2013-06-03 CJIL: Bringing Bitcoin within the Reach of the IMF

[TraderTimm]

Bitcoin - the Central Bank and Centralized Monetary Policy bunker-buster.

The next few years will be a lot of fun indeed.

[1714757839]

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[JohannSummers]

Things I learned today:

1. The last bitcoin will be mined in 2025...(pg. 3)
2. Bitcoins are computer files...(pg. 6)

I'm on page 8, can't wait to learn more! To be fair, I'm being a bit harsh on technicalities, it's good that someone is thinking about these issues.

[BurtW]

Things I learned today:

1. The last bitcoin will be mined in 2025...(pg. 3)
2. Bitcoins are computer files...(pg. 6)

I'm on page 8, can't wait to learn more! To be fair, I'm being a bit harsh on technicalities, it's good that someone is thinking about these issues.

Where should we send all corrections and clarifications?

[JohannSummers]

I'm working on an email with a list of corrections and clarifications to him now. Up to 4 points now. I'll share the list here when I finish reading the paper to reduce duplication. Poor guy doesn't know what's about to hit him, so...be nice? nplassar@uchicago.edu

[BCB]

http://www.linkedin.com/pub/nicholas-plassaras/21/b92/82a


Nicholas Plassaras
Judicial Extern at Ninth Circuit Court of Appeals
San Francisco Bay AreaLaw Practice
Previous   
Ninth Circuit Court of Appeals, UC Irvine Mock Trial, Judicial Board of the Associated Students of UC Irvine
Education   
University of Chicago Law School


(I bet that paper was funded by a VC)

[FiatKiller]

The BRIC alliance is creating competition with the IMF, and may motivate one of them to be more friendly to digital currency, to beat the other one to the punch.

http://en.wikipedia.org/wiki/BRIC

[cypherdoc]

(I bet that paper was funded by a VC)

i doubt that.  especially since it contains some factual errors.

it's probably just another one of his term papers for law school.

[JohannSummers]

There is a third possibility for the introduction of bitcoin into the IMF's currency pool that wouldn't require as much gymnastic maneuvering from the IMF. If a nation state adopts bitcoin as its official currency(I won't speculate on the odds of that happening here) it would negate the need for defining bitcoin as a "seperate currency" as the author mentioned, or giving it "quasi-membership" as his second option was.

[JohannSummers]

BurtW, here's an excerpt of the list I sent him. I'm sure there's holes.

"1.The last bitcoin will be mined around the year 2140, not 2025 (pg. 3, 10, 25)

The date listed of the end of bitcoin production is a off by a bit. The estimated year is 2140, not 2025 as is cited(12) from this link:
 
http://www.brainstormmag.co.za/index.php%20?option=com_content&view=article&id=4329:easy-money&catid=83:trends&Itemid=124

Support for this date can be found articulated here
( http://www.thegenesisblock.com/bitcoin-101/how-are-bitcoins-created/ ),
and here
 http://bitcoinmagazine.com/block-reward-halving-a-guide/ )

2. Bitcoins are not exactly computer files. (pg 6)

A bitcoin is a value associated with a bitcoin address. The following link may help..
http://blockchain.info/address/1Bd5wrFxHYRkk4UCFttcPNMYzqJnQKfXUE

3. The block reward is now 25 bitcoins, halved from the original 50.(pg

See links from #1

4."traditional, paper based fiat currencies" aren't exactly paper based anymore (pg. 9) and the USD is for all practical purposes an "electronic currency"(pg. 11)

http://money.howstuffworks.com/how-much-money-is-in-the-world.htm

5. The bitcoin exchange rate did not fall to $0.01

Item 2
http://bitcoinmagazine.com/common-misconceptions-about-bitcoin-a-guide-for-journalists/"

http://www.relativelyinteresting.com/wp-content/uploads/2012/07/evidence-based-change-after-peer-review-protestor.jpg

[xcsler]

If they want to corner Litecoins too that would be great, and VaginaCoin and then the immense number  of new coins that will be produced once people realize that the banksters will buy them all.  

I think they still do not fully appreciate how disruptive this could really be.

This ... BitCoin is not a single company, there is no "The Bitcoin Company" running the bitcoin servers, or even a single decentralised network. It is open source for creating monies ad infinitum, i.e. armageddon for anybody still harbouring illusions of monopoly power over monetary issuance.

stop with the "they don't realize, they don't understand" bullshit.

They do.

We have a battle on our hands.

