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Precious Metals Dealer To Pay Employees In Bitcoin Even As "Go-To" Bitcoin Exchange Is Massively Hacked

Tyler Durden's picture




 

Earlier today, a small Denver-based precious metals dealer AmagiMetals announced something curious: it would paid its staff in Bitcoin. As it reported in its press release, "its entire staff will voluntarily accept a portion of individual employee paychecks in Bitcoin in 2015 through a new service called Bitwage. CEO of Amagi Metals Stephen Macaskill said the company is taking this action to advance its ability to function fully in Bitcoin going forward. Macaskill will accept $40,000 of his annual salary in bitcoin to demonstrate his support of Bitcoin."

The announcement came on the heels of Amagi Metals’ August 2014 decision to no longer accept U.S. Dollars after 2016.

Whether it is a marketing gimmick, or the PM dealer is one of the few companies to put its (electronic) money where its ideological mouth is, and press for a world without dollar intermediation remains to be seen. However, for the sake of its employees we hope they did not put any part of their bonuses in the Bitstamp exchange which as we learned overnight, was the next big Bitcoin exchange to suffer a major hack following the now defunct Mt. Gox, and where a little over $5 million in bitcoins were stolen.

According to Wired, early Monday, a UK- and Slovenia-based bitcoin exchange Bitstamp announced that it would be going offline while it investigated a security compromise of some portion of its stored currency that occurred over the weekend. In a statement to WIRED, the company said that “less than 19,000? bitcoins were stolen in the attack—about $5.1 million dollars—and warned users to immediately stop making deposits to any addresses it issued before 4 a.m. ET Monday. Meanwhile, Bitstamp users’ money remains frozen in the company’s accounts.

“Bitstamp takes our security and soundness very seriously,” reads a statement on the company’s website. “In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate.”

Taking a cue from insolvent Europe, the exchange immediately rushed to define what it is by clarifying what it isn't: Bitstamp is not Mt. Gox. Just don't tell that to those were digitally corzined.

The company also tried to reassure users in its statement that they’re not facing a Gox-level debacle. Only the exchange’s “operational wallet” was compromised, it says, a fraction of coins that are frequently bought and sold. Careful exchanges (and users) keep the majority of their bitcoins in “cold storage,” on computers without any connection to the Internet to prevent their theft. “As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems,” the company’s statement reads. “Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins.”

 

Bitstamp’s chief executive Nejc Kodri? wrote on Twitter: “My sincerest apologies to those who are affected by our service being temporary suspended.” He continued, “Thank you all for your patience. We are working diligently to restore service and hope to have an ETA later today.”

 

In a followup email to WIRED Monday afternoon, Kodri? added that the company is cooperating with law enforcement to get to the bottom of the hack, and is “working to transfer a secure backup of the Bitstamp site onto a new safe environment and will be bringing this online in the coming days.”

 

Bitstamp is far from Bitcoin’s biggest exchange; prior to its suspension it accounted for only about 6 percent of transactions according to bitcoin statistics site Bitcoin Charts. But it had become one of the longest-lived and reputable ways to buy and sell currency in bitcoin’s volatile economy. After Mt. Gox’s bankruptcy, Bitstamp became a popular alternative to top exchanges BTC China, based in China’s uncertain regulatory environment, and BTC-e, a mysterious operation run by unknown owners thought to be based in Bulgaria.

 

“We’re the backbone of the entire Bitcoin industry,” Kodri? told Forbes last year in an interview. “The wallet services, ATM machines, mining companies all rely on us. The price of Bitcoin is the de facto price on Bitstamp. We’re the go-to exchange.”

 

Its temporary shutdown due to the theft of a still-unknown number of coins could rattle bitcoin at a bad time. On Monday morning bitcoin’s price hovered below $270, its lowest since 2013 and down from $375 just a month ago. If Bitstamp doesn’t quickly emerge from its downtime and replace any lost coins, cryptocurrency’s new year could be off to a unpleasant start.

Of course, the Bitcoin advocates will tell you that this hack couldn't possibly have happened and that all those digital monetary equivalents stored "safely" in some hard disk are still there and are a viable alternative to either the fiat in your bank account or the physical gold and silver stored... somewhere else.

In retrospect it is becoming increasingly clear that the collapse of the fiat system will not come from the outside where incidents such as this one do nothing to boost confidence in monetary alterantives, but from within, i.e., the central banks themselves. Then again, since we now live in a world in which only currency devaluation serves to inflate the perception of nominal wealth (recall that in a few short weeks the world will be en route to monetize a record $1.3 trillion in 2015), giving central bankers the key to terminal fiat destruction may be the best option available.

 

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Tue, 01/06/2015 - 15:53 | 5629248 LawsofPhysics
LawsofPhysics's picture

LOL...

Let me be clear.  When fraud is the status quo, possession is 100% of the law...

Tue, 01/06/2015 - 15:58 | 5629280 bovine-reuptake...
bovine-reuptake-inhibitor's picture

FUCK YEAH BUH BITCOIN BITCHEZ!!

