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The Threat To The Dollar As The World’s Primary Reserve Currency

Tyler Durden's picture




 

Submitted by Patrick Barron via Mises Canada blog,

(Following is the text of a speech given today at Drake University at the annual convention of the Iowa Association of Political Scientists.)

The Threat to the Dollar as the World’s Premier Reserve Currency

…but does it really matter?

 

My answer is that, “Yes”, it really matters. And that is why we need to take action today to protect all of our interests. The source of the threat may surprise you.

We refer to the dollar as a “reserve currency” when referring to its use by other countries when settling their international trade accounts. For example, if Canada buys goods from China, China may prefer to be paid in US dollars rather than Canadian dollars. The US dollar is the more “marketable” money internationally, meaning that most countries will accept it in payment, so China can use its dollars to buy goods from other countries, not solely the US. Such might not be the case with the Canadian dollar, and China would have to hold its Canadian dollars until it found something to buy from Canada. Multiply this scenario by all the countries of the world who print their own money and one can see that without a currency accepted widely in the world, international trade would slow down and become more expensive. Its effect would be similar to that of erecting trade barriers, such as the infamous Smoot-Hawley Tariff of 1930 that contributed to the Great Depression. There are many who draw a link between the collapse of international trade and war. The great French economist Frederic Bastiat said that “when goods do not cross borders, soldiers will.” No nation can achieve a decent standard of living with a completely autarkic economy, meaning completely self-sufficient in all things. If it cannot trade for the goods that it needs, it feels forced to invade its neighbors to steal them. Thus, a near universally accepted currency is as vital to world peace as it is to world prosperity.

However, the foundation from which the term “reserve currency” originated no longer exists. Originally the term “reserve” referred to the promise that the currency was backed by and could be redeemed for a commodity, usually gold, at a promised exchange ratio. The first truly global reserve currency was the British Pound Sterling.  Because the Pound was “good as gold”, many countries found it more convenient to hold Pounds rather than gold itself during the age of the gold standard.  The world’s great trading nations settled their trade in gold, but they might accept Pounds rather than gold, with the confidence that the Bank of England would hand over the gold at a fixed exchange rate upon presentment. Toward the end of World War II the US dollar was given this status by treaty following the Bretton Woods Agreement. The US accumulated the lion’s share of the world’s gold as the “arsenal of democracy” for the allies even before we entered the war. (The US still owns more gold than any other country by a wide margin, with 8,133.5 tonnes to number two Germany with 3,384.2 tonnes.) The International Monetary Fund (IMF) was formed with the express purpose of monitoring the Federal Reserve’s commitment to Bretton Woods by ensuring that the Fed did not inflate the dollar and stood ready to exchange dollars for gold at $35 per ounce.  Thusly, countries had confidence that their dollars held for trading purposes were as “good as gold”, as had been the British Pound at one time.

However, the Fed did not maintain its commitment to the Bretton Woods Agreement and the IMF did not attempt to force it to hold enough gold to honor all its outstanding currency in gold at $35 per ounce.  During the 1960’s the US funded the War in Vietnam and President Lyndon Johnson’s War on Poverty with printed money. The volume of outstanding dollars exceeded the US’s store of gold at $35 per ounce. The Fed was called to account in the late 1960s first by the Bank of France and then by others. Central banks around the world, who had been content to hold dollars instead of gold, grew concerned that the US had sufficient gold reserves to honor its redemption promise. During the 1960’s the run on the Fed, led by France, caused the US’s gold stock to shrink dramatically from over 20,000 tons in 1958 to just over 8,000 tons in 1970. At the accelerating rate that these redemptions were occurring, the US had no choice but to revalue the dollar at some higher exchange rate or abrogate its responsibilities to honor dollars for gold entirely.  To its everlasting shame, the US chose the latter and “went off the gold standard” in September 1971. (I have calculated that in 1971 the US would have needed to devalue the dollar from $35 per ounce to $400 per ounce in order to have sufficient gold stock to redeem all its currency for gold.) Nevertheless, the dollar was still held by the great trading nations, because it still performed the useful function of settling international trading accounts. There was no other currency that could match the dollar, despite the fact that it was “delinked” from gold.

There are two characteristics of a currency that make it useful in international trade: one, it is issued by a large trading nation itself, and, two, the currency holds its value over time.  These two factors create a demand for holding a currency in reserve.  Although the dollar was being inflated by the Fed, thusly losing its value vis a vis other commodities over time, there was no real competition.  The German Deutschemark held its value better, but the German economy and its trade was a fraction that of the US, meaning that holders of marks would find less to buy in Germany than holders of dollars would find in the US.  So demand for the mark was lower than demand for the dollar.  Of course, psychological factors entered the demand for dollars, too, since the US was the military protector of all the Western nations against the communist countries.

Today we are seeing the beginnings of a change.  The Fed has been inflating the dollar massively, reducing its purchasing power and creating an opportunity for the world’s great trading nations to use other, better monies. This is important, because a loss of demand for holding the US dollar as a reserve currency would mean that trillions of dollars held overseas could flow back into the US, causing either inflation, recession, or both. For example, the US dollar global share of central bank holdings currently is sixty-two percent, mostly in the form of US Treasury debt. (Central banks hold interest bearing Treasury debt rather than the dollars themselves.) Foreign holdings of US debt currently total $6.154 trillion. Compare this to the US monetary base of $3.839 trillion.

Should foreign demand to hold US dollar denominated assets diminish, the Treasury could fund their redemption in only three ways. One, the US could increase taxes in order to redeem its foreign held debt. Two, it could raise interest rates to refinance its foreign held debt. Or, three, it could simply print money. Of course, it could use all three in varying amounts. If the US refused to raise taxes or increase the interest rate and relied upon money printing (the most likely scenario, barring a complete repudiation of Keynesian doctrine and an embrace of Austrian economics), the monetary base would rise by the amount of the redemptions. For example, should demand to hold US dollar denominated assets fall by fifty percent ($3.077 trillion) the US monetary base would increase by eighty percent, which undoubtedly would lead to very high price inflation and dramatically hurt us here at home. Our standard of living is at stake here.

So we see that it is in America’s interest that the dollar remain in high demand around the world as a unit of trade settlement in order to prevent price inflation and to prevent American business from being saddled with increased costs that would derive from being forced to settle their import/export accounts in a currency other than the dollar.

The causes of this threat to the dollar as a reserve currency are the policies of the Fed itself. There is no conspiracy to “attack” the dollar by other countries, in my opinion. There is, however, a rising realization by the rest of the world that the US is weakening the dollar through its ZIRP and QE programs. Consequently, other countries are aware that they may need to seek a better means of settling world trade accounts than using the US dollar. One factor that has helped the dollar retain its reserve currency demand in the short run, despite the Fed’s inflationist policies, is that the other currencies have been inflated, too.  For example, Japan has inflated the yen to a greater extent than the dollar in its foolish attempt to revive its stagnant economy by cheapening its currency. Now even the European Central Bank will proceed with a form of QE, apparently despite Germany’s objections. All the world’s central banks seem to subscribe to the fallacious belief that increasing the money supply will bring prosperity without the threat of inflation. This defies economic law and economic reality. They cannot print their way to recovery or prosperity. Increasing the money supply does not and cannot ever create prosperity for all. What is more, this mistaken belief compounds a second mistake; i.e., that savings is not the foundation of prosperity, but rather spending is the key. This mistake puts the cart before the horse.

A third mistake is believing  that driving their currencies’ exchange rate lower vis a vis other currencies will lead to an export driven recovery or some mysteriously generated shot in the arm that will lead to a sustainable recovery. Such is not the case. Without delving too deeply into Austrian economic and capital theory, just let me point out that money printing disrupts the structure of production by fraudulently changing the “price discovery process” of capitalism. Capital is allocated to projects that will never be profitably completed. Bubbles get created and collapse and businesses are suddenly damaged en mass, thus, destroying scarce capital.

Because of this money-printing philosophy the dollar is very susceptible to losing its vaunted reserve currency position to the first major trading country that stops inflating its currency. There is evidence that China understands what is at stake; it has increased its gold holdings and has instituted controls to prevent gold from leaving China.  Should the world’s second largest economy and one of the world’s greatest trading nations tie its currency to gold, demand for the yuan would increase and demand for the dollar would decrease overnight.

