Gold collapsing. Bitcoin UP.

[justusranvier]

if all the top experts in the Bitcoin field do just that, i doubt they can be ignored.

Yes, if they all do just that.

Hopefully there's enough of them who can't be bought out.

[1714218783]

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[cypherdoc]

Bitfinex BTC shorts at 10000.  time for short squeeze:

[cypherdoc]

still have higher lows and working on a spinning top reversal today:

[iCEBREAKER]

i think it's too late for them to try that.

I think it is too late for them to be successful at this, but I'm convinced they will make the attempt.

PayPal et al. can throw a lot of resources at UX and advertising (propaganda) designed to keep people from taking physical custody.

They can also get help with this from the IRS and other government agencies. We might see a situation where anyone who takes physical custody of their coins will be subject to merciless and endless legal harassment.

"Oops, sorry my hard drive malfunctioned and the back-ups spontaneously disappeared.  Just like Louis Lerner and her 10 accomplices' did.

Then the entire computer was lost in an unfortunate boating accident."   

[cypherdoc]

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 think you might very well be right in your observation. I do however like to note two things:

1. Even if Bitcoin, is only better than gold and takes 80% of it's value, that's a hell of lot higher market value than it is today
2. It's easier to request delivery so it will at least happen more often than currently with gold. If it happens more frequently there won't necessarily be no naked short selling, but there will be less of it, limiting the manipulation of Bitcoin when compared to gold.

I'm curious whether history will repeat itself and the possession of Bitcoin will be made illegal in a developed country at a point in the future. At least it's easier to hide

the way i respond to this is that wealth and capital will efficiently seek the safest, most liquid, and best store of value asset out there.  normally, this used to be savings in gold and silver (and even cash), at least for the last few decades since we depegged.  now with the Fed's unfettered manipulation of interest rates and gold's failure to check this, wealth and capital will start seeking a better safe haven.  i think the fact that Bitcoin has diverged in an upwards direction for the last 3 yrs since gold and silver topped is yet further evidence that pm's are failing and conversely that Bitcoin is winning.  as noted earlier, gold is now also failing to hedge against the war premium.  that's very bad news for goldbugs.

there can't be 2 global safe haven currencies.  despite Bitcoin's 9 mo bear mkt, i am MORE focused on the new plunge in pm's.  it's a big clue, imo.

[cypherdoc]

i think it's too late for them to try that.

I think it is too late for them to be successful at this, but I'm convinced they will make the attempt.

PayPal et al. can throw a lot of resources at UX and advertising (propaganda) designed to keep people from taking physical custody.

They can also get help with this from the IRS and other government agencies. We might see a situation where anyone who takes physical custody of their coins will be subject to merciless and endless legal harassment.

"Oops, sorry my hard drive malfunctioned and the back-ups spontaneously disappeared.  Just like Louis Lerner and her 10 accomplices' did.

Then the entire computer was lost in an unfortunate boating accident."   

and then everyone else's Bitcoin just got more valuable encouraging even more responsible users.  a self reinforcing network phenomenon.

[wachtwoord]

This is a very nice write-up on the current state of the world economy (September 2014) and why the financial sector and especially the Euro zone is going to implode. The explain how the situation is actually a centrally planned market (as in the Soviet union) and not an open market in the slightest.

 http://www.icecapassetmanagement.com/uploads/documents/2014.09%20IceCap%20Global%20Market%20Outlook.pdf

[cypherdoc]

it's official:

http://blog.coinbase.com/post/96987622472/braintree-partners-with-coinbase-to-accept-bitcoin

[Peter R]

it's official:

http://blog.coinbase.com/post/96987622472/braintree-partners-with-coinbase-to-accept-bitcoin

Yep!  Heard it straight from the Braintree CEO's mouth.  It was nice to hear him discuss how the bitcoin protocol solves structural problems with the legacy payment systems that are holding back their users and merchants.   

[Chalkbot]

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 think you might very well be right in your observation. I do however like to note two things:

1. Even if Bitcoin, is only better than gold and takes 80% of it's value, that's a hell of lot higher market value than it is today
2. It's easier to request delivery so it will at least happen more often than currently with gold. If it happens more frequently there won't necessarily be no naked short selling, but there will be less of it, limiting the manipulation of Bitcoin when compared to gold.

I'm curious whether history will repeat itself and the possession of Bitcoin will be made illegal in a developed country at a point in the future. At least it's easier to hide

Haha, thanks wachtwoord, for these encouraging notes. I agree with your assessment, and it is reassuring to think that even if the bitcoin ecosystem isn't perfect, it's technically better and has a lot of room left to grow before it supplants the current and even less desirable alternatives. I'm reminded of the "outrunning a bear" analogy, where you don't necessarily need to be able to run faster than a bear, just faster than everyone else, and it appears that we're on course for that, at the very least.

[justusranvier]

i think it's too late for them to try that.

I think it is too late for them to be successful at this, but I'm convinced they will make the attempt.

PayPal et al. can throw a lot of resources at UX and advertising (propaganda) designed to keep people from taking physical custody.

They can also get help with this from the IRS and other government agencies. We might see a situation where anyone who takes physical custody of their coins will be subject to merciless and endless legal harassment.

