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"Dr. Bitcoin Venezuela" Wages 'Economic War' Against Maduro's Currency Controls

Tyler Durden's picture




 

"Even though bitcoin is volatile, it's still safer than the national currency," said one young 'tech-savvy' Venezuelan, who as Reuters reports, is looking to bypass President Maduro's dysfunctional economic controls. "I'm teaching people to use bitcoin to bypass the exchange controls," said Gerardo Mogollon, a business professor who styles himself as "Dr. Bitcoin Venezuela," speaks at conferences and appears in online videos to urge Venezuelans to adopt the crypto-currency.

Even small dollar transactions are out of the question for most Venezuelans since capital controls mean acquiring hard currency now means either requesting it from the state, which struggles to satisfy demand, or tapping a shadowy black market.

While bitcoin prices have fallen this year, Venezuela's own Bolivar has also plunged against the US dollar (and a black market dollar costs 16 times more than the government rate) and so two Venezuelan-born brothers are launching 'SurBitcoin' exchange this week to match local buyers and sellers, explaining "In Venezuela, we have a gold fever: a bitcoin fever!"

 


As Reuters reports, Venezuela offers a glimpse of just how powerful a virtual, unregulated, non-government-controlled currency can be (despite the high volatility)...

The price of a bitcoin price has dropped 70 percent to under $350 from a peak last November, illustrating one risk of the digital currency. But Venezuela's own bolivar currency has dropped nearly 60 percent versus the dollar on the black market here in the last year.

 

And a black market dollar costs 16 times more bolivars than the strongest Venezuelan government rate.

 

Source: Dolarparalelo.org

 

"Even though bitcoin is volatile, it's still safer than the national currency," said Kevin Charles, 22, who has just completed an economics degree in neighboring Colombia. Many convert the bitcoin immediately into dollars, in any case.

##And this is spreading... with no official commentary on bitcoin from Maduro on the 'economic war' being waged against his government...

Due to currency controls introduced by late president Hugo Chavez a decade ago, acquiring hard currency now means either requesting it from the state, which struggles to satisfy demand, or tapping a shadowy black market.

 

Even small dollar transactions are out of the question for most Venezuelans.

And so the local market for bitcoins is gathering pace in Venezuela...

Tech-savvy Venezuelans looking to bypass dysfunctional economic controls are turning to the bitcoin virtual currency to obtain dollars, make Internet purchases -- and launch a little subversion.

 

"Bitcoin is a way of rebelling against the system," said one bitcoin trader, Caracas-based software developer John Villar, 32, who discovered the usefulness of bitcoin when he wanted to buy a $10 cellphone battery on Amazon.

 

Unable to pay for it in dollars, he bought bitcoin off a friend using local currency. He then used the bitcoin to purchase an Amazon gift certificate, with which he bought the battery.

 

Gerardo Mogollon, a business professor who styles himself as 'Dr. Bitcoin Venezuela,' speaks at conferences and appears in online videos to urge Venezuelans to adopt the currency.

 

"I'm teaching people to use bitcoin to bypass the exchange controls," said Mogollon, a 42-year-old professor at the University of Tachira's graduate business school.

Currently, bitcoin trading in Venezuela is between enthusiasts who use internet forums and social media to make ad hoc deals.

Venezuela-born brothers Kevin and Victor Charles, now based in New York, are this week hoping to open the "SurBitcoin" exchange, which will match bitcoin buyers and sellers online.

 

It is the first bitcoin exchange in the socialist-run country, which already has at least several hundred bitcoin enthusiasts.

 

"In Venezuela, we have a gold fever: a bitcoin fever!"

*  *  *

We suspect this capital-control-bypassing use of virtual currencies will only grow.

 

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Wed, 10/08/2014 - 20:51 | 5306469 Joebloinvestor
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Something else for the state to seize.

Wed, 10/08/2014 - 20:53 | 5306472 CH1
CH1's picture

The State is not God.

Wed, 10/08/2014 - 20:58 | 5306495 LetThemEatRand
LetThemEatRand's picture

True, but it does have the wrath of God.  And think of all the bankers/oligarchs waiting to extract some more wealth from the VZ population.  

