# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  Bitcoins: The Second Biggest Ponzi Scheme in History

## muzzled dogg

Bitcoins: The Second Biggest Ponzi Scheme in History
Gary North - November 29, 2013

I hereby make a prediction: Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff. (It will never rival Social Security, however.)

To explain my position, I must do two things. First, I will describe the economics of every Ponzi scheme. Second, I will explain the Austrian school of economics' theory of the origin of money. My analysis is strictly economic. As far as I know, it is a legal scheme -- and should be.

PONZI ECONOMICS

First, someone who no one has ever heard of before announces that he has discovered a way to make money. In the case of Bitcoins, the claim is literal. The creator literally made what he says is money, or will be money. He made this money out of digits. He made it out of nothing. Think "Federal Reserve wanna-be."

Second, the individual claims that a particular market provides unexploited arbitrage opportunities. Something is selling too low. If you buy into the program now, the person running the scheme will be able to sell it high on your behalf. So, you will take advantage of the arbitrage opportunity.

Today, with high-speed trading, arbitrage opportunities last only for a few milliseconds seconds in widely traded markets. Arbitrage opportunities in the commodity futures market last for very short periods. But in the most leveraged and sophisticated of all the futures markets, namely, the currency futures markets, arbitrage opportunities last for so brief a period of time that only high-speed computer programs can take advantage of them.

The individual who sells the Ponzi scheme makes money by siphoning off a large share of the money coming in. In other words, he does not make the investment. But Bitcoins are unique. The money was siphoned off from the beginning. Somebody owned a good percentage of the original digits. Then, by telling his story, this individual created demand for all of the digits. The dollar-value of his share of the Bitcoins appreciates with the other digits.

This strategy was described a generation ago by George Goodman, who wrote under the pseudonym of Adam Smith. You can find it in his book, Supermoney. This is done with financial corporations when individuals create a new business, retain a large share of the shares, and then sell the stock to the public. In this sense, Bitcoins is not a Ponzi scheme. It is simply a supermoney scheme.

The Ponzi aspect of it comes when we look at the justification for Bitcoins. They were sold on the basis that Bitcoins will be an alternative currency. In other words, this will be the money of the future.

The coins will never be the money of the future. This is my main argument.

THE AUSTRIAN SCHOOL'S THEORY OF MONEY'S ORIGINS

The best definition of money was first offered by Austrian economist Carl Menger in 1892. He said that money is the most marketable commodity. This definition was picked up by his disciple, Ludwig von Mises, who presented it in his book, The Theory of Money and Credit, published in 1912.

In that book, Mises argued, as Menger had before him, that money arises out of market transactions. That which did not function as money before, now functions as money. Something that was valuable for its own sake, most likely gold or silver, becomes valuable for another purpose, namely, the facilitation of exchange. People move from barter to a monetary economy. This increases the division of labor. As more and more people use the money commodity in order to facilitate exchanges, the division of labor extends, and as a result, people's productivity increases. They can specialize. This specialization produces increased output per person, and therefore increased income per person.

In this scenario, something that had independent value becomes the focus of traders, who find that their ability to buy and sell increases as a result of the use of this commodity. Money develops out of market exchanges. Money was not used for its own sake initially, but it becomes widely used as money as a result of innumerable transactions within the economy. (I discuss this in my chapter in Theory of Money and Fiduciary Media, published by the Mises Institute in 2012.)

Here is the central fact of money. Money is the product of the market process. It arises out of an unplanned, decentralized process. This takes time. It takes a lot of time. It spreads slowly, as new people discover it as a tool of production, because it increases the size of the market for all goods and services. No one says, "I think I'll invent a new form of money."

Note: any time you see a proposal of a new form of money, hold on to your old form of money.

The central benefit of money is its predictable purchasing power. A monetary commodity is not easy to produce. The cost of mining is high. Money is slowly adopted by a large number of participants. These participants use money as a means of exchange. Why? Because it was valuable the day before. They therefore expect it to be valuable the next day. Money has continuity of value. This is not intrinsic value. It is historic value. So, a person can buy money by the sale of goods or services, set this money aside, and re-enter the markets in a different location or in a different time, in the confidence that he will probably be able to buy a similar quantity of goods and services.

Money is not accumulated for its own sake. It is accumulated to buy future goods and services. It is useful in the facilitation of exchange precisely because its market value varies little over time. It is the predictability of money's market exchange rate that makes it money.

BITCOINS ARE NOT MONEY

Now let us look at bitcoins. The market value of one bitcoin has gone from about $2 to $1,000 in a year. This is not money. This commodity is not being bought for its services as money. It is unpredictable to a fault.

Admittedly, those who got in early on this Ponzi scheme are doing very well. They will probably continue to do well for a time. As more people hear about this investment, which is justified in terms of its future potential as money, more people will buy it. Late-comers are not buying it because they understand its potential as future money, any more than the late investors in Charles Ponzi's scheme thought they were buying into the arbitrage potential of foreign postage stamps. They are buying Bitcoins because we are in the midst of a Ponzi scheme mania. They will continue to buy because they think this time it's different.

This digital so-called money will not be used to facilitate exchange. Nobody is going to be getting rid of an asset that has moved from $2 to $1,000 in one year in order to buy pizzas. People want to hang onto it, refusing to sell, in the hopes that it will go to $2,000. This is the classic mark of Ponzi scheme psychology. People do not buy the investment for the benefits that the investment provides as an investment, in other words, because it is a capital asset. They buy it only because it has gone up in price. They expect this to continue.

Here is the Austrian school's theory of money. People buy money because it has not fallen in price. But it has also not gone up in price much, either. It is predictable. Why? Because it is held in reserve by a large number of people over a large geographical area. It has become money through tradition, through experience, and through endless numbers of exchanges on a voluntary basis. It has proven itself in the marketplace as a means of facilitating exchange, and thereby as a means of preserving value over time. This is not the characteristic feature of a Bitcoin. People are not buying it to serve as money; they are buying it because they are in the midst of a mania, and they are gambling that the number of buyers will continue upward forever.

Here is an economic fact: the number of fools is limited. They are a scarce economic resource. As the price of bitcoins rises, more fools will be lured into the market. But this is a finite market.

In other words, bitcoins cannot possibly fulfill their supposed purpose: to serve as an unregulated currency unit. Bitcoins are not an alternative currency. They are something you buy in the midst of a mania, and you will sell at some point in order to get back your money. You are thinking of buying Bitcoins, not because Bitcoins will serve as a means of exchange, as originally argued, but because you want to get back lots more money than you paid for them. In other words, Bitcoins are not money; dollars are money. There has been no challenge from Bitcoins to the reign of the dollar.

JUST SAY NO

When you see an offer of an investment which inherently cannot possibly exist on its own merit, and yet lots of people are coming into the market to buy the item, you know, without any question, that this is a Ponzi scheme. In other words, people are buying into the program, not because of an arbitrage opportunity, and not because of a capital breakthrough in terms of technology, but because somebody else bought it cheaper yesterday. You buy it today, not because you think it is going to offer a stable value, but because you think you're going to make a bundle of money when more people come into the market. Again, this is the classic mark of a Ponzi scheme.

In order for Bitcoins to become an alternative currency, there will have to be millions of users of the currency. There will have to be tens of millions of users of the currency. They will have to develop in a market on their merit as money, not as an investment of dollars in order to get more dollars back. It would have to develop through exchange, not bought as an investment. In other words, the free market will have to adopt Bitcoins as a means of increasing the division of labor.

Bitcoins are not increasing the division of labor. They are bought on the basis that somebody can get into a game of musical chairs. Instead of running out of chairs, leaving one person the great winter, the promoters started with a given number of chairs, and then they hoped that lots would come and bid on the chairs. "If we issue it, they will come." This took place. The promoters creators are now very rich, as measured in dollars.

The fact of the matter is this: Bitcoins will not increase the division of labor by serving as an alternative currency. Inherently, Bitcoins have made their mark, not on the basis of their stable value in exchange, that is, their value in increasing the division of labor in alternative markets that do not use the dollar. On the contrary, Bitcoins are being purchased for one reason only: to get in on the deal. Buy low; sell high. Buy with what? Dollars. Sell for what? Dollars.

The mania has destroyed Bitcoins' use as money. Bitcoins are too volatile in price ever to serve as a currency.

Which is money: dollars or Bitcoins? The answer is obvious: dollars.

This is a Ponzi scheme.

WHAT GOES UP COMES DOWN

This will lead to the ruination of more people than any private Ponzi scheme in history. There will be the poor schnooks to get in at the end, paying perhaps thousands of dollars per Bitcoin. Then the market will unravel. It will unravel for the same reason that all Ponzi schemes have unraveled: not enough new buyers. When the new buyers do not show up in great numbers, the holders will start to dump them. What went up in price, as measured in dollars, the real money, will come down in price.

This mania is going to be the stuff of best-selling books. This is going to be this stuff of Ph.D. dissertations in economics and psychology. This is going to be the equivalent of Mackay's book, Extraordinary Popular Delusions and the Madness of Crowds.

The interesting thing is the mania started among the most technologically sophisticated people on earth: computer techies. The techies who got in early are going to be fabulously wealthy . . . if they sell. But the poor schnooks who come in at the and are going to lose money. Collectively, this will be the greatest single scheme for lots of people losing money that we have ever seen. This Ponzi scheme is not illegal . . . yet. It will spread. It has gone viral.

Any time you buy an investment, you had better have an exit strategy. There is no exit strategy for Bitcoins.

You must get out at the top, or you lose your shirt.

CONCLUSION

Anytime that anybody tries to sell you an investment, you have to look at it on this basis: "What are the future benefits that this investment will give final consumers?" In other words, how does it serve the final consumer? If it does not serve the final consumer, then it is a Ponzi scheme.

Bitcoins cannot serve the consumer. There is nothing to consume. The only way that Bitcoins can work to the advantage of the consumer is that they provides the consumer with increased opportunities, based on Bitcoins' function as money. But the fundamental characteristic of money is its relatively stable purchasing power.

Bitcoins will never achieve this. It is a mania going up. It will be a mania coming down. It will not increase the division of labor, because people will recognize it as having been a Ponzi scheme, and they will not again buy it. They will not use it in exchange. Companies will not sell goods and services based on Bitcoins. Bitcoins have to have stable purchasing power if they are to serve as money, and they will never, ever achieve stable purchasing power.

Whenever somebody tries to sell you an investment that is based on the economic analysis of a market -- an analysis that cannot possibly be true -- do not buy the investment. This is a simple rule. I adhere to this rule.

