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CosmicKat
26th March 2013, 12:37
BITCOIN sounds like something from science fiction: A purely digital currency, created by a pseudonymous developer named Satoshi Nakamoto in 2009, it operates outside the world’s traditional banking systems. The four-year-old currency is very real, though, and it’s trading at an all-time high, tripling in value in the last two months alone.


http://www.youtube.com/watch?v=Um63OQz3bjo

Internationally, bitcoins can be exchanged by personal computer directly through a wallet file or a website without an intermediate financial institution. In trade, one bitcoin is subdivided into 100-million smaller units called satoshis, defined by eight decimal places.

BITCOIN does not operate like typical currencies: It has no central bank and it solely relies on an internet-based peer-to-peer network. The money supply is automated, limited, divided and scheduled and given to servers or “bitcoin miners” that verify bitcoin transactions and add them to an archived transaction log every 10 minutes.

Here's the dark side of the Bitcoin..
Source: Project Camelot

Yes, bitcoins are very real - but beware, they are predominantly used as 'the' currency for the 'Dark Web'.
I feel obliged to inform everyone of the now infamous 'Silk Road' market place - where all manner of dark dealings take place.
From weapons to drugs to trafficking to snuff movies to fights to the death and all other manner of merchandise or services - throw in assassins for hire also.

So, to sum this up, will the BITCOIN eventually take ahold of the World as the Web has with the vast information we are privey to? If you think about it, you're able to now take a picture of a check with your phone and pay your bills. Doesn't make one wonder where our currency will be in 10 years time?

RMorgan
26th March 2013, 13:19
Hey my friend,

There´s another thread where I talked a little about bitcoin.

There´s a long way to go if they mean to make it safe for the regular computer user.

Right now, if anyone wants to use bitcoin safely, one needs to be a security expert to keep his wallet file protected. If someone manages to steal your wallet file, and there are hack groups and malware specialized in doing that, you just lose all your money forever. See this thread (https://bitcointalk.org/index.php?topic=16457.0) in bitcoin forum, where a savvy bitcoin user had the equivalent of U$500.000,00 stolen in bitcoins; It´s a 32 pages long nightmarish thread, and there are many similar cases both in bitcoin forum and in other parts of the internet.

Also, read this pretty good article from Wired, called The Rise and Fall of Bitcoin (http://www.wired.com/magazine/2011/11/mf_bitcoin/all/). I´ll quote a few parts of it:


By default, bitcoin kept users’ currency in a digital “wallet” on their desktop, and when bitcoins were worth very little, easy to mine, and possessed only by techies, that was sufficient. But once they started to become valuable, a PC felt inadequate. Some users protected their bitcoins by creating multiple backups, encrypting and storing them on thumb drives, on forensically scrubbed virgin computers without Internet connections, in the cloud, and on printouts stored in safe-deposit boxes. But even some sophisticated early adopters had trouble keeping their bitcoins safe. Stefan Thomas had three copies of his wallet yet inadvertently managed to erase two of them and lose his password for the third. In a stroke, he lost about 7,000 bitcoins, at the time worth about $140,000. “I spent a week trying to recover it,” he says. “It was pretty painful.” Most people who have cash to protect put it in a bank, an institution about which the more zealous bitcoiners were deeply leery. Instead, for this new currency, a primitive and unregulated financial-services industry began to develop. Fly-by-night online “wallet services” promised to safeguard clients’ digital assets. Exchanges allowed anyone to trade bitcoins for dollars or other currencies. Bitcoin itself might have been decentralized, but users were now blindly entrusting increasing amounts of currency to third parties that even the most radical libertarian would be hard-pressed to claim were more secure than federally insured institutions. Most were Internet storefronts, run by who knows who from who knows where.


In mid-June, someone calling himself Allinvain reported that 25,000 bitcoins worth more than $500,000 had been stolen from his computer. (To this day, nobody knows whether this claim is true.) About a week later, a hacker pulled off an ingenious attack on a Tokyo-based exchange site called Mt. Gox, which handled 90 percent of all bitcoin exchange transactions. Mt. Gox restricted account withdrawals to $1,000 worth of bitcoins per day (at the time of the attack, roughly 35 bitcoins). After he broke into Mt. Gox’s system, the hacker simulated a massive sell-off, driving the exchange rate to zero and letting him withdraw potentially tens of thousands of other people’s bitcoins.


In the public’s imagination, overnight the bitcoin went from being the currency of tomorrow to a dystopian joke. The Electronic Frontier Foundation quietly stopped accepting bitcoin donations. Two Irish scholars specializing in network analysis demonstrated that bitcoin wasn’t nearly as anonymous as many had assumed: They were able to identify the handles of a number of people who had donated bitcoins to Wikileaks.


More disasters followed. Poland-based Bitomat, the third-largest exchange, revealed that it had—oops—accidentally overwritten its entire wallet. Security researchers detected a proliferation of viruses aimed at bitcoin users: Some were designed to steal wallets full of existing bitcoins; others commandeered processing power to mine fresh coins. By summer, the oldest wallet service, MyBitcoin, stopped responding to emails. It had always been fishy—registered in the West Indies and run by someone named Tom Williams, who never posted in the forums. But after a month of unbroken silence, Wagner, the New York City bitcoin evangelist, finally stated what many had already been thinking: Whoever was running MyBitcoin had apparently gone AWOL with everyone’s money.


But that distinction is ultimately irrelevant. The underlying vulnerabilities that led to bitcoin’s troubles—its dependence on unregulated, centralized exchanges and online wallets—persist. Indeed, the bulk of mining is now concentrated in a handful of huge mining pools, which theoretically could hijack the entire network if they worked in concert.

Beyond the most hardcore users, skepticism has only increased. Nobel Prize-winning economist Paul Krugman wrote that the currency’s tendency to fluctuate has encouraged hoarding. Stefan Brands, a former ecash consultant and digital currency pioneer, calls bitcoin “clever” and is loath to bash it but believes it’s fundamentally structured like “a pyramid scheme” that rewards early adopters. “I think the big problems are ultimately the trust issues,” he says. “There’s nothing there to back it up. I know the counterargument, that that’s true of fiat money, too, but that’s completely wrong. There’s a whole trust fabric that’s been established through legal mechanisms.”

So, for now, bitcoins are far from being safe and stable. As a currency, it fluctuates a lot which makes it unreliable and, as a bank/wallet , it´is too fragile and vulnerable to hackers. As the articles says, there´s also a big risk that the major mining pools can eventually form a cartel and control the whole network.

You know, bitcoin is not backed up by anything, just like fiat currency, however, if someone hacks into your bank account and steals your money, at least the bank will give your money back; This wouldn´t happen with bitcoin.

In my opinion, the biggest drawback is the possibility of the governments making it illegal, if bitcoin grows large enough and become a real threat to the establishment. If it´s made illegal, it will become worthless overnight, you know, if you can´t buy anything with it in the legal market, it loses value.

Prodigal Son
26th March 2013, 13:24
I don't see why the Internet would be immune to Ponzi Schemes... just sayin

I'm sticking with gold, silver and real estate.

ceetee9
26th March 2013, 13:36
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."

RMorgan
26th March 2013, 13:59
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."

Another thing; Bitcoin is becoming centralized, now that there are really big bitcoin exchange services and huge mining pools. They can control the bitcoin value pretty much like conventional stock exchanges control our current system.

There are even bitcoin banks, where you can "safely" store your wallet, paying fees for it, of course.

These things are a big drawback that is contrary to the initial purpose of such system. Long term, it can become quite dangerous, given the fact that both bitcoin banks and exchanges can do whatever they want, with no proper legal mechanism to regulate their actions.

Right now, bitcoins are far from being decentralized and immune to manipulation.

As a side note, I must remember that no one knows who created the bitcoin and what was their true purpose; the man or team who uses the pseudonymous of Satoshi Nakamoto.

What if it is an experiment to see if people will adhere to a fully electronic global currency? How good it would be for the elite if they could just lock your account if you fail to obey their rules? The idea of a digital global currency is often discussed here and it´s considered to be a fundamental part of the "new world order" ideology.

Lifebringer
26th March 2013, 14:06
Another control mechanism, the dark side is trying to stay afloat on. They are now the central tracking/mark of the beast tentacle. Once your money's plastic, it's worth all the ink printed on it. Cybermoney, and a crashed bank= you never had any money when you gave it to them, just their crooked corrupt word of payment. A sucker bet on a criminal enterprise and there is NO honor among ALL thieves.

Limor Wolf
26th March 2013, 14:17
Good points, Raf. more than Bitcoin not being reliable, when looking at all the data surrounding it, it can definitely be a product of and by the government. Why to take risks?


http://24.media.tumblr.com/tumblr_lmvszogYsm1qziwyso1_500.png

Another article worth reading / New York Observer

" Bitcoin is Internet gold, a digital currency developed by a community of programmers in 2009 that represents the first plausible manifestation of an unregulated global “cryptocurrency” first imagined by anarchist computer hackers in the late 90’s. Bitcoins are snippets of code that use encryption to prevent counterfeiting and double-spending. Complex algorithms control the money supply, in theory replacing the need for banks or a central regulator. Right now Bitcoins can be generated—or “mined”—by running a program on a powerful computer. This task requires exponentially more time and processing power as the number of Bitcoins grows, and the absolute number of Bitcoins is capped at 21 million, mimicking the scarcity of gold. There are now 6,539,450 in circulation; $2 million worth were traded on the main Bitcoin exchange Mt. Gox on Friday"

http://observer.com/2011/06/bit-omoney-whos-behind-the-bitcoin-bubble/

Lifebringer
26th March 2013, 14:27
Watch this doesn't become a way for them to put the Soc Security TRUST on the market. The snakes/bankers/vipers are very sneaky and with enough paid politicians, they can take our hard earned and use in it in the "fantasy island banks."

God, these people are patheticly greedy and need prayer. An eye opener for them to change their ways. Century after century of deceit and lies. It must come to an end, before there can be a fair beginning. Born into a system of debt with a price for every soul, and now whatever you thought you earned, never left their pocket.


Oh, this is a job for divine intervention. Now the dark side wants to create its own markets with "digital money" and NO backing?
They really must take us for fools. Too bad for them, self sustainability and getting what is owed us, that we put our money in everyday of our working poor lives. To turn the SocSecTrust in to "fiat loop/tentacles that attach to select controlled health coverage, food, jobs, real estate. My what a game of monopoly, where they think we are all pieces to push around the board of life.

Listen, I'm watching the marches and protest in front of the Supreme Court and all of a sudden a wave of noise blocked the audio and is making a very strange sound. Don't know what happened, but something, just did.