Wed, 10/08/2014 - 21:03 | 5306526 Philo Beddoe
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In November 2013 Venezuelan ISPs were ordered to block websites that provide the black market exchange rate. The order is based on Venezuela's 2004 media law which makes it illegal to disseminate information that could sow panic among the general public.[23] Reporters Without Borders warned of the alleged "rising censorship in Venezuela's Internet service, including several websites and social networks facing shutdowns". They condemned actions performed by the National Telecommunications Commission (Conatel) after Conatel restricted access to websites with the unofficial market rate and allegedly "demanded social networks, particularly Twitter, to filter images related to protests taking place in Venezuela against the government".[24]

Bitcoin? Hijo de puta...que paso con mi crypto, cabron. 

Wed, 10/08/2014 - 21:06 | 5306545 SMG
SMG's picture

Screw S**tcoin.  Gold and silver in hand or "at the bottom of a lake"  is more valuable than crapcoin will ever be.

Wed, 10/08/2014 - 21:14 | 5306565 palmdetroit
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Don't forget to leverage BTC on the cheap!

http://phstones.com/mobile.php

Wed, 10/08/2014 - 21:31 | 5306653 summerof71
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Bitcoin ain't cheap. It's up 30,000% from 18 months ago. I'd be converting to silver/gold if I had the opportunity

Wed, 10/08/2014 - 21:33 | 5306665 TheAnalOG
TheAnalOG's picture

We give you junk silver at spot price for you Bitcoin!  You trade we one way up.  We trade you other way down.

Thu, 10/09/2014 - 06:52 | 5307550 GetZeeGold
GetZeeGold's picture

 

 

Bitcoin is the system.

 

What they didn't get the first time.....they'll get the second time.

Thu, 10/09/2014 - 08:52 | 5307913 N2OJoe
N2OJoe's picture

Exacly. I love my PM's and don't own any bitcoin but the ultility of bitcoinc for the people of a country like Venezuela for import and/or internet purchases is undeniable.

Wed, 10/08/2014 - 21:38 | 5306676 TheAnalOG
TheAnalOG's picture

We like to bug border security when we go through... "officer we have lots of Bitcoins to declare, they are in we camera bag.  Oh, cannot find?  Maybe we forget in the trunk?"

Wed, 10/08/2014 - 21:17 | 5306573 NoDebt
NoDebt's picture

I believe this story says more about desperation than it does about BitCoin.

"The price of a bitcoin has dropped 70 percent to under $350 from a peak last November, illustrating one risk of the digital currency. But Venezuela's own bolivar currency has dropped nearly 60 percent versus the dollar on the black market here in the last year."

Remember that not everyone who shows up when you're in trouble is there to help you.

Wed, 10/08/2014 - 21:31 | 5306655 TheAnalOG
TheAnalOG's picture

We do not care if Bitcoin is at $300 today!

We do not care if Bitcoin is at $3000 today!

We do not care if Bitcoin is at $30000 today!

Only the Satoshi knows where is Bitcoin to be with we today and we are grateful that Bitcoin is with we today!

Thu, 10/09/2014 - 06:55 | 5307554 GetZeeGold
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I'll stick with precious metals.

 

You go do that fad thing.

Wed, 10/08/2014 - 21:30 | 5306656 TheAnalOG
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We do not care if Bitcoin is at $300 today!

We do not care if Bitcoin is at $3000 today!

We do not care if Bitcoin is at $30000 today!

Only the Satoshi knows where is Bitcoin to be with we today and we are grateful that Bitcoin is with we today!

Wed, 10/08/2014 - 21:31 | 5306659 TheAnalOG
TheAnalOG's picture

 

 

Sorry we double post.

Wed, 10/08/2014 - 22:49 | 5306920 lickspitler
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If Gold goes below $1170 the foil hatters will be divoricing their sister and marrying Bitcoin.

Thu, 10/09/2014 - 11:08 | 5308696 messystateofaffairs
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Hey anus, whats the rate for btc trolling these days?

Wed, 10/08/2014 - 21:16 | 5306576 PaperWillBurn
PaperWillBurn's picture

Sure..it's nice having gold in the hand. It does suck moving it though. Bitcoin is good for portability and for transmitting anywhere in the world in seconds.