"Oops, sorry my hard drive malfunctioned and the back-ups spontaneously disappeared.  Just like Louis Lerner and her 10 accomplices' did.

Then the entire computer was lost in an unfortunate boating accident."   

Indeed. As I said, I don't think the attempts will be successful, but I also don't think people should underestimate the amount of damage that will be incurred by those attempts.

After all, Hollywood and the recording industry lost the filesharing wars years ago, but they're still causing problems every now and then.

[thezerg]

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.

Someday entrusting Bitcoin to third parties will not be such a disaster.  In fact it will be a sound redundancy strategy to store some of your wealth that way just in case your computer and your backups die or someone tries to physically beat the coins out of you.  For example, large retail stock brokers in the USA have generally been pretty responsible safeguarding stock shares (of course there have been some issues, especially in mutual funds). 

However, this is very different from trusting a recently incorporated company with 5-20 employees operating halfway around the world in a different legal jurisdiction with an asset that has still not been unambiguously recognized worldwide as property.

[rocks]

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.

One key advantage for bitcoin is the ability to use signatures to create proof of reserves. For example the questions of "How much gold does the FED have?" and "How much of that is leased in the open market?" are questions that apparently are too difficult to answer for the past 80 years.

However, with bitcoin it is easy to automatically on a per-month/day/hour/minute basis prove your reserves and that there is a 1-to-1 relationship with custodial assets. I hope that due to the ease of this, it will be demanded by bitcoin owners. This simple aspect can go a long way towards preventing the gaming that gold has allowed.

Yes Steve that is a great point. The initial distribution of coins in the "the people" and not "the banks" will go a long way towards preventing manipulation. Over time however this initial distribution can switch back to the banks though...

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...

i think it's too late for them to try that.  

the good thing about the mtgox hack is that it's now forced the community into performing Bitcoin audits via the hashing trees.  i don't think legacy payment processors like Paypal will be able to just get away w/o the same auditing as awareness is now high regarding the importance of this.

My point was more related to the effect government regulation can force on the community, instead of what the community demands itself.

For example, a federal version of a BitLicense together with an overly aggressive IRS, could effectively outlaw private ownership of bitcoin without actually having to enact an FDR style order. The tax and regulatory compliance issues could be layered on in such a complicated manner, that even individuals who try to be compliant are brought to court for tax evasion, money laundering, etc, etc. This would create an environment where only large established entities with legal teams hold bitcoin directly, and most people simply view it as too much of a hassle (or are too scared).

This is why fighting back against BitLicense and establishing an open legal precedent for bitcoin are imperative today IMHO.

[cypherdoc]

Android winning:

[rocks]

Android winning:

It is a good thing Microsoft was able to get their Trojan horse Stephen Elop into Nokia in 2011.

Making that call to drop Android and 100% back Windows was a clear winner, that is if by winning we mean stealing Nokia's phone division for free.

[wachtwoord]

Android winning:

It is a good thing Microsoft was able to get their Trojan horse Stephen Elop into Nokia in 2011.

Making that call to drop Android and 100% back Windows was a clear winner, that is if by winning we mean stealing Nokia's phone division for free.

I own Nokia stock and I was pretty thrilled with the deal (I also own MSFT though )

[rocks]

Android winning:

It is a good thing Microsoft was able to get their Trojan horse Stephen Elop into Nokia in 2011.

Making that call to drop Android and 100% back Windows was a clear winner, that is if by winning we mean stealing Nokia's phone division for free.

I own Nokia stock and I was pretty thrilled with the deal (I also own MSFT though )

I owned Nokia stock at the time also.

The reason you (and many others including myself) were thrilled with the sale was because for Nokia it shed off a massively unprofitable division and unlocked the value in the other parts, causing a moderate price increase.  

What would have resulted in a much larger price increase, was if Nokia took their amazing phone capabilities to produce the best Android phones and given Samsung some real competition. Then you would have had those other divisions plus a profitable phone division.

[cypherdoc]

Pantera Capital and gold:

https://cdn.panteracapital.com/wp-content/uploads/Pantera-Bitcoin-Letter-August-2014-2.pdf

[Adrian-x]

Android winning:

https://pbs.twimg.com/media/BxCUEHLIMAAGYdy.png

It is a good thing Microsoft was able to get their Trojan horse Stephen Elop into Nokia in 2011.

Making that call to drop Android and 100% back Windows was a clear winner, that is if by winning we mean stealing Nokia's phone division for free.

Nokia's Maemo os was light years ahead of Android with over a 2 year head start and an amazing community, it was out well before iOS and destined to be an open phenomenon, until the moment trojan horse Elop joined Nokia and the project was outcast - fed to an Intel partnership, and it was re-branded as meego os, where Nokia contribute a total of 2 development engineers to the project and killed the development after the hardware team completed the 5 device.

Elop's legacy is killed maemo more than preventing the adoption of android. Maemo was a fully functioning open Linux os on amazing hardware.

If it wasn't for Elop I may never have found Bitcoin as it filled the void back in 2011 when maemo died.   I still think Elop pulled the biggest corporate back door swindle in history.

[cypherdoc]

here's another way to look at it: