

Sat, 01/04/2014 - 00:37 | Link to Comment TheHound73
TheHound73's picture

So is "intrinsic value".

Sat, 01/04/2014 - 02:15 | Link to Comment fonestar
fonestar's picture

Things are situationally valuable and relatively valuable (or not).

Sat, 01/04/2014 - 00:54 | Link to Comment chemystical
chemystical's picture

Compounding the oxymoron, you go on to state that is has intrinsic value because.... drum roll ..... the thing that it is completely dependent upon.   If comedic effect was your intent, then well played sir.  Brilliant.

That's not semantics sir.  An apple, for example, has intrinsic value even if I cannot transport it across the pond.  It has intrinsic value even if I cannot transport it across my fence.  It has intrinsic nutritional value even if every human disaooeared tomorrow.  Try saying that about Btc.  Intrinsic?  Laughable.

Not poking at you sir, but instead at the general class who repeats the blather that Btc has intrinsic value.

Sat, 01/04/2014 - 01:40 | Link to Comment wintermute
wintermute's picture

I am making a point about economic systems while you are mired in lexicological quicksand. 

Perhaps intrinsic utility is better than intrinsic value. Splitting hairs is not important. 

Elsewhere:

The answer to why Bitcoin and not all its alt coins is because its user network, merchant network, investor network and most importantly mining network is far superior to all other alt coins combined.

The answer to why Mt Everest, is because no remote distance is too difficult. The whole globe enters a level economic playing field. This will electrify global GDP.

Sat, 01/04/2014 - 02:13 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I hear you, and at least so far I am pro-Bitcoin.  But this gives me pause (four day mining production of BTC):

GHash.IO and BTC Guild mined over 50% of all BTC.

https://blockchain.info/ <-- Then click Mining Pool Stats under Other Bitcoin Sites...

 

Sat, 01/04/2014 - 02:37 | Link to Comment chemystical
chemystical's picture

If you wanted to simply say that bitcoin has utilitarian value, then you might have said that water is wet or something else that is understood by all. 

You appear to know the difference between the 2 words.  You chose, however, to use "intrinsic".  It has been used/abused A LOT by the pumpers and sometimes misleadingly so.  I object.

If being dependent on the internet is what gives value, then you can apply the same to all other cc's and to paypal and visa and...

If you were refering instead to the current (and perhaps temporary) status as the cc with the most extensive network of miners/verifiers, then you are correct (now), but that same network can switch their resources to yourcoin, mycoin, and wtfcoin, in a heartbeat and it won't cost them a farthing to do so.  Oh the fickle lovers.  In fact, the # of miners/verifiers skyrocketed along with Btc price in a self-fulfilling prophesy, but as the yield from mining has dwindled appreciably the incentive to remain faithful has likewise dwindled except to those who still hold btc (and need to search for either bigger idiots or equal idiots). 

Competition is a bitch, and this is a marketing campaign for temporary popularity.  No intellectual property (neither patent, nor copyright, nor trademark), no contracts, no letters of guarantee.  Nothing but fickle lovers in search for a mutual admiration society of bigger idiots.  ("bigger idiots" not in the pejorative sense but in the investor metaphor sense).  "Tomorrow" you'll be "yesterday's" news; unless of course you belong to the investor class that believes Brittney Spears will retain popularity among the teens and tweens well into her 40's.  (Hint: that boat sailed before she hit 25).

 

Sat, 01/04/2014 - 10:20 | Link to Comment tmosley
tmosley's picture

NOTHING has intrinsic value without humans (unless you're an alien of some sort).  The concept of intrinsic value is always with relation to HUMANS.

If you define it without humans, then nothing has any value, because there is nothing to assign it value.  What value is an apple to an empty universe?  About the same as a bitcoin.  Now to HUMANS, an apple has value.  It can sate your hunger, or can be used to make a multitude of things.  If there is only one human, then there is no intrinsic value to gold or bitcoin, because there is no trade.  If, however, we have a planet full of humans...