Tue, 01/06/2015 - 16:05 | 5629309 overexposed
overexposed's picture

More interesting will be to see the IRS' reaction to this.  How is this "employer" planning on dealing with "withholding" on the virtual portion of the salary?  In what form will the employment taxes on this declared "salary" be remitted to the Government?  (Since he's stated that this is "a portion of their salary," and it is not in fact stock compensation or options, he DOES owe employment taxes on the amounts paid, and they WILL be coming after him to collect it.  Moreso for the State of Colorado, I'm sure - Our governments on the East Coast are friendly enough, but there are enough Californians living in Colorado that I'm sure it's a miserable place to do business.)

As much as I respect bold moves like this, dealing with "they who have the power to take what is yours" doesn't usually work out to the little guy's advantage.

EDIT: Of course, if he's dealing with offshore "contractors," then that's fair game.  It's the notion that he's paying salaries to US Citizens within the United States where this becomes a Big F'in Deal to the suited peeps at the Treasury.

Tue, 01/06/2015 - 16:08 | 5629331 bovine-reuptake...
bovine-reuptake-inhibitor's picture

That's awesome.  That guy will uh, be a happy hacker yeah!  18,000 BTC!  Woohoo!  All the haX0ring, the crashing, the soaring, the governmenting, the banning, the pumping!

This is the nectar of the virtual life!!

Tue, 01/06/2015 - 16:13 | 5629366 bovine-reuptake...
bovine-reuptake-inhibitor's picture

I got an RFID chip implanted in my left utter to accept BTC payment.

Mark of the bovine beast!

Tue, 01/06/2015 - 16:18 | 5629371 zaphod
zaphod's picture

The bitcoin system was not hacked, it has not been hacked once in it's lifetime and is completely secure. 

Bitstamp the company was hacked, and as a result of that hack some of their bitcoins were stolen. 

In the world of bitcoin possession is 100% of what constitutes ownership. Possession of bitcoin means possession of the keys to an address. This is what bitstamp lost when they were hacked. 

If someone robs a gold dealer and steals some gold coins, do you say that the concept of physical possession of gold is broken or that gold was hacked? No. You say that gold dealer got robbed and should have had better security, well the same is true in this case. 

Tue, 01/06/2015 - 16:32 | 5629480 commander gruze?
commander gruze?'s picture

2015 will be the year clueless journalists will stop misinform clueless masses that whenever bitcoin company gets hacked BITCOIN GETS HACKED.

Tue, 01/06/2015 - 18:24 | 5630085 wallstreetapost...
wallstreetaposteriori's picture

Sounds like a great way to get rid of a useless currency alternative and at the same time fuck all your employees over.  Yeah for shitcoin!

Tue, 01/06/2015 - 18:02 | 5629892 crusty curmudgeon
crusty curmudgeon's picture

Crypto currency is crap.

I don't normally say anything this dogmatically, but tempus fugit.

What you don't have in hand, you soon won't have.

Tue, 01/06/2015 - 19:32 | 5630392 shouldvekilledthem
shouldvekilledthem's picture

Presenting the average retard.

Can you hold the internet in your hand?

Wed, 01/07/2015 - 00:22 | 5631269 crusty curmudgeon
crusty curmudgeon's picture

Bitcoin is a ponzi scheme.  Who is the greater fool?

Wed, 01/07/2015 - 07:10 | 5631615 crazytechnician
crazytechnician's picture

Yawn , that is so 2011. Next it will be a Tulip , but that line went out in 2012.

Wed, 01/07/2015 - 11:11 | 5632512 crusty curmudgeon
crusty curmudgeon's picture

Yawn, this time is different.  I've got to keep up with the new fraud of the day.

Tue, 01/06/2015 - 18:05 | 5630009 funthea
funthea's picture

zaphod, while your above statements are true enough, the mere hope and salvation you afford bitcoin is not. All bitcoin loyalist need to grasp the concept that all the properties that make bitcoin the second coming for said loyalist, is all so its undoing, in so far as it perfect encryption can be replicated an infinite number of times through an infinite number of other alt coins. Ergo, its appeal to value is capped by the utter number of replacement possibilities. Riddle me this? Why would I pay you $250 for a bitcoin, with any hope of a further price rise, let alone a price decline, when i could just as well purchase 1000 bit-fuckmeintheass-coins for the same price, with all the exact same attributes as bitcoin. Literally indistinguishable from bitcoin other than by name. acceptability is merely a formality, just ask amx, visa, discover, m/c, etc. It doesn't matter, its all just pushin didgits through a wire. There is certainly a place for the crypto currency, problem is, it needs to be so lowly valued as to make all of the alt coins complimentary to one another, rather than in compitition, while also not punishing the late comer and not rewarding the early adapter. Its the only way it will work. Don't hold too tightly to your bitcoin dream, less you and the other loyalist will end up only being able to trade amongst yourselves.

Tue, 01/06/2015 - 19:39 | 5630414 shouldvekilledthem
shouldvekilledthem's picture

Bitcoin = freedom

Bitcoin is the longest, most trusted chain with the code scrutinized by the most peers and with the biggest and most secure network, and accepted by the most merchants and have the most utility among other crypto. This is called network effect.

Why do you pay 1200USD for your gold for storing it in your drawer?

Bitcoin is digital money, you can safekeep it, so no opressor can take it from you, meanwhile it can be readily sent anywhere on the planet without dealing with middlemen.

It cannot be counterfeited, and the whole system is transparent.

