Armstrong regrettably sees strong possibility of war in Europe and Asia:

http://armstrongeconomics.com/2014/04/03/rising-threat-of-international-war/
http://armstrongeconomics.com/2014/04/03/russia-recalls-ambassador-to-nato-as-this-spirals-out-of-control/
http://armstrongeconomics.com/2014/04/03/putin-beefing-up-syria-still-with-eyes-on-ukraine/
http://armstrongeconomics.com/2014/04/03/economics-sanctions-do-not-move-or-we-will-commit-suicide/
http://armstrongeconomics.com/2014/03/31/north-korea-fires-artillery-shells-in-the-south-as-they-return-fire/
http://armstrongeconomics.com/2014/03/30/putin-exposes-wests-hypocrisy/
http://armstrongeconomics.com/2014/03/28/putins-popularity-soars-as-he-addressed-the-nation-on-tv/
http://armstrongeconomics.com/2014/03/28/imf-demands-austerity-on-ukraine/


5000 dead in Thailand in past 30 days:

http://armstrongeconomics.com/2014/04/03/thailand-over-5000-dead-in-civil-unrest-to-date/
http://armstrongeconomics.com/2014/03/30/thailand-on-brink-of-civil-war-on-the-41-year-cycle/

Add Bolivia to the long list of countries undergoing civil unrest:

http://armstrongeconomics.com/2014/04/01/now-bolivia-bolivian-miners-clash-with-police-at-mining-law-protest/
http://armstrongeconomics.com/2014/03/31/the-age-of-civil-unrest/

Amazing how hard Armstrong has been working lately given his advancing age:

http://armstrongeconomics.com/2014/04/03/training-session-supplemental-materials/

Past 30 days (click 30-day chart), the largest volume days are the down days. Also only 8 up days (1 neutral) out of 30.

http://bitcoincharts.com/markets/bitstampUSD.html

This might indicate selling pressure is greater than buying.

All this moral crap really annoys me. Shorting helps to prevent selloffs from being so severe, because shorts cover on the way down and provide buying demand.

Moralists always cause the opposite of what they portend to.

I am merely answering all the relevant posts that occurred while I was sleeping. What is the crime in that?

The great thing is that when you put me on ignore, all those replies combined into one post thus collapse into one line on your browser, so it is much more respectful of me than putting them in separate posts.

And once you put me on ignore, then you won't be bothered by greater opportunities, which is I think a perfect outcome that would please me very very very very very much.

SlipperySlope why did you delete your post saying that you put me on ignore? Please don't realize you were wrong.

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It is too late because mining is already centralized and becoming more so every day.

Thus the protocol changes we need on the block chain can't be implemented. Gavin spends his time at the CIA and CFR coordinating the fiat future for Bitcoin. No major changes in the protocol have ever happened, only small fixes. Even other important fixes haven't been done. Adam Back (the creator of Hashcash which Satoshi based Bitcoin on) enumerated many of these unfixed bugs.


Agreed! It is going to happen, but not on Bitcoin. Those who realize this early and get on the right bandwagon will be insanely wealthy.

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Problem with Altcoins (note self-moderator closed the thread when he didn't like our refutations)

"Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)

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Debasement by altcoins has already begun. This is another reason that Bitcoin's adoption curve is likely log-logistic and not linear (in log10) as Risto's famous chart assumed.

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I guess you didn't read the upthread debate between Animorex and myself which stemmed from an assertion I made that once all your merchants take fiat (with a BTC facade) then they have no incentive to take BTC and not convert instantly to fiat.

Peter Thiel's Bitpay is a reverse takeover of Bitcoin and it is growing exponentially and at a much faster rate than Bitcoin adoption so it will soon engulf Bitcoin.

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Full node resource requirements are not the crux of the issue. Rather it is the fact that there is no decentralized way to limit pool sizes. I solved this algorithmic problem.

This shows you are not technically astute. You may know a little bit about programming, but you don't even have all the relevant design issues properly organized in your head. So that should indicate to you that you should stop being obnoxiously boastful and condescending. Because ignorance is not impressive.

I speak because I know what I am talking about. Otherwise I ask, or say "this is my opinion".