 

Denying bitcoin at this point simply means that you do not understand what it is

Wed, 10/08/2014 - 21:23 | 5306613 TheAnalOG
TheAnalOG's picture

OMFING GOD IT'S BITCOIN AGAIN!!!!

 

SATOSHI WE WORSHIP YOUR VIRTUAL FEET!!!!

Thu, 10/09/2014 - 00:51 | 5307232 PaperWillBurn
PaperWillBurn's picture

Open source = no need to worship anybody. It stands on it's own.

 

The hatred comes from a misunderstanding of bitcoin and a misunderstanding of gold and money. I love gold. I'm sure I hold more than 99% of ZH'ers. I'm not bragging but saying that because most people will think that I'm just talking my book.

 

Gov issued currency is a centralized ledger controlled by lunatics that dictate it's supply.

Gold is a distributed ledger with a somewhat fixed supply with the current technology available. (mining oceans and asteroids aren't really economical right now) but that's what gold is. You own a piece of a distributed ledger that isn't controlled by any entity. It's 100% fungible which makes it ideal for a unit to denominate wealth.

 

Bitcoin is a distributed ledger, not controlled by any entity, and the supply is fixed by math(which will never change). Owning bitcoin gives you real estate on the distributed ledger..same as gold. Only this ledger can be accessed anywhere in the world and your property(bitcoin) can be transmitted from anywhere, to anywhere, instantly. It's location independant and if properly safeguarded it cannot be confiscated.It's also 100% fungible and currently divisible down to 100,000,000 units per btc. Like gold is divisible down to the element.

For gold or silverbugs to dislike bitcoin it is either a case of misunderstanding(of bitcoin, money, and gold), you feel threatened by it, or you're simply scared of technology and the changes that it brings.

Thu, 10/09/2014 - 16:22 | 5310434 TruthHunter
TruthHunter's picture

"The hatred comes from a misunderstanding of bitcoin"

My hatred comes from observing incredible volatility

Wed, 10/08/2014 - 21:40 | 5306690 Spanky
Spanky's picture

 

 

Denying bitcoin at this point simply means that you do not understand what it is -- PaperWillBurn

 

We agree. It's surveillance and tracking technology in the guise of a "free" digital currency...

Wed, 10/08/2014 - 22:00 | 5306722 TheHound73
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"Because banks track nothing and I'd rather give them my business." Either that or "I hop on a plane with bags loaded with gold to pay my suppliers."

Wed, 10/08/2014 - 22:12 | 5306786 Pseudonymous
Pseudonymous's picture

So you could simply say that you do not understand what Bitcoin is. You could do a web search and fill the gaps.

Wed, 10/08/2014 - 21:18 | 5306588 Liberal
Liberal's picture

And this, my friends, is why America is the greatest country in the world.
We have no capital controls here. None!

USA! USA! USA!

Wed, 10/08/2014 - 21:33 | 5306660 klockwerks
klockwerks's picture

Liberal, you forgot the sac tag. Try sending 5 grand or more to any foreign country. You are surrounded

Wed, 10/08/2014 - 21:26 | 5306622 TheAnalOG
TheAnalOG's picture

Do you realize Bitcoin is the pineapple of technology?  The greatest thing in the modern era conceived by the most brilliant minds?

No you don't and the reasons are obvious!

Wed, 10/08/2014 - 21:32 | 5306663 Philo Beddoe
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 The greatest thing in the modern era conceived by the most brilliant minds?

The same folks who gave us the Atomic Bomb, The Fed, Abortion and Post It Notes. 

Maybe we should be more stupid. 

Wed, 10/08/2014 - 21:35 | 5306669 TheAnalOG
TheAnalOG's picture

No, no, we know that Bitcoin is pro-life not aborted atom bomber.  We think it is bad for the Banksirs though.

Wed, 10/08/2014 - 21:39 | 5306685 Philo Beddoe
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Life, hard work and tangible assets have lost value over the years. Bitcoin...yeah...that puppy will be around for a long time.  

Wed, 10/08/2014 - 21:17 | 5306579 nmewn
nmewn's picture

"In November 2013 Venezuelan ISPs were ordered to block websites that provide the black market exchange rate."

Ahem, makes it a little tough to transact in a virtual currency when in REALITY the infrastructure required to transact is blocked.