Tue, 01/06/2015 - 20:32 | 5630424 TheHound73
TheHound73's picture

That is for the market to decide.  If the market wants to diffuse value into a million altcoins, so be it.  I don't think us market participants want that.

One should also consider the liquidity and the relative strength of each coin's mining network.

Tue, 01/06/2015 - 20:48 | 5630672 Mike Hunt III
Mike Hunt III's picture

If you have USD $100 and the countries of Zimbabwe, Somalia, Liberia and Niger suddenly increased their money supply by 10x,you and your $100 would not be affected. If a newly formed government were to appear and create a new currency, the value of your $100 would not be affected. Think of Bitcoin as the dollar and any new "altcoin" as currencies of third world economies.

Tue, 01/06/2015 - 16:40 | 5629510 scrappy
scrappy's picture

Bovine-reup

It's actually boob, err been proto -titted, err, typed.

http://www.katherinealbrecht.com/blog/sensors-fitted-in-silicon-teats/

This lady is titelating herself, smart, sexy, and a survivor.

http://www.wired.com/2009/12/search-engine-privacy/

 

Tue, 01/06/2015 - 17:08 | 5629664 frenzic
frenzic's picture

Yeah uh fuck you fonestar. Good thing you were spotted and removed quickly this time around.

Tue, 01/06/2015 - 18:25 | 5630090 wallstreetapost...
wallstreetaposteriori's picture

foneystar.....  what a pathetic POS.

Tue, 01/06/2015 - 17:18 | 5629756 Performance Art
Performance Art's picture

Notice only 40K of his annual... hmm what a pussie, if Bitcoin was the real deal they would go ALL IN. Just thinking about a sun flare or EMP that would wipe out evey bitcoin pixel. Who's setting next to Bernie Madolf now.

Tue, 01/06/2015 - 21:24 | 5630797 Mike Hunt III
Mike Hunt III's picture

It is highly unlikely that scores of copies of the Bitcoin blockchain are not already snug and safe in their EMP hardened faraday cages. I believe one can also print the block chain on paper. If the the grid goes down worldwide we'd have much bigger issues to worry about.

Tue, 01/06/2015 - 16:12 | 5629356 CH1
CH1's picture

to see the IRS' reaction to this.

FUCK the agents of Mordor.

Tue, 01/06/2015 - 16:12 | 5629363 overexposed
overexposed's picture

Easy to say, until Mordor turns its eye to you.

It's easier to respect the law (and use every loophole available within to minimize your exposure to tax).

Tue, 01/06/2015 - 16:21 | 5629398 CH1
CH1's picture

Bow down and worship!

And, I hasten to add... FUCK the law.

Tue, 01/06/2015 - 16:46 | 5629560 bluskyes
bluskyes's picture

It is better to walk around the legal maze undetected, whenever possible. Blitzkreig.

Tue, 01/06/2015 - 16:19 | 5629397 bovine-reuptake...
bovine-reuptake-inhibitor's picture

2014 massive flag down, now to the m00000000(n)!

Tue, 01/06/2015 - 16:32 | 5629479 overexposed
overexposed's picture

NICE, thanks for the post, SC.  I forgot they issued a notice about virtual currencies already.  So there you go, it's not "income" that needs withholding, it's "property" from which the receipient will have to calculate gains.  Much like stock-based compensation.  Not bad, I guess, so long as the employees don't mind "holding on" to their "gains" until they become "long-term."

Tue, 01/06/2015 - 16:52 | 5629593 Bollixed
Bollixed's picture

If you accept a new car, as an example, in lieu of dollars as payment from your employer you'll still need to pay taxes on the cars' value as income. (Same as winning a new car on a game show.)

So it will be income in that sense to the IRS, as I understand it as a layman who is not giving any legal advice.

Tue, 01/06/2015 - 17:46 | 5629915 Antifaschistische
Antifaschistische's picture

Speaking of gains.....Here's how the government intends to confiscate your gold/silver.   By confiscating all the profit you make selling it.

http://www.fool.com/how-to-invest/personal-finance/taxes/2014/02/21/capi...

  • Silver and gold (and capital gains): There's also a difference in the capital gains landscape when it comes to silver and gold, and similar commodities used as investments via exchange-traded funds. Collectibles such as gold and silver bullion aren't eligible for the normal long-term capital-gains rates. Rather, these collectibles are taxed at a rate of 28%. This special collectibles tax rate also applies to certain ETFs that deal with the physical commodities themselves -- examples include SPDR Gold(NYSEMKT: GLD iShares Gold (NYSEMKT: IAU and iShares Silver(NYSEMKT: SLV.
Tue, 01/06/2015 - 16:19 | 5629404 Duke of Earl
Duke of Earl's picture

Not sure it will be that challenging.  The IRS has already stated that virtual currencies would be treated as property.  All owed to the IRS would have to be paid in dollars.

Tue, 01/06/2015 - 16:35 | 5629490 overexposed
overexposed's picture

Yep, SC reminded me about that above - Guess that simplifies things.

Tue, 01/06/2015 - 16:41 | 5629524 Stackers
Stackers's picture

Overexposed: The article says the Metals Dealers is using a service called Bitwage. Bitwage takes care of all the questions you just asked in a seemless service

https://www.bitwage.co/product

Tue, 01/06/2015 - 16:00 | 5629292 Bay of Pigs
Bay of Pigs's picture

BTC was $950 a year ago, now under $300. That chart looks worse all the time.

