Skim this report, not one mention of Bitcoin. They're talking about a triple bottom in gold despite silver having broken down out of its consolidation pattern. Big mistake. Not only that, but all the masturbation around mining companies. We are nowhere near a bubble in Bitcoin, as the gold bugs have yet to come (literally) : http://www.theaureport.com/pub/na/16271They ignore the Black Swan...  |
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He is a marxist, he wants to control everyone, be careful who you admire George Reisman rips Picketty: http://georgereismansblog.blogspot.de/2014/07/pikettys-capital-wrong_28.htmlReisman was a student of Mises and wrote the tome "Capitalism" although he still has some minarchist beliefs. Don't let that stop you from reading "Capitalism" - it is a superb explanation of Capitalism and a severe criticism of Socialism. His expose of how most environmentalist arguments are anti-human and anti-life is classic stuff. |
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So true. It's only a matter of time. They either join us or become extinct... |
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if i'm right that the digital dollar has already defeated gold as a form of money, then it doesn't seem too far fetched at all that a significant portion of the $8T gold market can come into Bitcoin. maybe even most of it.
Agreed. Gold has already failed us. It has failed because it was so easily supplanted by [digital] dollars and the powers behind them. |
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Steve, you articulated the most succinct, logical, & pertinent rapid fire explanations of Bitcoin Freedom under time pressure i've ever seen to date. congratulations. this is a big deal. +1 to this. You were landing punches every shot you got in spite of them cutting you off every ten words or so. Did you perform any specific preparation for these appearances or are you just a natural at PR? 10,000 hours on BitcoinTalk.org and /r/bitcoin plus no sleep the night before, LOL! Seriously, we have some great minds on these forums and, while we don't always agree on everything, the discussions force us to check our premises and refine or revise our arguments. Thank you guys! |
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Before the agricultural revolution, it took humanity about one million years on average to develop enough infrastructure/capability to support an additional one million humans living at subsistence levels. After the agricultural revolution, that changed to talking only a few hundred years. Now, after the industrial revolution, that takes 90 minutes on average.
There are huge side effects: http://www.worldwildlife.org/threats/soil-erosion-and-degradationThat's important but the kicker is overall economic growth, we're moving from a meme of more to a meme of better. The problem is the centers of control are working from the ideology of Co opting / controlling the supply of more. Monopolies have no value when people find alternatives, micro electronics, alternate energy and food security technologies like aquaponics (oh and money) are reshaping everything. Forget it, Adrian.
In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) is the proposition that as technology progresses, the increase in efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource.[1] In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological improvements could not be relied upon to reduce fuel consumption.[2]
The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency lowers the relative cost of using a resource, which tends to increase the quantity of the resource demanded, potentially counteracting any savings from increased efficiency. Additionally, increased efficiency accelerates economic growth, further increasing the demand for resources. The Jevons paradox occurs when the effect from increased demand predominates, causing resource use to increasehttp://en.wikipedia.org/wiki/Jevons_paradoxIgnore my post - (I started to reply to the wrong post). |
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So, if we ignore for a minute, the properties of gold that make it less attractive than bitcoin, and purely focus on the limited nature of each one; Why isn't gold acting as a store of value in a QE economy? Why is it not guaranteed profit to take out a huge low interest loan, and buy gold?
If there is an answer to that, why doesn't it apply to bitcoin?
