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Bitcoin In 2014 - The 3 Critical Factors

Tyler Durden's picture


In the last year Bitcoin has gone 'viral'. As ConvergEx's Nick Colas notes, a lot has happened in 2013: Price appreciation, yes, from $20 to +$800 – the result of this online “Currency” going from science project to mainstream topic.  Volatility too – disruptive technologies seldom travel a level path. The story, Colas notes, is about to change, and there are three critical gates which bitcoin must navigate in the New Year.  First is regulation, and we will get a good dose of that next Tuesday and Wednesday when the New York State Department of Financial Services holds hearings on bitcoin and potentially issuing a ‘Bitlicense’ to help regulate business which transact in the currency.  Second is adoption – how will existing businesses incorporate bitcoin into their sales, marketing and payment channels.  Lastly will be volatility, which will have to come down in 2014 to encourage broader use. 

Via ConvergEx's Nick Colas,

If the ratio of dog-to-human years is something like 7:1, then a bitcoin year is something like 500 years to one regular 365 day turn of the modern currency calendar.  Money as we know it today – a physical representation of stored economic value that supplants simple barter – goes back to about 600 B.C.. That’s when the Lydians – in modern day Turkey – started minting coins.  It’s a lot easier to buy a sheep or a goat with a coin than working out a barter with the seller, and every advanced civilization since then has used currency in some form to make economic transaction easier.  In 2008, an enigmatic programmer (or programmers) unknown released a paper describing an online payment system called bitcoin.  At first it was basically a puzzle contest for cryptographic hobbyists, with a prize for solving an endless battery of puzzles.  Bitcoins were code-breaking bragging rights that could be exchanged with others.

Then, in 2011, bitcoin began to find an actual following.  Its anonymous nature – the core of the system does not hold name, address and other information typical of a standard banking system – made it ideal for illicit transactions.  Individuals concerned over online privacy – ahead of their time, it now turns out – also appreciated the anonymity as well as the algorithmically controlled nature of the issuance of bitcoin.  No open-ended checkbook (as the Federal Reserve enjoys) in the bitcoin world – every 10 minutes another 25 bitcoin appear.  And that’s it.  For all this adoption, bitcoin remained largely under the radar.

Last year, bitcoin had its debutante coming out party, and its price went from $20 to $230 to $80 to $1000 and closed the year at $800. We started writing about it in February, mostly because we thought it was interesting that society – a portion of it, at least – had sufficient faith in technology to hand over their heard earned shekels to distributed network of computers running a program written by person or persons unknown.  Worshipping in front of a golden calf is one thing – making offerings to a virtual calf seemed to merit our attention.  Over the course of the year plenty of other market observers tossed their two cents in the hat, mostly in hater mode.

Well, its 2014 and the value of all bitcoin outstanding sits at roughly $10 billion.  Does that mean the future of the currency is assured? Of course not – there’s still plenty to go wrong.  But what that hefty amount does demand is a reasoned approach to the fundamentals driving bitcoin’s future.  There are headlines aplenty about bitcoin now – still, I think, with a distinctly skeptical eye.  Which is fine.  But to paraphrase a chant heard at many a street rally, ‘Bitcoin is here; get used to it.’

In thinking through a framework to interpret what will be an eventful 2014 for bitcoin, here are the three points – we’ll call them Bitcoin Buckets for a touch of alliterative flair – to guide the discussion.

Bitcoin Bucket #1 – Regulation.  Since those little Lydian coins in 600 BC, issuing currency has largely been the domain of governments.  Granted, the U.S. itself only followed that guideline after the formation of the modern Federal Reserve 100 years ago.  But in general to issue currency you need some bureaucrats, a standing army, a bank, and some borders on a map.  Bitcoin has none of that, which makes it the currency equivalent of a “Stateless person” at the end of World War II or a White Russian after the 1917 revolution.


Initially, there was concern that governments – especially in America – would choose to squash bitcoin for fears over money laundering and illicit activity.  That was, after all, an early use case for the currency and one that continues to this day.  Then in the back half of 2013 two regional Federal Reserve banks published papers commending bitcoin for its low-cost facility of moving money, and it became clear that the U.S. central bank saw some value in the online currency.


We’ll have another data point on government’s take on bitcoin at a hearing next week in New York City, courtesy of the New York State Department of Financial Services.  The early buzz, from an interview on CNBC with Superintendent Benjamin Lawsky, looks promising.  He seems to see the potential for bitcoin and related services to provide much-needed competition to the U.S banking system.  Should merchants have to fork over 3-4% for credit card transactions?  Should credit card holders have to wait a day (or more, in the case of a weekend) for payments to post to their accounts?  Bitcoin-based competition – within the confines of modern anti-money laundering and “know-your-customer” laws – could help drive those charges lower.


In the end, bitcoin really isn’t competition for national currencies – at least not for quite a while.  It can be competition here-and-now for national banking systems.  It is a disruptive technology for transferring money cheaply, by virtue of the online system’s dual mandate of solving those puzzle and keeping track of all transactions as a requisite for a seat at that table.


Bitcoin Bucket #2 – Adoption.  One of the side benefits of getting on the bitcoin story early last year was that I had a lot of very entertaining conversations with computer nerds who had been early bitcoin adopters.  By virtue of their early “Mining” efforts – solving those puzzles in the core algorithm for bitcoins – many of them found themselves quite wealthy.  Not a few hundreds thousand dollars well off, mind you, but serious seven and eight figure wealthy.


At least on paper, that is…  But they were reluctant – and still are – to sell those bitcoins on a still illiquid open market.  And that’s where capitalism comes in.  Bitcoin millionaires are a ready-made customer base for a wide range of luxury and near-luxury goods and services.  If you want to peruse a list, look here:


The bottom line is that bitcoin adoption by merchants is just going to accelerate.  There’s a reason why Rodeo Drive and Madison Avenue have all the chic shops; that’s where the money is.  And now the money is in bitcoin as well.


Bitcoin Bucket #3 – Volatility.  You can’t make an omelet without breaking some eggs, so it should be no surprise that bitcoin was both a big winner in 2013 and extremely volatile.  April saw the largest exchange melt down on huge volume.  Later in the year we had a similar selloff as the Chinese government sought to crack down on asset laundering.  None of this prevented bitcoin from ending the year near enough to $1000 to prove there is some level of organic global demand.


To succeed as a method of wealth transfer – which we believe to be the cornerstone of bitcoin’s long term success – price volatility will have to decline.  Yes, that is a tall order for asset with very little issuance and no convenient way to short it.  We have no doubt that merchants will adopt bitcoin simply to access newly minted high net worth individuals.  But to keep them in the fold and increase the usage of bitcoin in other parts of their business, they will need to see some greater stability in the price.


To end on a cautiously optimistic note, this appears to be happening already.  The decision by the Chinese government to curtail bitcoin exchange activity could have sent the currency into free fall – the growth in demand inside that country was a big part of the bullish case for bitcoin.  And drop it did – to $600.  But not $100.  Or $10.  Since then it has bounced back to $800-900.  Baby steps on the road to lower volatility.  But steps nonetheless.