I agree Doc. These bankers aren't morons. They know exactly what they are doing it's just that their motivations are counter to those of Bitcoiners. Having said that, if I were them I would be looking to add BTC to the IMF sooner rather than later at potentially much higher prices. Perhaps they already have some.

[n8rwJeTt8TrrLKPa55eU]

If they want to corner Litecoins too that would be great, and VaginaCoin and then the immense number  of new coins that will be produced once people realize that the banksters will buy them all.  

I think they still do not fully appreciate how disruptive this could really be.

This ... BitCoin is not a single company, there is no "The Bitcoin Company" running the bitcoin servers, or even a single decentralised network. It is open source for creating monies ad infinitum, i.e. armageddon for anybody still harbouring illusions of monopoly power over monetary issuance.

stop with the "they don't realize, they don't understand" bullshit.

They do.

We have a battle on our hands.

I agree Doc. These bankers aren't morons. They know exactly what they are doing it's just that their motivations are counter to those of Bitcoiners. Having said that, if I were them I would be looking to add BTC to the IMF sooner rather than later at potentially much higher prices. Perhaps they already have some.

Insider information about explicit Bitcoin monetization by the IMF (or any sovereign state) would be the trade of the century.

We have seen many times in the past few years how key information routinely gets leaked out by officials and bureaucrats to privileged banking cronies.

Remember, Bitcoin is the ultimate insider trading vehicle, as it's entirely unregulated in that regard.  If you're a bankster with friends at the IMF and get some hint of impending action, nothing restrains you from telling all your friends and family after you've loaded up yourself.  There is no SEC coming after any of you, especially if you take extra precautions and buy via OTC channels.

So if someday you start seeing the price shooting up inexplicably, day after day, on no fundamental news or media coverage, remember this article.

If there's easy billions to be made by pushing certain ideas to alumni from your company who now work as heads of central banks and treasury departments...don't be surprised to see the investment banking universe put their weight behind that kind of trade.

[cypherdoc]

If they want to corner Litecoins too that would be great, and VaginaCoin and then the immense number  of new coins that will be produced once people realize that the banksters will buy them all.  

I think they still do not fully appreciate how disruptive this could really be.

This ... BitCoin is not a single company, there is no "The Bitcoin Company" running the bitcoin servers, or even a single decentralised network. It is open source for creating monies ad infinitum, i.e. armageddon for anybody still harbouring illusions of monopoly power over monetary issuance.

stop with the "they don't realize, they don't understand" bullshit.

They do.

We have a battle on our hands.

I agree Doc. These bankers aren't morons. They know exactly what they are doing it's just that their motivations are counter to those of Bitcoiners. Having said that, if I were them I would be looking to add BTC to the IMF sooner rather than later at potentially much higher prices. Perhaps they already have some.

Insider information about explicit Bitcoin monetization by the IMF (or any sovereign state) would be the trade of the century.

We have seen many times in the past few years how key information routinely gets leaked out by officials and bureaucrats to privileged banking cronies.

Remember, Bitcoin is the ultimate insider trading vehicle, as it's entirely unregulated in that regard.  If you're a bankster with friends at the IMF and get some hint of impending action, nothing restrains you from telling all your friends and family after you've loaded up yourself.  There is no SEC coming after any of you, especially if you take extra precautions and buy via OTC channels.

So if someday you start seeing the price shooting up inexplicably, day after day, on no fundamental news or media coverage, remember this article.

If there's easy billions to be made by pushing certain ideas to alumni from your company who now work as heads of central banks and treasury departments...don't be surprised to see the investment banking universe put their weight behind that kind of trade.

you know, one of my key theses as to calling the top in the gold market back in Sept 2011 was that the parabola going into that top was "big enough".  whereas, all the gold bugs were calling for a parabola equivalent to the spike of 1980, i believed it couldn't get that large or disorderly b/c of the Internet.  

back then, information was very asymmetric.  pit traders had much more insider information than typical outsider retail investors who were always playing catch up to the big boys.  thus, insiders had much more time and a head start to accumulate, manipulate, and push markets higher followed by waves of uninformed retail investors who pushed that spike into it's peak.  also, we were still so close to the 1971 closing of the gold window that memories were still fresh and paranoid.

today, that can't happen.  Internet communication makes info much more symmetric and even insider info lasts a much shorter amount of time.  and then there was this thing called Bitcoin.

wouldn't it be ironic if Bitcoin goes into one of those 1980 parabolic spikes instead?  not b/c of information asymmetry but b/c of true disruptive, revolutionary potential?

like evoorhees says, it's either going to be a zero or worth hundreds of thousands.  we're much closer to zero right now yet holding well over $100 which is an awesome signal.  to get to $100,000 sometime over the next 6 yrs we need to get going at some point along here.  i believe that is the right timeframe as Falkvinge has outlined; 10 yrs from time zero or 2009.

i think it will be a rocket shot initiated by the banking community getting in.