There has to be an economic justification for a capital investment, and there is no economic justification of buying Bitcoins as an alternative currency. That was how Bitcoins were initially sold, and it was impossible as an economic concept from the beginning. The Austrian theory of money shows why.

I do not invest in capital that has no economic justification other than the greater fool theory. There are too few fools to keep the scheme going.

Bitcoins are not illegal. They should not be made illegal. They should merely be avoided.

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## ClydeCoulter

I agree.

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## dannno

I don't agree, I believe bitcoin will continue to help facilitate more free market transactions outside of the government controlled monetary paradigm.

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## muh_roads

Oh look, more sour grapes by another libertarian.  Surprise, surprise.




> and not because of a capital breakthrough in terms of technology


Really Gary?  You old wrinkled $#@!.

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## ClydeCoulter

> Oh look, more sour grapes by another libertarian.  Surprise, surprise.
> 
> 
> 
> Really Gary?  You old wrinkled $#@!.


Good argument, you've convinced me. /sarc

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## dannno

People sure like to outline the criteria for money as an argument against bitcoin, but the thing is those criteria were all created before the internet even existed. If you don't see something equivalent to 'intrinsic value' in bitcoin and the way people are able to use it to get around the system then I believe you lack the creative imagination to see the future of humanity until it smacks you in the face.

I'm not even saying that bitcoin will definetely be successful, but to deny that it could be doesn't make any sense when there has never been anything like this before so you can't exactly look at historical precedent to see what might happen. All you can do is talk about criteria that were invented like 100 years ago.

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## NorfolkPCSolutions

Shemdogg,

Please post a tl;dr of...whatever the hell you were trying to say.  You're posting on an internet forum, not writing a goddamn Wikipedia article.  I've got $#@! to do, man, and I'd really like to understand your point of view.

One sentence, please.  Jesus.

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## ClydeCoulter

> Shemdogg,
> 
> Please post a tl;dr of...whatever the hell you were trying to say.  You're posting on an internet forum, not writing a goddamn Wikipedia article.  I've got $#@! to do, man, and I'd really like to understand your point of view.
> 
> One sentence, please.  Jesus.


It's an article, by Gary North.  I read it.

Why are jumping on to Shemdogg?

Here's a link to the article, if you'd like that format better: http://www.lewrockwell.com/2013/11/g...-ponzi-scheme/

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## kpitcher

Some of his arguments are flawed. People do in fact make purchases with bitcoin. In fact since it's tied to the value of USD - or other national currency - it's not a big deal to buy a pizza with bitcoin. Or a subway sandwich. I could buy a subway meal deal for 0.008 bitcoins.. alright, fine.  Hard to notice if you bought a coin's worth. 
By his reasoning that people hold on things that go up rapidly in price, no one ever sells precious metals either. Or any high performing stock like Google.

Other problems, there is no evidence of Satoshi (The creator of Bitcoin) hording any coins. The blockchain was released with 1 single block mined to get things rolling. In fact someone did an analysis of the 10,000 Bitcoin pizza that was the first transaction. Those 10,000 coins are spread out all over the place as they were not horded. Some people have put significant investments into BTC - the Winklvos twins for one - but that's not a surprise. Kind of like getting in early in any new endeavor. 

There are 11.5 million wallets with coins in them. This doesn't take into account anyone with funds just in like coinbase in a separate wallet. There are already millions of users. There are already millions of users. Bitpay, a popular bitcoin payment processor, did $5 million in just March. I didn't bother to see what that volume has grown to recently. 

How it serves the customer is convenience and is not tied to a banking system that nearly collapsed. Take being able to transfer 140 million bucks for 38 cents like just happened. How is that not a game changing occurrence?

I'm bored now, so going to stop digging into reputing this.

Oh wait, the complete cynical side of me says - well heck, if it's the second biggest ponzi scheme and Madoff was 65 billion then we're only 1/5th of the way to the peak. No need to fret until it's over $6000 a coin.

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## PaulConventionWV

Can any of you critics tell me who is behind bitcoin?  You'd think they would be out there selling this from the beginning, but no, bitcoin took a few whole years to actually get off the ground, saw a bubble, crashed, and then recovered to meteoric new heights.  This is not typical of Ponzi schemes.  Secondly, it actually does have some benefits.  This isn't even debatable, and if you knew anything about bitcoin, then you would know this is true.  There are advantages to using bitcoin.  

Thirdly, bitcoin is NOT a Ponzi scheme.  If you want to call it a bad investment, then call it a bad investment and say you will lose your money.  Not everything that gets hyped and then crashes is a Ponzi scheme.  Not everything that ends up losing people money is a Ponzi scheme.  If you really believe it's going to crash, then say it's a bad investment, but it does NOT fit the definition of a Ponzi scheme.  The term Ponzi scheme is used in your OP simply for the sake of hyperbole.  I demand that you cease using it as such at once.  

A Ponzi scheme is FRAUD.  It is, by its very definition, a fraudulent investment.  Bitcoin is not fraudulent because everything that it has achieved, it has achieved because of the market.  Nobody forced people to buy into it, not once, but twice.  Nobody is using the principal from the investments of late buy-ins to pay the interest on the early adopters' investments.  A Ponzi scheme necessarily involves deception and fraud.  If you want to say that people aren't being completely straightforward (at worst) about what bitcoin offers, that still doesn't mean it's fraudulent.  All of the information about what bitcoin IS and what it provides is out there.  Most people have already figured out what bitcoin really is, and yet the demand for it continues to rise.  This is no accident.  The information about bitcoin was available from the beginning and the market has decided it's a worthwhile investment.  

Here's a link for the definition of a Ponzi scheme:

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

It requires the perpetrators to take from the existing capital collected in the form of investments to pay interest on those investments.  It is unsustainable by design.  Bitcoin is NOT unsustainable by design.  You can argue that it is unsustainable, but it was NOT made that way by design.  If everyone continued to believe in bitcoin, it would continue to rise, and the funds would never run out.  A Ponzi scheme requires that the funds run out at some point because there are a limited amount of new investors.

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## silverhandorder

There is a lot of speculation in bitcoin. But it's value is there. Stefan did a new video on how bitcoins can do financial transactions more efficiently than the financial industry.

edit: Personally I am waiting for bitcoin to spread without my help. Where there is no risk there is no loss .

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## PaulConventionWV

> Oh wait, the complete cynical side of me says - well heck, if it's the second biggest ponzi scheme and Madoff was 65 billion then we're only 1/5th of the way to the peak. No need to fret until it's over $6000 a coin.


At that point, Shemdogg will be scurrying to buy some so he doesn't miss out when bitcoin is a mainstream currency.

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## ronpaulfollower999

I've said it before, if bitcoin is a Ponzi then so is silver and gold. 

And is this the same Gary North that said:




> In 1980, he forecast rationing of housing and a nuclear war with the Soviet Union. He warned his followers to buy "gold, silver, a safe place outside the major cities."
> 
> Then AIDS became the threat: "In 1992, we will run out of available hospital beds.... The world will eventually panic," he wrote in 1987.
> Now North has found Y2K and a skittish audience receptive to predictions of doom.
> 
> A recent advertisement for his Remnant Review newsletter proclaims: "A bank run like no other will bankrupt banks all over the world in 1999."
> 
> If you fork over $225 for a 24-issue subscription, North will cheerfully equip you with "the tools you need to build untouchable wealth."
> 
> ...


http://www.wired.com/culture/lifesty.../1999/01/17193

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## Neil Desmond

> Some of his arguments are flawed.


I agree.  It's a weak and pathetic spiel.  It contains too many things to correct, rebut, or refute & I'm not gonna bother.  I'm simply going to describe it as a "lemon" of an article, and let the future prove me wrong.

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## PaulConventionWV

> I've said it before, if bitcoin is a Ponzi then so is silver and gold. 
> 
> And is this the same Gary North that said:
> 
> 
> 
> http://www.wired.com/culture/lifesty.../1999/01/17193


HAHAHAHA!

Gary North's ideas are more of a Ponzi scheme than bitcoin is.  He's selling subscriptions to his own stream of bull$#@! for $225 and he continues to be proven wrong.

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## muh_roads

> Good argument, you've convinced me. /sarc


Convince yourself.  I'm not here to hold your hand.

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## Keith and stuff

> Convince yourself.  I'm not here to hold your hand.


Use did name call, though 

I consider Bitcoin a way to exchange. A way to buy and sell. You know, let's say you want to pay your rent or buy a house or eat a meal or buy drugs or something from Amazon.com. Bitcoin is a way to do that with minimal fees, especially if you are buying it from a country other than where you were born. IMO, it might be acting as an investment, but I don't see it primary as an investment. Putting 1% of your savings in electronic currencies might not be a bad idea, though

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## ctiger2

Every person on earth is looking for more money. The central banks and sovereign govt are starving the people of their ability to make a living. These crypto currencies essentially bypass the controllers. It's very very good and I don't think they're going away anytime soon. Just refined and improved over time. Decentralization of power is they key to freedom.

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## cubical

For something to arbitrarily store value, producers must support it. You and I, we are consumers. Assuming no producers, such as the Middle Eastern Oil States, pick up bitcoin, the only way old users will "get paid" is to sell to new users. This will happen until the new users run out. In this way, it is a ponzi scheme. Gold has been selected to store value. That doesn't mean some else can't store value, but the selection has been made and its gold. Thousands of years of history support this, including central bank balance sheets.

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## Keith and stuff

> Every person on earth is looking for more money. The central banks and sovereign govt are starving the people of their ability to make a living. These crypto currencies essentially bypass the controllers. It's very very good and I don't think they're going away anytime soon. Just refined and improved over time.


Absolutely. There will be bumps along the way. Like when the Bitcoins Roger Ver gave me were stolen because the website I was using was closed. But I don't blame Bitcoins for that. It was a combination of my fault for not doing due diligence, and also of course, the website owner.

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## GregSarnowski

I don't understand what some libertarians have against the a very promising and viable alternative to government fiat. If and when the dollar collapses BTC will become instrumental in keeping some semblance of an economy going.

You can already buy plane tickets with bitcoin at cheapair.com. You can buy gold and silver with bitcoin at coinabul.com. You can buy gift cards with bitcoin to 15 major retailers at gyft.com There's an ebay for bitcoin. Overstock.com is considering accepting bitcoin. It is a free-market emerging currency and that should be very exciting for anyone wanting to see the kinds of changes to the status-quo that Ron Paul advocates.

