What is the main reason for the recent price raises?

[kefky]

What is the main reason for the recent price raises?
Really Cyprus?
Will the exchange rate fall down in the next few weeks or will it raise further?

[nobbynobbynoob]

Bitcoin fever has (unexpectedly?) exploded in recent weeks. Cyprus may be playing its part, though IMO not as much as some seem to think, because the gold price has not rallied at all really (yet) during this time, and that is typically the first port of call in just about any kind of financial crisis.

Analysing bitcoin price trends since its inception four years ago, one thing stands out: bitcoin is very bullish, one of the most bullish assets ever in the history of civilization? The price does drop sometimes but it always rebounds, often rapidly. The only real bear market was from about June through October of 2011, I believe. Nevertheless, all investments are risky, and this could be just a massive speculative bubble about to pop (though the price might still be $30-$50+ even after that, for all we know/guess). For this reason, bitcoin and PMs complement each other well (and I find litecoin a handy complementary cryptocurrency to hold/speculate on, too).

[superarthur]

http://www.bbc.co.uk/news/technology-21863593 <-this has been reported in various news outlet

[Gator-hex]

Max Keiser, who uses RT to reach 550 million worldwide viewers said...

1% of global trade in Bitcoins = $100,000 Bitcoin.

Keiser Report: Bitcoin Millionaires vs Paper Billionaires (E416)
http://www.youtube.com/watch?v=_t39jCXXIrY

He also claims to be Bitcoin millionaire.

[Drewbert]

A large number of people out there FINALLY figured out that fiat money is a joke, and banks are not a safe place to store it.

And bitcoins are easier to transport or hide than gold or silver.

[gochk]

A large number of people out there FINALLY figured out that fiat money is a joke, and banks are not a safe place to store it.

And bitcoins are easier to transport or hide than gold or silver.

When can one ever trust bankers? Or for that matter US Fed Reserve or FDIC!!

[piranha]

 What really intrigues me is even though the price is in the 80's today. We are still early adopters.. When you consider that 1% of market penetration would make 1 bitcoin worth over a 100k..

[nobbynobbynoob]

Indeed, that is most pertinent. Bitcoin is either ultimately going big or bust, for my money (quite literally!).

[BigJohn]

I don't know, to be honest it doesn't make any sense to me. I can understand that people are finally finding out about Bitcoin more. But that would be a steady increase, not going from $20 to $80 in a month. The European situation doesn't hold up. As was said, other physical assets like gold and silver haven't reacted at all, and actually maybe even lost some.

Even the whole FinCEN thing doesn't add up. So they greenlit it. So what? Say someone decided to take that opportunity to open a US exchange or whatnot. For the price to quadruple, Bitcoins would have to become several times more scarce. So unless someone is buying 70% of the entire BTC supply, that still doesn't explain the price hike.

The ASIC situation could be another. Maybe lots of Bitcoins are locked up in the expectation of being used for an ASIC in the near future. The situation with BFL would make this even worse. But again, it would have to be something like half the global supply of Bitcoins to see this kind of price hike.

The only options are either a massive supply of Bitcoins became unavailable, or a massive amount of new users started using Bitcoin, or it's a bubble.

[piranha]

I know some may label this a conspiracy.. But the truth is the Fed is naked shorting Gold and silver to keep people in dollars and stocks. They have to.. We have a stock market bubble because of cheap dollars ..This isn't because of little investors putting their money in.. there is very little volume. It's the banks speculating with all this QE money.

  Second we have a bond bubble .. Treasury are the highest they been in like 50 years .. Because the Fed is buying them to monetize our debt.

3rd we have an unstable dollar.. Because the fed is diluting the currency supply by 1 trillion dollars per year.. Other countries are getting out of the petro dollar ..

 The dollar is the weakest point in this whole scheme. Because the fed can't use policy to control it.. If they do.. By raising interest rates.. It will collapse the bond and stock market... and cause The US government not to be able to pay the interest on our debt.

Btw we are already bankrupt it's this little circus the fed is using to keep thing going.  Sooner or later with all this money printing the dollar will lose it value and collapse and hyper inflation will ensue..

When the dollar collapse happens gold and silver will rocket..

[jwhitman]

There is certainly something to be said about the raising price being a product of the raising price. People are excited about the prospect of the price rise and buying into it causing the price to further rise.

[txoomy]

I've been buying precious metals for a number of years and have seen many up and down trends. I think this up trend is good, but temporary.

I guesstimate that within 2-3 weeks we'll be back to around $65, which is still great, but a more appropriate growth.

[bitsidian]

I think Cyprus was just an indicator for the general dislike a lot of people are building towards big banks; the idea of a decentralized currency seems more and more attractive to people when they see what the EU et al are doing with their money.

[notme]

Aliens.

Tornados

[notme]

Aliens.

Tornados

Sink Holes.

Actually, it's inept, kleptocratic governments being raped by narcissistic bankers who are in a race to devalue currencies to limit the costs of the mountain of debt we keep adding to.

[AnonyMint]

Numerous media stories about Bitcoin.

Greater fools are rushing in.

Got to keep them coming at exponentially increasing rate, else price  will decline.

[AnonyMint]

^ Thinks Bitcoin has no value. Probably pushing Ponzi.

No, I think there are two possibilities:

https://bitcointalk.org/index.php?topic=159908.0

1. World domination as a 666 system
2. Crash and burn

There is no scaling for a middle ground.

[numismatics]

Yellow arrow is when FinCen released this report: http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf.

[freedomno1]

Honestly i'm not sure whether to speculate and buy more at $100 and wait for the market to reach 120 then sell back at 110 or Just hold and see what happens for now quite a rally

[AnonyMint]

Yellow arrow is when FinCen released this report: http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf.

Very astute. I have had many silver bugs tell me they sold silver to buy Bitcoin after FinCEN legalized Bitcoin.

[AnonyMint]

Thus as I said, only the government can give paper money its value, unless they are gold or silver.