Well lemme see, yup, still there and I can actually touch it just to make sure ;-)

Wed, 10/08/2014 - 21:28 | 5306637 TheAnalOG
TheAnalOG's picture

There is no way to block these sites and we have personally used localbitcoins.com to do face-to-face-to-face-to-face-to-face (we have four faces now) to exchange Bitcoins.

Wed, 10/08/2014 - 22:25 | 5306815 TheHound73
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"Because communication channels are not worth fighting for, wether you are communicating government corruption or bitcoin transactions is irrelevant."

Wed, 10/08/2014 - 21:27 | 5306630 Pseudonymous
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You don't know very much about the internet on a technical level, do you?

Internet censorship is one of the easier things to get around.

Wed, 10/08/2014 - 21:28 | 5306642 TheAnalOG
TheAnalOG's picture

SOCKS are great for punching holes in their "great walls"  ;-)

Wed, 10/08/2014 - 23:47 | 5307120 Bunga Bunga
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Use tor, VPN or SSH tunnel to bypass censorship.

Wed, 10/08/2014 - 20:58 | 5306499 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

Seize my Bitcoin? The State will seize my projectile lead!

Wed, 10/08/2014 - 21:03 | 5306524 PaperWillBurn
PaperWillBurn's picture

How do you seize a private key?

Wed, 10/08/2014 - 21:07 | 5306549 Philo Beddoe
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Have you ever locked your keys inside your car? They are your keys. No doubt. But, there is a barking German Sheppard that will bite your nuts off if you try to gain entry to your vehicle. 

Wed, 10/08/2014 - 23:50 | 5307131 Bunga Bunga
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No doubt, there are still people not properly understanding Bitcoin yet.

Wed, 10/08/2014 - 23:59 | 5307151 TheHound73
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Bitcoin says: Fuck 'em, they are not going to post dogs around the entire internet.  And if they do they have more than just Bitcoin to worry about.

Wed, 10/08/2014 - 21:09 | 5306552 TheCanadianAustrian
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"Sir, do you have any large amounts of cash in the car?"
"Yeah, I have a couple thousand in the trunk that I'm using for a deposit on an apartment."
"Sir, I'm confiscating this money on the grounds that it way have been involved in drugs."

...

"Sir, do you have any large amounts of cash in the car?"
"No. I'm just on my way to pay a deposit on an apartment using Bitcoin. I have a copy of the public key here in my wallet. I don't remember what my private key is; it's encrypted and stored in a password-protected file in my cloud drive."
"Dammit, fuck me. Okay, have a nice day sir."

Wed, 10/08/2014 - 21:14 | 5306566 Philo Beddoe
Philo Beddoe's picture

Officer Roidmonster..smack smack smack smack.....wap wap wap wap.  Put that in your clouddrive, poindexter. 

Wed, 10/08/2014 - 22:03 | 5306765 TheHound73
TheHound73's picture

Bitcoin and gold are equally weak against a rubber hose. Well, there is multi-sig, equivalent to splitting a pm stash GPS coords among trusted parties.

Thu, 10/09/2014 - 10:58 | 5308624 messystateofaffairs
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At least you found some trolls to agree with you. Trolls are very important to keeping new adopters ignorant of bitcoin and are currently the only tool TPTB have to defend their fiat from digital specie. The internet can't go away again and neither can digital specie currencies. The sheeple are hooked on the net and so is the global economy, you'll have a bleating sheepshit storm if thry killed their little toy.

Wed, 10/08/2014 - 20:52 | 5306470 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

When the paper currencies hit the skids. Digital currency will be a good place to park some.

Wed, 10/08/2014 - 20:54 | 5306477 CH1
CH1's picture

Digital currency will be a good place to park some.

Indeed.

Wed, 10/08/2014 - 21:37 | 5306674 XqWretch
XqWretch's picture

Bitcoin is great, until you get Mt. Gox'd

Wed, 10/08/2014 - 22:50 | 5306932 tmosley
tmosley's picture

So don't deposit it with a company that doesn't have a long history of honest transactions.

IE just keep your bitcoins in your oun wallet.

Wed, 10/08/2014 - 20:53 | 5306479 wintermute
wintermute's picture

Bitcoin will take Latin America and all its rubbish fiat currencies by storm!