turiya
26th March 2013, 14:50
Clif High's 2cents worth on Bit Coins


http://www.youtube.com/watch?v=fzmyU0Y0qPc

~~~~~edit~~~~~


Because of the crashing monetary system, hyperinflation needs to be expressed in the markets, but is being suppressed by the 'controllers', so Universe has provided a way for that expression to occur in the realm of bitcoins (the world's premiere unregulated currency). The inflationary rate of the bitcoin will begin in North America (U.S. & Canada) around April 1, 2013.

The only way to destroy bitcoins is to take down the entire planetary grid.

As we move forward here, in our work, as I have noted here yesterday, we saw a bit of "pressure in the pipe", so to speak, relative to the amount of data coming towards us, in a forecasting mode about the economics. And I think we are eight days out (from March 24, + or - 3 days error rate) before we see an impact here in North America. That impact will be very positive for bitcoins. This is sort of a heads-up.

The volatility is a big one for those that have an emotional response to money. Here's the deal: in a normal market, you will find, if you have a large supply & low demand, prices fall. Notational prices, whether in US dollars, or whatever, relative to any commodity, will rise or fall relative to the relative demand of that commodity & its supply. This basic understanding to economics (more or less).

This would then make sense, with the wide range of humanity - the wide range of human needs & desires at any given moment, and the availability of any given commodity at any given moment, in a real true market, fluctuating volatility levels should be more extreme than we see in our central bank controlled world of digits versus paper, etc.

With the crashing dollar, we can expect to see huge levels of fluctuation in bitcoins. I [personally] am not going to be shocked to see a 10,000 dollar per day level of volatility within a bitcoin... could get to be several 100,000 dollars per bitcoin in value. And the beginning part of that "pressure" occurs between 8 & 11 days from now (April 1-4). So the economic "pressure" on the bitcoin will eventually (mid April) lead to our first 10,000 dollar per day fluctuation - - where you get up in the morning and your bitcoin is worth $98,000, and you go to bed at night and its reached a high of $108,000 but fallen to $86,000 by the time you go to sleep.

My point is to get all of my $42 out of US currency and put it into bitcoin, because the US currency itself is dying and bitcoins will survive, if anything, because of its tie to the nature of the internet, as the internet is somewhat resilient.

turiya

RMorgan
26th March 2013, 15:59
A few more articles about Bitcoins, folks.

Funny Money: Why Bitcoin Is a Scam (http://www.good.is/posts/why-bitcoin-is-a-scam/)


...So far, you can’t buy anything with bitcoins that you couldn’t purchase more easily with cash or a credit card. Despite rumors that Bitcoin was creating an online Hamsterdam where anonymous users could sell drugs and lord knows what else, Bitcoin isn’t truly anonymous unless you’re already taking some relatively advanced anonymity steps. Even then, Internet forensics could likely track you down.

More problematically, the economics don’t quite work. Currencies are most valuable when lots of people trust and use them frequently. But PayPal has refused to convert bitcoins to cash, and major exchanges like MtGox have fallen to hackers. A currency that you can’t convert into anything else isn’t worth, well, anything.

But the biggest problem is that, despite its anarchic design, the system presents a huge opportunity for big fish to take advantage of the Internet everyman. Ben Laurie, a respected web security expert and cryptographer, makes a compelling case that Bitcoin won’t work because it accrues such a huge advantage to people who can bring the most computing power to bear on clearing transactions. “I mean, it’s nice for the early adopters, so long as new suckers keep coming along,” he concludes. “But in the long run it’s just a pointless waste of stuff we can never get back.”

Most worrisome is the opportunity for collusion: If any single person or group controlled a majority of computing power in the network, they could rewrite the transactions to take your money.
Bitcoin relies on the growth of the network to outpace any single node’s ability to control the bulk of the processing power, but one mining collective, deepbit, currently clears more than a third of all transactions. Already, hackers have used botnets, online networks of computers, to increase their ability to process transactions and mine bitcoins.

These dynamics make watching Bitcoin a lot like watching monetary history in fast-forward. Timothy B. Lee, a tech journalist, paints a convincing scenario in which Bitcoin nodes band together to seize control of the network, becoming the equivalent of online banks as they provide transaction services to everyone else. And if those banks get together to regulate the supply of money, well, that’s where central banks come from.

Ultimately, all money is based on trust. Aside from the folks who prefer to base the value of their assets on the hard work of Russian gold miners, most Americans trust dollars because we have some sense that the U.S. government isn’t going anywhere and is somewhat accountable to us. It’s hard to trust a monetary system concocted and managed by anonymous hackers who aren’t answerable to anyone...

Bitcoin Exchange Scam (http://nerdr.com/bitcoin-exchange-scam-bitcoins-are-worthless/)


...I’ve said it before and I’ll say it again; their are 3 main users of Bitcoin:

-The Money cleaners/tax evaders.
-Those involved in non-legal activities.
-The Greedy.

It seems our friend is going after the greedy.

We all know Bitcoin is a sham, it’s a pyramid scheme, but I never thought to consider the exchanges to be on such shaky ground. I guess something about them encouraged trust, we think of them with the same respect we hold for the DAX or FTSE 100, but when one considers why we revere these Bitcoin Exchanges the argument falls short and the mental house of cards we’ve built comes crashing down.

Bitcoin Exchange

Bitcoin Exchanges have no audit process, no way of keeping them honest, no trail and no verification procedures. It’s just a number like he said. It’s all trust, based on a house of cards and this is one of the issues I’ve been harping on about from the beginning. Why do you trust the exchanges? What gives Bitcoin it’s value?

An anonymous currency requires trust between users. Especially when used online. If I pay you N Bitcoins, I have to trust you will send the goods in exchange. Think about who you will be sending those Bitcoins to. Without trust, there is nothing. The key to remember is the Bitcoin system relies on trust, yet you are dealing with the most untrustable and criminal of people, exactly those who seek an anonymous currency like Bitcoin. For those who are still unaware, there is no honor among thieves except in Hollywood.

Bitcoin Scam

It is possible that last weeks Bitcoin Black Friday event (10th June 2011) was a market manipulation. If you owned an exchange and were running low on Bitcoins, what would you do?

I’ll tell you what I’d do. I’d drop the prices on the exchange, buy up as many Bitcoins as I could get from Idiots looking to sell, then jack the Bitcoin price right back up and make a killing. And I’d do it everytime.

And you would too.

There are no controls, no structure and no systems in place to keep things honest on the Bitcoin exchanges. No Securities and Exchange Commission. No Financial Services Authority. Bitcoin is unregulated and not the right place for a regular Joe to be placing money. Especially when they gain little value from Bitcoins anonymity, unlike those intending nefarious acts. Add in Bitcoin pricing volatility and you have a currency that is unusable for real world trade.

Having said that, without the Bitcoin Exchanges, how else will Bitcoin users value their “currency”? They can’t. Bitcoin valuation, as with any currency, requires a central base to assign that value.

A currency requires agreement on value, even if it is just perceived with little or no tangible mass behind it.

Even if it is just a database our friend can change at will.

What do you think? Would you put your life savings into Bitcoin?

Bitcoin: Scam or Currency? (http://randosity.wordpress.com/2013/01/12/bitcoin-scam-or-currency/)


...The fact that you have to go to a Bitcoin controlled exchange (regardless of being ‘decentralized’, read peer-to-peer) to change dollars (or any other currency) to Bitcoins is suspect. Let’s get to the heart of the matter. Exchanging real money for Bitcoin may simply make the originators of Bitcoin rich with ‘legal tender’ at the expense of people buying into the ‘Bitcoin’ idea as currency, but in reality is destined to fail and become worthless digital files. Where do those dollars go when handed over to that exchange? How is the exchange rate determined? These are all questions not easily answered...

...You are taking that money and exchanging it for Bitcoin which has extremely limited uses cases, limited spend venues, questionable exchange rates, limited denominations coupled with low supply, no governmental backing, not being recognized by governments and other authorities and the high probability that it will be used for less than legitimate purposes, and this is presently what Bitcoin is...

... Since it’s not recognized as legal tender or even valid currency other than in very limited uses and by limited ‘businesses’, this currency is ripe for scam artists...

...In addition, because Bitcoins are now being considered as the standard for online gambling uses (to thwart restrictions on the US dollar in online gambling), this further reduces the legitimacy of this ‘currency’. That is, you can’t run to your local supermarket and buy a loaf of bread with a Bitcoin, but you can place an online poker bet with it. You can’t run to your local car dealership and buy a new car with Bitcoin, but you likely can buy some drugs with it. You can’t buy school supplies with your Bitcoin, but you probably can buy a handgun with it in an underground market...

...There is one other thing that could potentially destroy Bitcoin. If the US Government (or any government) were to take the idea of Bitcoin and implement something similar (and easier) as a national digital currency sanctioned and issued by the Treasury department, this would likely destroy Bitcoin’s main objective, to become the defacto digital currency. The one thing that a US digital coin cannot destroy in Bitcoin, however, is the anonymous nature of the currency, that Bitcoin is not issued by a government (it is outside of government control) and the peer-to-peer decentralized nature of it. In the end, those pieces probably don’t really matter. That the new digital currency works, that it is usable, that it can buy milk and eggs and pay rent, that’s what’s important. Were the US to legitimize its own digital currency, businesses would adopt this en-masse and people and businesses wouldn’t look twice at Bitcoin thereafter. A US digital coin would become the defacto standard for digital currency, at least in the US. Bitcoin would then, as it is now, be relegated to a digital underground currency used for purchases where government sanctioned money cannot be used without penalties.

It’s just a matter of time before the US Treasury department wakes up. As the saying goes, “Fight fire with fire”. Creating a national digital currency solves a lot of problems. It reduces the amount of paper and metal that it must mint saving money buying the supplies for the production of tangible money, it ushers in an even more solid digital economy and it gets rid of Bitcoin all at the same time...

300 million dollars out of thin air: Bitcoin turns four and approaches $30 value (http://www.gizmag.com/bitcoin-creation-value-overview/26325/)



Pros and cons of bitcoins

Pros:

-They're more or less anonymous if you take the right precautions, meaning your transactions can't be tracked or taxed
-They will never devalue due to inflation - in fact, a slow process of deflation is built into the algorithm
-There is often no transaction fee when moving bitcoins
-You can buy things with them
-You can trust the authenticity of your bitcoins, and prove your ownership of them
-You can speculate on bitcoin values by buying and selling them as the market fluctuates
´
Cons:

-Like U.S. dollars, they have no inherent value. If other people don't want them, they're worthless
-Bitcoins will never be any good for over-the-counter or face to face payments, because every time you make a transaction, there's a roughly 10 minute wait as the network validates the bitcoins' ownership. This wait will get longer in the future, too.
-Like cash, if you lose your Bitcoin wallet, you lose your money
-Currently, the most popular uses for bitcoins seem to be speculation, scams, money laundering and black market contraband sales. This is not escaping the attention of the authorities. However, it remains to be seen if they can actually do anything to stop it
-They can be stolen

Other articles:

Bitcoin: How a Virtual Currency Became Real with a $5.6M Fraud (http://pandodaily.com/2012/08/31/bitcoin-how-a-virtual-currency-became-real-with-a-5-6m-fraud/)

Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt. (http://www.theverge.com/2012/8/27/3271637/bitcoin-savings-trust-pyramid-scheme-shuts-down)

Raf.

Calz
26th March 2013, 16:11
Happy to see this thread and thanks to those participating.

I had not heard about bitcoins until :cow: posted the Clif mp3 in another thread.

Beyond fascinating ... perhaps we should break this down a bit (no pun) and remember the last two US presidents who tried to print currency outside the "matrix" were soon disposed of ... meaning there is going to be at a *minimum* a whole lotta crap thrown at this.

Started in 2009???

Still alive??? (unlike so very many that try to bring light on things that can break people free).

hmmmmmm.

Clif is no one's fool (say what you will about his web bot predictive skills).


Cashless society??? hmmmmm.


With only *one* day of having this brought into my scope of "reality" I simply have nothing of value to add except pushing the conversation forward.

I Clif is correct (based on his predictive modeling .. and additionally taking into consideration the Cyprus situation) then we see even in lamestream media that the "value" of a bitcoin has gone from about $40 to $72 in the last couple weeks due to the volatility, fear and panic regarding the Cyprus/Euro/Russian concerns on bank runs.

Ummm ... okay ... tell me more ...

At the very least that presents an investment opportunity of a lifetime in that if, indeed, these worthless paper assets with *nothing* to back them up crash and burn (as so very many bright and connected folks suggest as a real possibility) then what would you expect the "value" of a bitcoin to be if that scenario does, in fact, transpire???

Hmmmm???

Hello????

If your country's currency crumbles in value close to zero ... or at least you consider that to be a *real possible future* then what is to lose by taking a portion of that and converting it to bitcoins while you have the chance???


That said ... I don't know all the caveats and ins and outs ... hopefully Paul can jump in as well as others.

Very short time window to move on this.

Clif suggests it is more to spit in the eye of the system than anything.

I see a tremendous upside on hedging a bet on the future of what I consider to be soon worthless paper.


Let the conversation continue ...


*** adding ***

note the 11:11 time stamp (at least for my time zone ... with zero intent) ... DW would be pounding the table :)

joke folks ... please no DW bashing.

RMorgan
26th March 2013, 16:20
Hey Calz,

We have to be careful here. Bitcoin has gone through huge bubbles before only to crash a few days later (32 dollars to 1 cent); It´s a very unstable "currency".

Watch this videos to know more:

Bitcoin Bubble Warning

UX75tiViEjA

BitCoin Ponzi Scheme

0UKC7iaBKvs

BitCoin CIA Connection

K5VC58gjnjY

Raf.

Calz
26th March 2013, 16:31
Thanks Raf ... you always bring clarity into consideration.

IMHO the world economy is a "ponzi scheme" ...

What I am trying to suggest comes from a few years experience in trading the futures market.

There is a tremendous short term window of opportunity with a measured high risk situation here.


***IF*** the markets go on with the illusion of stability (as manipulated by the banksters to whatever ends they see fit) then what I suggest (as well as Clif) an amazing spike in the "value" (only relative to the crashing paper assets) will not happen.

I am not suggesting that people use their money they need to survive and feed their family.

I suggest this is a "once in a lifetime" opportunity to take a small portion of *disposable income* to hedge against what many people expect to occur with the financial markets.

Free advice is worth what???

Yes ... I suggest learning everything you can asap if you intend to pursue this.


What are the alternatives?


Cash stuffed into mattresses??? (still worthless when the currency crashes).

Gold bars ... better but good luck with that unless you are wealthy enough to have a safe place to store it and a means of barter short of a gold bar ...

Best to stock food (seeds) and other physical tangible items while you can.

etc


*** adding ***

what do people buy insurance for???

hedging against all sorts of risk.

I suggest taking no more than you would be willing to put into insurance for another type of protection ... with a remarkably higher upside potential.

From my earlier post ... don't you suspect there will be all sorts of effort and disinfo put out to suppress this??? Isn't that obvious???


Beyond fascinating ... perhaps we should break this down a bit (no pun) and remember the last two US presidents who tried to print currency outside the "matrix" were soon disposed of ... meaning there is going to be at a *minimum* a whole lotta crap thrown at this.

Ilie Pandia
26th March 2013, 17:04
Hi,

IMO only true abundance (and that is necessarily energy abundance) will make the FEDs (and everything we think of as "economy") obsolete.

Using any kind of currency (time dollars, bitcoin, dollars, you name it!) has the background, unchallenged assumption that you need to work for a living, that you need a currency to keep track of scarce resources so you can tell who deserves what amount... This is old (very very old) paradigm. I challenge that! Give me energy, I could not care less of any form of currency or accounting or book keeping or whatever...

Calz
26th March 2013, 17:12
Hi,

IMO only true abundance (and that is necessarily energy abundance) will make the FEDs (and everything we think of as "economy") obsolete.

Using any kind of currency (time dollars, bitcoin, dollars, you name it!) has the background, unchallenged assumption that you need to work for a living, that you need a currency to keep track of scarce resources so you can tell who deserves what amount... This is old (very very old) paradigm. I challenge that! Give me energy, I could not care less of any form of currency or accounting or book keeping or whatever...

I expect you are correct ... or at least I "hope" so.

Regardless of the "end results" there surely will be a troublesome transition.

Planning in that regard is paramont ... imho


I have children who will be looking up to me when they are hungry ... got it?

RMorgan
26th March 2013, 17:48
With the crashing dollar, we can expect to see huge levels of fluctuation in bitcoins. I [personally] am not going to be shocked to see a 10,000 dollar per day level of volatility within a bitcoin... could get to be several 100,000 dollars per bitcoin in value. And the beginning part of that "pressure" occurs between 8 & 11 days from now (April 1-4). So the economic "pressure" on the bitcoin will eventually (mid April) lead to our first 10,000 dollar per day fluctuation - - where you get up in the morning and your bitcoin is worth $98,000, and you go to bed at night and its reached a high of $108,000 but fallen to $86,000 by the time you go to sleep.
[/INDENT][/INDENT]


Hey mate,

You forgot to say one thing:

If the dollar crashes, even if one bitcoin equalizes to U$100.000,00, it would be worthless anyway because the dollar itself would be worthless.

Really, I don´t know why all this hype about bitcoin is happening right now in the forum, but you people should be aware that it is a ponzi scheme, which instead of being controlled by an official central bank, is controlled by anonymous computer geeks who own the bitcoin exchange websites and mining pools.

The only people who benefited from bitcoins were the early adopters. Back then it was pretty easy to mine coins, so they got 6 million (out of the 20 millions maximum allowed) coins in the first months practically for free, then lured people into believing bitcoin is a good thing, which increased demand over a limited supply and ,consequently, increased value.

What the early adopters did, back then when bitcoin was not available to the general public yet (yes, it was restricted to a small group of people), is the same thing that people do in stock markets frequently; It´s called speculation. They bought a lot of it when it was cheap (free, actually), convinced people that it was worthy of investment which increased value.

Basically, they have been making a lot of money out of thin air.

Raf.

Calz
26th March 2013, 17:58
Don't expect dollars or other currencies to be ***zero*** ... although that is what they are really worth.

Please folks ... I am shooting from the hip on what my experience and intuition suggests.


What I can offer in terms of sound advice is to ***not*** put all your eggs in one basket.

***HEDGE YOUR BETS*** ... or if that type of terminology is too strong the ... ***consider some insurance from the global econmic storm that some suggest is soon to be in our face***

Nanoo Nanoo
26th March 2013, 19:39
Its a great idea to support the Bitcoin with just a small investment. You should spread your portfolio over several " Safe Bets " This will give you better stability.

One thing for sure , Bitcoin is a nice bit of leverage.

Dont blow everything on it , just what yo ucan afford to lose. I bought 6 Bitcoins and have enjoyed 36% growth .. you just cant get that anywhere.

its going to be very interesting to see where it goes .. it could be a game changer.

N

sheme
26th March 2013, 19:47
I wouldn't give it my spittle. If you can afford to loose money give it to water aid.

Snookie
26th March 2013, 20:26
Hey mate,

You forgot to say one thing:

If the dollar crashes, even if one bitcoin equalizes to U$100.000,00, it would be worthless anyway because the dollar itself would be worthless.

Really, I don´t know why all this hype about bitcoin is happening right now in the forum, but you people should be aware that it is a ponzi scheme, which instead of being controlled by an official central bank, is controlled by anonymous computer geeks who own the bitcoin exchange websites and mining pools.