Or, the long festering crisis in Europe may drive Germany to leave the eurozone and reinstate the Deutschmark. I have long advocated that Germany do just this, which undoubtedly would reveal the rot embodied in the Euro, the commonly held currency that has been plundered by half the nations of the continent to finance their unsustainable welfare states. The European continent outside the UK could become a mostly Deutschmark zone, and the mark might eventually supplant the dollar as the world’s premier reserve currency.

The underlying problem, though, lies in the ability of all central banks to print fiat money; i.e., money that is backed by nothing other than the coercive power of the state via its legal tender laws. Central banks are really little more than legal counterfeiters of their own currencies. The pressure to print money comes from the political establishment that desires both warfare and welfare. Both are strictly capital consumption activities; they are not “investments” that can pay a return. In a sound money environment, where the money supply cannot be inflated, the true nature of warfare and welfare spending is revealed, providing a natural check on the amount of funds a society is willing to devote to each. But in a fiat money environment both war and welfare spending can expand unchecked in the short run, because their adverse consequences are felt later and the link between consumptive spending and its harm to the economy is poorly understood. Thus, both can be expanded beyond the recuperative and sustainable powers of the economy.

The best antidote is to abolish central banks altogether and allow private institutions to engage in money production subject only to normal commercial law. Sound money would be backed one hundred percent by commodities of intrinsic value–gold, silver, etc. Any money producer issuing money certificates or book entry accounts (checking accounts) in excess of their promised exchange ratio to the underlying commodity would be guilty of fraud and punished as such by both the commercial and criminal law, just as we currently punish counterfeiters. Legal tender laws, which prohibit the use of any currency other than the one endorsed by the state, would be abolished and competing currencies would be encouraged. The market would discover the better monies and drive out less marketable ones; i.e., better monies would drive out the bad or less-good monies.

We need to look at the concept of a reserve currency differently, because it is important. We need to look at it as a privilege and a responsibility and not as a weapon we can use against the rest of the world. If we abolish, or even lessen, legal tender laws and allow the process of price discovery to reveal the best sound money, if we allow our US dollar to become the best money it can - a truly sound money - then the chances of our personal and collective prosperity are greatly enhanced.

We all have the same interest. We all want to have the highest standard of living for ourselves and our families. A sound money reserve currency offers us the best chance of achieving our shared goal; therefore, we should rally around every effort to make it so.

 

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Sat, 03/07/2015 - 11:30 | 5864456 GetZeeGold
GetZeeGold's picture

 

 

Something that's as good as gold. Something that has been in use for thousands of years.

 

It will come to me.

Sat, 03/07/2015 - 11:32 | 5864468 crazytechnician
crazytechnician's picture

Bitcoin is far superior as a global currency.

 

 

 

Instant Worldwide Value Transfer
Zero storage costs
Zero transport costs
Full reserve auditing
Micropayments (fractions of a cent)

None of the above possible with gold.

Sat, 03/07/2015 - 11:33 | 5864476 IridiumRebel
IridiumRebel's picture

Yeah until the hedgies start to manipulate in an "exchange" like BITEX that will be developed. I see its benefits, but it'll get fucked with too by dotgov and its cronies.

Sat, 03/07/2015 - 11:37 | 5864480 crazytechnician
crazytechnician's picture

like gold and silver you mean ? One thing about bitcoin is that exchanges and dealers will be forced to provide proof of reserve , this means they can be audited by anybody with a tablet or laptop. Fraud impossible.

Sat, 03/07/2015 - 11:39 | 5864491 IridiumRebel
IridiumRebel's picture

They'll figure away. They're evil. It's what they do.

Sat, 03/07/2015 - 13:29 | 5864781 ratso
ratso's picture

Dollar will remain the world reserve currency for decades despite this kind of fear mongering.

Sat, 03/07/2015 - 13:38 | 5864800 malek
malek's picture

Why so coy?
The US Dollar will remain the world reserve currency for the next 1000 years!!!1!
You know, just like the German 1000 year empire.

Uh, yeah. Dream on.

Sat, 03/07/2015 - 14:55 | 5864981 Self-enslavement
Self-enslavement's picture

Please accept our paper in exchange for your wealth. We parasites need more wealth. Thanks.

Sat, 03/07/2015 - 15:10 | 5864993 strannick
strannick's picture

We all know money supply has been increasing. Why hasn't  this translated into inflation,?

It hasn't because of money velocity and shadow banking. Primary dealer banks ensure this new money goes into Treasuries, not the economy, through commercial loans and it's attendant fractional reserve money creation. Treasuries through reverse repos are then used as collateral, instead of banks loans. 

This insures money velocity is low, and inflation is funneled into demand for Treasuries is high ie. Yields -and interest rates- stay low

Sat, 03/07/2015 - 15:46 | 5865079 Oh regional Indian
Oh regional Indian's picture

Here are some of the things we do know:

a) Dollar's dead

b) Mises and Miser are too damn close for it to be a coincidence

c) Word on the street is that Von M was a Rothschield/Rockerfeller supported academic.

d) Dollah's croked, kicked the bucket, met it's maker.....

But....perspective...

https://aadivaahan.wordpress.com/2015/03/07/videos-worth-watching-pictur...

Sat, 03/07/2015 - 16:07 | 5865117 strannick
strannick's picture

Thanks quite a claim about Mises being  Rothchild rube.

Links plz

Sat, 03/07/2015 - 16:14 | 5865128 Oh regional Indian
Oh regional Indian's picture

Ludwig Von Mises, who never held a paid job at any University, was maintained first by David Rockefeller and then for decades received money from the Volker Fund and related business men, like Lawrence Fertig.

Von Mises' biographer, Richard M. Ebeling:

"Many readers may be surprised to learn the extent to which the Graduate Institute and then Mises himself in the years immediately    after he came to United States were kept afloat financially through generous grants from the Rockefeller Foundation. In fact, for the first years of Mises's life in the United States, before his appointment as a visiting professor in the Graduate School of Business Administration at New York University (NYU) in 1945, he was almost totally dependent on annual research grants from the Rockefeller Foundation."
- See more at: http://www.henrymakow.com/libertarianism_as_an_illuminat.html#sthash.Cjz...

 

Plenty more on the net....

Sat, 03/07/2015 - 17:04 | 5865236 strannick
strannick's picture

Thanks for the linK, though that doesn't necessarily prove he was a disisinfo agent 

Sat, 03/07/2015 - 17:40 | 5865333 Dugald
Dugald's picture

Von Mises.....Just another f'ing freeloader.....

 

Sat, 03/07/2015 - 18:17 | 5865437 malek
malek's picture

Hmm, the good ol' "divide the opposition until infighting commences" approach

Sat, 03/07/2015 - 15:02 | 5864996 Soul Glow
Soul Glow's picture

Fiat currency is its own worst enemy.

Sat, 03/07/2015 - 15:26 | 5865038 bwh1214
bwh1214's picture

Fiat currency is bad but debt based fiat currency is much much worse.  

This is a great overview of our horrid monetary system. http://www.debtcrash.report/entry/history-and-introduction

Sat, 03/07/2015 - 16:14 | 5865127 Soul Glow
Soul Glow's picture

Split hairs much?

Sat, 03/07/2015 - 15:07 | 5865002 Sudden Debt
Sudden Debt's picture

Well, it won’t.

the dollar will now keep rising untill parity with the euro and after that, over the next 18 months, it will crash back to 1,75 against the euro.

And in that timeframe, the US needs to raise rates or risk a dollar implosion.

and we all know why they can’t do this so in the next 18 months there’s a very big chance that it will finally be over.

 

And all that talk about rescueing the dollar and trying to keep it a reserve currency?

HA!

That’s like the captain of Titanic saying that maybe they should start to avoid icebergs when the water is flooding the back deck.

I’m fully invesd in dollar for over 5 months now and soon I’m going to turn that position back into euro’s.

And if you hold money, you should do that to.

 

Sat, 03/07/2015 - 15:49 | 5865083 Tall Tom
Tall Tom's picture

The plan is to bring all currencies to parity so that the SDR can be instituted in the Great Reset.

 

Currencies are not safe havens and gains from arbitrage will be controlled, if not eliminated, by the Central Scrutinizers.

Sat, 03/07/2015 - 16:05 | 5865114 hungrydweller
hungrydweller's picture

Expect WWIII before that happens.

Sat, 03/07/2015 - 15:40 | 5865066 cornflakesdisease
cornflakesdisease's picture

The dollar will collapse just as soon as we run out of zeros.

Sat, 03/07/2015 - 11:41 | 5864495 samsara
samsara's picture

It involves a computer and you say 'Fraud is Impossible' ?

LMAO.