Gold truly is the barbarous relic. It can be shorted to hell with naked contracts (big banks can sell what they don't own) and it is very inefficient in the digital age. How can it compete with instant and cheap value transfers like bitcoin (for which naked short selling does not currently exist)? As we've said before, bitcoin is assuming the position historically held by gold. Bitcoin is Gold's Black Swan. Just remember to take possession of your private keys. Appreciate the response Steve. To delve a little deeper, I realize that gold is a "barbarous relic" and inconvenient to use, which is why I was ignoring those facets for this particular comparison. Surely a clumsy, less efficient, hassle of a commodity will still rise in value relative to a paper currency issued in unlimited supply? If naked shorts really are the answer to what keeps gold value in check, then my next question would be what keeps bitcoin protected from entities offering naked short selling? I realize that if everyone acts responsibly, that won't be a possibility, but that's never happened before, so I'm not counting on it. Also, just to clarify a bit, I wasn't trying to compare gold to bitcoin, I believe bitcoin is superior in this role. I was comparing each to dollars, and wondering how we can expect bitcoin to clear the hurdles that gold failed to do, when they are both using the same approach. Gold can only function properly if the majority of people demand delivery of physical metal. If the majority do not demand delivery of physical then it becomes possible to fractionalize gold and artificially increase supply by selling paper. Essentially the scarcity property of gold breaks down unless the majority of people take physical delivery. This is why FDR's executive order banning physical possession was so effective at breaking the gold standard, after 2 generations the majority no longer demanded physical possession, but see paper products as "gold". It also is why the "gold bugs" vision is never realized, you need the majority of the population to demand physical and reject paper. If only 1% of the population regularly buys gold eagles, then banks can continue to sell paper for a long time. The advantage for bitcoin is it is just so easy to take delivery. Any smartphone app can do so in seconds, and there is no reason not to. If people who adopt bitcoin for the most part use bitcoins directly then we just might fix the problems gold ran into. My suspicion is this is how bitcoin will be attacked though, with regulation that drives adoption out of individually held wallets and into coinbase type online services by making compliance easier with online services. From there it becomes easier for online services to fractionalize bitcoin same as gold... It is much easier to demand delivery of Bitcoin, or at least proof of reserves.
Thanks rocks and notme. You both agree that the simplicity of taking delivery of bitcoin is what is going to protect it from the same fate as gold. I think it's a reasonable observation, but so far we've seen no evidence of that happening. The general public, and even some outstanding members of our early adopter community, have repeatedly lost bitcoin entrusted to a third party. The general feeling I get from normal folk when I talk about bitcoin is that it's too complicated, and they'd rather have someone else holding it for them and allowing access with a nice GUI or credit card analogue. This is what gave me pause; Outside of the people in threads like this, everyone wants a 3rd party to hold their bitcoin, and they may or may not care about solvency or audits. These are things that they don't really have a grasp of. With the majority of the world made up of people like this, how can we expect the industry NOT to capitalize on them? We can shout about private keys and audits all day long, but to an outside observer, we sound like the gold bug stackers ranting about physical coins. I agree that most people are fools and they will continue to entrust their asset to third-parties but I also think that it will be very difficult for entities to conduct naked short sales of bitcoin without being called on the carpet for it (squeezed). The assumption is that most of the bitcoins are already in private hands and not bankster hands making it much harder for the manipulations to take place. Of course, I could be wrong. My optimistic opinion is that counterparty risk failures in the legacy banking system will drive bitcoin adoption along with the awareness of the importance of taking possession of one's assets. |
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Look at the text I just received from a good friend. He's a young dentist in Vancouver.  Now the question is "how do I answer him?" [This is always a problem for me]. If I recommend cavirtex, then he must persevere through the time-consuming KYC/AML procedure, link his bank account, and then still wait a week for the first transfer to clear .... Telling him about 2FA on top of this will be too much [I wish cavirtex disabled bitcoin withdrawals by default unless 2FA was enabled and verified]. I could send him over to the bitcoin ATM which is fast and easy [although unsuitable for large purchases], but then I would feel personally responsible to set him up properly with a wallet on his phone, a back-up of the seed, and a cold-storage system. I wish we had an exchange-tradeable product like GLD but with bitcoin as the underlying…  My standard operating procedure: 1. Have them download a simple smart phone wallet. For iPhone I suggest BitWallet or BreadWallet. For Android it is Mycelium. 2. I send them a dollar's worth of bitcoin - now they are owners. 3. I walk them through the backup process (pretty easy) 4. At that point they can buy from me, LocalTrader or LocalBitcoins (screw buying from AML/KYC nodes) 5. I tell them to get my paper wallet product ( http://CoinPro.me) to store anything larger than pocket change. It has the tutorials and a BitAddress clone on a Ubuntu Live DVD. Or, if I don't want to spend much time with them, I direct them to http://BitcoinMerchant.com and have them click on "How to Bitcoin." |
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So, if we ignore for a minute, the properties of gold that make it less attractive than bitcoin, and purely focus on the limited nature of each one; Why isn't gold acting as a store of value in a QE economy? Why is it not guaranteed profit to take out a huge low interest loan, and buy gold?