The only people who benefited from bitcoins were the early adopters. Back then it was pretty easy to mine coins, so they got 6 million (out of the 20 millions maximum allowed) coins in the first months practically for free, then lured people into believing bitcoin is a good thing, which increased demand over a limited supply and ,consequently, increased value.

What the early adopters did, back then when bitcoin was not available to the general public yet (yes, it was restricted to a small group of people), is the same thing that people do in stock markets frequently; It´s called speculation. They bought a lot of it when it was cheap (free, actually), convinced people that it was worthy of investment which increased value.

Basically, they have been making a lot of money out of thin air.

Raf.

What do you think the Banksters are doing right now?

This might be being implemented by the PTB to start a new digital world currency, but I tend to think the reason it is being denigrated so much by accusing all Bitcoin users as drug dealers and criminals is because it scares the hell out of the drug dealing criminal cabal who are currently running things.

PathWalker
26th March 2013, 20:42
As the reader knows the PTB control all technology.
That includes bitcoin as well.

Since it is an electronic coin it trails an electronic footprint on any transaction and delivery.
I could imagine who would like to have that information.

A currency value is defined by the public belief in its value.
If enough people will believe in it it will flourish. Yet this is another technological power consolidation by TPTB.

Good luck with your currency beliefs.

RMorgan
26th March 2013, 20:58
Hey mate,

You forgot to say one thing:

If the dollar crashes, even if one bitcoin equalizes to U$100.000,00, it would be worthless anyway because the dollar itself would be worthless.

Really, I don´t know why all this hype about bitcoin is happening right now in the forum, but you people should be aware that it is a ponzi scheme, which instead of being controlled by an official central bank, is controlled by anonymous computer geeks who own the bitcoin exchange websites and mining pools.

The only people who benefited from bitcoins were the early adopters. Back then it was pretty easy to mine coins, so they got 6 million (out of the 20 millions maximum allowed) coins in the first months practically for free, then lured people into believing bitcoin is a good thing, which increased demand over a limited supply and ,consequently, increased value.

What the early adopters did, back then when bitcoin was not available to the general public yet (yes, it was restricted to a small group of people), is the same thing that people do in stock markets frequently; It´s called speculation. They bought a lot of it when it was cheap (free, actually), convinced people that it was worthy of investment which increased value.

Basically, they have been making a lot of money out of thin air.

Raf.

What do you think the Banksters are doing right now?

This might be being implemented by the PTB to start a new digital world currency, but I tend to think the reason it is being denigrated so much by accusing all Bitcoin users as drug dealers and criminals is because it scares the hell out of the drug dealing criminal cabal who are currently running things.

That´s exactly the point, my friend.

It´s pretty funny how people here are always complaining about the illusory characteristics of fiat money and about central banks printing money out of thin air, then they get all hyped up by bitcoins.

Bitcoins are also fiat money, meaning they they aren´t backed up by anything, and are also controlled by mining pools and exchange websites owned by anonymous hackers; except that bit coins are not legal tender and are not protected or regulated by any legal mechanism.

Of course, not all users of bitcoins are criminals, but the big players are, given the attractive characteristics of such currency such as anonymity and low exchanging fees; It´s specially attractive to money laundry schemes.

Honestly, I have no idea how the early bitcoin adopters managed to convince a lot of people to exchange their dollars for bitcoins; It´s the same thing as exchanging Monopoly funny money for gold.

The more people adhere to bitcoins, the more the people who control it will profit.

Really, it´s astonishing to think that people don´t believe official institutions to keep currency stable and reliable, but believe a bunch of anonymous untraceable computer geeks to do it.

You know, fiat money is fiat money; It doesn´t matter if it´s bitcoin, dollar, euro or monopoly money; Its imaginary value is always susceptible to fluctuations caused by manipulation...Did you know that Mt.Gox, a single bitcoin exchange website, handles about 80% of all bitcoin trade? Man, we don´t even know who owns this website. This same exchange was hacked before and people lost millions in bitcoins. Do you know what happened with them? NOTHING. Were the people who lost their money refunded? NO.

These folks don´t answer to anyone, my friend. Poland-based Bitomat, which was one of the top exchanges, revealed that it had "accidentally" overwritten its entire wallet. Do you know what happened to them? NOTHING. Were the people who lost their money refunded? NO.

Sorry folks, but as far as reliability, security and stability goes, bitcoin is a really bad choice; The whole thing is just too vulnerable. Let alone the fact that we don´t even know who created it and for what purpose, in the first place.

Some people are laughing all the way to the bank in this scheme, and you´re not one of them.

Raf.

SilentFeathers
26th March 2013, 22:01
Illusions come in many shapes and sizes.....and obviously with many names too :)

It's probably another Goldman Sachs ponzie scheme...........

SilentFeathers
26th March 2013, 22:38
I took a good look at a bitcoin and could of swore I seen a "mark of the beast" aura surrounding it!

Bitcoin ATM Could Soon Be Opening in Cyprus (http://reason.com/blog/2013/03/26/bitcoin-atm-could-be-opened-in-cyprus)

I also noticed some strange numerology attached....


Based on digital signatures, payments are made to bitcoin "addresses" or "public keys": human-readable strings of numbers and letters around 33 characters in length, always beginning with the digit 1 or 3

Masons/Illuminati??????

First Bitcoin Hedge Fund Launches From Malta (http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitcoin-hedge-fund-launches-from-malta/)

Malta???? Just a coincidence I'm sure....

I'm sure the Rothchilds or other reptilians have nothing to do with bit coins....

whoops, perhaps I'm wrong.....

The Bitcoin sub-fund was incorporated as a Bermuda exempted company and is registered as a segregated account company receiving funds at Citibank London (http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitcoin-hedge-fund-launches-from-malta/)

Well, anyways, not all roads lead to Rome huh????

remember? the Vatican just recently suggested a "one global currency" was needed.

RMorgan
26th March 2013, 22:56
I'm sure the Rothchilds or other reptilians have nothing to do with bit coins....


Well, my friend, I´m not sure about reptilians, but the banking cartel could very well be behind it indeed.

It´s truly amazing how no one, and I mean no one, knows the true identity of the bitcoin creator(s).

It´s also funny and at least suspicious how the so called "elite" isn´t taking any major actions against bitcoin, which has the potential to become a threat to the current financial system.

A global electronic currency has always been part of the "new world order" agenda, so I wouldn´t be surprised if this bitcoin scheme was created just to test the grounds, as a beta experiment to test such system.

This whole thing smells really bad to me.

Raf.

SilentFeathers
26th March 2013, 23:26
I agree Raf, it smells like a nasty rat.....


Namecoin is an alternative peer-to-peer Domain Name System that is based on the open-source bitcoin protocol.
Like bitcoin, the Namecoin network reaches consensus every few minutes as to which names/values have been reserved or updated.[54][55] Each user has its own copy of the full database, which attempts to reduce censorship on the DNS level.[56] The use of public-key cryptography also means that only the owner is allowed to modify a name in the distributed database. For name resolution Namecoin uses .bit as pseudo-top-level domain.
The internet activist Aaron Swartz described a similar concept.[57] It tries to square Zooko's triangle which states that a naming system cannot be secure, distributed and have human-meaningful names at the same time.
http://en.wikipedia.org/wiki/Bitcoin

Perhaps Swartz knew too much about this insane currency/system?????

Cidersomerset
26th March 2013, 23:51
All sounds a bit dodgy to me, most of the money created is interrest so does not really exist, thats why the markets have to be
crashed every now and then.The 'Banksters' / economists have a name for it the economic cycle.In Briton when Gordon Brown
kept saying in the late 1990's.We will end boom and bust, i told anyone who would listen he is talking BS.


Max is using it........

kEHIOi8iXqE


It sounds like a pyrimid scam to me, untill you can use them in a store,
pay your bills or buy a pint down the pub.I don't see what good they
are to the average person.There is nothing wrong with money or
high street banking, its the speculative side that has caused all the
fraud and criminality.Its a well known proverb all the real criminals
wear suits..LOl..

Paul
27th March 2013, 00:25
It´s truly amazing how no one, and I mean no one, knows the true identity of the bitcoin creator(s).

It´s also funny and at least suspicious how the so called "elite" isn´t taking any major actions against bitcoin, which has the potential to become a threat to the current financial system.
It's open source and peer-to-peer, so to those able to understand the algorithms and to also read the code (several versions have been written now, by various people), it matters not who wrote the first version.

In December of 2010, I studied the math involved in the bitcoin architecture, which was something I could do easily enough, given my background in both math and cryptology software. That part all made sense to me. I downloaded and rebuilt the software and played with it for a little bit. The software appears to do what it purports to do, though I didn't read it closely.

===

As to whether the elite are taking actions ... that I'd expect to come a bit later, if it comes. When the Feds bite, they wait until it hurts.

===

There is a key lesson here, involving bitcoin, and I think that lesson is this:

Historically, there have been two basic types of monetary system:

Debt money is lent into existence by the "money changers" in exchange for a mortgage, contract or lien on property or future income.
Community service money is spent into existence by the community, in payment for a useful good or service.

Debt money is the handiwork of the money changers, who eventually gain immense power over all. It is cursed.

Community service money is probably a lot healthier in the long run, but usually gets overridden by debt money eventually, as happened for example in the USA with the Federal Reserve Act of 1913.

===

Bitcoin is neither. It is created not by providing useful goods or services to the community, nor in exchange for indebtedness, but by providing useless goods ... a computationally difficult calculation that is of no inherent usefulness outside of bitcoin.

This is the inherent weakness of bitcoin, in my view. It manifests in the following fashion. The amount of bitcoins in circulation was artificially determined to grow at a certain rate, decreasing over time, eventually reaching zero, after when no further bitcoins will be created (and gradually they will be lost, as people lose passwords.)

A "healthy" currency encourages contributions to the community and grows in proportion to those contributions.

It was necessary to artificially pre-determine the growth in bitcoin supply to some approximate degree in order to simulate scarcity. This simulation is artificial, rather than organically connected to the prosperity and productiveness of the community using bitcoins. <== That is why bitcoins are not destined to last (though a few may make some good money on them in the interim.)

===

One key positive of bitcoin, that one manages one's own wealth, is also a key deficiency, in that not many of us are prepared to institute the necessary security for a system guarding substantial wealth, where that system must be connected to the Internet or some other such network to function, and where theft is a simple matter of cleverness and persistence, with no risk of personal encounter. In other words, being a wimp myself, I'd much rather attempt to steal a chunk of money from someone by hacking into their computer half way around the world, than I would by sneaking into their house at night and betting they are not armed (a stupid bet in Texas.)

So I am more confident that the bank won't steal my money if I have it on my own computer using bitcoin than if I have on deposit in a bank in Cypress; but I am likely one of a small group competent to wager my own anti-hacking skills on safe guarding any substantial amount of such wealth that way.

A money system that won't work with the average person up and down my street is of limited use to me.

===

The reason bitcoin is attracting attention now is that bitcoin is not debt money. We are beginning once again to widely recognize the failings of debt based money. This has happened before, such as when Jesus Christ threw the money changers out of the temple, or when William Jennings Bryan's first delivered his “Cross of Gold” Speech (http://historymatters.gmu.edu/d/5354/) in 1896, perhaps the most successful speech ever delivered to a political convention in the US.

Precious metal based monetary systems can be either debt money or community service money. At the time of Bryan's speech, the "elite" controlled the above ground gold to a larger extent than they controlled silver. So the contest was between a more scarce elite controlled money, or a more popularly available money which individuals, communities and states could acquire without mortgaging their future (which in those days mostly meant mortgaging the farm) and spend more freely.

Successfully using either gold or silver as a community service money requires a fairly ample supply of it. More often paper script is used as a community service money, as that more readily comes in ample supply.

Unfortunately, bitcoin is not a community service money either.

Paul
27th March 2013, 00:33
Historically, there have been two basic types of monetary system:
I am indebted to Joseph P. Farrell's Introduction (pages viii and ix) in his The Grid of the Gods: The Aftermath of the Cosmic War and the Physics of the Pyramid Peoples (http://amzn.com/1935487396) for this distinction, though I have mangled it a bit in presenting it here. Farrell connects this distinction to two groups of elites surviving a Cosmic War, who have struggled for survival and for control of earth, since then. This struggle may be coming more to the surface again, in our times.

Cidersomerset
27th March 2013, 00:52
This is quite interresting.....

0UKC7iaBKvs

---------------------------------------------------------------------------------------------

Its discussed on Fox and explains it a bit more....

L6kRZo63IPE

Published on 3 Feb 2013
John Stossel receives Katherine Mangu-Ward to talk about bitcoin.

----------------------------------------------------------------------------------------------

WAjL_X_ZesE


Published on 7 Mar 2013


Abby Martin talks to Max Keiser, host of the Keiser Report, about the global
economy and the growing popularity of the decentralized digital currency known as
the Bitcoin.

---------------------------------------------------------------------------------------------

It still sounds dodgy to me ..LOL....I understand the 'Banksters' are crooks and
hold soveriegn governments to ransom,and need proper regulation.But Bitcoin
will have alot of the same problems with even less security as far as I can see,
apart from being semi anonymous you can only trade in the community.I feel
I'm missing something ..LOL ??

Positive Vibe Merchant
27th March 2013, 00:53
I still say, online money systes will not work. no matter how secure... better off buing a years worth of baked beans a tent and a wind turbine

Phoenix1304
27th March 2013, 01:13
Interesting to find this thread today as I first heard of Bitcoin this morning. Was it Raf who said we don't know who the developers are? I just found this Guardian piece in which they are apparently interviewed. Are these guys stooges or the avante garde changing the world? I'd love to believe the latter...

http://www.guardian.co.uk/technology/video/2013/mar/22/bitcoin-currency-video

Paul
27th March 2013, 02:21
Interesting to find this thread today as I first heard of Bitcoin this morning. Was it Raf who said we don't know who the developers are? I just found this Guardian piece in which they are apparently interviewed. Are these guys stooges or the avante garde changing the world? I'd love to believe the latter...
That interview is with Amir Taaki and Mihai Alisie. Amir has founded and worked on various bitcoin exchanges and project development. Mihai has been involved in various bitcoin startups.

The original code and architecture was written and copyright by Japanese developer(s) working under the pseudonym of Satoshi Nakamoto. It is not known publicly who the real Satoshi is.

Cidersomerset
27th March 2013, 03:05
What Is Bitcoin? Tom Woods Talks to Erik Voorhees

yi2WgeJ73IE

It works by everyone involved having access to the ledger every
transaction is recorded for all to access.I pressume not the details,
but he says if you send five Bitcoins to another member everyone
will see.Bitcoins are released roughly every 10 mins, until it
reaches 21million max.Each unit can be divided into 100 million units ?

It said in a earlier vid the first 6 million Bitcoins were created for free
by the first participents.The programme creates the coins,It still sounds
like casino chips, and i'm wondering how you use them outside the
community ? or participating outlets ? He does answer that you
have to treat it like gold or silver coins, and get someone to buy
them off you for dollars.

Its is a pyrimid speculative scheme...

The callers Q&A for the last 15 mins is good.

RMorgan
27th March 2013, 15:03
...i'm wondering how you use them outside the
community ? or participating outlets ? He does answer that you
have to treat it like gold or silver coins, and get someone to buy
them off you for dollars.

Its is a pyrimid speculative scheme...


Hey my friend,

Yes, you can exchange bitcoins for money. There are huge bitcoin exchange websites like Mt.Gox (https://mtgox.com/).

The problem is; Who control the exchanging rates, since, technically, there´s nothing tying bitcoins to any legal tender or commodities?

Well, the answer is simple; The exchanging rates are highly controlled by the exchanging websites. They can change, and have changed, the exchanging rates as they see fit.

So, how good is it? It eliminates Wall Street and Central Banks from the equation and replace them with an anonymous computer geek´s cartel.

And yes, it obviously is a pyramid scheme. The first users got 6 million bitcoins for free, while the system was restricted. Now, this 6 million bitcoins are worth hundreds of millions of dollars, only because they managed to convince a lot of people to join. So, the more people join in, the more the selective early bitcoin users will earn.

Raf.

Nanoo Nanoo
27th March 2013, 15:22
I'm sure the Rothchilds or other reptilians have nothing to do with bit coins....


Well, my friend, I´m not sure about reptilians, but the banking cartel could very well be behind it indeed.

It´s truly amazing how no one, and I mean no one, knows the true identity of the bitcoin creator(s).

It´s also funny and at least suspicious how the so called "elite" isn´t taking any major actions against bitcoin, which has the potential to become a threat to the current financial system.

A global electronic currency has always been part of the "new world order" agenda, so I wouldn´t be surprised if this bitcoin scheme was created just to test the grounds, as a beta experiment to test such system.

This whole thing smells really bad to me.

Raf.

now if that were true , id have to give them credit ... hang on .. i just did !

hmmm


anything is possible , and thats the exciting part. Makes you feel alive dosent it ?

N

PathWalker
27th March 2013, 18:21
In December of 2010, I studied the math involved in the bitcoin architecture, which was something I could do easily enough, given my background in both math and cryptology software. That part all made sense to me. I downloaded and rebuilt the software and played with it for a little bit. The software appears to do what it purports to do, though I didn't read it closely.


Excellent explanation, I am very grateful to this post and the thread in general.

I would like to point out the following

A currency value is defined by the believed value the users assign to it.
Go figure out how currencies value is defined these days and by whom.

As for Bitcoin.

1. You do not know if the software you are running is the open source software it claims to be. For example Google Chrome you probably run (if you did not built it) is not the open source version.
2. You do not know how it really works. Unless you read the build scripts and runs the software with code coverage analyzer. (generic abstract void typed structures - sorry for the techy terms).
3. You do not know who governs the code and how it evolves if at all. How decision are made and by whom. The controller of the source code is the controller of the currency.
4. Do you have access to the code base history (configuration management repository), see who made, what change. I do not know.

The "community" is very laundered term, to say - trust them they know what they do.

The interesting part of this Bitcoin is not the cryptography and exchange. It is about evolution and policy management (policy management = government).
If you have time, please investigate point 3+4.

Gardener
27th March 2013, 20:30
And if the internet goes down? Solar flares and whatnot. Obama's kill switch. Invest in honey-money, and toilet paper :)

Nanoo Nanoo
27th March 2013, 21:08
this is sound advise , forget currencies and invest in tangibles. EG yesterday i bought a blade sharpening kit , $45 , now i am teaching my self to sharpen blades , chainsaws etc. This is a portable skill i can barter for food or water. And in the old ways you would sit and spend time with your client , do your trade , eat a good dinner and move on.

Personally icannot wait for all the bubbles to burst , it will be an exciting time. It will be creation in the making and a new sence of fredom as the structures fall and all these fake laws that have nothing to do with Goodness crumble into the dust they were made from.

N

Paul
28th March 2013, 06:33
Yves Smith over at Naked Capitalism (http://www.nakedcapitalism.com) has a good post on Bitcoin. There is much good detail in the post. He concludes by saying:



