Gold collapsing. Bitcoin UP.

[cbeast]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

I fully support idea of stealth addresses but as long as we have fully centralized exchange services which requires us to deliver our full personal data if we want to sell or buy coins we won't be safe.
Government will got our info from crypto exchanges and even with the stealth address we would be fated to pay taxes in the future.

It sounds like your government is your problem. That isn't everyone else's problem.

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[Cconvert2G36]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

I fully support idea of stealth addresses but as long as we have fully centralized exchange services which requires us to deliver our full personal data if we want to sell or buy coins we won't be safe.
Government will got our info from crypto exchanges and even with the stealth address we would be fated to pay taxes in the future.

Realized fiat gains are taxable about anywhere. Just saying you wish you could hide from the taxes is less noble than asking what tax haven island you can move to.

[cbeast]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

Realized fiat gains are taxable about anywhere. Just saying you wish you could hide from the taxes is less noble than asking what tax haven island you can move to.

Nobody is talking about realized fiat gains. That is a strawman. Tax avoidance is not tax evasion. You are always obligated to voluntarily report your gains, of course.

[Cconvert2G36]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

I fully support idea of stealth addresses but as long as we have fully centralized exchange services which requires us to deliver our full personal data if we want to sell or buy coins we won't be safe.
Government will got our info from crypto exchanges and even with the stealth address we would be fated to pay taxes in the future.

Ok, just pulled that straw fellow out of a hat I suppose.

[cbeast]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

I fully support idea of stealth addresses but as long as we have fully centralized exchange services which requires us to deliver our full personal data if we want to sell or buy coins we won't be safe.
Government will got our info from crypto exchanges and even with the stealth address we would be fated to pay taxes in the future.

Ok, just pulled that straw fellow out of a hat I suppose.

There was nothing incriminating in that statement.

[marcus_of_augustus]

Realized fiat gains are taxable about anywhere. Just saying you wish you could hide from the taxes is less noble than asking what tax haven island you can move to.

This is false.

Germany has 0% cap. gains after 1 year holding, Switzerland has 0% on foreign currency gains, Hong Kong, Singapore are similar and NZ has 0% capital gains if the asset was acquired without an "intent" to trade for profit.

[Cconvert2G36]

Realized fiat gains are taxable about anywhere. Just saying you wish you could hide from the taxes is less noble than asking what tax haven island you can move to.

This is false.

Germany has 0% cap. gains after 1 year holding, Switzerland has 0% on foreign currency gains, Hong Kong, Singapore are similar and NZ has 0% capital gains if the asset was acquired without an "intent" to trade for profit.

I stand corrected, to a degree, congrats to them.

"Intent" to trade for profit, wonderfully vague, like it would be at the whim of some functionary. 

[cypherdoc]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

I fully support idea of stealth addresses but as long as we have fully centralized exchange services which requires us to deliver our full personal data if we want to sell or buy coins we won't be safe.
Government will got our info from crypto exchanges and even with the stealth address we would be fated to pay taxes in the future.

i think he is talking about trading p2p.

[Zangelbert Bingledack]

It crashed in 2008 because of the greed on wallstreet caused by repackaging debt of households that couldn't afford the mortgages.. the math model was assuming that a large % of people wouldn't go bankrupt at the same time which they did and caused a ripple effect. THey did make some changes but didnt make enough... however it will rise until it breaks because there is so much money just sitting around waiting to be put somewhere.

That was the symptom, but not the cause.

The cause was following the LTCM blow-up, the FED made it clear to creditors that they would always be bailed out and there was no risk to lending money. LTCM was levered 50 to 1, this means that for every dollar invested they borrowed 50 dollars from creditors. When LTCM went down creditors lost billions. However the FED engineered a group bailout by the banks where equity holders lost big, but more importantly credit holders recovered 100% of their principle. This was historic and it was a first.

This action created the moral hazard where it was now known the FED would restore creditors from their bad decisions and protect them from any and ALL loses. After LTCM the credit market went wild. Credit standards crashed and no one was worried because the assumption was the FED would keep them whole.

One symptom of this was the low standard mortgage debt issued (that you mention), in 2006 no one thought they could lose money because the FED would backstop fannie mae. Another symptom was every bank was able to leverage anything (no matter how junky) and IBs went to record amounts of leverage themselves.

After Bear went down, the FED again saved creditors. But this time it telegraphed that it was worried about the current state of the credit market (which it created) and may not do this again. Smart investors understood this and started to remove their exposure to credit instruments. This in turn put pressure on the credit system.

Then when Lehman went under stress the FED finally said no more, closed their liquidity window with them, and stated creditors were on their own. The run was immediate and Lehman was bankrupt in less than an hour.

This demonstrated 1 thing:
- The entire credit market existed and depended upon an implicit understanding that the FED would bail creditors out. With this understanding default risk is removed and high leverage is possible. Without this understanding risk returns and existing leverage must unwind.