Sun, 01/05/2014 - 11:22 | Link to Comment TheReplacement
TheReplacement's picture

An apple can fall from the tree and provide sustenance for some critter which will poop it out and thus distribute the seeds hither and yon which begets more apple trees and so more apples for more critters to feed upon.

Intrinsic value with no humans.

Sat, 01/04/2014 - 11:06 | Link to Comment Amagnonx
Amagnonx's picture

Intrinsic value is an oxymoron, it cannot be applied to anything.  Not even your apple has any value, except that value is imputed to it by human beings - VALUE IS A FKN CONCEPT!  It exists in the mind only.

 

So, if Im ever looking for a greater fool - I have your tag - because in your haste to instruct on the 'un'-intrinsic-ness of BTC's value, you commited exactly the same fallacy yourself.

Sat, 01/04/2014 - 11:36 | Link to Comment chemystical
chemystical's picture

BULLSHIT.  Your reading comprehension and syllogism comprehension need improvement.

Don't be so narcissistic as to assume that the falling tree makes no noise because you weren't there to hear it.  Nothing can have value unless you say so?  Or unless a group of "you" say so?  What if other "you's" disagree?  Everything is relative?  Everything is semantics?

I'll play your game, however, and assume that the only thing we're discussing is value to humans and that there is unanimous agreement.  The OP (the person to whom my reponse was addressed in case you've forgotten) stated that Btc has huge intrinsic value because of the thing that it is dependent upon.  That statement utterly failed by ANY definition of "intrinsic" - even your narcissistic one.

Lecture me next on intensive and extensive properties?  (That discussion folds nicely into the Btc thread btw)

Sat, 01/04/2014 - 00:58 | Link to Comment IPA
IPA's picture

It is the only crypto e currency blah blah blah... Oh wait there are countless others.... Well why is btc worth more than those ones? 

Sat, 01/04/2014 - 01:02 | Link to Comment TheHound73
TheHound73's picture

Because folks want to back a winning horse.  Why acquire some random, new, weakly-secured crypto currency that you are not sure anybody will want 6 months down the road?  Bitcoin has been around for 5 years, there are millions of people who have some and may wish to acquire more.  There are more merchants that accept Bitcoin than any other crypto and the bitcoin network is more secure from attack.

Sat, 01/04/2014 - 04:18 | Link to Comment imbtween
imbtween's picture

Bullish for doge coin!

Sat, 01/04/2014 - 10:22 | Link to Comment tmosley
tmosley's picture

Google is the only search engine.  Except there are countless others.  Why is Google stock worth so much?

They are the largest, most advanced, and all around best in a LOT of different ways, that's why.  Hardly anyone uses anything other than Google.

Bitcoin is the Google of cryptocurrencies.  That may change in the future, but the most likely course is that it dominates, just like ten years ago it was most likely that Google would dominate.

Sat, 01/04/2014 - 11:57 | Link to Comment chemystical
chemystical's picture

I understand the analogy, but you certainly understand that - unlike Btc - Google the corporation has extensive hard assets by way of real and intellectual properties, and that it operates in markets that have higher barrier to entry, and that it also partners with and shares information with TPTB, and that as a dynamic entity it has leveraged all of those things very well to advance and expand its positions well beyond its original mission statement.

Google mightn't be the best comparison to make your point.

 

Sat, 01/04/2014 - 06:12 | Link to Comment dark pools of soros
dark pools of soros's picture

nah you have some holy idea of intrinsic.  the internet has intrinsic value. it has functionality. bitcoin is a part of the blockchain.  that protocol, network, etc has intrinsic value as a function regardless of whatever value a bitcoin has. bitcoin can be a penny but the blockchain still functions the same.