My gut tells me that at US$70 Bitcoins are probably closer to a short term bubble peak (given the short term nature of the rise) than at the base of an immediate move to $150 or other high price targets I have seen thrown around ($500+), but that doesn’t mean they can’t head higher (in the short or long term).I think to a degree the price in the short term will depend a lot on who is holding Bitcoins and for what purpose. If there are a lot of speculators or people storing large amounts with no reason to transact then a move to sell and take profit could drive the price lower. If there are few of these types though and the price is being driven higher by a genuine need for Bitcoins for use in transactions then the price could keep moving higher.

Personally though even if I thought Bitcoins were undervalued, after rising 700%, their risks and weaknesses would stop me from putting any significant amount of money into them, a couple of thousand dollars maybe for a punt, but nothing serious. Although they have similarities to precious metals, they are far from a replacement.
More at Bitcoin Bubble or New Virtual Currency? (http://www.nakedcapitalism.com/2013/03/bitcoin-bubble-or-new-virtual-currency.html).

CosmicKat
28th March 2013, 13:14
To those of you who think that the Bitcoin is a ponzi scheme, maybe BUT remember even though the Bitcoin has fallen from the market previously, it's now on the rise. I guess the best way I can put this is Porn, drugs, prostitution and other illegal ideals have been on the rise and the best way to pay for such things is a form of payment that is not recognized by the Federal system...The BITCOIN, it cannot be traced. SO, the Bitcoin rises to fame. I guess I wouldn't mark this as a scheme just yet.

RMorgan
28th March 2013, 13:48
To those of you who think that the Bitcoin is a ponzi scheme, maybe BUT remember even though the Bitcoin has fallen from the market previously, it's now on the rise. I guess the best way I can put this is Porn, drugs, prostitution and other illegal ideals have been on the rise and the best way to pay for such things is a form of payment that is not recognized by the Federal system...The BITCOIN, it cannot be traced. SO, the Bitcoin rises to fame. I guess I wouldn't mark this as a scheme just yet.

Well, in my opinion, that´s what it really is.

Here´s the wikipedia definition of a piramyd scheme:


A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that a "con artist" Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the "business" expands.

Such "businesses" seldom involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the "payment" itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information.

The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator (sometimes called the "pharaoh") and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit.

So, doesn´t it define exactly what bitcoin really is? Let me try to exemplify.

Lets suppose I had created an informal currency called Rafcoin.

Then, at first, I distribute the software and one third of the maximum available Rafcoin supply to all my friends who are very influential people. So, by now now, my friends already have a total of six million Rafcoins, which currently are worthless. They got them for free, of course.

Then, each person from this selective group of influential people, manages to convince ten people to buy each Rafcoin for 10 cents. Right now, these six million Rafcoins which used to be worthless, now are worth thousands of dollars. Smart move, right?

Now, each person who first bought a Rafcoin for 10 cents, manages to convince another ten people to buy Rafcoins. Now, since the demand is increasing over a limited supply, each Rafcoin will be worth about U$1,00. Now, Rafcoins, which used to be worthless, are worth millions of dollars.

This exponential calculation goes on and on and on, since more people will convince more and more people to exchange dollars or tangible products for Rafcoins, increasing value exponentially, until one Rafcoin is equivalent to, currently, lets say U$70,00.

Now those original worthless six million Rafcoins, are worth hundreds of millions of dollars, and each person of the first selective group is now a multi-millionaire.

Tell me, which group of people really benefits from this value growth? The new adherents or the first group who fabricated hundreds of millions of dollars out of thin air?

For me, it is that simple, my friend.

Bitcoin, like all pyramid schemes, is moved by greed. People see it more as an investment stock than as a trading mechanism, and actually profit from its valuation in different percentages, but the ones who really profit from it are those at the top of the pyramid.

Lets say one of the first users got 100.000 Bitcoins for free. One bitcoin, right now, is worth about U$90,00. Do the math. This man now have U$9.000.000,00.

Raf.

Cidersomerset
28th March 2013, 14:10
Lets supposed I had created an informal currency called Rafcoin.


Good explanation Raf, i was thinking of trying to do an example on the 'Avalon'...LOL..

There are aprox 6000 members at the momment, if we all had 10 free Avalons
at $1 each they were now worth $ 60,000......Then my brain started to hurt...LOl.

But any new investors have to be at a disadvantage...Cheers steve

Antagenet
28th March 2013, 14:51
For the record, I bought into bitcoins at $13. us fiat paper, at $28., at $35, at $82 and today at $95, and I am thrilled to have done so. I fancy owning some currency that one can trade anonymously without having to pay fees to paypal. I value supporting a non-bankster form of currency. I will shortly accept bitcoins on my own website.

I smell a bit of envy here, for the early adopters. All I can say is they took a risk, and they deserve to get the profit, just like anyone who is an early adopter of anything in this world does. Viva the courageous trailblazers!!! I wish I had known about bitcoin earlier.

The governments will never be able to stop bitcoin, unless the whole internet comes down. The large bitcoin exchanges are not needed. The more bitcoin grows, the more smaller exchanges will open and in fact are doing so. The more places one will be able to spend bitcoins. Mike Adams the health ranger is just starting to accept bitcoins on his natural food store, for example.

Bitcoins will break through $100 usd soon and I doubt it will ever crash back below $50 and there is more of a chance that it will go to $500. As I see it, Gold and Silver are manipulated by the elites, but they cant do that with bitcoin, and bitcoins rise reflect the debasement of the usd and all other fiat printing cartels.

I would think that this libertarian currency would find more favor here. Maybe the other bitcoiners are loathe to speak up, in this atmosphere of ridicule and negativity.

Put it like this... if one doesnt have enough currency to live on a day to day basis, bitcoins are a gamble that one might not want to take... but after one has enough PM's, enough stored food and supplies for a few years, a bug out location or two, diversified offshore funds and a very cheap lifestyle off grid, bitcoins are a perfect freedom promoting venue to park some extra funds and a fun way to remunerate other bitcoiners.

RMorgan
28th March 2013, 15:12
I smell a bit of envy here, for the early adopters. All I can say is they took a risk, and they deserve to get the profit, just like anyone who is an early adopter of anything in this world does. Viva the courageous trailblazers!!! I wish I had known about bitcoin earlier.

The early adopters actually didn´t invest anything while the system was restricted. They made money out of almost zero investment and they got six million coins practically for free.


The governments will never be able to stop bitcoin, unless the whole internet comes down. The large bitcoin exchanges are not needed. The more bitcoin grows, the more smaller exchanges will open and in fact are doing so. The more places one will be able to spend bitcoins. Mike Adams the health ranger is just starting to accept bitcoins on his natural food store, for example.

Yes, the government can stop bitcoin simply by making it illegal. If it does that, people wont be able to use bitcoins within the legal market and they will be worthless overnight. Mark my words; If bitcoin grows large enough to become a threat to the system, which I highly doubt, the government will make it illegal.

About exchanges, Mt.Gox right now controls about 80% of the bitcoin exchange market.


Bitcoins will break through $100 usd soon and I doubt it will ever crash back below $50 and there is more of a chance that it will go to $500. As I see it, Gold and Silver are manipulated by the elites, but they cant do that with bitcoin, and bitcoins rise reflect the debasement of the usd and all other fiat printing cartels.

Bitcoin exchanging rates and value are also manipulated by it´s own elite, which are are the exchange websites and major mining pools, which control the exchanging rates and the amount of new coins that are mined daily.

Don´t be naive about bitcoin, my friend. It is not the libertarian currency dream as people are trying to push it, far from it.

The whole system is very vulnerable.

Raf.

Cidersomerset
28th March 2013, 15:14
Thanks for your comments Antagenet its not envy, everyone should be free to do
what they want,as long as it does not hurt others ,thats how the the 'Banksters' got
control in the first place,and we do need ways of stopping these monoplies. Credit
unions,co-operative banks and building societies are good places for the average
person to save a few extra pounds a week.Very few speculate on markets and if
Bitcoin is the new gold/silver exchange fine.But I'm still having trouble seeing
that new customers are not subsiding the first generation and so on ?

PathWalker
28th March 2013, 16:10
To those of you who think that the Bitcoin is a ponzi scheme, maybe BUT remember even though the Bitcoin has fallen from the market previously, it's now on the rise. I guess the best way I can put this is Porn, drugs, prostitution and other illegal ideals have been on the rise and the best way to pay for such things is a form of payment that is not recognized by the Federal system...The BITCOIN, it cannot be traced. SO, the Bitcoin rises to fame. I guess I wouldn't mark this as a scheme just yet.

Bitcoing transaction is both traceable and trackable.
Meaning, there is electronic trail for any transaction. The origin and the destination are well authenticated and identified.
Guess who devised a pseudo anonymous electronic currency system.

The pirates and smugglers do not trust technology they are smart. Guess who trust technology.

TargeT
28th March 2013, 18:31
Thanks for your comments Antagenet its not envy, everyone should be free to do
what they want,as long as it does not hurt others ,thats how the the 'Banksters' got
control in the first place,and we do need ways of stopping these monoplies. Credit
unions,co-operative banks and building societies are good places for the average
person to save a few extra pounds a week.Very few speculate on markets and if
Bitcoin is the new gold/silver exchange fine.But I'm still having trouble seeing
that new customers are not subsiding the first generation and so on ?

same as the gold and silver markets really.. same as any market, who ever delcares a stick to be worth money first & gets a bunch of people to agree will bennifit.

The UPSIDE to bitcoin is that it cannot be generated when ever someone wants to ( like the USD can, or any other world currency) and it has an eventual cap..

I see a lot of negativity over a very solid mony scheme, one that I support and wish worked better; sort of like Liberty dollar was before the Feds arrested the owner for forgery.

william6565william
28th March 2013, 18:51
i've been wanting to try this out since i doubt i'll lose any real currency. As far as I know, I don't HAVE to pay to get bitcoins (though you can if you want) and earn them either by mining them or offer services. It's those two that I actually want to get info on as well as any other method that will help me earn as much bitcoins as possible.

blufire
28th March 2013, 19:06
Come on guys . . . . . Bitcoins are an experimental ‘new’ global financial system.

What do you think the One World or New World economic system would look like?

They are slowly getting the population used to the concept.

Bitcoin ‘money’ or currency has been produced literally out of thin air.

Eventually when the current system is nothing but a memory, we will function economically much like the Star Trek system of ‘credits’.

‘Credits’ will hold no intrinsic value other than the ‘thing’ it allows you to acquire for basic everyday function.

‘Credits’ will be completely computer or electronically controlled and they will have the ability to eliminate your ‘credits’ in the blink of an eye.

Every human across the planet will be on the exact same rate of trade and financial ability.

I would bet the farm that this form of economic system will be in place by the next 10 years . . . . and getting there will not be pretty.

RMorgan
28th March 2013, 19:12
same as the gold and silver markets really.. same as any market, who ever delcares a stick to be worth money first & gets a bunch of people to agree will bennifit.

The UPSIDE to bitcoin is that it cannot be generated when ever someone wants to ( like the USD can, or any other world currency) and it has an eventual cap..

I see a lot of negativity over a very solid mony scheme, one that I support and wish worked better; sort of like Liberty dollar was before the Feds arrested the owner for forgery.

Well, not that I can´t be generated. It´s programmed to gradually reach a 21 million bitcoins maximum level, which is estimated to happen approximately in the year of 2160.

There´s no way to guarantee that, until then, someone wont find a way to break its cryptography code and find a way to release fake bitcoins that will literally be identical to the authentic ones, or even that the cryptography code behind it may become technologically obsolete.

A big issue I see right now, is that people are creating specific chips and special computer rigs that can mine bitcoins considerably faster.

Those big mining pools can control the amount of bitcoins that enter the market daily, so they actually have the power to accelerate or slow down the influx of coins, controlling short term inflation.


i've been wanting to try this out since i doubt i'll lose any real currency. As far as I know, I don't HAVE to pay to get bitcoins (though you can if you want) and earn them either by mining them or offer services. It's those two that I actually want to get info on as well as any other method that will help me earn as much bitcoins as possible.

You know, the whole thing is very complex. Let me try to explain the mining process.

Bitcon mimics gold; that´s why the word "mining" is used.

Like gold is a limited resource, bicoin is also limited to 21 million coins.

Like gold, when there was plenty of it, mining used to be pretty easy and gold used to be cheaper. After a while, mining gold became harder and gold became more expensive.

Bitcoin use the same principle. You mine bitcoins by downloading a program that breaks cryptography codes. The codes used to be simpler in the begining, which made easier to mine coins.

The bitcoin system is programmed to make it progressively harder to mine, making the cryptography codes more complex progressively. That´s why it´s estimated to reach its 21 million maximum only in 2160.

Nowadays, the process of mining bitcoins is unfeasible to regular computer users. In fact, if you turn on the mining function of the program, your computer will actually spend more electric energy than what you will earn in bitcoins, because of the increased GPU usage (yes, it uses GPU for mining, not CPU). In other words, you have financial loss.

However, some geeks found a way to overcome this issue, by creating super computer farms calibrated specifically to mine bitcoins as effective as possible without spending that much energy. This guy (http://www.theverge.com/2013/2/1/3941768/new-chips-mine-bitcoins-50-times-faster) even created a chip that mines coins 50 times faster than the average bitcoin mining setup. I´m not sure if the mastermind behind bitcoin predicted that people would cheat like this.

So, with the increase in computer technology, some people will find ways to mine coins faster than it was first predicted, creating devaluation, since more coins will be inserted into the market faster than they were supposed to be.

In fact, as many people predict a dramatic shift in computer technology to happen in the near future, perhaps even proper quantum computers, it´s very possible that all coins will be mined much sooner than expected, possibly in the next 10 or 20 years, since its cryptography may become technologically obsolete.

Even now, if the government decides to use their already established super computers to mine bitcoins, it would make a hell of a mess.

Right now, my friend, if you don´t have a specific computer setup for mining bitcoins, you´ll actually suffer financial loss, because your GPU will spend more energy than you will receive in coins. So no, you wont be able to get bitcoins for free.

Cheers,

Raf.

Paul
28th March 2013, 19:14
i've been wanting to try this out since i doubt i'll lose any real currency.
You'll lose the cost of the electricity :).

Current mining equipment, using the most efficient software and best suited graphics cards as compute engines (or even better, the up and coming special ASIC's) typically ends up generating bitcoins for a cost of electricity pretty close to the value of those bitcoins. Ordinary hardware, such as an ordinary PC, probably won't run the bitcoin algorithm fast enough to even generate one coin, meaning you simply wasted that electricity. Note that any recent CPU or graphics card will consume significantly more electricity when in a tight compute loop, than when idle most of the time (as CPU's typically are when just being used to browse the web.)

TargeT
28th March 2013, 19:32
Well, not that I can´t be generated. It´s programmed to gradually reach a 21 million bitcoins maximum level, which is estimated to happen approximately in the year of 2160.

There´s no way to guarantee that, until then, someone wont find a way to break its cryptography code and find a way to release fake bitcoins that will literally be identical to the authentic ones, or even that the cryptography code behind it may become technologically obsolete.

This isn't possible, as the algorithm prevents it by it's very nature, it's a closed system that will stop around 21 million (maybe less, depends on the advance of computers)



A big issue I see right now, is that people are creating specific chips and special computer rigs that can mine bitcoins considerably faster.

Those big mining pools can control the amount of bitcoins that enter the market daily, so they actually have the power to accelerate or slow down the influx of coins, controlling short term inflation.

Thats not really how it works either, I'd say it's the same as spending 1billion dollars to mine gold, sure you're going to find gold, but at the same time, you have 1billion in costs to overcome to do so.

Now, if there were a SIGNIFICANTE jump in computing (quantum computing, nanochips etc.. stuff that's not even further than theoretical currently) then there would be a short term flood of coins, but it would just just dip the value of the current bitcoins a little (sorta like how every day the USD becomes worthless, except not at all, since it would be short term).


This guy (http://www.theverge.com/2013/2/1/3941768/new-chips-mine-bitcoins-50-times-faster) even created a chip that mines coins 50 times faster than the average bitcoin mining setup. I´m not sure if the mastermind behind bitcoin predicted that people would cheat like this.

how is mining for gold more efficently cheating? I don't think you understand this currency at all, it's exactly like gold or silver except bitcoins are never used up in industry.

it's impossible for a government or even the owner of the system to randomly "bail out" his buddies; it's a far superior currency model than any other currently functioning that I know of.

Paul
28th March 2013, 19:38
Come on guys . . . . . Bitcoins are an experimental ‘new’ global financial system.

What do you think the One World or New World economic system would look like?

They are slowly getting the population used to the concept.

Bitcoin ‘money’ or currency has been produced literally out of thin air.
That's not how bitcoins are produced, and the current bitcoin apparatus will, I'm confident, never get much use past (1) a fairly computer geeky crowd and (2) specific markets such as on-line gambling. On-line gambling is a rather nice fit, actually, as gamblers are I presume accustomed to buying some chips from the house to play with. Bitcoins become just sort of an open source chip.

Producing new bitcoins does require some effort ... increasingly so by design. The effort is computational, requiring computers, electricity and software, rather than muscles or brains. But effort none-the-less, rather in proportion to the value of the bitcoins thus mined.

The bastards in power would indeed like to get us all on a one world, all electronic, currency. But bitcoins are to that NWO currency as old fashioned paper ballots, counted by hand, are to the paperless, vastly corrupted, electronic voting systems sold by Diebold (now "Premier Election Solutions" (PES), owned by Election Systems & Software (ES&S)).

RMorgan
28th March 2013, 19:48
Hey TargeT,

Man, that´s not impossible at all. Everything can be hacked, including bitcoin. People already tried to hack the bitcoin encryption code before, and will continue trying until eventually they succeed. There´s no perfect encryption.

Anyway, there´s a market going on specifically for Bitcoin setups; Like this setup (https://products.butterflylabs.com/homepage/1500gh-bitcoin-miner.html), which costs U$30.000,00.

And yes, I consider it cheating, because it takes the mining power out regular computer users and gives it to a selective group of people. This goes against the bitcoin principles. It creates another "elite".

These people are forming mining cartels and controlling the influx of coins; That´s a fact, just like the bitcoin exchanges are forming cartels and combining exchange rates to manipulate the bitcoin market value. This is beyond proved mate; That´s why many of the honest bitcoin advocates changed their minds about it.

Do a little research about it and you´ll get it, or just read this thread from the begging.

It´s a pyramid scheme created by a very smart anonymous group of people, mate.

Raf.

blufire
28th March 2013, 19:53
Come on guys . . . . . Bitcoins are an experimental ‘new’ global financial system.

What do you think the One World or New World economic system would look like?

They are slowly getting the population used to the concept.

Bitcoin ‘money’ or currency has been produced literally out of thin air.
That's not how bitcoins are produced, and the current bitcoin apparatus will, I'm confident, never get much use past (1) a fairly computer geeky crowd and (2) specific markets such as on-line gambling. On-line gambling is a rather nice fit, actually, as gamblers are I presume accustomed to buying some chips from the house to play with. Bitcoins become just sort of an open source chip.