Exactly. So when are you going to wake up?


Since you called me a "nutcase" upthread, I can speak frankly to you now...

Another example of your inadequate logic skills. I am estimating that I would never hire you as a programmer, because it appears I would spend more time correcting your logic errors than I would gain from your efforts.

The reason people prefer fractional reserves is primary because loans can't exist on a finite money supply.

The others reasons are safety. And Bitcoin has that in spades as many lose their wallets.

And other reasons for Bitcoin are only way to get fast transactions and micro payments. Etc..


You are talking about the Block chain bloat scalability. Yes I agree it is not the big doom. However, there are other issues which are unresolvable in Bitcoin without offchain as mentioned above.


It is irrelevant to the final outcome as what you personally (or the idealist Bitcoiners) think should be accepted. It is the weaknesses in the protocol and what the masses want that matters.

Simplicity is for simpleton surrogates who are easily manipulated by Risto's incorrect (incomplete) summaries.

The summary that says all that matters is how many BTC you have, is what I am attacking right now. That summary is very wrong and it will cost you (and Risto) dearly.

Btw, while he tells you that, he is off buying altcoins and making profits (where do you think his recent cash came from? Im guessing he sold his Auroracoin at the top).


Because Risto isn't stupid. He realizes that he must adjust to new information that opens his eyes. He realizes he must be able to defend his thesis against all valid logic, else he wouldn't be wealthy.

He deletes noise.

You are trying to turn this into a political contest instead of a factual and analytical contest. I don't think Risto is that dumb.

You are trying to use political pressure to make Risto feel guilty if you don't read his thread. Who cares? Don't let the door hit you in the butt on the way out you whiner. Surely you can skip the posts you don't want to read. Rather you are trying to censor facts that you don't want others to read.



I did summarize. It is deep stuff. It is not for simpletons. You need an attention span more than a 5 year old.

Then discuss. Present your factual counter-argument.

While I was sleeping there were many posts where I did not post, thus your claim is erroneous. I am responding now, that is why my posts are grouped closely together.

I am responding to posts made by others and I am allowed 10 posts per day.

And FA is relevant to TA because TA is otherwise accurate roughly 50% of the time.  

I know you want to shut me up because I have pointed out Bitcoin's weaknesses and pointed out that environmentalism is a moral fraud.

Hiding from the facts won't help you. It can only hurt you.


Agreed. But Bitcoin is clearly headed to being a part of the existing fiat regime.


Nonsense. Miners mine for profit and return security of the network in exchange.

Socialism is always failure.

Autonomous protocols are valuable because they enable diversity and diversity is fitness and fitness is prosperity and resilience.


That is just socialist bather nonsense.

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Astute.


Black budget think tanks are designed not to operate by committee. The elite recognize what works and doesn't work. Please see this:

http://armstrongeconomics.com/2014/04/02/the-age-of-civil-unrest-part-ii/


http://armstrongeconomics.com/2014/04/03/fully-invisible-aircraft/

Also see my upthread link to Catherine Austin Fitts' point that government intentionally designs in failure when it is in its best interest but can act very swiftly when that is in its best interest (i.e. the best interests of the elite "Fourth Branch of Government" who capture the government).


Indeed the $4 trillion unaccounted Black Budget of the USA.

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They are investing in offchain services such as Bitpay and Coinbase, thus converting Bitcoin into a mainstream fiat regime and away from our original ideals.

If price doesn't increase consumers break down the doors of the electric company and City Hall. Price will increase damn fast when people don't have electricity. I am here in Davao, Mindanao and we are having rotating brownouts. The people and businesses are ready to strangle the necks of the politicians and so yes the price has risen and the new coal powerplants are being built (200MW to come online next year and more coming).

I agree price may not rise if the damn socialists who want subsidies are in control.


Man-made climate and global environmental change is the most irrational thought a person could have. Start here on the definition of the scientific method.


I assume you are referring to this point:


You must have flunked Economics 101 because you forgot opportunity cost.

They can sell the hardware. Factor that in and you see my point was relevant.

Obviously for ASICs you are correct, but general purpose computers you would not be. That is another reason a cpu-only coin is needed.

Regarding my upthread point that climate change causes can't ever be falsified, because it is impossible...