Bitcon is just another fiat. I know, I know it isn't debased as much. Irrelevant! The value of money is based on confidence. The government can change the confidence at any time. So the government can cause inflation or deflation in Bitcon at any time that they wish.

So all this BS about NO INFLATION is just utter nonsense.

[superarthur]

Thus as I said, only the government can give paper money its value, unless they are gold or silver.

Bitcon is just another fiat. I know, I know it isn't debased as much. Irrelevant! The value of money is based on confidence. The government can change the confidence at any time. So the government can cause inflation or deflation in Bitcon at any time that they wish.

So all this BS about NO INFLATION is just utter nonsense.

It's not only the Americans that are using it. Unless all governments act together against Bitcoins, there shouldn't be too much of an effect.

[BigJohn]

I don't understand what the FinCen announcement has to do with it. So it means that someone wants to use it to make a US exchange, and therefore bought a ton of Bitcoins, which drove the prices higher? How does FinCen translate into higher prices?

[michellj]

"Bitcoin is just another fiat" - well everything used as money is fiat - Gold only has value because some people want to hold it but in itself it is rather useless and far less practical than BTC.

BTC is probably nearer to Gold in reality than to national fiat currencies in the way it behaves - independent of governments and easily exchanged among individuals.

Back to topic - BTC is increasing rapidly against fiat currencies because people are becoming aware about its existence and the smart ones see it as a real opportunity to get in at a relatively early stage of something big.

Sure the Cyprus fiasco confirms to those who were unaware how incompetent governments are when it comes to money - and many see BTC as a viable alternative.

I'm not sure about the FinCEn stuff - BTC is global rather than US-based.

Having worked with governments I see no danger that many governments will get together against BTC - they find it almost impossible to get together to agree about anything much as a common aim - systemically BTC is safe from their meddling - and that is another reason why BTC has a great future - it is a people's not a government's currency!

[MikeH]

I've seen a lot of talk lately (even in the mainstream media) that the US dollar will collapse and there is no way around it.

Countries are moving gold like there's no tomorrow and people are also waking up to how the banks operate - my first introduction was in watching Bill Still's Money Master and that was only a few months ago.

I'm in IT and I have various rss feeds like slashdot yet I somehow I never saw mention of bitcoin until about a month ago.

Unfortunately by the time I had investigated it and decided to get on board it was at $47 - by the time I was able to actually purchase bitcoins after waiting for Mt Gox then being screwed around by people via localbitcoins.com, I ended up buying at $87 plus an 8% fee.

I just keep thinking if I had quit work 2 years ago as I had intended, I would have known about bitcoin a whole lot sooner and may already be rich.

I guess a lot of people here are kicking themselves to some degree, at least I didn't buy a $900,000 pizza.

[shiv]

Would BTC really survive a dollar collapse?

I mean, it would break almost all BTC related payment services.

[AnonyMint]

You fools have so many delusions driving your fanatical demand. Ripe for manipulative control of confidence! See below in addition to link above...

"Bitcoin is just another fiat" - well everything used as money is fiat

BINGO! So who controls confidence in a socialized institution?

- Gold only has value because some people want to hold it but in itself it is rather useless and far less practical than BTC.

Gold is a private hedge against government. BitCON is a public IPO for the supra-national corporation's global digital currency.

Physical gold can't be hyperinflated away by Bitcon's inherent design weakness which insures there will be a 51% attack.

BTC is probably nearer to Gold in reality than to national fiat currencies in the way it behaves - independent of governments and easily exchanged among individuals.

The government controls it, both because of the incorrect design linked above which will force mining to be monopolized by the corporate interests and also because every rose has its thorns.

BitCON has nothing in common with gold. Gold can be traded with no global record of all transactions (in conjunction with the government tracking of every action on the internet so they know very well who is making the transactions in most cases). Perhaps (that fictional story known as) the Bible's reference to throwing gold and silver into the street is because you will be forced to use Bitcon when corporations take over all retail and 51% of the hashing power in Bitcon, couple that with the 99% enforcement against blackmarkets now.

Martin Armstrong wrote in the above linked article:

What is different here than at any point in history is they track everything. Not even Hitler could do that and his conviction rate was 90% whereby we are at 99% [in the USA for criminal convictions]. Government will become far more aggressive. Storing bullion will not survive. Can we retain enough of civility to vote out these people and reclaim civilization? That remains to be seen.

Gold's supply is always increasing and the rate of nominal increase in supply is increasing every year. BitCON is geometrically decreasing so as to lock in 50% of the money supply for the early adopters, a certified scam. Which the government will surely have to regulate, put early adopters in jail or fine them, etc.. once the public interest is burned.

Back to topic - BTC is increasing rapidly against fiat currencies because people are becoming aware about its existence and the smart ones see it as a real opportunity to get in at a relatively early stage of something big.

Correct except they are not smart. And the perception that FinCEN's guidance was a step towards official legalization was another factor driving these expectations of bitcoin's future.

They are not smart because due to Ponzi Satoshi's design, bitcoin only scales to one thing.

1. a "666" monopoly for corporate-fascism

The only other possible outcome is the power elite abandon it because I reveal it is scam (and possibly provide an alternative that becomes more popular), then they dump it and it crashes and burns. I am hoping for the second outcome and working (but maybe not for long) to make it happen. So shoot me?

Sure the Cyprus fiasco confirms to those who were unaware how incompetent governments are when it comes to money - and many see BTC as a viable alternative.

I'm not sure about the FinCEn stuff - BTC is global rather than US-based.

Having worked with governments I see no danger that many governments will get together against BTC - they find it almost impossible to get together to agree about anything much as a common aim - systemically BTC is safe from their meddling - and that is another reason why BTC has a great future - it is a people's not a government's currency!

Supra-national corporations are really in control now (of the socialized institutions, not the private sector such as individual arbitrage within socialized open source programming).

I don't understand what the FinCen announcement has to do with it. So it means that someone wants to use it to make a US exchange, and therefore bought a ton of Bitcoins, which drove the prices higher? How does FinCen translate into higher prices?

