They can only issue new debt based on new deposits.  It might not work the exact same, but it's a system that can only function if people keep taking on loans and then depositing those loans within the system.  If enough people walk in and demand their deposits now, in cash, that's when you just throw up your hands, as a banker, and say "sorry, we don't have it, and the FDIC only has $2,200 in the insurance pool per $1,000,000.00 of "insured" deposits".  Ponzi...

Well, that's something I would be interested in contributing to at some point.   Let me know if there are any topics you guys are looking for people to write on, and I'll let you know if I can do anything to help.

The powers that be are bankrupt and about to subject to the sledge hammer that is the laws of economics.  I'm not all that worried about them - I just want to help people move on as fast as possible and get humanity morally sound and civilized as fast as possible again...

Dimon needs to get himself back a half-millenium, where they strung up anyone who called himself a "banker" and practiced the type of financial shenanigans that are currently practiced.

I think most bankers in the lower regions of the business are generally decent people - there have been 3-4 generations now where their day-to-day practices, previously defined as blatant fraud, have been considered to just be the regular course of business, and A-Okay.

Until the multi-generational ponzi scheme of $XHUNREDED trillions in promises to pay backed by less than $20 Trillion in cash and deposits, bankers will be regarded as "really nice people".....

OK, I have read through a bunch of this post, and I have a little bit of a bone to pick.

You previously mentioned the "accumulation of too much wealth" as a bad thing.  I would like you to expand on this.  Please explain the following:

a) how much is "too much"? 

b) Who gets to decide this, upon which basis is it decided, and how is this enforced?

c) Do you consider all accumulation of wealth to be bad, or are there specific methods of wealth accumulation that run contrary to your "ideal socialist society"? 

I absolutely agree with this.  PM's will get food to your mouth and a roof over your head while fiat is dying.  My focus on bitcoin is philosophical, economic, and even a bit philanthropic.  Bitcoin is international money.  It can facilitate international trade across institutions while a central-depository PM currency will take days to do this on any transaction outside of its own institution.  This is what makes it brilliant.

For philosophical and economic reasons, it is simply because bitcoin is a moral money, much like anything else the market voluntarily elects i.e. gold, silver, etc.  It is because when the market (whenever I say "market" in any conversation I have on here, this is my condensed term for "all of the voluntarily interacting human beings making choices all of the time") chooses the money, the market flourishes.

What we have seen in the digital economy is growth that only existed in the physical economy for a short time - the Gilded Age, where true economic expansion in production under gold and silver increased at a rate beyond anything in the scarce realm before, or since.  We are in the Gilded Age of the digital economy, and more and more scare resources are being brought into it for that reason.  Already, millions upon millions of man-hours of former labour are now instantaneous and infinitely-replicatable in the digital realm, freeing up untold riches in human capital and that most precious commodity - time.  It's the most beautiful thing for the human race that has happened in ages.

The philanthropic aspect is sort of a two-edged sword (and I'm holding the hilt!).  On the one hand, I want to cut off the mechanism that allows states to hire people, ship them off to other countries, and pay them to murder hundreds of thousands of innocent civilians.  War is not possible without currency monopoly, at least any war that violates the NAP is not (pre-emptive/aggressive).  Can you possible imagine how it would work out if the US government had to actually extract every dollar it uses to pay the Offensive Military directly from the hands of taxpayers?  There is no way.  The "Great Society" would die on the vine as it should, because there is no way you could tax what has been monetized directly from the hands of productive people.  They wouldn't stand for it.    This is why no "true believer" progressive ever talks about abolishing central banking, only "reforming" it - they know their vision of every second of life being managed by "experts" and being "equal" for all, is absolutely impossible under market money.

What we have now is that people know something is wrong, in their gut, they are a bit resentful of how much is being stolen directly from them, and they instinctively have the impulse to speculate because their store of "value" buys less and less every year.  Imagine if tax-by-central-bank became an actual attempt to tax!  It would be the Whiskey Rebellion all over again (and damned straight!), with the good guys likely winning.

On the other hand, there is only one key to actually stopping men and women from signing up to head off and kill other people in other countries for the sins of their governments or tiny factions therein.  That key is trade.  People do not kill each other when they do business together and make money from each other.  "when goods and services cross borders, soldiers won't".  It is extremely hard to propagandize me that all Chinese are evil cannibals who want to murder me for being randomly born in an arbitrarily fined geographic region, when just last night I was on the phone with Wong and we worked out a very good deal to get some stuff shipped over for me.  This is why you see economic sanctions, always, before you see military action - it is part of the "consensus" upon which our society has disgustingly set the foundation for its morality.  Our latest example is Iran, and military action is sure to follow unless the bond market does what I am praying it should, and forces the US government to shrivel up and die (disclosure:  I am fully leveraged short in long-term treasuries as of about 2 weeks ago, along with Japanese long bonds, German bunds, and France long term debt).