Producing new bitcoins does require some effort ... increasingly so by design. The effort is computational, requiring computers, electricity and software, rather than muscles or brains. But effort none-the-less, rather in proportion to the value of the bitcoins thus mined.

The bastards in power would indeed like to get us all on a one world, all electronic, currency. But bitcoins are to that NWO currency as old fashioned paper ballots, counted by hand, are to the paperless, vastly corrupted, electronic voting systems sold by Diebold (now "Premier Election Solutions" (PES), owned by Election Systems & Software (ES&S)).


And who created or invented our current computer systems and related technology??

TargeT
28th March 2013, 20:04
Hey TargeT,

Man, that´s not impossible at all. Everything can be hacked, including bitcoin. People already tried to hack the bitcoin encryption code before, and will continue trying until eventually they succeed. There´s no perfect encryption.

Anyway, there´s a market going on specifically for Bitcoin setups; Like this setup (https://products.butterflylabs.com/homepage/1500gh-bitcoin-miner.html), which costs U$30.000,00.

And yes, I consider it cheating, because it takes the mining power out regular computer users and gives it to a selective group of people. This goes against the bitcoin principles. It creates another "elite".

These people are forming mining cartels and controlling the influx of coins; That´s a fact, just like the bitcoin exchanges are forming cartels and combining exchange rates to manipulate the bitcoin market value. This is beyond proved mate; That´s why many of the honest bitcoin advocates changed their minds about it.


bitcoins ARE encrypted (http://en.wikipedia.org/wiki/Encryption), they are not encryption (http://en.wikipedia.org/wiki/Encryption) themselfs, it's a very spesific algorythm, similar to a complex PKI (public key infrastructure) set up; the bitcoins can be checked against the algorythm, if they don't pass they aren't valid, if they do pass they are valid, this is why people "mine" them, running numbers against the agorythm to try and find a match.

it's just math, math cannot be "hacked".


& the creators absolutely knew this would happen, that is WHY there is a cap built into it... if you fully understand it, it's a beautiful currency system.

People can control the influx of coins, that can be a fact all day long, it doesn't matter however, as all it will do is devalue bitcoins; so lets say you found a way RIGHT NOW to get all the bitcoins out, (quantum computer or something) all you would do would devalue the currency; you wouldn't really gain anything from it.

how is that cheating again?




Do a little research about it and you´ll get it, or just read this thread from the begging.

It´s a pyramid scheme created by a very smart anonymous group of people, mate.

Raf.

I've been following bitcoins since they were created along with several other alternate currency (most have failed, bitcoins hasn't)

william6565william
28th March 2013, 20:06
so in other words, i have to offer services to earn bitcoins it seems. that sucks since i don't know what i can offer for that.

Paul
28th March 2013, 20:11
And who created or invented our current computer systems and related technology??

Well, the straight answer to you question would be engineers such as myself. I spent 30 years creating some of that technology, and working side-by-side with others doing the same.

But, more honestly, I don't get the relevance of your question to this topic :confused:

RMorgan
28th March 2013, 20:16
Check this article mate.

----------------------------------------

Centralization is Killing BitCoin

BitCoin is a well-designed decentralized crypto-currency. As far as cryptographers know, BitCoin is absolutely secure and very robust as long as a single party cannot gain control of the majority of the network. However, an undesirable trend towards the centralization of BitCoin is beginning to form. Monopoly BitCoin services are beginning to emerge, and as BitCoin becomes more popular and more valuable, they are starting to be attacked. These attacks are now becoming a major concern for the health of the BitCoin currency and the security of BitCoin users.

DeepBit Attacks

I first noticed the centralization trend when I saw that almost 50% of the entire network's computing power was concentrated in one mining pool - DeepBit. This kind of centralization directly contradicts one of BitCoin's core goals - to be decentralized. It's no surprise though, since implementing a centralized service is much easier than designing an entire peer to peer network just to provide the same functionality. Peer to peer is still relatively new technology. We haven't yet established a rock solid framework that makes P2P applications easy to develop. We opt to quickly develop a centralized service rather than spend months planning and implementing the P2P equivalent.

https://defuse.ca/images/xbitcoin-chart.png.pagespeed.ic.47n9lhkKQB.png
BitCoin computing power distribution before the DeepBit attacks.

The simplicity of building centralized services comes at a cost. I pointed out to the BitCoin community that if DeepBit was ever shut down, either by malicious attack or accidentally, all of it's users would be effectively disconnected from the BitCoin network. Their machines would remain idle, trying to reconnect to DeepBit until it came back online. During that time, DeepBit's 50% share of the network's computing power would be gone. The network's strength, as a whole, would be reduced by half.

https://defuse.ca/images/xbitcoin-ddos.png.pagespeed.ic.bt4GtQsMEF.png
BitCoin computing power distribution during the DeepBit attacks.

Sure enough, DeepBit was hit with a Distributed Denial of Service (DDoS) attack. The service went offline for a few days, and during that time, as expected, much of the BitCoin network's computing power went missing. This should have been a wake up call to the BitCoin community that the ease of centralization is not worth the risk to the network. Centralization gives BitCoin a single point of failure, making it much less robust than it is intended to be.

DDoS attacks aren't the only way centralized mining pools can hurt BitCoin. If one party obtains over 50% of the network's computing power (like DeepBit did), they can:

-Reverse transactions the party sent while in control.
-Prevent all or some transactions from gaining confirmations.
-Prevent some or all other generators from getting any generations.

The community's reactions to the attacks were mostly nonconstructive. They suggested switching to other pools while DeepBit was down, ignoring the inherent threat of centralization. I suggested that a distributed pool should be created, possibly integrated into the BitCoin client software. That idea didn't take off though, probably because it's just too hard to build peer to peer systems.

MTGOX Attacks

Centralization does not only impact the reliability of the BitCoin network, it degrades the security of BitCoin users. MTGOX, arguably a monopoly BitCoin to U.S. Dollar exchange website, recently had its database compromised. The hash of every MTGOX user's password was released onto the Internet. Thankfully, MTGOX was hashing passwords properly, with salt, so users who used a strong password are completely safe. Nevertheless, it's a good example of how centralization can harm BitCoin - it put a huge dent in it's reputation as a secure and reliable currency. The MTGOX downtime put a stop to most of the BTC to/from USD trades. If the exchange service was decentralized, or even if there were more than just a handful of them, MTGOX users could have switched to one of the others and trading would have continued as usual during the attack.

source: https://defuse.ca/bitcoin-pool-ddos.htm

------------------------------

Man, can´t you realize that this whole thing is so vulnerable?

Read post #42 to see how this whole thing it´s a pyramid scheme, mate.

The only aspect that bitcoin is different from our current system is that you can´t fabricate bitcoins, at least for now.

Except for that, it´s also fiat currency, the mining pool cartel exerts similar function to central banks, the bitcoin exchange cartel exerts the same function as Wall Street.

Bitcoin just takes the power from the current banking elite and gives it to an anonymous computer hackers elite.

So, bitcoins are not decentralized, are not safe and are not stable. What reason do you have to use it then?

Open your eyes, my friend.

Raf.

william6565william
28th March 2013, 20:19
On a related note, I found a variation of Bitcoins called Litecoins, though it has a much smaller value than the former. I'm even surprised there's actually a trading system for these two currencies as though they're part of the Forex market or something similar:

https://btc-e.com/exchange/btc_usd

I would assume Litecoins have the same issues with BitCoins in terms of mining (eats up as much GPU), unless I'm wrong. Nonetheless, do you guys think it can be a slightly better alternative to BitCoins (like for those who can't afford getting BitCoins)?

RMorgan
28th March 2013, 20:54
On a related note, I found a variation of Bitcoins called Litecoins, though it has a much smaller value than the former. I'm even surprised there's actually a trading system for these two currencies as though they're part of the Forex market or something similar:

https://btc-e.com/exchange/btc_usd

I would assume Litecoins have the same issues with BitCoins in terms of mining (eats up as much GPU), unless I'm wrong. Nonetheless, do you guys think it can be a slightly better alternative to BitCoins (like for those who can't afford getting BitCoins)?

Check this out, about litecoin.

geWUr8cNwXQ

Bitcoin calls litecoin a pyramid scheme in its official wiki here (https://en.bitcoin.it/wiki/Litecoin), except that both litecoin and bitcoin work under exact the same principle. Tell me about a the pot calling the kettle black.

Raf.

Paul
28th March 2013, 21:12
Man, can´t you realize that this whole thing is so vulnerable?

Read post #42 to see how this whole thing it´s a pyramid scheme, mate.
You're hitting on perhaps the two biggest problems I see with Bitcoin.
They are vulnerable, both to the inability of individuals to properly secure them against loss or theft, and to the overly centralized institutions that are growing up around them (Deepbit and MtGox, apparently.)
They are what you label a "pyramid" scheme. That's a technically accurate label, in my view, though an inflammatory one as well :).

I phrase that second problem in a more abstract fashion. A healthy currency, in my view, is one that is not lent into existence, but rather one that is earned into existence the old fashioned way, by contributing one's own goods and services to the community. For example the wheat farmer might put some excess grains in the community store, in exchange for script that can be used to purchase some shoes or vegetables.

Bitcoins are neither lent into existence, nor earned in fair exchange for one's own labor and property that has inherent value to community. Rather bitcoins are computed into existence by an otherwise useless computation.

The "pyramid" nature of bitcoins is essentially another way of describing their inherent, built-in, deflationary characteristics. In order to counter the inevitable concerns that bitcoins were just created out of thin air and hence would eventually become worthless due to inflation (an increasing number of bitcoins chasing the same or fewer goods and services willingly offered in exchange), the designer of bitcoins went to the other extreme, and designed a system that is essentially deflationary. The number of bitcoins that can ever be created is capped at 20 million, and we already have half of those, some 10 million, created.

Eventually the quantity of bitcoins "above ground" (available for use) will decline steadily (or abruptly) as they are lost. A deflationary currency becomes increasingly valuable, exactly the opposite of an inflationary currency which becomes increasingly worthless. Neither inflation nor deflation is a good property for currencies; better that currencies have a relatively stable long term worth in trade for goods and services.

Currency that is "earned" into existence by providing the issuing community with some of one's own services or property, and that is "spent" out of existence in trade for some of that shared community wealth, is a currency that has the potential to be relatively stable long term, purchasing the same amount of goods and services over time, if the community manages it well. Unfortunately, such stable and long term well run communities have always (in recorded history, anyway) been destroyed by more powerful empires run by bastards.

Observe that gold and silver are not ideal currencies either. They can be used as the physical media for a healthy currency, when in the hands of a healthy community. But they end up being hoarded and manipulated by the masters of the empire, as yet another weapon for destroying healthy independent (unruly) communities and gaining control over uppity persons. At least gold and silver have maintained a relatively stable value for goods and services long term (though not short term) thanks to the effort to bring gold and silver "above ground" being in proportion to the available human labor and ingenuity to physically mine them. Bitcoins, by their very design, absolutely lack that long term (centuries, even millenia) stability. They will eventually deflate out of existence (if they don't die a more violent death sooner, due to being overly centralized and hence susceptible to systemic loss due to corruption.)

Nor are land or fine art (the other two classic ways the wealthy store wealth) ideal currencies in our present earthly civilizations. Both have been excessively hoarded by a few. Land is now just another instrument of control. Essentially no common person anymore can own a single square meter of land, free from the risk of confiscation by some government for taxes, or of being foreclosed on by some bank for a mortgage, or of being bombed out of existence by the Anglo-American Empire if your community refuses to participate in their banking and taxation schemes, or of being strip mined and deforested if you have the misfortune to be "squatting" above some good dirt or minerals. Fine art ... that being less essential to survival ... we only get to see in museums or in pictures in glossy books for our coffee tables.

william6565william
28th March 2013, 22:25
Apparently, the value of BTC dropped from 95 to 78 as of this writing:
http://bitcoinity.org/markets

Decided to have my young friend set up a BTC wallet for the heck of it and look for some places to earn BTCs. Managed to make a dollar worth of it.

Nanoo Nanoo
28th March 2013, 22:35
For the record, I bought into bitcoins at $13. us fiat paper, at $28., at $35, at $82 and today at $95, and I am thrilled to have done so. I fancy owning some currency that one can trade anonymously without having to pay fees to paypal. I value supporting a non-bankster form of currency. I will shortly accept bitcoins on my own website.

I smell a bit of envy here, for the early adopters. All I can say is they took a risk, and they deserve to get the profit, just like anyone who is an early adopter of anything in this world does. Viva the courageous trailblazers!!! I wish I had known about bitcoin earlier.

The governments will never be able to stop bitcoin, unless the whole internet comes down. The large bitcoin exchanges are not needed. The more bitcoin grows, the more smaller exchanges will open and in fact are doing so. The more places one will be able to spend bitcoins. Mike Adams the health ranger is just starting to accept bitcoins on his natural food store, for example.

Bitcoins will break through $100 usd soon and I doubt it will ever crash back below $50 and there is more of a chance that it will go to $500. As I see it, Gold and Silver are manipulated by the elites, but they cant do that with bitcoin, and bitcoins rise reflect the debasement of the usd and all other fiat printing cartels.

I would think that this libertarian currency would find more favor here. Maybe the other bitcoiners are loathe to speak up, in this atmosphere of ridicule and negativity.

Put it like this... if one doesnt have enough currency to live on a day to day basis, bitcoins are a gamble that one might not want to take... but after one has enough PM's, enough stored food and supplies for a few years, a bug out location or two, diversified offshore funds and a very cheap lifestyle off grid, bitcoins are a perfect freedom promoting venue to park some extra funds and a fun way to remunerate other bitcoiners.

Best post yet !


N

PathWalker
28th March 2013, 22:38
And who created or invented our current computer systems and related technology??

Well, the straight answer to you question would be engineers such as myself. I spent 30 years creating some of that technology, and working side-by-side with others doing the same.

But, more honestly, I don't get the relevance of your question to this topic :confused:

The more interesting question, is who govern the technology? ( Govern = manage policy.)
The people who control the source code control the currency.
It is that simple.

Paul
28th March 2013, 23:22
The more interesting question, is who govern the technology? ( Govern = manage policy.)
The people who control the source code control the currency.
It is that simple.
The source code for Bitcoins is open, and understandable, and re-implementable.

Its technical security vulnerabilities are known, and have been spelled out above, such as the risk of one party or a small oligarchy of parties gaining too much dominance, or the risk to an individual of losing their bitcoins (as easy as forgetting a password or losing a computer disk file) or having their bitcoins stolen (as easy as having your computer or website hacked.)

william6565william
29th March 2013, 01:36
Apparently, I found some basic information about Litecoins as well as mining from, out of all the places I could find information, 4chan.


What are litecoins?
Litecoin is an alternative cryptocurrency based on Bitcoin. It differs from Bitcoin in that it targets a faster block rate (2.5 minutes) and uses scrypt for the primary hashing done in mining.

How to mine these?
There are numerous ways to mine litecoins, but the one I've had the most success with would be ScryptMiner Gui (CPU only) and Reaper (CPU or GPU)

ScryptMiner: https://bitcointalk.org/index.php?topic=62414.0
Reaper: http://wiki.solidcoin.info/wiki/Reaper

Getting a wallet:
You can use a traditional wallet such as listed on http://litecoin.org/ (and mine with it as well) or you can get one at an exchange site, such as: https://btc-e.com. Personally, I use btc-e.com

Finding a pool:
Finding a pool is quite simple, generally target one with a low pool fee. Comparison list: https://github.com/litecoin-project/litecoin/wiki/Comparison-of-mining-pools
Join a pool and create workers, if you want to do a CPU/GPU on one computer using Scrypt and Reaper, create two workers.

How to use ScryptMiner:
Step one, download ScryptMiner and extract it to desired location.
Step two, run ScryptMiner.exe.
Step three, choose and input settings/account.
Note: More threads = more stress on CPU
Note: For pool address leave out 'http/https://'
Step four, start mining. It'll take a bit for it to start working.

How to use Reaper:
Download Reaper and extract to desired location.
Step two, open litecoin.conf and input account information/server information. Save, make sure it is a .conf file not .conf.txt.
Note: Leave off 'http/https://'.
Step three, Open reaper.conf with Notepad
Step four, Delete 'mine bitcoin' and 'mine solidcoin' and save.
Step five, run Reaper. If done correctly, it will connect to your pool and begin submitting shares.


I guess I should try this out since the value is so small. What do you all think?

Watching from Cyprus
29th March 2013, 10:53
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."

Another thing; Bitcoin is becoming centralized, now that there are really big bitcoin exchange services and huge mining pools. They can control the bitcoin value pretty much like conventional stock exchanges control our current system.

There are even bitcoin banks, where you can "safely" store your wallet, paying fees for it, of course.

These things are a big drawback that is contrary to the initial purpose of such system. Long term, it can become quite dangerous, given the fact that both bitcoin banks and exchanges can do whatever they want, with no proper legal mechanism to regulate their actions.

Right now, bitcoins are far from being decentralized and immune to manipulation.

As a side note, I must remember that no one knows who created the bitcoin and what was their true purpose; the man or team who uses the pseudonymous of Satoshi Nakamoto.

What if it is an experiment to see if people will adhere to a fully electronic global currency? How good it would be for the elite if they could just lock your account if you fail to obey their rules? The idea of a digital global currency is often discussed here and it´s considered to be a fundamental part of the "new world order" ideology.

Excellent Rmorgan, i was thinking in the same alley, and subsequent this could be a test for the new money/wallet to be implanted under our skin in the RFID chip.. Bloody scary. I am going to give it a go and invest a bit through one of the major dealers, but will first ask Max Keiser for advise.
Cheers
Peter

CosmicKat
29th March 2013, 13:11
http://www.youtube.com/watch?v=_t39jCXXIrY

william6565william
29th March 2013, 17:45
well it appears BTC has gone public now that places like Yahoo has taken notice:
http://finance.yahoo.com/news/bitcoin-cyprus-sparks-scramble-digital-164900785.html

I can expect BTC to go down at this point, though last time I checked it was $88.

tnkayaker
30th March 2013, 15:50
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."