If there is an answer to that, why doesn't it apply to bitcoin?
Gold truly is the barbarous relic. It can be shorted to hell with naked contracts (big banks can sell what they don't own) and it is very inefficient in the digital age. How can it compete with instant and cheap value transfers like bitcoin (for which naked short selling does not currently exist)? As we've said before, bitcoin is assuming the position historically held by gold. Bitcoin is Gold's Black Swan. Just remember to take possession of your private keys. |
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I am really interested in one of these phones. This or Silent Circle. Anyone with any experience? Checkout RedPhone and TextSecure by Whisper Systems. All open source: http://whispersystems.org |
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death spiral, baby. death spiral. there will only be one:  There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options. Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system. Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me. Bitcoin up, Litecoin down, Gold....who cares lol maybe, but: i think the most important financial dynamic going on in the world today is Bitcoin vs Gold. yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past. the pure fiat game has only been around since 1971. that is why i was a goldbug from 2005 to 2011 and why i started the gold threads: Gold: I Smell a Trap and this one. while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words. otherwise, why would India, China, and Russia continue to stock gold? why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts. enter gold’s Black Swan, Bitcoin. i’m also surprised at how short memories are. we’ve already kicked out 4.5/5 legs of the precious metal story: 1. Silver: remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs? while gold was supposed to go to $35000, silver would head to $200 or something like that? simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013. effortlessly, like a knife thru butter. and yet goldbugs fail to understand/remember its significance. what bigger a red flag to wave that Bitcoin is superior to metals? Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point. this is an important clue to the big picture. this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver. Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s. gold has a limited form of divisibility despite what you’ve been told. 2. Miners: oh Lordy. this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster. i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin. remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself? how’s that turned out? disastrously. pay close attention to that excellent analysis as to the environmental and USD costs of pm mining. that is unsustainable and undesirable. http://www.coindesk.com/microscope-true-costs-gold-production/3. Gold itself: did you all forget that Satoshi dared to touch the face of gold in price last November? what did that tell us? answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price. we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be. that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past. the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom. 4.5. we’re seeing one after another of former staunch gold bugs convert: Turk, Schiff, Rogers, and possibly Casey and Rickards. the momentum is clear. they will be running to Bitcoin soon. i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2. yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning. The metric of comparison of Bitcoin and Litecoin in my view should be in terms of life span and milestones on the timeline since inception. To compare Bitcoin to Litecoin, as an example, is like comparing someone like Bill Gates who has had lots of time and experience to make his Billions as opposed to a newly made 18 yr old millionaire. You really can't compare them like that to call it a fair comparison in my opinion. Think about it... Where was Bitcoin when it was at 2.75 years old? I think you will find some very particular similarities between the two. The arbitrage part I talked about where instead of keeping USD on an exchange you can trade for another crypto and withdraw that immediately. As someone who has used exchanges...keeping USD or any other fiat on an exchange is disconcerting and would prefer another means to withdraw that would not be tied into the broken financial system. the Austrian theory of money calls for one commodity to rise to the level of money in any society. that commodity being the one that is most useful in terms of durability, divisibility, portability, fungibility, and scarcity. gold filled this role for thousands of years. imo, silver was only used b/c gold really doesn't fulfill all the above properties very well b/c of it's physicality; too heavy, not really transportable in bulk, counterfeit-able, really not divisible in a practical sense, not really scarce with 1.5-2% additive supply and perhaps more with new sources (deep ocean, asteroids, chemical synthesis). metals are just a high friction way of transacting. an ugly hack. why should anything be any different in cryptocurrencies? sure, i suppose a Litecoin