The perception that it was a step towards legalization and success towards the supra-national digital tracking currency.

[AnonyMint]

The developers of bitCON are so afraid that I have revealed the truth about bitCON's design, that stole 100+ points from my SE bitcoin reputation so that they stop me from stating the facts about the design:

http://bitcoin.stackexchange.com/users/3441/shelby-moore-iii

http://bitcoin.stackexchange.com/users/message/9?sent=1#9

This will all be part of the public record, when the criminal prosecutions begin.

I am the living ghost of the Cherokee tribe. You've never seen how fiercely we fight.

[perseus]

Another factor is that Avalon sold its machines denominated in BTC, which driven demand -- folks need to buy BTC to pay for them. 600*88 = a decent amount of coin.

[Wekkel]

Nice FUD.

[AnonyMint]

Nice FUD.

Factual and technical retort?

(if you engage me in a debate on the technical design of BitCON, you will lose. Be forewarned. I welcome a debate with any BitCON developer. Bring it on!)

[numismatics]

I don't understand what the FinCen announcement has to do with it. So it means that someone wants to use it to make a US exchange, and therefore bought a ton of Bitcoins, which drove the prices higher? How does FinCen translate into higher prices?

The announcement signals that the US Treasury Dept., and thereby the US Government, recognizes the use of BTC for barter, and clearly proclaims it legal. While there's some exceptions for other activities—use from which an income is derived, i.e., mining or arbitrage—the announcement legitimates US BTC holders and increases certainty in BTC transacting. Whether or not it wold be easy for the US government to interfere with US BTC use is besides the point; if the FinCen had announced BTC use contravened criminal statutes with stiff penalties, do you think the USD-BTC currency pair would have responded the same way? Generally, receiving recognition and legitimacy from a sovereign increases that asset's value; when that sovereign is home to a significant proportion to the demand of that asset, the announcement of recognition and legitimacy will affect the price for which that asset is traded, provided sufficiently liquid markets.

[AnonyMint]

They have begun deleting my questions and answers to attempt to hide the facts, such as this one that I saved a copy of:

http://www.coolpage.com/commentary/economic/shelby/mining%20-%20Any%20counter-proof%20that%20Satoshi%20Nakamoto%20did%20not%20design%20a%20ponzi%20scheme%20on%20purpose%20%20-%20Bitcoin%20Beta%20-%20Stack%20Exchange.htm

The developers of bitCON are so afraid that I have revealed the truth about bitCON's design, that stole 100+ points from my SE bitcoin reputation so that they stop me from stating the facts about the design:

http://bitcoin.stackexchange.com/users/3441/shelby-moore-iii

http://bitcoin.stackexchange.com/users/message/9?sent=1#9

This will all be part of the public record, when the criminal prosecutions begin.

[Wekkel]

Nice FUD.

Factual and technical retort?

(if you engage me in a debate on the technical design of BitCON, you will lose. Be forewarned. I welcome a debate with any BitCON developer. Bring it on!)

Actually, your tone puts me off from engaging further. I'm sure there's a lot to learn from you but it is the tone that makes the music. I clicked one of your links.

"There is a distinction between preventing excessive inflation (probably good), preventing insider control over and front-running deflation/inflation rate (probably good) and no debasement (certainly bad and unrealistic)."

If it concerns voluntary choice to hold certain currency, I could not care less. But with government money, the games is played differently. Yes, I stopped being interested after reading the -th time about deflation-Baaaad. But I like the slogan  

"Gold is a private hedge against government. BitCON is a public IPO for the supra-national corporation's global digital currency."

You made me think, and that's a good thing.

[AnonyMint]

I am contacting friends in high places now. Time to put a stop to this. You all should know that my father was a general counsel for Exxon.

Search Attorney Shelby Moore Jr. Pensacola, FL

[BitFutex]

The madness of the crowds or the new gold, either way, the price is too volatile.

[AnonyMint]

Wekkel,

FYI:

Imagine a world of slavery where the rich got richer just for collecting interest on bonds and doing nothing with their mind? That is what the delusional goldbugs would get with no debasement.

To understand money, you need to understand the economy, see How an Economy Grows and Why It Doesn’t.

Bitcoiners will rationalize that gold is a superior money because they claim that no one can debase it. This so stupid. First of all, both inflation and deflation concentrate wealth to the rich. Secondly, because of this concentration of wealth under gold to the rich, the public will never allow it! You get a world war if necessary, but the public will always demand debasement, and there is no technical way to stop it (not even Bitcoin is immune, the government can easily subvert it when they are ready). Besides Bitcoin is even more harsh deflation than gold, as gold’s supply and nominal annual increase are both increasing. Bitcoin’s is geometrically declining.

And this is the way it should be! A free-market does not mean that it is a merit to encourage non-productivity by erroneously assuming that BLIND capital can invest most efficiently in productivity. The larger the capital one has, the less knowledgeably one can allocate it. This is a fact. This is because innovation is born in the small, and no person is omniscient.

Storing past productivity and holding the future in chains with your past accomplishments, is the antithesis of prosperity.

Yes we need some savings, because this represents sacrifice and hard work, which is a merit based system.

But we also need to debase the capital over time, so that the BLIND and LAZY rich don’t have an unfair advantage to make the innovators slaves to the lack omniscience.

The philosophical paradigm of Bitcoin, is that the early adopters from first 4 years will have 50% of the money supply. That is insane and will never be allowed in a meritocracy. The free market will never allow this. Yes people should profit on their innovations, but they should not have 50% of all future production. Society will go to world war if necessary to remove those chains, but regulation and corporate-fascist takeover will probably suffice in this case (there isn’t always a distinction).

Also all you goldbugs should read this:

Does Money Have to be Backed?

One point is gold is a private vote on the economy. BitCON is a socialized vote. No debasement of the private vote is good. No debasement of society is impossible. BitCON is thus very much subject to future hyperinflation, because its design insures that to scale big it has to suffer the 51% control by corporations.