Wed, 10/08/2014 - 20:59 | 5306509 CH1
CH1's picture

Bitcoin will take Latin America and all its rubbish fiat currencies by storm!

For the sake of millions of decent people, I truly hope so.

Wed, 10/08/2014 - 20:54 | 5306486 Bumbu Sauce
Bumbu Sauce's picture

You only get a chance to spend it when the power grid is up for a few hours of the day.

Wed, 10/08/2014 - 21:00 | 5306511 CH1
CH1's picture

Which means it still clears faster than credit cards.

Wed, 10/08/2014 - 21:01 | 5306514 seek
seek's picture

Many are using wallet apps on phones, so they charge when the grid is up but otherwise run off battery, and the telco's infrastructure gets built around the flaky grid.

The bigger deal will be when the Venezuelan government kills the gateways, since it will force the exchanges to be local. I suspect someone with satellite internet would be well positioned to be a bitcoin gateway, however. This thing is tougher to kill than it looks.

Wed, 10/08/2014 - 20:54 | 5306487 Philo Beddoe
Philo Beddoe's picture

Sad to see somebody survive a plane crash and get hit by a bus the next day. 

Wed, 10/08/2014 - 20:57 | 5306496 p00k1e
p00k1e's picture

National IQ Scores - Country Rankings

Venezuela Rank 23 / Average IQ 84

Wed, 10/08/2014 - 20:59 | 5306505 TheCanadianAustrian
TheCanadianAustrian's picture

Bitcoin could see its fastest growth rates in high-inflation countries like these, but this could also be hampered by poor internet infrastructure and government interference with ISPs. During the Hong Kong protests, mesh networks allowed citizens to organize in a way that the government couldn't control. Maybe we'll see something similar for the Bitcoin network in the next few years.

Wed, 10/08/2014 - 21:01 | 5306516 CH1
CH1's picture

Mesh networks ROCK!

Wed, 10/08/2014 - 23:08 | 5307010 meghaljani
meghaljani's picture

MAIDSAFE

Wed, 10/08/2014 - 21:00 | 5306512 GrinandBearit
GrinandBearit's picture

Still talking about shitcoin huh? -lol

Originally driven by get rich quick dreams, this tulip bulb was finished in 2013.  Takes time for all the diehard bagholders to realize they've been had.  Many will hold it all the way down to zero.

Wed, 10/08/2014 - 21:02 | 5306517 CH1
CH1's picture

Happy dreams of destruction... not terribly becoming.

Wed, 10/08/2014 - 21:19 | 5306593 TVP
TVP's picture

Did you even read the article, you imbecile?  

People in Venezuela are being saved by this new technology, a new form of currency that can save them from the tyranny of their government-issued fiat currency. 

The time will come when citizens of many other countries experience much the same thing, as their currencies collapse due to money printing.

Bitcoin cannot be produced by fiat - it is finite and must be mined into existence, and therefore has intrinsic value.  The value comes from computing power and electricity necessary to create it.  I'm sure this makes no sense to you at all so I'm going to stop right there.

Go ahead and hold onto your fiat currency that continues to depreciate, and your illiquid precious metals that are also "plunging toward zero" in fiat terms.  (All commodities have been falling lately - it's called deflation, dick).    

What can you buy with gold and silver?  NOTHING, other than fiat currency.

What can you buy with bitcoin?  ANYTHING, from electronics to bed spreads to jewlery (overstock.com) to airfare and hotel booking (expedia.com) to soon to be literally ANY-F*%KING-THING you can imagine (paypal.com).

Bitcoin has intrinsic value, serves as a medium of exchange, and as of now serves as a store of value for about 4.5 Billion dollars.  It's like gold, only it can be divided infinitely and teleported instantly.  

 

 

 

 

 

Wed, 10/08/2014 - 22:03 | 5306755 TheCanadianAustrian
TheCanadianAustrian's picture

" it is finite and must be mined into existence, and therefore has intrinsic value"

 

That's a bit of a non-sequitur. The limited supply of Bitcoin is not in itself an intrinsic value. All money has intrinsic value as a medium of exchange. The more accepted a form of money is, the more intrinsically valuable it is.