Bitcoin is something that can usher in world piece as a two edged sword - it removes the monetization possibility that enables war, and it keeps people in the rational world, where they do business together and benefit each other.  Rational people are that much harder to propagandize, and would revolt if their economic success were cut off because of politicking.  It really can be a tool that could re-shape so many paradigms of society.

Sorry for the rant.  My fingers need a break.  Once I get typing about this stuff it's hard to stop...

Well, the more the merrier then.  I'm a huge fan of bitcoin, but I'm also a huge fan of the derivative nature of all human progress, and I see LTC picking up in bitcoin's shadow as more people adopt BTC as a payment method.  I'm sure it will be driven almost entirely by speculative fervor, for a time, but it does have a bright future.  My little bit of hashing power is just another check and balance on a wonderful idea!

I guess you guys are sort of right about posting in "discussion", however my background and focus are more on the financial side of things, which I generally consider "speculation", so I just tossed it in here.  If a mod feels like moving it elsewhere, by all means!

One of the things I would like to set up is an actual ratings system for bitcoin securities and institutions.  One of the things that bitcoin entrepreneurs are going to have to get over is some of their anonymity.  People need to have a recourse, and I want to set up a rating system and a sort of BBB for bitcoin businesses, who I can vet based on their operations, actual cash and bitcoin holdings, etc, and rank them on viability and on trust.  Kind of like BBB meets Yelp, for bitcoin businesses.

I am also looking at other opportunities to make dealing in physical goods with bitcoins a lot safer, even over distances.  I'm not saying more than that about that specific venture right now, but my goal is to set up a sort of network for bitcoin that brings good, moral entrepreneurs and customers into the fold and leaves the scammers and tramps (old definition, here) out hanging in the wind.  Sort of a "digital, gated society" that offers security and recourse in the even of a dispute.  And, because my background is mainly in investing, I want to offer investment opportunities that are very transparent and give long-term holders and adopters a place to put their coins and generate a yield (an actual, real, achievable target and full breakdown of allocations and holdings, all done through offshore accounts that are untouchable by western governments, and all with a minimum 10% ownership by myself or any other "insider").

This is something I've been cooking on the back burner while I wind down my own business operations in the physical world.  The climate is becoming a disaster to do business where I am, and I almost feel bad for the fellow who's buying me out, because of the legislative shitstorm and army of bureaucrats that will crash down on his head as of next year.  But, it is what it is, and I am shifting myself over to the last realm on earth that is a truly free market - the digital one.  I can't begin to explain how excited I am for bitcoin and for the digital economy, which has been growing by double digits YoY since it sprung up in the 1990's.  And that is on the back of a fiat currency and draconian financial system.  How much more do we have to look forward to now that money itself is back in our hands!

P.S. This was a great read, OP.  Thanks for sharing.

That's actually a misconception, since if you are a producer you can earn the exact same money over and over again as it circulates through the economy.

The "compound interest paradox" functions only on the assumption that all money is only spent once.  It is a farce.  Even if I borrowed $50,000 in an economy with $100,000 of total money available, I could earn that 50 times over if I produced enough.  Not saying I'd like to work my balls off like that, but it can be done, and that's the point.  The compound interest paradox is something touted by greenbacker "debt-free" money crazies who want to hand the printing press over to the political class directly, instead of the central banks, who are beholden to the banking system (you only get HIGH inflation from central banks, hyperinflation only comes from the political class because it wipes out the banking system, too).

Under hyperinflation, a farmer walks into a bank and pays off the entire nominal loan on his acreage and operations with a few flats of eggs.  The bank is done.  This does not happen with central banking and the current monetary setup we have here.  25% inflation annually for a while, sure - wipes out the middle class, takes the load off of the biggest debtors (banks and governments), and transfers wealth up to those who own the most non-financial assets.  Banks are also the biggest creditors, and creditors get destroyed by hyperinflation.

That is pretty sweet.  Anybody have a script that pulls that into a CSV or something else that can be used for charting?