well that does it for me, for now anyways, why bank on a unit of trade fueled by the internet if as you say,( and i think one day we may loose the net for a while) not to mention the onslaught of control-ability laws/bills presently being discussed now resulting in who knows what then moving foward in the future i think its a slam dunk eventually we will see more internet laws and controls, if a unit of trade is solely accessible through an internet connection then its a bit hollow and scary in its inception in my mind, i dunno i dont have alot of extra money anyways, but i surely want to be able to drive to a location and talk to a person behind a window and feel my hard earned money is safe (more or less) somewhere.we/they should come up with an idea of or unit of trade that helps this country not puts us in need of the internet for our units or trade for commerce, the net is good for what it is good for, but all this need for being connected all the time is a bit messed up i think, so many folks are addicted to the net now, can you imagine if their whole life and money is soley tied up by an interment connection? smacks of a ploy to get more folks connected to the net all the time, im trying to move away from needless use of the net,mindless surfing and paying by the gig to read stuff and find things i used to be able to find with a little more effort, this bi t coin could be a test to see how the masses feel about a new unit of trade, or worse, it could be the coming of one world unit of trade,only accessible with an internet connection, then all this mystery about who makes it, what it is really, and how it is doled out, to whom and for what reasons, it seems it could be just another ooops we should have thought about that idea if ppl loose their converted savings to this new idea....well i dont need to even go there...i need to know more, not more mystery, years ago ppl bartered for some stuff neighbors needed, still do and there are some areas this kind of barter for service thing is on the upswing, of course it is more difficult to track, and that should be considered,who not some kind of barter for service unit of trade? something that could be monitored so we could pay a fixed percentage to run the country and programs, i dunno im just trying to brain storm, it seems we need to get a grasp on our present way of making paper money and make it better for everyone,i know thats possibly what someone was thinking with this bitcoin thing but shrouded in mystery is not the way to go about it , stay well folks, peace,dennis

Paul
30th March 2013, 23:47
I just split off 14 posts into a separate thread: PathWalker and Paul debate Bitcoin project structure (http://projectavalon.net/forum4/showthread.php?57556-PathWalker-and-Paul-debate-Bitcoin-project-structure).

PathWalker
31st March 2013, 08:01
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."

I fully agree.
No one really know who control the code in the "Open Sources" Bitcoin community. The Bitcoin community is obscure and amorphous.
It might be new Power To Be. Control and greed driven.

The Bitcoin has no accountability (no one to blame), and no governing body (no committed strategy, no policy to change strategy).
What you see in the open source code, is not guaranty it will be the same code in few months from now.
You trust it as an investment, with a grain of risk.

Paul
31st March 2013, 08:17
I just split off 14 posts into a separate thread: PathWalker and Paul debate Bitcoin project structure (http://projectavalon.net/forum4/showthread.php?57556-PathWalker-and-Paul-debate-Bitcoin-project-structure).



No one really know who control the code in the "Open Sources" Bitcoin community. The Bitcoin community is obscure and amorphous.
It might be new Power To Be. Control and greed driven.

The Bitcoin has no accountability (no one to blame), and no governing body (no committed strategy, no policy to change strategy).
What you see in the open source code, is not guaranty it will be the same code in few months from now.
You trust it as an investment, with a grain of risk.
PathWalker: you and I already had a lengthy discussion of this -- which I split off into a separate thread.

Please respect that split.

Paul
31st March 2013, 08:26
While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02.
If you run one of the "full download" versions of Bitcoin, which I've done, then your bargaining power is not located on some server. It's located on your PC. You are still dependent on the Internet to connect to other PC's, but you are not dependent on some server in the cloud to let you access your money ... or not. Any two such PC's can connect to each other and transfer bitcoins.

Running your own full download version of bitcoin does use more PC space and compute power than your typical tablet or smartphone has available. For those devices you're relying on some server, of your choice. But all such servers will be sharing copies of the same data, so you can switch servers without notice to anyone else, or without even the first server being online. You could run your iPhone off one server and your Android off an entirely different one, and access the same bitcoin funds.

RMorgan
31st March 2013, 19:10
Another two videos about bitcoin. It´s nice to see more people are smart enough to see bicoin for what it really is. I recommend watching other videos about this issue, from the same youtube channel:

BitCoin Bubble Psychology

SlJ6oh50hiI

Confessions Of a BitCoin Scammer

7fvSYT7vhQY


As a side note, now I can see why Max Keiser is so happy about bitcoins. He seems to be one of the early adopters, you know, those that benefit more than anyone else from the increasing bitcoin´s popularity.

Raf.

Jeffrey
31st March 2013, 19:21
-----------

Here's an interesting chart.

http://media.economist.com/sites/default/files/imagecache/full-width/images/2013/03/blogs/graphic-detail/20130323_gdc287.png

PathWalker
31st March 2013, 22:49
-----------

Here's an interesting chart.

http://media.economist.com/sites/default/files/imagecache/full-width/images/2013/03/blogs/graphic-detail/20130323_gdc287.png

What is the blue line?
What is the brown line?

Paul
1st April 2013, 01:43
What is the blue line?
What is the brown line?
See the legend, near the top of the image:

Blue is $ per Bitcoin
Red is Google searches for "Bitcoin", worldwide, 100=peak

turiya
1st April 2013, 03:20
Using Bitcoin to monitor true state of hyperinflation...

Clif High:




Because of the crashing monetary system, hyperinflation needs to be expressed in the markets, but is being suppressed by the 'controllers', so Universe has provided a way for that expression to occur in the realm of bitcoins (the world's premiere unregulated currency). The inflationary rate of the bitcoin will begin in North America (U.S. & Canada) around April 1, 2013...

With the crashing dollar, we can expect to see huge levels of fluctuation in bitcoins. I [personally] am not going to be shocked to see a 10,000 dollar per day level of volatility within a bitcoin... could get to be several 100,000 dollars per bitcoin in value. And the beginning part of that "pressure" occurs between 8 & 11 days from now (April 1-4). So the economic "pressure" on the bitcoin will eventually (mid April) lead to our first 10,000 dollar per day fluctuation - - where you get up in the morning and your bitcoin is worth $98,000, and you go to bed at night and its reached a high of $108,000 but fallen to $86,000 by the time you go to sleep.


http://www.youtube.com/watch?v=rNvSj6c1H6I

turiya

tnkayaker
1st April 2013, 03:44
I'll repeat what I said on another thread regarding "Bitcoins" since this thread appears to be more apropos:

"While I'll admit upfront that I know nothing about "Bitcoins," the following statement from Wikipedia set off all kinds of alarms for me: "Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network." So if all your bargaining power is tied up in some "decentralized" account somewhere in the cloud and then they decide to take the Internet down--or selectively control what gets through it--where do you suppose that will leave you? Just my $.02."

I fully agree.
No one really know who control the code in the "Open Sources" Bitcoin community. The Bitcoin community is obscure and amorphous.
It might be new Power To Be. Control and greed driven.

The Bitcoin has no accountability (no one to blame), and no governing body (no committed strategy, no policy to change strategy).
What you see in the open source code, is not guaranty it will be the same code in few months from now.
You trust it as an investment, with a grain of risk.
...yeh what he said ....lol thanks for summing it up and making more sense than my rambling on pathwalker,,,thanks buddy, peace,dennis

Paul
1st April 2013, 06:44
No one really know who control the code in the "Open Sources" Bitcoin community. The Bitcoin community is obscure and amorphous.
It might be new Power To Be. Control and greed driven.

The Bitcoin has no accountability (no one to blame), and no governing body (no committed strategy, no policy to change strategy).
What you see in the open source code, is not guaranty it will be the same code in few months from now.
You trust it as an investment, with a grain of risk.
...yeh what he said ....lol thanks for summing it up and making more sense than my rambling on pathwalker,,,thanks buddy, peace,dennis

That's the primary strength of bitcoin. No organization can control it.

See Bitcoin: The Simplest Non-technical Explanation (http://blog.zorinaq.com/?e=66) for more details. That post begins with:




Bitcoin is diametrically opposed to all existing electronic currencies.

Bitcoin is the world's first invention of a decentralized electronic currency, with no central authority or trusted parties whatsoever, as its inventor originally describes. Not even the Bitcoin developers themselves have special control of Bitcoin. Compare this to other e-currencies that are operated by central authorities that are single points of failure: they have a history of regulating transactions (Paypal blocking donations to Wikileak, etc), or simply failing and shutting down (Beenz, etc).

If Bitcoin is confusing to you, that is normal. Bitcoin is best explained by this list of analogies. Read carefully:
Bitcoin is like digital gold.
By design, there is a known, immutable, fixed supply of bitcoins, similar to gold being available in limited quantity on Earth. There are 2.1 quadrillion indivisible units of value (0.00000001 bitcoins), and not one more will ever exist.
Bitcoins are digital, therefore you can instantly transfer them to anybody across the world.
Bitcoins are stored locally on your electronic device (cellphone, computer), contrary to being stored in an account managed by a financial institution. This is similar to how you can store cash or gold in a physical location of your choice. This means there is no "Bitcoin account" that can be frozen by someone in power (eg. your spouse making malicious claims to seize a bank account during a divorce).
Bitcoin transactions are technically irreversible. There is no mechanism to revert a transaction, other than convincing the recipient to send the bitcoins back. This solves the fraud problem for merchants, as all the payments they receive are final, whether fraudulent or not. (On the downside, like cash or gold, if bitcoins are stolen from you, the chance of recovering them is generally slim.)
Payments are sent directly from one party to another without going through a financial institution, similarly to how cash or gold can be handed directly to someone. You do so by sending them from your computer, to the recipient's computer, through the Bitcoin network (which is nothing more than other computers running Bitcoin). Since no one can realistically prevent a computer from getting Internet access one way or another, no one can regulate or block transactions (eg. oppressive governments financially repressing activists.)
Finally, there is no financial institution, or bank, or company, operating Bitcoin, just like there is no company in charge of "operating gold". There is no Internet server to shut down to terminate Bitcoin. It exists merely as an application running on your computer, which communicates with other Bitcoin users over the Internet. This "mesh" Bitcoin network is called a peer-to-peer network, and this design makes it effectively indestructible, as long as the medium of communication (Internet) exists.

See Bitcoin: The Simplest Non-technical Explanation (http://blog.zorinaq.com/?e=66) for more details.

PathWalker
1st April 2013, 11:01
That's the primary strength of bitcoin. No organization can control it.


This is absolutely correct and to the point.
And requires subjective "paranoid/conspiratorial" perspective.

As for my self, I would like to trust/believe a currency has substantial value (in contrast to fiat currency).
I fail to trust obscure amorphous community.

I believe/suspect the community behind the Bitcoin is another warring faction of TPTB. And have no better motives then the FED. Since all communication technology is controlled by TPTB and laced with spyware.
Every each Bitcoin transaction is traceable and trackable to the source and destination.

So from my perspective let the beasts eat each other alive. Both are doomed.

P.S
Being paranoid does not cancel the possibility of being followed.

Paul
1st April 2013, 17:12
I fail to trust obscure amorphous community.
The underlying technology of bitcoin does not ask that you trust a community. It provides a robust means of transferring unique "bitcoins", down to one part in 100 million of one bitcoin, out of 10 million such bitcoins (now), up to 21 million bitcoins (eventually). That transfer does not need to depend on a third party organization any more than handing someone a gold or silver coin does. Unfortunately, this robustness is not nearly as obvious to most people as handing over coins, as it depends on certain mathematical and cryptological properties, and on their (open and understandable, to those with the proper skills) software implementation.

You seem to be saying that only organizations with established rules and formal structure are worthy of trust. I know that is not true. I have worked in formally established organizations that should not be trusted, and in informal communities (e.g., the Linux kernel developers) that were quite worthy of trust.

You apparently think that it would be safer if one well defined organization with established procedures controlled bitcoin, and then you (reasonably enough) worry about control of bitcoin by TPTB. It is often just such centrally controlled systems that are easiest for TPTB to subvert.

In my view, there are significant problems with bitcoin, sufficient that I am not substantially invested in them. I do have 0.05 bitcoins, that I got for free somewhere along the way, likely back in 2010. I have described these bitcoin problems in other recent posts on this forum.

Please be more careful in your statements about bitcoin. You have repeatedly made inaccurate, prejudicial and/or misleading statements about bitcoin. This confuses the topic, rather than contributing to a healthy discussion. You are persisting in doing so, despite my various efforts to correct and clarify.

I obviously don't know whether you are consciously attempting to muddy up the discussion, but that is certainly the effect.

[Mod-hat on] Stop this bitcoin mudslinging, or confine it to the 'PathWalker and Paul debate Bitcoin project structure (http://projectavalon.net/forum4/showthread.php?57556-PathWalker-and-Paul-debate-Bitcoin-project-structure) thread, or I will go back to moving all such posts from you to that thread, in an effort to keep your confusions from muddying up the other bitcoin thread(s). [Mod-hat off]


I believe/suspect the community behind the Bitcoin is another warring faction of TPTB. On the one hand that "community" is amorphous, but on the other hand it's a faction of TPTB? There may well be several factions of TPTB that have a hand in bitcoin, perhaps a very significant hand. But I seriously doubt that the bitcoin "community" is one and the same as one such faction. Heck, bitcoin is not even one cohesive community, as you have observed.


Since all communication technology is controlled by TPTB and laced with spyware.Wrong and wrong. Not all. TPTB do not control all comm tech. Not all comm tech is "laced with spyware". I've written comm tech that was neither :). I have used and continue to use comm tech that I am confident is neither controlled by TPTB, nor "laced with spyware." On the other hand, if I were a person of sufficient interest to the right people, then I would be hard pressed to keep any form of my communications secret from them.


Every each Bitcoin transaction is traceable and trackable to the source and destination.That is an oversimplification to the point of being incorrect, unless one gives rather narrow and unexpected definitions to your vague words. See further Bitcoin Wikipedia: Staying Anonymous (https://en.bitcoin.it/wiki/Anonymity#Staying_Anonymous). However there is a very valid concern here, as explained at The Pure Fiat Con: Every Transaction Available for Official Scrutiny – and That's Just the Point? (The Daily Bell) (http://www.thedailybell.com/4311/The-Pure-Fiat-Con-Every-Transaction-Available-for-Official-Scrutiny-and-Thats-Just-the-Point). Nevertheless, the actual words you wrote are incorrect, as written and likely to be understood.

DevilPigeon
1st April 2013, 17:18
-----

I'm sick to death of hearing about bl**dy BitCoin now....

PathWalker
1st April 2013, 17:48
If anyone know, please explain.

1. How the exchange rate for Bitcoin is decided (against USD, against EU, against Gold)?
2. What is the difference between Bitcoin exchange business and other currency Exchanges business.

RMorgan
1st April 2013, 18:14
If anyone know, please explain.

1. How the exchange rate for Bitcoin is decided (against USD, against EU, against Gold)?
2. What is the difference between Bitcoin exchange business and other currency Exchanges business.

There are several factors which influence the exchanging rate of bitcoins:

a) Demand. In this case, demand is connected to visibility, like Vivek shows in his post #78. In other words, the bigger the hype, the bigger the appreciation.

b) The way bitcoins are used. People use it as a currency (to buy actual products on stores that accept bitcoin) and as speculative investment (buying bitcoins as investment hoping to achieve short/medium term profit).

Currently, the vast majority of people use bitcoin as speculative investment, which causes the bubble effect, because they hold bitcoins instead of spending them.

Notice that speculation is the biggest cause of its volatility and goes against its original principles, which were to use it to buy goods, not to speculate.

c) By rarity. Bitcoin has got a deflatory progressive algorithm; The more its mined, the more difficult it becomes to mine, reducing the injection of new bitcoins in the market gradually.

d) This is the most problematic one, which is the bitcoin exchanges themselves manipulating the exchange value of bitcoin. They not only have the power to do that, but they had already done it in the past. There´s a video about it on my post #77. Currently, one bitcoin exchange holds 80% of the bitcoin exchange network, causing centralization and huge potential for manipulation.

e) This is the second most problematic one, which are the mining pools. They essentially control how many new bitcoins enter the market daily, which obviously influence appreciation or depreciation. There´s a huge trend in centralization regarding mining pools as well. It ends up centralizing blockchain solving in their private servers, which means they can halt the whole network for a while if they are hacked or deliberately shutdown, like happened with deepbit in the past.

So, essentially, there´s no difference between bitcoin exchanges and other regular exchange markets; except that regular official exchanges have many more variables involved. The basics are the same; demand, speculation, rarity, manipulation, rumors, etc...

Points d) and e) represent the major and most serious bitcoin vulnerabilities. Bitcoin exchanges and major mining pools ended up controlling the bitcoin market. Both can be hacked or deliberately manipulated.

Point b), which is speculation, is another very serious issue. Bitcoin was allegedly supposed to be used for trading goods, not as speculative stock.

Raf.

PathWalker
1st April 2013, 18:46
If anyone know, please explain.

1. How the exchange rate for Bitcoin is decided (against USD, against EU, against Gold)?
2. What is the difference between Bitcoin exchange business and other currency Exchanges business.

There are several factors which influence the exchanging rate of bitcoins:

a) Demand. In this case, demand is connected to visibility, like Vivek shows in his post #78. In other words, the bigger the hype, the bigger the appreciation.

b) The way bitcoins are used. People use it as a currency (to buy actual products on stores that accept bitcoin) and as speculative investment (buying bitcoins as investment hoping to achieve short/medium term profit).

Currently, the vast majority of people use bitcoin as speculative investment, which causes the bubble effect, because they hold bitcoins instead of spending them.

Notice that speculation is the biggest cause of its volatility and goes against its original principles, which were to use it to buy goods, not to speculate.

c) By rarity. Bitcoin has got a deflatory progressive algorithm; The more its mined, the more difficult it becomes to mine, reducing the injection of new bitcoins in the market gradually.

d) This is the most problematic one, which is the bitcoin exchanges themselves manipulating the exchange value of bitcoin. They not only have the power to do that, but they had already done it in the past. There´s a video about it on my post #77. Currently, one bitcoin exchange holds 80% of the bitcoin exchange network, causing centralization and huge potential for manipulation.

e) This is the second most problematic one, which are the mining pools. They essentially control how many new bitcoins enter the market daily, which obviously influence appreciation or depreciation. There´s a huge trend in centralization regarding mining pools as well. It ends up centralizing blockchain solving in their private servers, which means they can halt the whole network for a while if they are hacked or deliberately shutdown, like happened with deepbit in the past.

So, essentially, there´s no difference between bitcoin exchanges and other regular exchange markets; except that regular official exchanges have many more variables involved. The basics are the same; demand, speculation, rarity, manipulation, rumors, etc...

Points d) and e) represent the major and most serious bitcoin vulnerabilities. Bitcoin exchanges and major mining pools ended up controlling the bitcoin market. Both can be hacked or deliberately manipulated.

Point b), which is speculation, is another very serious issue. Bitcoin was allegedly supposed to be used for trading goods, not as speculative stock.

Raf.

Thank you very much, very good explanation.
This answer leads to the next question.

1. What happens if there is run on Bitcoins and the Bitcoin exchange has no more Bitcoins (Assuming the Bitcoin exchange cannot generate Bitcoins)?
2. Is it possible for the Bitcoin exchange to act like a bank and issue Bitcoin debt notes? (Fractional reserve banking)

Thanks again

RMorgan
1st April 2013, 19:01
1. What happens if there is run on Bitcoins and the Bitcoin exchange has no more Bitcoins (Assuming the Bitcoin exchange cannot generate Bitcoins)?
2. Is it possible for the Bitcoin exchange to act like a bank and issue Bitcoin debt notes? (Fractional reserve banking)

Thanks again

1- Well, this is possible, but extremely unlikely to happen. There are still a lot of bitcoins to be mined. In a hypothetical case of an abrupt and massive increase in demand for bitcoins, their price would get prohibitively high much longer before bitcoin supply is extinguished. Considering that one bitcoin can be divided by 100.000 units, people would start using just fractions in practical situations.

2- Yes, it is. This is well defined in their own wiki.

