Bitcoin, the war on cash, Clif High, and the NSA's long range plans

This long post has four major parts:

• The NSA has been planning for money to "go electronic" for decades.
• The new global monetary system will be centrally controlled and debt-based.
• Clif High may be a "salesman" for this new monetary system.
• The claimed "basis" (most valued fungible assets) of this new system will include silver.

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Part 1: The NSA has been planning for money to "go electronic" for decades.

NSA Paper (1998): Transactional Money Comes to the World Wide Web.

The bastards in power have been spending the last several decades moving humanity into the nearly instantaneous, ubiquitous, electronic, digital world of the World Wide Web (aka the "Matrix"), a massively surveillable and controllable, at both large scale group levels and individual "person of interest" levels.

They have moved, or are now moving, our "news", entertainment, shopping, politics, education, social media, health (aka sickness management), marketing, distribution and sales to a world of dominated by smart phones, computers and a massive World Wide network.

If you stop for just a minute to think about it, it should be overwhelmingly obvious that "they" would want to move transactions, of money and of contract, to the Web as well.

In 1996, over 20 years ago now, the National Security Agency (NSA) spelled out just such a plan, in some detail, anticipating the release of Bitcoin in 2008 by over a decade. That NSA paper, HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH, is still available on MIT's website, 20 years later.

This NSA paper does not spell out the distributed nature of the database used by Bitcoin and subsequent crypto-currencies. Rather this paper presumes that one or banks will provide the robust and secure transactional databases needed to implement this. But other key crypto-currency features are there.

I was alerted to this 1998 NSA crypto-currency paper by this article: Is Bitcoin and other cryptocurrencies the result of a government experiment imagined 12 years before Satoshi white paper?, which in turn includes this Youtube video:

Source: https://youtube.com/watch?v=v_DmtLsTsp4

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Part 2: The new global monetary system will be centrally controlled and debt-based.

The severe transaction volume limitations on Bitcoin are forcing, and will continue to force, most transactions to occur off the main blockchain. The elite bastards have no intention of empowering 7 billion people to make arbitrary person-to-person transactions in volume, anonymously, outside of banking control, and for nearly zero cost.

No one with just a smartphone, and few without an expensive crypto-currency mining rig, can actually afford, even now, the time, money, electrical power and technical expertise required to run a first class node on most such crypto-currency blockchains.

As the size of the blockchain databases increase, as their technology becomes more complicated, as the transaction volumes increase, and as the regulatory constraints become more cumbersome, this will become increasingly so. All ordinary individuals, businesses and governments, except for a few large central banks and sovereign governments, will rely on major service providers to handle this electronic computational, storage and communication traffic ... just as they do now.

The hype that a crypto-currency system removes the control of central powers over the monetary system is just that ... hype.

Also, besides the issue of who controls the transaction systems that move money, and increasingly contractual obligations, between parties, there is also the question of how "wealth" is generated. This boils down to the question of who decides, and by what means do they determine, which projects (building a bridge, bombing a village, running a world-wide drug cartel, ...) will be funded.

That will be done just as it is now ... by central banks controlling how much is lent into existence and to whom, mostly working through the retail banks, governments and corporations that they control, thanks to their control over the creation of debt and money.

We live in a debt-money based system and I see no way, short of a major collapse of our "civilization", that this will change. It is working far too well for the elite bastards.

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Part 3: Clif High may be a "salesman" for this new monetary system.

I love listening to Clif High ... he's my kind of old fart computer geek. However ...

In 2008, Clif High was predicting a summer of hell and a bloody revolution in America in 2009, followed by alien wars by 2011.

In 2009, Clif High was predicting alien contact and an American Revolution, and other catastrophic earth and solar changes, leading to the death of a billion people, all by 2011.

In 2010, Clif High was predicting escalating tensions in a "crocodile teeth" pattern (the same pattern he is forecasting, now in 2017, for the dollar price of bitcoin), building to a peek and a major release event, Nov 8-11, 2010, involving something such as a November 2010 "global thermonuclear war as the Allies take on the TPTB and their stooges, the Israelis and the American Military Empire. "

In 2011, Clif High was predicting food hyperinflation, earth changes including “planetary earthquakes”, social chaos, and government collapse.

