A new better bitcoin - capital coin

[steelhouse]

Why Bitcoin will fail.

Bitcoin is backed by nothing and eventually a new cryptocoin coin based on productive assets will come along and displace it.  Bitcoin was created with work the same way a hamster riding on a wheel creates work, once the hamster gets off the wheel you have nothing.  Bitcoin represents no wealth. It may have value as a collectible, but the value of that long-term is unknown.  

Consider bitcoin is priced at about $500 per coin.  Now suppose we had a cryptocurrency based on gold as Max Keiser recommends at $500 a coin.  It would not really matter, it will still be based on faith the gold is there.  As has been shown, gold always and eventually fails as a currency as leaders eventually cheat on the gold backing. Gold as a nations currency has a 100% failure rate. Bankers can even go into the vaults if unaudited daily and use some of the gold for a summer vacation or a new house.  They can always issue too much debt or the government can shave or debase coins. However, gold as a metal commodity has never failed.

The U.S. dollar is only used because you have to use it.  Social security checks, welfare checks, government jobs, and all stores depend on it.  The government requires its use and no one would use it otherwise. Bitcoin is not subject to this tyranny. All government fiat is used for a specific geographic area. The M2 money supply has been increasing by about 6% annually since 1980 (http://research.stlouisfed.org/fred2/data/M2.txt). Even before 1971 the U.S. dollar lost about 80% of its value. The United States learned a hard lesson in 1929, even though you are on a gold standard all the gold is not necessarily there to back the money supply.

Presently there is another asset worth about $539, it is called Autozone stock AZO. AutoZone is the second-largest retailer of aftermarket automotive parts and accessories in the United States, Founded in 1979, AutoZone has over 5,200 stores across the United States, Mexico, and Brazil.   But there is something really unique about Autozone as a stock, it has no assets. Its book value has been negative for over 5 years.  It pays no dividend.  But why does it have value?  Earnings and positive cash flow.  It is the brain child of Eddie Lampert who does not even own the stock anymore.  All virtually all earnings and debt not used for growth was used for buybacks or stock repurchases.  AZO began the century at about $26 (see appendix below). Thus the stock has increased 20 to 1 or a 20 bagger.  Today sometimes you hear in the investment world the stock is going to go Autozone on you.  Meaning doing everything to do massive repurchases.  The danger is if anything happens to AZO earnings stream it will go bankrupt.  Even though bitcoin or any currency has zero assets, it still has more assets than Autozone.

Now consider a cryptocurrency (call it Capital Coin) that instead of $500 of nothing or gold, owns $500 or more of productive assets per coin.  Furthermore the legal owners of these assets are in a country that pays no investment taxes.  Suppose you buy $500 worth of a coin and it goes into Iowa farmland, or even 100% in a stock like Coca Cola KO.  Now take the profits of this $500 a use it to buy Capital coin, send it to an void address, and destroy it.  Coca Cola presently pays a 3.1% dividend.  Just destroy 3.1% dividend of capital coin a year.  There would be paper trail to see the coin was destroyed.  If bitcoin with a market cap of $6 billion held only KO it would be the 4th largest shareholder of KO.

Rather than have $500 of nothing, invest the $500 in a stock or business.  Destroy the coin of capital Coin with the profits.  Use high transaction fees to protect the coin and keep blockchain small like peercoin. We should be able to make productive investments to earn and destroy 10% annually on our investments.  There is also a lot we can do with those investments, we could own billboards, television stations, we could even allow you to rent land at low rates and destroy the rent in the coin.  Thus you might rent 10,000 square feet of land for $50 U.S. equivalent annually.  The only thing is the rent goes down 10% a year.  So you have a nestegg of 30 coins and the rent is .1 CC. You have at least 300 years not to worry about rent.

Sales tax is often 10% in the United States.  If we collect a 2% tax and destroy 1% and 1% to the miners. It would add more value to the coin and keep the blockchain small. Capital coins will be where you save like you should in a currency, as it was meant to be, that is truly INCREASING in value.  Currency is suppose to increase in value, it is suppose to represent commodities, and represent things of value.  It is not suppose to be a fantasy used to give government employees a big fat raise and summer vacation.