It is tempting to conclude these notes with ‘Bitcoin is going to $5,000!’, but I don’t think anyone can reliably predict where it will trade over the next year.  What does seem more certain is that bitcoin is a very important disruptive technology in financial circles.  If it were a private, venture backed enterprise, it would certainly be worth more than the latest mobile picture app or video game platform.  Which puts that $10 billion total valuation in some context.  But our three buckets put some context around the challenges ahead – regulation, adoption, and volatility.  We think that bitcoin will grow in relevance over 2014; we know it will be fascinating to watch.


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Fri, 01/24/2014 - 22:25 | 4365336 fonestar
fonestar's picture

Enter the fonestar

Fri, 01/24/2014 - 23:17 | 4365471 BTFDemocracy
BTFDemocracy's picture

Its all about Dogecoin now..

The currency isn't even 2 months old & has 40k subscribers on Reddit; Bitcoin has 100k.
Fastest growing 'non-default' reddit.

For those who say "I'll say its a currency when strippers and prostitutes accept it" ..

This is not logical or serious, but this world is not logical. WE ALL know that from reading here.

Fri, 01/24/2014 - 23:25 | 4365498 Mr Pink
Mr Pink's picture

Please take your dogecrap spamming somewhere else.

It started as a joke and will always be a joke.

I hope you and the other 39,999 little dweebs can someday pool your 80 quadrillion dogshit coins together and buy a comic book

Fri, 01/24/2014 - 23:46 | 4365559 Pladizow
Fri, 01/24/2014 - 23:49 | 4365565 fonestar
fonestar's picture

Yes, we're all aware of intelligence agencies envolvement in basically everything on the internet.  Yawn.

Sat, 01/25/2014 - 00:09 | 4365619 Spanky
Spanky's picture

How telling.

Sat, 01/25/2014 - 00:26 | 4365663 fonestar
fonestar's picture

I guess this is news for people not involved in this circle for... oh, I don't know, the past two decades or so?

Sat, 01/25/2014 - 00:43 | 4365692 Pladizow
Pladizow's picture

Did you see the name of one of the refrences at the bottom of the paper - Tatsuaki Okamoto  - sound familiar?

Sat, 01/25/2014 - 01:18 | 4365760 fonestar
fonestar's picture

Brother of the other mother?  Or just Sum Yung Gai?

Sat, 01/25/2014 - 10:12 | 4366390 Occident Mortal
Occident Mortal's picture

It's old news now.

Without the rampant 1000% price gain, the Bitcoin story is not worthy of the mainstream news. Without the soaring price it's just old news.

2014 will have other stuff in the news.

Bitcoin was fun. But it peaked with the congressional hearing.

Sat, 01/25/2014 - 11:23 | 4366500 fonestar
fonestar's picture

Right, Bitcoin and the cryptocurrencies are "old news" hahaha.  Keep wishing hard.

My guess is Bitcoin could be anywhere from $5,000 - $10,000/BTC in January 2015.

Sat, 01/25/2014 - 13:15 | 4366764 madtechnician
madtechnician's picture

There are a lot more price triggers to come. Every piece of QE , each new bank bail-in , bail-out , bank failure , the US debt ceiling debacle and new problems in the EU will shoot btc higer. These problems are never going away so the bitcoin price trend has only one direction to go in.

Sat, 01/25/2014 - 16:02 | 4367096 gold-is-not-dead
gold-is-not-dead's picture

and even without those triggers, just two more years to 12.5 btc per 10 min

Sat, 01/25/2014 - 20:28 | 4367525 madtechnician
madtechnician's picture

And as if the ignant fucks on here will even know what the fuck you are on about ........ (LOL) /

/Sarc ON.



Sat, 01/25/2014 - 01:19 | 4365761 boogerbently
boogerbently's picture

I don't know about Bitcoin as a "currency", but it would make a good TRADE.

Volatility is not good in a "currency".

You could buy and sell in whatever currency provides the best return.

Sat, 01/25/2014 - 06:48 | 4366128 GetZeeGold
GetZeeGold's picture



Bitcoins....leaving slavery.....only to go in to captivity.


Don't leave home without your tracking might get lost.

Sat, 01/25/2014 - 09:12 | 4366322 Bindar Dundat
Bindar Dundat's picture

As a student of the BTC invention I can suggest this is one of the most thoughtful and insightful articles written to date on the issues relating to bitcoin. Well done.

Sat, 01/25/2014 - 09:46 | 4366363 chemystical
chemystical's picture

"Thoughtful"?  "Insightful"???

With all due respect - and no matter which side of the Btc fence you're on - this article was neither.  It didn't tell us anything we didn't already know, and it took a lot of time to do that. 

If the purpose was to inform, then it was an abject failure.  If it's purpose was to provoke thought, it was an even worse failure.  If it's purpose was to persuade - as it appears to be - then it was an abysmal failure: nothing therein would budge me even a picometer in one direction or the other.

I've yet to read the readers' comments subsequent to yours in the thread but I have little doubt that they'll be more informative and more thought provoking and - as always - more entertaining than the piece they're commenting on.

Fri, 01/31/2014 - 10:35 | 4387669 Bindar Dundat
Bindar Dundat's picture

I suppose I could have said from a " business prospective" it is thoughtful and insightful piece of work.  


Having said that when someone does not understand the basics of business it would be hard for you to get it.


I will try harder next time to attend to your slow mind -- NOT

Sat, 01/25/2014 - 14:23 | 4366923 FinalEvent
FinalEvent's picture

Since BTC is capped, FIAT is the one creating volatility!

Sat, 01/25/2014 - 00:25 | 4365659 satoshi101
satoshi101's picture

Bit-Tards will deny that DOD-ARPA NSA/CIA  created the TCP-IP internet ( 1960's), so its fairly easy to see that they can deny that SATOSHI (1996) was an NSA scientist.


Sat, 01/25/2014 - 00:27 | 4365667 fonestar
fonestar's picture

There's a good chance Satoshi was INT.  Big deal, I'm still buying.

Sat, 01/25/2014 - 04:26 | 4365997 satoshi101
satoshi101's picture

Just 2 months ago you said that BTC wasn't NSA, and now today your saying "SO WHAT", ... my you have changed.

Wasnt' that the entire purpose of BTC was to 'fuck the system?', now even you admit that BTC is the system, yet you still love to bit-fuck(tm) the weak and stupid.

Sat, 01/25/2014 - 06:49 | 4366138 GetZeeGold
GetZeeGold's picture



Embrace the surveillance.

Sat, 01/25/2014 - 09:14 | 4366323 fonestar
fonestar's picture

Go back and read my damn posts bonehead, I've always saild .mil .gov was the biggest employers of advanced cryptographers.  The entire internet exists largely due to the contributions of these people.

Sat, 01/25/2014 - 09:36 | 4366344 satoshi101
satoshi101's picture

Dude, I was there I worked in this shit since the 1960's and NO the CRYPTOGRAPHERS didn't develop TCP-IP.