Where is the fonestar brigade?

Tue, 01/06/2015 - 16:02 | 5629304 bovine-reuptake...
bovine-reuptake-inhibitor's picture

fonestar is with you!

and also with you!

Tue, 01/06/2015 - 16:04 | 5629313 Bay of Pigs
Bay of Pigs's picture

Yet another new handle?

Fuck me....lol.

Tue, 01/06/2015 - 16:09 | 5629334 McMolotov
McMolotov's picture

If you strike fonestar down, he shall become more powerful than you can possibly imagine.

Then he'll get struck down again, and then he'll become more powerful than you can possibly imagine again, and then he'll get struck down again, and then he'll become more powerful than you can possibly imagine again...

Tue, 01/06/2015 - 16:11 | 5629350 bovine-reuptake...
bovine-reuptake-inhibitor's picture

We collect the junk!  We use it build statue of Satoshi!

Tue, 01/06/2015 - 16:31 | 5629467 pods
pods's picture

Aha, so fonestar is like inverse bitcoin.

The Kramer of bitcoin if you will.  The stronger he becomes, the worse bitcoin does.

pods

Tue, 01/06/2015 - 16:53 | 5629602 dogbreath
dogbreath's picture

I'll say it.    I want a t-shirt with Fonestar's old avatar      "Fonestar rules" beneath

 

I can't believe I'm saying this.....................  his name was Fonestar

Tue, 01/06/2015 - 16:58 | 5629619 Miffed Microbio...
Miffed Microbiologist's picture

Oh dear God! Dogbreath...No!

Well, come to think of it, we are going into the Year of the Goat. May be his time has come.

Miffed;-)

Tue, 01/06/2015 - 17:07 | 5629677 dogbreath
dogbreath's picture

I just came back to delete that...............damn woman..

 

 

Tue, 01/06/2015 - 17:15 | 5629723 Miffed Microbio...
Miffed Microbiologist's picture

That's why I jumped on it so fast! I knew you'd have a change of heart.

We womenz are evillll I tell you.......just evvviiilll. Stay away from us! Save yourself from our clutches. We will drain your essences if given a chance.

Why do you guys keep coming back??

Miffed;-)

Tue, 01/06/2015 - 17:20 | 5629759 Bollixed
Bollixed's picture

Draining our essences is why we get married, come to think of it...

Tue, 01/06/2015 - 18:13 | 5630045 highly debtful
highly debtful's picture

Why do you guys keep coming back??

Well, she gave me three great kids, that keeps me in her web. Plus she's a first rate partner and still a corker at fifty. In all fairness: best decision I ever made was asking her to marry me twenty years ago. Sounds corny, right? But there you have it.

Tue, 01/06/2015 - 19:33 | 5630396 Hulk
Hulk's picture

"Why do you guys keep coming back??"

OH MY, you are truly evil !!!

Tue, 01/06/2015 - 18:24 | 5630093 funthea
funthea's picture

I rather miss fonestar. Sure with pity and all, but you gotta hand it to him, he was committed... well, maybe not now, assuming he hasn't offed himself an account of his mal-investment in bitcoin.

Wed, 01/07/2015 - 07:46 | 5631652 StandardDeviant
StandardDeviant's picture

Perhaps he really was committed.  But yeah, he could be entertaining.

Tue, 01/06/2015 - 16:09 | 5629335 bovine-reuptake...
bovine-reuptake-inhibitor's picture

They call it "fight club" which I guess means these little bitchez can't even deal with one virtual man like fonestar!

Tue, 01/06/2015 - 16:44 | 5629548 pods
pods's picture

You are like a naked crazy person who busts into a party pissing on people while running around yodeling.

Or that guy in the Silence of the Lambs:

"I bit my wrist, look at the blood!" 

https://www.youtube.com/watch?v=edQ1cOkDujU

Spiderman that Hoe!

pods

 

Tue, 01/06/2015 - 16:56 | 5629607 Bollixed
Bollixed's picture

Looks like banhammer has already struck if you click on his user name.

Tue, 01/06/2015 - 20:34 | 5630616 Heavy
Heavy's picture

Awh, the world needs naked crazy people now more than ever! Oh well, onward to the future.  Bit coins are probably becoming too inefficient to compete long term.  Bitcoins did cause a ton of inovation though.  I agree its not going to change everybody's worlds but some of it, especialy the exchanges like the one that got hacked above, is going to influance more than a few businesses.  FX and remittance payments are high on the list.  The exchanges are the interesting part, they are parts of a distributed trade ledgering system that's open and open source.  That's the important part of the the rise and fall of bitcoin.  I wouldn't write that idea off just yet.  From what I read on some forums, I wouldn't write Bitstamp off yet either.  But yeah buy gold and take me with you to New Zealand when ya go....bitchez.

Tue, 01/06/2015 - 17:27 | 5629804 tocointhephrase
tocointhephrase's picture

You came back for another beating. LETS GET READY TO RUMMMMMBLE!

Tue, 01/06/2015 - 16:12 | 5629360 crazytechnician
crazytechnician's picture

Look at the 2 year chart instead.

