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Guest Post: Bitcoin - Revolution Or Trap?
Excerpted from The Money Bubble by James Turk and John Rubino,
In the Internet’s early days there was general agreement that one of the first killer apps would be some form of cyber-currency. Since money was already largely non-corporeal, existing as entries in bank accounts and ready to spend with plastic cards, the next logical step would be to move the whole thing online and dispense with paper and coins and their costly and burdensome infrastructure of banks, regulators and printing presses. The emergence of such currencies would, in this optimistic scenario, consign relics like the dollar and the Fed to history’s circular file and usher in an era of trust, stability, and growth similar to what occurred under the classical gold standard.
But the digital liberation of money turned out to be easier said than done, as the first wave of cyber-currencies came and went without much of an impact. eCash, for instance, was an encrypted, anonymous payment system that allowed anyone anywhere to send and receive instant payments. But it relied on the existing banking infrastructure, and because “anonymous” meant “money laundering” to the police, it faced extreme pushback from authorities who viewed such currencies as primarily empowering drug dealers – and from banks that saw no point in encouraging the competition. Only one small bank ever accepted eCash, and the currency died a quiet death a few years after its introduction.
A larger impact was made by e-gold, which offered accounts denominated in grams of gold from which owners could make and receive payments. It generated some buzz, peaking at five million users and $2 million of transactions in 2009. But here again, the fact that much of this action was apparently money laundering by parties with good reason to stay anonymous led to legal pressure that eventually led to its failure.
James’ company, GoldMoney, was originally designed to operate as a gold-based payment system based on several digital currency patents. It avoided the money laundering stigma by requiring users to register under their own names, and also met with early enthusiasm. But other logistical and legal barriers proved to be insurmountable, and GoldMoney’s payment system was deemphasized in favor of offshore gold storage. By the late 2000s, purely digital currencies looked, to most observers, like a near-impossibility in a world where governments and banks had the power to prevent such competition.
ENTER BITCOIN
In 2008, a mysterious person or group using the apparent pseudonym Satoshi Nakamoto unveiled a new digital currency called Bitcoin that appeared to solve some of its predecessors’ problems. Without going too deeply into the technical details, the Bitcoin system tracks each piece of currency from buyer to seller, eliminating the possibility of one person spending the same piece of currency multiple times before the counterparties catch on. The network is distributed, with no central clearinghouse or bank holding everyone’s money and imposing rules. “Miners” create more Bitcoins by solving complex algorithms to add more Bitcoin to the system, with the difficulty of the number crunching increasing as the quantity of Bitcoin grows, thus keeping their supply rising at a steady, predetermined rate until it reaches is a preordained limit of 21 million a century or so hence.
Bitcoins, which are a long string of alphanumeric characters, can be stored in a variety of places, from a digital “wallet” on a desktop computer to a centralized service in the cloud, or even completely off-grid by being printed on a piece of paper. And because it operates over peer-to-peer networks similar to those used by techies and teens to download music and videos, it bypasses the established banking/regulatory system, making it, at least initially, free of government oversight.
Nakamoto, whoever he (or she, they) was, disappeared in 2010. But by then the Bitcoin community had taken on a life of its own. Hundreds of users began to mine Bitcoins with increasingly sophisticated computers, and the number of merchants and individuals willing to accept, store, and transact in the currency rose steadily.
As the buzz grew louder, the small community of techie/libertarian early adopters was joined by traders sensing a serious momentum play. The dollar price of a Bitcoin rose from 5 cents in early 2010 to 36 cents in November. In February 2011 it briefly achieved parity with the dollar, and when a Forbes Magazine ran a favorable story that called it a “crypto currency,” the price went parabolic, to nearly $9. More breathless press ensued, sending the price to $27 and putting the market value of Bitcoins in circulation at $130 million.
On the Internet’s black market – the network of sites only accessible to computers running anonymizing software such as Tor – Bitcoin was rapidly becoming the preferred form of money. This drew the ire of the establishment, with US Senator Charles Schumer demanding the closure of online drug emporium Silk Road and describing Bitcoin as “an online form of money-laundering.”
At about the same time, Bitcoin’s Achilles heel became apparent, which is that it has to be stored somewhere, and no place is 100 percent secure. Bitcoins stored on a desktop can be wiped out by a crashed hard drive. Backed up on other storage media, they’re vulnerable to hackers. Kept in an online storage service – which sounds like a bank but has no deposit insurance or even physical reality – they can disappear without a trace. Traded on an online exchange they can likewise simply disappear, with no recourse to former owners.