Other predictions by Clif High for the period 2009 through 2012 included massive world wide volcanos, a massive increase in UFO sightings, and the collapse of the US Dollar and economy.

In April of 2013, Clif High was predicting a "Global Coastal Event" (GCE) by May of 2013. This GCE would be "every much to be the greatest event in our current human history".

Clif High went somewhat more quiet in 2014 and 2015 (based on frequency of threads mentioning him on ProjectAvalon.net)

In early 2016, Clif High was predicting that 2016 would be a "Year of Chaos, Nuclear Fallout, Megaquakes, Epidemics, Weather Wars".

By late 2016, Clif High was anticipating that "At some point in 2017, probably past mid-year, we’re going to be looking at hyperinflation so bad that the DOW will be measured around $100,000 to $125,000." Since there are still four months remaining in 2017, as I write this, this could still happen ... but I'm not expecting it.

Currently, in mid 2017, Clif High is predicting major increases in the Dollar price of Bitcoins and silver, orders of magnitude greater than present. ... Perhaps, based on the success (or lack thereof) of his some of his previous predictions, I shouldn't invest all my (puny) life savings in Bitcoin and silver.

My guess is that Clif High is hyping forecasts that serve the interests of some of the elite bastards. Other "alternative media analysts" that I enjoy following, such as Jim Willie, are making similar forecasts about silver and/or bitcoin. So I conclude that therefore, for some reason, the elite bastards want to hype the future of silver and bitcoin.

I also have listened, many times, over many years, to Clif High describe the Perl and C code that implements his Webbot, and I have ocassionally purchased one of his Webbot reports. I have some 40 years of expertise in such scripting and code myself. My guess is that Clif High's webbot is less than he presents it to be, and that he uses the "magic of code that few could understand", but that is rather mundane in its abilities, to mystify and obfuscate the true origins of his analysis and forecast.

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Part 4: The claimed "basis" (most valued fungible assets) of this new system will include silver.

Note, if you listen to Clif High's most recent silver forecasts, such as his interview a couple of days ago with Greg Hunter at https://www.youtube.com/watch?v=xmWg7NRx-Ow, you will hear Clif High proclaim what are (in my view) several often stated but quite deceptive myths about Bitcoin. Clif claims that the powers that be are powerless to monitor or control Bitcoin, that Bitcoin is a store of wealth replacing gold, and that the distributed database over multiple independent mining computers can be made fast enough, since it's "just software". He nearly ignores the fundamental debt-money basis of our global monetary system, which will (in my view) continue to be the dominant way that "digital money" (and the corresponding debt obligations) are created in the world's coming new monetary system. In Clif's view, debt generation is a property of the existing, failing, system, which will not apply to crypto currencies.

But there was a new (to me) twist to what Clif says in this interview (listen at about 19 minutes, then 23 minutes, into the above Youtube link). Clif High predicts that there will be silver crypto-currencies that are not based on stored silver, but on reliable industrial supplies of silver. This resembles the "petro-dollar" in my view ... some 10 to 100 US Dollars reliably got you a barrel of oil over the last half century. It seems that Clif High is predicting that holding a unit of one of these silver cryptos will reliably get you an ounce of silver for your factory in China or India. But Clif High leaves out one-half of that equation ... why would the silver miners want to receive such a crypto for the silver they deliver? The Saudi's and other OPEC nations wanted to receive US Dollars because the US military/financial/intelligence agencies bought/sold/compromised/assassinated/bribed/blackmailed/bombed/terrorized/etc the leaders of OPEC nations into taking US Dollars for their oil. The US Dollars spent by the world's nations on oil imports ended up flowing back to the New York money center to purchase US Treasuries, most of which the oil exporting nations will never receive fair value for. Clif High offers us no clue what would provide the balancing transaction for these silver crypto currencies - where would they flow to - what would the silver miners do with the huge stash of these crypto currencies that they accumulated?