They are opposing in that the past is inductive and the future is co-inductive. Also they are opposing in that there is not one past and one future, thus really they don't exist as aggregated entities (thus can't oppose each other).

Humans have a difficult time accepting diversity, because they can't know it all. Thus we erroneously gravitate towards absolute bullshit such as man-made climate change, as if one climate even exists.

I know diehards are going to resist the point of my immediately prior post, but the fact is that for money to become widely accepted by the masses, it must lose its "no debasement" store-of-value qualities. I explained this in great detail else where on this forum (from memory only see my debate with MoodShadow in the Peter Schiff thread in the Economics sub-forum, also my thread "No Money Exists Without The Majority", and all my debates with forum member bitfreak! in his Mini Block Chain threads, and with bitfreak! in my "Failure to..." thread in the Bitcoin Discussion sub-forum). You can find data to back up my arguments in those prior discussions. Let me attempt now another superior summary.

The delusion of the goldbugs (which apparently Satoshi strategically understood) is that debasement is bad for the masses. The truth is the antithesis. Fact is that wealth is power-law distributed[1], thus if money isn't debased the masses become enslaved to the rich.

So society tries to redistribute from the rich to the poor, but this is crony capitalism because of the power vacuum of democracy[2]. Instead of redistributing capital from the (less knowledgeable) rich to the knowledge-intensive entrepreneurs, the collective action actually distributes from the (upper middle-class) entrepreneurs to the poor. The elite capture the collective action and rule it.

So the problem is not debasement. The problem is who controls taxation and debasement, which are the elite. This natural system is basically that the biggest fish eat all the smaller fish.

This is disastrous because it concentrates capital away from those who have the most knowledge capital and towards the top-down fatcats and the unproductive lazy poor.

It is important to understand the reason that the rich are less knowledgeable than the smaller entrepreneur and also this is why smaller things grow faster than larger things. The reason is fitness, which I covered in great detail in the "Information is Alive!" essay on my blog. I elaborated on these concepts in my two essays which CoinCube has linked from his OP in the Economic Devastation thread. I am not saying a rich man isn't smarter, rather I am pointing out a natural law of physics, which is that information can't travel instantly. If the speed-of-light were infinite, nothing would exist and the universe would collapse into a single infinitesimal point in time, because the past would be communicated to the present instantly and thus time would cease to exist. Friction is required for existence. This is explained more analytically in "The Universe" essay on my blog.

You can understand this less abstractly by noting that a manager can't possibly keep track of all the details that his workers are doing. And this is why until you learn to make your own decisions, you can never sustain wealth. The point is that each person knows about opportunities which are local to his/her environment which the fatcat capitalist can't possibly know. Also there is the issue of economies-of-scale, the fatcat can't double his investment in a year because the investments of size don't grow that fast, but the guy who sells mineral water on a hot scalding day, can triple or more his capital outlay.

You see that only productivity sustains wealth. There is no such thing as storing wealth without it losing its value. That couldn't possibly exist in any framework that you could envision. This is a high IQ point and most readers will still not get it after reading the above over and over. If you get this point, pat yourself on the back, it means you are very smart.

The key is that you as a very productive knowledge entrepreneur can grow your wealth faster than the fatcat, so if money is debased by say 5% per year, then you gain relative wealth as compared to the fatcat. That is if the debasement isn't being gamed by that damn power vacuum of democracy crony capitalism. You can also say arithmetically that no debasement is required for you to gain against the fatcat for as long as the power vacuum isn't in control of society, but the problem with that is there is no way to fund the security of a decentralized crypto-currency without debasement. Transaction fees are one of the big Achilles Heels of Bitcoin, because it incentivizes the capture of transactions by those who want to centralize control of mining (this is actually happening now but it is very subtle and hard to prove because 3 pools already control > 50% of mining).

After realizing this, I set out to try to figure out how to design crypto-currency in way that it couldn't be taxed and that would also naturally redistribute the money from the fatcats to the mining entrepreneurs in a competitive framework that rewarded innovation. And I realized that cpu-only would distribute the debasement to the most innovative.

