Discussion in 'Financial Cents' started by Yard Dart, May 18, 2013.
Bitcoin blow: U.S. government freezes funds to trade the digital currency | Marketplace.org
They did the same thing to the Liberty Dollar a few years back:
Liberty Dollar - Wikipedia, the free encyclopedia
Some demented quotes from our fine public servants which makes it clear that at least some of them intend to declare whatever war is necessary to maintain their monopoly over the nations money supply (which they are hell bent on destroying with their inflation creating policies, oddly enough):
Attorney for theWestern District of North Carolina, Anne M. Tompkins, described the Liberty Dollar as "a unique form of domestic terrorism" that is trying "to undermine the legitimate currency of this country". The Justice Department press release quotes her as saying: "While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country."
Yep, seems that Mt. Gox's US LLC did not register with the feds as a Money Exchange Business ... and they froze this account.
It's ok, it's only going to affect us amerikans being able to transfer money into/out of their exchange using this method.
The rest of the world just says, meh.
Bitcoin FAIL. Knew it would happen. Hey Winklevoss twins. Looks like you got screwed again!
Yep, it's a government fail. They continue failing to stop it.
All that the government has done has made it more difficult for amerikans to participate.
the rest of the world isn't even noticing. Those holding BitCoin still hold BitCoin.
What has changed? Not much.
...in of the largest economies.. ok.. you can keep trying to convince yourself that bitcoin is not a failure, just remember that anyone who got in early, already cashed out (i.e. the creator of bitcoin). I don't see this is anything but a scam where late comers make early adopters more rich.
Well, I guess we can agree to disagree.
Even with the 'freezing' of one single bank account. Nothing has happened to the street price of BitCoin. Wait, I'm wrong. It went up 20%.
One thing to note, while the americans tend to want to horde it. There are large pockets of people across the world that use it for commerce / barter.
The US != The world.
The only way that BitCoin fails, is if everyone stops using it.
It's an idea on how 'Money/Trade/Barter' should work, freely, without government interference.
It's really really difficult to stop an idea. And yeah, I guess i've drank some of the BitCoin Koolaid.
For the record, I was mining for a while. I stepped into it and gave it the old college try. It's not like I didn't spend time in the BC world. I did, for several months and damn near burnt out my video card doing it too. The reason Bitcoin went up wasn't because it was more desired in the "i have to have it" sense. It went up because it was safer than the worthless paper in your wallet. It was easy to move to and had, at least, some monetary value in the reserve money of the world as well as some other currencies. It other words, it's a dirty whore. If ever there was a more stable currency along with a truly stable financial system to back it up, bit coin will disappear. Much like it's necessity in being created, it will eventually become un-necessary. I'd rather have hard money than more FIAT (and yes, BC is FIAT).
No one is forcing anyone to accept it as legal tender. So, not fiat.
But right now, I can transfer my measly BTC holdings to individuals I know in Australia, Germany, Finland and the Ukraine and have them buy me stuff with Fiat in their country and either hold it for me until i get there or ship it back to me here in the states. Oh, and the transfer fee? Essentially nothing. How long to send them the BTC, about 30 minutes. And i don't have to let the government know.
I can also buy stuff online like encrypted storage hardware, night vision, website hosting. I can do the same with a credit card but my cost basis for BTC is lower.
Seriously though, BTC is not for everyone.
Some think it's novel
Some think it's evil
Some think it's great
Some think it's just a fad.
Some think it will save us from central banks.
Look at it this way. It's a modern day precious metal. Some will accept payment in gold/silver, some might think about it, some flat outright refuse it.
To each their own.
Hey, if you have BTC laying around .. I'll take it. I might even swap you FRN, CAD or Euros for it.
Fiat doesn't necessarily mean "gov't instituted".. it means "no intrinsic value" in the context of which I speak of it.
Well, if you have some of those worthless BTCs, I'll assume your risk in holding them and give you worthless Federal Reserve Notes.
Na. I just deleted them.. wasn't worth my time.
Wow! Probably regretted that when they hit 250+ USD each.
How many did you have?
I mined mine..I only had 2. I will admit, I was shocked at the surge, but having understood why it jumped, I know that it will be short lived in the grand scheme of things.
Well, as time marches on we shall see where the chips fall.
Yeah, I'd have bought those 2 off you.
Indeed we shall. Let me know when I can trade it in some place that barely knows what a computer is but knows what gold is. now THAT'S money.
Look at it this way....bitcoin is 1's and 0's.
It's NOT precious metal.
It's NOT water.
It's NOT a commodity....it's just trendy.
but you can buy ammo with it.
ARMSLIST - For Sale: 1000 rds Case Tula .223 5.56 AR-15 Ammo 223 NEW PMC Federal Wolf Winchester 5.56mm 55gr FMJ bitcoin
I'm not disputing that you can use it as currency.
I'm stating that it's not a real commodity.
If we take a .jpeg picture of a baconator....
It's 1's and 0's. You can't eat it.
You can call bitcoin "digital gold" all you like...
It doesn't make it gold and you can't craft a ring out of it.
Bitcoin is a Ponzi scheme—the Internet’s favorite currency will collapse.