could survive but there really is no need for it. ppl like simplicity and security. having multiple alts confuses the issue. i think the network of money will be a zero sum game over the long term. i understand the use cases you cite above for traders but will those be enough to sustain a Litecoin network over time? personally, i have my doubts. You perhaps are right that it isn't "needed". But since when do needs trump wants in today's speculative world? Having multiple payment processors wasn't a bad idea to move fiat around the world. I can see there being space for more than one cryptocurrency given some people will want faster confirmations. Not to mention I've seen personally investors say "Bitcoin looks pricey, hey let me buy something that is secure and is much cheaper". That is a psychological issue there as some people might feel better holding 10,000 LTC as opposed to 1 BTC. I agree, the network of money will be a zero sum game over the long term. Something tells me we got a long way to go before that zero sum comes into play as "value" and fiat get exchanged back and forth between bitcoin, litecoin, and other "valuables" over time. Bitcoin and alts have a lot of soaking up to do to account for all of the fiat that has been created around the world and is currently being created around the world. I guess the question is at what point is enough alts enough? Honestly it is ridiculous how many exist to date but then again it reminds me of the 90's when the internet was growing/booming. I think that if Litecoin has any value it is more as a result of the potential to "clean" bitcoins versus "faster confirmation times." Whether or not this feature is sustainable in the long term will be determined by whether or not bitcoin improves anonymity. The simple fact that "value is subjective" could keep altcoins alive for quite some time although their utility will be severely limited. Case in point: Ithaca Hours |
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it looks to me that mining would be best described as being in a Pure Strategy Nash Equilibrium - cypherdoc
Highlights are mine:" A pure strategy Nash equilibrium is a profile of strategies such that each player’s (miner's) strategy is a best response ((results in the highest available payoff (block reward)) against the equilibrium strategies of the other players (miners).
A pure strategy Nash equilibrium only requires that the action taken by each agent (miner) be best against the actual equilibrium actions taken by the other players (miners), and not necessarily against all possible actions of the other players (miners). In other words, it's expected for some miners to be malicious.
A Nash equilibrium has the nice property that it is stable: if each player expects 'a' to be the profile of actions played, then no player (miner) has any incentive to change his or her action (no incentive to start cheating). In other words, no player (miner) regrets having played the action that he or she played in a Nash equilibrium." http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1968579Nice. I hadn't looked at it that way but it makes perfect sense. |
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Costa said the bank's activities "were in clear violation of Bank of Portugal rules" and used "fraudulent schemes." Police suspect former Chief Executive Ricardo Espirito Santo Salgado, who stepped down last month, of fraud, forgery and money-laundering at the bank, whose business dates from the 19th century and has been one of Portugal's most venerable financial institutions, as well as for years its biggest private bank.Portugal Bank Collapse and Rescue Raises Questions http://abcnews.go.com/International/wireStory/portugal-puts-66-bn-save-ailing-bank-24827430dickheads. Portugal, Argentina. Someday those folks will discover bitcoin.  |
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Bitccoin is not backed by gold so we don't get #2.
It is backed by gold it's backed by the productive wealth of those who choose to be part of the ledger. If my memory serves Cypher backed Bitcoin with gold by using the dollar as a proxy. Even the likes of Schiff are backing Bitcoin with gold, they're using BitPay as a proxy. Backing with gold is an idea whose time had gone, Bitcoin is backed by much more ultimately it's faith in the maths that governs the ledger. While the concept of a "necessary backing" is a fallacy in my book, I did like this definition I heard early in my bitcoin days: "Bitcoin is backed by the lack of faith in central bankers and politicians." |
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The problem I have with gold bugs who advocate a gold backed currency such as Rickards and Schiff is that gold backed currency has been tried and failed. It failed because of a central point of failure and in the US this central point of failure is the federal reserve and it failed to maintain a dollar peg to gold. Einstein's definition of insanity is "doing the same thing over and over again and expecting a different result." By that definition, all gold bugs who want a gold backed currency are insane because it has been tried and failed miserably. Don't try it again. Bitcoiners are the sane ones for trying something different.