Today we see the same thing with sovereign debt. No one believes any real government will default, and that the IMF or someone will always come in and bail them out. When Greece exits the euro and defaults, creditors will see that there are risks and start to price that back in. If suddenly you become worried that default risk is real, why the hell would you lend money to Spain or Japan at < 1% rates? No upside but you risk the principle. Sovereign debt valuations are based only on the (false) belief that established governments will never default.

So it comes back to my original point. Everything is enabled, supported and depends on the central banks. They enable credit bubbles in the first place. Once they are either unwilling or unable to continue artificial support, credit will deleverage which will cause the market will go down. Their only alternative is to hit Cntl+P hard.

Thanks for this great Austrian-style analysis.

[cypherdoc]

It crashed in 2008 because of the greed on wallstreet caused by repackaging debt of households that couldn't afford the mortgages.. the math model was assuming that a large % of people wouldn't go bankrupt at the same time which they did and caused a ripple effect. THey did make some changes but didnt make enough... however it will rise until it breaks because there is so much money just sitting around waiting to be put somewhere.

That was the symptom, but not the cause.

The cause was following the LTCM blow-up, the FED made it clear to creditors that they would always be bailed out and there was no risk to lending money. LTCM was levered 50 to 1, this means that for every dollar invested they borrowed 50 dollars from creditors. When LTCM went down creditors lost billions. However the FED engineered a group bailout by the banks where equity holders lost big, but more importantly credit holders recovered 100% of their principle. This was historic and it was a first.

This action created the moral hazard where it was now known the FED would restore creditors from their bad decisions and protect them from any and ALL loses. After LTCM the credit market went wild. Credit standards crashed and no one was worried because the assumption was the FED would keep them whole.

One symptom of this was the low standard mortgage debt issued (that you mention), in 2006 no one thought they could lose money because the FED would backstop fannie mae. Another symptom was every bank was able to leverage anything (no matter how junky) and IBs went to record amounts of leverage themselves.

After Bear went down, the FED again saved creditors. But this time it telegraphed that it was worried about the current state of the credit market (which it created) and may not do this again. Smart investors understood this and started to remove their exposure to credit instruments. This in turn put pressure on the credit system.

Then when Lehman went under stress the FED finally said no more, closed their liquidity window with them, and stated creditors were on their own. The run was immediate and Lehman was bankrupt in less than an hour.

This demonstrated 1 thing:
- The entire credit market existed and depended upon an implicit understanding that the FED would bail creditors out. With this understanding default risk is removed and high leverage is possible. Without this understanding risk returns and existing leverage must unwind.

Today we see the same thing with sovereign debt. No one believes any real government will default, and that the IMF or someone will always come in and bail them out. When Greece exits the euro and defaults, creditors will see that there are risks and start to price that back in. If suddenly you become worried that default risk is real, why the hell would you lend money to Spain or Japan at < 1% rates? No upside but you risk the principle. Sovereign debt valuations are based only on the (false) belief that established governments will never default.

So it comes back to my original point. Everything is enabled, supported and depends on the central banks. They enable credit bubbles in the first place. Once they are either unwilling or unable to continue artificial support, credit will deleverage which will cause the market will go down. Their only alternative is to hit Cntl+P hard.

Thanks for this great Austrian-style analysis.

Yeah, you 2 have made my job alot easier these days. Thanks for that.

[cypherdoc]

talk about bearish wedges:

[cypherdoc]

Andreas may have his misunderstandings of Bitcoin, but he's mostly right on.  But most importantly, he is getting better and better and better at articulating all of Bitcoin's strengths in an unabashed manner; which is just what we need.  He is not afraid of speaking what he thinks.  We all should be thankful to him:

http://www.bitcoinwednesday.com/antonopoulos-video/

[cypherdoc]

just in case, on balance you should be averaging in now, as it could be your last chance.

[faince222]

In this period I don't have some trust in Bitcoin, so I've chosen GOLD. Hope to see great signals from the bitcoin market because it seems that bitcoin market is death now. (I speak about the economic market of bitcoin, but I appreciate so much that many company now accept bitcoin !)

[cypherdoc]

In this period I don't have some trust in Bitcoin, so I've chosen GOLD. Hope to see great signals from the bitcoin market because it seems that bitcoin market is death now. (I speak about the economic market of bitcoin, but I appreciate so much that many company now accept bitcoin !)

no.  it just cycling normally. 

when you say you have no trust in Bitcoin, when did the protocol get hacked?

[NewLiberty]

I think there’s a really high chance that we see a lot more government action against bitcoin, including the core protocol.

...

I keep talking to regulators at conferences who believe bitcoin simply must change to bring it in line with other payment systems; unfortunately this means adding identity information to bitcoin transactions and making it possible to blacklist funds.