Having worked as a systems programmer for 30 years, that is so funny I can't begin to tell you.

Sat, 03/07/2015 - 11:50 | 5864510 crazytechnician
crazytechnician's picture

Systems programmer for 30 years and you don't see the potential of the bitcoin protocol ? LMFAO . I call B/S.

Sat, 03/07/2015 - 11:55 | 5864538 samsara
samsara's picture

You were born after 1980 weren't you? Then dear boy, I've been programming for longer than you have been alive.

If it has a wire or wifi, it can be hacked. Maybe you should read more.

Sat, 03/07/2015 - 12:05 | 5864564 crazytechnician
crazytechnician's picture

I agree that SHA_256 is hackable , it would only take a couple of Trillion years.

Maybe you should read more.

Sat, 03/07/2015 - 12:11 | 5864580 y3maxx
y3maxx's picture

"Something that's as good as gold. Something that has been in use for thousands of years.

It will come to me."

Masturbating?

Sat, 03/07/2015 - 12:25 | 5864619 N0TME
N0TME's picture

Gold, Jerry, gold!

Sat, 03/07/2015 - 14:23 | 5864898 cornfritter
cornfritter's picture

"Something that's as good as gold. Something that has been in use for thousands of years. - Something that has perceived value and that the lordlings sit upon tones of so's they may continue to kick the world in the head, It will come to me."  Wait ....

Why yes, Gold, that and some kinda "drawing rights" for the children nations?  effen candy shop theatre

Fuck Gold.  Fuck Bitcoin.

Sun, 03/08/2015 - 06:07 | 5866499 GetZeeGold
GetZeeGold's picture

 

 

Clean up on aisle five.

Sat, 03/07/2015 - 12:19 | 5864604 CrazyCooter
CrazyCooter's picture

As I have posted many times, bitcoin is the ABG strategy of the elite. The are 14M of 21M coins in circulation. The presumption is that those remaining coins aren't already known. Bitcoin is presented as taking years/decades to find the rest, but I don't buy it. 

If you like it so much, go long.

Cooter

ABG: anything but gold

Sat, 03/07/2015 - 12:31 | 5864639 crazytechnician
crazytechnician's picture

They cannot be known because their checksums depend on the transactional block for the previous 10 minutes. If that block has not been generated then no checksum exists to enable the next block of coins to be generated. The source code is open to peer review , the best programmers and hackers on the planet have poured over this code for 6 years looking for holes and the core source code is rock-solid.

Sat, 03/07/2015 - 13:03 | 5864712 winchester
winchester's picture

nothing humanly made is perfect. make it hammered in your head, whatever your level/skill in computing is.

 

it is just philosophical evidence. what a xxx super stuff is impossible to decode/decrypt in Time_1 with technology_1 will we so in Time_2 or technology_2.

 

period.

 

Sat, 03/07/2015 - 16:26 | 5865153 SHRAGS
SHRAGS's picture

The code may be bulletproof for BTC itself, but it is dependant upon other libraries & functions & the random number generator of the machine itself.  Are these bulletproof.

 

Check out Poul-Henning Kamps video on how things are manipulated NSA operation ORCHESTRA: Annual Status Report

Another bug to look at is the Debian 2008 OpenSSL random number generator that resulted in a small number of default seeds https://www.schneier.com/blog/archives/2008/05/random_number_b.html

 

from the article: Random numbers are used everywhere in cryptography, for both short- and long-term security. And, as we've seen here, security flaws in random number generators are really easy to accidently create and really hard to discover after the fact. Back when the NSA was routinely weakening commercial cryptography, their favorite technique was reducing the entropy of the random number generator.

 

RNG's are the archives heel of the entire computer cryptographic system, and TPTB know it.  They are also attacking the hardware RNG (google RNG doping to reduce the randomness for intel TRNG).  You may make your own RNG, but how about each and every other endpoint, you can't trust the other machine does the same.

Sat, 03/07/2015 - 16:51 | 5865203 crazytechnician
crazytechnician's picture

I absolutely agree with everything you say here. That is why people should not trust SSL , and only create their own digital wallets using the original Satoshi software which uses it's own RNG library. Web wallets are not to be trusted. This technology is not for the lighthearted. Given time partial custodial holding of bitcoin will be possble with multi-sig wallets. These are in development right now and will transform the wallet space.

Sat, 03/07/2015 - 17:31 | 5865301 SHRAGS
SHRAGS's picture

PRNG's in software are still vulnerable to seeding from the host's RNG. You can make your own TRNG from a radiation source, fine, but how about everyone else.  You may have seen Bruce Schneier post on hardware tampering: Surreptitiously Tampering with Computer Chips https://www.schneier.com/blog/archives/2013/09/surreptitiously.html

 

In all likelihood, you cannot *REALLY* trust any computer cryptography for something truely valuable or life & death unless you have manufactured every bit of hardware yourself, and written the compiler from scratch and compiled every piece of software yourself.  Its worse, you need each & every single one of your counterparties to have done the same so they don't leak your keys.   In other words, its not going to happen.

 

We haven't even talked about various flaws in designed into major protocols by you-know-who.  

Sat, 03/07/2015 - 17:35 | 5865322 crazytechnician
crazytechnician's picture

If you really want to take it that far then fine. That would mean there is absolutely *no* security at all.

Sat, 03/07/2015 - 18:05 | 5865356 SHRAGS
SHRAGS's picture

Correct.  And that is the problem.  The entire computer edifice is fatally flawed from a security perspective.  Whilst BTC software may be perfect, it does not operate in isolation, but still depends upon other components that are vulnerable.

Real world analogies are correct, gold, seashells or any other form of stored wealth all have vulnerabilities, BTC is not the exception.  Its flaw may be better or worse than the other stores, but it is still vulnerable, to believe otherwise is foolish.

Ultimately, there is no security.  The best we little people can do is raise the hurdles to that theft as high as we can.  

Sat, 03/07/2015 - 12:42 | 5864665 KingGenius
KingGenius's picture

agreed, they call it "mining" and need computer power to "mine"

they don't need gas, muscle, geological insight, etc. to long cryptocurrencies is crazy. to short them, maybe....but to compare to gold, forget it. the NSA has supercomputer facilities bigger than the size of many downtowns. computing speed and efficiency grows exponentially over time, and that is just to the public. if they want the BC they'll get it-simple. seems more like a digial fiat to ppl who have critical thinking skills and don't speak in digial code. with supercomputers, and regulation of what is legal tender, it is covert fiat. Gov probably created it in the first place. What's next? RFID implants to proove id and authenticity of BC? Please. 

Sat, 03/07/2015 - 13:50 | 5864806 malek
malek's picture

 I agree that SHA_256 is hackable , it would only take a couple of Trillion years.

Completely meaningless.

You believe to snoop on you entering your passcode will also take a couple of Trillion years in preparation (finding exploits etc.) to pull that off successfully?

Sat, 03/07/2015 - 14:22 | 5864893 quikwit
quikwit's picture

NSA has more computation power than any other entity on the planet.  They can simply outmine all other miners into the ground, corral a majority of the bitcoin money supply for themselves, loan it out like FRNs, and we're back to the present.

A currency is only as good as its ability to withstand debasement.  That's why backing currency with a finite resource is a good idea.  With bitcoin, there is no resource backing, so no limit to the supply potential.

Gold is the finite resource that humans have used over the past thousands of years.

Sat, 03/07/2015 - 15:24 | 5865035 post turtle saver
post turtle saver's picture

speaking as someone who's actually witnessed an MD5 collision happen right before his very eyes... you place way too much faith in encryption...

how many of those shitbird Bitcoin mines are using ECC memory? food for thought...

Sat, 03/07/2015 - 15:56 | 5865094 crazytechnician
crazytechnician's picture

They do not use memory. They use SHA_256 ASIC cores. They are constantly generating errors , the protocol does this deliberately as another layer of protection. Only through consensus does the correct block get broadcast over the network. Do some research , you may actually see the beauty of this thing.

Sat, 03/07/2015 - 19:12 | 5865582 post turtle saver
post turtle saver's picture

"they do not use memory"... I think you're oversimplifying the architecture... a lot...

 

Sat, 03/07/2015 - 19:36 | 5865657 crazytechnician
crazytechnician's picture

Miners only use a memory pool to hold transactional data. The actual mining is done using SHA_256 , this is done with registers embedded onto an ASIC chip

Sat, 03/07/2015 - 19:47 | 5865693 malek
malek's picture

And with selectively quenched electrons only!

But the flux capacitor might be prone to manipulation...