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## kcchiefs6465

> I don't understand what some libertarians have against the a very promising and viable alternative to government fiat. If and when the dollar collapses BTC will become instrumental in keeping some semblance of an economy going.
> 
> You can already buy plane tickets with bitcoin at cheapair.com. You can buy gold and silver with bitcoin at coinabul.com. You can buy gift cards with bitcoin to 15 major retailers at gyft.com There's an ebay for bitcoin. Overstock.com is considering accepting bitcoin. It is a free-market emerging currency and that should be very exciting for anyone wanting to see the kinds of changes to the status-quo that Ron Paul advocates.


If the market wants it, that is fine.

I'm partial to silver and gold. The weight, smell, and shine appeal to me. Hell, a thirty pound ball of copper wire is beautiful. I wish those invested in BTC the best of luck, though.

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## dannno

> You can buy gift cards with bitcoin to 15 major retailers at gyft.com.


Oil Changes/Car Maintenance - Sears

Healthy Organic Food - Whole Foods (aka Whole Bitcoin ;P )

Home Supplies/Furniture/Clothing - Kmart and Target

Medications and Personal Care - CVS

Hotel - Marriot

Office Supplies/Furniture - Staples


Then you got Amazon and a few more, that's great.

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## GregSarnowski

> Oil Changes/Car Maintenance - Sears
> 
> Healthy Organic Food - Whole Foods (aka Whole Bitcoin ;P )
> 
> Home Supplies/Furniture/Clothing - Kmart and Target
> 
> Medications and Personal Care - CVS
> 
> Hotel - Marriot
> ...


There's actually 159 total, if you do a search for all categories.

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## thoughtomator

Social Security isn't the biggest Ponzi scheme in history - fractional reserve banking is.

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## cubical

> I don't understand what some libertarians have against the a very promising and viable alternative to government fiat. If and when the dollar collapses BTC will become instrumental in keeping some semblance of an economy going.
> 
> You can already buy plane tickets with bitcoin at cheapair.com. You can buy gold and silver with bitcoin at coinabul.com. You can buy gift cards with bitcoin to 15 major retailers at gyft.com There's an ebay for bitcoin. Overstock.com is considering accepting bitcoin. It is a free-market emerging currency and that should be very exciting for anyone wanting to see the kinds of changes to the status-quo that Ron Paul advocates.


Do you really think a stable business can run on bitcoin as a form of payment? The value of it drops and rises some days up to 50% and the spread in regularly 5% or more.

Most libertarians I have seen point out how it is not sustainable or the fact that it will be easily monitored by the government(like all data transmissions on the internet). They don't have anything against it, if it were to be viable. Most, like myself, just don't see that and don't want people get burned. We already have gold and there only need to be one focal point for monetary value. No need for bitcoins, litecoins or even silver, thus they will all fall away. Buying BTC is a gamble on the greater fool theory. Just hope you aren't the last guy in.

See you at the bottom.

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## Keith and stuff

> Do you really think a stable business can run on bitcoin as a form of payment? The value of it drops and rises some days up to 50% and the spread in regularly 5% or more.


If a business cannot run on Bitcoins as a form of payment, it isn't a stable business at all

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## GregSarnowski

> Do you really think a stable business can run on bitcoin as a form of payment? The value of it drops and rises some days up to 50% and the spread in regularly 5% or more.
> 
> Most libertarians I have seen point out how it is not sustainable or the fact that it will be easily monitored by the government(like all data transmissions on the internet). They don't have anything against it, if it were to be viable. Most, like myself, just don't see that and don't want people get burned. We already have gold and there only need to be one focal point for monetary value. No need for bitcoins, litecoins or even silver, thus they will all fall away. Buying BTC is a gamble on the greater fool theory. Just hope you aren't the last guy in.
> 
> See you at the bottom.


Too bad gold obviously presents no threat to the current monetary status-quo. In fact the big banks and governments own most of it.

Saying Bitcoins can be tracked is meaningless. Bitcoin is very anonymous relative to current payment methods.

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## cubical

> Too bad gold obviously presents no threat to the current monetary status-quo. In fact the big banks and governments own most of it.
> 
> Saying Bitcoins can be tracked is meaningless. Bitcoin is very anonymous relative to current payment methods.


You and your bitcoin buyers will not threaten the monetary status quo. Just like the silver buyers would never crash JP Morgan. We are all shrimp in a very large ocean. From our perspective maybe we can change things. The whales just laugh.

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## cubical

> If a business cannot run on Bitcoins as a form of payment, it isn't a stable business at all


ok...

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## Keith and stuff

> ok...


Please don't make such high quality posts here. It is an embarrassment to everyone else here. Maybe you just need to eat some Baklava? http://mandrik.com/

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## GregSarnowski

> You and your bitcoin buyers will not threaten the monetary status quo. Just like the silver buyers would never crash JP Morgan. We are all shrimp in a very large ocean. From our perspective maybe we can change things. The whales just laugh.


The cat has already been let out of the bag. It's just a matter of time. The state has failed. Agorism will win the future and cryptocurrencies are a big part of that.

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## PaulConventionWV

> For something to arbitrarily store value, producers must support it. You and I, we are consumers. Assuming no producers, such as the Middle Eastern Oil States, pick up bitcoin, the only way old users will "get paid" is to sell to new users. This will happen until the new users run out. In this way, it is a ponzi scheme. Gold has been selected to store value. That doesn't mean some else can't store value, but the selection has been made and its gold. Thousands of years of history support this, including central bank balance sheets.


You are arbitrarily conflating and distorting the definition of a Ponzi scheme.  Gold may have been "selected", but it's not set in stone.  If you want to call it a Ponzi scheme because it needs "producers" in order to keep its value, then that could be applied to many investments.  That, however, does not make it fraudulent, and it still doesn't require the use of new investors' capital to pay interest on the investments.  Bitcoin simply can't be a Ponzi scheme because there is no perpetrator.  Whoever created bitcoin doesn't have control over it any more, so they cannot appropriate the funds to support the scheme, and they no longer have the ability to control its value.  At this point, it is all determined by the market.  The information about bitcoin has been out there since its creation, and there is no excuse for calling it a Ponzi scheme because everyone is able to research it and know what it is.  The market has decided that it has value, and barring any major flaws that nobody saw coming, it will continue to hold that value because there is no limit to the amount of investors it can support since it is not fraudulent.

Now, stop holding onto your desperate tripe that it's a Ponzi scheme.  It's just hyperbole and it's pathetic.  Anyone who calls it that is pathetic because they are clinging to knowingly false and hyperbolic words just to discredit bitcoin.  If you are that desperate to destroy it, then go buy a bunch of it and try to spark a major sell-off.  There are no guarantees that the market won't just make it rise again, though.

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## PaulConventionWV

> Do you really think a stable business can run on bitcoin as a form of payment? The value of it drops and rises some days up to 50% and the spread in regularly 5% or more.
> 
> Most libertarians I have seen point out how it is not sustainable or the fact that it will be easily monitored by the government(like all data transmissions on the internet). They don't have anything against it, if it were to be viable. Most, like myself, just don't see that and don't want people get burned. We already have gold and there only need to be one focal point for monetary value. No need for bitcoins, litecoins or even silver, thus they will all fall away. Buying BTC is a gamble on the greater fool theory. Just hope you aren't the last guy in.
> 
> See you at the bottom.


Not now, but it could happen in the future.  Stop being so ignorant.  If bitcoin really has value in the marketplace, then its price will stabilize and businesses will be able to use it.  

Also, like has been discussed already, there are many advantages to bitcoin that gold doesn't have, and your desperate clinging to gold is only hurting you.  Thanks, but I don't find your altruistic concern for my economic well-being very convincing.  The fact that you think there's no need for silver really just accentuates your ignorance.  Silver has value because the market has determined that it has value, just like bitcoin or anything else that the market has determined is valuable.  These values are all represented by the market, and it is completely stupid and arbitrary for you to say what we do and do not need.  Who are you that you think you can determine that the world only needs gold?  Newsflash: the world disagrees with you, as evidenced by the value of bitcoin and the value of silver and other commodities.

----------


## eduardo89

Very good article.

----------


## amonasro

> This digital so-called money will not be used to facilitate exchange. Nobody is going to be getting rid of an asset that has moved from $2 to $1,000 in one year in order to buy pizzas. People want to hang onto it, refusing to sell, in the hopes that it will go to $2,000. This is the classic mark of Ponzi scheme psychology. People do not buy the investment for the benefits that the investment provides as an investment, in other words, because it is a capital asset. They buy it only because it has gone up in price. They expect this to continue.


He is wrong here. I used bitcoins to buy a computer power supply just the other day. And I used it to (regrettably) buy some mining hardware a few months ago. I plan to use bitcoins through Gyft to buy giftcards to Amazon & Blue Nile for Christmas. My wife will appreciate this, I am sure 

It is easy and fast to pay with bitcoins with nearly zero tx fees and no chargebacks. And it will enable individuals in underbanked countries to participate in a growing world economy. Bitcoin users know the price will go up, and yes I am hoarding my savings wallet in cold storage, but it doesn't seem to stop these pesky Bitcoin payment processing companies from setting records in sales.

He article also fails to explore the cryptography and security of the largest distributed computer network in the world, ever, and the fact that the government can't confiscate it. All in all it seems he just doesn't understand it quite yet.

----------


## Peace&Freedom

To be fair to North, some people have promoted Bitcoin as a "new form of currency" and have been primarily selling it as an investment vehicle. From this, he errors in defining BTC entirely in these terms and critiques those two claims accordingly. In other words, his article debunks a strawman. The piece conveys the attitude of "it's new, so it must be just an investment fad or bubble." This is sad, considering in past years North wrote positively about alternative e-currencies like e-Gold. What he seems to have missed is the flaw revealed about those alternative centralized systems (i.e., they could all be smeared, raided, seized, frozen, or judicially shut down), to which the rise of a decentralized alternative is the reaction.

Bitcoin is not even a new e-currency (although most all currencies these days are exchanged or stored digitally), *it is a perfected delivery system for accessing a truly independent and decentralized currency, that restores the supply of this form of exchange to a market that clearly demands it.* The rapid rise of its value is partially explained by speculation, but mostly by the collapse in value of government monopoly fiat money---BTC isn't rising, so much as it is exposing that the dollar is tanking. This collapse will probably further accelerate when quantitative easing has run its course, or sooner.

The exchange value of precious metals (with their thousands-of-years track record) is obviously more established and tangible than a fiat digital currency, but that does not mean the latter has no _intangible_ value. The root value in Bitcoin currency is driven by its independence from the bank and government systems, and its inability to be shut down by either. Perhaps this factor is the silent issue that the critics (who in liberty circles uphold gold/silver) do not want to address, _because it exposes that gold and silver are also subject to bank/government control and seizure as well, and in this respect are inferior to Bitcoin type currencies in a tactical sense._ The bashing of BTC is their unfortunate way of making the perfect the enemy of the good, in order to protect their traditional favorite alternative.