This is the problem FONESTAR, if you actually had any experience or knowledge, of mathematics or science, you might be able to pull a little shit off. But tonight I can see your finally losing, cuz usually your the guy with grace, but tonight you said 'damn', which is quite surprising for a bot to get mad, cuz usually you are without emotion.


The "ENTIRE" internet was developed by DARPA(DOD-MIL-NSA) back in the 1960's so that nuclear silos could communicate in the advent of a full nuclear war.

Cryptography had not a fucking thing to do with the invention of TCP-IP ( the internet protocol ).


I know what your getting too, your now admitting that EVERYTHING 100% ONLINE&ON-COMPUTER is 'owned' in the somodist sense by the US-MIL & NSA, and yes it is, microsoft, google, and et-al.

Trouble is foney, not only are you fucking with the wrong person, not only do I know my CS and MATH shit, but I also worked for the NSA back in the day writing cryptography algo's. So you can't shit me, ... I was there, and I know who has done what. I know where all the body's are buried.


But me & you have had this battle before, ... lets just agree that your doing a good job, ... and we all love you for your PASSION, cuz I'm the first person on earth to respect a man with PASSION, we just need you to channel this passion into something GOOD.

I love you fonestar. xxx0000xxx

Of course I'm saying this cuz I drank bei-ju all night, but so what :)


Yes, the internet exists because MIL-DOD-NSA, but not because of CRYPTOGRAPHY. INTERNET is 1960's, but virtual currency is late 1990's.


Lastly, fonestar I deeply apologize for allowing myself to fall into this trap, as it bores the fucking hell out of me to talk about BITCOIN. I would much rather talking about how we can take the USA back from the ASSHOLES.

Sat, 01/25/2014 - 13:30 | 4366783 madtechnician
madtechnician's picture

Actually ass hole you are wrong. TCP/IP was developed by DARPA almost by accident. At first 2 US University campus research departments needed to connect their mainframe computers together , when a 3rd university requested access to the network they came up with a clever protocol which then evolved. Nuclear silos were never connected into that network.


Now you are also saying you worked for the NSA back in the day writing Cryptography algo's ? You are the biggest shill bullshitter on this forum ....

Sat, 01/25/2014 - 10:12 | 4366394 chemystical
chemystical's picture

earlier he finally at least replied to my repeated question where I asked why he admittedly sold Btc at around $200/Btc "to pay some billls" and then a few months later bought back in at $800. 

Recall that I asked why anyone with such a 24/7 "buy buy buy" and "they might reach a 5 or 6 digit conversion rate" message on this (and at least half a dozen other sites) would ever sell and then pay 1600% premium (annualized) to buy them back?

I asked whether he lacked the courage in his convictions that he wants everyone else to have, or whether he didnt have a pot to piss in and didnt have enough credit to "pay some bills".

He replied but did not answer.  His reply: "Fonestar says a lot of things."

A few days ago he commended a poster for quoting and linking a reddit post.  He said that "reddit is an excellent source of information on Btc".  Well that curious because a month ago he lambasted a different poster who also quoted and linked something from reddit: "So we're supposed to believe what some idiot on reddit said?"

I know that there have been others but it's not my habit to memorize this pumper's inconsistencies.

One of the litmus tests for a liar is that they can't consistently stay on message because they can't remember all the lies.  The truth has no such impediment, and I speak truthly about this guy.

At least he did refently inadverantly admit that this was a pyramid scheme.  He posted that Btc was "the ticket to riches".  I called him out and pointed out that it's the early adopters who will grow rich off the subsidy provided by others (as, for example, the folks who bought at $1250).  Btw I don't know yet whether it is a scheme, and I did not say that it was...he did.

Btc does have momentum, and there are and will be plenty of holders who tenaciously cling to their beliefs no mattter what the fundamentals may some day indicate (picture Randolph and Mortimer Duke), so even if this does unwind badly, it likely won't unwind which case I'll reverse Fonestar's words:  you don't want to be the last one selling.

Sat, 01/25/2014 - 07:25 | 4366149 madtechnician
madtechnician's picture

Hey man it wasn't long ago that the idiot brigade was saying it was a Ponzi , a Tulip , a Pump & Dump , a Scam , you guys said it was going to crash and dissapear in 2009 , 2010 , 2011 , 2012 , 2013 , now your saying it was invented by the Fed. There is no consistency in any of your theories or arguments. You just pluck random shit out of thin air and throw it at the wall to see what sticks. So far none of you shit has stuck because it is precisly that - mindless bullshit.

Sat, 01/25/2014 - 10:21 | 4366407 chemystical
chemystical's picture

Irrespective of all else,

"you guys said it was going to crash and dissapear in 2009 , 2010 , 2011 , 2012 , 2013"

You guys??  2009?  2010?  2011?  Please provide a link to ANY zh thread dating from those years in which posters said ANYTHING abt Btc. 

Hyperpbole much?  Hyperbole too much?? 

"Now you're saying that it was invented by the Fed"

Now???  Where have you been.  That's been a recurring speculation for at least a year and has been posited hundreds of times herein.

Re-read your blather and self-apply it liberally.  The ablation will do you good.

Sat, 01/25/2014 - 13:32 | 4366813 madtechnician
madtechnician's picture

You think some of your shit is actually gonna stick ? FAIL ....

Sat, 01/25/2014 - 18:14 | 4367321 chemystical
chemystical's picture

Not one iota of shit.  I simply asked you to put up or shut up.  And as usual you did neither.  I'll accept that as an admission that you can neither put up nor shut up.

You had the opportunity to put your bitcoins where your mouth is, and as usual you declined to do so.  Ironically you say that I fail.  

Continue along that same path I suppose that you'll still expect to have a shred of credibility.


P.S. what kinda vaccuous ditz still says "fail"?  Were you the same poster who earlier in the week - after failing to present any support for his bullshit - said I was a newbie poster and then said stfu?  Stfu?  Bravo to your ilk.  Your superiority astounds.  What's the protocol in Puerile World?  Was I supposed to reply to "stfu" with: "make me"? 

Sat, 01/25/2014 - 20:46 | 4367545 madtechnician
madtechnician's picture

Until you fucks come up with an actually semi intelligent constructive argument against bitcoin then all I will give you is a fuck vacation. If you could even try to demonstrate an IQ slightly above average then lets talk , until then keep sucking out those dried flecks of shit which have actually managed to dry up on the insides of your nostrils.

Sat, 01/25/2014 - 04:00 | 4365975 Matt
Matt's picture

"I hope you and the other 39,999 little dweebs can someday pool your 80 quadrillion dogshit coins together and buy a comic book"

millions of dollars a day trading hands just on DOGE/BTC. At least the exchange is making a few grand a day off it.