Sat, 03/07/2015 - 20:06 | 5865748 crazytechnician
crazytechnician's picture

If you could supply me with the exact same material that you are currently smoking , I could get on the exact same level as yourself and thus provide an informed answer.

Sat, 03/07/2015 - 20:39 | 5865832 malek
malek's picture

Your mining using ASIC chips was not meant sarcastically? Oh, my bad. It was a honest mistake. I used Turbo Tax... errrr, never mind.

By the way, still waiting on your responses to
http://www.zerohedge.com/news/2015-03-07/threat-dollar-world%E2%80%99s-p...
and
http://www.zerohedge.com/news/2015-03-07/threat-dollar-world%E2%80%99s-p...

(Which were both meant seriously, if you have any doubts.)

Sat, 03/07/2015 - 15:55 | 5865093 Tall Tom
Tall Tom's picture

Wallets are so secure...NOT.

 

Exchanges are incorruptable...NOT.

 

Processor speeds have stalled....NOT.

 

AI is being shelved as a result...NOT.

 

3-D Processors are not being planned...NOT.

 

Your trillion year estimate is at current levels of tech.

 

The technology is still advancing. The Bitcoin architecture is NOT.

Sat, 03/07/2015 - 15:57 | 5865099 crazytechnician
crazytechnician's picture

Good luck wallowing in your ignorance.

Sat, 03/07/2015 - 16:41 | 5865183 Tall Tom
Tall Tom's picture

I can back every statement which I wrote.

 

Wallets are secure...NOT

 

There are just too many instances and many references about this in the news.

 

Here is an entire Yahoo Search of links.

 

https://search.yahoo.com/search;_ylt=AwrSbm3ZWPtU8pQAKXhXNyoA;_ylc=X1MDMjc2NjY3OQRfcgMyBGZyA3lmcC10LTkwMS1zBGdwcmlkA0pIN2FwbElHUkY2cGtVbnRxMm9kRUEEbl9yc2x0AzAEbl9zdWdnAzQEb3JpZ2luA3NlYXJjaC55YWhvby5jb20EcG9zAzQEcHFzdHIDQml0Y29pbiB3YWxsZXRzIGhhY2tlZARwcXN0cmwDMjIEcXN0cmwDMTkEcXVlcnkDYml0Y29pbiBoYWNrZWQgbmV3cwR0X3N0bXADMTQyNTc2MDM1MA--?p=bitcoin+hacked+news&fr2=sa-gp-search&fr=yfp-t-901-s&fp=1

 

Exchanges are incorruptable...NOT.

 

Again there is a plethora of links.

 

https://search.yahoo.com/search;_ylt=A0SO8yASYftURmIApjhXNyoA;_ylc=X1MDMjc2NjY3OQRfcgMyBGZyA3lmcC10LTkwMS1zBGdwcmlkAwRuX3JzbHQDMARuX3N1Z2cDMARvcmlnaW4Dc2VhcmNoLnlhaG9vLmNvbQRwb3MDMARwcXN0cgMEcHFzdHJsAwRxc3RybAMyNARxdWVyeQNCaXRjb2luIEV4Y2hhbmdlIGZhaWx1cmUEdF9zdG1wAzE0MjU3NjA1NjA-?p=Bitcoin+Exchange+failure&fr2=sb-top-search&fr=yfp-t-901-s&fp=1

 

I found that this one is remarkable as it demonstrates a FORTY FIVE PERCENT FAILURE OF BITCOIN EXCHANGE FAILURES.

 

http://bgr.com/2013/04/26/bitcoin-exchange-failure-rate-45-percent-467146/

 

Now I can go on...

 

You claim that I am ignorant and not well read?

 

That is fucking laughable.

 

 

 

 

 

But you cannot counterpoint any statement which I made.

 

 

Sat, 03/07/2015 - 17:23 | 5865213 crazytechnician
crazytechnician's picture

If wallets are so hackable why have the largest wallets never been hacked ? Why have the original Satoshi wallets never been hacked ? Maybe some insecure web wallets have been hacked by the people who created the website. And regarding exchanges , who were the fools that trusted these exchanges ? Any idiot can open an online gold exchange , it's the idiot who beleives it is a gold exchange in the first place that is at fault not the bitcoin. Your arguments are weak at best.

You are fucking laughable.

Sun, 03/08/2015 - 20:08 | 5868029 acetinker
acetinker's picture

If a calm soul like samsara suggests you are an idiot, you are more than likely an idiot.  Take that for what it's worth.

There is much to learn, you just need to know where to look.

It's not bitcoin.

Wed, 03/11/2015 - 17:03 | 5879116 crazytechnician
crazytechnician's picture

I don't give a fuck about what your gimp pal samsara says about me. I have my opioions about bitcoin which you reject , but what maybe harder for you to reject is his little peanut cock trying to get up your ass. Good luck loverboys.

Sat, 03/07/2015 - 12:25 | 5864620 iofera
iofera's picture

If it's online or computer-related, it can be hacked.

Conversely, gold has never been "hacked."  Alchemists have been trying to manufacture gold for thousands of years without success.  

See the difference, Bob? 

 

Sat, 03/07/2015 - 16:27 | 5865135 Tall Tom
Tall Tom's picture

Wrong Amerikan Patriot.

 

Gold has been produced from Nuclear Reactions in the Lab. Learn some science before you demonstarte your ignorance.

 

The "Alchemists" are the Nuclear Scientists of today. We do have the ability to transmute Elements.

 

Since you, Amerikan Patriot, are UNWORTHY because of your ILLITERACY to have Science Journal References I give you this.

 

http://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold_synthesis_in_a_nuclear_reactor

 

Gold synthesis in a nuclear reactor[edit]

Gold was synthesized from mercury by neutron bombardment in 1941, but the isotopes of gold produced were all radioactive.[12] In 1924, a Japanese physicist, Hantaro Nagaoka, accomplished the same feat.[13]

Gold can currently be manufactured in a nuclear reactor by irradiation either of platinum or mercury.

Only the mercury isotope 196Hg, which occurs with a frequency of 0.15% in natural mercury, can be converted to gold by slow neutron capture, and following electron capture, decay into gold's only stable isotope, 197Au. When other mercury isotopes are irradiated with slow neutrons, they also undergo neutron capture, but either convert into each other or beta decay into the thallium isotopes 203Tl and 205Tl.

Using fast neutrons, the mercury isotope 198Hg, which composes 9.97% of natural mercury, can be converted by splitting off a neutron and becoming 197Hg, which then disintegrates to stable gold. This reaction, however, possesses a smaller activation cross-section and is feasible only with un-moderated reactors.

 

Reading is a PREREQUISITE before you write.

 

As for counterfeiting Gold is easily counterfeited.

 

If you had bothered to READ Zerohedge then you may have read this article...

 

Get Your Fake Tungsten-Filled Gold Coins Here

 

http://www.zerohedge.com/news/2012-09-24/get-your-fake-tungsten-filled-gold-coins-here

 

...then you, yes you, can easily become a Gold Coin counterfeiter. You do not even have to manufacture them.

 

You can make your purchases from the company in the included link here...

 

http://www.tungsten-alloy.com/tungsten-alloy-scan-gold-coin.html

 

While I REFUSE to own Bitcoin, or SHUN any other variation of Electronic Money including the US Dollar, I will NOT say that buying Gold is a bad deal as that is one of the best vehicles to place savings into.

 

But I am not so naiive to not understand that I can be subjected to being frauded.

 

But as your whole persona is based upon FRAUD, with your changing User Names like dirty underwear as an example...YOU FUCKING DESERVE IT.

 

 

 


Sat, 03/07/2015 - 20:12 | 5865761 Calmyourself
Calmyourself's picture

Tom, you and I know only molecules have been made of gold and at huge energy expenditures it is not anywhere synonymous with artificial diamonds..

Sun, 03/08/2015 - 01:27 | 5866280 Tall Tom
Tall Tom's picture

First Gold is ELEMENTAL...not molecular.

 

I did not write that it was economic. I wrote that we have TRANSMUTED ELEMENTS.

 

Third there has been quantifiable and measurable weights recovered. We are not talking about single Gold Atoms.

 

Finally I did not write anything about synthesizing Diamond, a much less demanding endeavor.

 

(I can do that with Peanut Butter...https://www.youtube.com/watch?v=_CB74Y_p1G8)

Sat, 03/07/2015 - 11:52 | 5864522 Thirst Mutilator
Thirst Mutilator's picture

 "Fraud Impossible"

 

OK ~ I'm gonna start a crypto currency exchange tomorrow...