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In short, and the reason I decided to make this long post:

• For many years, Clif's been selling a collection of views that some elite want to be sold.
• I have started listening to Clif not for real insight, but for clues as to what the elite's next bubble/scam is.
• Clif is selling (over selling) cryptos and silver ... so that's part of the elite's next bubble/scam.

Just as my gut instincts served me well, leading me to get into, then get out of, Silicon Valley dot-com stocks in the 1990's, and to get into and then get out of, single-family residential real estate (a small McMansion in Silicon Valley), similarly my gut sense is that there will necessarily be a "new" "Tulip Mania", forming yet another bubble and bust. That's how things work, in a debt-money based monetary system. Something has to be hyped as having expanding future value ... until the elite crash that market too, and pick up real assets for pennies on the dollar.

US Treasuries have been one of the assets serving in this role since the early 1970's, as their steadily falling interest rate manifested a steadily rising value of Treasuries ... a steadily expanding future value that encouraged the deepest stashes of saved wealth, the central banks of major nations, to remain mostly in US Treasuries.

Several "stores of wealth", including these US Treasuries, mortgage backed securities, securitized student loan and auto loan debt, corporate lending for stock buy backs, corporate and government pension plans, interest rate and foreign exchange derivatives, and seemingly unending rising stock market valuations ... will all see dramatic declines in actual delivered real wealth with the coming monetary reset.

Always, always, there must be something "new" to replace the promises of future wealth that are dashed when the previous "store of wealth" collapses. Only that way can people, businesses and governments be enticed to enter into ever rising debt again, following the collapse of previous wealth stores.

It sure looks to me to be that silver and cryptos are shaping up to be key parts of that new "promise for a shining future." Also somehow in ways not yet clear to me, I also expect that new forms of energy and new space faring and mining technologies will become part of this promise.

Back to the opening part of this long post ... the above linked 1998 NSA paper provides good evidence that the world-wide "webification" of monetary transactions has been a key element of the elite's plans for the world's new monetary system, to replace the US Dollar, after its collapse as forecast on the January 1988 cover of The Economist magazine, almost 30 years ago now.

https://socioecohistory.files.wordpr...cy_by_2018.jpg

Well put, Paul.

What I see with BTC is replacing a fiat currency, which (at this point) still has the full-faith of the US, with a fiat currency based on nothing more than code and hype.

Why BTC is now at $3,350 today as opposed to $2,600 a day ago? I have no idea, since it trades on whims and no economical modeling.

I think Clif's pumping of BTC and other cryptos comes from him being an early mover on these. So like many on Wall Street, he is talking up his own book.

Following his story over the years he has talked of being dirt poor and whatever, now he has restored an RV and has moved to a bigger property. It appears he has come into some serious BTC profits.

Thanks again for the detailed post Paul.

I am still puzzled how Satoshi Nakamoto has been able to keep his/her/their cover.

It is possible the NSA or another intelligence service is behind Bitcoin.

That's why i heavily wash my cryptocoins.

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Posted by mgray

Well put, Paul.

What I see with BTC is replacing a fiat currency, which (at this point) still has the full-faith of the US, with a fiat currency based on nothing more than code and hype.

Why BTC is now at $3,350 today as opposed to $2,600 a day ago? I have no idea, since it trades on whims and no economical modeling.

I think Clif's pumping of BTC and other cryptos comes from him being an early mover on these. So like many on Wall Street, he is talking up his own book.

Following his story over the years he has talked of being dirt poor and whatever, now he has restored an RV and has moved to a bigger property. It appears he has come into some serious BTC profits.

Thanks again for the detailed post Paul.

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Cliff High could be preforming a pump & dump scheme. However he could also just be a Bitcoin "believer"

Many people exploit crypto currencies.

Well Paul you prodded me into writing today on BTC and how price discovery is a myth.

The price went up $70 while I was writing the post. Why? No one knows.

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Posted by mgray

I think Clif's pumping of BTC and other cryptos comes from him being an early mover on these. So like many on Wall Street, he is talking up his own book.

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I'm pretty sure you're right on that ... Clif is talking his book.