A gold backed digital currency would be great but these three conditions cannot exist simultaneously for money:
1. Digital
2. Backed by gold
3. No third party risk (no central point of failure - decentralized)
The next best thing is to have 1 and 3 exist simultaneously, which leaves us with bitcoin.
With Bitcoin Specie, we get all three. Bitccoin is not backed by gold so we don't get #2. The problem with #2-#3 is when it is all kept in some central vault.
A gold coin standard with a flexible free market valuation gives all three.
Bitcoin does this now. You can buy gold or silver with bitcoin, and sell them for bitcoin.
This is not a true gold standard. If it were, then a fixed amount of bitcoin would be directly redeemable for a fixed amount of gold. This cannot exist in a trusless environment. What you speak of are just market rates. By your logic, the Argentinian peso is backed by gold. Gold and silver provide pure anonymity in point of sale transactions. They are not so good at being sent over the internet as Bitcoin.
Bitcoin is not quite as good at point of sale. With both, you get Rickards dream coin. Its already here. Its called Bitcoin.
Gold and silver cannot be sent over the internet. Period. All you can do is send an IOU for gold or silver over the internet, which requires third party trust. Bitcoin gives us 1 and 3 but not 2. All 3 cannot exist simultaneously. Unless someone can make all 3 happen at the same time, then bitcoin is our best option. Bitcoin doesn't need backing any more than gold does. They are both scarce commodities that are valued in the marketplace for the utility that they provide. |
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First time i've listened to this. Stripe is looking at the same endgame i've been advocating since the beginning. he's essentially saying that Bitcoin will act as a world reserve currency at the lower layer that can uniquely extend across borders to accomplish settlement btwn nations. the in country "gateways", as he calls them, will allow the interface btwn Bitcoin and fiat currency. customers of those gateways will continue to transact in fiat and trusted entities will arise to help guarantee customer tx's. in other words, pretty much the same system we have today except with a trustless immutable protocol layer that ties everything together, ie, a Bitcoin Standard. have a listen: http://www.youtube.com/watch?v=6qZwl7mukZ8It should be noted that bitcoin will eventually obviate the need for all these "gateways" and fiat currencies. The Stripe guy just needs to take his argument to its logical conclusion: no middlemen. |
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#3 paper wallet stored in safety deposit box #2 crypto cards#1 Brain Wallet**But not if you're a moron #2 is probably a bad idea, as it would likely mean that you are trusting your private keys to a 3rd party. #3 is most likely bad because the human brain is very bad at being random and will likely pick something that can be guessed by the many botnets that are checking possible brain wallet combinations. I beg to differ regarding Brain Wallets. Brain Wallets can be the most powerful wallets if you take care to use a protocol like Diceware to generate your passphrase and then use the simple method to memorize it as described in the link below. The advantage of brain wallets is the fact that you can lose everything (backups included) and you can still regenerate your wallets. If you are worried about forgetting your passphrase, split the passphrase into multiple pieces stored in multiple different locations and then add redundancy if so desired. Brain Wallets Aren't Just For Spies - How to store bitcoins in your brainhttp://digitalcurrencyinstitute.org/brain-wallets-arent-just-for-spies-how-to-store-bitcons-in-your-brain/How To Create Super-secure and Easily Memorable Passphraseshttp://digitalcurrencyinstitute.org/how-to-create-super-secure-and-easily-memorable-passphrases/Of course, my favorite tool to create these is my CoinKee™ http://coinkee.com BTW, crypto cards are fine if you use a strong passphrase to encrypt your private key via BIP38 before sending it to them for manufacture. |
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