That a medium of exchange has a limited supply just means that the intrinsic value that it already has can't be diluted. Therefore it's more desirable as a store of wealth, and therefore its intrinsic value may rise as a result.

Wed, 10/08/2014 - 22:01 | 5306758 Crisismode
Crisismode's picture

Bitcoin is promulgated by idiots like you.

To your own benefit and the detriment of others.

God have mercy on your soul.

 

Thu, 10/09/2014 - 02:47 | 5307331 TheHound73
TheHound73's picture

Bitcoin from day 1 has always been openly discussed on public forums (it wasn't created behind closed doors).  It is open source. The creation of bitcoins has always been open to anybody anywhere.  Today some 3600 bitcoin will be created, some of those could be created by you (oh, but you'd have to compete with others)... If you were to create a new currency how could you make it any more egalitarian?

Wed, 10/08/2014 - 22:40 | 5306878 GrinandBearit
GrinandBearit's picture

You shitcoin nerds all regurgitate the same nonsense. 

From $1250 down to $350 and you still haven't learned anything.  It's going to a MILLION.. any minute now, you swear!

Bitcoin bagholders keepin the dream alive... all the way to ZERO.

Wed, 10/08/2014 - 23:59 | 5307156 Bunga Bunga
Bunga Bunga's picture

Who promises a million, any minute? On the long term it is not unlikely.

 

Wed, 10/08/2014 - 23:59 | 5307159 TheHound73
TheHound73's picture

I heartily encourage you to short the shit out of Bitcoin.  Why go down in history as merely being right when you can also be rich?

Thu, 10/09/2014 - 10:45 | 5308553 messystateofaffairs
messystateofaffairs's picture

I agree, don't just grinand bearit while vomiting up emotional shit about things you have no understanding of. put all that knowhow you got to work and short it bigtime.

Wed, 10/08/2014 - 21:02 | 5306523 Pseudonymous
Pseudonymous's picture

A blockchain confirmation is nine tenths of the law.

He who holds the private keys makes the rules.

Wed, 10/08/2014 - 21:07 | 5306546 sessinpo
sessinpo's picture

A private key means nothing behind a prison wall.

Wed, 10/08/2014 - 21:17 | 5306569 Pseudonymous
Pseudonymous's picture

Which one is going to last longer - the government run prison or the private key securing long-term appreciating assets?

Wed, 10/08/2014 - 21:31 | 5306654 Barnaby
Barnaby's picture

The Count of Monte Crypto

Thu, 10/09/2014 - 07:36 | 5307641 Perfecthedge
Perfecthedge's picture

RIGHT THERE!  Found my gold nugget comment in this thread.  That, Mr. Barnaby was a smart comment.

Wed, 10/08/2014 - 21:05 | 5306540 Barnaby
Barnaby's picture

I hash therefore I stack.

Wed, 10/08/2014 - 21:07 | 5306547 TVP
TVP's picture

What a beautiful case of cryptocurrencies uplifting the populace out of ruling-class induced poverty.

This is an example of the technological reovlution liberating people and raising living standards.  Freedom = Prosperity.  

In the future, there will be no utility for any kind of currency other than crypto.  People will look back on the tyranny of central banking and see it for the insanity that it is - far worse than traditional slavery, for there is no escape, and no discrimination as to who becomes enslaved.  Most people don't even realize or comprehend that they are slaves to this system. 

All that will change soon, and has already begun to do so.  

 

Wed, 10/08/2014 - 21:39 | 5306682 Pseudonymous
Pseudonymous's picture

This Yahoo version of the story omits the funnier part at the end of the original Reuters article about arbitraging Venezuela's centrally planned subsidized electricity prices to mine bitcoins cheaply (in other words, at the expense of the government's budget).

Wed, 10/08/2014 - 22:18 | 5306797 crazybob369
crazybob369's picture

Nothing like putting a target on your back. It's been nice knowing you Mr. Moron..., er, I mean Mr. Mogollon.

Wed, 10/08/2014 - 22:45 | 5306898 hairball48
hairball48's picture

I agree. Going "public" on Mogollon's part was dumb.

Wed, 10/08/2014 - 22:44 | 5306890 hairball48
hairball48's picture

I'll keep "stackin" my PMs. I'm not going anywhere so I'm not concerned about crossing borders, etc.