[the joint]

No, they can't achieve control that way.

1. It's not possible to accumulate a significant proportion of the current supply without pushing the price up commensurately. And as is pointed out in the OP, the legitimacy is also pushed up. Incentive to sell back to fiat is further lessened.

Yes, it absolutely is possible.  In fact, it's possible to accumulate a significant proportion of the current supply while pushing the price down in the process.

[n8rwJeTt8TrrLKPa55eU]

wouldn't it be ironic if Bitcoin goes into one of those 1980 parabolic spikes instead?  not b/c of information asymmetry but b/c of true disruptive, revolutionary potential?

like evoorhees says, it's either going to be a zero or worth hundreds of thousands.  we're much closer to zero right now yet holding well over $100 which is an awesome signal.  to get to $100,000 sometime over the next 6 yrs we need to get going at some point along here.  i believe that is the right timeframe as Falkvinge has outlined; 10 yrs from time zero or 2009.

i think it will be a rocket shot initiated by the banking community getting in.

As we gleaned from the conference, the current price lull is temporary...in 6 months there will be another raft of positive news from all the projects that are have been started.  Many of which attempt to address Bitcoin's infrastructure problems.

Never in history have we seen a commodity going from being worthless, to having a realistic chance of becoming worldwide circulated as money, in an era of instant information flow.  Bitcoin has already proven to be unprecedented in terms of ambition and speed versus all other assets and charts that have ever existed.  It might be one of the few times when the word "new paradigm" is actually justified, except unlike TV, Internet, and other past authentic disruptions, the paradigm itself can be directly bought and sold and invested in!  Yet another unique trait.  Some have called it an economic singularity...for lack of a better word I thought Konrad Graf had a really good insight in calling the Bitcoin event a "hypermonetization".  If it succeeds, it'll write a new chapter in economics textbooks.

http://konradsgraf.com/blog1/2013/4/6/hyper-monetization-questioning-the-bitcoin-bubble-bubble.html

[cypherdoc]

wouldn't it be ironic if Bitcoin goes into one of those 1980 parabolic spikes instead?  not b/c of information asymmetry but b/c of true disruptive, revolutionary potential?

like evoorhees says, it's either going to be a zero or worth hundreds of thousands.  we're much closer to zero right now yet holding well over $100 which is an awesome signal.  to get to $100,000 sometime over the next 6 yrs we need to get going at some point along here.  i believe that is the right timeframe as Falkvinge has outlined; 10 yrs from time zero or 2009.

i think it will be a rocket shot initiated by the banking community getting in.

As we gleaned from the conference, the current price lull is temporary...in 6 months there will be another raft of positive news from all the projects that are have been started.  Many of which attempt to address Bitcoin's infrastructure problems.

Never in history have we seen a commodity going from being worthless, to having a realistic chance of becoming worldwide circulated as money, in an era of instant information flow.  Bitcoin has already proven to be unprecedented in terms of ambition and speed versus all other assets and charts that have ever existed.  It might be one of the few times when the word "new paradigm" is actually justified, except unlike TV, Internet, and other past authentic disruptions, the paradigm itself can be directly bought and sold and invested in!  Yet another unique trait.  Some have called it an economic singularity...for lack of a better word I thought Konrad Graf had a really good insight in calling the Bitcoin event a "hypermonetization".  If it succeeds, it'll write a new chapter in economics textbooks.

http://konradsgraf.com/blog1/2013/4/6/hyper-monetization-questioning-the-bitcoin-bubble-bubble.html

that was a well written and well thought out article.  thanks for that one.  it would behoove many to think carefully about what he is saying.

the point about Bitcoin rising from zero is an important one.  this fact alone should silence all accusations of ponzi, scam, bubble, toy, niche, etc.  Bitcoin has "proven" itself over 4.5 years as the best performing asset in the world bar none.

it certainly does have the potential to redefine financial markets.