In summary which would you rather own:

Money Supply Growth Rates:
=================================
German Mark: Infinity
Zimbabwe Dollar: Infinity
Argentine Peso: 20%
U.S. Dollar: 6%
Euro: 4%?
Gold: 1-2%
Bitcoin: 0% (presently 9%)
Capital Coin: -10%

The answer is obvious a capital coin. This should put the nail in the coffin of the Euro and Dollar and all currencies controlled by professors, bankers, politicians, and lawyers.  In his book stocks for the long run, Jeremy Seigel made a graph of investments.  These are real returns of $1 invested in 1802 after inflation from 1802 to 2006.  I added my estimates bitcoin and capital coin.  I also added German Mark and Russian Ruble.

German Mark $0
Russian Ruble $10E-14
U.S. Dollar $0.06
Gold $1.95
Bitcoin $100
Bills $301 (dead)
Bonds $1083 (dead)
Stocks $755,163 (last hope of liberals to completely raid they got about 80% of it so far).
Capital Coin $2,000,000

Can bitcoin become a capital coin?  I think so if new capital coins donate 1% of the deletion of bitcoin.  Or people who create bitcoin businesses donate 1% of profits to the deletion of bitcoin.  You might even see secret societies popping up around the coins. So instead of the coins you typically see, you will start to see new coins like:

Iowa farmland Coin
Coca Cola Coin
Autozone Coin
Crowdfunding Coin
Gold Mining Coin
Dog Kennel Coin
NY Rent Coin
Berkshire Coin (10% of value deleted every year)
Gas Station Coin
Ethanol Coin
Fishing Boat Coin

Autozone Stock
shares (MM)-Price
2013 034.3 $477
2012 037.0 $357
2011 040.1 $327
2010 045.1 $273
2009 050.8 $159
2008 059.6 $137
2007 064.9 $120
2006 071.3 $115
2005 076.6 $92
2004 079.8 $91
2003 088.7 $85
2002 099.3 $71
2001 109.4 $67
2000 121.5 $28
1999 144.4 $32
1998 152.3 $33

I would like to be known as the godfather of capital cryptocurrency coins (CCC).  As a capital coin is being bought with dollars, there will always be a buyer, you will not need to promote the coin.  The lower the coin goes the more will be bought back.  A committee that runs these capital coin funds should be allowed to use 10% of the profits (coins that are to be destroyed) to run and maintain the system.  Bitcoin can still be used as the base coin to buy all your goods online.  Just a simple BTC-CCC exchange and it could all be done automatically like BTC is done with the dollar.


Welcome to capital coin, are you in?
When in doubt delete - capital coin.

Recommended Reading
Progress and Poverty - Henry George (capital definitions)
Stocks for the Long Run - Jeremy Seigel
100 to 1 in the Stock Market - Thomas W. Phelps
Global Stock Valuation - Mebane Faber https://www.youtube.com/watch?v=B1RhAWzUCsc

[spazzdla]

I choose Bitcoin and gold.

[jersey19957]

Bitcoin has the stablished network, no other coin will replace it. If there is something key in tech levels, the Bitcoin developers can copy it and integrate it within Bitcoin. No problemo.

[ltbharley]

Interesting reading but bitcoin won't fail in the near future.
It could be replaced by some other cryptos in may years from now.

[sprot]

Isn't this just the oft-repeated intrinsic value myth, rephrased in a confusing way?

Bitcoin (and equivalently, gold) will fail when human civilization fails. There are enough incentives in place to prevent it from happening earlier. Mind you, this might be sooner rather than later.

[counter]

You claim Bitcoin is backed by nothing is that is completely false.  Bitcoin is backed buy the users of the system, trust and the innovation of the system itself.  So your first sentence is completely false and you're following comments automatically lose credibility in my opinion.  Hopefully you take the time to explain why it has been so successful over the years?