As Bitcoin rose in value the number of high-profile crimes and crashes rose apace. A Tokyo-based exchange was hacked and lost numerous client accounts. A Poland-based storage service accidentally overwrote its customer records. A West Indian storage service simply shut down, and its owner disappeared. And viruses aimed at Bitcoin caches proliferated. Newcomers, meanwhile, discovered that working with Bitcoin required skills not yet common among the non-techie 99 percent. The press turned scornful, and a consensus formed that the concept was fatally flawed and without much of a future.
The Comeback
Throughout that boom and bust, Bitcoin retained a core user base that saw its possibilities and worked to overcome its flaws by developing point-of-sale hardware and online merchant services while lessening its dependence on a small number of exchanges.
And then, just when the outside world had stopped paying attention, Bitcoin recovered. From under $20 at the beginning of 2013 it rose to $240, crashed to below $100, and then in one dramatic arc soared to more than $1,000. In early 2014 Bitcoin’s market value exceeded $10 billion and the number of merchants willing to accept it was soaring.
The market appears to have spoken: Bitcoin is for real.
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Excuse me, but IMHO exiting BTC mean's getting back 100% of my USD $$$, when I want and NOT waiting and not having to suck dick to get MY money back, and it doesn't mean getting a BTC haircut or shopping at the KMART of the online world.
Bullshit most retailers now give a discount for using BTC over Fiat which far outweighs any loss of getting out.
Your 'getting out' argument is a Straw Man argument , selling BTC is way easier than selling gold or any other foreign currency.
mad is right
illiq bro
goldsilverbitcoin.com
amagimetals.com
dude yes but v/mc knew that years ago and is why they own that income you cite
to any extent btc bites some of that pie, it wont be with less friction
this thing is a cool, hip, techie, pro-modern sink for the lazy free market -- saving the world is as easy as scanning a QR code, now return to your frappacinnnoooooo -- who is nakaunnacare any more.
Anyway what'd you say?
Track all purchases forever
Turn people on and off
Tun off population at flick of a switch (its not like you can go back to transacting after the authorities clear it, okay guys? other posters breathlessly extoll)
Devalue after 50% ownership
50% ownership is easy, mathematically gets easier, best to wait for far broader public adption and not scurr up good souls in the herd of early adopting miners before thinking about taking the reward. First it must grow
"You put dollars in one end to get them. You get dollars out the other end when the retailer unloads them. People get excited easily. Bitcoin is digital nothing. The value is in the transaction method, not the medium of bitcoin. People that confuse that are going to be bagholders"
Yeah, now let's add some real "value" to that equation. You have found your dream-home. It's located on a small remote island just 300 miles west of the Brazillian coast. You look at the ad online, and the guy wants $10,000,000.00 USD for it. He is willing to accept the funds via Western Union. So you now have to pay $10,100,000 for a house that was listed for $10,000,000 because Western Union wants a 1% funds transfer fee (I know they charge more for funds transfers, but it was a nice easy to deal with number). Now if this transaction were happening in BTC, you would authorize a transfer of a little less than 11,000 BTC from your wallet, type in his wallet identifier, and bam! Minutes later, he is $10,000,000.00 richer, you are the proud owner of a south-pacific dream home, and you didn't have to get ass-raped for $100,000.00 by Western Union....
-Oz
Think of Bitcoin as a bank without buildings, owners or employees. Anyone can open an account and all accounts are completely free and there are no mandatory fees. A bank that didn't require identification and had no forms to fill out. A bank without any arbitrary borders, fees, restrictions or regulations. Open for business via internet 24 hours a day 365 days a year. Based on currency that is impossible to counterfeit or double-spend and that is not regulated by a CEO, politician or central bank. A system designed to create an open, decentralized and borderless network to faciltate trade.
That is a fantastic explanation , even the real ZH simpleton's should understand it like that.
Bitcoin Part II: Replace government beaurocracy with a distributed digital ledger
Bitcoin Part III: Replace entire government departments with distributed trustless digital voting systems.
Bitcoin Part IV: Replace entire government with distributed trustless digital voting systems.
Doesn't it kind of make you want to cry when you hear these fucking idiots talk about letting the federal government regulate it???
-Oz
They will start holding it when their suppliers start taking it, or when the dollar starts fluctuating wildely prior to its final and inevitable collapse.