But that is not the technical reason for failure. Go back to my prior post for the technical design flaw in BitCON that makes it so.

Wekkel, you would be wise to realize my IQ is well north of 140. My IQ is focused on seeing the generative essence of any thing. I have only a moderate IQ w.r.t. to language. It is a handicap.

[Wekkel]

After reading 10 words I stopped. Its full of fallacies and, no, I wont be spelling them out because I need to spend my time better. You can consider that my loss  

The reason for prices going up is more buyers than sellers. The rest is just stories. People like stories.

Wekkel, you would be wise to realize my IQ is well north of 140.

I realise that genius and insanity are closely related. And no, I don't mean that as an insult.

[AnonyMint]

After reading 10 words I stopped. Its full of fallacies and, no, I wont be spelling them out because I need to spend my time better. You can consider that my loss  

The reason for prices going up is more buyers than sellers. The rest is just stories. People like stories.

Wekkel, you would be wise to realize my IQ is well north of 140.

I realise that genius and insanity are closely related. And no, I don't mean that as an insult.

Then it confirms you have not the IQ (or attention span or bias) to understand. So move on.

Logic fail. You read 10 words, then you can say it is "full" of. Look up the definition of "full". You would need to read the entire thing to make such a determination.

[Wekkel]

Then it confirms you have not the IQ (or attention span or bias) to understand.

There, I corrected it for you. You did indeed understand me correctly 

I'm going back to my other life. There is Bitcoin crashing to watch. I suggest you join as well: https://bitcointalk.org/index.php?topic=85687.16660;topicseen

[AnonyMint]

I probably I crashed it.

The smart people realize I am correct, and are dumping while they still can.

I try to warn the insiders before I go wider scale with spreading the truth. Now I am making phone calls to people who have the ability to get my message out to two orders-of-magnitude more people. Let's see if they will do.

[Wekkel]

Please make it $1 for 1 BTC 

[AnonyMint]

I just got permission to send an email to former first Asst to Sec of Treasury at HUD dept.. The person has to power to spread this out.

I have numerous contacts like this.

I can't promise the contacts will act on the information.

[BigJohn]

Please do.

You know what they say? There's no such thing as bad publicity. The best thing that could happen to Bitcoin right now is for Obama or Bernanke or something to publicly speak of it. Either condoning it or condemning it, doesn't matter, it's all good news to the community.

[AnonyMint]

Please do.

You know what they say? There's no such thing as bad publicity. The best thing that could happen to Bitcoin right now is for Obama or Bernanke or something to publicly speak of it. Either condoning it or condemning it, doesn't matter, it's all good news to the community.

Normally yes. But if the goldbug community goes against you, you are in trouble. And my contacts are in this industry.

Once they see that ButtCon's technical design can be nothing other than a trojan horse, the backlash on blogs could be widespread and severe.

I will encourage such terminology as ButtCon, BitCon, Ponzi Satoshi.

The butterfly effect.

[BigJohn]

Please do.

You know what they say? There's no such thing as bad publicity. The best thing that could happen to Bitcoin right now is for Obama or Bernanke or something to publicly speak of it. Either condoning it or condemning it, doesn't matter, it's all good news to the community.

Normally yes. But if the goldbug community goes against you, you are in trouble. And my contacts are in this industry.

Once they see that ButtCon is a trojan horse, the backlash on blogs could be widespread and severe.

The butterfly effect.

You're assuming that what I want to see is a higher Bitcoin price. You would be mistaken. More users is what the community needs, and any kind of publicity, good or bad, is great for that.

So please do e-mail whoever you can in a position of power.

[AnonyMint]

Indeed, that is the level-headed attitude I like. Thanks.

And more searching for alternatives to BitCon that are not a trojan horse.

[yefi]

I am contacting friends in high places now. Time to put a stop to this. You all should know that my father was a general counsel for Exxon.

Search Attorney Shelby Moore Jr. Pensacola, FL

This is his office?

[AnonyMint]

He is semi-retired at 70. I am 48.

That is only one of his many homes. We were born in New Orleans, so they like the old french/cajun style shotgun wood homes for nostalgia.

Frankly I hate that house. Insufficient windows. I prefer the open style.

He was West Coast Division Head attorney for Exxon. Here is evidence of him living there:

https://bulk.resource.org/courts.gov/c/F2/915/915.F2d.1301.89-55668.89-55666.89-55510.89-55377.html

Cited by:

http://scholar.google.com/scholar?hl=en&lr=&cites=16132442940821086919&um=1&ie=UTF-8&sa=X&ei=6MRUUZG0Jsj-rAef84HADg&ved=0CGsQzgIwCA

Proof that Exxon office was in Thousand Oaks, CA at the time:

http://articles.latimes.com/1993-04-06/local/me-19698_1_thousand-oaks

[AnonyMint]

I gotta go. Bye.

[AnonyMint]

Article will go out to 60,000 silver investors stating that "any one can make a copy of Bitcoin, thus it is nonsense to say there isn't debasement of P2P currency units".

Supply of P2P currency units is UNLIMITED, especially as someone make a way to trade between them, then they are fungible in terms of merchants who accept one or the other.

[BigJohn]

The article could say that. The article would be lying though. Not simply wrong mind you, straight up lying. Since you've asked and were given the answer already that in fact nobody can make a copy of a Bitcoin. That it gets debased at a linear and dropping manner, instead of an exponential manner as fiat does. And that you can't trade in anything close to a 1:1 ratio between the different cryptocurrencies.

If you want to be honest, you'd have to mention all these facts.

[AnonyMint]

Fungibility between Bitcoin and competitors can maybe be provided by a real-time exchange at the time of spend.

It is still required to have confidence in the quality of the competitor's P2P database.

I don't agree this is the strongest point. But that writer likes it. I am urging him to hit the other points also.

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.

[AnonyMint]

This is verbose. I did not take time to refine it.