----------


## 69360

You call it a currency, but it's main use to date has been speculation with the second most common use illegal activity and now 3rd most common use moving money out of China.

You complain about fractional reserve banking and money created out of thin air, but BTC is created out of thin air and worse yet, it's value is pegged to currency created out of thin air. 

Given all this, I can't see how BTC has a future. Yes someday the world will go to electronic currency, but BTC it won't be. If BTC gets big enough it will be regulated to death and replaced by something government controlled.

Given how unstable the value of BTC is, you can only use it as a medium of exchange when it's value is pegged to the currency you wish to replace, that is just not sustainable.

----------


## brandon

Gary North is a complete embarrassment to be associated with.

----------


## PaulConventionWV

> Very good article.


Actually, it was probably one of the worst articles ever written.  Do any of you critics even know what a Ponzi scheme is or are you just using that word because it seems to carry stigma and sounds cool?

----------


## PaulConventionWV

> You call it a currency, but it's main use to date has been speculation with the second most common use illegal activity and now 3rd most common use moving money out of China.
> 
> You complain about fractional reserve banking and money created out of thin air, but BTC is created out of thin air and worse yet, it's value is pegged to currency created out of thin air. 
> 
> Given all this, I can't see how BTC has a future. Yes someday the world will go to electronic currency, but BTC it won't be. If BTC gets big enough it will be regulated to death and replaced by something government controlled.
> 
> Given how unstable the value of BTC is, you can only use it as a medium of exchange when it's value is pegged to the currency you wish to replace, that is just not sustainable.


Are you freaking kidding me?  You are seriously going to sit there and tell us bitcoin is bad because its value is pegged to a currency created out of thin air?  I got news, pal.  The value of EVERYTHING we use in America is pegged to a currency created out of thin air.  And no, bitcoin was not created out of thin air.  It was created out of computer code.  Just because it has no physical substance, that doesn't mean it can't be valuable.  You put value on things with no physical substance every day.

----------


## cubical

> You are arbitrarily conflating and distorting the definition of a Ponzi scheme.  Gold may have been "selected", but it's not set in stone.  If you want to call it a Ponzi scheme because it needs "producers" in order to keep its value, then that could be applied to many investments.  That, however, does not make it fraudulent, and it still doesn't require the use of new investors' capital to pay interest on the investments.  Bitcoin simply can't be a Ponzi scheme because there is no perpetrator.  Whoever created bitcoin doesn't have control over it any more, so they cannot appropriate the funds to support the scheme, and they no longer have the ability to control its value.  At this point, it is all determined by the market.  The information about bitcoin has been out there since its creation, and there is no excuse for calling it a Ponzi scheme because everyone is able to research it and know what it is.  The market has decided that it has value, and barring any major flaws that nobody saw coming, it will continue to hold that value because there is no limit to the amount of investors it can support since it is not fraudulent.
> 
> Now, stop holding onto your desperate tripe that it's a Ponzi scheme.  It's just hyperbole and it's pathetic.  Anyone who calls it that is pathetic because they are clinging to knowingly false and hyperbolic words just to discredit bitcoin.  If you are that desperate to destroy it, then go buy a bunch of it and try to spark a major sell-off.  There are no guarantees that the market won't just make it rise again, though.


I agree that it is not a traditional ponzi scheme. It doesn't take away from his point. Standing on a box and proclaiming tulip bulbs are not a ponzi scheme wouldn't have made it any better. The people who entered late lost a lot of money.

----------


## cubical

> Not now, but it could happen in the future.  Stop being so ignorant.  If bitcoin really has value in the marketplace, then its price will stabilize and businesses will be able to use it.  
> 
> Also, like has been discussed already, there are many advantages to bitcoin that gold doesn't have, and your desperate clinging to gold is only hurting you.  Thanks, but I don't find your altruistic concern for my economic well-being very convincing.  The fact that you think there's no need for silver really just accentuates your ignorance.  Silver has value because the market has determined that it has value, just like bitcoin or anything else that the market has determined is valuable.  These values are all represented by the market, and it is completely stupid and arbitrary for you to say what we do and do not need.  Who are you that you think you can determine that the world only needs gold?  Newsflash: the world disagrees with you, as evidenced by the value of bitcoin and the value of silver and other commodities.


Stop being ignorant? Pointing out that it would be next to impossible to run a stable business on a currency that moves up to 50% in a day is factual. Sure anything COULD happen as you say, but that is a terrible reason to hold out hope.

There are many advantages of paper over gold as well. Doesn't matter. And as you say, who am I to determine the world only needs gold. You are correct. I don't determine that. The largest players in the game determine that. They have made their choice and it isn't bitcoin. You won't be changing anything because you are a shrimp. They are the giants. 

If you can trade it and make money, good job. Hope you don't lose all those unrealized profits overnight.

----------


## cubical

> Are you freaking kidding me?  You are seriously going to sit there and tell us bitcoin is bad because its value is pegged to a currency created out of thin air?  I got news, pal.  The value of EVERYTHING we use in America is pegged to a currency created out of thin air.  And no, bitcoin was not created out of thin air.  It was created out of computer code.  Just because it has no physical substance, that doesn't mean it can't be valuable.  You put value on things with no physical substance every day.


Clearly you are emotional about bitcoin. Reminds me of the silver pumpers in 2011. At least silver holders still have something. I am afraid it will be much different in the case of bitcoin.

----------


## Peace&Freedom

> Stop being ignorant? Pointing out that it would be next to impossible to run a stable business on a currency that moves up to 50% in a day is factual. Sure anything COULD happen as you say, but that is a terrible reason to hold out hope.
> 
> There are many advantages of paper over gold as well. Doesn't matter. And as you say, who am I to determine the world only needs gold. You are correct. I don't determine that. The largest players in the game determine that. They have made their choice and it isn't bitcoin. You won't be changing anything because you are a shrimp. They are the giants. 
> 
> If you can trade it and make money, good job. Hope you don't lose all those unrealized profits overnight.


The stability of a business using Bitcoin (including several I am currently familiar with) doesn't depend on the transcient top value of it, but on the usability and accessibility of it at its bottom value. The main currency unit (BTC) is divisible to 8 decimal places, so as long as it can be dependably exchanged at that level there is no problem. The only businesses at real risk are speculative businesses, whose stability is questionable based on several factors besides Bitcoin. Those who speculate will experience the risks of speculation, duh. That does not mean what they speculate on has no inherent value or stability---any more than the fact that most people into forex don't make money, proves that the currencies they exchange aren't stable.

The fundamental factors fixing the value of Bitcoin are 1) strong demand for a decentralized, independent currency, 2) a limit on the maximum total generated number of BTC built into the software, and 3) strong expectation that the value of competing fiat currencies will continue to fall via inflation. These factors are also facts, and the independence they establish for the currency is not only with respect to the banks and governments, but with respect to "the largest players in the game." Most of the big players got that way precisely due to government and/or banking collusions. Because BTC is structurally *independent* of their monopoly/gatekeeper stranglehold on currency and trade, we don't need them to "determine" the currency has value or can be used. The shrimp can co-exist with larger creatures or 'giants,' and trade without interference.

----------


## DGambler

> You call it a currency, but it's main use to date has been speculation with the second most common use illegal activity and now 3rd most common use moving money out of China.
> 
> You complain about fractional reserve banking and money created out of thin air, but BTC is created out of thin air and worse yet, it's value is pegged to currency created out of thin air. 
> 
> Given all this, I can't see how BTC has a future. Yes someday the world will go to electronic currency, but BTC it won't be. If BTC gets big enough it will be regulated to death and replaced by something government controlled.
> 
> Given how unstable the value of BTC is, you can only use it as a medium of exchange when it's value is pegged to the currency you wish to replace, that is just not sustainable.


Please explain in detail how "it will be regulated to death and replaced by something government controlled", thank you.

I invite you to use torrents as an example.

----------


## cubical

> The stability of a business using Bitcoin (including several I am currently familiar with) doesn't depend on the transcient top value of it, but on the usability and accessibility of it at its bottom value. The main currency unit (BTC) is divisible to 8 decimal places, so as long as it can be dependably exchanged at that level there is no problem. The only businesses at real risk are speculative businesses, whose stability is questionable based on several factors besides Bitcoin. Those who speculate will experience the risks of speculation, duh. That does not mean what they speculate on has no inherent value or stability---any more than the fact that most people into forex don't make money, proves that the currencies they exchange aren't stable.


So if I sent 100 bitcoins to a gold dealer to buy 100oz of gold, and in between the time I place to order and the time he ships to products, the bitcoins lose 30, 40 or 50%, do you think he just eats the 10s of thousands in losses and still ships me my coins? Doubt it. And if so, how many times would he be willing to do this before realizing just how risky it is to transact in bitcoin.





> The fundamental factors fixing the value of Bitcoin are 1) strong demand for a decentralized, independent currency, 2) a limit on the maximum total generated number of BTC built into the software, and 3) strong expectation that the value of competing fiat currencies will continue to fall via inflation. These factors are also facts, and the independence they establish for the currency is not only with respect to the banks and governments, but with respect to "the largest players in the game." Most of the big players got that way precisely due to government and/or banking collusions. Because BTC is structurally *independent* of their monopoly/gatekeeper stranglehold on currency and trade, we don't need them to "determine" the currency has value or can be used. The shrimp can co-exist with larger creatures or 'giants,' and trade without interference.


Yes the same can be said for every other "coin" out there. The powers that be are not on your side though. You will not change the monetary system. "The people" have never been in front of a monetary change in history. You(we) don't hold the cards, they do. The shrimp can not co-exist with the giants on different monetary planes. Sorry, you(we) NEED what they produce. 

If you got in a while ago and are still holding congrats to you. I would have been gone long ago. If the price creeps back up to its high in the next day or so I would expect it to pop again. A good price action motto is "you never have long to sell at the top".

----------


## cubical

> Please explain in detail how "it will be regulated to death and replaced by something government controlled", thank you.
> 
> I invite you to use torrents as an example.


Easy, where ever you try to use bitcoin online you will see...

----------


## gwax23

cubical I cant rep you anymore, slow down.

----------


## cubical

> cubical I cant rep you anymore, slow down.

----------


## Peace&Freedom

> So if I sent 100 bitcoins to a gold dealer to buy 100oz of gold, and in between the time I place to order and the time he ships to products, the bitcoins lose 30, 40 or 50%, do you think he just eats the 10s of thousands in losses and still ships me my coins? Doubt it. And if so, how many times would he be willing to do this before realizing just how risky it is to transact in bitcoin.