But I'm sure you can just buy after the dollar has collapsed without a problem. I'm sure people will still offer bitcoins (and PMs for that matter) for dollars when dollars are falling by 25% every day.
If you want to be dogmatic, then by all means take a position and cherry-pick facts to suit your agruments. But if you want to be rational plus objective, it's customary to look at the facts first, and then reach a conclusion.
In the case of BTC as Currency or as Money, let's look at ALL the attributes of "Money", shall we?
Let's have some intellectual integrity (leave personal bias and emotion out of it), and look at the Ideal Attributes of Fiat, Gold or BTC.
IDEAL
MONEY FIAT GOLD BTC
1. Finite Supply N Y Y (store of value)
2. Portable Y Y+N Y
3. Fungible Y Y Y
4. Non-forgeable N Y Y
5. Divisible Y Y+N Y
6. Private N ? Y
7. Acceptance Y Y+N Limited but
growing fast
8. Conf/Theft-resistant N N Y
9. Durable N Y Y+N
You couldn't put it any better..
not private, not finite
I admire the spirit of BTC but in reality it's just bits and bytes. How is that a store of value? BTC may not be forgeable but it is susceptible to competition from new crypto-currencies (Ponzi schemes?) that are popping up every day. It is also susceptible to confiscation or theft either by hacking or a good old-fashioned gun to the head.
You are also not accounting for the real world where politics come into play. Govts don't like competion to their fiat, hence PM market manipulations. The US is content to sit back for now and let Wall Street toy with the BTC suckers, but if push ever came to shove the NSA would shut that shit down in a heartbeat.
Can you tell me what the functional difference between a "digital" Federal Reserve Note, and a "digital" Bitcoin is? Also, the NSA can't shut down shit. The Bitcoin Network is the SINGLE MOST POWERFUL COMPUTER ON PLANET EARTH! It is distributed over MILLIONS OF NODES ALL OVER THE PLANET. Your NSA data center in Utah couldn't hope to record one week of the network's traffic, much less "stop it". HA! Really that is some comical crap right there. There is no fed at the head of the blockchain. There are no central bankers printing BTCs off by the billions. Anyone can find out at any time EXACTLY how many BTCs there are in circulation, we know EXACTLY how many BTCs there will EVER be, and anyone with a GPU can set up a mining account, and crank off megahashes! And you think a government. or petty party politics anywhere is going to stop it? I'm sorry, but you have another thing coming.... As to other cryptocurrencies? COUNT ON THEM! I will be surprised if before you die, you don't make up one yourself. I imagine in the future, that they willl be as ubiquitous as business contracts, and that you'll be able to exchange them for any number of assorted asset classes. Somewhere along the line, I expect that it will lead to a market based on actual value, demand, supply, rather than social, political, cultural, and religious considerations mucking up the market.
-Oz
Vivek Ranadive, owner of the Sacramento Kings, was interviewed at Davos about the Kings accepting bitcoin. He said he is NOT changing bitcoin into dollars. He is holding bitcoins. I suspect Ranadive is not alone in this.
The BTC market will be manipulated if it isn't already, Wall Street is always looking for new victims. I'm sure BTC "price enhancement" was a topic of discussion at Davos. Not hard to buy low and sell high when you can move that market at will.
I doubt that Ranadive will be holding BTC for too long, or else the Kings really will be moving to Seattle.
Short term burns. That is the best any of them can do to disrupt Bitcoin. If you know what is really driving the spikes in BTC value, you can tell how they are operating. The big dips you see on the chart are usually the result of big sell offs by institutional investors. They hold for months, wait for the volume of noise to get high enough, and they sell off. The trouble is that once they sell their BTC, they have to buy them back at the same rate as everyone else. So the best they can do is short term burns. The fact is that they don't make Bitcoin, and as such, do not control the supply to the market. Bitcoin is made by the global network of miners, many of whom mine them and hold them (like me). Kind of hard to gain a dominant market-share with that kind of market dynamic....
-Oz
You're close, however when a "receipt IS the transaction" a mudpie is a pie. That is the distinction between neo liberal economics and behavioral economics. Ricardian contracts. To take the argument to an extreme, you imply mud is valueless when in truth all pies come from mud because they are grown.
For those into Bitcoin, more power to you. However, like I've written before, "Gold just works."
Power out, gold just works. Internet down, gold just works. At a TSA checkpoint between FEMA Zones VII and VI, gold just works.