I'll continue to maintain that the best defense to this is to make bitcoin as widely used worldwide directly by people as end-users with their own wallets. If everyone just holds coins or uses bitpay and coinbase, it will be much easier to push regulation into the system. If usage grows globally to be a complicated mess of direct person-to-person usages and numerous small services spread around the world, it will be very hard for a single gov to push regulation in (even for the USSA).

We should do the opposite and add more privacy features to clients.

Adding finishing touches to an improved stealth address proposal that includes useful features like being usable on mobile wallets without requiring the help of a trusted third party server to identify your incoming payments.

Bitcoin transparency is inherently ANTI-CORRUPTION, so we should expect corrupted governments to attempt to create limitations and regulations.

Wherever government is designed to merely govern and not also to usurp and corrupt, we should expect to foster the use of Bitcoin within both the private sector but also in the public sector.  In doing this, Bitcoin can prevent and expose corruption.  This is a demarcation between those that merely pay anti-corruption lip service, and those that truly seek to rid this cancer from their jurisdictions.

With the advent of Bitcoin, governments now for the first time can become provably non-corrupt in their public affairs. 
And we can see when the transfers go out to the private sector also, and the use of 'stealth addresses' makes this possible also, within the same protocol, and in the same block chain.

[cypherdoc]

heads up.  both DJI & DJT gone negative.

[rocks]

Citibank economist wants to ban cash, for the express purpose of enabling rates to go below zero and to tax cash balances. (In order to save his employer and his paycheck).

http://www.bloomberg.com/news/articles/2015-04-10/citi-economist-says-it-might-be-time-to-abolish-cash

As horrible as this is, I wonder what the effect would be on people's perception of bitcoin? If they did this, then it would be plainly obvious to your average person that dollars are nothing more than an electronic ledger. Today a lot of people I know seem to be under the impression that cash is money and banks hold onto cash for you when you deposit money. Banning cash would break this thinking, it would be clear how money is all an accounting system only.

If they did this, and they taxed dollar holdings with a negative rate, I think more and more people would seek mechanisms to put money back into their control. Gold is one place, bitcoin wallets are another, land/stocks/etc are not since they are taxable as well.

[cypherdoc]

Citibank economist wants to ban cash, for the express purpose of enabling rates to go below zero and to tax cash balances. (In order to save his employer and his paycheck).

http://www.bloomberg.com/news/articles/2015-04-10/citi-economist-says-it-might-be-time-to-abolish-cash

As horrible as this is, I wonder what the effect would be on people's perception of bitcoin? If they did this, then it would be plainly obvious to your average person that dollars are nothing more than an electronic ledger. Today a lot of people I know seem to be under the impression that cash is money and banks hold onto cash for you when you deposit money. Banning cash would break this thinking, it would be clear how money is all an accounting system only.

If they did this, and they taxed dollar holdings with a negative rate, I think more and more people would seek mechanisms to put money back into their control. Gold is one place, bitcoin wallets are another, land/stocks/etc are not since they are taxable as well.

gold is not really under one's control either.  you can't carry it across boarders, you can't store significant amts of it, you can't buy or sell significant amts w/o going thru a dealer (who will just document any sale), you can't carry significant amts of it due to weight, and you can't  transact with it b/c a coin isn't divisible (who here uses gold daily?).  

it should be crystal clear at this point in Bitcoin's evolution that it is infinitely more usable and efficient as a transaction medium worldwide compared to gold.  i don't think there is any question about that given the volume of tx's going on.  i think the only question remaining is the SOV function, oddly enough, due to the ever present threat of gvt intervention thru regulation or an outright ban it..  this is odd b/c Bitcoin has an even harder fixed supply than gold while gold could be banned just as easily if not more so.  this threat is being reflected in the price volatility.  

but this is why Satoshi decentralized Bitcoin round the world.

[tabnloz]

Citibank economist wants to ban cash, for the express purpose of enabling rates to go below zero and to tax cash balances. (In order to save his employer and his paycheck).

http://www.bloomberg.com/news/articles/2015-04-10/citi-economist-says-it-might-be-time-to-abolish-cash

As horrible as this is, I wonder what the effect would be on people's perception of bitcoin? If they did this, then it would be plainly obvious to your average person that dollars are nothing more than an electronic ledger. Today a lot of people I know seem to be under the impression that cash is money and banks hold onto cash for you when you deposit money. Banning cash would break this thinking, it would be clear how money is all an accounting system only.

If they did this, and they taxed dollar holdings with a negative rate, I think more and more people would seek mechanisms to put money back into their control. Gold is one place, bitcoin wallets are another, land/stocks/etc are not since they are taxable as well.

Interesting he thinks that rates should have went to - 6% during the crisis. Then the author says states that sometimes strongly negative nominal rates are called for - when? when financial institutions make shitty, high risk investments so they can be bailed out at the expense of the public?