A few months ago, Clif quipped that he had (if I remember right) some 80 or 800 (?) bitcoin that he had obtained very early on for almost no cost, and that he had the key for on some old disk drive(s) that he had not even looked at for years. He figured that money was still there, if and when he bothered to dig up the key. Unstated was that if he hadn't bothered yet to go looking for the key, then he likely had quite a bit more bitcoin, in more recently active accounts. Certainly if I thought I had the keys to that much bitcoin, I'd not be posting here on Avalon. Rather my entire focus would be on making sure I still had those keys and access to that money, as it would make a major change in my life style and wealth.

What's also interesting to note are his remarks on gold. In his opinion, gold will initially rise 3-4 fold but eventually lose is luster due to overabundance on this planet. That is something that I first heard from David Wilcock. As such, red flags are going up for me...

A fraud may cry wolf twice before no one believes him. C High is exceptional in that he can cry wolf a few dozen times and still have a large audience hunting for wolves. The last time I believed in him was when he said the D Jones would go over 20000 and immediately drop back never to see 20000 again. Considering that years ago I took his global coastal event quite seriously, I have to laugh at myself.
No doubt he and many others are working for the elites. They are assigned to identities that possess different extraordinary skills and experiences and the target population is those who think they are awaken ones.
So be humble when you think you know the government conspiracies, and you are spending an enormous amount of time listening to the top alternative shows. To know the truth you have to be a researcher youself.

http://www.marketwatch.com/story/be-...ded-2017-08-07

Edging closer???

Paul, everything else aside, I'm having trouble equating the current debt-based fiat system to Bitcoin. Bitcoin's value is supposed to be based on the fact that (1) quantities are permanently and forever limited, and (2) demand will increase as more and more people use Bitcoin, and more businesses accept it as currency. Gold has not been something you can eat or get much other practical use out of either historically, except for jewelry, but that hasn't stopped people from agreeing upon a more or less arbitrary value in order to conduct trade on a society-wide basis.

The globalist bent on world digital currency is a great concern to me in Bitcoin investment too. But I think there are many smart developers who are trying to avoid the traps being laid. For example, there was a big push from a big American Bitcoin exchange, backed by Wall Street bankers, to change the Bitcoin protocol in order to reduce the number of nodes running the block chain, requiring these nodes to be larger to handle more traffic, and thus limiting nodes to people (or rather corporations) who have the resources (like bankers) to pay for such things. The push-back was significant enough from developers that it had to drop the argument.

At any rate, you must also consider that unless we reverse our technological/Internet integration trends, it is going to be impossible to separate currencies from the Internet and eventually digital currencies in one form or another are going to be nearly impossible to suppress anyway. Rather than avoiding them entirely we may as well try to construct one democratically, with smart developers from all over the world, as has been occurring so far.

China, Japan, India, Russia, Europe and the US are all pursuing different policies right now with Bitcoin and it is creating a bit of a mess. Bitcoin Cash just split from the standard Bitcoin blockchain, and Japan is clearly moving to favor the Bitcoin Cash fork. China has monopolized Bitcoin exchanges and Japan obviously does not want to be beholden to a digital currency manipulated by their arch rivals. These kinds of power plays create a much more complicated horizon than simply globalists vs. little people.

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Posted by mgray

Why BTC is now at $3,350 today as opposed to $2,600 a day ago? I have no idea, since it trades on whims and no economical modeling.

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Bitcoin is in demand by several different groups for different reasons, sometimes we'd need insider info to determine what they are thinking.

1) China is exerting tremendous pressure on Bitcoin and the Chinese or Chinese servers already conduct about 90% of all exchange activity. The price of Bitcoin can fluctuate wildly with a single policy statement by the Chinese government. I have seen it twice already just this year, and Chinese government announcements have been the cause of the biggest Bitcoin crashes.

2) Japan has just moved toward a new fork from Bitcoin called Bitcoin Cash, and is implemented it in stores.

3) Wall Street bankers are investing in Bitcoin, no doubt for bad reasons. Pump and dump or else subversion and influence for the long-term would be my guess. "If you can't beat em, join em."