Bitcoin is a fantasy. The Internet’s currency—a secure, private, decentralized type of money that makes possible anonymous and virtually costless transactions across borders—contains the seeds of its own destruction. More than anything else, it resembles a Ponzi scheme—and the wild claims made on its behalf reveal a great deal about a libertarian strain of thinking with deep roots in the American psyche.
As Farhad Manjoo relates in his entertaining (but dubious) foray into the market, bitcoin is the brainchild of a person (or persons) called Satoshi Nakamoto. Computer users can “mine” bitcoins by instructing their computers to solve complex problems generated by the bitcoin network. As more bitcoins are produced, the problems become more complex, requiring more computer power to solve them, and this limits the total number of bitcoins that can be created over time. Bitcoins are themselves simply strings of numbers. Once you own a bitcoin, you can transfer it to someone else (as a gift or to purchase goods) over the Internet. You can also convert it into dollars or other currencies on various exchanges. The Bitcoin network keeps track of where the bitcoins are located, so you cannot spend a single bitcoin over and over again by trying to transmit the identical code.*
The currency was launched in 2009. It has traded for less than 1 cent. As recently as a year ago, a bitcoin was worth less than $5; this week the price of a bitcoin reached $266, an increase of more than 1,000 percent over the last three months, but then yesterday plunged to $105 before finishing off at $165 last I looked. More than 11 million bitcoins circulate, and so their aggregate value is fluctuating between $1 and $2 billion—a tiny fraction of the trillions of dollars in currency but not bad for the infant brainchild of an anonymous brain.
Bitcoin may be useful for certain types of transactions, especially illegal ones. But bitcoin’s defenders argue that the experiment has proved that a currency can come into existence and function without any government role, so designed as to make inflation impossible and bank transfer fees unnecessary. These features are supposed to make bitcoins irresistible for consumers. Meanwhile, stripped of the power to manipulate currencies to advance nefarious ends, governments will collapse, and we will live in an anarcho-utopia.
This is wrong, both theory and experience tell us. Bitcoin is not the first unregulated or private currency. Until central banks were invented in the 17th century, the money supply was unregulated even if governments did stamp coins. Other unregulated or private currencies have emerged from time to time—think of cigarettes in prison camps. Gold, silver, bank notes, and all kinds of other things have played similar roles. Paul Krugman wrote a famous Slate piece about a private currency that was invented to facilitate the exchange of services in a baby-sitting co-op.
Felix Salmon and many others have pointed out that a currency cannot succeed with a supply that is fixed, or if it grows too slowly. A currency is used to enter transactions; the more transactions there are, the more of the money you need. As the economy grows, a fixed-supply currency becomes worth more in terms of goods and services, and people begin to hoard it—expecting that if they wait a little longer, they will be able to buy more. Once hoarding takes over, circulation ends, and with it the function of the currency. Hoarding accounts for the large increase in the value of bitcoins; hoarding also sank Krugman’s baby-sitting scrip.
An even more fundamental problem with bitcoins, and indeed any private currency, is that there is no way to limit its supply. True, bitcoins cannot be manufactured beyond the limits set by Nakamoto. But there is no way to prevent future Nakamotos from creating bitcoin substitutes—say, bytecoin, or botcoin. If merchants are willing to accept bitcoins, they will be willing to accept the substitutes, especially as bitcoins become scarce and consumers scramble for substitutes. Nakamoto must have realized this because there are not enough bitcoins to substitute for the currencies around the world. The currency can only succeed if it is expanded or supplemented. But if there are no constraints on substitute digital currencies—and there aren’t—then the value of bitcoins will plummet as the subs begin to circulate. And once it becomes clear that there is no limit, people will realize that their holdings could become worthless at any moment, and demand for bitcoins and the other currencies will collapse, ending the experiment.
Unless a bitcoin has value as a currency, it has no value at all, and its price in dollars will fall to zero. A regular Ponzi scheme collapses when people realize that earlier investors are being paid out of the investments of later investors rather than from the returns on an underlying asset. Bitcoin will collapse when people realize that it can’t survive as a currency because of its built-in deflationary features, or because of the emergence of bytecoins, or both. A real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion.
Given this, why all the enthusiasm for bitcoin? Partly, the technological ingenuity of the scheme, of course. And people have misinterpreted the run-up in price as a sign of success rather than failure. But more fundamentally, bitcoin unites futuristic left-wing Internet anarchism—the fantasy that the Web can provide the conditions for a governmentless society—with the cave-dwelling right-wing libertarianism of goldbugs who think a stable money supply can be established without government involvement. It is proof for both that government is not needed for much, or at all.
Yet history shows that private currencies always end in tears; if central banks sometimes abuse the trust we place in them, the alternatives are worse. The strangest feature of the bitcoin saga is that people who are so suspicious of government put their trust in Satoshi Nakamoto, who could be anyone, or anyones—eccentric academic researchers, mischievous Fed economists, DARPA, U.N. globalizers in black helicopters, a criminal syndicate, a bored 11-year-old Ukrainian genius. If Nakamoto is as amoral as he is ingenious, then he pocketed the early bitcoins and laughed himself to the bank.
Separate names with a comma.