Fractional Reserve Banking and Bitcoin (https://en.bitcoin.it/wiki/Fractional_Reserve_Banking_and_Bitcoin)


Fractional Reserve Banking with Bitcoin is possible and practical. There is no fundamental difference between classical currencies and Bitcoin as it applies to banking. Banks will still be free to take in bitcoins and present them to customers as "available for withdrawal" while still lending most of those bitcoins to a different customer for a profit. Some of those bitcoins will be held in reserves in case of a bank run. It will be up to the bank to hold a sufficient supply of reserves in order to prevent insolvency in the event of a bank run. Central banks were established to enforce reserve requirements and so, with Bitcoin lacking a central bank, some banks will almost surely collapse, taking their customers' deposits with them. MtGox could tomorrow lend out 10,000 bitcoins to an individual to start a business. The money supply would thus increase by 10,000 and we would instantly have Fractional Reserve Banking. The same amount of bitcoins would still exist in the Block Chain, but the body of people participating in the Bitcoin economy would have the perception that more bitcoins exist. If the value of a bitcoin is stable for a long period of time, then Fractional Reserve Banking is inevitable. The Monetary Base of Bitcoin is limited to 21 million. But because Fractional Reserve Banking is possible, the money supply of bitcoins (which includes demand deposits) can exceed 21 million by a factor of x where x is the Money Multiplier

Of course, such system eventually leads to the creation of bitcoin banks or even the acceptance of bitcoins by already established banks...This is a dangerous road, like stated in this article. (http://www.libertariannews.org/2012/03/09/fractional-reserve-banking-with-bitcoins/)

Raf.

avid
1st April 2013, 22:08
Thank you George Ure from UrbanSurvival.com


This weekend's Peoplenomics looked at Bitcoins and was (how to say this?) less than overwhelmingly positive. One further reason, which I didn't get into in the article is that Bitcoin has already evolved its own kind of "elites" - which are big miners who can marshal more horsepower and bandwidth than the plebes.

So this technical review from reader Michael is really spot on:

"George -

Interestingly I spent a good day or so recently exploring the BitCoin phenomenon in a little greater depth. (Also including how I could get some "coin" -- which included "mining"...)

I believe you had previously surmised (due to my email address/extension) that I was in academia. However, in fact, I've merely been piddling away on a PhD in Computer Science (so I have a better than average chance at understanding the underlying aspects of BitCoin).

While I choose not to pursue the "fundamentals" (such as the original paper/algorithms/etc.) I believe I got a feel of the fundamentals. (My investigation was focused on how this whole thing worked/operated in practice and how I might benefit myself if possible ;)

Take for example the timeline projections on the number of BitCoins produced (which you had in your article detailing the current 25 BTC payout (previously 50 BTC), dropping to 12.5 (and halving once again later). This is due partially to the fact that they calculate a new block is processed on a 10-minute average. That temporal average is achieved by changing the level of difficulty of calculating the blocks.

In other words, as more computational power is applied to solving, the computational difficulty is increased to maintain the 10-minute solving interval. Earlier on in the BitCoin existence, it was possible for individual users to have a chance at "mining" the BitCoins using their equipment (essentially CPU cycles -- but for added discussion there are "pools" where lots of lower-power users can band together to mine BitCoins and share the payout).

The "Miners" were the ones getting the "free lunch" BitCoins by helping with the solving by providing their computational resources. With the surge of GPU processing, mining calculation power jumped and GPU-based miners dominated.

As any tech savvy student knows, specially designed hardware wins out every time (just research Deep Blue if you have any doubts - this was a machine designed specifically to play chess, and it was the first to win against human grandmasters (Deep Blue).

FPGA-based BitCoin miners were a soft launch into the "machine-specific" design and they're now entering the ASIC (Application Specific Integrated Circuit) realm with companies like Butterfly Labs... (Though, Butterfly Labs hasn't actually *shipped* any/many units so they really haven't gotten online in any great capacity ... yet)...

The main point is that the capability to "earn" (mine) BitCoins through processing power favors those who are disproportionately powerful to all other miners -- and that will soon be only those with ASIC capabilities.

Why did I go through all this semi-technical background?

Well because there's only ONE small chance as I see it to really have a chance at the BitCoin mining aspect (which is a little more technological-oriented and something you didn't really cover in great detail in your weekend column).

If/When your web-collapse scenario comes to pass, that could have a chance at knocking enough of the existing miners offline that those who remain could have a shot at mining BitCoins once again (and, depending on outage, in a substantial/meaningful way/capacity).

Being a distributed system, there's still some questions which I don't have answers to - such as what would happen if the existing network was split into two (or more?) independent networks in which each thought they were the official BitCoin P2P network and continued with their own (separate?) mining capabilities.

In fact, that might be a good research question for someone doing their Masters work... (Actually my naivety in the BitCoin fundamentals is showing through - the distribution of blocks would likely have to be done from a centralized manner, thus, unless they had redundant servers (which would each resume in separate "sub-internets" following a collapse - as though they were the only independent survivors) we wouldn't see that scenario... though if they do have that redundancy it could get interesting in the event of a web collapse...)

Just figured you'd enjoy that additional technical perspective (and at no additional charge!) ;)

Feel free to share as you see fit even though I'm not sure I really had any conclusions to speak of! - Mike in Missouri

PS - Other than my thoughts I didn't really have much to disagree with respecting your column on BitCoins!"

http://urbansurvival.com/week.htm

PathWalker
1st April 2013, 23:06
1. What happens if there is run on Bitcoins and the Bitcoin exchange has no more Bitcoins (Assuming the Bitcoin exchange cannot generate Bitcoins)?
2. Is it possible for the Bitcoin exchange to act like a bank and issue Bitcoin debt notes? (Fractional reserve banking)

Thanks again

1- Well, this is possible, but extremely unlikely to happen. There are still a lot of bitcoins to be mined. In a hypothetical case of an abrupt and massive increase in demand for bitcoins, their price would get prohibitively high much longer before bitcoin supply is extinguished. Considering that one bitcoin can be divided by 100.000 units, people would start using just fractions in practical situations.

2- Yes, it is. This is well defined in their own wiki.

Fractional Reserve Banking and Bitcoin (https://en.bitcoin.it/wiki/Fractional_Reserve_Banking_and_Bitcoin)


Fractional Reserve Banking with Bitcoin is possible and practical. There is no fundamental difference between classical currencies and Bitcoin as it applies to banking. Banks will still be free to take in bitcoins and present them to customers as "available for withdrawal" while still lending most of those bitcoins to a different customer for a profit. Some of those bitcoins will be held in reserves in case of a bank run. It will be up to the bank to hold a sufficient supply of reserves in order to prevent insolvency in the event of a bank run. Central banks were established to enforce reserve requirements and so, with Bitcoin lacking a central bank, some banks will almost surely collapse, taking their customers' deposits with them. MtGox could tomorrow lend out 10,000 bitcoins to an individual to start a business. The money supply would thus increase by 10,000 and we would instantly have Fractional Reserve Banking. The same amount of bitcoins would still exist in the Block Chain, but the body of people participating in the Bitcoin economy would have the perception that more bitcoins exist. If the value of a bitcoin is stable for a long period of time, then Fractional Reserve Banking is inevitable. The Monetary Base of Bitcoin is limited to 21 million. But because Fractional Reserve Banking is possible, the money supply of bitcoins (which includes demand deposits) can exceed 21 million by a factor of x where x is the Money Multiplier

Of course, such system eventually leads to the creation of bitcoin banks or even the acceptance of bitcoins by already established banks...This is a dangerous road, like stated in this article. (http://www.libertariannews.org/2012/03/09/fractional-reserve-banking-with-bitcoins/)

Raf.

Thanks you very much for this great answer. Which leads to the next answer.
Assuming Bitcoin exchange may print unlimited Bitcoins debt notes (Fractional reserve banking).
Is there any effective way to limit the actual number of Bitcoins debt notes in the market, as was designed in the algorithm to limit the number of Bitcoins in existance?
Something like attaching a debt note to a specific identified Bitcoin?

RMorgan
1st April 2013, 23:22
1. What happens if there is run on Bitcoins and the Bitcoin exchange has no more Bitcoins (Assuming the Bitcoin exchange cannot generate Bitcoins)?
2. Is it possible for the Bitcoin exchange to act like a bank and issue Bitcoin debt notes? (Fractional reserve banking)

Thanks again

1- Well, this is possible, but extremely unlikely to happen. There are still a lot of bitcoins to be mined. In a hypothetical case of an abrupt and massive increase in demand for bitcoins, their price would get prohibitively high much longer before bitcoin supply is extinguished. Considering that one bitcoin can be divided by 100.000 units, people would start using just fractions in practical situations.

2- Yes, it is. This is well defined in their own wiki.

Fractional Reserve Banking and Bitcoin (https://en.bitcoin.it/wiki/Fractional_Reserve_Banking_and_Bitcoin)


Fractional Reserve Banking with Bitcoin is possible and practical. There is no fundamental difference between classical currencies and Bitcoin as it applies to banking. Banks will still be free to take in bitcoins and present them to customers as "available for withdrawal" while still lending most of those bitcoins to a different customer for a profit. Some of those bitcoins will be held in reserves in case of a bank run. It will be up to the bank to hold a sufficient supply of reserves in order to prevent insolvency in the event of a bank run. Central banks were established to enforce reserve requirements and so, with Bitcoin lacking a central bank, some banks will almost surely collapse, taking their customers' deposits with them. MtGox could tomorrow lend out 10,000 bitcoins to an individual to start a business. The money supply would thus increase by 10,000 and we would instantly have Fractional Reserve Banking. The same amount of bitcoins would still exist in the Block Chain, but the body of people participating in the Bitcoin economy would have the perception that more bitcoins exist. If the value of a bitcoin is stable for a long period of time, then Fractional Reserve Banking is inevitable. The Monetary Base of Bitcoin is limited to 21 million. But because Fractional Reserve Banking is possible, the money supply of bitcoins (which includes demand deposits) can exceed 21 million by a factor of x where x is the Money Multiplier

Of course, such system eventually leads to the creation of bitcoin banks or even the acceptance of bitcoins by already established banks...This is a dangerous road, like stated in this article. (http://www.libertariannews.org/2012/03/09/fractional-reserve-banking-with-bitcoins/)

Raf.

Thanks you very much for this great answer. Which leads to the next answer.
Assuming Bitcoin exchange may print unlimited Bitcoins debt notes (Fractional reserve banking).
Is there any effective way to limit the actual number of Bitcoins debt notes in the market, as was designed in the algorithm to limit the number of Bitcoins in existance?
Something like attaching a debt note to a specific identified Bitcoin?

Hello my friend,

Well, assuming that bitcoin banking will become a common and inevitable business, and that a fractional reserve system will necessarily be applied, the banks themselves will have to achieve a common agreement about a common money multiplier (http://en.wikipedia.org/wiki/Money_multiplier) ratio.

In such case, since there´s no central authority, the bitcoin banks will actually assume the role of such authority, regulating themselves, which, of course, is obviously very dangerous.

Honestly, it´s not hard to imagine the whole bitcoin system becoming exactly like our current system. We have enough solid material in this thread to prove that.

Raf.

Paul
9th April 2013, 01:04
ZDNet (Ziff-Davis Net) has a straight forward explanation of how bitcoins work and the practicalities of obtaining and using them:

How to buy and sell Bitcoins -- Part 1: Theory (http://www.zdnet.com/how-to-buy-and-sell-bitcoins-part-1-theory-7000013661/)
How to buy and sell Bitcoins -- Part 2: Practical (http://www.zdnet.com/how-to-buy-and-sell-bitcoins-part-2-practical-7000013662/)

Phoenix1304
11th April 2013, 09:39
Massive Bitcoin crash:

http://www.naturalnews.com/039865_bitcoin_crash_prediction_Mike_Adams.html

PathWalker
11th April 2013, 10:08
Massive Bitcoin crash:

http://www.naturalnews.com/039865_bitcoin_crash_prediction_Mike_Adams.html



This engineered crash was, in effect, a currency war probe attack designed specifically to calculate what is needed for a much larger attack planned for the future -- an attack that will decimate bitcoin and cause long-lasting distrust in non-centralized currencies.

Again, I predicted this would happen almost word for word in yesterday's article, in which I outlined a 6-step "recipe" the central banks would use to destroy bitcoin:

Step 1) Central banks buy up massive quantities of bitcoin currency, driving the prices into the stratosphere and encouraging millions of people around the world to jump on board the "get rich" bandwagon.

Step 2) Once bitcoin valuations reach a sufficient level of insanity, start a massive selloff by dumping the bitcoins you already bought onto the market, offering them for sale at any price (i.e. sell into falling prices, accelerating the loss in valuations).

Step 3) Watch panic take hold as the bitcoin crash accelerates, ending in a catastrophic wipeout of "valuation" of all bitcoins.

Step 4) Find "victims" of the bitcoin crash who can tell a good sob story for the mainstream media about how they invested little Johnny's college money in bitcoin and lost it all. Roll them out on CNN and MSNBC where they cry on camera and talk about how they were ripped off by bitcoin and now they only trust the government from now on.

Step 5) Demonize bitcoin by characterizing it as a "libertarian pyramid scheme." Lash out against both decentralized currencies and libertarians.

Step 6) Once the demonization gains traction, have traitors in the U.S. Congress announce a "Consumer Currency Protection Act" that outlaws non-central bank currencies such as bitcoin. It's all "for your safety," of course. Shut down all online bitcoin wallets and exchanges, calling them "criminal pyramid schemes" and arrest a few people using bitcoin to send a warning message to the rest.

What we saw unfold today was step 2. Step 3 is next, but the central banks may wait weeks, months or even years before pulling the trigger in step 3. (The timing is impossible to know.)

I follow this as well.

turiya
11th April 2013, 23:28
Massive Bitcoin crash:
http://www.naturalnews.com/039865_bitcoin_crash_prediction_Mike_Adams.html

Freeman also seemed to be onto this one:

http://www.expatworld.net/image/Free-ManHeader2_nopoint.jpg

Bitcoin Should Get Ready For an Attack
FREEMANSPERSPECTIVE · Apr 10th, 2013

Bitcoin - Freeman's PerspectiveBitcoin – poorly understood and frequently talked about ignorantly – is a wonderful new financial tool… and a very timely one. But because of its virtues, it is about to be attacked.
But before I explain how, why, and my recommended responses, let me get everyone up to speed on what this stuff really is:



-Bitcoin is digital cash. You do not get an account, you get a wallet. Holding Bitcoin on a computer is the same as holding government money in your wallet.
-Bitcoin is distributed. There is no central office and no central computer… anywhere.
-Bitcoin can’t be printed up, like national currencies. It has to be ‘mined’, and this requires special computers, lots of calculations, electricity and a bit of luck. It’s neither free nor easy.
-Bitcoin is limited. Only 21 million of these things can ever exist, and they can only be mined on a very specific schedule. (About 11 million exist now.)
-Bitcoin can’t be changed. Bitcoin is a specific computer program and cannot be changed by any single party. It is a specific set of rules cast into a computer program, and since that program is open source, it can be checked by anyone to assure that there are no secret back doors.
-Bitcoin is pseudonymous. Every transaction is recorded, but real names are not. While it is not properly anonymous, it can be used anonymously if you do simple things like never using the same address twice. (There are even ‘laundries’.)
-Bitcoins are oblivious to borders, laws or rules. This is simply computer code – nothing else matters.
Why The Fiat Masters Must Attack Bitcoin

I say that Bitcoin will be attacked for the simple reason that it is the anti-fiat currency… and a lot of very powerful people have their entire kingdoms built upon fiat currency and its central banking game.
It is actually very similar to gold and silver in its overall effect: If Bitcoin, or gold, or silver – or any combination thereof – ever became dominant, no one could play games with the world’s money and skim from millions of people at once… or run welfare states in defiance of economic reality.
The bankers do not want to lose their positions, and if they let this alternative currency take over, they will. So, they will have to attack. In fact, I am sure as I can be that they are doing it already.
I should add that there are socialist types who love this development because it could destroy the greedy bankers, but I don’t expect them to deter the attacks to any significant extent.

The Attacks

It is important to understand that the system is not invulnerable. It’s certainly not easy to attack (like a Cyprus bank account), but attacks both small and large are possible.
I’m not going to describe large attacks, as I don’t want to give anyone ideas. You can either believe me that they are possible, or not. These big attacks, however, would not be easy, and would have side-effects. So, I don’t expect to see them first. First, Bitcoin’s enemies have to win the PR war.

There was a great line in the movie Gladiator that applies right now:


"You have a great name. Before they destroy you, they will have to destroy your name."
I’m not sure it’s fair to say that Bitcoin has a great name among the general populace, but it certainly does among the best and brightest of the younger generations. And this great name is spreading rapidly in places like Cyprus, and among people who fear a Cyprus-style mass theft coming to their area.
Gold and silver are the traditional ways of avoiding predation, but trying to cross a national border with precious metals these days is to invite theft and punishment. (This was not much of a problem before the 20th century.) Bitcoin, on the other hand, can be moved world-wide, instantly, from the comfort of your chair.
So, the first attacks will be combined with a PR war. The point will be to scare people away. “You’ll get ripped-off!” will be their emphatic meme.

Do not underestimate fear, by the way: Humans are hard-wired to over-respond to it. Fear works, which is why power-mongers always use it. And these people also own, influence or control the broadcasting systems that consume nearly all of the Western world’s attention.
So, the first attacks will be those that we are already seeing: Malicious hackers breaking into whatever clustered systems they can and stealing. (Or running Distributed Denial of Service [DDoS] attacks.) They are attacking exchangers, wallet hosting services, and so on – anything largish that can be hit. They are already publicizing these attacks, but I expect more and better.
The coming attacks will be publicized rapidly – with stories and releases prepared ahead of time – and will paint the worst possible picture. Afterwards it will be seen that the first loss estimates were wildly high, but that won’t matter to the people who see the headlines on the evening news. Joe and Jane Obedient will believe the worst.

This is all manipulation, obviously, since people are being ripped-off in government money, on gigantic scales: millions of thefts at once. Heck, every productive person in the West has about half their earnings taken from them every year in the form of taxes, not to mention the 5-10% they lose every year in the form of inflation. To compare these things to a few stolen wallets is a sick joke. But, such is the state of the West at this sad moment: The large abusers are sanctified and the innovators are demonized.

What to Do About It

Here’s my list:
-Be prepared. Don’t let it shake you. Don’t compromise your beliefs.
-Tell others to prepare. Tell people to expect attacks and a PR war. Tell them to upgrade their security and to be personally ready. Bitcoin will be called all sorts of things: A Ponzi, a fraud, a tool for terrorists, a threat to civilization, and so on. It’s not fun to have those accusations hurled in your face, so expect it and get ready for it.
-Prepare for the worst. At some point we may need an alternative to the government-owned Internet. Setting up our own systems will not be hard or expensive, but it will require action on our parts. Learn about mesh networks (PDF) and packet radio. Those who can code should think about writing new high-latency protocols, or reviving old ones like FidoNet.
-Do not rely on Internet exchangers. We should all be grateful to Bitcoin Exchange Mt. Gox and the others, but they are vulnerable and will soon enough be compromised or shut. The future lies with over the counter (OTC) exchangers.
-Keep having fun! Bitcoin has been a gas – don’t let go of that. Adapt, improvise, overcome! Yes, there will be more bad days from here on, but don’t let them steal your joy for any length of time. Hold to the good, reject the fear. Do what resonates within you; do what makes you feel good and creative and productive.

Paul Rosenberg
FreemansPerspective.com (http://www.freemansperspective.com/bitcoin-should-get-ready-for-an-attack/)