Some more thoughts in this video:

http://www.youtube.com/watch?v=0UKC7iaBKvs

I like the point that "Ponzi" Sotashi (the anonymous creator) disappeared when the developers started to pressure him on his identity.

Our talking points:

1. SATOSHI:

I don't know if you like the conspiracy angle, but it doesn't make any sense that someone can work on something alone for 3 years, then pop up and be such an expert on cryptography, no one in the industry knows him, no family or friends know of him and his work, then disappear without a trace. Normal people talk to other people over a period of years. This indicates it must be CIA or military industrial complex like agent. In one of the cryptography examples that Sotashi gave on the mailing list where he first discussed his invention with James A. Donald (a person I know), he used a military example.

The design Satoshi chose (as described below) is not a random choice. It was clearly design to fail in a very specific way that gives power to the government, even there are other designs that won't fail.


2. BITCON's DEBASEMENT IS NOT AT ALL THE SAME AS GOLD:

Bitcoin fanboys claim that Bitcoin is like gold because the debasement is halving every 4 years, to stop at 21 million coins with a couple of decades (75% in first 8 years, 87.5% in first 12 years). This provided 50% of the total money supply to the insiders who mined in the first 4 years.

But this is nothing like gold, which was debased over millenia, and still has an increasing supply forever (we can mine gold in future in outer space), and the nominal increase every year it itself increasing. Gold is much more fair to mankind because the very rich can't enslave us with a money supply that never depletes. Slowly depleting money supply is important, so that lazy capitalists can't concentrate their percentage of money supply with interest bearing bonds. Innovation comes from new production, and in the small. Large capital can't see all those small innovations and can't finance innovation with guaranteed interest. Investmet at risk is required to finance innovation, not usury. A money supply which did not debase at all, is slavery to the usurists.

What is bad about debasement, is uncontrolled debasement or especially debasbement that is decided by one group. Gold is meritocracy because the debasement can't be altered easily by any one group, and new gold is added to keep capital from becoming lazy and sit in usury bonds.


3. BITCON's INFLATION IS IN THEORY UNLIMITED (but are they fungible?):

P2P currency units can be created by anyone who creates a competitor. If an exchange is created between different P2P currencies, then if a merchant accepts Bitcoin, then it also accepts the currencies that can be exchanged to it. Exchanges could operate in real-time in theory because these are digital, so "Clickout Shopping Chart" in Bitcoin could in theory be paid with any P2P units.

I liked this point a lot. Currently Litecoin is only worth pennies per coin even though there are much less Litecoins mined than Bitcoin.

Perhaps they are not yet fungible, because people a) don't see this real time exchange capability, b) they don't yet trust that Litecoin is a stable system.

Fungibility between Bitcoin and competitors can maybe be provided by a real-time exchange at the time of spend.

It is still required to have confidence in the quality of the competitor's P2P database.

I don't agree this is the strongest point. I am urging to hit the other points also.

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.


4. ANONYMITY IS OVERRATED:

Yes each sending and receiving address doesn't have a name. But FinCIN ruled March 13, 2013 that to cash in/out to any other currency makes the person a money transmitter and falls under their regulation and reporting requirements.

The P2P (peer-to-peer) database has one copy and is viewable by everyone. The govt tracks what we do with various methods such as cookies,
man-in-the-middle routers, our facebook and google accounts (they have to provide the info if govt asks for it), etc.. Thus they can figure out the identity of the transactions if they really want to.

Gold is a private hedge against government. You can trade it without any public record viewable by everyone on the internet.


5. MONOPOLY ON PROCESSING (666):

Digital kill switch.

I want you to get the technical description correct. So I will write the following paragraph carefully.

Bitcoin transactions are processed by the peer computers who contribute their processing power to computing a hash puzzle, in exchange for a reward which is the debasement that occurs with each transaction block. Without this processing by the peers, then no transactions can occur and the Bitcoins would be worthless. These peers compete to solve the puzzle (on each 10 minute block of transactions), and this mathematically insures that there can't be a double-spend in the one distributed copy of the database (sounds like magic but it isn't). If an attacker had 51% of the processing power, he could corrupt this database, refuse to do certain transactions, or even change the protocol to do hyperinflation or what desired. Normally it is not likely for an attacker to get 51% because the whole world is motivated to contribute processing power in exchange for that debasement reward. But this reward is halving every 4 years and will eventually be 0. So who will process the transactions then? The developers of Bitcoin claim that a) some retailers such as Walmart will have an incentive to offer processing for free in exchange for prioritizing their own transactions, and b) that a market-based transaction fee can
compensate other peers.

That is a logic fail. If the corporations can give away processing for free, then there is no market for a transaction fee. Users will not route their transactions to the peers that charge, if the corporations are offering to process the transactions for free.  (Also the market-based transaction fee wouldn't scale any way for numerous reasons... ask me if you need to know... but you don't really need to know because the other point trumps this one any way).

So therefor Bitcoin is designed to hand over processing of digital payments to corporate-fascism.

Although some might think we can't create a competitor later (in which the no debasement is a lie), I actually think that once the bitcoin is #1 and widely adopted, it will be impossible to compete to create a new P2P currency. The reason is because the primary need will be fulfilled and it would be impossible to get the momentum to build from small again. Remember money is a social institution, so you need economy-of-scale. Right now, everyone is very excited because there is no such P2P currency in widespread adoption. Once there is, most people won't want to try an upstart small currency. And I think probably they are not fungible, but you can present both arguments.


6. WASTEFUL and THUS NOT PROFITABLE FOR PROCESSORS

Bitcoin's Proof-of-Work algorithm for preventing double-spend requires all the peers to be continually processing thus burning electricity (the main cost) and expensive specialized hardware such as GPUs, FPAs, and ASICs.

Thus the mining is less profitable and the Bitcoin difficulty scales to the total mining power in the system. This keep the reward for mining nearly equal to the cost of mining on a system-wide basis. The only way to profit is the have a more efficient hardware (or lower electric cost) than the other peers. Thus there is really not net profit being generated system wide-- zero-sum game.  Many miners don't realize this yet and have doubled-down on huge hardware investments and long payoff terms (but Moore's Law means the new miners double in speed every 18 months).