At this point, everyone aware of Bitcoin knows that for every drop of 30-50% in spending power, there is a corresponding recovery of that spending power, so there is no need to interpret a temporary drop as anything but that. Risk assessments by BTC traders will factor this in before a transaction, especially if they are not short term traders. People holding Bitcoin for the medium term or longer know the drops and rises are transitory, and that the long term trend is stable, particularly on the lower end of the BTC scale.  





> Yes the same can be said for every other "coin" out there. The powers that be are not on your side though. You will not change the monetary system. "The people" have never been in front of a monetary change in history. You(we) don't hold the cards, they do. The shrimp can not co-exist with the giants on different monetary planes. Sorry, you(we) NEED what they produce. 
> 
> If you got in a while ago and are still holding congrats to you. I would have been gone long ago. If the price creeps back up to its high in the next day or so I would expect it to pop again. A good price action motto is "you never have long to sell at the top".


Once again, we _don't have to_ change the monetary system. Crypto-currencies merely _remove layers of distortions_ to the monetary system by elite parties, and users of BTC can simply co-exist with the establishment without being dependent on it. Bitcoin is restoring access to a free market currency system, not changing the system. You have a number of things exactly backwards.

----------


## Peace&Freedom

> Easy, where ever you try to use bitcoin online you will see...


This does not effect peer networks upon which the transactions are being conducted, nor email based communications for the exchanges, nor tribler based communications that don't even employ links to so called bad domains. This jpg is a scare tactic that evades the plain fact that cryptocurrencies permit transactions that _aren't reliant on domains_ in order to trade.

----------


## DGambler

> Easy, where ever you try to use bitcoin online you will see...


All that proves to me is you have a fatal flaw in understanding the nature of Bitcoin and, as has been demonstrated by you and others in this thread, you, and others, have no desire to correct your misunderstanding.  I asked to use torrents as an example and you sidestepped it with your cute little jpg.  I can still obtain torrents despite numerous and public takedowns of torrent sites.  It's a hydra, figure it out for yourself.

All you and others are doing in this thread is scaremongering.  I'm sure there were similar people when electricity was first introduced and even the car.

----------


## brandon

> All that proves to me is you have a fatal flaw in understanding the nature of Bitcoin and, as has been demonstrated by you and others in this thread, you, and others, have no desire to correct your misunderstanding.  I asked to use torrents as an example and you sidestepped it with your cute little jpg.  I can still obtain torrents despite numerous and public takedowns of torrent sites.  It's a hydra, figure it out for yourself.
> 
> All you and others are doing in this thread is scaremongering.  I'm sure there were similar people when electricity was first introduced and even the car.


Torrents are a terrible analogy. If your torrent was a token that you had to take to your bank to turn into a an actual movie (etc) maybe that would be a slightly better analogy?  You can have your bitcoins till the end of time but they won't be worth much if there's no way to use them outside of illegal black markets.

----------


## brandon

> People holding Bitcoin for the medium term or longer know the drops and rises are transitory, and that the long term trend is stable, particularly on the lower end of the BTC scale.


Can you please qualify exactly what it is the people holding BTC know about the long term trend?  BTC has only been around for 5 years and is up something like 1,000,000% in that time frame.   Is that the stable long term trend you are referring to? Should we expect that every 5 years? Or is there another stable long term trend you are talking about?

----------


## Peace&Freedom

> Can you please qualify exactly what it is the people holding BTC know about the long term trend?  BTC has only been around for 5 years and is up something like 1,000,000% in that time frame.   Is that the stable long term trend you are referring to? Should we expect that every 5 years? Or is there another stable long term trend you are talking about?


Long term means at least waiting longer than a week or so before declaring "people have lost money on Bitcoin," when the trend over months and years has been growth. Or perhaps what this 'growth' actually represents is long term decline of the dollar from QE. The establishment can't disguise or mute the collapse of traditional fiat currencies compared to Bitcoin (they way they have with gold, by hoarding a lot of it, then mass-selling it whenever there is a gold rally in order to depress the price). Whatever, the clear judgement of the market has been thousands of merchants and business who have embraced BTC over the last few years. 

According to Wikipedia, "As of November 2013, the main use for bitcoins was likely for international money transferring purposes.[24] Bitcoin's deflationary bias encourages hoarding.[43] However, currently Bitcoin does see some use as a currency.[44][45] By November 2013 there were about 1000 "brick and mortar" businesses willing to accept payment in bitcoin,[46] and more than ten thousand merchants online.[47]"

----------


## PaulConventionWV

> I agree that it is not a traditional ponzi scheme. It doesn't take away from his point. Standing on a box and proclaiming tulip bulbs are not a ponzi scheme wouldn't have made it any better. The people who entered late lost a lot of money.


Actually, it DOES take away from his point.  What does he have if he is left with hyperbole?  And you comparing it to tulip bulbs doesn't help.  There's a big difference between bitcoin and tulip bulbs.  If you can't see that, then you're blind or incredibly stupid.  Your desperation is showing.  It's no wonder you feel the need to begrudgingly admit that it's not a "traditional" Ponzi scheme.  It's not a Ponzi scheme at all, in any way, shape, or form.  The ONLY reason that was used is because it's hyperbolic.  That's it.

----------


## PaulConventionWV

> Stop being ignorant? Pointing out that it would be next to impossible to run a stable business on a currency that moves up to 50% in a day is factual. Sure anything COULD happen as you say, but that is a terrible reason to hold out hope.


No, it's not.  EVERYTHING begins that way.  There is a beginning for everything, and the beginning is always the most unstable part.  What's wrong with holding out hope?  Why do you expect everyone to ditch it before it gets a chance to prove itself?  That's not how the market behaves.  People don't ditch things because they have no reason to hold out hope.  They ditch things when they're not working, and so far, I see no reason to LOSE hope.




> There are many advantages of paper over gold as well.


Name one.




> Doesn't matter. And as you say, who am I to determine the world only needs gold. You are correct. I don't determine that. The largest players in the game determine that. They have made their choice and it isn't bitcoin. You won't be changing anything because you are a shrimp. They are the giants.


You changed the subject.  We were talking about silver and why you think we don't need it.  The big players chose silver and you, while admitting that you don't determine anything, say we don't need it.  You are a hypocrite, sir.  Also, they have not made their choice yet.  It's way too early to say that "their [the big players] choice isn't bitcoin.  You can't possibly know that yet.  It is still in limbo right now.  If it skyrockets, then we'll know.  If it crashes down to zero, then we'll know, but you claim to already know, so you further expose yourself as a hypocrite and a know-it-all.  It is usually the fools who think they are wise.    

What are you talking about?  Of course it matters.  Advantages and disadvantages, benefits and detriments are what determines the value of something.  It's why people assign value to things, because they see an advantage over the old way.




> If you can trade it and make money, good job. Hope you don't lose all those unrealized profits overnight.


Why do you have such a vendetta against bitcoin?  First you're telling me you don't determine anything, then you tell me that we don't need silver and that the market has already decided against bitcoin as if you determined everything.  Why the contradiction?

----------


## PaulConventionWV

> Clearly you are emotional about bitcoin. Reminds me of the silver pumpers in 2011. At least silver holders still have something. I am afraid it will be much different in the case of bitcoin.


It's not about bitcoin, it's about the ignorance.  I'm easy to upset when I'm faced with sheer stupidity and ignorance.

----------


## PaulConventionWV

> So if I sent 100 bitcoins to a gold dealer to buy 100oz of gold, and in between the time I place to order and the time he ships to products, the bitcoins lose 30, 40 or 50%, do you think he just eats the 10s of thousands in losses and still ships me my coins? Doubt it. And if so, how many times would he be willing to do this before realizing just how risky it is to transact in bitcoin.
> 
> 
> 
> 
> Yes the same can be said for every other "coin" out there. The powers that be are not on your side though. You will not change the monetary system. "The people" have never been in front of a monetary change in history. You(we) don't hold the cards, they do. The shrimp can not co-exist with the giants on different monetary planes. Sorry, you(we) NEED what they produce. 
> 
> If you got in a while ago and are still holding congrats to you. I would have been gone long ago. If the price creeps back up to its high in the next day or so I would expect it to pop again. A good price action motto is "you never have long to sell at the top".


So you're saying it's hopeless and can't be done because, well, it's never been done.  Sorry, that argument doesn't really hold water when it comes to something this groundbreaking.

----------


## PaulConventionWV

> cubical I cant rep you anymore, slow down.


Wow, this is just pathetic.  The only reason you are sucking his dick is so he can go wave it around in people's faces some more.  What a joke.

----------


## gwax23

> Wow, this is just pathetic.  The only reason you are sucking his dick is so he can go wave it around in people's faces some more.  What a joke.


Someones angry. Ill give you some of my FunCoins. Everyone loves FunCoins they are the new best thing.

----------


## angelatc

> Very good article.


I think so too.  Only time will tell if he is right, though.

I do believe that most people are entering the Bitcoin market for investment purposes.  But there are outliers.  You can spend them on stuff.  eBay has some rogue sellers offering Bitcoin payments, Bonanza.com allows it although their checkout won't process it yet. A reporter in California lived for a week spending nothing but BTC.  It was hard, but she did it.

I just don't think there's any way to predict what will happen with BTC yet.  Once the government steps in and starts regulating it, it's days will be numbered.  But on the other hand, if the currency decides to collapse any time soon, BTC might be the new currency of choice. Yeah, that's a long shot, and I actually agree with Gary North, but I'm not unwilling to  give up all hope entirely.



(Where the heck is Overstock.com?  You'd think Patrick Byrne would be all over this.)

----------


## angelatc

> This does not effect peer networks upon which the transactions are being conducted, nor email based communications for the exchanges, nor tribler based communications that don't even employ links to so called bad domains. This jpg is a scare tactic that evades the plain fact that cryptocurrencies permit transactions that _aren't reliant on domains_ in order to trade.



That's true, but that's one of the problems I see with Bitcoins.  99% of Americans have no idea what the hell you just said.  Unless Bitcoin can make the process even easier than it is now, it will never be the currency of choice for mainstream America.

Which is fine - there's no reason we can't have competing currencies.  We already do, really.  It's just that the other currencies can only be used for speculation, and they're all owned by foreign governments.

----------


## Seraphim

OP article is NONSENSE.

A ponzi scheme requires revenue streams and payouts. The revenue to pay out old investors must come from expanding the ponzi and bringing in new money.

Bitcoin is not a "revenue" based business (nor is it built on fraud).

It is digital commodity.