Tue, 01/06/2015 - 16:31 | 5629456 sleigher
sleigher's picture

https://bitcoinwisdom.com/markets/bitstamp/btcusd

The 1D chart...  

I should probably sell what I have.  But it isn't a lot and why not ride it out and see where it goes.  I am not going to lose anything.  Not really anyways.  

Tue, 01/06/2015 - 16:35 | 5629489 crazytechnician
crazytechnician's picture

I called 266 bottom about 9 months ago. 2014 was painful. I have very high hopes for 2015.

Tue, 01/06/2015 - 16:58 | 5629630 sleigher
sleigher's picture

Maybe 266.  I see it going lower than that.  I still believe long term it goes up.  That is if everything doesn't go out in a flash of light...  

Tue, 01/06/2015 - 17:14 | 5629713 frenzic
frenzic's picture

That 2 year chart will look very different in a couple of months. What argument will you copy then?

Wed, 01/07/2015 - 00:51 | 5631325 frenzic
frenzic's picture

Right on cue a downvote without a reply. The BTC 2 year chart starting around the middle of februari 2013 will show you what they dare not reply to. The truth is getting harder and harder to hide for these people. God they must feel fucking awful by now.

Tue, 01/06/2015 - 16:35 | 5629502 shouldvekilledthem
shouldvekilledthem's picture

We are busy buying the fucking dip. ;)

Tue, 01/06/2015 - 17:20 | 5629758 rubiconsolutions
rubiconsolutions's picture

What did P.T. Barnum say?

Tue, 01/06/2015 - 15:54 | 5629253 Dr. Engali
Dr. Engali's picture

Yeah, and that dealer would get a big fuck you from me. A hard currency dealer paying in virtual play money. Fuck you pal.

Tue, 01/06/2015 - 16:00 | 5629300 bovine-reuptake...
bovine-reuptake-inhibitor's picture

The "play money" putting in hard bottom at $280.  Now we go back up to the moons.  And you "dollar' is the play money goof!

Tue, 01/06/2015 - 16:08 | 5629337 Dr. Engali
Dr. Engali's picture

Been hearing the bottom is in all the way down from $1,200.

Tue, 01/06/2015 - 16:19 | 5629393 CH1
CH1's picture

Been hearing "Bitcoin is dead" since 25 cents!

Tue, 01/06/2015 - 16:31 | 5629461 Pool Shark
Pool Shark's picture

 

 

Let me get this straight: A precious metals dealer paying its employees in Bitcoin.

Hmmmm...

Here's a thought:

How about paying your employees in PRECIOUS METALS???!!!!!

Tue, 01/06/2015 - 16:44 | 5629537 graneros
graneros's picture

"How about paying your employees in PRECIOUS METALS???!!!!!"

Come on man you are trying to use logic in this very strange world.  You should know better than that.  If things weren't already strange enough, Fonestar has reappeared in another of his guises for fuck's sake. Not a good omen. 

This time he is some kind of bovine character.  Fitting for a BS artist. I guess Tyler got tired of hearing him as Goatfucker or whatever his last incarnation was.

Tue, 01/06/2015 - 17:04 | 5629651 Bollixed
Bollixed's picture

I think he was also Bunga Dim.

Tue, 01/06/2015 - 17:16 | 5629727 frenzic
frenzic's picture

bitcoiners be trollin'

Tue, 01/06/2015 - 19:41 | 5630426 shouldvekilledthem
shouldvekilledthem's picture

Precious metals suck when it comes to transacting.

Tue, 01/06/2015 - 16:04 | 5629314 highly debtful
highly debtful's picture

Exactly. What's next? GM's HR department offering Ford company cars to its staff? 

Tue, 01/06/2015 - 16:15 | 5629375 CH1
CH1's picture

What would possibly give you the idea that BTC and PMs are enemies?

They are natural compliments!

Tue, 01/06/2015 - 16:19 | 5629395 highly debtful
highly debtful's picture

Call me old fashioned, but that remains to be seen. 

Tue, 01/06/2015 - 16:24 | 5629418 CH1
CH1's picture

Call me old fashioned, but that remains to be seen.

And in the meanwhile you need to ridicule Bitcoin?

Tue, 01/06/2015 - 16:26 | 5629445 highly debtful
highly debtful's picture

Well, let's put it his way: in 2014 Bitcoin was one of the worst performing currencies in the market. That might have something to do with me not putting too much trust in it. 

Tue, 01/06/2015 - 16:42 | 5629521 commander gruze?
commander gruze?'s picture

Bitcoin is not a currency. To view bitcoin solely as a currency is to miss the point.

Bitcoin is a communications protocol designed to acheive consensus over distributed network without central clearing house. To support its operation it is also a payment network of peers facilitating transactions using custom tokens of value and programmatic contract resolution system.

Tue, 01/06/2015 - 16:48 | 5629572 highly debtful
highly debtful's picture

That was helpful, thanks. I'll make sure to convey your message to my mum, who doesn't even have a PC at her disposal.

Tue, 01/06/2015 - 17:31 | 5629821 Mike Hunt III
Mike Hunt III's picture

Bitcoin can be sent and received on a phone.