Thus the miners really are not profitable. Thus this is going to fall right into the lap of the corporate-fascism to keep the processing going.

Whereas, I designed a Proof-of-Work which uses hard-disk space and the peers are only doing something when they are selected round-robin. Thus mining can be much more profitable and the more important thing is everybody already has a hard-disk to contribute and don't need to buy esoteric specialized hardware.

So my point is that Bitcoin is designed to making the processing by peers fail and fall into the lap of corporate-fascism. There is a way to fix this technically, but Bitcoin refuses to make these changes. I talked with the developers for a period of days, then they banned me when they realized I had figured out their scam system.

[AnonyMint]

fungibility point is a bit weak

I may be sending you a better document after a few hours. I'm worried that if you get some technical details wrong, they will accuse you of lying.

I will try to condense and not use technical language.

On the issue of fungibility between competing P2P currencies, I think you need to be careful about this point. It is not clear that they will be fungible.

The stronger point is that they are not fungible, and that the first mover advantage will go to BitCON! And thus it will monopolize processing for the corporate-fascism and then they have the digital kill switch on each person.

Now the fanboys will say that you can just create a new address at any time. This is myopic, because as soon as the corporates have 51% of the processing power (by giving it away for free), then they can change the protocol and work with the government regulators to require everyone to be registered with global id per person.

[AnonyMint]

Fungibility between Bitcoin and competitors can maybe be provided by a real-time exchange at the time of spend.

It is still required to have confidence in the quality of the competitor's P2P database.

I don't agree this is the strongest point. But that writer likes it. I am urging him to hit the other points also.

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.

I will try to get all the facts and possibilities mentioned, but I can't completely eliminate the communication barrier between a programmer (myself) and non-technical person. Some understanding will be lost in the process.

I am composing something better now. I have to rush because that writer wants to publish immediately. I'm sleepless, my prose is suffering.

[BigJohn]

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.

No, that's BS.

The argument is that Bitcoin is inflation-proof once the 21 million were mined. You're claiming that this is not true. You're wrong, and here's why.

Your point is that while it's true that there will only ever be 21 million Bitcoins, that number can be extended with additional currencies like Litecoin. The problem with that is for that logic to make sense, each Litecoin would have be worth exactly 1 Bitcoin. If a Litecoin is worth say 0.5 of a Bitcoin, then what's the point? You could just use 0.5 of a Bitcoin. The existence of Litecoin doesn't extend the amount of Bitcoins out there any more so than the existence of Silver extends the amount of Gold out there. One of the uses for Silver is to use it as a smaller denomination because 1 unit of Gold is worth so much. That's not a problem with Bitcoin, as it can be divided to eight decimal places. Good luck trying to get 0.00000001 ounces of physical Gold. If Silver was worth exactly the same as Gold, then it could be said that for the purpose of currency-backing, Silver is as good as Gold, therefore we have more to work with. But it's not. And Bitcoin isn't either.

The rhetorical question here is, if people wanted to extend Bitcoin, then why start a whole new currency instead of just using a smaller value of Bitcoin? It's trivial to send 0.00000001BTC just as much as it is to send 1BTC.

[Bitzing]

Is this crazy?

What if satoshi created this knowing the difficulty would go up and just make a killing of the software to mine it.
Remember the real money in the gold rush was sell equipment. If there were no pick axes there was no gold.

[AnonyMint]

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.

No, that's BS.

The argument is that Bitcoin is inflation-proof once the 21 million were mined. You're claiming that this is not true. You're wrong, and here's why.

Your point is that while it's true that there will only ever be 21 million Bitcoins, that number can be extended with additional currencies like Litecoin. The problem with that is for that logic to make sense, each Litecoin would have be worth exactly 1 Bitcoin. If a Litecoin is worth say 0.5 of a Bitcoin, then what's the point? You could just use 0.5 of a Bitcoin. The existence of Litecoin doesn't extend the amount of Bitcoins out there any more so than the existence of Silver extends the amount of Gold out there. One of the uses for Silver is to use it as a smaller denomination because 1 unit of Gold is worth so much. That's not a problem with Bitcoin, as it can be divided to eight decimal places. Good luck trying to get 0.00000001 ounces of physical Gold. If Silver was worth exactly the same as Gold, then it could be said that for the purpose of currency-backing, Silver is as good as Gold, therefore we have more to work with. But it's not. And Bitcoin isn't either.

The rhetorical question here is, if people wanted to extend Bitcoin, then why start a whole new currency instead of just using a smaller value of Bitcoin? It's trivial to send 0.00000001BTC just as much as it is to send 1BTC.

1. This was not my point. The writer mentioned it and as sleepless as I am at the moment, I agreed in a rush that it might be a possibility.

2. Actually gold and silver do extend the money supply of each other, but they are not exactly fungible because they have different qualities. In terms of valuation, silver is more volatile. In terms of physical properties, they are different and have different applications. Thus they have different  pricing. But do not think that their prices are not related. If either gets too overvalued w.r.t. to the other, this is an arbitrage opportunity over the long-term. C.f. the gold/silver ratio and the Bimetallic standard. These were important concepts in the 1800s. Many elections were found over them.

3. The key reason why they won't be fungible is because competing currencies will have different properties and their valuations will have different dynamics. However, I think it is wrong to assert that more competitors does not increase the supply of digital coins. Sorry I think the writer is correct, but he must be careful to point out they are not perfectly fungible.

[AnonyMint]

I missed the main point. Gresham's Law.

Bad money drives good money out of circulation.

So Bitcoin will end up being more hoarded than a P2P competing currency that has more debasement. Which will be better for that competitor, because lack of velocity is the problem in Bitcoin. Too much hoarding as store-of-value, not enough using as a unit-of-exchange.

1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.

No, that's BS.