[giveBTCpls]

Bitcoin is backed by mathematical certainty. FIAT is backed by nothing. Don't confuse backed by forced upon us with weapons (army and power).

[thresher]

Before even bothering to go through the rest, who is holding the "backings."  Some jerkoff is going to rob fort knox or take over Iowa and then out of the good nature of his heart distribute a bunch of coins that is somehow going to replace fiat?  WTF

What happens when the good natured Iowa warlord gets robbed, who is backing these coins then? 

Bitcoin is backed by mathematical certainty. FIAT is backed by nothing. Don't confuse backed by forced upon us with weapons (army and power).

Force is something. You can have all the btc in the world, and if every country in the world decided that they will hang anyone who uses btc for anything, well your fucked.  The mathematical certainty of being hung (hanged lol?) is more compelling.   

[nelruk]

I find your post very interesting and I share everything except that Bitocoin is going to die. I think BTC is going to have an evolution and a 2.0 Version of the same is going to take place.

[BitcoinBadger]

Bitcoin can surely be used as a asset or say Internet Gold.But I too think bitcoin as a currency is a thing to fail for sure.After all at the end bitcoin doesn't exists if Fiats doesn't.No mater how long you argue the answer is just few lines."Bitcoin came out of nowhere and will vanish alike".

[RodeoX]

Your argument that bitcoin can't work because it is not backed by anything is an old one. The first one really.  But there is an implied premise that backing is needed. Look at shiny rocks. Shiny rocks have been a store of wealth for thousands of years. Why? Gold is simply thought of as expensive. There is no real reason to think gold has value other than tradition. All you need to have a currency is that it is unprofitable to counterfeit, and people believe it is valuable. Money is nothing more than a social contract.
I'll stick with bitcoin only. It's the coin I will be using for the rest of my life.  I have only seen pain and poverty from alts.

[steelhouse]

Interesting reading but bitcoin won't fail in the near future.
It could be replaced by some other cryptos in may years from now.

bitcoin has no productive asset. It is only a collectible. Fortunately it can be used for gambling thus it will be really hard for it not to have some value. If you get 1 million users the price may actually increase, but all this is unknown.

Imagine a capcoin with 21 million outstanding, $500 in value, or $10,500,000,000 in market cap. If that were invested in productive assets, the coin could knock out 2 million coins or 10% of the coins a year. Furthermore there would be a constant grinding away and deletion of the coin. There would by a constant buyer of the coin. Since the coin is infinitely divideable no worry about running out of coins.

capcoin would be identical to bitcoin in virtually everyway, most would not know the difference. capcoin would be capital based, while bitcoin is collectible based. Unlike a stock anyone can vote for board members of capcoin, majority does not rule. You do not even have to a be a owner only a good capitalist. They are subject to fiduciary responsiblity and repurchase requirements.

http://www.panarchy.org/george/capital.html

Basically we have the combination of a stock market and a darkcoin. I noticed another thread some girl wants a $15,000 loan. This actually could be possible in a capcoin.

[steelhouse]

I choose Bitcoin and gold.

Although gold is wealth and an asset, it does not produce wealth thus if you use it to buy back a capcoin, you are going to lose some of your gold.  A good money manager can use gold as a hedge buying it like in 2000.

[steelhouse]

You claim Bitcoin is backed by nothing is that is completely false.  Bitcoin is backed buy the users of the system, trust and the innovation of the system itself.  So your first sentence is completely false and you're following comments automatically lose credibility in my opinion.  Hopefully you take the time to explain why it has been so successful over the years?

The problem is even though bitcoin might have 0% inflation, -10% inflation is better. The U.S. dollar has +6% inflation.  Bitcoin is backed like the U.S. dollar.  As long as bitcoin is the world reserve cryptocurrency it will be in the same position as the dollar, it will fail tomorrow, it will fail tomorrow, 100 years from now, it will fail tomorrow.

What you have here is stock market 2.0 and darkcoin combined, where anyone can ipo a stock based on a dream.