 

that is the same type on intrinsic definition as gold.. stop acting like god rubs your gold for good luck everyday or whatever

Sat, 01/04/2014 - 10:16 | Link to Comment tmosley
tmosley's picture

Gold's intrinsic value is in its usefullness as a trade token.  Bitcoin's intrinsic value is in its usefullness as a trade token.  They both have different qualities that make them more or less useful in different circumstances, but they do both have intrinsic value, if you define "intrinsic value" in such a way that means ANYTHING.

Sat, 01/04/2014 - 02:12 | Link to Comment Seer
Seer's picture

"Someone sitting in a grass hut in the Congo can easily move $100 million to someone climbing Mt Everest, in 1 second, irrevocably confirmed in 1 hour, for 5 cents of fees, no third party involved, no government permission needed."

You're a city boy, ain't ya?

Ever been to a grass hut in the Congo?

And that person climing on Mt Everest would have what in common with someone in the Congo?  Oh, that's right, they're BOTH 1%-ers!  The real people, for which Bitcoin doesn't and never will apply (because they'll never see the required infrastructure), the 4+ billion of them, don't count in this "currency that'll save the world" revolution.

BTW - Where does that "5 cents of fees" come from? (I've noted -I was in the business- that it a certainty that there will be middlemen clearing this shit so that transactions can be insured, at a cost of course.)  Only marketing types and the ignorant fail to realize these things- so, I'd advise against touting Bitocoin as having a lot transaction cost because it's WAY too early to make that claim and this is something that the market place will decide (and it may not end up to be so superior to the existing mechanisms).

Sat, 01/04/2014 - 06:11 | Link to Comment dark pools of soros
dark pools of soros's picture

if you were actually informed you could state your case better..  but I aint going to help you without a fee

Sat, 01/04/2014 - 10:17 | Link to Comment BitStorm
BitStorm's picture

Wow - whole lot of nonsense in that post.

Sat, 01/04/2014 - 10:30 | Link to Comment tmosley
tmosley's picture

"Only rich people can use low fee services!"

wat

"People living in grass huts on the Congo are 1%ers!"

wat

"4+ billion people don't even have access to cellphones."

wat

"The market might not choose an ultra-low cost transaction medium that doesn't require trust over expensive fees from untrustworthy trusted third parties."

all of my wat

The transaction fees come from the computing power required to make the transactions.  They go to the people generating new blocks and ensure that there will be infrastructure for processing bitcoin transactions.  The costs are built in to the system, and will vary according to the amount of processing power available to log new transactions.

Sat, 01/04/2014 - 01:15 | Link to Comment hmmtellmemore
hmmtellmemore's picture

user @Stackers wins.  This whole page is a troll for anti-btc people.  Gold is the best money; bitcoin is currently the best currency.  They work together, they do not compete.

In a side note, bitcoin people are smart and can understand this pretty quickly; most "stackers" are fairly slow sadly.

Sat, 01/04/2014 - 01:42 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

 

 

hmmtellmemore wins.  

Gold and BTC both complement each other.

Hold a LOT more gold, but BTC is worth a shot.  It is for me.

YMMV.

Sat, 01/04/2014 - 02:15 | Link to Comment Seer
Seer's picture

"In a side note, bitcoin people are smart and can understand this pretty quickly; most "stackers" are fairly slow sadly."

That would be your take, which might also be a bit on the slow side...

I'd figure that "stackers" are likely to have been around the block a few times, and that this is why you might confuse their more deliberate and reasoned reactions as being slower of mind.  But, hey!  Go for it, experience is the best education!

BTW - I worked on crypto-currency before most here likely even knew about it.  Nearly all the discussions are old to me (though I always keep an ear open for something new).

BTW2 - Currencies and money are secondary to wealth-generating assets.  I'm down the block aways and, well, others need to take their owns steps...

