This is a good start.  Sweet!  Now if we can just get to the sub-$25 range in the next month it would be quite handy for me as I need a sink for some USD variety funds.

I'd actually prefer to have more gold than more silver at this point but I'm afraid that the Chinese are going to put in a pretty solid floor above the price which I would consider 'the deal of the day.'

Maybe I'll just buy a new toy instead.  I've always wanted an excavator and have some projects which I could use to justify such a thing...in my mind at least.

Asking that the cash you wish to spend be handed over to a quasi-bank-thing which is probably considered illegal and a national security threat by TPTB is like...well...giving your money to 'Tom Williams'.

There is nothing 'wrong' with the solution per-se; It's just not the same thing as the Bitcoin which appealed to me in the early days.

So the Bitcoin network would rely on independent 'banks' of some sort to offload the accounting to?  Or you believe that it could handle such traffic if it needed to?

I don't find this particularly unique to be honest.  Probably it's more common than not.  Shells with holes in them served the Native Americans admirably in their time.

I will agree that Bitcoin is a wonderfully capable exchange medium for our time...and I hope it pans out as a good store of value as well.  I must reiterate that I see limitations about exactly how capable it proves if called upon to live up to it's potential demand.


If anything, I see the lack of transactional flexibility as a positive for a reserve store of value.  Things which can take flight easily tend to be easier to lose, and if one is dipping into one's reserves on a regular basis than one probably has other issues to deal with.

I would also argue that the Internet is significantly secondary to the telegraph and radio in terms of being a revolutionary step forward.  All pale compared to the printing press, and that pales compared to writing language itself.


I think that most governments have had plenty of money of their own obtained through selling resources, imposing tariffs, etc.  Anyway, the gold standard can and has existed without government involvement, and with fractional characteristics.  To me, a 'gold standard' simply means that the net worth of an entity is based on how much gold they control.


Probably could, but it would take some sort of incentive.  Something more compelling that 'cypherdoc hopes so.'

Gold is one of the few things that is even more simple than a stone ax.  That is a very appealing characteristic to me, and probably to a lot of other people on the face of the earth as well.

That is the way I would like to see it evolving and at one time had hoped to see it evolving, but cannot see a mechanism for that to transpire at this point in time (thus my thought experiments on 'bakcoin'.)

Essentially Bitcoin is just to good as an exchange currency and there is no practical way to stop people from using it.

I think that there is a possibility that within the space of hours, the problem Bitcoin could face is how to discourage users rather than encourage them, and do so in a way that preserves the reputation of the solution.  If such an event happened it would correspond to a failure of other currencies and would occur at the time when the Bitcoin solution was needed the most.

By my two-second calculations, if about half of the worlds population were using Bitcoin and making 2 transactions per day, a flat average would be about 70,000 transactions per second.  To account for peaks which one typically finds in network service use, better bump that up to about 250,000 transactions/sec.  Then one must consider the potential for DOS attacks.

Contrast this with the .25  (aka 1/4) transactions/sec at the current high.

As currently implemented, Bitcoin scales until it fails then that's all she wrote.  Ultimately I would be more comfortable with a solution which anticipated 'sharding' of some sort, and it seems logical and workable to combine this with a multitude of crypto-currencies each tuned to offer various advantages to their user base.

Of course the 'money changers' would have a hey-day in such an environment, but that fine.  Probably open systems would develop to make things less costly for end-users.  Some guy had a link to such a project a while ago.  I think it was on Docmeister's Bitcoin-2 post.

I think it was you who was potentially interested in my 'bakcoin' idea some months ago.  I hacked out some material around that time, but have been off on other completely unrelated interests since and have not touched it.  I'd have to do (much) more work before presenting it as an alternate crypto-currency or whatever, but here's what I've got for those who might be interested:

  http://bakcoin.org

Remember a guy they used to call Saddam Hussein?

Seriously, thinking that any government is likely to support Bitcoin in any serious or long term way strikes me as a total pipe dream and quite unlikely, and basing any sort of nest-egg on the necessity of such an eventuality is not wise.

I have a lot of hope for (and have a lot of) Bitcoin, but as I've stated before, I view it as a long-shot gamble with the potential for an enormous payout.  Unlike PM's which I don't have to think about, capitalizing on Bitcoin (which again, I do not expect as a given or even very likely) will require a good bit of attention and nimbleness.