Sat, 01/25/2014 - 08:44 | 4366275 tip e. canoe
tip e. canoe's picture

It started as a joke and will always be a joke.

in an era of "It's All A Fucking Joke", so what?

the interesting piece of the doge experiment is that the currency centers around the concept of gifting, an economic variable with a non-zero value that has been missing in economic systems since the euros started sailing across the seas, killing off most of the indigenous ways and ghettoizing the rest.

one of the advantage of gifting is that it spreads the distribution of the currency across a wider net, securing the system with a forgotten, but innate, ethical principle.

time will tell whether that will thrive (or even survive) once the selfish miners move in.    with scrypt, everyone is restricted to their GPUs (and their botnets of course).   when the security is maintained by a strictly proof-of-work algorithm, there's always that use of energy thingie lurking in the background.

however it turns out, much interesting, more so than comics.  or bitshit for that matter.

to the moon...bitchez

Sat, 01/25/2014 - 12:14 | 4366599 freedogger
freedogger's picture

"dogecoin is a joke" 

Averaged $40 a day mining and heating my house up here in the great white north for the past 11 weeks. The current operation involves mining the DOGE, sell them for bitcoin on an exchange and use the BTC on to pay the electric and any other bills with what is left over. I'll probably keep a few hundred thousand for the long term. At some point I'll unload my five 7970 gaming cards on eBay. 

I have two duct fans pulling the heat of the rigs that send it to the main furnace duct. Both the basement and upper floor are toasty warm, about 2800 square feet. We have had a week this year where it was below - 20 Celsius, that was the only time I turned on our traditional heating. 

Sat, 01/25/2014 - 12:53 | 4366701 tip e. canoe
tip e. canoe's picture

wow, genius.   you should do an instructable on your system and slap your addressess for donations.   would be cool to rig it up on a hot water heater as well, as long as you have a cool basement with good airflow in the summers.

now if there were a crypto that equalized that incentive over time (maybe a combined PoW/PoS system?), someone might have somethin'.

p.s. how does work?   they were down for maintenance when i clicked.


Sat, 01/25/2014 - 13:08 | 4366743 freedogger
freedogger's picture

Old hardware + new GPU + electricity is hardly e=mc2.

Here's the guide:

Sat, 01/25/2014 - 13:30 | 4366806 tip e. canoe
tip e. canoe's picture

i meant hooking it up to the heating system.

Sat, 01/25/2014 - 16:15 | 4367117 freedogger
freedogger's picture

Sorry, I thought you were being sarcastic,. I just cut a hole in my main furnace duc, pplugged a new duct from there with two 150 cfm fans that I got from home depot into that. 

Sat, 01/25/2014 - 19:20 | 4367437 tip e. canoe
tip e. canoe's picture

no worries, to be expected here.  but i actually think it's a genius idea.   kill 2 birds with 1 electricity bill.

so you're just sucking warm air off the computer?   do you have any fans blowing onto the GPU's or no?

Fri, 01/24/2014 - 23:53 | 4365574 dark pools of soros
dark pools of soros's picture

and you have to cash out to btc to get any fiat for doge like all the other alts..  ltc might get some traction there but it sat on its lead all last year and did squat to better itself.


so all alts are in a toss up stage

Fri, 01/24/2014 - 23:54 | 4365578 fonestar
fonestar's picture

I don't understand why LTC is getting pummled but then again it was less than $5 just a few short months ago.

Sat, 01/25/2014 - 01:20 | 4365768 The Ponz
The Ponz's picture

LTC is being undermined by DOGE. More and more GPU miners are switching from LTC to DOGE. Many of those miners are just mercenaries, moving to the currently most profitable scrypt coin, but I bet some are DOGE true believers. Doge may have started as a joke, but now it's got a $60+ million market cap, and a friendly fast-growing community.DOGE's quick rise, coupled with LTC's dip, illustrates the value of community to these coins. And how quickly a front-runner can fall back.

Sat, 01/25/2014 - 12:20 | 4366615 freedogger
freedogger's picture

Very true and a lot of the horse power on the network is from the pools that automatically calculate the most profitable coin and switch to that currency. If you configure your rig to point to that pool,  you could have several different coins each day. 

Sat, 01/25/2014 - 01:23 | 4365774 The Ponz
The Ponz's picture

Also, many thanks for all your excellent work here taking on the trolls telling the truth about crypto. I enjoy your wise comments.

Sat, 01/25/2014 - 01:26 | 4365784 fonestar
fonestar's picture

Thanks.  I enjoy taking a byte out of their sorry arguments where I can.

Sat, 01/25/2014 - 13:20 | 4366781 Crash Overide
Crash Overide's picture


Sat, 01/25/2014 - 03:56 | 4365970 mister33
mister33's picture

How about this for the truth...

"JPMorgan’s proposed system involves creating 'virtual cash' that would sit in an online wallet, reminiscent of the computer files that hold Bitcoins on behalf of their users.

The JPMorgan system would also create a public record of transactions made using the technology – a feature that would appear to mirror Bitcoin’s use of 'blockchain', a massive block of code stored across a peer-to-peer network of computers that acts as a public ledger of all Bitcoin transactions."

This club is staying silver and golden :)

Sat, 01/25/2014 - 07:27 | 4366191 madtechnician
madtechnician's picture

That is really old news and the patent was not granted anyway. Even if they did manage to pull it off who would buy into a currency created by an insolvent bank ?

Sat, 01/25/2014 - 13:36 | 4366544 Spanky
Spanky's picture

Exacta mundo...

Which may be why bitcoin has such a "mysterious" provenance...

Would you buy into a digital currency created by no such agency on behalf of the Fed, USG and TBTF banks?

Sat, 01/25/2014 - 00:23 | 4365651 satoshi101
satoshi101's picture

CASH out what joke my ass

When I go to where I live and go the exchange I get


SELL BTC $600 ( $30 MAX )

In another words, I could BUY BTC for $900 USD, but I would lose 30% should I sell, and I would have to find 20 partys to buy a fraction of that $600 USD.


This is complete fucking lunacy.

Sure the scientology fone-tards want you to go shopping with BTC, cuz nobody wants to give you CASH $$ USD.


Sat, 01/25/2014 - 00:25 | 4365660 fonestar
fonestar's picture

Lowballers and scuzballers different on the web than in the "real" world, pawnshops, corner dealers, etc... how exactly?

Sat, 01/25/2014 - 01:20 | 4365769 boogerbently
boogerbently's picture

What's the "premium" on gold or silver ?

Sat, 01/25/2014 - 01:26 | 4365779 fonestar
fonestar's picture

When you buy, it's a rare and historic collectable that demands a premium.  When you sell, it's a major pain-in-the-ass that I'm going to have to ship to the refiner to melt down.

Sat, 01/25/2014 - 03:27 | 4365938 eclectic syncretist
eclectic syncretist's picture

And bitcoin is fiat. Case closed.

Sat, 01/25/2014 - 04:24 | 4365955 TheHound73
TheHound73's picture

Open sesame.

Sat, 01/25/2014 - 06:50 | 4366141 GetZeeGold
GetZeeGold's picture



And bitcoin is fiat.


Doesn't even come with paper.

Sat, 01/25/2014 - 12:05 | 4366584 bitcoinbear
bitcoinbear's picture

Fiat is any money declared by a government to be legal tender and state-issued money. According to wikipedia. 

It's a bit of a shame that you don't know the basic definition of the words you are using. 