 

crazytechnician ~ Send me all the your things of value & I'll tell you how much your digits are worth... I promise you, I'm as trustworthy as Warburg, Kuhn & Loeb.

 

Fucking idiots!

Sat, 03/07/2015 - 11:54 | 5864532 crazytechnician
crazytechnician's picture

Another basement dweller waiting for amageddon. How's that 30 year old cold can of prepper food going down ?

Sat, 03/07/2015 - 11:57 | 5864543 samsara
samsara's picture

Away with you troll.

Sat, 03/07/2015 - 12:07 | 5864562 Thirst Mutilator
Thirst Mutilator's picture

Send me all your gold [for some crypto digits] or STFU


You can use them to buy a new printer on the internet.

Sat, 03/07/2015 - 12:28 | 5864630 iofera
iofera's picture

No.  Why is he a troll?  Because he's saying something you don't agree with? 

Sat, 03/07/2015 - 12:49 | 5864677 samsara
samsara's picture

Not in the slightest. His counter arguments are nonexistent.

His premises are based on a very very limited timeframe, and as some else pointed out, are based on a 'business as usual' framework.

He cannot conceive of a time when he may not be able to have 'instant access' to the internet.

Reread his posts.

As the movie said; Intrinsic... 'I do not think that word means what you think it means'

Sat, 03/07/2015 - 13:11 | 5864731 iofera
iofera's picture

I agree he is unable to support his assertions that bitcoin or other digital currencies are superior to gold.

But his opinion is valuable nevertheless, because it allows for a full airing of the relative merits and demerits of digital currencies. 

Personally, all my savings are in gold and silver, because I haven't been persuaded of the value of Bitcoin et al. 

However, I'm open to hearing the evidence and having back and forth discussion on it - even though I'm not persuaded.

This guy appears to earnestly believe that digital currencies are viable, so voicing that opinion and trying to explain his rationale - flawed as it may be - doesn't make him a troll.

Sat, 03/07/2015 - 13:20 | 5864759 crazytechnician
crazytechnician's picture

I was having the exact same arguments with this lot when bitcoin was 10 dollars. The same at 100.

No doubt I will be having the same arguments with them when it's 1000 dollars. I give up after that. I tried for years to explain what this is with technical information and called an idiot account shut down 3 or 4 times because I was not a gold worshipper.

They are basement dwellers waiting for armageddon. They think the global future of money is to bury your stash at the bottom of some random lake , fill a warehous with ammo and live off of prepper food. And they call me paranoid & schitzo LOL. Each to their own I suppose.

Sat, 03/07/2015 - 14:18 | 5864880 umdesch4
umdesch4's picture

I have gold, I have bitcoins. I've used both for financial transactions. I see the merits of both. I have read the source code for bitcoin, I've written utilities to find interesting outlier data points in the block chain, and generate some graphs. There are arguments to be had here, but I'm saddened by how lame your detractors on this thread have been. Especially any stupid arguments about how long any of us have been around. I did the whole punch card thing, so what?

Sat, 03/07/2015 - 14:21 | 5864891 StupidEarthlings
StupidEarthlings's picture

Ummm....it WAS at 1000$... and came crashing back down pretty damn quick once the 'tulip bulb sellers' got their money.

FURTHERMORE. .id be willing to bet that (As it stands right now) more people LOST money purchasing that digital scam, than made money. 

Its NOT by any stretch,  a store of wealth. It was just an idea to be used for puchasing items without using cold hard cash. Some people saw they could lure the fools into the idea ...AND MAKE MONEY AT THE SAME TIME..and they did. 

Eventually it will come back to 'market value' (when the market finally does get freed).. which is.....zero. just zeros and ones. (But mostly zeros)

;)

Sat, 03/07/2015 - 14:42 | 5864938 crazytechnician
crazytechnician's picture

"FURTHERMORE. .id be willing to bet that (As it stands right now) more people LOST money purchasing that digital scam, than made money."

You don't even know basic math do you ?

For your above statement to be true the price would have to be a negative number. But that is probably way above your IQ.

It will break 1000 again , the price is fractal in nature , again way above your station.

 

Sat, 03/07/2015 - 15:16 | 5865018 malek
malek's picture

ohh, the price is fractal!

An euphemism for cyclical, or repeating.
I actually agree, the price of shitcoins will repeat the cycle of all fiat currencies and will finally go to zero.

Sat, 03/07/2015 - 16:00 | 5865104 crazytechnician
crazytechnician's picture

Bitcoin is not a fiat currency. And yes it will go to zero , just like the sun will eventually burn out , none of us will be around to see it.

Sat, 03/07/2015 - 17:09 | 5865253 cheech_wizard
cheech_wizard's picture

Or the moment the electrical grid goes down... no electricity, no bitcoin.

 

Sat, 03/07/2015 - 16:01 | 5865105 crazytechnician
crazytechnician's picture

.

Sat, 03/07/2015 - 18:14 | 5865430 cornfritter
cornfritter's picture

period, indeed... who wants all their transactions tracked either, all this cyborg stuff is total bullshit, wake up or go bruce jenner with a chip, your choice

Sat, 03/07/2015 - 14:34 | 5864905 umdesch4
umdesch4's picture

Meanwhile, in the real world, I have transferred bitcoin in exchange for the shipping of physical goods to my house*. I have never managed to convince anyone to send me anything in exchange for my physical gold, only sold it at exchanges for fiat currency. Also, I've never had any fraud or financial errors occur with my bitcoins, but my bank has fucked up at least 3 times in the last year with my money. I'm not going to say bitcoin is perfect, but people in this thread spouting theoretical nonsense against your points sound like armchair quarterbacks.

* A lot of it prepper stuff like water purification devices, and off-grid power generation/storage equipment, so...I'm also a bit of a prepper myself. If the internet goes down I stand to lose the use of a few hundred dollars worth of bitcoin. So? It's just diversification, people!

Sat, 03/07/2015 - 15:45 | 5865077 cornflakesdisease
cornflakesdisease's picture

Lets keep our wealth stored in Sony Walkman's or Apple Ipods.

Sat, 03/07/2015 - 16:03 | 5865111 crazytechnician
crazytechnician's picture

Maybe you could hide your money in there but it would be unwise in case the device got stolen. With bitcoin your wealth is stored on thousands of computers all mirroriing each other , of which are spread across the globe so there is no single point of attack or failure.

Sat, 03/07/2015 - 14:23 | 5864897 Captain Chlamydia
Captain Chlamydia's picture

Great. RU  gonna eat gold or BC  when SHTF? 

Sat, 03/07/2015 - 14:35 | 5864921 delacroix
delacroix's picture

mt gox ?

Sat, 03/07/2015 - 14:18 | 5864879 Mr. Magoo
Mr. Magoo's picture

Lets see how you get your bitcoin when

A complete take down of the electrical grid or an emp (which is already happening in various places)

When the government takes complete control of the internet (which is being done right now)

If you dont have physical possession of an item you have nothing at all

 

Sat, 03/07/2015 - 15:40 | 5865067 Took Red Pill
Took Red Pill's picture

You nailed the main argument against bitcoin in my opinion. If you can't hold it in your hands, you could easily lose it

Sat, 03/07/2015 - 16:28 | 5865156 crazytechnician
crazytechnician's picture

Your handle should be Took Blue Pill

https://www.youtube.com/watch?v=zE7PKRjrid4

Sat, 03/07/2015 - 20:19 | 5865777 Charming Anarchist
Charming Anarchist's picture

To BitCoin or Not To BitCoin?? that is the question!! 

 

I do not care to buy or use Bitcoin but I admire the technology for more than its pecuniary uses.  I respect people who use it wisely.  Personally, I believe it is a combination deep state scam and deliberately blown up bubble that happens to be of technological use. 

 

For me, it is a choice and a gamble.  I prefer to live my life with less dependence on complicated technology.  It is just too complicated and thus, I do not trust myself to feel safe using it.  I like conmputers but I am gambling that in the future, we will not be enjoying them as we do right now.  Thus, any investment into bitcoins is loss on a long enough time line. 

Sat, 03/07/2015 - 13:59 | 5864844 Jack Burton
Jack Burton's picture

Anything that involves "software" and a "connection to the internet" is by it's very nature open to manipulation via hacking into that "software" through that "internet connection".