I know I'm very new here in terms of post count and all that.  I'm a long-time lurker (since 2010 when Robert Prechter did a special report on bitcoins in his monthly newsletter), and I am also a long-term holder of bitcoins (mining on a dual-core CPU at that time, generating about 50btc per month, and made some purchases around $.10-$.15/BTC way back then).

Oh, how things have changed.

Bitcoin is very, very viable long-term.  It's only weakness is that it hasn't been selected as a commodity and then assigned a monetary premium by an organic and complex market, but instead was simply created with the intent of being used as a unit of exchange and account.  The trade-off, however, is total decentralization - no clearinghouse, no depository for gold or silver that may or may not actually have it, etc.  I am a long-time precious metals investor (Thanks, in part, to my love of the Austrian school, and my distrust of all artificial monopolies - including those in currency), and I think that precious metals will again become the "gold standard" for money in the world as state-monopolized money lose all credibility and confidence.

That being said, you still have the fight against human nature when you are dealing with PM's in the digital age.  Anybody can start a gold depository or silver depository and set up a financial network on top of it.  The trouble with it is that all you have to go on is a quarterly or monthly audit, and hope that "your" metal is still sitting exactly where it's supposed to be.  There are a ton of such services, and the scams are being exposed out the woodwork over the past few months.  Strong, legitimate companies are few and far between - GoldMoney, SmartMetals, and several others seem to be very legitimate allocated holdings.  Peter Schiff's new EuroPac Bank has allocated holdings with a linked debit card that converts your metals to whichever currency you happen to be spending.

If you don't know who Peter Schiff is, check out "Peter Schiff was Right" on youtube.  If you are interested in signing up for an allocated metals account at his bank in the West Indies (sorry, NO US Citizens thanks to Dodd-Frank), here's a link (yes, I will get a small headhunting fee as I have been an account holder since about 2 days after he opened the bank lol):

http://secure.europacbank.com/register_alt.php?ra=248e844336797ec98478f85e7626de4a

The other disadvantage to gold and silver is that they are physical goods, and they must move through the physical world.  A central depository could set up a worldwide network to distribute redeemable certificates (digital or otherwise), but eventually the metal has to follow, which is far slower and prone to serious security risks.  This can be a burden in a world of instant transactions.  Bitcoin solves this problem - 25 minutes and you've got your asset, free and clear.

My background is in finance and economics, which is sort of funny because I had to "unlearn" a lot of what I learned (in the future, mainstream economics (Keynes, Chicago, etc.), as it is practiced today, will probably be held in the same esteem as blood-letting doctors are regarded by modern medicine, or flat-earth "astronomers" are regarded by their modern counterparts).  Thankfully I was still young enough and saw several international financial crises that mainstream economics were absolutely blindsided by, while a certain few people seemed to be saying "yeah, I told you so".  I'm sure most here are subscribers to the Austrian school, or at least to the tenants of praxeology and free markets, so I'm not going to go on a huge diatribe about it.

Anyway, the big question is going to be - where do we go from here?  There is a massive scandal unfolding as we speak which will likely shake bitcoin to its core along the lines of the Mt. Gox hack last year and the fold-up of the online wallets and the recent bitcoinica hack and collapse (along with your money).  My suspicion is that we will see bitcoin make a new low relative to the lows it put in after the initial blow-off last year. This will likely be the last single-digit move we see for a very, very long time.  This is the last "is survival possible?" time for bitcoin.  If we can make it through the coming storm, the future is wide open.

This is the "trouble-cycle" of bitcoin.  The community is so optimistic and so ready to push the envelope, which is amazing.  But it leaves us prone to getting burned and ripped off, and the anonymity that is so key to bitcoin can also be a deadly enemy.  It seems that every few months, someone comes along and offers a "new" idea, consolidating a whole bunch of bitcoins and then taking off with them, either through their own maliciousness or through being careless with what becomes a very, very low-hanging fruit for attackers.  These bumps and scrapes will hopefully push the community to come up with its own self-regulating mechanisms and hoops through which legitimate opportunities and offerings will gladly jump to better serve their customers.  This is one of the areas I am very excited to bring some ideas to the table for the community.

From where I'm sitting, bitcoin is one of the avenues of the future.  I do think that local and regional economies will embrace privately-minted money once nation-states have destroyed faith in their promises-on-paper.  The entire planet is over-leveraged on promises to a level I can only call insane.  Your bank book is only a promise to hopefully have the money on hand if you decide to come in and withdraw it.  Actual cash will be king, and all bitcoins are cash, which is key.  Bitcoin will bridge the gap of instantaneous transactions that we have come to expect, which commodity money can only truly do within the same central depository institution.  It is the "perfect" unit of exchange and account.