Sat, 01/25/2014 - 07:01 | 4366154 madtechnician
madtechnician's picture

Bitcoin is not fiat. The definition of a fiat currency is that it is legally sanctioned by law for use as legal tender which also allows you to pay your taxes in.

Sat, 01/25/2014 - 07:06 | 4366163 prains
prains's picture

then it's a phiat currency if you're going all dictionary

Sat, 01/25/2014 - 07:31 | 4366197 madtechnician
madtechnician's picture

Not sure what the fuck you mean exactly. If you are trying to say bitcoin can be created out of thin air like other fiat currencies well it cannot. It is created at a pre-determined precise mathematical rate which tracks the mining production curve of gold.

Sat, 01/25/2014 - 07:36 | 4366199 prains
prains's picture



the curve of Satoshi's dick, but nobody can verify that........phiat in that it's ALL phait(h) based.....get it phonzi

Sat, 01/25/2014 - 08:27 | 4366264 TheHound73
TheHound73's picture

Good, good. Let the bitcoin hate phlow through you.

Sat, 01/25/2014 - 11:03 | 4366329 fonestar
fonestar's picture

No, what they're trying to say is that they believe they can simply commandeer words to meet their precondunced(sic) meaninings.

Sat, 01/25/2014 - 07:37 | 4366207 frenzic
frenzic's picture

Buya what a great way to put it.

Sat, 01/25/2014 - 10:39 | 4366432 chemystical
chemystical's picture

"legally sanctioned by law"

Thanks for the laugh.  If it crashes will you suicidially kill yourself?  Perhaps by jumping out of a virtually virtual Wall St window.

"for use as legal tender which also allows you to pay your taxes in"

I won't touch that, but it's probably likely possible that your dead English teachers are rolling in the graves.

Sat, 01/25/2014 - 11:57 | 4366556 Urban Roman
Urban Roman's picture

Predictions are difficult, especially about the future.

If you come to a fork in the road, take it.

Sat, 01/25/2014 - 12:13 | 4366597 tip e. canoe
tip e. canoe's picture

or a fork in the blockchain for that matter.

Sat, 01/25/2014 - 13:41 | 4366835 madtechnician
madtechnician's picture

such a clever cunt: "rolling in the graves"

Sat, 01/25/2014 - 04:23 | 4365994 satoshi101
satoshi101's picture

I only buy 5 or 10 tael gold bar's.

I NEVER buy premium, or cosmetic GOLD, why? for what?

I only care about minimizing LOSS when I want out.


Above some BITCOIN bitch says he can off me 90% on my BTC? Fuckn can nobody do better?

With gold I get 99.9995% back the same day.


Sat, 01/25/2014 - 02:27 | 4365869 satoshi101
satoshi101's picture

Here in CHINA the premium for BUY/SELL is 0.005, meaning that if I buy $1000 of PURE GOLD, and 5 minutes later sell it back at the same store, ... I pay $5, or 0.5% That's not a bad buy/sell differential.

In BTC I see that the posted loss is 30%, but I have yet to find anybody that will buy back 100% of what they sell you.

Sat, 01/25/2014 - 10:48 | 4366448 chemystical
chemystical's picture


playing devil's advocate, you'd almost have to be referring to person to person open markets and/or markets where a single transaction's volume is sufficiently large to justify the related expenses.

why else would anyone accept that small of a fee for facilitating exchange? 

what's the fraud rate with regard to, for example, gold-plated tungsten - or do these market participants all carry analytical equipment and honest scales?

something doesn't add up.

Sat, 01/25/2014 - 12:26 | 4366629 freedogger
freedogger's picture

At most charges 1% to allow me to pay any bill I have in Canada with bitcoins. Good enough for me for now.  

Sat, 01/25/2014 - 13:23 | 4366782 chemystical
chemystical's picture

How much does your bank charge you?  Better yet, how much does your plastic charge you?  Some plastic actually pays 1% me back. 

The plastic issuer certainly passes that 1% on to their vendor clients, but that's not my problem; and that NIMBY reasoning applies to your 1% as well.

Whay would I pay 1% to pay my bills when I can instead be paid 1% to pay my bills?  Crypto?  Seriously?  I (the hypothetical consumer) don't mind anyoneone knowing that I owe my local utility provider, my mortgage holder, my auto finance co, etc etc.  As a matter of fact, that info is out there for anyone looking at "my" credit report.

Crypto?  Bah.  Not if the vision is 7BN ppl using it.  6.9999BN have nothing to hide. 

Transactions are cheaper?  Not for the above "me".  Cheaper if merchants widely adopt it and subsequently lower their prices to commensurately reflect their lower cost?  Yes, but that's a long way off, and there will absolutely be counterparties in between, and they won't offer their services for free.  Btc already has 1 layer of that.  The cost of risk management is another layer that will need to be added.  (Escrow companies don't offer that gratis out of the kindness of their hearts).  Plastic issuers already protect you against fraud and and mediates buyer-merchant dispute.  Btc does not, and that won't be free.

Transnational payment system?  We can do that now.

Rapid transaction system?  Btc settlement is currently running nearly 15 minutes behind plastic, PayPal etc.  That time lag is not going to improve as scale increases.

Tell me again what incentive you have to pay your bills in Btc?

Sat, 01/25/2014 - 13:55 | 4366857 freedogger
freedogger's picture

The house I am in only has electric. Rather than pay to heat hot water to run through our floors, I run a few mining cards on old hardware. The waste heat is then sent through the existing furnace duct. Seams to be the simplest way to convert my btc right now. 

Sat, 01/25/2014 - 18:26 | 4367358 chemystical
chemystical's picture

Ah I see.  First you need Btc, and then the mechanism to pay bills with them becomes useful, and then the Btc themselves become useful.  Sounds reasonable in a circular logic sort of way akin to creating a crisis and then creating the means to mitigate it. 

Sounds a bit like Field of Dreams: if you mine them they will come.  Didn't someone earlier mention that you can pay hooker with Litecoin?

Sat, 01/25/2014 - 04:14 | 4365986 bluemaster
bluemaster's picture

cool down satoshi101 just send here  and I will pay you -10% bitstamp price  but only buying  not selling BTC.


Sat, 01/25/2014 - 08:21 | 4366258 tip e. canoe
tip e. canoe's picture

why are you even valuing cryptos in fiat at all?

Sat, 01/25/2014 - 08:32 | 4366267 TheHound73
TheHound73's picture

Currently the best indicator of market penetration.  Pricing items based on the mathematical reference that 0.002 BTC currently exist for each person on earth will quickly put a merchant out of business.