Sat, 03/07/2015 - 14:36 | 5864894 Calmyourself
Calmyourself's picture

Samsara, Dude is not so bright, does not understand conventional wisdom is conventional as a result of time tested value... New is most certainly not always better..  Better to allow spittle to form on its chin and ignore..

Sat, 03/07/2015 - 14:57 | 5864956 crazytechnician
crazytechnician's picture

Well what are your gold gains over 5 years compared to my bitcoin gains ?

Who ain't so bright again ?

Sat, 03/07/2015 - 15:05 | 5865001 Calmyourself
Calmyourself's picture

So young so convinced new is better, no worries you'll grow..  No disrespect but think a bit more, talk less.

Sat, 03/07/2015 - 11:44 | 5864506 doc333
doc333's picture

you can even melt a bitcoin and use it to build electronic devices, dental crowns, cell phones, computers, explore space - you changed my mind, where do I buy some bitcoin

Sat, 03/07/2015 - 11:52 | 5864528 crazytechnician
crazytechnician's picture

Get out of your damp basement and you will see it's a lot easier to get hold of than gold.

Sat, 03/07/2015 - 12:41 | 5864661 iofera
iofera's picture

You need an argument that doesn't involve an ad hominem attack.

Sat, 03/07/2015 - 12:53 | 5864683 ThirdWorldDude
ThirdWorldDude's picture

Good, it didn't take too long for you to understand what makes him a troll.

Sat, 03/07/2015 - 13:22 | 5864765 iofera
iofera's picture

I'm hearing ad hominem attacks on both sides of this issue here.  Hell, in light-hearted moments I've made them myself.

But on balance, having someone here like this guy is of value.  It's instructive because it gets folks discussing what's good and bad about digital currencies.

For me, digital currencies ultimately fail because, unlike gold, they were created at will out of nothing.  However difficult it may be, they can be created / duplicated again. 

Those attempting to advance digital currencies point to numerous safeguards that greatly reduce the likelihood that they'll be "printed" into oblivion as other fiat currencies have been throughout history.  But as many here have pointed out, everything digital is susceptible to hacking.

Until alchemy succeeds, gold has never been "hacked."

Sat, 03/07/2015 - 13:37 | 5864799 crazytechnician
crazytechnician's picture

The internet could be duplicated again , however , like bitcoin there is "network effect" , this virtually guarantees bitcoin will stay as the clear leader. None of the bitcoin copycat's have brought anything new to the table. Whoever created bitcoin seemed to have thought of everything already,

Sat, 03/07/2015 - 14:13 | 5864875 SimplePrinciple
SimplePrinciple's picture

Anything you think is secret and private, if it is stored on hard drives, the NSA has the backdoor key.  Period.  Do bitcoins get fraudulently stolen, such as with Mt. Gox, you know they do.  Has bitcoin been discussed on these boards ad nauseum? Yep.  So troll it is.

Sat, 03/07/2015 - 14:46 | 5864953 crazytechnician
crazytechnician's picture

The conversation has not yet even started on these boards. Not even close.

Sat, 03/07/2015 - 14:51 | 5864971 Deathrips
Deathrips's picture

I bought 2 bitcoins at 30$ and sold them at 850$ the result sits solidly at the bottom of the lake.

I even picked up 2 more around 200$. Those are for the plane ride out...if these ziofucks can kill fungible reality.

 

RIPS

Sat, 03/07/2015 - 16:08 | 5865118 crazytechnician
crazytechnician's picture

How do you find your gold without a sat - nav ? Surely they will be useless after the EMP & the great collapse ? And how do you charge your scuba air reservoirs without electrical power ?

Sat, 03/07/2015 - 20:22 | 5865788 Charming Anarchist
Charming Anarchist's picture

Uh..... the same way you will shuffle Bitcoins to and fro. 

Sat, 03/07/2015 - 14:34 | 5864917 cornfritter
cornfritter's picture

gold has long since been hacked, hacked and stacked by TPTB... hell, they own the mines - are you a DumBasS or just paid to spew tripe on boards?  It was hacked using paper, false weights and measures, then stacked.  Get it?????????? Get it yet???????????

Sat, 03/07/2015 - 13:11 | 5864733 CuttingEdge
CuttingEdge's picture

And I suppose you think it will be a damned sight easier to monetise than physical gold once the fuckwits in charge shut down the internet?

Which they will (because they will have to), when sooner or later the SHTF - especially in the USSA, where the NSA already "owns" the people lock stock...

Sat, 03/07/2015 - 16:08 | 5865108 JRev
JRev's picture

You honestly believe the COMEX or comparative entity will actually hold Bitcoin on the public, auditable blockchain? Get real. They'll develop "trading software" to swap the ETFs back and forth and keep a small percentage of coins available for "delivery," confident that the class of people a Bitcoin ETF would attract aren't the type of people who give a shit about buying, spending, or transferring value with it. Merely that it gives them a return to settle in FIAT.

ETFs, as they were to gold and silver, will be the end of real price discovery. Crypto is cool, but the sheer naiivete of its community is going to run the coin into the ground. Might it be worth something in the future? Perhaps, but its original vision will be all but null. Just ask CoinBase, who's already tracing Bitcoin transactions despite use of protocols like CoinJoin and BitcoinFog and then closing people's accounts for things as simple as buying coins through localbitcoin. In my heart of hearts, I hope that the cryptoanarchy crowd can come out on top, but any thinking man knows this to be a pipe dream in the digital Panopticon of the 'Net.

When you look back in 5 years or so and wonder why Bitcoin has becmoe little more than Paypal 2.0, you'll have only yourselves to blame. 

Sat, 03/07/2015 - 16:15 | 5865125 crazytechnician
crazytechnician's picture

It is impossible to hold bitcoin off of the blockchain. You need to do more research. A simple app. can audit an entire exchange or ETF for proof of reserve. In 5 years time you will be sickened because you did not do more research on this.

Sat, 03/07/2015 - 16:31 | 5865159 JRev
JRev's picture

I'm not asserting that in the slightest; perhaps I should've chosen my words more carefully, but I'm more than studied enough in crypto at this point, thank you. Mine it, buy it, trade it, read all the whitepapers... everything short of developing for it.

I'm saying they won't hold it AT ALL and no one will care enough to produce an audit. You need to be more creative, or learn to understand the ETF market on a more comprehensive basis. They only have to hold as many coins as they feel will be redeemed, and if the gold and silver market is any indicator for that, peak withdraw volume will be at about 2%. That's a pretty big margin for manipulation, and just like the gold and silver market, day traders won't give a fuck, merely that they can put in their daily buy/sell orders. At that point, it takes only the pegging of the biggest dollar-bitcoin exchanges to the ETF price and everything else falls in line. The few nerds who scream from the mountaintops about auditing the blockchain will become the GATA of the 21st Century. GATA has proven that above-ground gold store numbers, both on exchange, national, central bank, and world levels, are little more than smoke and mirrors, and you know who cares? No one who can change it.

You're also assuming that the corrupt and impotent "Bitcoin Foundation" won't roll out a sidechain exclusive to ETFs with all the bells and whistles to protect the "Wall Street way," which is absolutely possible. You've ignored all of my other arguments as well, which is disconcerting.

Barring the implementation of something like Ring Signatures, a Masternode-esque network, IP obfuscation, and the elimination of mining cartels (which can perform attacks with as little as 25% of network share, far less than the previously identified 51% attack) Bitcoin will be in danger and far from the promise of "anonymous internet money safe from central banking." Period.

Sat, 03/07/2015 - 16:36 | 5865174 crazytechnician
crazytechnician's picture

I agree in part with what you are saying. However , for this to happen its market capitalisation would have to go up a thousandfold for it to be worth it. And I still think that auditing proof of reserve will still be a major part that evolves with the market cap. One thing about the blockchain is that it is transparent , once a few exchanges or funds blow up because they did not have reserves , which is inevitable I think proof of reserve realtime auditing will be at the forefront of the system. Bailouts / Bailin's are not possible with bitcoin.

Sat, 03/07/2015 - 17:02 | 5865202 JRev
JRev's picture

Well at this point we're just arguing future hypotheticals; I'm simply playing the role of the cynic and yourself the optimist. Only time will prove who is ultimately correct. 

As it stands now, though, we know two things: Bitcoin's future could be as positive as it is negative, and that currently, even the best of bitcoin obfuscation methods (CoinJoin, DarkWallet, BitcoinFog) are virtually useless for anonymity, save for the most technical of users, and even they're not 100% secure. The only people who could change the latter point, the "Foundation" or a consensus of miners, have no desire or will to make such a change, and have said so on multiple occasions. In fact, they're doing their best to distance themselves from the "cryptoanarchy" crowd who built Bitcoin, and instead bending over backwards to make Bitcoin more accessible for Wall Street. I hope we can at least agree this is hardly a positive development, despite what most of the mouth-breathers in the Bitcoin subreddit would say.