Sat, 01/04/2014 - 06:14 | Link to Comment dark pools of soros
dark pools of soros's picture

they were the same dumbasses with snide remarks about the internet and now they flood facebook (before that AOL) with there crappy kid pictures

 

just because someone is old and don't spend their money anymore doesn't make them some wise soothsayer

 

 

Sat, 01/04/2014 - 00:15 | Link to Comment satoshi101
satoshi101's picture

Once upon a time the USD was backed by GOLD, and they couldn't print more  than they can back.

Today they print all they want, as its only backed by a GUN (USD)

Why in the fucking hell do any of you nerds think that in 10+ years the allocation of BTC's will not rise from 40M to 10000M? Fuck its the nature of man, ... to fucking dillute.

I predict that if BTC survives 10+ years ( 1% chance in hell ), that the CAP will GO ASTRO, cuz its the nature of the fuckinb beast.

It's fucking software folks, its not math, its all a fucking hack, and I can pull any CAP I want out of my ass, if I'm the guy (BITCOIN.ORG) running the software

Sat, 01/04/2014 - 00:40 | Link to Comment TheHound73
TheHound73's picture

oh shucks, another dissatisfied customer.

Sat, 01/04/2014 - 01:18 | Link to Comment hmmtellmemore
hmmtellmemore's picture

"Why in the fucking hell do any of you nerds think that in 10+ years the allocation of BTC's will not rise from 40M to 10000M? Fuck its the nature of man, ... to fucking dillute."

It is mathematically limited.  IE, physics rules not men.

Sat, 01/04/2014 - 06:19 | Link to Comment dark pools of soros
dark pools of soros's picture

wow realization is hitting that you totally fucking missed the boat on this huh?   I think I will buy 5 times your gold stacks tomorrow for the fuck of it

Sat, 01/04/2014 - 08:35 | Link to Comment negative rates
negative rates's picture

Because you don't have 10 years Einstien!

Sat, 01/04/2014 - 01:58 | Link to Comment TaperProof
TaperProof's picture

This is true, other crypto currencies taking market share and impacting the value of bitcoin is inevitable.   I see bitcoin as something to process payments or transfer money with.. but not use it as a means to store wealth... not for the long term anyway.

Gold and Bitcoin go good together and serve differnet purposes IMO.

Sun, 01/05/2014 - 10:31 | Link to Comment TheReplacement
TheReplacement's picture

Turn off the power and tell me how pointless comparison is.

Fri, 01/03/2014 - 22:42 | Link to Comment tmosley
tmosley's picture

Fuck "Bitcoin versus Gold".  How about "Bitcoin and Gold United Against Central Banking"?

Why must it be either/or?  Buy both gold AND bitcoin.  You only need a small amount of bitcoin (if any at all).  Really what you need is a wallet and a working knowledge of the system.  Once you have that, you can use that system to move your wealth around the world without the need to round off your gold bars so they will fit comfortably in your ass.

Bitcoin makes Freegold possible, if not inevitable, perhaps to the chagrin of Freegolders, as governments don't get to inflate thier transactional currency into worthlessness and collapse the system back into a gold standard.

Fri, 01/03/2014 - 22:53 | Link to Comment mbutler101
mbutler101's picture

Exactly...no reason they can't be complementary. Gold/Silver as the store of wealth, and BTC for the transactional crap. When you need more spending money, just retrieve some of the sunken stash and convert it to BTC and pay the bar tab with it.

Fri, 01/03/2014 - 23:41 | Link to Comment Urban Roman
Urban Roman's picture

+1 for making sense.

Sat, 01/04/2014 - 01:41 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 to tmosley, mbutler101, and U.R. for all making sense.

Fri, 01/03/2014 - 22:43 | Link to Comment kliguy38
kliguy38's picture

They have you putz's so confused on gold that you don't even have half a clue.....take your bitcoins and stuff um up your azzes now cuz they'll do it for you and it won't be pretty the way its done.........you don't own physical gold now....nor will you ever.......that IS the game and as Carlin said YOU AINT IN THE CLUB!