"The guillotine pricing problem: "Charge by height, but before or after?"
Adjust your tariff to suit your needs, after all, it's what the bnksters do.
Only seems fitting.
Lmao! How does "Gold just works"??? What have you bought lately with Gold? You for sure didn't buy anything over the internet...
If the power goes out for a short period of time youre not going to start using your "precious" Gold are you?? and if the power is out for a long period of time Gold is not gonna help ya...better get your bullets out!
Getting gold through a TSA checkpoint would be just as difficult as getting it through airport security - impossible without a full search and declaration and probable confiscation. Bitcoin transcends that , USB keys do not set off metal detectors or X-Ray alarm systems. Even if they did you can email your bitcoins to yourself , then pick them up when you reach your destination. Impossible to do that with PM's .
In my admittedly humble opinion, Bitcoin's "Achilles heel," as it were, is the simple fact that nobody knows who or what is behind the thing. That, and of course the fact that a sustained power outage would pretty much zero out your ability to use it. Strange indeed it is that there are some, who while rightly holding in contempt the Federal Reserve and its printing apparatus, will express their love for this, the fiat-iest of fiats.
The Bubble Theory of Money holds that money has a notional value only because people speculate in it. In this money does not differ from other types of assets, it simply has the distinction of being the most liquid. The corollary of this theory is that all money is bubble-money; or, to put it another way, there are always bubbles in the economy and the most inflated bubble is none other than the money supply itself. Bitcoin takes this theory to its logical extreme.
Although I find the bubble theory morally repugnant, I admit that it is hard to argue against. In fact I have to concede the premise about the speculative value of money, but I give it the opposite signification. If I were to sail right 'round the world, I would fing the bubble theory waiting for me at the antipodes. Agreed, money is a bubble--and this is a reductio against which argument: the argument that Bitcoin is valid money, or the argument that all money is an evil speculative phantasm and ought to be dispensed with? Who gets to bite the bullet?
I take up the position that money is an evil bubble. Stackers should agree with me, and Bitcoin acceptors no longer have an argument against fiat. Not everyone will like it, but these are the logical consequences of the decision.
Bitcoin is a distributed ledger of ownership. The market decides the value of the units on that ledger. We can argue about markets but, it is what it is.
If Nakamoto were shown to be Obama or Putin, they would have as much power over the network as anybody else: They would have to convince users on an individual basis to change their behavior to affect a change of the network.
Power? Bitcoin provides surveillance...
The other part of the power is the corralling of something that is trans-cultural, a true global currency for the new era, plausible more than any prior.
That's why all are playing their role well. The "hearings"
The "regulation"
The coronation more like.
The power is global slavery no less, and the lure is nice.
Geeks unemployed love it, thinking they're righeous. Lenin's gold
Needing to know who invented it is plain ridiculous ... would you not use a light bulb if someone other than Edison was "accredited" with inventing it ? It smacks of underlying authority worship. I think the reason he kept himself annoymous was so the technology could be judged and stand on its own two feet. If he had been busted smoking a joint in high school the MSM would have gone to town trying to destroy it based on this irrelevant fact and people who care "who invented it" would have jumped on the bandwagon.
Take a profound quote and remove the reference to the author ... is it still profound ?
It is open source ... it does not require trust from association with a "trusted' person or institution. Judge it for what it is and if the missing "who" is the only negative you can find you should be on board.
It is true that a good idea should stand on its own merit.
It was for this very reason, when I worked for a well-known hi tech company some years ago, that I spearheaded a change to the internal process of deciding which patent applications to support and file for Patents.
Up until then, the Patent Committee started to get a bit crony-like. Numerous patent applications got support on political basis (on 'who' filed it). With the change in process, each Application got an ID and the Inventor(s) names were masked to keep objectivity. The name(s) of the Inventor(s) were revealed only after they were approved for filing with the USPO.
In the case of Crypto-currencies (Bitcoin as the dominant leader), I am reminded of an old saying: "There is nothing more irresistible, than an idea whose time has come".
None of us know how this story will unfold, or if it will end some day. In the meantime... the only question each of us needs to ask ourselves is: "Can I use it for my purposes?" What the answer is for another person is not anyone's business. Nor need/should it be.
"None of us know how this story will unfold, or if it will end some day. In the meantime... the only question each of us needs to ask ourselves is: "Can I use it for my purposes?" What the answer is for another person is not anyone's business. Nor need/should it be."