The argument is that Bitcoin is inflation-proof once the 21 million were mined. You're claiming that this is not true. You're wrong, and here's why.

Your point is that while it's true that there will only ever be 21 million Bitcoins, that number can be extended with additional currencies like Litecoin. The problem with that is for that logic to make sense, each Litecoin would have be worth exactly 1 Bitcoin. If a Litecoin is worth say 0.5 of a Bitcoin, then what's the point? You could just use 0.5 of a Bitcoin. The existence of Litecoin doesn't extend the amount of Bitcoins out there any more so than the existence of Silver extends the amount of Gold out there. One of the uses for Silver is to use it as a smaller denomination because 1 unit of Gold is worth so much. That's not a problem with Bitcoin, as it can be divided to eight decimal places. Good luck trying to get 0.00000001 ounces of physical Gold. If Silver was worth exactly the same as Gold, then it could be said that for the purpose of currency-backing, Silver is as good as Gold, therefore we have more to work with. But it's not. And Bitcoin isn't either.

The rhetorical question here is, if people wanted to extend Bitcoin, then why start a whole new currency instead of just using a smaller value of Bitcoin? It's trivial to send 0.00000001BTC just as much as it is to send 1BTC.

1. This was not my point. The writer mentioned it and as sleepless as I am at the moment, I agreed in a rush that it might be a possibility.

2. Actually gold and silver do extend the money supply of each other, but they are not exactly fungible because they have different qualities. In terms of valuation, silver is more volatile. In terms of physical properties, they are different and have different applications. Thus they have different  pricing. But do not think that their prices are not related. If either gets too overvalued w.r.t. to the other, this is an arbitrage opportunity over the long-term. C.f. the gold/silver ratio and the Bimetallic standard. These were important concepts in the 1800s. Many elections were found over them.

3. The key reason why they won't be fungible is because competing currencies will have different properties and their valuations will have different dynamics. However, I think it is wrong to assert that more competitors does not increase the supply of digital coins. Sorry I think the writer is correct, but he must be careful to point out they are not perfectly fungible.

[BigJohn]

3. The key reason why they won't be fungible is because competing currencies will have different properties and their valuations will have different dynamics. However, I think it is wrong to assert that more competitors does not increase the supply of digital coins. Sorry I think the writer is correct, but he must be careful to point out they are not perfectly fungible.

Hey listen, I respect any kind of critical thinking on any subject, especially one such as this. But you can't just say "I think it is wrong..." without explaining why it's wrong and expect to be taken seriously.

The fact is that there are very few things you can pay for directly with gold and silver. One of the reasons is divisibility, but mostly because the state makes it very difficult to actually use gold and silver in that way. Someone could charge you 1oz of gold and 10oz of silver for something, like say 1g10s would be the price. But with Bitcoin that's simply not needed. You could just charge someone 1.281249BTC for something. So why on earth would any merchant charge 1BTC200LTC for something? To accept both Bitcoin and Litecoin for something you could easily denominate with just 1 currency is crazy. Also to exchange between one and the other will incur a price. So if say 1BTC is worth 1,000LTC in the future, if you wanted to actually trade 1BTC you'd get 900LTC. The rest is the merchant fee. Why lose that money when you could just sell something for 0.05BTC to begin with?

Your entire premise doesn't make sense.

Another thing is that the Bitcoin 21million cap could simply be removed if enough people wanted that. So why even bother with a new currency? Just move the cap on Bitcoin if it ever comes to that (and I hope it won't)

[AnonyMint]

3. The key reason why they won't be fungible is because competing currencies will have different properties and their valuations will have different dynamics. However, I think it is wrong to assert that more competitors does not increase the supply of digital coins. Sorry I think the writer is correct, but he must be careful to point out they are not perfectly fungible.

Hey listen, I respect any kind of critical thinking on any subject, especially one such as this. But you can't just say "I think it is wrong..." without explaining why it's wrong and expect to be taken seriously.

The fact is that there are very few things you can pay for directly with gold and silver. One of the reasons is divisibility, but mostly because the state makes it very difficult to actually use gold and silver in that way. Someone could charge you 1oz of gold and 10oz of silver for something, like say 1g10s would be the price. But with Bitcoin that's simply not needed. You could just charge someone 1.281249BTC for something. So why on earth would any merchant charge 1BTC200LTC for something? To accept both Bitcoin and Litecoin for something you could easily denominate with just 1 currency is crazy. Also to exchange between one and the other will incur a price. So if say 1BTC is worth 1,000LTC in the future, if you wanted to actually trade 1BTC you'd get 900LTC. The rest is the merchant fee. Why lose that money when you could just sell something for 0.05BTC to begin with?

Your entire premise doesn't make sense.

Another thing is that the Bitcoin 21million cap could simply be removed if enough people wanted that. So why even bother with a new currency? Just move the cap on Bitcoin if it ever comes to that (and I hope it won't)

You are missing a point. There is only a finite demand for P2P currency. That demand has to be spread between P2P currency units that are issued. The spreadout won't be uniform (e.g. Bitcoins are $90 and Litecoins are $0.65 at the moment), but there is a conjecture that the competitors will become better and gain more market share.

So if I create a better Bitcoin and I debase mine more than Bitcoin does, Bitcoin will suffer a debasement of the market. But remember what I wrote below too...


I sort of superseded those comments with the following. Did you miss my post above?

I missed the main point. Gresham's Law.

Bad money drives good money out of circulation.

So Bitcoin will end up being more hoarded than a P2P competing currency that has more debasement. Which will be better for that competitor, because lack of velocity is the problem in Bitcoin. Too much hoarding as store-of-value, not enough using as a unit-of-exchange.

[BigJohn]

There is only a finite demand for P2P currency. That demand has to be spread between P2P currency units that are issued. The spreadout won't be uniform (e.g. Bitcoins are $90 and Litecoins are $0.65 at the moment), but there is a conjecture that the competitors will become better and gain more market share.

Why? Who says the competitors will be better? You're defeating your own point.