One *could*  make an argument that future payouts require a "greater fool" type of market - but even that is NOT a Ponzi Scheme.

----------


## Seraphim

Tulip Mania was NOT a ponzi scheme.

It was a function of Greater Fool Syndrome. If you want to call it that.

Ponzi, it was not.




> I agree that it is not a traditional ponzi scheme. It doesn't take away from his point. Standing on a box and proclaiming tulip bulbs are not a ponzi scheme wouldn't have made it any better. The people who entered late lost a lot of money.

----------


## Schifference

> I think so too.  Only time will tell if he is right, though.
> 
> I do believe that most people are entering the Bitcoin market for investment purposes.  But there are outliers.  You can spend them on stuff.  eBay has some rogue sellers offering Bitcoin payments, Bonanza.com allows it although their checkout won't process it yet. A reporter in California lived for a week spending nothing but BTC.  It was hard, but she did it.
> 
> I just don't think there's any way to predict what will happen with BTC yet.  Once the government steps in and starts regulating it, it's days will be numbered.  But on the other hand, if the currency decides to collapse any time soon, BTC might be the new currency of choice. Yeah, that's a long shot, and I actually agree with Gary North, but I'm not unwilling to  give up all hope entirely.
> 
> 
> 
> (Where the heck is Overstock.com?  You'd think Patrick Byrne would be all over this.)


With the extreme rise in the Bitcoin value why would anyone diminish their asset holding and use it to spend? If you pay cash for your pizza today tomorrow you could get 2 or ?? more pizza's with the same Bitcoin.

----------


## Schifference

> OP article is NONSENSE.
> 
> A ponzi scheme requires revenue streams and payouts. The revenue to pay out old investors must come from expanding the ponzi and bringing in new money.
> 
> Bitcoin is not a "revenue" based business (nor is it built on fraud).
> 
> It is digital commodity.
> 
> One *could*  make an argument that future payouts require a "greater fool" type of market - but even that is NOT a Ponzi Scheme.


Maybe Ponzi was a poor choice of word. Maybe Pyramid scheme would have been more appropriate.

----------


## angelatc

> With the extreme rise in the Bitcoin value why would anyone diminish their asset holding and use it to spend? If you pay cash for your pizza today tomorrow you could get 2 or ?? more pizza's with the same Bitcoin.


Same reason anybody ever liquidates investments.  They decide something else has more value to them at that current moment.  The pizza buyer has made a choice. He has weighed all the possible future outcomes, and decided that he feels like pizza tonight.

----------


## ClydeCoulter

> Same reason anybody ever liquidates investments.  They decide something else has more value to them at that current moment.  The pizza buyer has made a choice. He has weighed all the possible future outcomes, and decided that *he feels like pizza tonight*.


Kind of a...squishy feeling?

----------


## Seraphim

Bolded is EXACTLY why selling some is the prudent thing to do. Whether it is reinvested or consumed elsewhere is another matter. But BTC has gone up from around 150$ to the top (so far) of 1240$.

Those are insane returns in such a short time frame.

Holding onto every BTC after such an absurd run up thinking it will keep up or that a major correction is not in line is a function of greed and/or stupidity.






> *With the extreme rise in the Bitcoin value why would anyone diminish their asset holding and use it to spend?* If you pay cash for your pizza today tomorrow you could get 2 or ?? more pizza's with the same Bitcoin.

----------


## Schifference

> Same reason anybody ever liquidates investments.  They decide something else has more value to them at that current moment.  The pizza buyer has made a choice. He has weighed all the possible future outcomes, and decided that he feels like pizza tonight.


So in that context the Bitcoin holder is liquidating an investment that he feels is less valuable than what they are getting. Would that mean that the person using or liquidating Bitcoin fears or realized that Bitcoin has reached its upward potential?

----------


## Schifference

> Bolded is EXACTLY why selling some is the prudent thing to do. Whether it is reinvested or consumed elsewhere is another matter. But BTC has gone up from around 150$ to the top (so far) of 1240$.
> 
> Those are insane returns in such a short time frame.
> 
> Holding onto every BTC after such an absurd run up thinking it will keep up or that a major correction is not in line is a function of greed and/or stupidity.


So the argument that it is a currency exchange is null and void. It is at best a volatile speculative investment that at this point in time is easy to liquidate.

----------


## evilfunnystuff

> So in that context the Bitcoin holder is liquidating an investment that he feels is less valuable than what they are getting. Would that mean that the person using or liquidating Bitcoin fears or realized that Bitcoin has reached its upward potential?


No just for the moment, just like when gold hit a high last year before droppinng 25% and many sold and boight back in after the drop gold will go beyond that higj again and some of the same people who sold will still be buying.

----------


## Schifference

> No just for the moment, just like when gold hit a high last year before droppinng 25% and many sold and boight back in after the drop gold will go beyond that higj again and some of the same people who sold will still be buying.


Timing the market is also speculative at best. When is that High? Is the 5% drop in one day the beginning of a major downturn or a simple correction? Will you ever be able to buy back in at today's prices again? I still hold all my gold and silver and use the lower price to just acquire more.

----------


## Seraphim

No.

There are times when free floating currencies become overvalued in the interim. When that happens, you don't hold onto the currency simple because it is currency. You sell for your homeland currency and book a profit there or for a currency you deem undervalued and try to expand your gains even more.

BTC is not much different in that regards.




> So the argument that it is a currency exchange is null and void. It is at best a volatile speculative investment that at this point in time is easy to liquidate.

----------


## Schifference

> No.
> 
> There are times when free floating currencies become overvalued in the interim. When that happens, you don't hold onto the currency simple because it is currency. You sell for your homeland currency and book a profit there or for a currency you deem undervalued and try to expand your gains even more.
> 
> BTC is not much different in that regards.


BTC has gone from $100 to $1200 in a year. Not like any currency I have ever heard of. More like a speculative investment.

----------


## Seraphim

There is A LOT of speculation involved, yes. But BTC is relatively new so any long term value (if it exists) can be priced in early and quickly. 




> BTC has gone from $100 to $1200 in a year. Not like any currency I have ever heard of. More like a speculative investment.

----------


## Schifference

Today if you had never had a BTC, would you buy $100,000 worth? If you had previously purchased BTC and had $100,000 worth of BTC would you liquidate some, all, or keep them?

----------


## PaulConventionWV

> I think so too.  Only time will tell if he is right, though.
> 
> I do believe that most people are entering the Bitcoin market for investment purposes.  But there are outliers.  You can spend them on stuff.  eBay has some rogue sellers offering Bitcoin payments, Bonanza.com allows it although their checkout won't process it yet. A reporter in California lived for a week spending nothing but BTC.  It was hard, but she did it.
> 
> I just don't think there's any way to predict what will happen with BTC yet.  Once the government steps in and starts regulating it, it's days will be numbered.  But on the other hand, if the currency decides to collapse any time soon, BTC might be the new currency of choice. Yeah, that's a long shot, and I actually agree with Gary North, but I'm not unwilling to  give up all hope entirely.
> 
> 
> 
> (Where the heck is Overstock.com?  You'd think Patrick Byrne would be all over this.)


How can anyone admit that they agree with Gary North after that steaming pile of crap?  What on earth could compel you to say that Gary North is making any valid points in this article?  Can you point to something specific that you thought was particularly convincing?  I'm just dying to know what's so appealing about that utter garbage.

----------


## Seraphim

I would not touch BTC with your money at these prices let alone my own.

If I had bought at a much lower price, yes I'd sell it all or damn near close around the 1000$ level. 

Would look to buy back in around 225-300$. It may very well correct to that level. 




> Today if you had never had a BTC, would you buy $100,000 worth? If you had previously purchased BTC and had $100,000 worth of BTC would you liquidate some, all, or keep them?

----------


## dannno

> Today if you had never had a BTC, would you buy $100,000 worth?


If I won the lottery and had a few million in gold and silver already, then ya probably, but not much more than that.





> If you had previously purchased BTC and had $100,000 worth of BTC would you liquidate some, all, or keep them?


I would slowly spend them on things I need, get some gold and silver and assuming spending bitcoin instead of cash resulted in excess cash flow I would put some back into gold/silver/bitcoin. But I would definitely not liquidate more than half, and realistically it would probably be closer to 10%.

----------


## Schifference

> I would not touch BTC with your money at these prices let alone my own.
> 
> If I had bought at a much lower price, yes I'd sell it all or damn near close around the 1000$ level. 
> 
> Would look to buy back in around 225-300$. It may very well correct to that level.


That sounds reasonable. At this time BTC is an overvalued volatile speculative investment.

----------


## dannno

> That sounds reasonable. At this time BTC is an overvalued volatile speculative investment.


Why do you believe it is overvalued? Most people haven't even heard of it yet. It is a bit speculative because it certainly isn't guaranteed, but the potential is there for a bitcoin to be worth millions of dollars if it catches on.

----------


## angelatc

> So in that context the Bitcoin holder is liquidating an investment that he feels is less valuable than what they are getting. Would that mean that the person using or liquidating Bitcoin fears or realized that Bitcoin has reached its upward potential?


No, it could just mean he is willing to sacrifice a little long term gain for a pizza.

----------


## Schifference

> Why do you believe it is overvalued? Most people haven't even heard of it yet. It is a bit speculative because it certainly isn't guaranteed, but the potential is there for a bitcoin to be worth millions of dollars if it catches on.


Let me change the word overvalued to a gamble.

----------


## dannno

> Let me change the word overvalued to a gamble.


Have you seen this video yet?

http://www.ronpaulforums.com/showthr...-Erik-Voorhees

This is not a "gamble" it is a monetary revolution.

If it is successful, then those who helped ensure early success by participating will be rewarded as they should.

----------


## Seraphim

Overvalued in the short term does not mean it's overvalued from a long term perspective.

It's gone up too high, too fast for it not to be overvalued (at least for now).

Parabolas are by their very nature unsustainable and self destructive.




> Why do you believe it is overvalued? Most people haven't even heard of it yet. It is a bit speculative because it certainly isn't guaranteed, but the potential is there for a bitcoin to be worth millions of dollars if it catches on.

----------


## Neil Desmond

> I think so too.  Only time will tell if he is right, though.
> 
> I do believe that most people are entering the Bitcoin market for investment purposes.  But there are outliers.  You can spend them on stuff.  eBay has some rogue sellers offering Bitcoin payments, Bonanza.com allows it although their checkout won't process it yet. A reporter in California lived for a week spending nothing but BTC.  It was hard, but she did it.
> 
> I just don't think there's any way to predict what will happen with BTC yet.  Once the government steps in and starts regulating it, it's days will be numbered.  But on the other hand, if the currency decides to collapse any time soon, BTC might be the new currency of choice. Yeah, that's a long shot, and I actually agree with Gary North, but I'm not unwilling to  give up all hope entirely.
> 
> 
> 
> (Where the heck is Overstock.com?  You'd think Patrick Byrne would be all over this.)