A crypto-currency or solution based on the principles is, I feel, a potentially revolutionary world changing (for the better) development, but I am currently of the mindset that Bitcoin itself is not really the one which could do so.  At least not in many of the possible scenarios which the future holds and/or not by itself.

Looks like Gavin is saying that 'they' could retro-actively code up something which I've previously argued should be put in place and tested and ready to go pro-actively (namely, user-optional black lists.)

But I'm not even talking about 51%-type attacks in my comments.  What I am referencing is that significant network bandwidth and a fairly complex 'supernode' arrangement will be needed for transmission if/when Bitcoin gets big.  Both such solutions would be, in my opinion, challenging to maintain in the event of a coordinated attack by the various corp/gov entities which will probably always have their hands on the levers of the global infrastructure.

Several reasons:

1)  I do not consider Bitcoin to be reliable under what most people consider 'success'.  I do not trust that the infrastructure needed to support the solution under heavy usage worldwide will be maintainable under coordinated attack.

2)  A beauty (in my opinion) of Bitcoin is that it operates at the pleasure of the user base....but user bases can be fickle.

My feeling is that trying to draw a distinction between 'investments' and 'assets' tends to simply muddy the waters in a lot of cases.  Particularly in times of change, and we are in one now as we were in the early 70's, following WW-II, and countless times before that.


Bitcoin is also an asset which is nobody's liability.  In my mind, BTC is much more like Gold than it is like the USD for this reason.  As someone who is light on liabilities, both BTC and PM's appeal to me very much.

It's been a long time since anyone was overtly burnt by this asset/liability issue so it is not front and center in people's minds.  (Actually, I would argue that people are covertly burnt by the issue all the time, but anyway...)  I have significant paranoia that the asset/liability thing could come to the for with rapidity, and any day.


Happily for TPTB, very few people do.


I'm not ruling out the possibility that things could limp along in current form for many years.  Even decades.  But I also feel that it is just as possible that it could collapse happen tomorrow.  As long as there is not an excessive opportunity cost in keeping my investments/assets in a form which is more immune from loss if some entity cannot honer their liabilities, I choose to largely do so.


This is a point that I've been trying to make forever.

I feel that Gold is a good 'reserve' but there are difficulties in 'exchange'.  Bitcoin, on the other hand, is great on the 'exchange' side of the spectrum, but I (seemingly alone) do not consider it a good 'reserve' currency.  Marry the two (or at least get them being regular fuck-buddies) and one has a very robust solution which would be relatively cumbersome for attackers to meddle with.

I suspect that the USD will have extraordinary pull on the worlds financial systems and be legitimately classifiable as 'the worlds reserve currency' as long we (the US) manage the availability of the energy resources of the Middle East.  That does not preclude volatility and and/or 'economic emergencies' if they serve the purposes of the relatively few entities who manage things.

Furthermore, our grasp on the management of these resources of the Middle East is probably a bit more tenuous than some people may think.  For instance, if we had to resort to boots on the ground in Saudi Arabia (and the likely simultaneous conflagration of issues in surrounding areas), I personally question our ability to strap on that many boots.  And I have less faith than most in the robustness of our very complex weapons systems when put to the test against our more capable adversaries.  (Excepting our thermonuclear offensive capability that is, but man do I not want to go there!)


I've been paranoid about a sudden collapse for about a decade.  In fact, trying to understand the push into Iraq really triggered my extreme interest in (and paranoia about) the various monetary regimes around us these days.  My answer was PM's and I never really expected to _make_ any money on them (and am not completely sure that I have) but by happenstance I would have been unlikely to have done much better with any of the alternates.

I've always suspected that if/when a collapse comes, it will be shockingly rapid (as in hours.)  This in part because the most well connected will do better in such a scenario, and if a collapse is mathematical inevitability (which I believe to be the case) then one might as well make the most of it.  I suspect that the likes of JP Morgan have a current script which the update continuously dealing with how to manage a collapse.

Back to my point some pages ago about MF Global 'case law', although I am not a lawyer I believe it to be true that depending on the current state of the MF Global case, some assets which moved around in the first few microseconds of a collapse may either stay put during the subsequent legal wranglings, or need to be returned pending said.  (This assumes that there even exists a legal system after a significant collapse which is not, in my mind, a given.)