This is because the home miners would mine at a loss and not know it, thus economies-of-scale for marginally lower electrical cost, e.g. in East Washington wouldn't make the datacenter mining very profitable. Rather it would incentivize innovative miners to locate high vertical head and flow stream microhydropower which is almost free energy. The fatcats would hate that, because it doesn't have high economies-of-scale. This is probably why many developed nations outlawed unlicensed moonshine (ethanol) and hemp cultivation. It actually takes individual brawn, search, and effort. As well, such a properly designed cpu-only proof-of-work would not gain economies-of-scale from Tilera CPUs and other ways of applying large capital to mining. Algorithmic check mate on fatcats.

Note one of the very important reasons that mining at a loss is still valuable is because it can be the way to convert fiat to coins without any third party involved, which is very powerful veto on corrupt exchanges and governments, e.g. it nullifies regulation and confiscation. It also makes the personal computer a form of autonomously issued cash, while the governments are trying to eliminate cash so they can track everything digitally.

Note that money isn't all the wealth, e.g. assets such as land are wealth, but as I pointed out above that debasement of all the wealth happens naturally if the power vacuum of democracy isn't allowed to stomp on entrepreneurs with taxation and regulation. Thus entrepreneurs gain relative wealth! And doing a crypto-currency correctly is a key factor in making that a potential reality. Unfortunately Bitcoin as designed can never do that. Bitcoin already lost its potential to change the world in that positive way, for example the mining is already centralized. The adoption pattern and future of Bitcoin is already set in stone.

So I hope I have explained to you why money should not be a store-of-value, and hinted to you how we can improve crypto-currency so that money isn't controlled by the fatcats and the destructive power vacuum of democracy.

Next you may want to hear about specific technological details. Some can be revealed now and others soon.


Note, my blog domain expired which I just renewed but there will be up to a 24 hours delay for the nameserves to propagate again so in the meantime use this link instead.


[1] A. Dragulescu and V. Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States.

[2] Eric S. Raymond discussing Mancur Olson's The Logic Of Collective Action in Some Iron Laws of Political Economics.

Note I am not saying Bitcoin isn't a performant nor uninteresting investment. If my crude fit of the log-logistic curve to the adoption data is correct, then price should be increasing at roughly 10X every 16 to 20 months from about now for next couple of years, with another bubble to push it temporary higher than that. After that rate of appreciation would noticeably slow again. Note I wrote "if" my theory and fit are correct. We really need someone to do some more empirical analysis of the data.

My goal is to mitigate the excessive "it is totally different this time" towards a more balanced view of Bitcoin's real strengths, weaknesses, and likely scenarios of the future.

I also agree with the comments that most $100+ millionaires are not technologically astute, are busy, have an ingrained inertia in their area of investment, etc.. New technologies have an adoption curve which is determined by the friction of these structural inertias. We can't change that adoption curve unless we fundamentally changed some aspect of Bitcoin that isn't already baked in (factored by speculation). Your evangelism is already factored in (so overdoing with hyperbole only causes the newbies to rush in too aggressively and we get extreme bubbles and crashes, but your hyperbole is already baked in also). As Risto noted, it takes perhaps 12-24 months after someone learns about Bitcoin to become an investor, and not everyone who learns about it becomes an investor.

The binary adoption curve of biotech startups (is an interesting point but) is not applicable to Bitcoin because Bitcoin isn't proceeding with binary outcome, as it is already a proven technology that is being adopted with a well demonstrated adoption curve for us to extrapolate on, while the ecosystem is also morphing with offchain infiltration (as factored already by the due diligence of the speculative investment adoption).

The proposed inverted pyramid may be accurate. Note gold is on the bottom of the Exter's inverted fiat pyramid, but that doesn't mean gold went "to the moon". As Risto pointed out, there are paper futures markets and others ways that gold is diluted in the fiat system. The same will happen to Bitcoin, because humans refuse to be controlled by some limited supply of money. Money is mostly a unit-of-exchange, not a store-of-value. Stores-of-value are incoming earning investments as Buffet has wisely noted many times. Bitcoin is undergoing a speculative investment phase wherein it is not really money and more like shares in an IPO startup. As it transitions to money, then it will become less of a store-of-value. It simply can't be any other way. Millionaires may not be smart enough to figure that out, but they are conditioned to know "it isn't different this time".