Tue, 01/06/2015 - 21:30 | 5630816 TheHound73
TheHound73's picture

I've switched to making most all of my Bitcoin payments using my phone.  Its just easier and more convenient, especially compared to credit card payments.  Mycelium Wallet for Android.

Tue, 01/06/2015 - 17:05 | 5629660 sleigher
sleigher's picture

I have tried to point out the benefits of the protocol itself and to ignore the currency aspect.  No one cares...

It is pretty badass actually but I say that as a systems engineer of almost 20 years.  So I am just some dork...

Tue, 01/06/2015 - 16:36 | 5629503 tocointhephrase
tocointhephrase's picture

Too mmany variations. Bit, lite, feather, max etc. There is only one gold and one silver.Both of which have uses outside of being money. 

PPlease explain how p2p compliments them?

Tue, 01/06/2015 - 17:43 | 5629901 Mike Hunt III
Mike Hunt III's picture

Golds is valued as money because it has the properties of money, not because it is used in jewelry or electronics. If gold was not useful in electronics, it would still be money. Similarly, Bitcoin is valued as money because it has properties of money. It doesn't NEED to have other uses, although the Bitcoin network apparently does have many potential other uses.
"If successful, bitcoin changes pretty much everything! To understand bitcoin, you have to imagine a world where you can buy without a merchant, bet without a bookie, get insurance without an underwriter, access finance and loans without a bank, trade without an exchange, purchase commodities without a broker, have law without lawyers, courts, and judges, create assets without an issuer, secure escrow without an agent, have internet without an ISP, verify records without a notary, establish reputation and credit without a credit agency, and create identity without a government."

Tue, 01/06/2015 - 17:17 | 5629559 scrappy
scrappy's picture

True that, CH1, & sleigher.

It depends on who controls it.

There might be some good to come out of Bit Coin.

http://www.coda.co/#about

http://maidsafe.net/overview

https://ethereum.org/

An my favorite, that I have posted about here over the years...

http://www.ingenesist.com

Tue, 01/06/2015 - 16:04 | 5629315 NoDebt
NoDebt's picture

Well, not so fast there.  You sure you wouldn't rather be paid in an electronic-only currency that is accepted at very few places where you shop for day-to-day needs (gas, food), whose value bounces like a yo-yo relative to your local currency and is so susceptible to hacking that the first thing you do when you receive it is quickly stash it away offline where it becomes COMPLETELY illiquid?

I implore you to reconsider your closed-minded position on this.

Tue, 01/06/2015 - 16:06 | 5629326 highly debtful
highly debtful's picture

I'm sorry, you're right, I didn't think this one through. Thank you for showing me the error of my ways. 

Tue, 01/06/2015 - 16:39 | 5629514 Pool Shark
Pool Shark's picture

 

 

If China is able to pretty much block the use of Google in a country of 1.4 billion people, good luck when the NSA decides it wants to block or track all Bitcoin transactions...

http://www.reuters.com/article/2014/12/29/us-google-china-idUSKBN0K70BD20141229

 

Tue, 01/06/2015 - 16:59 | 5629637 dogbreath
dogbreath's picture

I've been to china and the locals have ways around the blocks.    I am too old to take an interest in the technology to perform this as I am more interested in keeping the cabbage moths off my Kale.  The more they block the more the youngsters will find ways around it me thinks

Tue, 01/06/2015 - 16:14 | 5629362 highly debtful
highly debtful's picture

And another thing, NoDebt: damn, you're good at this. 

Tue, 01/06/2015 - 16:17 | 5629389 CH1
CH1's picture

Well, not so fast there.

Sure, keep using your precious Fed notes every day. Save the Fed!

If you think BTC is the enemy of PMs, you're an idiot.

Tue, 01/06/2015 - 16:22 | 5629411 NoDebt
NoDebt's picture

I love Bitcoin threads.  Everybody goes all apeshit in them.

Were you aware I was replying to Doc?  I bet you weren't.  Go read it again.

Tue, 01/06/2015 - 16:26 | 5629433 CH1
CH1's picture

Apologies that I didn't include more of your post for clarity, but the reply stands.

Tue, 01/06/2015 - 16:34 | 5629482 highly debtful
highly debtful's picture

Please don't piss him off. He's pretty ad rem and only gets more green arrows when you piss him off. 

Tue, 01/06/2015 - 17:04 | 5629646 Kidrobot
Kidrobot's picture

Pointing out the obvious flaws of crypto currencies does not postulate a pro fed or hard currency position.  Drop the strawman and simply consider the original premise.

Tue, 01/06/2015 - 17:03 | 5629647 Kidrobot
Kidrobot's picture

-duplicate-

Tue, 01/06/2015 - 17:09 | 5629679 chubbar
chubbar's picture

The guy could pay his employees in gold, ether keep track and give a gold coin or easier www.goldmoney.com which deals in gram fractions and is held offshore.

Tue, 01/06/2015 - 18:45 | 5630221 TheHound73
TheHound73's picture

Amagi Metals have also said that starting next year they will only accept Bitcoin for PMs.  It looks like the fuck you is reciprocal.

Tue, 01/06/2015 - 15:55 | 5629258 pods
pods's picture

It makes no difference what they are paid in, it only matters what their salary is VALUED in.

pods

 

Tue, 01/06/2015 - 16:38 | 5629299 bluskyes
bluskyes's picture

Yeah, let's see the dude base his contract on qty of bitcoin alone - not the dollar equivalent amount of bitcoin.