[Buffer Overflow]

We should really start archiving all these bitcoin fail threads for future entertainment purposes.

[steelhouse]

Before even bothering to go through the rest, who is holding the "backings."  Some jerkoff is going to rob fort knox or take over Iowa and then out of the good nature of his heart distribute a bunch of coins that is somehow going to replace fiat?  WTF

What happens when the good natured Iowa warlord gets robbed, who is backing these coins then?  

Bitcoin is backed by mathematical certainty. FIAT is backed by nothing. Don't confuse backed by forced upon us with weapons (army and power).

Force is something. You can have all the btc in the world, and if every country in the world decided that they will hang anyone who uses btc for anything, well your fucked.  The mathematical certainty of being hung (hanged lol?) is more compelling.  

Owners of Dell and Heinz stock got the shaft by Michael Dell and Warren Buffet.  The U.S. stock market is a corrupt as hell, the CEO in bed with the large shareholders really control and own the company. The majority shareholders wanted the productive assets for themselves.  The assets of a capcoin, will be owned by the capcoin.  The minority shareholder will have rights. Similar to the Bitcoin foundation, anyone whether or not they own the coin can be a board member.  What I see is the coin divided into 10 money managers, the money manger who bought back the least amount of coins is out and replaced every year.  

The capcoin would not own any gold type assets, there would be a paper trail and long jailtime for any money manager not up to fiduciary responsibility.

For the Iowa Farmland Coin, the land would be owned by the coin.  You could steal the corn or the $270 an acre rent but the money manager most likely would have poor performance an be out next year.   It would be hard to steal the $270 an acre rent as there would be a paper trail.

[galbros]

This is pretty much the same argument people make against gold, it has no productive value. 

You also have to be careful about making comparisons with stock prices as you have to consider the number of shares.  AutoZone has a market cap of 17.51 billion versus bitcoin's 6.5 billion.  So AZO is worth more than three times bitcoin.

Good Luck.

[steelhouse]

I thought I would show how the coin works.  Suppose you want to invest in strip clubs or a bowling alleys.  Call the Capcoin Bowling Alley Coin.  Similar to a crowd funding site, suppose you want the coin to own 3 bowling alleys and they cost $1 million each, so you need $3 million.  but you want to make them state of the art so you want $2 million for improvements.  Thus a $5 million goal.  The money goes into a fund and a bowling alley committee is set-up.  Anyone preferably someone poor without a degree or experience would get elected.

Thus you set a goal of 5 million coins at $1 a coin and you set up an exchange for bitcoin.  you can use btc-e or any exchange.  So the 1st day you sell $200,000, not enough to by a bowling alley, so you put the money in coca cola stock and use the dividends to buyback stock.  After a month you get a dividend and knock off some shares. Soon you get $1 million and then $1.5 million and you buy the first bowling alley.  By rules you can only be paid 10% of the coins you are buying back.  The profits of the bowling alley, hopefully 10% are plowed back into coin deletion.

[countryfree]

I find it boring that every week, there's a new guy starting a topic to explain that BTC is doomed, but I see that BTC is still standing.
I bet BTC will still exist next week!

[steelhouse]

This is pretty much the same argument people make against gold, it has no productive value.  

You also have to be careful about making comparisons with stock prices as you have to consider the number of shares.  AutoZone has a market cap of 17.51 billion versus bitcoin's 6.5 billion.  So AZO is worth more than three times bitcoin.

Good Luck.

gold is wealth, not capital (Henry Georges Definition).  Capital is wealth used to make more wealth.  gold has value, no doubt, and it is getting harder and harder to find it at least on earth.  gold is a great wealth preserver.  When the hamster gets off there is something there.  

What if bitcoin owned 10 million shares of AZO, that would be about $5 billion.  Suppose every year, bitcoin sold 10% of its shares a year and used that to delete Bitcoin.  Would that not be considered a bonus.  Not only do you own bitcoin, you own a productive asset too.

I renamed the title, it was too harsh.