So while BTC has certain advantages over, say, credit cards (like being bail-in or "holiday-proof") it maintains their primary flaw, i.e. the ability to be tracked, traced, followed, and stalked twelve ways to Sunday by .gov.

Hedge accordingly.

Sat, 03/07/2015 - 17:16 | 5865237 crazytechnician
crazytechnician's picture

Semantics I agree. One other thing about bitcoin that nobody else here seems to recognise is that like email on the internet , currency is just one app. for bitcoin , who knows what other app's will come along ? All of them will add value to the protocol. In fact , it's not unfeasable that the bitcoin protocol could in fact swallow up the entire stock / bond and commodities markets. That is why transparency is actually a good thing about bitcoin. Imagine one satoshi is actually linked to a share of Apple , that way when the dividend is paid out the holder of the key of that partcular satoshi is the one who receives the dividend into that particular wallet. The possibilities are endless. But , like you say , only time will tell who is correct.

Sat, 03/07/2015 - 18:37 | 5865477 JRev
JRev's picture

I agree completely... who knows what kind of software could be developed? Perhaps a completely open, public ledger will replace Wall Street, contracts and arbitration can be settled through cryptography without third parties, and coin obfuscation protocols can exist simultaneously in this ecosystem for those who wish to use it for certain applications. 

...then again, software isn't impartial. It's merely a reflection of the developer's vision combined with a userbase willing to support it. In a world where the State and the Corporatocracy are the developers with the most cash, talent, and zombified consumers, I'm not sure that this pan-utopian cryptographic wonder world can ever be built. 

Nor would I want it to be when all our chipsets are developed by DoD subcontractors, our mobile operating systems are (deliberate) Swiss Cheese for NSA, and our ISPs, especially in North America, offer our data on a silver platter to those who wish to do harm to otherwise peaceful people.

For what it's worth, I own some Crypto, and if I ever needed to flee the country it'd be optimal. It has its place, even if it is flawed at the moment. But it has a long and difficult road ahead of it if it wishes to reach its highest ideal, perhaps too high a hurdle to clear. And everyone could use a Devil's Advocate from time to time ;) 

Sat, 03/07/2015 - 18:41 | 5865494 crazytechnician
crazytechnician's picture

Instead of fleeing a country it would be wiser to try to educate that country. However difficult that may seem , at this point , to me , the barriers are not the banking system or the governent , but the very people who ultimately vote in and tacitly support these systems.

Sat, 03/07/2015 - 19:00 | 5865534 JRev
JRev's picture

Been at that for years now, as I'm sure you have, too. If we had another 40 years to slowly convince the public that outsourcing their (im)morality and sovereignty to groups of people that claim to represent them is a bad and dangerous idea, I'd be all for it. I don't think we have the luxury of that time, and unfortunately, the vast majority are still too mired in the Huxleyan chemical and mechanical distractions of the Proles, too enthralled by the Ghost of Nationalism, and/or too dependent on free money in the form of loans or government assistance, to give a shit. 

Sticking around to see what a nation of man-children will do after next-day grocery delivery fails might not be something I'm willing to risk my life on. Nor is some slower, Fabian degradation towards a Transhuman track-and-enslave society. 

Not saying I won't continue attempting to educate and make the best of living in Slavelandia, but the way things are going now, I'd be remiss to limit my options.

Sat, 03/07/2015 - 19:54 | 5865689 crazytechnician
crazytechnician's picture

Woe , dude , slow down man it is not that bad. Through information & knowledge propagation we can perhaps educate just a few of these luddite philistines that the future could actually be very bright. Otheriwsie we may as well just dump all our PM's & BTC in some random lake as well and hope for the best I truly beleive that the human spirit is really much stronger than that , stronger than anybody can beleive and we will overcome these Fiat / luddites and their tacit support of another fake gold backed fiat ponzi.

Sat, 03/07/2015 - 16:59 | 5865229 Exponere Mendaces
Exponere Mendaces's picture

I admire someone willing to wade in and try to convince the prepper legions that Bitcoin will end up being a solution to monetary malfeasance, but lets face it, crazytechnician - most of the people commenting here have ossified brain cells, and they barely understand the dollar, much less a global cryptocurrency.

You can keep on trying to convince cavemen that yes, you know how to fly, you just have to make wings like so, and get the proper angle of attack and airspeed, but the neanderthals here will just beat their chest and repeat the familiar mantra "OOOK OOOK GOLD AMMO OOK OOOK OOK".

Its fine, really. Most countries are going down the toilet, the USA in particular is poised to plunge below into the depths of third-world hell, so all of these rabid commenters deserve exactly what is going to come to them.

Keep your head up, brother - but don't bother to save these idiots, they're too busy throwing feces to listen to any arguments.

Sat, 03/07/2015 - 17:39 | 5865306 crazytechnician
crazytechnician's picture

I just get bored sometimes and throw myself in as the cat amongst the pidgeons. They are a bunch of fucking cave dwelling clowns for sure , I just love it when they come out with ponzi , tulip , hackable , etc. I just love the ones who go on about the government shutting down the internet and the power grid to stop bitcoin , that just makes my day.  They really are going to get it in the ass , I have tried to show them the light and all I get is shit in return , but I actually find it amusing - and hilarious in some twisted kind of way ..

Sun, 03/08/2015 - 06:10 | 5866507 Exponere Mendaces
Exponere Mendaces's picture

Hahah yeah.

That always makes me laugh -- "WELL IF THE INTERNET EXPLODED IT WOULDN'T WORK" or something like "IF I CANNA HOLD IT IN MY HAND IT AIN'T FOR REAL" or some other stupid caveman nonsense.

Its like describing to your 90 year old grandpa how it is to program in C#. He'll nod and try to follow along, but before you finish he'll be interjecting about how "COMPUTERS ARE SHIT" and how programming languages are "THE DEVILS WORK" before he gets wheeled away and tranquilized.

Most of the commenters here are complete idiots, and even the ones that grasp basic finance are so inured to the system of GOLD EQUITIES BONDS that they couldn't see a new asset class if it shoved a hot poker up their asses.

The same chuckle-heads that say "HYUK HYUK WHAT IF THE INTERNET CRASHES" will willingly rely on the same network to do their personal banking, view their trading statements, and commment on Zerohedge like a bunch of fucking retards.

You see, Bitcoin is using the internet WRONG, and they just KNOW it is true.

What a bunch of fucking thumb-sucking mongoloids.

 

Wed, 03/11/2015 - 16:53 | 5879081 crazytechnician
crazytechnician's picture

Hahaha you nailed it very funny !

Sat, 03/07/2015 - 15:30 | 5865049 post turtle saver
post turtle saver's picture

to be fair, we've seen gold-plated tungsten presented here on ZH... so, there's that...

Sat, 03/07/2015 - 11:37 | 5864483 samsara
samsara's picture

Is it predicated on the internet? Do you have to Talk to or contact someone or sign on somewhere? Can you hold it in your hand?

No thanks

Sat, 03/07/2015 - 11:39 | 5864490 crazytechnician
crazytechnician's picture

You cannot hold the google web-site in your hand. Does your theory mean that if something cannot be physically touched it does not hold value ?

Sat, 03/07/2015 - 11:44 | 5864505 Tinky
Tinky's picture

idiotic analogy.

Bitcoin is worthless without access to the internet. It is accepted by a minute fraction of people who offer goods and services around the world. It's history, relative to gold, is roughly equivalent to the life span of a flea.

Best of luck.

Sat, 03/07/2015 - 11:49 | 5864521 crazytechnician
crazytechnician's picture

Gold is worthless to somebody who cannot weigh it and test it's purity. Far easier to get internet access if you ask me.

Best of luck.

Sat, 03/07/2015 - 12:03 | 5864561 toys for tits
toys for tits's picture

Your premise is based on a major fallacy, which is everything stays the same.

If you can show any aspect of this planet that has stayed the same for a few hundred years, then maybe you have a shot at redemption.

India's people have the correct attitude regarding gold.  Watch the 60 minutes story on them.

If you're too lazy to look it up, here's the link:

https://www.youtube.com/watch?v=sUr2E4dfs0Y

Sat, 03/07/2015 - 12:18 | 5864601 crazytechnician
crazytechnician's picture

No , we are moving into the future. bitcoin to gold is like the telephone is to smoke signals or a jet airliner to a sailing ship.