I will post again soon about the technical issues such as cpu-only, altcoins, offchain, etc..

The $500 millionaire doesn't need to grow his capital very fast. He needs to manage his capital safely. Getting involved in "anti-government" activities or anything not mainstream is risking his entire fortune.

Much safer to buy the NYSE and watch his capital double between now and end of 2015. That is a sanctioned activity.

If he wants to invest in Bitcoin, do like Peter Thiel and reverse buyout the Bitcoin ecosystem. The super rich understand not to step outside their sphere of expertise. They understand someone like Thiel will end up owning Bitcoin, just as he did with Facebook.

They don't believe our decentralization delusions.

The OP is nonsense. Here is why.

On the subject of why $500 millionaires should not buy Bitcoin and why I disagree with Risto's claim that the only thing that matters is how many BTC you own...

1. A bitcoin is not an heirloom. The chances that it will hold its value long-term are very slim. Gold is a much better heirloom.

2. The 21 million supply limit is a lie. This WILL be violated and there are numerous ways it can happen. The most likely way is Bitcoin is obviously moving towards offchain storage and services. In fact, Bitcoin can't have instant transactions without offchain fractional reserves (technically the exchange has to be fractional for it to happen instantly). Also the government could today regulate the few pools who have 51% and the few ASIC miners who have large datacenters, and produce as many coins per coinbase as they wanted. Later when the masses are all using government regulated offchain Coinbase.com and Bitpay.com, etc, then government can do what ever it wants to the mining and the masses won't care.

3. For the reason I stated in #2, the government can easily confiscate your coins by blacklisting them in the future. They can surely make you pay any tax they want. And they could simply blacklist every onchain coin that can't present a certificate of tax compliance from the G20. And worse you can't hide your onchain coin from the government control. Gold is much better for that. So the government can replace your onchain coins with offchain and give them to the masses to pay for this upcoming financial crisis. And I think that is a very likely outcome.

4. Altcoins will proliferate the # of coins in the ecosystem.

5. There are zillions of other investments in the world. The audacious claim that BTC is the only good investment in the world is unadulterated delirium or snake oil salesmanship.

6. There are many more reasons I can give, but I am growing tired of typing.... for now...

1. The price of electricity would rise long before we reached 100GW, thus no problem. Price always solves the problem.

2. That article assumes the genre and capital cost of the mining equipment is irrelevant. Thus with cpu-only mining, this problem will be much improved, as the both the home electricity cost per KWH and the cost of the equipment per Watt consumed are higher than for Bitcoin's specialized ASIC mining. For example, Butterfly lab's shipping 10GH/s consumes 50W and costs $349. The Intel i7 costs $329 and consumes 87W, but to build an entire system costs about double that. Also Intel has just begun focusing on power consumption reduction so this will improve at a faster rate than ASICs will.


Controlling or compensating for the morals of others is a waste of time. Masses are supposed to lose on speculation, otherwise valuation wouldn't ever converge and the masses would starve to death.

Moralists accomplish exactly the opposite of their intended result.

If you really want to help the masses, go produce some technological innovation. That is the ONLY thing that sticks.

(if you can't figure out the logic in between the lines, ask)

I didn't quote your post, because I couldn't find it. I was operating on memory. And I am in a rush to go eat.


Waste of time for most wealthy in their estimation. And you are not talking to them here. You need to find a different forum to reach them.


This is the kind of comment from you that drives me crazy.

I emphatically disagree with that. It is like snake oil salesmen talk.

I will explain when I get back from eating.

See my earlier posts today on this topic.

2 or 3 mining pools already control 51%. Government can just regulate them.

It is getting worse over time, not better as you assumed.

Okay mea culpa me. After writing that I remembered you mentioned publicly about buying some Auroracoin.

I guess I am aghast that you don't ever talk critically about Bitcoin. It is always rose colored glasses. Yes Bitcoin provides some things, but it taketh other things.

I think you will find that creekbore and I just are wishing you would be more forthcoming on balance and transparency about Bitcoin's pluses and minuses.

I suppose I hate snake oil salesmen.