The above statement is, by far, the most intelligent comment I have yet seen regarding bitcoin. My problem with the bitcoin controversy is the religious-like zeal with which it's fans pimp it endlessly. If you like it.......use it, but leave the rest of us alone. BTC fanboys are worse than evangelical christians. They are right and anyone who dissents are evil devil worshiping scum. It's pretty silly.
Actually it's the non BTC croud who do the name-calling. Most BTC pundits are just trying to educate.
Do you have a reading comprehension problem? You have completely missed the point. This is not about supplying a missing "who." It is about knowing what's going on. Nobody really knows what the purpose behind Bitcoin is. There is an angle somewhere and right now all paths lead to a question mark. The unknowns will have to be resolved before Bitcoin can be taken seriously.
This really sounds a lot like how people talked about the world wide web circa 1995. Then by '97 just about every ad on television had a URL shown at the bottom of the screen.
It's new and it's somewhat technical, so that's going to cause some suspicion particularly with people who aren't very technical. Not surprising.
But there really aren't any deep dark secrets to Bitcoin. Everything about it is out in the open, except for the identity of the inventor, and as several people on this post have already commented, since the system itself is transparent and controlled by the people who freely choose to use it, it doesn't really matter who the inventors are.
If Hitler had invented a cure for cancer, it would still be a cure for cancer, right? If Satoshi has invented a mechanism for disintermediating a bunch of things including the state itself, if Satoshi turned out to be Keith Alexander (which I doubt), who cares?
How do you conceal a hidden agenda in a transparent box?
-1
For... an asinine statement.
It's new and it's somewhat technical, so that's going to cause some suspicion particularly with people who aren't very technical. -- BadLibertarian
"he system itself is transparent and controlled by the people who freely choose to use it"
NO DUMB ASS
it is controlled by the majority of the verifiers, which are easily oligopolistic in the medium-term future. You know: The ones approving your kid's "right to trade" , and sorting inter-connected webs of IP/physical addresses and your favored, permanent public logs
Verifiers who are paid for their efforts in currency that would collapse if they damage the system. You mean THOSE verifiers? lol
You clearly haven't thought this through.
In your world, do the owners of gold mines blow up their own mines - especially when they are competing with 80+ other mines, all hungry for business?
If you're going to support a conspiracy theory, then please try to develop an argument that supports it with internally consistent logic.
Nobody knows who or what is 'behind' BTC? What a ridiculous argument - if you want to understand BTC, and what it does and how it works - then do some research - you seem to be the product of the spoon fed age where you expect someone in authority to come and tell you the answer so you dont have to think for yourself. The code is open source, apparently the words open source seem to you to be a random set of arbitrary letters lacking any meaning - let me enlighten you, if there was anything in there that looked suspicious in any way - there would be an avalanche of critics pointing it out - all I hear is crickets.
BTC is NOT fiat - this argument is dead in the water before leaving the cavernous region you call a mind. Fiat is by decree, BTC is by consent of the market. Additionally, the true criticism of fiat is the central authority that issues it, regulating the volume of money for its own private purposes - regardless of the detrimental effect on those forced to use it. The rate of supply of BTC is regulated by an algorithm that is widely known and understood.
You fail to understand what BTC is - but more fatally you fail to understand what either fiat or gold is. You seem to stack gold for religious rather than logical reasons. You believe things not because of logic - but purely because you have an inflexible mind that is not capable of adpating to new information. I know what gold is, so I hold it - same for silver - and same for BTC - they are sound money - and sound money is the best defense against a deflationary collapse, or hyperinflation.
Trap
I'm all in AkbarCoin, the exchange is in Nigeria way out of sight of any tax man stooges, apparently it was setup by a Prince who needed to get some money out of the country fast.
It's a slam dunk.
Gold is the Earthly Universal Standard of Integrity.
Money was designed as convenience of commercial Interchange,
to substitute for the vagaries of temporalities of Word and Character in time and space,
that is, secondary and removed intent.
As such, money can take many forms,
where the form best suited, is that which is founded in Integrity,
and
chosen for its ability to resist compomise, a priori.
It is never the form of money which is at fault and in question,
but always the nefarious will of man to deny the integrity of character of Man,
and to cheapen the gift and responsibilities of humanity,
and Life itself in his appetite to gain out of Harmony
and to reduce the gods of the heavens to his abode in the sewers
of the camp followers and self.