So basically there are people out there who want to trade with bitcoin, and it would be much easier for them if only the big online shopping sites would make it possible for customers to use bitcoins?  Sounds like the big online shopping sites are holding back bitcoin from its full potential.  I guess it's only a matter of time before the bitcoin damn breaks open.

----------


## 69360

> Are you freaking kidding me?  You are seriously going to sit there and tell us bitcoin is bad because its value is pegged to a currency created out of thin air?  I got news, pal.  The value of EVERYTHING we use in America is pegged to a currency created out of thin air.  And no, bitcoin was not created out of thin air.  It was created out of computer code.  Just because it has no physical substance, that doesn't mean it can't be valuable.  You put value on things with no physical substance every day.


Sort of. I'm not calling BTC bad. I'm just saying that it only has value right now when sold and converted to other currency.




> Please explain in detail how "it will be regulated to death and replaced by something government controlled", thank you.
> 
> I invite you to use torrents as an example.







> Easy, where ever you try to use bitcoin online you will see...


That would have been my answer.




> This does not effect peer networks upon which the transactions are being conducted, nor email based communications for the exchanges, nor tribler based communications that don't even employ links to so called bad domains. This jpg is a scare tactic that evades the plain fact that cryptocurrencies permit transactions that _aren't reliant on domains_ in order to trade.


Nobody cares about that. If the feds or some other government shut down exchanges or outlaw BTC in any way, watch it's value crash like the Hindenburg. Look at how it crashed after the first silk road shutdown. Look at how it recovered after the positive senate hearings. It's so speculative, it's value fluctuates with news stories.

----------


## ronpaulfollower999

Domain seizure might not be a problem in the future: http://en.wikipedia.org/wiki/Namecoin

Hopefully some developers pick up the project to continue working on it.

----------


## 69360

> Domain seizure might not be a problem in the future: http://en.wikipedia.org/wiki/Namecoin
> 
> Hopefully some developers pick up the project to continue working on it.


I don't totally understand this so bear with me. It says you need a copy of the namecoin blockchain to access the site? Why can't the feds buy one coin and have access to seize it?

----------


## juleswin

> I don't totally understand this so bear with me. It says you need a copy of the namecoin blockchain to access the site? Why can't the feds buy one coin and have access to seize it?


Yea, bitcoiner think they have found a chink in the govt's armor to exploit. Why the govt is treating bitcoin lightly and letting it thrive is another story. But dont be fooled, when they decide to crack down on bitcoin, the whole charade will unravel. Just put out a decree that any business found accepting bitcoin will have their bank accounts seized. Pass the bill with some connection with fighting the war on terror or fighting child prostitution ring and its OVER.

We all should be asking why the govt keeps closing gold backed currencies instead of trying to find inferior ways around it. If the farmer banned you from seeing his daughter, will you start f'ing the farm animals? no, you find a way to the daughter's room or keep fighting till you make it. Bitcoin and the other nothing backed crypto-currencies are the farm animal in my analogy and gold is the farmer's daughter

----------


## Neil Desmond

> Just put out a decree that any business found accepting bitcoin will have their bank accounts seized.


There's something I'm not getting here, so please clarify for me.  What if the businesses in this situation which accept bitcoins decide to simply no longer use bank accounts, since with bitcoin they'd be obsolete anyways?  How's this supposed to be a disincentive to prevent businesses from accepting bitcoins?  In fact, it seems to me that something like this could backfire and act as a catalyst for motivating businesses to do away with FRNs.

----------


## 69360

> There's something I'm not getting here, so please clarify for me.  What if the businesses in this situation which accept bitcoins decide to simply no longer use bank accounts, since with bitcoin they'd be obsolete anyways?  How's this supposed to be a disincentive to prevent businesses from accepting bitcoins?  In fact, it seems to me that something like this could backfire and act as a catalyst for motivating businesses to do away with FRNs.


Be realistic, a business can not pay it's expenses or taxes in BTC.

----------


## Neil Desmond

> Be realistic, a business can not pay it's expenses or taxes in BTC.


Are you implying that it's impossible to pay expenses or taxes without a bank account?

Also, you're contradicting one of my given premises.  In the hypothetical scenario I'm presenting here, I'm talking about many businesses doing business in bitcoins, which means that this includes many (if not all) of those businesses that are providing the goods and services resulting in the business's expenses.  This means that for the business, BTC will be accepted as payment for many (if not all) of its expenses.

For taxes and the remaining expenses (if any), BTC can simply be exchanged for FRNs.

BTW, I don't know that taxes can't be paid in BTC or other forms.  I'm under the impression that taxes can be paid with the shirt off your back, if that's all you have to offer.  So, why wouldn't a business be able to pay their taxes with BTC?

----------


## PaulConventionWV

> Sort of. I'm not calling BTC bad. I'm just saying that it only has value right now when sold and converted to other currency.
> 
> 
> 
> 
> 
> 
> 
> That would have been my answer.
> ...


What are you talking about?  It didn't crash after the first silk road shutdown.  It dipped a little bit for about an hour and then took off again.  Everything's value fluctuates with news stories.  That's generally how the market works.  News affects the prices of most things when the news is related.

----------


## 69360

> Are you implying that it's impossible to pay expenses or taxes without a bank account?
> 
> Also, you're contradicting one of my given premises.  In the hypothetical scenario I'm presenting here, I'm talking about many businesses doing business in bitcoins, which means that this includes many (if not all) of those businesses that are providing the goods and services resulting in the business's expenses.  This means that for the business, BTC will be accepted as payment for many (if not all) of its expenses.
> 
> For taxes and the remaining expenses (if any), BTC can simply be exchanged for FRNs.
> 
> BTW, I don't know that taxes can't be paid in BTC or other forms.  I'm under the impression that taxes can be paid with the shirt off your back, if that's all you have to offer.  So, why wouldn't a business be able to pay their taxes with BTC?


Not implying. I'm telling you outright the IRS does not take BTC for tax payments. 

Could the IRS seize your BTC for non-payment of taxes, possibly. 




> What are you talking about?  It didn't crash after the first silk road shutdown.  It dipped a little bit for about an hour and then took off again.  Everything's value fluctuates with news stories.  That's generally how the market works.  News affects the prices of most things when the news is related.


It fluctuates way way beyond what a normal security or currency would. Now with China banning BTC it's down to $1000 and dropping.

----------


## Neil Desmond

> Not implying.


Then I take it we have it settled that a bank account is not necessary for a business to be able to pay taxes.  Ok.  So now, please explain to me, if the government puts out a "decree that any business found accepting bitcoin will have thier bank account seized", what are the consequences for a business that accepts bitcoins, if it has no bank account for the government to seize?

----------


## Neil Desmond

> Now with China banning BTC


There's a report that China banned financial institutions from trading in bitcoin; is that what you're referring to as a "ban", or are you referring to a different report, one which states that China has banned everyone from trading in bitcoin?  If so, please provide a link to a source; I'd like to learn more about that.

I saw plenty of CNY exchanged for BTC before the Chinese financial institution bitcoin trading ban and still see plenty of activity now, on here: http://fiatleak.com/




> it's down to $1000 and dropping.


Really?  Where are you getting this?  According to Mt. Gox charts, it's been fluctuating back and forth between $950 and $1,250 in the past 10 days; and at the moment, it's at almost $1,100.  That doesn't seem like dropping to me.

----------


## PaulConventionWV

> Not implying. I'm telling you outright the IRS does not take BTC for tax payments. 
> 
> Could the IRS seize your BTC for non-payment of taxes, possibly. 
> 
> 
> 
> It fluctuates way way beyond what a normal security or currency would. Now with China banning BTC it's down to $1000 and dropping.


It's not necessarily "and dropping."  You sound like you're just trying to make it look bad when it's not that bad.

----------


## donnay

Where is the checks and balances here?  Is bitcoins backed by something of intrinsic value?   I cannot help but think the Federal Reserve notes are backed by nothing so when the government runs out of money they just simply print more.  Well, if bitcoins run out, do they just simply digitize more?  Who holds them accountable when your bitcoins disappear?  What restitution will you have?

I am all for bartering, but to gain something from nothing doesn't make sense to me.  You bitcoin people, educate me.

----------


## PaulConventionWV

> Where is the checks and balances here?  Is bitcoins backed by something of intrinsic value?   I cannot help but think the Federal Reserve notes are backed by nothing so when the government runs out of money they just simply print more.  Well, if bitcoins run out, do they just simply digitize more?  Who holds them accountable when your bitcoins disappear?  What restitution will you have?
> 
> I am all for bartering, but to gain something from nothing doesn't make sense to me.  You bitcoin people, educate me.


That is what FRNs are for, but that's not what bitcoin is for.  You can't just digitize it.  There is a hard limit of 21 million that will ever be in existence, and that number cannot be changed.  Someone will probably be able to explain it better than I do, but it's based on the blockchain, which is a running ledger of all transactions.  The blockchain ensures that all bitcoins used are valid based on the transactions.  If you simply try to introduce another coin into the blockchain, then it will determine that it is not valid and will reject it because it is keeping track of all valid transactions.  The bitcoin itself is a special math problem which is solved and proof of work is provided, after which the bitcoin becomes valid and gets introduced into the blockchain.  Nobody can simply print or digitize more bitcoins.  They stand on their own, just like a gold coin.  

I hope that helps.

----------


## donnay

> That is what FRNs are for, but that's not what bitcoin is for.  You can't just digitize it.  There is a hard limit of 21 million that will ever be in existence, and that number cannot be changed.  Someone will probably be able to explain it better than I do, but it's based on the blockchain, which is a running ledger of all transactions.  The blockchain ensures that all bitcoins used are valid based on the transactions.  If you simply try to introduce another coin into the blockchain, then it will determine that it is not valid and will reject it because it is keeping track of all valid transactions.  The bitcoin itself is a special math problem which is solved and proof of work is provided, after which the bitcoin becomes valid and gets introduced into the blockchain.  Nobody can simply print or digitize more bitcoins.  They stand on their own, just like a gold coin.  
> 
> I hope that helps.


Okay, I am understanding it a bit more now.  But still very skeptical about how it can progress past the Central Bank hard control--they are not going to sit back and allow this to continue--without a fight.  I saw what they did to Bernard von NotHaus and Liberty dollars.