[oakpacific]

If they want to corner Litecoins too that would be great, and VaginaCoin and then the immense number  of new coins that will be produced once people realize that the banksters will buy them all.  

I think they still do not fully appreciate how disruptive this could really be.

This ... BitCoin is not a single company, there is no "The Bitcoin Company" running the bitcoin servers, or even a single decentralised network. It is open source for creating monies ad infinitum, i.e. armageddon for anybody still harbouring illusions of monopoly power over monetary issuance.

stop with the "they don't realize, they don't understand" bullshit.

They do.

We have a battle on our hands.

I agree Doc. These bankers aren't morons. They know exactly what they are doing it's just that their motivations are counter to those of Bitcoiners. Having said that, if I were them I would be looking to add BTC to the IMF sooner rather than later at potentially much higher prices. Perhaps they already have some.

Insider information about explicit Bitcoin monetization by the IMF (or any sovereign state) would be the trade of the century.

We have seen many times in the past few years how key information routinely gets leaked out by officials and bureaucrats to privileged banking cronies.

Remember, Bitcoin is the ultimate insider trading vehicle, as it's entirely unregulated in that regard.  If you're a bankster with friends at the IMF and get some hint of impending action, nothing restrains you from telling all your friends and family after you've loaded up yourself.  There is no SEC coming after any of you, especially if you take extra precautions and buy via OTC channels.

So if someday you start seeing the price shooting up inexplicably, day after day, on no fundamental news or media coverage, remember this article.

If there's easy billions to be made by pushing certain ideas to alumni from your company who now work as heads of central banks and treasury departments...don't be surprised to see the investment banking universe put their weight behind that kind of trade.

You can't be serious. We will have some information because we'll see some significant improvements on the infrastructure. I don't believe tens of billions of dollars will flow into Gox to buy bitcoins, at least not in its current incarnation.

[n8rwJeTt8TrrLKPa55eU]

You can't be serious. We will have some information because we'll see some significant improvements on the infrastructure. I don't believe tens of billions of dollars will flow into Gox to buy bitcoins, at least not in its current incarnation.

Agreed.  Note, I didn't specifiy a timeframe, just "someday".  And qualified that with an "if".

But the mere fact that someone with decent credentials has written a first paper outlining a reserve currency roadmap is, by definition, one step further in that direction than two days ago.

Remember, only six months ago, it would have been viewed as not serious to predict that BTC price would be in three digits at the present time.

[Cubic Earth]

You can't be serious. We will have some information because we'll see some significant improvements on the infrastructure. I don't believe tens of billions of dollars will flow into Gox to buy bitcoins, at least not in its current incarnation.

They wouldn't just be sending money to Gox.  That would be the fastest way to raise the price, and they would have every incentive to try to hide the fact they were accumulating BTC.  They would use a bunch of different techniques, starting with the purchase of several million dollars worth of ASIC hardware.  Next they should hit up local bitcoins and buy as many coins there as possible, no worrying about losing 20% to fraud.  That action would affect the Gox price, as some people would be using Gox to hedge and otherwise enable the trades, but that strategy would drive up the price far more slowly than buying the coins directly on Gox.  They may even dump coins on Gox and buy them back OTC.

[cypherdoc]

You can't be serious. We will have some information because we'll see some significant improvements on the infrastructure. I don't believe tens of billions of dollars will flow into Gox to buy bitcoins, at least not in its current incarnation.

They wouldn't just be sending money to Gox.  That would be the fastest way to raise the price, and they would have every incentive to try to hide the fact they were accumulating BTC.  They would use a bunch of different techniques, starting with the purchase of several million dollars worth of ASIC hardware.  Next they should hit up local bitcoins and buy as many coins there as possible, no worrying about losing 20% to fraud.  That action would affect the Gox price, as some people would be using Gox to hedge and otherwise enable the trades, but that strategy would drive up the price far more slowly than buying the coins directly on Gox.  They may even dump coins on Gox and buy them back OTC.

i can see them complying with AML/KYC.

[justusranvier]

Next they should hit up local bitcoins and buy as many coins there as possible, no worrying about losing 20% to fraud.  That action would affect the Gox price, as some people would be using Gox to hedge and otherwise enable the trades, but that strategy would drive up the price far more slowly than buying the coins directly on Gox.  They may even dump coins on Gox and buy them back OTC.

I suspect that most active BTC sellers on LocalBitcoins act as a passthrough to the exchanges. They sell above spot at a price that allows them to rebuy on the exchange to replenish what they sell for cash.