4) The Trump administration has been cracking down on crime on the dark web, which will impact Bitcoin demand by drug, weapon, human trafficking cartels, etc. AlphaBay, the largest dark web market in the world, was recently shuttered by Jeff Sessions. The FBI no doubt has their servers and lots of additional leads now.


Some people buy to diversify their assets, as a long-term investment gamble, some engage in more rapid trading for short-term profits, some are buying to actually conduct untaxed transactions on both the regular Internet and dark web. If the Euro crashes, you can predict increased demand in Bitcoin. If even it looks as though the EU might dissolve, Bitcoin demand increases. The Greek crisis greatly increased demand. Also in Latin America, prior to the situation in Venezuela for example, citizens began pouring their savings into Bitcoin. Announcements related to the technology also cause fluctuations. If you monitor the "pulse" of the geeks developing the protocols it can give some indication of what is happening. But you can't really predict what China is going to say tomorrow.

Yes I have written about all these being the reason behind it rising, but on a day-to-day basis and the moves today (Monday) there is no economic or financial reason for it to jump today. That's what I am getting at. It rises more on whim.

There are some who believe Bitcoin's relative volatility will match that of fiat currencies within the next couple of years or so. Here's one article: http://woobull.com/bitcoin-volatilit...ncies-by-2019/

http://woobull.com/wp-content/upload...tc-vs-fiat.png


I'm skeptical simply because I think the whole market is in serious trouble for all forms of currency. There are "flash crashes" going on in the silver market to suppress prices and all kinds of weird stuff lately. By 2019 fiat currency may also be more volatile. What is happening in Venezuela right now is a warning to the world.

The only way anyone should indulge in purchasing Bitcoins and such other trash is if the sellers accept the fictional bits from the buyer's computers in payment. Tit for Tat.

Paul, while concurring with many (most ?) of your observations regarding the cryptocurrency phenomenon, I have to say I come to almost diametrically opposite conclusions regarding their origins, nature and ultimate intent. It’s quite perplexing how you cite example after example of how bitcoin *doesn’t* remotely resemble a centrally controlled, one-world, debt-backed global monetary system and then finally conclude that’s exactly what it is, based on what ?…..that it’s ‘over hyped’ and that a retired Microsoft troubleshooter with a cult following promotes it ?

I don’t think you make a very strong case. In particular I find the following points notably void of consistency or analytical completeness:

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Posted by Paul

[*]The NSA has been planning for money to "go electronic" for decades.

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Why is this always banded about as a stick with which to beat cryptocurrencies with ? The nature of money isn’t defined by whether it manifests physically or electronically. Both are simply a token counter in some broader ledger of economic credit or debt. What is a Gold coin ? Just a physical bitcoin in that sense - it’s performing exactly the same monetary function except it has a problem with travelling through wires so anyone wanting to transact on an electronic platform where the bulk of the world’s trade occurs is going to need a non-physical token of some kind.

It isn’t the “NSA” who’ve been planning for money to go electronic for decades - it’s anyone who fancied spending “more time with their kids” rather than trucking it out to the nearest Amazon warehouse with a bucketfull of banknotes to exchange for their new PC.

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Posted by Paul

[*]The new global monetary system will be centrally controlled and debt-based.

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So the fact that bitcoin is not centrally controlled and not debt-based makes it a candidate for the elite’s “one world currency” ? (Not to mention the fact that bitcoin is not even a ‘single’ blockchain-based currency but one of hundreds).

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Posted by Paul

[*]Clif High may be a "salesman" for this new monetary system.

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Clif High may be a salesman for lots of things but the fact that he gets some things right and so much else wrong probably means he is what he appears to be - somebody trying to predict the future and having about as much success as most of us on the wrong side of a few glasses of finest Italian Barolo. I doubt Clif High is the new Christine Lagarde in waiting.

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Posted by Paul

In 1996, over 20 years ago now, the National Security Agency (NSA) spelled out just such a plan, in some detail, anticipating the release of Bitcoin in 2008 by over a decade. That NSA paper, HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH, is still available on MIT's website, 20 years later.