----------


## Neil Desmond

> BTC...down to $1000 and dropping.


Woah, about $700 now!  You were right after all!  Maybe this means toodle-loo for bitcoin.  Who knows?

----------


## dannno

> Woah, about $700 now!  You were right after all!  Maybe this means toodle-loo for bitcoin.  Who knows?


It's just a correction.. it has happened before and a lot of people on this forum were exclaiming that "bitcoin was dead!"

It will over correct and then come back up to some level and then at some point will likely go way up again.

----------


## Neil Desmond

> It's just a correction.. it has happened before and a lot of people on this forum were exclaiming that "bitcoin was dead!"
> 
> It will over correct and then come back up to some level and then at some point will likely go way up again.


Yeah, I know.

----------


## cubical

> Actually, it DOES take away from his point.  What does he have if he is left with hyperbole?  And you comparing it to tulip bulbs doesn't help.  There's a big difference between bitcoin and tulip bulbs.  If you can't see that, then you're blind or incredibly stupid.  Your desperation is showing.  It's no wonder you feel the need to begrudgingly admit that it's not a "traditional" Ponzi scheme.  It's not a Ponzi scheme at all, in any way, shape, or form.  The ONLY reason that was used is because it's hyperbolic.  That's it.


Nope, its because the people who are making money off bit coins are doing so only at the expense of the new buyers. EXACTLY like a ponzi scheme. I guess I could say "If you can't see that, then you're blind or incredibly stupid.", but I am not as angry as you.

----------


## dannno

> Nope, its because the people who are making money off bit coins are doing so only at the expense of the new buyers. EXACTLY like a ponzi scheme. I guess I could say "If you can't see that, then you're blind or incredibly stupid.", but I am not as angry as you.


People using bitcoins today are doing so at the expense of those making money off bitcoins.

----------


## cubical

> No, it's not.  EVERYTHING begins that way.  There is a beginning for everything, and the beginning is always the most unstable part.  What's wrong with holding out hope?  Why do you expect everyone to ditch it before it gets a chance to prove itself?  That's not how the market behaves.  People don't ditch things because they have no reason to hold out hope.  They ditch things when they're not working, and so far, I see no reason to LOSE hope.


LOL. At least are admitting it has not proved itself. But again, you rest on your hope.





> Name one.


Much easier to carry my wealth around and make payments.




> You changed the subject.  We were talking about silver and why you think we don't need it.  The big players chose silver and you, while admitting that you don't determine anything, say we don't need it.  You are a hypocrite, sir.  Also, they have not made their choice yet.  It's way too early to say that "their [the big players] choice isn't bitcoin.  You can't possibly know that yet.  It is still in limbo right now.  If it skyrockets, then we'll know.  If it crashes down to zero, then we'll know, but you claim to already know, so you further expose yourself as a hypocrite and a know-it-all.  It is usually the fools who think they are wise.


Sorry, but that is the subject. How "money" gains/retains its value is determined by who supports it. And you say I don't know, but I do. They already have gold. They don't need anything else. Why would they?




> Why do you have such a vendetta against bitcoin?  First you're telling me you don't determine anything, then you tell me that we don't need silver and that the market has already decided against bitcoin as if you determined everything.  Why the contradiction?


No vendetta other than I don't want people to get burned by the hype machines such as yourself who are calling bitcoin everything it isn't and it never will be.

----------


## cubical

> So you're saying it's hopeless and can't be done because, well, it's never been done.  Sorry, that argument doesn't really hold water when it comes to something this groundbreaking.


Yes, THIS TIME it's different. THIS TIME we will change the world!! JUST BUY!!

----------


## cubical

> This does not effect peer networks upon which the transactions are being conducted, nor email based communications for the exchanges, nor tribler based communications that don't even employ links to so called bad domains. This jpg is a scare tactic that evades the plain fact that cryptocurrencies permit transactions that _aren't reliant on domains_ in order to trade.


If you can't exchange bitcoins for anything outside of the bitcoin world, it will quickly become worthless. Just like if you couldn't use Ugandan Schillings to buy US dollars, it would soon become worthless. It doesn't matter if you can transfer p2p, that is not what gives money it's value.

----------


## dannno

> If you can't exchange bitcoins for anything outside of the bitcoin world, it will quickly become worthless. Just like if you couldn't use Ugandan Schillings to buy US dollars, it would soon become worthless. It doesn't matter if you can transfer p2p, that is not what gives money it's value.


What makes you think that there will be a time when you can't exchange bitcoin for anything outside of the bitcoin world? What are the boundaries of this Bitcoin World you speak of? Is it like a theme park?

----------


## cubical

> What makes you think that there will be a time when you can't exchange bitcoin for anything outside of the bitcoin world? What are the boundaries of this Bitcoin World you speak of? Is it like a theme park?


The response was in the context of a post I made showing the US Government shutting down a site which accepted/used bitcoin.

----------


## dannno

> The response was in the context of a post I made showing the US Government shutting down a site which accepted/used bitcoin.


The beauty of bitcoin is that it operates everywhere so the U.S. govt. shutting down something is not very significant. 

In fact I think it will work sort of like a balloon animal effect where if one government clamps down it will just make the currency more valuable elsewhere. Think of bitcoin like a revolutionary virus, people see the governments cracking down and that makes them realize how valuable it could be, why else would these governments be cracking down on it? Even those who are being limited by their government in some way will still find ways around it and be able to retreive the value of their bitcoin. For example if the government says you can't convert bitcoin to USD through banks then you buy gold or silver, convert it to something else. If they shut down companies that accept bitcoin then order your bullion from a company in Canada or something.

The only end game against bitcoin would be to shut down the entire grid, everything, destroy it all. Everywhere.

----------


## cubical

> The beauty of bitcoin is that it operates everywhere so the U.S. govt. shutting down something is not very significant. 
> 
> *In fact I think it will work sort of like a balloon animal effect where if one government clamps down it will just make the currency more valuable elsewhere.* Think of bitcoin like a revolutionary virus, people see the governments cracking down and that makes them realize how valuable it could be, why else would these governments be cracking down on it? Even those who are being limited by their government in some way will still find ways around it and be able to retreive the value of their bitcoin. For example if the government says you can't convert bitcoin to USD through banks then you buy gold or silver, convert it to something else. If they shut down companies that accept bitcoin then order your bullion from a company in Canada or something.


This makes no sense. The value of money rises as more people demand it. Taking away people's ability to access money would obviously decrease it's demand.

If the government says you can't convert bitcoin to USD, then I doubt you could convert it to anything of value for very long(in the current International Monetary System).

----------


## dannno

> This makes no sense. The value of money rises as more people demand it. Taking away people's ability to access money would obviously decrease it's demand.


Your problem is you start forming your arguments before I've finished mine.




> Think of bitcoin like a revolutionary virus, people see the governments cracking down and that makes them realize how valuable it could be, why else would these governments be cracking down on it?


The government cracking down increases demand ELSWHERE especially because people read the news and see that the big money establishment is cracking down on bitcoin, so more people realize the value in engaging in the bitcoin economy to remove their own shackles and the demand goes up globally more than the demand decreases in the one country out of hundreds which performs the action. The country thati is being cracked down on begins to feel oppressed by their government and retaliates by moving more of their life out of the perview of government and more into the underground bitcoin world.




> If the government says you can't convert bitcoin to USD, then I doubt you could convert it to anything of value for very long(in the current International Monetary System).


Why can't I buy gold from Canada or currency in another market in another country and wire it back or some other one of a thousand different options that people would discover and spread?

----------


## cubical

> Your problem is you start forming your arguments before I've finished mine.
> 
> 
> 
> The government cracking down increases demand ELSWHERE especially because people read the news and see that the big money establishment is cracking down on bitcoin, so more people realize the value in engaging in the bitcoin economy to remove their own shackles and the demand goes up globally more than the demand decreases in the one country out of hundreds which performs the action. The country thati is being cracked down on begins to feel oppressed by their government and retaliates by moving more of their life out of the perview of government and more into the underground bitcoin world.


Kinda like how the price rose when China came out against bitcoin? I wish the people of the world would react in this way, but they won't and they can't really.




> Why can't I buy gold from Canada or currency in another market in another country and wire it back or some other one of a thousand different options that people would discover and spread?


Because what would someone in Canada want with bitcoins? Ultimately Canadians need Canadian dollars. No one with Canadian dollars will want bitcoins if they can't get USDs with them. A money's value is determined as it goes up the chain.

If the US government deemed bitcoins illegal, many if not most other countries would follow. They want USDs because USDs are linked to oil and gold.

----------


## dannno

> Kinda like how the price rose when China came out against bitcoin? I wish the people of the world would react in this way, but they won't and they can't really.


The invisible hand of the market will shine through government oppression eventually, I fully expect people to panic sell off the bat but let's see where that price is in a few days.





> Because what would someone in Canada want with bitcoins? Ultimately Canadians need Canadian dollars. No one with Canadian dollars will want bitcoins if they can't get USDs with them. A money's value is determined as it goes up the chain.
> 
> If the US government deemed bitcoins illegal, many if not most other countries would follow. They want USDs because USDs are linked to oil and gold.


So wait, now you are saying that the US AND Canada are cracking down at the same time on bitcoin? I would think a coordinated attack would cause even greater alarm and wider acceptance worldwide. The world is a big place and there are a lot of countries.

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## RickyJ

> *The invisible hand of the market will shine through government oppression eventually*, I fully expect people to panic sell off the bat but let's see where that price is in a few days.


The "invisible hand" of the market is fully controlled by the elite, not the government. They are greater than the government, since they also control the government.

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## dannno

> The "invisible hand" of the market is fully controlled by the elite, not the government. They are greater than the government, since they also control the government.


Bitcoin may be their downfall.

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## DGambler

We get it, some of you don't like  it and some of us do... We aren't going to change each others minds at this point. 

If it crashes to 0, I fully expect you guys to be here telling us "I told you so"  and rubbing our noses in it.   If it goes the other way, do you think we'll be doing the same? I doubt it.

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## RickyJ

> Bitcoin may be their downfall.


How much do you want to bet on that?

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## NewRightLibertarian

> How much do you want to bet on that?


I dunno about bitcoin, but it seems like online currencies could give them a handful if enough of them develop and enough people utilize them

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## Shane Harris



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## vickersvimy

> There is a lot of speculation in bitcoin. But it's value is there. Stefan did a new video on how bitcoins can do financial transactions more efficiently than the financial industry.
> 
> edit: Personally I am waiting for bitcoin to spread without my help. Where there is no risk there is no loss .


It is tulipmania part two. Tulips could be used to buy a house...

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