I use JP Morgan as an example here because as best I can ascertain, they ended up with the money from the MF Global customer accounts and have yet to part with a dime of it.  I'm shocked that the victims are still only at 80%...I expected they would have been made %100 whole within a few day on the back of my tax dollars and in the 'national security interest' of 'maintaining market confidence' or some such.  That that did _not_ happen got me to generating hypotheses on why.

I never was much of a trader, and have not exchanged USD/BTC since around $2.35, but...

This subforum was one of the ones I read most often.  I'm almost certain that some of the material I absorbed from this source factored into some of my decisions about when to make purchases.

In some cases it was a negative association.  For instance, when I saw Proudhon getting vocal about how BTC was going to zero, that probably induced me to go ahead and pick up another hundred or so   I'm sure that he was practicing reverse psychology and pocketed a lot of my USD however.  All I can say is thanks to him...I collected many more BTC in the $2.?? range than I ever thought I would be holding even as a total.

Under $30?  I blinked and missed it.  Oh well, I wasn't in buying mode anyway.  I would dearly love it if your predictions for lower PM prices came to pass in the coming weeks as my mode may be switching.

Just for fun, I'll go on record with a couple of photosynthesis/theories.

 1) Mining shares are among the most heavily _naked_ shorted these days.  Probably ETF's as well.  Since it serves various powerful interests to depress the fiat price of PMs, there is next to no possibility that these crimes will analyzed (except to further facilitate them.)  I predict that if/when the share prices explode, very few people will actually see a monetary reward unless they are either very well connected or thinking very independently and orthogonaly about how to capitalize.

 2) A component of the high frequency trading which is endemic at present exist to provide a mechanism by which mountains of naked shorted paper are hidden in plain site.  The mechanism would be similar to trying to keep track of bowling pins handled by a large team of very talented juggling artists.

 3) The main purpose of the MF Global 'fiasco' was to establish in case law certain surprising principles which had been codified into written into the books over the preceding decade about who shoulders what losses in the event of a collapse.

#2 is one of the few hypothesis that I believe is completely my own invention.  #3 may be, but I'm not so sure.

On a personal level: I need $6.00 BTC to get into the black.  I'll go red on PM's when they fall to maybe $600-ish and $6.00-ish (as a very rough estimate.)

Maybe like that Dorian Grey story.  QE is keeping up some appearance of health and vibrancy, but behind the facade the actual corpus is decomposing to a thoroughly putrid state.

Actually, as I remind myself of the story by looking it up on wikipedia http://en.wikipedia.org/wiki/The_Picture_of_Dorian_Gray, I think it more fitting to consider the reserve currency status of the USD as the mojo which allows various malfeasance...including QE.  So to slightly re-arrange the wikipedia text:

  "Bernanke's wish is fulfilled, plunging him into debauched acts."

Things are getting weird over the last several weeks in ways I have trouble characterizing (my not being a professional.)  I'm holed up waiting to see what happens.

I would not want to be out of either PM's or Bitcoin at the moment.  Of course I never want to be out of these two items so that isn't saying much, but I would be extra concerned about missing the boat right now simply on the basis of the behavior of various things in the various markets.

Sadness, pity, sorrow for my poor deluded fellow traveler, hopefulness that the healing process will begin before it is too late and all hope is lost.

If Vlad and Co produce an ASIC, I would not expect them to have a monopoly for long, and I would anticipate that the follow-up fabs (assuming he is even first to market) could well be more optimized.

From: http://marginalrevolution.com/marginalrevolution/2010/01/estimating-soviet-production-speed-for-a-nuclear-weapon.html
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In the mid 1940s he and his colleagues were commenting on how quickly the Russians would get the bomb – most of his colleagues put it to 20-30 years. He however amazed them with his estimate 5 years. His reasoning was they they would be much more effective and focused in their research , since they knew it *can* be done. This is the key thing in research be it purely for science or military.

In two years the Soviets had the bomb and it’s all history after this.
==============

As do I of course.  I do try to have a balanced inventory of tools at my disposal and need to deal with the classic problems that that challenge presents.  I'm not looking for or forward to a fight, but do wish to be prepared for such an eventuality.