Fri, 01/03/2014 - 23:20 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Happy New Year Kli

ABR

Fri, 01/03/2014 - 22:47 | Link to Comment TeamDepends
TeamDepends's picture

A gold coin in the hand is worth a grove of Bitbushes.

-Post-Apocalyptic Saying

Fri, 01/03/2014 - 23:33 | Link to Comment VD
VD's picture

see u can shove a piece of gold up ur ass, BTC not so much...best to b well diversified cause u never know when when a pig wantz to do cavity search....

Fri, 01/03/2014 - 22:26 | Link to Comment Leonardo Fibonacci2
Leonardo Fibonacci2's picture

There is nothing between me & my physical gold coins.  I love to get naked with my gold and get physical!!!!The shiny yellow gets me horny.

Fri, 01/03/2014 - 22:29 | Link to Comment lickspitler
lickspitler's picture

Fibo    The defence rests. The is no rational view on gold.

Fri, 01/03/2014 - 23:19 | Link to Comment hmmtellmemore
hmmtellmemore's picture

The physical nature of gold can be a liability.  Any alternative currency based on gold will eventually have its gold stores confiscated by the State it resides in.  Cryptocurrencies are very different.

Sat, 01/04/2014 - 10:59 | Link to Comment Dick Buttkiss
Dick Buttkiss's picture

Correct, especially if the price goes high enough, as I fully expect it will. So high, in fact, that governments will confiscate mining operations and keep the gold in the ground.

Best to have your own gold (and silver) in your physical possession, fully agreeing (as I stated above) that precious metals have their place, as does physical cash.

In fact, so do coins that already have metal content beyond their face value, which will be accepted as money by the public, in an emergency, on the basis of that content, especially for small transactions that even single dollar bills will be too valuable for:

http://archive.lewrockwell.com/orig13/hathaway2.1.1.html

 

Sat, 01/04/2014 - 11:26 | Link to Comment Jannn
Jannn's picture

Unprecedented Total Chinese Gold Demand 2013

 

http://www.ingoldwetrust.ch/unprecedented-total-chinese-gold-demand-2013

Sat, 01/04/2014 - 13:05 | Link to Comment if
if's picture

Scariest thing about gold is the people who actually believe its worth more than its intrinsic in a world revolving around TCP/IP.

Fri, 01/03/2014 - 22:25 | Link to Comment Tinky
Tinky's picture

"Gold's weakness over the past 24 months has also spooked many former adherents."

 

Really? Former "adherents"? That implies people with both a sophisticated understanding of gold, and a longer-term perspective.

I call bullshit. The vast majority of those who have been "spooked" are either those who didn't bother to try to understand what has actually been transpiring, and/or those who stupidly thought that they could make a quick killing in gold and are behaving like petulant traders.

True adherents, ironically, have been sitting patiently and, in many cases, adding to their holdings at artificially low prices.


Fri, 01/03/2014 - 22:46 | Link to Comment Soul Glow
Soul Glow's picture

Everyone has the memory of a grapefruit when it comes to "investing".  Mom and Pop want into the stock market now, whereas just a year ago they were feverishly scared to enter.  And whereas a year ago they might have considered buying gold now Mom and Pop think gold will go back to $35/oz.  Americans buy high and sell low, forever wasting their time and energy we have come to know as dollars.

Fri, 01/03/2014 - 22:58 | Link to Comment Xibalba
Xibalba's picture

wait a sec...GLD isn't Gold?  But I saw a whole thing about it on Cnbc!  

 

 

/sarc

Fri, 01/03/2014 - 23:16 | Link to Comment Soul Glow
Soul Glow's picture

Yeah, I saw it too.  They showed Pisani one room of gold bars and he said, "See, they have all the gold they say they do!  Waka waka!"

Sat, 01/04/2014 - 01:46 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for derp derp Pisani!

Fri, 01/03/2014 - 22:31 | Link to Comment GoldMeUp
GoldMeUp's picture

The shit is going to hit the fan when a BRIC nation comes out and launches a new DOGE-backed global reserve currency.