Sat, 01/25/2014 - 09:40 | 4366349 tip e. canoe
tip e. canoe's picture

"market penetration" : market, i'm assuming you mean, the one dominated by a web of national fiats that distorts all values (including time, labor, work, energy & life) to fit a "growth" paradigm where the skimmers & scam-artists always win by convincing the conqusitidors that they're the bestest set of peoples that ever lived.  

if so, have fun stormin the castle!

but if i'm wrong and you mean market (a venue of voluntary exchange of goods and/or services between individual human beings) instead, why not skip the middleman and cut out the bullshit by valuing it by what's it really worth: kWH and let the market come to you as the reality sets in?   cuz behind the Green Curtain of The Fiat, that's what this is really about : the energy required to do the work necessary to provide sustenance for 7 billion + human beings without everyone killing each other.

when valued in electricity, you can immediately utilize one of the best weapons in any technologist's arsenal : Koomey's Law.   most especially if you can distribute the law across as many "consumer" devices as possible while maintaining security of the ledger.

might take longer to penetrate, because you're penetrating at all, you're building a solid foundation from the ground up.  of course, that would bore (a) all the hot speculators who still see their winnings in fiat and (b) all those who wanna be part of the bestest set of people that ever lived.   

but if they'll drop anyone on a dime, why do you wanna play with them anyhow?

Sat, 01/25/2014 - 10:17 | 4366397 TheHound73
TheHound73's picture

I'll trade you a couple 9-volt batteries for a pack of smokes.  Fully charged Duracells, of course, no skimmer scam artist here, wink wink.  

To me Wealth in its simplest form boils down to Energy + Materials + Knowledge to combine them.  Pricing everything in terms of Energy is interesting but leaves something out of the equation. How many KwH is a Picasso worth?

An energy market already exists but would anybody want to use an electricity backed currency? Possibly. Who would be the issuer?  What about renewables, technological advances, and disruptions in energy supply due to weather or war?

The "market" currently says 1 oz. of gold is worth 13 barrels of oil or 1.32 bitcoin.  The trade token doesn't really matter as long as both parties in an exchange are in full agreement. Here's a Satoshi Nakamoto quote:

"As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: boring grey in colour, not a good conductor of electricity, not particularly strong, but not ductile or easily malleable either, not useful for any practical or ornamental purpose, 

and one special, magical property: can be transported over a communications channel

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it."

Sat, 01/25/2014 - 11:06 | 4366475 tip e. canoe
tip e. canoe's picture

wink wink.  haha, it takes a thief, no?

How many KwH is a Picasso worth? 
great question.   how much is a gift worth? 
"A work of art is a gift and not a commodity."

would anybody want to use an electricity backed currency?
why not?  there's an oil backed one, and it seems quite successful.

thanks for the treasure trove of quotes, hadn't read all those before.   here's another:  If you’re using electric heat where you live, then your computer’s heat isn’t a waste. It’s equal cost if you generate the heat with your computer. If you have other cheaper heating than electric, then the waste is only the difference in cost. If it’s summer and you’re using A/C, then it’s twice. Bitcoin generation should end up where it’s cheapest. Maybe that will be in cold climates where there’s electric heat, where it would be essentially free.

too bad that almost all of the computers maintaining the security backbone of satoshi's baby don't exist in people's homes any more to heat them.    it be mad cool to build a mining rig inside a rocket mass heater and sell for BTC, code-friendly too ;~)


Sat, 01/25/2014 - 04:39 | 4366008 Nassim
Nassim's picture

This is a valid point. True, it is no possible to overmanufacture Bitcoins, but we will soon have 79 varieties of cryptocurrencies.

Sat, 01/25/2014 - 10:45 | 4366444 TheHound73
TheHound73's picture

Do any merchants accept Diners Club or Discover Card anymore?  Most alt-currencies will meet a similar fate.  Oh wait, they're already there.  I do not envision Merchants setting up their shop with 100 different digital wallets and exchange rates.  If they do accept Crypto-currency, they'll go with the one with the most liquidity and customer base: Bitcoin.

Sat, 01/25/2014 - 11:24 | 4366502 chemystical
chemystical's picture

I understand the attempt to analogize, but Discover?  It's accepted at 9 of 10 US merchants (and almost half of those that don't accept it don't accept any typeof plastic).

Diner's Club was acquired by Discover a few years ago.

Discover via it's partnership in China is the most widely used plastic in-country. 

I fully understand that merchants currently have an incentive to use Btc versus other cryptos, but this is way to early in the game to put a cross over the grave of every current and future competing crypto.

Bear in mind also that competing crpytos - as compared to competing credit cards or "video storage" (i.e the betamax vs VHS anaolgy) - have practically no barrier to entry. 

Btc has no intellectual properties (patent, trademark, copyright), no physical assets, no contracts, no letters of agreement or credit, etc. etc.  The only thing even resembling a physical asset is the network of other people's physical assets, but those other people can leave in a nanosec and take "their" network with them.  Merchants who currently accept Btc don't need to invest in so much as a "card swipers", and switching to whatthefuckcoin won't cost them a farthing.  They can drop Btc in the same nanosec as the network.

What you're instead relying on (hopin for) is that no disincentive to drop/switch can or will ever appear on the horizon.  That is akin to whistling past the graveyard.  Don't blockchainers already have a growing disincentive to mine and to verify?  The expense of mining is by design increasing, and the fees for verifying relies solely on a scale that must be inversely proportional to that mining expense. 

Scale introduces other issues that have been oft-discussed but too easily dismissed with: "Oh, they'll write a patch".  Who is they?  Oh, the majority of owners.  Who's the majority of owners?  By all accounts it is a handful of early miners.  "And this patch won't change anything about the past assurances?"  The early miners will say either no or too bad.  Yes, they have a disincentive to say no lest the kill their golden goose.  "They" also have no disincentive to patch in such a way that they can liquiduidate quickly without being detected, and then leave the bag holders with an unrecoverable mess.  Way too early.  Way.

Sat, 01/25/2014 - 11:39 | 4366529 tip e. canoe
tip e. canoe's picture


funny what happens when you open up pandora's box, in'nit'it?

Sat, 01/25/2014 - 11:46 | 4366542 TheHound73
TheHound73's picture

Boom. Great response. No doubt about it Bitcoin is nose bleed high risk from an investment perspective. Only time will tell.

Sat, 01/25/2014 - 11:57 | 4366561 Spanky
Spanky's picture

They'll go with the one that TPTB bless.

Sat, 01/25/2014 - 12:37 | 4366657 freedogger
freedogger's picture

That's easy, just put the BitPay widget on your check out page and you will automatically accept whatever alt coins BitPay supports. Right now I think it is just Bitcoin, but I'm sure they or a competitor will take them all eventually. 

BitPay is a great option for merchants. They take the Bitcoin and pay the merchant the equivalent in whatever fiat the merchant wants at a fraction of what Amex, visa and PayPal charge. 

Sat, 01/25/2014 - 18:35 | 4367376 chemystical
chemystical's picture

Good point.  When traveling abroad and using plastic I'm still paying for things in the currency of the realm, and later VISA's billing details shows me the conversion rates from USD to AUD, Euro, Pesos, etc.

Same goes for using that VISA at ATM's when I have a need for paper currency from those countries.

Sat, 01/25/2014 - 00:49 | 4365706 jomama
Sat, 01/25/2014 - 03:26 | 4365936 eclectic syncretist
eclectic syncretist's picture

Take your fiat fantasies and go elsewhere. 