Ho hum
A revolutionary trap it is!
Imagine a world where transactions were based on honest exchange without a third party in between, stealing a percentage at (effectively) the point of a gun.
Now imagine the square root of -1
"The market appears to have spoken: Bitcoin is for real."
Was that the punch line?
Turd has taken a BTC shit, and now tells you its ready to eat.
*
On the other hand, TURD probably has some BTC and they're desperate for fresh blood, cuz right now there aren't any new fools coming to the party.
coming to the gold party ?
He is talking his book.
He is betting on the ponzi.
He is trolling for the greater fool.
He is promoting what he knows to be the currency-less trap for civilization because it is his chosen trade today.
Otherwise, he has an agenda.
above drones fly
wallet empty, block chain fades
when will my bitcoin come?
jb
Brilliant Bitcoin Haiku!
bitcoin is the Beta version for the NWO currencyless society.
It is not just a trap, it represents potentially a means to ultimate control of the population, total discretion over who retains a means of exchange for goods in real time.
Bitcoin IS on a mission to kill statist currencies... Bitcoin will force physical transactions back into bullion and barter -- where they belong. Get out from under your rock and start exchanging with bullion now.
Let me get this straight... so NWO wants:
1. Freedom from the banking cartels
2. Privacy of use (with the possibility to be completly annonymous - bitcoin mixers)
3. Independence from Central Banks
4. An almost impossible tasks of tracking tax revenues.
5. A "savers" currency
Shall I go on.....
cant save in what'll be devauled, clock-set to be (an affront to truth, itself) in an blame-game v. deflation if BTC act as promised / hyped
you morons cant see its
FREE PRODUCTION OF MONEY
that matters?
...not co-optable, currency "LEDGERS" with permanent tracking, once global adoption and miner profit degredarion/consolidation are far enough along
Bitcoin is a Fool's Journey...
One hell of a sales pitch (you believe it, it must be so), subject to change as other Xcoins materialize, eventually linking up into oneCoin.
And who is it again that has filed for patents on electronic currency????? JPM!! Kinda makes the autonomy claim null and void (we will have to read the patents), eh? Like I said, bitoin/Beta version.
http://www.youtube.com/watch?v=OXm6py-T2dU&feature=youtu.be
@paint it
Precisely. Now that we agree, is that bullish for the price? Bullish for the payment network? Bullish for the blockchain protocl as applied to other utility?
They don't get it yet that the virtual coin is also part of the physical hardware payment network / structure , chicken & egg situation. PS like your blog.
That's cause to leave it alone. Not to try and popularize it with profit as a motive. Cause to call it out for what it represents, slavery..
Monopolies only benefit those who set them up.
See: Jeckyl Island.
http://www.youtube.com/watch?v=4F4qzPbcFiA
just another product to trade - haven't traded yet
I've read that bitcoin liquity is shit, so I'll stick to other more liquid products.
There's no lunch money for low liquidity products in your portfolio?
it's more liquid than physical metal
Anuscoin is coming out this week. Sure winner.
Swap some legacy currency?
Where can the source-code be downloaded ?
Yes, about as real as God.
Roll on the global Ponzi.
Ponzi schemes can only ever crash once and they are over. Bitcoin has 'crashed' 4 times in 5 years now and every time it's price has recovered way above it's earlier high's. No way fits into the definition of a Ponzi. If anything it is 'crashing' itself into existance.
Just a simple question - I read news every day and havent heard about BTC until the middle of 2013, why is that? This whole thing was a pyramid from the very begining and if it was a valid future currency it would allow a period of consolidation, not exponential growth before it got media attention.
Media has been talking about it since 2009 , you just needed to read the right stuff , MSM is more interested in keeping people asleep. It has not yet entered exponential growth , the price right now is just a warm-up before it hits critical mass.
Try to put together two sentences without a non sequitur some time.
stfu ?
Bitcoin = Brawno
If you think Bitcoin or similar currencies will be allowed to survive long-term by central banks or "the authorities", you may need to consult a psychiatrist.
If you think fiat currencies are going to survive short-medium term you definitely need to consult a psychiatrist.
"Mining" huh? Creating "wealth" through computers. And the Fed prints via chips too. So the guy with the biggest supercomputer gets to mine the most new currency?
Bitcoin Channel programming will resume in 5, 4, . . .