Fri, 01/03/2014 - 23:09 | Link to Comment Grosvenor Pkwy
Grosvenor Pkwy's picture

wow.

why bricks?

such faith.

to the moon!

Fri, 01/03/2014 - 23:43 | Link to Comment CrazyCooter
CrazyCooter's picture

Sorry to be dense, but DOGE-backed is defined as ... ?

Regards,

Cooter

Sat, 01/04/2014 - 00:47 | Link to Comment TheHound73
TheHound73's picture

Dogecoin is a stupid joke crypto currency based around a dog.  

 

Such Wow

     much joke

so wealthy

Sat, 01/04/2014 - 04:23 | Link to Comment imbtween
imbtween's picture

But stupid/funny enough that doge will probably be the one that wins.

Fri, 01/03/2014 - 22:37 | Link to Comment Xibalba
Xibalba's picture

Difference between Gold and Bitcoin is that Gold will survive an EMP blast. 

Fri, 01/03/2014 - 23:19 | Link to Comment wintermute
wintermute's picture

There are about 3 million copies of Bitcoin's blockchain all over the world. In 5,000 years when alien time-travellers discover the ruins of the Earth the blockchain will be one of the few datafiles still intact that they will find.

 

Fri, 01/03/2014 - 23:37 | Link to Comment satoshi101
satoshi101's picture

The block-chain which Satoshi defines as 'coin' in his original classic paper was never predicted to grow beyond 2GB, it now is nearing 20GB, in 5,000 years at the current rate of growth of just one BTC block-chain all the NSA storage in the world will not hold just one  block-chain.

BTC block-chain will not survive 2014, I predict BTC 2.0 before the end of the year, already the block chain has been broken and glued back together so many times by the majority mining-pools and exchanges that block-chain refabrication is now a cottage industry, soon you'll be able to go online and BUY BTC's by just going to one of the Block-Chain Editiing houses and ask them to write you in a few 1,000 BTC's, ...

Satoshi's orginal paper made it clear for BTC 1.0 to work that over 70% of players had to be honest, today less than 10 men control over 90% of the BTC nexus by way of exchanges and mining pools. To assume that these 10 men are honest is to assume that the NSA is not spying on you, or to assume that the NSA didn't create BTC.

Me thinks that JPM, or GS already has BTC 2.0 in the waiting, and there just waiting for the right time of offer a solution to the problem.

 

Sat, 01/04/2014 - 00:12 | Link to Comment Grosvenor Pkwy
Grosvenor Pkwy's picture

The blockchain is the core of the Bitcoin protocol. Bitcoin lives or dies based on the technical strengths and weaknesses of the blockchain.

As it is defined now, the blockchain contains every transaction Bitcoin ever made, including fractional values. And once a coin is fractionated, each fraction must be accounted for evermore. As an analogy, this would be equivalent to having to account for every penny of change ever made on every paper bill (dollars, Euros, etc.), even after that bill is deposited in a bank account, forever.

Meanwhile, the entire blockchain must be replicated throughout the entire system. Any player in the Bitcoin game must store and update the entire blockchain, or else become a subsidiary node in the system, dependent on bigger players to maintain the full accounting structure. This ends up being similar to the current system, with most players dependent on a small number of central banks or exchanges.

Sat, 01/04/2014 - 01:39 | Link to Comment JustUsChickensHere
JustUsChickensHere's picture

block chain size is a red herring ... do some research. There are already technical proposals for resolving this issue. The developers are simply taking their time to choose what to implement.

Check out the actual BitCoin wiki page about the issue...

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

I like this proposal: http://www.bitfreak.info/files/pp2p-ccmbc-rev1.pdf but the developer community will thrash this out, make a choice, extensively test ... and then when needed, implement a solution.

So it would much smarter if you recognized this, rather than repeatedly spewing misinformation about the 'block chain size will kill BitCoin' - it wil not.