Sat, 01/25/2014 - 06:25 | 4366107 prains
prains's picture



like a dog to a bone, always ready to pimp the virtual fiat currencies, trying to get more to buy into the bottom of another << PONZI>> fucking scheme. Can't eat it, fuck it, shoot it, or cook it. The virtual ponzi transaction to alter 1's and 0's to a tangible good is STILL required. Meaning it's based on FAITH, meaning it's a PONZI...........

Sat, 01/25/2014 - 07:02 | 4366159 madtechnician
madtechnician's picture

Hey man , if you can pay for hookers and blow with bitcoin , that tells me it's not quite what you think it is.

Sat, 01/25/2014 - 07:08 | 4366165 prains
prains's picture

dude the convertibility is a faith based transaction to ...get... to the boobies and blow,


because somebody else is converting the bitcoin fiction believing they will someday in the futre ALSO be able to convert the FICTION for some nice facts

Sat, 01/25/2014 - 07:33 | 4366200 madtechnician
madtechnician's picture

Sounds like you have just described exact the definition of any form currency or money there , not just bitcoin.

Sat, 01/25/2014 - 07:38 | 4366214 prains
prains's picture

.........AND !!! ****** monsieur Phonzi what prize would you like to claim from the grab bag tonight, oh wait.....we're out of prizes right now but trust me next week my bag will be full of treats for you, come back next week!!!

Sat, 01/25/2014 - 07:43 | 4366219 frenzic
frenzic's picture

Nobody or nothing has the power to enforce the use of bitcoin. In the case of that thing nobody seems to call greenback anymore you are up against a bloodthirsty monster, same for all other kinds of fiat. That is what is backing convertibility.

Sat, 01/25/2014 - 07:50 | 4366222 prains
prains's picture

Nobody or nothing has the power to enforce the use of bitcoin.


Yet another PHaith based claim, it's crypto is man made and can be man broken.......Biology mutates to survive, look to the simple answers for understanding, complex systems always mutate to survive, adapt and evolve. Sometimes the mutation makes a Gork, sometimes it makes a Giselle. Just depends on who controls the DNA.....God or Satoshi

Sat, 01/25/2014 - 08:10 | 4366247 frenzic
frenzic's picture

I don't think you are calm are you. Read again and notice you are preaching to the choir. I don't have a binary world view deal with it.

Sat, 01/25/2014 - 13:45 | 4366841 madtechnician
madtechnician's picture

Looks like him and Satoshit101 both forgot to take their meds.

Fri, 01/24/2014 - 22:31 | 4365352 Rentier
Rentier's picture

Right on!

Fri, 01/24/2014 - 22:33 | 4365357 gafgroocK
gafgroocK's picture



With his new Paul Krugman moniker

Fri, 01/24/2014 - 22:38 | 4365381 sixsigma cygnus...
sixsigma cygnusatratus's picture

Bitlicense = Bank license.  Rinse and repeat.

Fri, 01/24/2014 - 22:41 | 4365388 q99x2
q99x2's picture

People in NY can't regulate anything and that is why we are headed toward a global economic meltdown.

Fuck NY. New York sucks. It's sucking sucks so bad that each year its sucking influences suck less upon the whole sucking world.

I'm going there in February and there better be a fucking Bitcoin ATM or I'm going to be pissed.


Fri, 01/24/2014 - 23:30 | 4365509 Dick Buttkiss
Dick Buttkiss's picture

Me, I'm so fucking, sucking, pissed at the NYification of the entire world that if Bitcoin doesn't fucking, sucking, pissing shit on it, I fucking, sucking, pissing give up.

Seriously, it's showdown time.



Sat, 01/25/2014 - 02:15 | 4365838 the0ther
the0ther's picture

Then don't do business in NY. Get bent. Hypocrite.

Sat, 01/25/2014 - 11:33 | 4366513 chemystical
chemystical's picture

"People in NY can't regulate anything"

You can debate whether their efforts are successful (and argue the definition of "success") but they without question can and have regulated.

"Fuck NY. New York sucks. It's sucking sucks so bad that each year its sucking influences suck less upon the whole sucking world"


"I'm going there in February and there better be a fucking Bitcoin ATM or I'm going to be pissed."

If your personal or financial outlook depends on the presence of a Btc ATM in NYC or anywhere else, then you are way too deep.  "In what?" is the question only you can answer.

Fri, 01/24/2014 - 22:47 | 4365403 satoshi101
satoshi101's picture

"When Bitcoin is criminalized, only criminals will use bitcoin"

Where have we heard this before?


Well lets be honest, ... I like it cuz if some older person without mean gets "BIT FUCKED", then he has a party, that is "BONDED", and that means there is a mechanism for recovery albeit burden will be on the 'bit licensee', which means that only a few people who are liquid can play.

But you can go underground and play with 'fonestar' and have zero recovery option, or you can go above ground and have 100% recovery option.


My summary is that when BITCOIN is licensed only MORONS will be playing in the underground bitcoin market.

Ingress/Egress to BITCOIN had always been back and forth to USD $$$, so its always been there, this now just means that the kid in the basement can't play. Poor foney.

Fri, 01/24/2014 - 22:52 | 4365411 fonestar
fonestar's picture

....says the idiot abusing one of the greatest names in modern times (who believes bags of rice are the superior currency).

There will be many escrow services and time-locks built up around the blockchain, that much is true.  If the "morons" who "play underground" become richer because of the lower fees and higher attraction of less regulation to certain players, then that is fine by me.

Sat, 01/25/2014 - 00:00 | 4365592 Spanky
Spanky's picture


For... of the greatest names [satoshi] in modern times... -- fonestar

An assertion that has yet to be proven. Only time will tell.

Sat, 01/25/2014 - 00:08 | 4365615 fonestar
fonestar's picture

Hypothetically, if Bitcoin collapsed tomorrow, Satoshi would still go down in the history books.  If you don't understand what is going on here, that's your problem and not the world's.

Sat, 01/25/2014 - 00:11 | 4365626 Spanky
Spanky's picture

Problem is, if what is going on here is what I think it is, it's just another mind fuck.

Sat, 01/25/2014 - 00:18 | 4365644 satoshi101
satoshi101's picture

lookey here,

I know here on ZH your all financial geniasses,

but go to the street and ask about tulips or south-sea bubble and they not a clue

then go ask around about cabbage patch doll, or beanie baby, and both had same capitalization as BTC today,

nobody ever remembers pyramid scams, its why they alway work every generation or so ...


foney would like to think that he'll end up in a museum, but I can honestly say that a few years after this thing implodes ALL will be silent.


Because the MSM will be too embarrassed to mention it ever again.

Sat, 01/25/2014 - 00:23 | 4365650 fonestar
fonestar's picture

The media begrudgingly acknowledged Bitcoin's existence with about the same fanfare they gave OWS.

Sat, 01/25/2014 - 00:28 | 4365666 satoshi101
satoshi101's picture

The MSM has beeing PIMPING & PUMPING BITCOIN every bit as much as fonestar, if not more.

If I google 'bitcoin' on news right now, I'll get 100's of HOT story's about people getting rich, and never  a mention of FRAUD.