~~~~~~~EDIT~~~~~~~~

Andrew Guase & Patrick Timpone Audio Interview 2013.04.10: http://k003.kiwi6.com/hotlink/efphb4n9r2/the_real_world_of_money_with_andrew_gause_2013.04. 10.mp3


turiya :cool:

Anchor
11th April 2013, 23:50
Crash? Not really. Loss in "value" by what measures?

I think this demonstrates that Bitcoin works as designed.

Quite impressive actually.

Time to buy ?

turiya
11th April 2013, 23:55
Crash? Not really. Loss in "value" by what measures?
I think this demonstrates that Bitcoin works as designed.
Quite impressive actually.
Time to buy ?

At least worth a venture.

turiya :cool:

Anchor
12th April 2013, 01:12
On one of the many other threads about Bitcoin I also speculated that TPTB would try to take it down. I am not sure if this "Crash" really is that, but its certainly a test.

Here is something more: http://www.smh.com.au/technology/technology-news/bitcoin-bursts-hacker-currency-gets-wild-ride-20130412-2hpbf.html

I have not read all the text in the above linked article, but the pictures are showing physical coins. This is, in my opinion, calculated disinformation. So we see another swipe taken by the media.

I am rather enjoying this. I think Bitcoin must have something going for it, if it can cause this kind of reaction.

The article comments also:


A report apparently drawn up by the bureau and leaked to the internet last year said "since Bitcoin does not have a centralised authority, detecting suspicious activity, identifying users and obtaining transaction records is problematic for law enforcement."

It went on to warn that Bitcoins might become "an increasingly useful tool for various illegal activities beyond the cyber realm" – including child pornography, trafficking and terrorism.

That is, if the currency survives.

foreverfan
12th April 2013, 02:21
Time to buy? :confused: I'd let it shake out and stabilize for a few days. It could easily go back down to $5.00. Once the media gets wind of this, they will destroy bitcoin. More importantly, vendors will refuse to accept bitcoin because it's true value cannot be determined.

In any case, after a few weeks, I plan to buy a few to be part of the resistance.

http://www.rakerace.com/uploads/images/My_Precious_Bitcoin.jpg

gripreaper
12th April 2013, 02:24
bitcoin crashed today from $266 to a low of $105 in a rapid "free fall" market crash pattern, erasing $1 billion in currency valuation in a matter of hours.

http://www.naturalnews.com/gallery/300x250/Money/Bitcoin-Collapse-Bitcoinbullbear.jpg

If I had gone short 3X with a put option, I could retire in one day.

phillipbbg
12th April 2013, 02:37
Just another group of "Privateering Bankers" IMO

Bitcoin- A vessel authorised by a nation to damage the commerce of the enemy by acts of piracy.

A new currency trading instrument (Bitcoin) authorised by the financial banking industry (Banking Cabal) to do damage to everyday money traders and savers by tricking them and stealing their accumulated savings and wealth better known as piracy.

foreverfan
12th April 2013, 02:39
Just another group of "Privateering Bankers" IMO

Bitcoin- A vessel authorised by a nation to damage the commerce of the enemy by acts of piracy.

A new currency trading instrument (Bitcoin) authorised by the financial banking industry (Banking Cabal) to do damage to everyday money traders and savers by tricking them and stealing their accumulated savings and wealth better known as piracy.

I don't believe this... still... it appears that the PTB can still easily mess with it.

phillipbbg
12th April 2013, 02:46
Lets hope I am wrong in my opinion...

http://www.naturalnews.com/039880_bitcoin_bubble_panic_selling_accounts_froze n.html

Paul
12th April 2013, 03:32
I don't believe this... still... it appears that the PTB can still easily mess with it.
At this point, the bastards that be can simply overwhelm bitcoin.

They can for example ramp up the price of bitcoins in dollars with some purchases and positive hype, and then they can crash the price with some fear mongering (Mike Adams?) and selling. They can run distributed denial of service attacks on prominent bitcoin sites, and hack into them and steal bitcoins from them. They have the compute power to overwhelm any mining efforts by us ordinary people. They can see enough of bitcoin transactions to usually know who is transacting what with whom and when and in what amounts.

Bitcoins are currently a sufficiently small market (10 million bitcoins worth over $100 each, which is a 1 or 2 billion dollar market, total ... pocket change) that it's trivial to manipulate.

Bitcoins also have the disadvantage that most people cannot really understand the strengths and limitations of the underlying software and algorithms, so are reliant on vendors and exchanges to trade in bitcoins. This opens the door to many more abuses.

As with other "magic" technologies, such as radio, TV, cell phones, and the Internet, there are those ordinary people who understand the technology well enough (ham radio operators and Internet software coders for example) to reliably circumvent almost any effort of the bastards in power. But as with those technologies, most ordinary people don't have the specific skill sets needed to do this. Such technologies can become tools of mass control when they become controlled by a few, but usable by many.

Astronomy, chemistry, alchemy, architecture, printing, computing, ... all these technologies have been at one time, or still are, such "magic" technologies, further enabling control of the masses.

RMorgan
12th April 2013, 13:27
Lets hope I am wrong in my opinion...

http://www.naturalnews.com/039880_bitcoin_bubble_panic_selling_accounts_froze n.html

Good article, my friend.

Bitcoin is crashing by itself. It´s not the first nor the last time it crashes. This is not a conspiracy theory involving TPTB. This is simply the fruit of greed.

The whole thing is very simple, actually. Bitcoin is not being used as a currency, as it was supposed to. A good currency has to circulate and bitcoin simply doesn´t. There´s actually a very small market where you can actually buy stuff with it.

This trend can be exemplified by reading this thread. Actually, no one here talked about buying bitcoin to use as currency to buy stuff. So, bitcoin will not become a stable currency until the people and the market decide it is. As long as people continue to see it mostly as an investment asset, it will never work as a currency.

Could you imagine, as an example, what would happen to the dollar if the majority of the global market decided to buy it as investment asset, keeping extremely large quantities of the currency out of circulation? First, its value would skyrocket, then, when investors decided to sell it, it would crash. This is what happens with bitcoin, over and over again; It´s a roller-coaster of extreme highs and lows.

Greedy people see bitcoin as investment stock, so they buy it low and sell it high. They keep their investment under their mattresses until they decide to liquidate.

These people are pros. They setup their exchange account so that it will automatically buy or sell according to their established input. They don´t suffer significant losses when bitcoin crashes overnight, because their bitcoins are sold immediately when a serious decline trend is detected.

The Average Joe who thinks bitcoin is a digital gold mine is the one who loses in the end.

The biggest bitcoin exchange, Mt.Gox (https://mtgox.com/), crashed itself yesterday to stop people from selling their coins.

Like the above article (http://www.naturalnews.com/039880_bitcoin_bubble_panic_selling_accounts_froze n.html) says:


The top bitcoin exchange, MTGox, now openly admits that its trade engine crashed during the yesterday's panic selloff, preventing people from being able to get out of the bitcoin market.

Today, MT.Gox now says, "....Trading is halted until 2013-04-12 02:00am UTC to allow the market to cooldown following the drop in price," meaning that the #1 bitcoin exchange has arbitrarily decided to stop processing orders just because it wants to!

It's a bitcoin bank holiday! Don't you just love holidays?...

...At this point you will hopefully realize that you traded dollars for a virtual currency that can be wildly manipulated, crashed, frozen and halted without your knowledge or input. If you bought in at anything over $20, you probably got suckered...


And people keep telling me that bitcoin is uncontrollable and decentralized...Mt.Gox owns the bitcoin market.

gripreaper
12th April 2013, 14:47
Well, with Neil Keenan having the cabal backed into a corner, running scared, and about to collapse, would it not make sense that they would want to grab onto bitcoin as a last ditch effort to survive? Once all debt is eliminated through global jubilee, the elite are put in jail, and all the prosperity packages go out, and we each get our equal share of the wealth of the earth that was absconded from us by these elite, will we let them have bitcoin or should we send them off planet back to where they came from?

I'll go check with Sheldon Niddle, Ben Fulford, Drake Bailey and Cliff High and get back to ya. :p:rolleyes:

TargeT
12th April 2013, 16:38
And people keep telling me that bitcoin is uncontrollable and decentralized...Mt.Gox owns the bitcoin market.

none of my bitcoins have anything to do with Mt Gox.. they don't own anything as far as I'm concerned.

The bank you have a bank account is the same as Mt Gox, just because they haven't decided to shut down arbitrarily doesn't mean they cant, wont or are invulnerable to major issues.

I don't see why you're such an anti-fanboy... it's strange to see your fervor on this topic, what is the motivation?

william6565william
12th April 2013, 20:00
Now that CNN has made a report of BitCoins, I feel that the niche of the said currency has been killed off. I do prefer the currency to still be circulating among those in the Deep Web and to a smaller extent, from us surface dwellers, but never to the mass public. Now that its out there, investing/earning it is no different than trying to win the stock/futures market.

On the other hand, I personally find a slight silver lining of BitCoins going public - it contributes to the value to go down to below $100 or so, making it slightly easier for someone like me to go in and invest (though I'm not going to do it nonetheless. I STILL want to earn BitCoins in any form possible without ever having to spend real money on it).

This post I got from Reddit clearly points out that, regardless of its value, its core function still remains:
http://www.reddit.com/r/Bitcoin/comments/1c7b5i/remember_bitcoin_itself_is_still_fine/

>I think it is important for everyone to remember (especially the mass media) that Bitcoin itself - the protocol and thus the currency's functionality itself is still fine. It all still works, specifically Bitcoin transactions still work fine.

>What has happened is the perceived value of a Bitcoin has dropped, when compared to USD, Euros, GBP and most (all?) fiat currencies. This does not affect the intrinsic values/functionality Bitcoin has. These are:

>Near instant peer-to-peer transactions
>Payments worldwide with no restrictions
>Zero or very low fees (depending on transaction size)
>No centralisation (again, for Bitcoin transaction)

>Again, a reminder: the problem, and the negative press that has begun, is only related to the perceived value of Bitcoin against traditional fiat currencies. If you're about to write an article regarding Bitcoin's recent drop in value, please make the point clear:

>Bitcoin itself is still fine.

thalox
12th April 2013, 20:15
i think this is a set up for digital currency. i have no proof, i just feel it.

they set up bitcoin or something like this and say its "free." to catch peoples attention. once it catches on, TPTB will already have their own implemented, or just buy off bitcoin and then there they have their digital currency and control it all.

william6565william
12th April 2013, 21:00
So according to this, a new virtual currency is going to be announced within 1-2 weeks time:
http://www.reddit.com/r/Bitcoin/comments/1c7ahh/we_are_mt_gox_ama/c9dqgtx

How does this raise the value of BTC and LTC? In any case, if I can mine it with my low-end PC, I might as well give it a shot.

Lost Soul
13th April 2013, 02:56
While the concept is nice, remember that it is an intangible object. It is subject to bank holidays like regular bank accounts.

How is this any better than the fiat proffered to the public today? It only has value because the users accept it.

Paul
13th April 2013, 07:26
Another decent and readable article on Bitcoin, apparently written prior to this latest crash: Of Bubbles and Bitcoins (The Daily Bell) (http://www.thedailybell.com/28968/Hugo-Salinas-Price-Of-Bubbles-and-Bitcoins).

It concludes by worrying that not just bitcoins, but also all the "debt backed" fiat currencies of our time are going to fail:




You tell me: What is the future that awaits a humanity so confused that it can no longer distinguish between an abstract concept and what is real and material? Very confused people are participating in speculations in imitation currencies – dollars, pounds, euros, yen, yuans, Bitcoins − in the hopes of obtaining some profit or benefit, because unable to think for themselves, they can do nothing but speculate − and ruin themselves.

What worries me is not how the speculators will fare; what worries me is: how are the masses going to behave toward me and my family when the fraudulent currencies of the world, Bitcoins included, have turned those masses into hungry beggars?
More at the above link.

phillipbbg
13th April 2013, 11:26
It all comes back to our concept of ownership... in this world there is no such thing .

When you die what do you take with you? Nothing not even your body or vessel the only thing you own is your record (memory) the rest you just gain rights or title over to use whilst here in this life. Once you realise that you own nothing you can approach it from a different mind set. TPTB use ownership to tempt you knowing they can remove your rights at any time by changing your status. Just some truths to ponder.

Paul
17th April 2013, 08:19
Thanks to a link (http://gizadeathstar.com/2013/04/tidbit-reflections-on-bitcoin/) from Joseph P. Farrell, here's an interesting article on BitCoin: The Real Significance of the Bitcoin Boom (and Bust) (http://business.time.com/2013/04/12/the-real-significance-of-the-bitcoin-boom-and-bust/).

Paul
15th May 2013, 01:09
Another day in the Bitcoin saga: Department of Homeland Security Shuts Down Dwolla Payments to and From Mt. Gox (http://betabeat.com/2013/05/department-of-homeland-security-shuts-down-dwolla-payments-to-and-from-mt-gox/):




The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. A Dwolla representative confirmed the move to Betabeat. Chris Coyne, cofounder of OKCupid, posted a screenshot of an email he received from Dwolla, stating that due to recent orders from the Department of Homeland Security, Dwolla cannot complete the bank transfer to Mt. Gox.

A representative for Dwolla told Betabeat that the company is “not party” to this matter and encourages those with questions to reach out to Mt. Gox or the DHS.

“The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),” he said. “In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”

“Dwolla requires a court order before honoring requests such as seizing funds or revoking access to an account,” he added.

donk
17th May 2013, 17:44
Here is the latest on Paul's post, looks like they successfully seized the accounts...per the front page of yahoo! Finance: US Authorities Seize Accounts of Major Bitcoin operators (http://finance.yahoo.com/news/u-authorities-seize-accounts-major-163408353.html)

The thing about this article is the "promotion" of finCEN, something i feel like I must being losing my mind not remembering having heard of them before.

Working in a financial institution, I have to take a "Bank Secrecy Act" test every year, that covers the things they enforce, mostly SARs and PATRIOT Act crap. But if they mention that agency at all, it is in passing, and I feel it never got much mention in the financial media, at least when I feel like that was the case when I used to pay attention to it...

Paul
19th May 2013, 09:24
The thing about this article is the "promotion" of finCEN, something i feel like I must being losing my mind not remembering having heard of them before.

Here's a repost of a post I made last Sept 2012 (http://projectavalon.net/forum4/showthread.php?50041-A-recent-banking-experience&p=557611&viewfull=1#post557611), describing finCEN:




The Bank Secrecy Act (BSA) (http://en.wikipedia.org/wiki/Bank_Secrecy_Act) requires financial institutions to file reports with the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury (http://www.fincen.gov/) for cash and cash equivalent transactions that exceed $10,000 either individually, or in related transactions that might be structured in a possible attempt to avoid these reporting requirements.

The BSA also requires financial institutions to report in less detail such transactions exceeding $3,000,
individuals to report foreign accounts exceeding $10,000 in value at any time in the year,
individuals to report any transfer of $10,000 or more in cash or equivalents in or out of the country, and
any business receiving cash payments exceeding $10,000 to report it.
Financial service businesses are also required to file Suspicious Activity Reports (http://en.wikipedia.org/wiki/Suspicious_activity_report) for suspicious or potentially suspicious activity exceeding $5,000.

The above is "give or take" some details ... I'm not an expert in this.

Paul
29th May 2013, 13:22
Here's a good review of Bitcoin by James Corbett: Bitcoin The Hope Hype and the Space in Between (http://www.theinternationalforecaster.com/International_Forecaster_Weekly/Bitcoin_The_Hope_Hype_and_the_Space_in_Between):




For the most part I've held off throwing my hat into (or keeping it out of) the ring during the recent bout of Bitcoin-mania. This isn't out of ignorance of the currency. Back in May 2011, before most people had even heard of the crypto-currency, I interviewed a man calling himself “The Real Plato” claiming to be on “the world's first Bitcoin road trip” traveling across America paying his way exclusively in Bitcoin. No, it's not ignorance that has kept me out of the Bitcoin arena up until this point; it's ambivalence.

If ambivalence were a power I'd be a superhero. For the longest time I've had the most uncanny ability to see both the potential good and the potential bad in a new idea simultaneously, often in equal measure. Ambivalence is either my fatal flaw or my saving grace. I haven't decided yet.

When it comes to Bitcoin, this ambivalence of mine has left me particularly on the fence. The debate that has taken place in recent months seems, from my perspective, to have played out on the far poles of opinion on the matter. All we have heard are arguments between the currency's ardent defenders—who seem too strident, too ardent, too zealous for my liking—and its staunch opponents—who seem too categorical, too unimaginative, too closed-minded. This is the nature of debate: it presents us with two categorically opposed viewpoints, asking us to choose one side or another. But often these debates leave me feeling like an excluded middle. What if I am not willing to convert my life savings to Bitcoin and vow never to spend another dollar again? And what if I have no wish to condemn this currency experiment as the spawn of the devil? Where does that leave me?

...
In Conclusion: There is no conclusion

There's a lot to consider when it comes to a new, relatively unproven idea for digital currency like Bitcoin, including much that we haven't covered here. But I hope at the very least that I've given you an indication why I'm not selling the farm and plowing it into Bitcoin quite yet...but why I do have a Bitcoin donation button on my homepage.

Ultimately, I think Bitcoin is not a financial savior nor yet a financial demon. It's merely a tool, albeit one whose utility is currently rather limited. It may be theoretically possible to conduct all of the transactions necessary for one's daily existence using Bitcoin, but it would be exceedingly difficult to do so at this point. And so I will remain cautiously optimistic that Bitcoin (or some other crypto-currency) might be a useful arrow in the quiver of monetary tools for use in the marketplace of the future. While Bitcoin remains useful for facilitating one-on-one transactions across borders, there is still a place for local alternative currencies (mutual credit systems and exchange trading systems, for example) and precious metals in that basket of monetary tools, too.

For those of you who are more prone to conclusive judgments, I hope some of this discussion has helped flesh out your own thoughts on the matter. And for those of you who are prone, like me, to sitting on the fence, I've saved a spot for you there right next to me. I don't see why I have to decide one way or the other yet, anyway.