 

 

 

Sat, 01/04/2014 - 01:10 | Link to Comment TheHound73
TheHound73's picture

<<the block chain has been broken and glued back together so many times>>

Yeah, well, that's bullshit.  

Your choice is this: Centralized payments or decentralized.  If you go the decentralized route, you're gonna need some harddrive space to store the blockchain.  

Sat, 01/04/2014 - 02:00 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Or go with Multibit light client:

https://multibit.org/

Or if you are a risk-taker, have a wallet right in the blockchain itself: 

https://blockchain.info/

 

Both above do not require loading the whole blockchain locally.

Sat, 01/04/2014 - 04:30 | Link to Comment TheHound73
TheHound73's picture

<<in 5,000 years at the current rate of growth of just one BTC block-chain...>>

Now that's forward thinking!

Sat, 01/04/2014 - 08:38 | Link to Comment negative rates
negative rates's picture

Now 5000 years? You better hope to just make it till tomorrow. 

Fri, 01/03/2014 - 23:39 | Link to Comment Xibalba
Xibalba's picture

Your epistemological presuppositions have created a distorted worldview.  Bitcoin, Dogecoin, Coinye, and the like are but mere experiments with no proven track record.  A tulip among tulips, juxtaposed to millennia of that of GOLD, bitchez.    

Fri, 01/03/2014 - 22:39 | Link to Comment ghostzapper
ghostzapper's picture

Really????  Is anyone going to come up with a more creative and deep criticism or are they just going to regurgitate the same "too volatile" argument?  of course it's volatile right now.  It has a market cap of around $10B but the potential to completely change the global financial system so, ummmm ya, it's gonna be volatile before it finds its ultimate value whether that be $0 or whatever it is much, much higher than where it is now.  Cry me a river with another song and dance about the volatility hurting some merchant.  If it does indeed go as far as some think it can then it will primarily move higher until it ultimately reaches some more confined trading range.  if it completely flops and bombs then it goes to zero in which case who gives a fuck anyways.  This "it's too volatile" whining is so childish and superficial. 

I'm trying to find the chinks in the armor here to talk myself out of buying even more.  I still come back to taking the stance that "why the fuck shouldn't I protect myself" with some Bitcoin.

Oh, and I'm also opening my mind to the possbililty that TPTB actually want the peeps to move into Bitcoin (I know, I know cue the chorus of calls on my stupidity).  We are so far into the Twilight Zone that even if some or many of TPTB truly are evil they are not so stupid that they don't know that the current system will indeed collapse at some point.  They are telling you they will print into perpetuity.  Maybe they are being very literal and, well, telling you they will print until nobody even acknowledges the existence of the current currencies.  QE/POMO could have been a "wink, wink" you better get it while the gettins good and I don't see any entity with ahem credibility or some teeth literally trying to topple Bitcoin.  The lack of full scale attacks (and by this I mean more than jawboning from China or the Treasury Department) might be your "wink, wink" you might wanna grab some Bitcoin and prepare for the future.  And yes I realize they may be doing this to track us as well.    

Fri, 01/03/2014 - 22:46 | Link to Comment kliguy38
kliguy38's picture

You're the best argument against bitcoin......BTW when they're through with your stash of bitcoins, you can buy a roll of toilet paper to clean up your mess

Fri, 01/03/2014 - 23:10 | Link to Comment ghostzapper
ghostzapper's picture

Ok tough guy, I'll keep that in mind.  I'll also remain open to all potential outcomes that appear plausible to me given what I am seeing.

Nah, they could never confiscate your physical gold.  A lot of people here at ZH married to and unwilling to consider divorcing the "stacking physical bitches" stance along with stackin ammo, forming militias, and buying farm land.  because with all that farm land you're gonna need a militia to protect it if the whole world is knocked back a couple hundred years.  

How's that chart for gold looking?  I know, I know it's going straight to $10,000 bitchez. 