Sat, 01/25/2014 - 00:46 | 4365696 TheHound73
TheHound73's picture


Sat, 01/25/2014 - 07:17 | 4366177 GetZeeGold
GetZeeGold's picture



and never a mention of FRAUD.


Didn't hear a peep out of them when tech stocks collaped either.....just sayin.

Sat, 01/25/2014 - 01:19 | 4365764 fonestar
fonestar's picture

Why is the media's darling AAPL constantly blocking everything to do with Bitcoin?  Riddle me that... (if you need a few hours to invent a counter-conspiracy, feel free to take your time).

Sat, 01/25/2014 - 07:33 | 4366127 madtechnician
madtechnician's picture

Apple and Micrsosoft can be like a coiled spring when it comes to a new technology adoption , they wait and then they pounce spectacularly. Would not surprise me that once the network gets around 100-150,000 Th/sec they will disclose all the latest bitcoin apps they have been working on for the last 18 months. I suspect them , along with PayPal , Google, Amazon and eBay are all in full swing bitcoin app. development right now.

Sat, 01/25/2014 - 13:13 | 4366761 freedogger
freedogger's picture

I think they are heads down developing their own currency right now. 

Sat, 01/25/2014 - 14:12 | 4366895 madtechnician
madtechnician's picture

They are not allowed to create their own currencies without a banking license. They can create 'tokens' but the value of their token would have to be pegged to a fiat currency price , therefore defeating the whole point.

Sat, 01/25/2014 - 08:43 | 4366278 eclectic syncretist
eclectic syncretist's picture

Maybe there's something in the "crypto" part of cryptocurrency that they're not quite comfortable with, you shameless huckster used car salesman asshole.

Sat, 01/25/2014 - 11:41 | 4366533 chemystical
chemystical's picture

Wow, please don't sugar-coat it.

Btw when the shoddy used car crashes at least it has scrap value.  The other: crap value?

Sat, 01/25/2014 - 11:49 | 4366545 alien-IQ
alien-IQ's picture

"If" you go down in the history books is not quite as important as "how".

Charles Ponzi is in the history books and so is Rudolf Von Havnstein. Some would say that type of fame is worth avoiding...wouldn't you agree?

Sat, 01/25/2014 - 14:16 | 4366906 madtechnician
madtechnician's picture

One of the primary definitions of a Ponzi scheme is that it promises to make you rich. Bitcoin is not making any such promise.

Fri, 01/24/2014 - 22:48 | 4365408 I Write Code
I Write Code's picture

I loves me some bitcoin, "... my preccccious!"

Fri, 01/24/2014 - 22:57 | 4365426 Long-John-Silver
Long-John-Silver's picture

I can't figure out how to have a "Boating Accident" with Bitcoins.

Fri, 01/24/2014 - 23:04 | 4365447 nmewn
nmewn's picture

Just get a virtual boat and wing it! ;-)

Sat, 01/25/2014 - 07:25 | 4366181 GetZeeGold
GetZeeGold's picture



You set off a mini EMP with a LED flashlight over your computer......should do the trick.

Fri, 01/24/2014 - 23:18 | 4365476 BTFDemocracy
BTFDemocracy's picture

Put coins on Laptop, spill some beer on Laptop; no deep water needed.

Fri, 01/24/2014 - 23:19 | 4365478 Curiously_Crazy
Curiously_Crazy's picture

That's the beauty of it. You don't need to.

Sat, 01/25/2014 - 03:38 | 4365947 eclectic syncretist
eclectic syncretist's picture

The difference between gold and bitcoin is that bitcoin is hidden under a mattress that someone else can access and control.

Sat, 01/25/2014 - 04:43 | 4366015 TheHound73
TheHound73's picture

Yup totally dude, go play with the 111,111 bitcoins on 1933... all ya like.  Just be sure to put them all back like a good boy when you're done, a'ight.

Sat, 01/25/2014 - 08:47 | 4366281 eclectic syncretist
eclectic syncretist's picture

But I'll bet you can figure out a LOT of ways to jam, block, eliminate, or impede the electronic capabilities required for someone to access their bitcoin account.

Sat, 01/25/2014 - 10:35 | 4366427 Spanky
Spanky's picture

Like turn off the power...

Fri, 01/24/2014 - 23:14 | 4365468 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

I think I'll coin a term for ZH'ers: stamp-lickers

Licking a stamp and sending a snail mail when the rest of the world is moving over to email. Happy licking!

Fri, 01/24/2014 - 23:35 | 4365524 nmewn
nmewn's picture

Because no one ever opened an attachment & was not amused? ;-)

Sat, 01/25/2014 - 00:02 | 4365603 Spanky
Spanky's picture

If that keeps the content of my communications private, so be it.

Sun, 01/26/2014 - 05:12 | 4368003 Zero-risk bias
Zero-risk bias's picture

And therein lies the important issue.

The protocol is not particulrly important, as long as the means by which information or wealth is stored or transmitted is secure.

Carrier pidgeon could well have some advantatges over email.

Fri, 01/24/2014 - 23:21 | 4365482 saulysw
saulysw's picture

It is starting to really annoy me that every time I see something about bitcoin it has a picture of the "B dollar" on a gold coin. This is a subtle psychological trick to try and promote the bitcoin as good as gold and also something physical - two things it is not.

Fri, 01/24/2014 - 23:25 | 4365495 nmewn
nmewn's picture

The observant eye can usually tell fraud by its own marketing ;-)

Fri, 01/24/2014 - 23:46 | 4365556 TheHound73
TheHound73's picture

As a bitcoin user, it annoys me as well.  Bitcoin is intangible, media company lazy graphics departments just regurgitate the same stupid coin images everywhere to satisfy their addiction to splash graphics over everything.

Sat, 01/25/2014 - 00:33 | 4365676 nmewn
nmewn's picture

I do think it hurts your cause and I really don't have a problem (generally) with alternate currencies, just with those who promote them for their own profit as an asset...I think you know that (among a few here) from my past comments.

Just be careful with it, its only as real as what someone else wants to trade something real, for it.

We're cool, we see the same thing ;-)

Sat, 01/25/2014 - 00:57 | 4365720 Harbanger
Harbanger's picture

As a bitcoin trader, I'm accumulating PM's on the swings like a bandit.  Let me tell you sumthin, the West has NO FUCKING GOLD LEFT.  Cryptocurrency is quickly becoming their last hope.

Sat, 01/25/2014 - 07:04 | 4366162 madtechnician
madtechnician's picture

Which is another reason they will not take it down.

Sat, 01/25/2014 - 07:20 | 4366184 GetZeeGold
GetZeeGold's picture



Cryptocurrency is quickly becoming their last hope.


Please tell me it's not THAT bad.

Sat, 01/25/2014 - 08:51 | 4366285 eclectic syncretist
eclectic syncretist's picture

Actually, they would probably be interested in replacing it with something not called CRYPTO-currency.

Sat, 01/25/2014 - 00:03 | 4365605 Spanky
Spanky's picture

Marketing is just another name for propaganda.

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