Tue, 01/06/2015 - 16:13 | 5629365 froze25
froze25's picture

The Fed says that FRN's are only worth what someone will exchange for them.  They are also an extention of credit.  The IRS does not consider credit a source of income.

Tue, 01/06/2015 - 16:27 | 5629439 pods
pods's picture

Well, the income tax is voluntary anyways.  Otherwise it would be a direct, unapportioned tax, which the 16th amendment did not allow.

(following the letter of the law, which I know doesn't really count anymore)

Easiest way is to limit your income.  Let things collapse THEN fix the system on restart.

Now it is suicide, even if you have a correct legal argument.  You only get to tell your cellmate how right your reasoning is.

pods

Tue, 01/06/2015 - 16:43 | 5629534 Pool Shark
Pool Shark's picture

 

 

We have a name for Tax Protestors:

 

 

'Inmates'

 

Tue, 01/06/2015 - 15:55 | 5629264 Hamm Jamm
Hamm Jamm's picture

SHITCOIN !

HAHAHAHAHAHAHAHAHAAAAAAAaaaaaaaaaa

Tue, 01/06/2015 - 16:00 | 5629298 WarPony
WarPony's picture

MOOOAAAAARRRR ShitCoin!  hehehehe - FIFY

Tue, 01/06/2015 - 15:56 | 5629265 ultimate warrior
ultimate warrior's picture

Paid in AG would be better.

Tue, 01/06/2015 - 15:58 | 5629287 bovine-reuptake...
bovine-reuptake-inhibitor's picture

I'll give you some AG if you send me some BTC...

Tue, 01/06/2015 - 16:48 | 5629563 tocointhephrase
tocointhephrase's picture

How do I do that in the event of a power cut or the internet going down for prolonged periods or general lack of availability to get online? 

Tue, 01/06/2015 - 17:03 | 5629649 dogbreath
dogbreath's picture

If the asteroid hits that HH was talking about I'd grab my bitcoin and get outta dodge /s

Tue, 01/06/2015 - 15:55 | 5629267 madcows
madcows's picture

HA! So the owner must think that a Hackable currency is safer/better than a Fiat currency.

I'm not sure I agree... seems to me that they both suck.

Long live barter and trade... we're heading back to the middle ages.

Tue, 01/06/2015 - 16:21 | 5629405 crazytechnician
crazytechnician's picture

It is not hackable. Another exchange was hacked. Equivalent to a digital bank robbery but without guns or violence. If a gold vault gets robbed don't blame the gold blame the security.

Tue, 01/06/2015 - 16:45 | 5629538 Citxmech
Citxmech's picture

Very secure locations at the bottoms of lakes are in abundance for PMs.  Apparently, secure exchanges for crypto-currencies are much harder to come by. 

Tue, 01/06/2015 - 16:53 | 5629594 crazytechnician
crazytechnician's picture

Ahh yeah , the global future of currency: burying your stash at the bottom of some random lake. That is what we would call PROGRESS.

Tue, 01/06/2015 - 18:01 | 5629994 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Let me guess: you loosed your PMs in a boating accident !

Tue, 01/06/2015 - 17:05 | 5629276 RaceToTheBottom
RaceToTheBottom's picture

Precious Metal Dealer pays his employees in Bitcoin.

Isn't that Precious.....

Tue, 01/06/2015 - 15:58 | 5629281 gcjohns1971
gcjohns1971's picture

What did you expect them to pay with? Gold? Other PMs?

There isn't any for buying or for selling in return for labor...or anything else.

Orders placed on supposedly "In Stock" PMs over a month ago have not cleared nor shipped.

The PM industry's shelves are bare.

Tue, 01/06/2015 - 15:59 | 5629288 bluskyes
bluskyes's picture

If, in 2008 everyone learned the phrases "Subprime Crisis" and "Asset Backed Commercial Paper" - then the phrases for 2015 will be "Collateral Chain" and "Counter-party Risk"

Tue, 01/06/2015 - 16:00 | 5629293 unplugged
unplugged's picture

Rothschild regime funding yet another NSA hack project.

Tue, 01/06/2015 - 16:02 | 5629305 Robot Traders Mom
Robot Traders Mom's picture

I'd ask to be paid in silver/gold first, a readily-exchangeable currency second, durable good third, and computer currency fourth. 

Tue, 01/06/2015 - 16:21 | 5629413 Jstanley011
Jstanley011's picture

In fourth place I've got shoot them and rifle their pockets.

Tue, 01/06/2015 - 16:02 | 5629312 FuzzyDunlop21
FuzzyDunlop21's picture

I know fonesex star is a dork but with all the venture capitalist firms invested in bitcoin related businesses, I think it would be wise to own a few. If just one of these companies takes off the popularity, and demand, for bitcoin will rise. Its not as safe as gold, but as a short term investment I think its worth doing

Tue, 01/06/2015 - 16:25 | 5629426 fedupwhiteguy
fedupwhiteguy's picture

I also think that as a short term vehicle, bitcoin is worth the risk. And, as a means to transfer funds overseas, hell yeah!

I just would not want to park a huge chunk of frn's into a bitcoin wallet for any longer than my desired transaction would take.