Y'all can keep your bitcoins.

Wed, 10/08/2014 - 22:49 | 5306926 q99x2
q99x2's picture

Clone Bitcoin Jesus. Yes! Bitcoin rocks.

Wed, 10/08/2014 - 22:55 | 5306951 hairball48
hairball48's picture

Nobody has explained to me yet how bitcoin will be used when TPTB start screwing with all manner of internet activity.Tracing transactions, who knows? Those who say that your  internet transactions are immune to being fiddled with by the Feds, NSA, FBI, etc. are fantasizing...imo.

I live in a small community. I seriously doubt just how "liquid" bitcoin would be around here for local purchases like food and other necessities. I DO know that gold and silver would be accepted widely by local merchants. Even assuming the Feds tried to confiscate gold as in 1930's, there would still be a black market for it...just like everywhere in the world.

So I'll take the risk of owning PMs over bitcoin.

Thu, 10/09/2014 - 00:04 | 5307173 Bunga Bunga
Bunga Bunga's picture

TPTB start screwing with all manner of internet activity

Sure they can, but they will screw up 99% of commercial activity too. What can they tax then?

Thu, 10/09/2014 - 09:38 | 5308153 Abaco
Abaco's picture

Curious as to why you see it as a binary choice.

Thu, 10/09/2014 - 11:27 | 5308771 TheHound73
TheHound73's picture

Bitcoin isn't for MadMax.  It is a digital currency for the here and now instead of using "their" dollars and "their" credit cards.

Usually used for internet purchases but can be used in a Point-of-Sale setting.  Check Coinmap.org for the nearest bitcoin accepting businesses in your area.

It uses military-grade cryptography to secure transactions, but that probably doesn't mean very much to you.

Wed, 10/08/2014 - 23:27 | 5307070 gwar5
gwar5's picture

I don't do it but I have no problem with Bitcoin.

 

It was invented for the little people in places like Venezuela, Argentina and Obamazuela. Moar choices the better. Go forth and diversify.

Thu, 10/09/2014 - 00:05 | 5307175 TheHound73
TheHound73's picture

Avoiding capital controls is one thing bitcoin is good at.  But what about just general frictionless transactions?

My customers are in Europe/UK, my employees are mostly in the USA, my expenses are mostly in JPY.

My company has been happily using Bitcoin to grease the gears of commerce for over a year now.

Fuck banks, their fees and their delays.  Bitcoin is so much easier.
Thu, 10/09/2014 - 00:52 | 5307236 Miketheterrible
Miketheterrible's picture

Maybe someone can answer this for me, but couldn't this also help get Venezuela government out of trouble as well?  Couldn't they also get into cryptocurrencies in order to purchase needed goods?

 

Also, cryptocurrencies are great and all for doing transactions and obtaining currency without bank control (CB's in all countries are crooks).  But the value of it is only based upon what others are willing to accept.  Also, the value of the bitcoin is kinda....strange since it fluctuates way too much, as well as it isn't exactly 100% secure, and not a physical asset either.  I imagine that forms of electronic warfare can be had against people who have cryptocurrencies and they can lose everything they have if they invested too much into it, with little.  Ever recall the guy who threw out a hdd with $9M in Bitcoin: http://www.forbes.com/sites/kellyphillipserb/2013/11/30/from-treasure-to...

 

anyway, back to my initial question.... Couldn't governments use it too?  Like Iran or Russia to bypass sanctions?  I guess the only limitations would be the transfer of the products and if the company is willing to accept it.

Thu, 10/09/2014 - 01:17 | 5307254 TheHound73
TheHound73's picture

Yes, governments can use it too, at the cost of legitimizing bitcoin and giving up some of their (fiat) control.  Bitcoin itself has no way of knowing who or what is spending or receiving funds.

Individual bitcoin users can be targeted much like the roadside cash forfeiture story posted here yesterday.  But to attack bitcoin systemically requires going after the mining network.  This is one of the great but still not 100% proven claims bitcoin puts forward: that the mining network will be healthy enough to fend off these attacks.  A year ago the bitcoin network was already the largest computing endeavor humankind has ever known.  Since then it has increased 25 times.  The other great unknowns are:  Will the volatility decrease, Will society come to value bitcoin as a store of value, Will the network be cost-effective after the currency issuance phase peters out?