Fri, 01/03/2014 - 23:21 | Link to Comment Soul Glow
Soul Glow's picture

Gold is money and I really don't care what the number next to the dollar sign is because it is based largely on WS specs throwing paper at it long and short.  I find solace in knowing I have it on my person.  I find solace in knowing it won't rot and it will maintain for as long as I have it.

Sat, 01/04/2014 - 01:48 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

 

Gold will be good for generations to come.  That's why I like it.  

But BTC may have some advantages as it complements gold.  Hold gold, and if you have some spare FIAT$, experiment w/ BTC like I am.

YMMV

Sun, 01/05/2014 - 05:41 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

how did your gold delivery from BTC work out? I tried finding any comment from you saying one way or another but I didn't want to spend all night reading everything you wrote for the last 2 weeks.

Fri, 01/03/2014 - 23:23 | Link to Comment hmmtellmemore
hmmtellmemore's picture

@ghostzapper I suspect most of these "stackers" don't have enough wealth to stack a sandwich.  They are so fucking clueless as to the potential of cryptocurrency, and from their writing I imagine they are clueless about other aspects of life in general.  Well fuck them, they're missing the boat.  

Fri, 01/03/2014 - 23:34 | Link to Comment ghostzapper
ghostzapper's picture

I hear you man.  The thing is I am not anti-gold or anti-silver.  I actually prefer silver to gold but that's a separate debate.  I was long before and sold as I saw a blow off top.  I try to, but definitely have not mastered, avoid getting too attached to anything when I invest and/or trade. I always make EVERY decision based on what the charts are telling me.  When they are NOT propping something up artifically then the sell signals in the charts are valid. 

I just don't see a scenario where we all (or what's left of us) walk around with a rifle and satchel of gold coins slung over our shoulder.  I'm willing to consider that we do find a reasonably peaceful and fairly modern way out of this mess.  We are already at war and it's a financial war.  I will be surprised if we do not see entire nations adopt Bitcoin as their currency.  it solves a lot of problems for them and makes things easier.  My guess would be Indonesia would be the first to do so in terms of larger nations.   

Sat, 01/04/2014 - 04:51 | Link to Comment frenzic
frenzic's picture

fucking kids

Sat, 01/04/2014 - 05:08 | Link to Comment mumcard
mumcard's picture

I wonder if any of them understand how a single random CME could wipe out their vast fortunes of Super Mario Money.

Sat, 01/04/2014 - 10:26 | Link to Comment BitStorm
BitStorm's picture

I'll see your "CME" scenario and raise you a "proton removal from mercury to make gold". If you're beating up on crypto because you've watched Mad Max for the thousandth time, I feel sorry for ya.

Sat, 01/04/2014 - 09:10 | Link to Comment frenzic
frenzic's picture

 deleted because truth hurts

Sat, 01/04/2014 - 09:36 | Link to Comment BLUEJAY1111
BLUEJAY1111's picture

ghostzapper: I believe the future is not in farmland per se; the future is in aquaponics.  Traditional farming is unsustainable in the long-run since too much energy is consumed.  We will be forced to change.  Check out the following sites my friend:

http://portablefarms.com/

http://aquaponics.com/page/aquaponic-systems

And these systems can be run by solar power. 

 

Fri, 01/03/2014 - 22:51 | Link to Comment philosophers bone
philosophers bone's picture

I agree volatility is not the best argument against BTC. Competing cryptos (lack of barriers to entry) and government regulation are the best arguments against it.

Fri, 01/03/2014 - 23:04 | Link to Comment mbutler101
mbutler101's picture

The jury is still out on whether bitcoin is the new NWO coin of the realm, or the people's money. I'm leaning towards the latter, but not sure yet. Whether BTC or Gold, I think most can agree that either are better than remaining in the $ which is d00med. If you haven't picked up they've been telegraphing dollar death for what seems like years, your never going to get it and will lose most of your wealth if left in dollars.

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