You're saying it's possible to extend Bitcoin by making nearly-identical alternatives, thereby bypassing Bitcoin's 21million limit, and in the same breath you're saying that the new currency will be different and better and gain marketshare on its own, which means it's not Bitcoin.

So if I create a better Bitcoin and I debase mine more than Bitcoin does, Bitcoin will suffer a debasement of the market.

See, that's an oxymoron. Either the new currency is identical to Bitcoin, which means it's extending the money-base and creating inflation, or it's unique enough to be "a better Bitcoin", which means it's not Bitcoin and cannot extend the Bitcoin money-base.

You're countering yourself.

Which by the way I actually agree with you. I think some new and completely not-Satoshi based digital currency will come up that will be better than Bitcoin. But that has nothing to do with any of this, or the viability of Bitcoin itself in the short term until that moment comes.

[AnonyMint]

There is only a finite demand for P2P currency. That demand has to be spread between P2P currency units that are issued. The spreadout won't be uniform (e.g. Bitcoins are $90 and Litecoins are $0.65 at the moment), but there is a conjecture that the competitors will become better and gain more market share.

Why? Who says the competitors will be better? You're defeating your own point.

You're saying it's possible to extend Bitcoin by making nearly-identical alternatives, thereby bypassing Bitcoin's 21million limit, and in the same breath you're saying that the new currency will be different and better and gain marketshare on its own, which means it's not Bitcoin.

It is possible that there are people who would otherwise buy Bitcoin, who would prefer some features in another system more.

You are actually missing the KEY POINT, which is barrier to entry. Replacement goods have low barriers to entry.

If there is an exchange rate from currency A to currency B, then the barrier to entry is nearly zero. Merchants will accept as many currencies as they can.

That is why I say real-time market exchange at POS is a crucial factor. Surely some aspiring entreprenuer will provide it, if not already.

People should be dumping Bitcoins and buying Litecoins like mad right now. Those who do are going to make a big arbitrage when the rest of the herd catches up to this reality.

But the competitors can't all be the same. You are correct someone won't go buy Litecoin if it is just an exact copy of Bitcoin.

So each competitor has to have a few compelling features. I don't know how many such features are possible. The market will tell us.

So I am saying that not everybody buying Bitcoin now or in future, is getting exactly what they want from Bitcoin. Competition will come (I hope).

So if I create a better Bitcoin and I debase mine more than Bitcoin does, Bitcoin will suffer a debasement of the market.

See, that's an oxymoron. Either the new currency is identical to Bitcoin, which means it's extending the money-base and creating inflation, or it's unique enough to be "a better Bitcoin", which means it's not Bitcoin and cannot extend the Bitcoin money-base.

Study "replacement good" in economics.

[BigJohn]

lol but I'm agreeing with you. I'm saying that in the future there will be a new currency that will either replace Bitcoin (and its derivatives), or supplement it significantly. But the fact is that right now in the present, such a currency doesn't exist. So you telling people that Bitcoin is a scam because in the future something else will replace it is pure nonsense. When that future comes, then you will have a point. Until then Bitcoin remains useful.

[AnonyMint]

lol but I'm agreeing with you. I'm saying that in the future there will be a new currency that will either replace Bitcoin (and its derivatives), or supplement it significantly. But the fact is that right now in the present, such a currency doesn't exist. So you telling people that Bitcoin is a scam because in the future something else will replace it is pure nonsense. When that future comes, then you will have a point. Until then Bitcoin remains useful.

I am not saying that Bitcoin is a scam for that reason. Read the next post please.

[AnonyMint]

Bitcoin: The Digital Kill Switch

https://bitcointalk.org/index.php?topic=160612.0

[MikeH]

the current rules aren't set in stone, there may very well be a minimum transaction fee or other such things you are concerned with in the future.

[AnonyMint]

the current rules aren't set in stone, there may very well be a minimum transaction fee or other such things you are concerned with in the future.

I believe it to be impossible to force in any protocol that can be imagined.

If a corporation wants to provide free tx fees, even if the protocol attempts to enforce it, they can just refund the money back in another transaction.

So users will route their transactions to those corporations.

I believe the only possible way is forced debasement and NO tx fees.  

You must remove the user's incentive for a Tragedy of the Commons.


P.S. this is why I suspect Satoshi had evil intentions. He made a big deal about lying and saying Bitcoin's money supply was modeled on gold.

[GCInc.]

I talked with the developers for a period of days, then they banned me when they realized I had figured out their scam system

Do you mean locking your thread or banned how?

He made a big deal about lying and saying Bitcoin's money supply was modeled on gold.

Maybe he just didn't notice or account for the possibility to mine gold on other planets than earth, like many other experts. Upon scrutiny I saw such omittances in his writings many times. A genius may not see every possible point of view on every area.

[AnonyMint]

I talked with the developers for a period of days, then they banned me when they realized I had figured out their scam system

Do you mean locking your thread or banned how?

He made a big deal about lying and saying Bitcoin's money supply was modeled on gold.

Maybe he just didn't notice or account for the possibility to mine gold on other planets than earth, like many other experts. Upon scrutiny I saw such omittances in his writings many times. A genius may not see every possible point of view on every area.

My SE bitcoin.stackexchange.com account is locked for 7 days, but I won't be returning there any way. I am finished talking to the developers of bitcoin, they obviously won't listen. So I have moved on to replacing Bitcoin:

Bitcoin: The Digital Kill Switch

https://bitcointalk.org/index.php?topic=160612.0

Bitcoin is diabolical, but only an expert can see it.

I will grant you that it is possible that Satoshi did not intend his design flaw, but I find it highly unlikely. But it isn't worth arguing. Let's move on to fixing the problem, then let users decide which P2P coin they want.

[GCInc.]

I will grant you that it is possible that Satoshi did not intend his design flaw, but I find it highly unlikely. But it isn't worth arguing. Let's move on to fixing the problem, then let users decide which P2P coin they want.

Yes, I read your Killswitch earlier and was about to suggest that [moving on] next