I want to bring what I can to the bitcoin community.  The more goods and services that are offered in bitcoins, the stronger and more viable this money will become.  I'm keeping everything pretty close to the chest right now, but I will say that in any avenue of finance or services that I offer, my own personal information will be fully available.  I will not hide behind an anonymous username, behind "forum rep" or anything silly like that.  Every venture that I start, I will personally hold at least a 10% stake in it, up to 100%, and anyone who wants to do business with me can know who they are doing business with.  But again, this is all for much later - I just basically wanted to write a bit of an intro, what I think is happening with BTC right now, and say hello to everyone here.

My own goals are very ambitious.  I want to be here to help take bitcoin to the next level, along with any competing currency that has the same merits.  I want to see 1 in 100 people on this planet actually know what the word Bitcoin means.  This is one of the greatest tools of economic freedom that has ever been available, and we need this, all of us.  Bitcoin is to money what Gutenberg was to education and free speech.

First of all, I'm wondering if it's possible to use the LTC client to run pooled mining from OZCoin or another pooled site.  Or is everyone using a mining program like minerD for pooled mining?

Any tips would be appreciated.  I spent some time mining bitcoins way, way back when Robert Prechter put out a commentary in his publication back in very early 2011 (I'm an e-wave trader in other financial assets when I swing trade).  Best ROI of my life at this point, over 10,000% return on investment for the ones that I bought.

I'm a huge believer in competition and I think LTC has what it takes, because it's got the same "perfect money" profile as BTC with all of the same inherent strengths and potential weaknesses.  I would like to see LTC grow and offer a strong secondary alternative to bitcoins, especially in the eventual brick and mortar world, where it would actually be more useful than BTC thanks to its far faster confirmation times.  In the meantime, I'm interested in mining some.  If anyone is using the actual LTC client to mine successfully through a pool, I'd be grateful if they shared the pros and cons.

See?  That's the spitting image of health, is what that is.

A healthy does of paranoia is... well, healthy.

I am interested in starting a few businesses that cater to bitcoins and other online-only currencies, mainly offering secure methods of doing transactions for currency-to-currency exchanges but also for any sort of good/service that is purchased over the internet.

I'm also a long-time trader in both bitcoins (about 16 months now) and equities, currencies, commodities, and bonds (over 10 years), including a 3 year stint at a prop-trading firm, essentially a swing trading hedge fund with scaled trader payouts.  Crazy times.  Anyway, I have been thinking of setting up an actual company offshore and starting a hedge fund that would essentially offer returns that aren't diminishing (as in bitcoin miner bonds) over time and giving people who have a large bulk of their assets in bitcoins the opportunity to get involved in international finance opportunities without having to go through all of the hoops to get it set up themselves, especially since my brokerage already allows me to add corporate/business accounts and is already set up to handle a huge laundry list of domestic and international assets.

I am working on an actual investment strategy breakdown and prospectus with some hard-line rules and a good, solid contract that can be respected by both parties (judge.me is international, and all of my personal and business information will be available to investors once the time is right)

My account is very, very new, but I have been a long, long time lurker on here (since back in the days of 10-cent bitcoins), and just never really had a reason to sign up.  It's time.

A ponzi scheme has to be unlawful by default since it's built on paying out less than is coming in and keeping people on the hook for as long as possible, thinking their deposits are safe, while not actually having them at all (the money coming in is used to cover withdrawals and the difference goes into the owner's pocket).  Kind of like every bank on the planet (fractional reserve is just a nice way of saying "ponzi").

P.S. I'd recommend having a read up on Wikipedia about the actual guy who the scheme is named after.  It's a pretty crazy story.

Hi everyone.  Long time friend of bitcoin here, although I haven't mined since they were $0.10/bitcoin since I didn't have the rig for it once people started hopping on board and cranking on the GPUs.

I do some trading in bitcoin and trading in many other things.  My background is in finance and economics, with my "traditional" economics being mostly unlearned in favor of something that made actual sense a la the 2008 crash - the Austrian school.  I'm sure I'm not alone on here.

Are people holding BTC's for the long haul?  I have been holding my latest batch of about 300 since they dropped off to $5.00 a pop last fall.  That first run up was amazing, and it looks like we are going to get at least a few more dollars out of this latest rally.  P.S. If you want live updated charts for Mt. Gox you can use the gox feed through Sierra Chart, all the way down to one minute bars.  Very handy (although you have to pay after you've used up the 2 weeks trial period).