"So the guy with the biggest supercomputer gets to mine the most new currency?"
egg-zak-lee...until that issue is addressed, the names may change, but the song remains the same...
Doesn't the guy with the best land and the best bulldozers, blasting equipment, etc. get to mine the most gold now? What you're arguing against is Capitalism.
The difference with crypto currencies is that if you understand the actual value of the ledger, you can create your own gold mine within the context of the local part of civilization that you interact with every day.
One day, we may see thousands or millions of local crypto's serving not just the currency needs of their local communities, but also replacing many of the functions (like contract enforcement and voting) that we currently rely on the state to provide. Bitcoin, at that point, will become a medium of exchange between those local currencies - a digital reserve currency. Or it may be some other crypto that takes on that role.
But in order to see that, you have to be able to see beyond the event horizon of the state and the things you've been conditioned to expect from it.
what's being argued against is centralization and its associated bottlenecks, chokepoints, manipulations and other assorted control tactics.
you can create your own gold mine within the context of the local part of civilization that you interact with every day. if you mean that now everyone can be a banker and siphon off their neighbors' wealth, then i don't think the neighbors are going to go for that too well. if you mean providing security for a transparent ledger system in return for a fee, why can't that responsibility be shared amongst all those who choose to use the ledger?
thousands or millions of local crypto's serving not just the currency needs of their local communities but also replacing many of the functions, indeed, this is where cryptos hold the most value, imo, but again, this begs the question : who watches the watchers? in any system, large or small?
a digital reserve currency : all the more reason for that digital reserve currency to be free from manipulation as possible. when stability is highly subject to speculation and security is dependent upon a simple 51% majority of the computing power, how is this digital reserve currency any improvement to the systems that are already in place, other than starving the old pack of wolves to breed a new pack of wolves?
But in order to see that, you have to be able to see beyond the event horizon indeed, so why are you still building pyramids (even & especially if they're being promoted as rhizomes)?
What I mean is that the general problem is one of trust. In a state based system, we are forced to transact directly with people we don't know, have no history with, and are therefore unlikely to trust. In that scenario, the currency itself must serve as a proxy to fill in the gap for that lack of counterparty trust. I don't trust you, but I trust the currency, so we can do business. That dynamic is why counterfeiting is such a serious issue with widely used currencies. Unfortunately, we are about at the point where the state has abused the currency to such a degree that it risks losing its ability to provide that function.
A widely used crypro currency has the same problem, but at least it gives us a mathematical solution that is hard to counterfeit. The difficulty in factoring large primes stands in for the mint mark, water mark, security strip, etc., and the algo's in the source code assure us that QE will never be allowed. So that's an improvement, in my opinion.
But if crypto currencies proliferate to the point where each one is used within the context of a mini-economy where trust between transacting parties is actually rather large (according to Robin Dunbar, this means groups of no larger than 150 people) then the dynamic is changed, and at some point the reserve currency starts being valued by the number of successful local trust network currencies that decide to use it amongst each other as a medium of exchange.
So in some ways, with Bitcoin we may have the cart before the horse, but that doesn't mean it's going to stay that way. Viewed from that perspective, splinter crypto currencies aren't a threat or a bug - they're a required feature.
And you're right that people won't take well to having their wealth stolen by a neighbor or a family member, which is why smaller trust networks are preferable - since they tend to self-police more effectively than large ones do.
excellent response.
splinter crypto currencies aren't a threat or a bug - they're a required feature. : absolutely agreed, in an ideal world. but one can not pretend that there are those who see it in the exact opposite way. and those are the people who are being handed the keys to the blockchain in which most people's perceptions are being molded.
the danger with the cart going before the horse is that the cart begins to see itself as not needing the horse at all and then proves it by placing fences around all the horses to prove that it's superior.
how do we know it is not just some ploy by Soros to make money? Pump and dump. Who has the code security that can be compromised at any moment? maybe the chinese?
Who here thinks Germany would take bitcoin in settlement for the remaining tonnes of gold it is owed??
What fool would take that trade??
That's a silly example. The USD value of Germany's owed gold is about 60 billion dollars. The value of all Bitcoin currently available is under 12 billion.
So the fool who would take that trade would be one who doesn't understand addition and subtraction.
But if the aggregate value of the currency were much higher, then your hypothetical becomes more interesting.
Revolution Or Trap?
there's a difference?
Well, it seems even J Turk can over come his religious affiliation with gold and use some logic, and also mark himself as an actual capitalist by recognizing that it is the markets choice - and trying to argue with the market is futile.