Tue, 01/06/2015 - 16:25 | 5629427 bovine-reuptake...
bovine-reuptake-inhibitor's picture

Do you have any hard evidence that fonestar is a dork?

Tue, 01/06/2015 - 16:42 | 5629529 83_vf_1100_c
83_vf_1100_c's picture

  There ya go. FoneStar is a freakish troll.

 

 

Tue, 01/06/2015 - 22:13 | 5630949 FuzzyDunlop21
FuzzyDunlop21's picture

wow

Wed, 01/07/2015 - 01:10 | 5631362 gallistic
gallistic's picture

Yep, that sounds about right...

Tue, 01/06/2015 - 16:39 | 5629517 BlackChicken
BlackChicken's picture

Yes. Half of what he says...

Tue, 01/06/2015 - 16:05 | 5629324 ebworthen
ebworthen's picture

NOTHING on a computer connected to the Internet is secure; NOTHING.

Tue, 01/06/2015 - 16:08 | 5629338 bovine-reuptake...
bovine-reuptake-inhibitor's picture

Never lost ANY BTC online.  Ever!

Tue, 01/06/2015 - 16:37 | 5629506 Panic Mode
Panic Mode's picture

But you are losing the face value. Keep the pride.

Tue, 01/06/2015 - 22:28 | 5630989 TheHound73
TheHound73's picture

Ha!

Tue, 01/06/2015 - 16:12 | 5629351 crazytechnician
crazytechnician's picture

Cold Storage , bitcoin stored OFFLINE

Tue, 01/06/2015 - 16:20 | 5629399 1Inthebeginning
1Inthebeginning's picture

metasploit

Tue, 01/06/2015 - 16:41 | 5629519 danster82
Tue, 01/06/2015 - 20:44 | 5630659 Heavy
Heavy's picture

A nice Linux computer makes it managable though.

Tue, 01/06/2015 - 16:07 | 5629327 Bam_Man
Bam_Man's picture

Why not just pay them with lottery tickets?

It's the same thing.

Tue, 01/06/2015 - 16:08 | 5629332 NoVa
NoVa's picture

Kinda funny - business paying payroll taxes to the IRS in BitCoin.  

 

Tue, 01/06/2015 - 16:10 | 5629340 A_latvian
A_latvian's picture

I still don't get the hate of BTC that is dripping in this article and throughout ZH. It's an interesting and useful technology that IS a direct threat to fiat currency. It's not "digital money." The analog is more like "digital gold." It's only worth the value people assign to it. BTC has the advantage, however, of being able to be sent anywhere in the internet very quickly.

I can't buy my CVS & Target gift cards using gold coins. I'd much rather be paid in BTC than gold, or perhaps even USD.

Tue, 01/06/2015 - 16:16 | 5629379 crazytechnician
crazytechnician's picture

Flat Earthers hiding in their bunkers waiting for armageddon so they can spend their eagles they stashed in the lake and shoot everybody with all their lead they have saved. Neanderthols.

Tue, 01/06/2015 - 16:27 | 5629430 hoist the bs flag
hoist the bs flag's picture

"Neanderthols"...don't you mean "barbarians"? sweet jesus...if you are going to insult 'em, get that straight already.

Tue, 01/06/2015 - 16:28 | 5629447 crazytechnician
crazytechnician's picture

barbarians are much more intelligent than flat earth Neanderthols.

Tue, 01/06/2015 - 16:33 | 5629471 hoist the bs flag
hoist the bs flag's picture

well...you got a point there. Barbarians also sack cities for silver and gold. (and bitchez & booze) ;)

Tue, 01/06/2015 - 16:37 | 5629507 crazytechnician
crazytechnician's picture

modern day barbarian has switched their attention over to btc , must be something in it.

Tue, 01/06/2015 - 16:56 | 5629569 hoist the bs flag
hoist the bs flag's picture

who cares though right? your logic on intrinsic value of gold/silver, that they are subjective in regards to humans walking upright, also applies to shitcoin...so i guess I agree with you...it’s all fuckin crap.

Tue, 01/06/2015 - 16:57 | 5629612 crazytechnician
crazytechnician's picture

It's fucking crap or it's fucking great man. That is the thing about having a free mind You can decide for yourself. Me, I think bitcoin is going to make the greatest change in currency since the Holy Fucking Roman Empire collapsed 2000 years ago. And I am not fucking kidding either. My advice: Just buy yourself one fucking bitcoin. Just think what will happen if 14 million more people try to buy just 1 fucking bitcoin. Get the idea ?

Tue, 01/06/2015 - 16:59 | 5629628 hoist the bs flag
hoist the bs flag's picture

got it...trust me. I don't go long or hold a fixed view on anything as of late ( especially the shit they peddle for "truth" here on ZH).. As with anything: diversify. nice chat. thanks

Tue, 01/06/2015 - 16:57 | 5629627 IridiumRebel
IridiumRebel's picture

This thread make me dumb dumb. Me go search for moon at end of earf.

Tue, 01/06/2015 - 16:59 | 5629640 hoist the bs flag
hoist the bs flag's picture

thanks for showing up

Tue, 01/06/2015 - 17:06 | 5629668 IridiumRebel
IridiumRebel's picture

You're only late to your first meeting.

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