Sat, 03/07/2015 - 12:56 | 5864693 ThirdWorldDude
ThirdWorldDude's picture

Bitcoin is to gold what Google Glass is to ordinary sunglasses.

Sat, 03/07/2015 - 13:15 | 5864747 Thirst Mutilator
Thirst Mutilator's picture

 "we are moving into the future. bitcoin to gold is like the telephone is to smoke signals or a jet airliner to a sailing ship."

 

"I can't tell you what WWIII will be fought with, but WWIV will be fought with sticks & stones"

~Einstein

Sat, 03/07/2015 - 13:12 | 5864739 winchester
winchester's picture

problem is you cannot accept to be able to revert to past system/Value if you got a techological issue. this is what is all about.

 

solar flare = off grid, how you use your electronic stuff if you cannot charge it with solar panel and the antennas are not powered... no network... what is said here is anything can be hacked, counterfeit, sure, like gold bar with tungsten inside... but any human beeing alive is physical functionning, internet is virtualisation of the interactivity, this is why those times suck, inter generation are lost in the void of the gap.

 

to me, anything physical is better than total virtual. yoçu can buy shitty blade/knives,  420, 440 a or c... still able to cut, not necessary needing a 154 or aus8 or cv30, you get the idea. ?

 

some things are intemportal, can be used anytime. a saw can cut a tree, a robot with  laser tool can cut it too,  unplugg the robot.... hand job. this is all about this, seriously, no need to act like a prick ...

Sat, 03/07/2015 - 13:47 | 5864813 malek
malek's picture

You forgot one: bitcoin to gold is like today's electronic surveillance is to Mata Hari.

(Good luck with your bitcoin "privacy")

Sat, 03/07/2015 - 12:11 | 5864582 Stuck on Zero
Stuck on Zero's picture

I've spent a fair amount of time in unpopulated areas of Africa.  In the middle of nowhere you can trade gold and silver for anything.  The look and feel of gold and silver is unmistakable.  Many of the people in places I've travelled have never seen a computer ... but they sure recognize shiny metals.

Sat, 03/07/2015 - 12:18 | 5864593 crazytechnician
crazytechnician's picture

4 Billion of the world's unbanked will have internet connected smartphones within the next decade. Bitcoin is as easy to use as making a telephone call.

Sat, 03/07/2015 - 20:29 | 5865808 Charming Anarchist
Charming Anarchist's picture

Tracking devices?  Perhaps. 

Sat, 03/07/2015 - 12:30 | 5864635 KingGenius
KingGenius's picture

Look up items like: Niton DXL also we have reviews of businesses and the BBB for shady dealings.

Bitcoin upon initial insight, seemed to be a good idea. Unfortunately it is not "as good as gold". I'll tell you why. 1. It was made by man. 2. Other cryptocurrencies are made by man so bitcoin has hundreds of competitors. Since it was made by man and computers, it can be replaced very easily or grow useless as another crytocurrency can easily take it's place.

Therefore cryptocurrencies are not a good store of value, are extremely volatile-and are so without being manipulated by government.

PM's are natural finite materials on earth. I suggest holding some in hand rather than labeling ppl "basement dwellers". Also why do you think all the major powerful countries, banks, and even corporations are collecting these PM's at a supressed bargain, if they are such a relic? How old are you?

Sat, 03/07/2015 - 12:43 | 5864666 iofera
iofera's picture

Gold has stood the test of thousands of years of time. 

Digital currencies have (sort of) stood the test of a few years.

Sat, 03/07/2015 - 14:28 | 5864906 Calmyourself
Calmyourself's picture

I bite my gold, just like in Eastwood spaghetti westerns, tried to bite my bitcoin, got a large shock..  But hell if only mathematicians make to the other side your bitcoin is "golden"..

Sat, 03/07/2015 - 12:43 | 5864667 Nafets93
Nafets93's picture

Gold is beautiful, and people wanted it before even it became money. That's intrinsic value, built up for thousands of years. Everybody who holds gold in his hands knows he's holding something valuable.

Sat, 03/07/2015 - 13:00 | 5864703 KingGenius
KingGenius's picture

Nexy they will argue artificial diamonds are more valuable than regular diamonds. lol

Sat, 03/07/2015 - 13:51 | 5864823 Chupacabra-322
Chupacabra-322's picture

Absolutely! And, one strategically placed EMP will not disappear any gold or silver.

Sat, 03/07/2015 - 13:53 | 5864828 crazytechnician
crazytechnician's picture

Bitcoin uses a decentralised ledger. EMP would have no effect , hundreds of EMP's would not even dent the system.

Sat, 03/07/2015 - 14:12 | 5864869 Chupacabra-322
Chupacabra-322's picture

Yes, that's right. I forgot. The decentralized ledger works through Osmosis & LEGO. No, no, wait.. It works with two empty soup cans & string.

Sat, 03/07/2015 - 14:21 | 5864889 crazytechnician
crazytechnician's picture

The decentralised ledger works by thousands of computer nodes spread across the globe all holding a mirror image of the ledger. Due to consensus and the cryptographic nature of the protocol it cannot be corrupted. This is called the blockchain. If you understood how it worked you would see it as a thing of great beauty. Instead you insult what could be one of the greatest inventions of this century.

Sat, 03/07/2015 - 14:38 | 5864928 cornfritter
cornfritter's picture

look at the pretty nodes, one in every color... can i get one in cornflower blue bob?

Sat, 03/07/2015 - 14:51 | 5864962 crazytechnician
crazytechnician's picture

Sounds like you have forgotten to take your meds , or maybe you have just taken them ?

Sat, 03/07/2015 - 11:39 | 5864487 doc333
doc333's picture

Bitcoin - ZERO intrinsic value. Why hold a hot patato 

 

Sat, 03/07/2015 - 11:40 | 5864493 crazytechnician
crazytechnician's picture

There is no such thing as intrinsic value. All value is subjective. What is gold worth to a dog or a monkey ?

Sat, 03/07/2015 - 11:56 | 5864540 ISEEIT
ISEEIT's picture

Bullshit.

Sat, 03/07/2015 - 12:00 | 5864554 crazytechnician
crazytechnician's picture

Cant handle the truth ? Intrinsic value is a myth. All value is subjective. Just ask your gimp the next time he's pounding away and he will explain it.

Sat, 03/07/2015 - 12:09 | 5864575 MsCreant
MsCreant's picture

No water, food, or air for you then. It holds no intrinsic value.

Sat, 03/07/2015 - 12:15 | 5864597 crazytechnician
crazytechnician's picture

That is subjective value. Big difference.

Sat, 03/07/2015 - 12:21 | 5864609 Thirst Mutilator
Thirst Mutilator's picture
in·trin·sic   
adjective adjective: intrinsic
belonging naturally; essential.
crazytechnician ~ For your perusal when deciding on the definition of 'intrinsic'... From that POV, neither gold nor bitcoins have intrinsic value.
Sat, 03/07/2015 - 12:41 | 5864660 crazytechnician
crazytechnician's picture

Neither gold or bitcoin have intrinsic value.

Take your gold to a dog or a monkey - does it hold any value to them ? The answer is no , because intrinsic value is a myth. Like beauty , all value is subjective and holds value only in the mind of the beholder.

Sat, 03/07/2015 - 17:39 | 5864690 Thirst Mutilator
Thirst Mutilator's picture

Perfect!

 

I've 'subjectively' formed the opinion that gold is valuable to my beholding eyes, & think bitcoin [whilst, perhaps, 'dreamily' utilitarian in some fantasy world that doesn't exist EXCEPT TO THIS FUCKING DWEEB WHO HAS DIFFICULTY FINDING HIS PENIS TO JACK OFF TO 'WORLD OF WARCRAFT' CARTOON ANIMATION BABES] is a joke.

 

You gave your subjective opinion on the matter, I gave mine...

Sat, 03/07/2015 - 13:06 | 5864719 Jz kong
Jz kong's picture

Why even waste your time trying to convince people which assets they should own.  Keep buying yours, others will buy theirs, shut up, and we'll see who still has wealth.

And that goes for gold lovers too.  Just buy your shit and shut the fuck up about it.  You think your great grand daddy's walked around announcing how much gold they stacked.

Sat, 03/07/2015 - 14:31 | 5864910 Calmyourself
Calmyourself's picture

My dog eats bitcoin over purina, he wont eat gold for some reason..

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