Those who whine about BitCoin today instead of buying or investing, are just giving themselves more to whine about tomorrow.
So many people complain that its volatile, or lacks acceptance, or its difficult to use or whatever - these issues are true for any idea in the infancy of adoption - its like saying children are useless because they cant lift 100lbs, or cant catch a ball - how about focussing on the potential instead of being distracted by issues that are uniformly shared by all start ups. BitCoin is like a 5yr old Clark Kent, it already has super powers - and this year it will be adding more super powers, and developing its existing set - BTC is the Superman of money - it just needs to grow up a bit.
If you don't hold it, you don't own it. How fucking hard is that to understand?
That's a very difficult concept for the XBox and CGI generation to wrap their heads around. Digital is convenient and entertaining, but it ain't real.
Problem with bitcoin is that is lacks underlying value other than medium of exchange. People like gold for being jewelry and such like people like diamonds, thus has a alternative value other than currency, or barter. BTC can only have alternative value if states accept it as currency, and demand taxes to be paid in BTC. BTC simply doesn't have the characteristic of a marketable good. A good that is marketable on it's own because of intrinsic value. It simply exists as a digital pattern of numbers, and algos. For example, almost everybody likes diamonds, or gold, silver, etc, while they don't need it, or necessariy can afford it, society values it even still. If basic needs are met, people value other non-essentials. They may not want a extra pair of shoes, or pants, whatever, but wouldn't mind having gold, or diamonds. Thus they are most marketable goods.
Another potential problem with digital currency is new currencies popping up, and competing. Competition is not inherently bad, but for currency, it can have some adverse effects like the way floating exchange of fiat currencies. One currency gives away to newer currency based on speculation.
Another thing is the currency depends on technology to even exist. I dunno if Zimbabwans would be to trade with BTC when they have little to no computers which is real official transaction that cannot be fulfilled with simply paper representations. With that said though, BTC still has it's strengths, it's decentralized "nominally" stable. Much speculation is rampant in BTC, which doesn't make it a ideal unit of account, which is necessary for price stability for exchanges in the long term. The main problem, is ideal unit of account. If price of BTC can stabilize sometime in the future, then it will fulfill ideal money for exchanges, and not for central planners who want to manipulate the money for it's own ends.
Bitcoin is useful for things other than being a currency - that is its real underlying value. Money is just the tip of this iceberg.
Also, gold and diamonds are easy to counterfeit and detecting the deception is time consuming and expensive. That's not the case with crypto currencies, which is another huge point in their favor - they allow you to conduct transactions with people you don't necessarily trust, without fear of counterfeitting, because false currency is comparatively trivial to detect.
"Problem with bitcoin is that is lacks underlying value other than medium of exchange"
Could you please repeat that again ?????
His name is _Bitcoin_ !
MONEY = TECHNOLOGY
e-gold was never anonymous.
Starting in 2001-2003 select individuals and organizations began to spread the meme that e-gold was "anonymous, untraceable and inaccessible to law enforcement". The reality, though, was that actual criminals who believed the anonymity claims and matriculated to e-gold discovered the hard way that was their career-ending, game-over mistake. For a criminal, to touch e-gold was to touch a spider web, creating a permanent discoverable link to every counterparty and their counterparties ad infinitum. Such data was provided to law enforcement in numerous instances to locate and prosecute cyber-criminals, including the case of Albert Gonzalez (TJ Max, Heartland breaches).
When e-gold and its principals were sentenced for operating without required licenses, the judge acknowledged the government's widely published anonymity clams were bogus, saying "...in terms of the anonymity...the very fact that e-gold kept such credible records" contradicted claims that "this was a business that was really trying to operate in the shadows." Noting also that the Founder "has respect for the law" and that "the intent was not there to engage in illegal conduct", she imposed a sentence that did not involve incarceration. In contrast the court ruled "there is no reason to shut down e-gold and G&SR, and every reason to have them come into legal compliance". Unfortunately, the guilty plea itself effectively precluded e-gold or its principals from subsequently obtaining required licenses in any jurisdiction.
It is interesting to note that Turk's company committed the same violation of the law e-gold pled guilty to - Operation of an Unlicensed Money Transmitting Business, with US customers - and for him to now embrace Bitcoin which embodies anonymity and is often characterized as being susceptible to criminal activity seems rather duplicitous.