Thu, 10/09/2014 - 01:33 | 5307272 Miketheterrible
Miketheterrible's picture

I recall reading about some sort of group got hacked and... was it $25,000 worth or was it 25,000 bitcoins total?  Don't remember but it forced this group to close down and it dropped prices of bitcoin a lot.  I imagine it will be more prone to targets from the hacking communities, if it hasn't already and just under-reported.

As for the rest, I imagine due to the fact that it isn't a physical product, that it becomes very hard to value it.  But then again, so is majority of fiat currencies where they can be printed to oblivion (USD).  Guess it comes down to the business.  I would say it would maybe be a good idea to start up digital currencies for nations as well, only to make it easier to translate it to an actual currency, and what not.  Dunno how it would work (sorry for my lack of knowledge on this stuff, as I am not entirely 100% knowledgeable on digital currencies).

I guess if countries decided to pin (or were forced to) their currency to commodities, then technically the need for bitcoin and what not would be pointless for most nations peoples (like Venezuela could tie it to its resources as example).  But it seems that it would give up many of the CB's control over the currency and thus they don't want it.  Perfect example is the Ruble since technically, Russia holds the worlds known resources and its resources are in heavy demand (regardless if prices dropped quite a bit) and such resources are needed for various countries just to survive.  So if they tied the ruble to it, it would increase its value significantly (and if they force people to purchase goods with it, like Rubles for oil).  But CB has been curbing any course and has hurt its countries economy, more so than the sanctions.  So theoretically, these digital currencies could be a way for the government to bypass these issues.  Doesn't help though that many people in the government (around the world technically) are afraid of losing their control that they don't see the benefit of working with a digital currency rather than just banning it or trying to control it (FED Reserve).

Thu, 10/09/2014 - 01:28 | 5307266 franciscopendergrass
franciscopendergrass's picture

Fonestar no longer needs to post in comments.  He is posting as Tyler Durden

Thu, 10/09/2014 - 05:04 | 5307445 frenzic
frenzic's picture

I suspect he is posting as TheAnalOG.

Thu, 10/09/2014 - 07:47 | 5307663 Perfecthedge
Perfecthedge's picture

Right now I can't afford either one, just surviving is an act of art (living in Southern Europe).  I love both PM and BitCoin for the obvious advantages that both offer.

I just don't understand how one group (gold bugs) can critize the other group (bitcoiner's) saying that government will seize, control or meddle with the internet, etc. and not believe that a well armed police men cannot seize your Gold.  As I've said, I am neither against or for either of these assets, but if this becomes an apocalyptic "end time"-game of scenario you will get killed if you try to exchange that Gold for food.  Or the food sellers will be to scared to accept your Gold because Mr. Government will throw them into prison.

I know, i know the red arrows will puncture me to death.

Honest question for BitCoin Experts - seriously:

Would this work? Government A (lets say poor, indebted Ireland) starts buying up BitCoin and mining like crazy (hey, it's almost free money, almost like printing) and hoarding BitCoin until it reaches some insane value.  Pay off countries debt and tell the ECB to fuck off, because they just created money "out of nothing".  No need for more population or stupid GDP growth or anything.  Just mine yourself from chump to champ.

Gold would be much more difficult (you need to find it in your country or go out and steal it). 

Is this possible?

Thu, 10/09/2014 - 08:09 | 5307745 fiftybagger
fiftybagger's picture

"We suspect this capital-control-bypassing use of virtual currencies will only grow."

Just a bit late to the party Tyler, but welcome.

http://youtu.be/bxQ4OrzULoU?t=7m55s

Thu, 10/09/2014 - 14:32 | 5309831 gdpetti
gdpetti's picture

Yes, the same policy as always, 'divide and conquer'. Get the people divided and fighting among themselves, which makes the job of herd control and thinning so much easier. This way, the herd thins itself and sets up its own self-censorship and ignorantly supports your plans for a new digital fiat currency for the NWO. Stupid suckers, more and more of these sheep being born all the time and so close to the final curtain call. Perfect. Simple perfect.

Bitcoin special??? Really, and if every country, state, business and individual wants to set up its own? How special is it then? THey can all utilize the same protocols... perfect. simply perfect.

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