This NSA paper does not spell out the distributed nature of the database used by Bitcoin and subsequent crypto-currencies. Rather this paper presumes that one or banks will provide the robust and secure transactional databases needed to implement this. But other key crypto-currency features are there.

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Ok. Lets take a closer look at that paper - one that I am quite familiar with having scrutinised it many times for the exact same reasons that you are citing it here.

It sets out a conceptual design (note, conceptual, not implementational) for a partially decentralised, encrypted network capable of supporting peer to peer transactions. However there are two big elephants in the room that make this NOT a blueprint for the current bitcoin implementation. The first is kind of obvious if you look at Figure 1: there is a great big bank in the loop. i.e. this is a blueprint for debt-backed money, not an unbacked bearer-token. The second is that the transaction protocol is (by implication) encrypted so that the actual transacting engine is hidden from view. So again, citing this paper as a piece of evidence undermines your case that bitcoin is some “NWO global currency by stealth”, rather than supports it IMO.

Having said that, there is a type of cryptocurrency that does bear much better comparison to its design parameters and that is the so called “Cryptonote” protocol which forms the basis of currencies like Bytecoin, Monero and Boolberry. Like Satoshi, nobody actually knows conclusively what the origin of this protocol was. Its creation is attributed originally to a pseudonominous author named Nicolas van Saberhagen and it differs from Bitcoin in that its transacting engine is not transparent and its address balances are only accessible to those holding private keys. If you’re looking for a suspicious, potentially back-doored candidate based on that NSA paper then this is a much more likely actor since whatever bitcoin is or isn’t, its entire state is at least transparent and auditable by all and sundry.

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Posted by Paul

The severe transaction volume limitations on Bitcoin are forcing, and will continue to force, most transactions to occur off the main blockchain. The elite bastards have no intention of empowering 7 billion people to make arbitrary person-to-person transactions in volume, anonymously, outside of banking control, and for nearly zero cost….The hype that a crypto-currency system removes the control of central powers over the monetary system is just that ... hype.

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With respect, this is a gross generalisation IMHO. The true picture - not just for bitcoin but for any monetary base - is much more complex as I’m sure you must know, but apart from that the statement that bitcoin’s impact on centralisation is “just hype” is surely nonsense by any measure.

For a start, it isn’t debt-backed. The monetary base is issued by a decentralised mining process which does not rely on willing parties queuing up to sign mortgage bonds. Secondly, there isn’t a central authority deciding who can mine and who can’t. (There are semi-centralised ‘pools’ but even these are unregulated and unlimited). Thirdly, whatever bitcoin’s limitations regarding transacting capacity, they do not impact its properties as a decentralised monetary base, nor remotely return it to anything that looks like a national central bank.

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Posted by Paul

Also, besides the issue of who controls the transaction systems that move money, and increasingly contractual obligations, between parties, there is also the question of how "wealth" is generated. This boils down to the question of who decides, and by what means do they determine, which projects (building a bridge, bombing a village, running a world-wide drug cartel, ...) will be funded.

That will be done just as it is now ... by central banks controlling how much is lent into existence and to whom…We live in a debt-money based system and I see no way, short of a major collapse of our "civilization", that this will change. It is working far too well for the elite bastards.

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All I can say is try it.

Try using it and living on it - you’ll see that this statement is well wide of the mark. Sure, the commercial gateways are still controlled by the likes of Visa and MasterCard (e.g. if you live off a bitcoin-backed debit card) but that doesn’t suddenly make your weekly grocery purchase “debt backed”. The financial system is complex with many layers stacked on top of one another. Bitcoin (and the other cryptos) is a base layer but how much of it forms the broader flesh of the commercial realm is up to us - the users - not central banks. So I don’t agree with your blanket pessimism on this point.

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Posted by A Voice from the Mountains

Paul, everything else aside, I'm having trouble equating the current debt-based fiat system to Bitcoin. Bitcoin's value is supposed to be based on the fact that (1) quantities are permanently and forever limited, and (2) demand will increase as more and more people use Bitcoin, and more businesses accept it as currency.

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Whether or not the quantity of something is supposedly limited or not has little bearing on whether or not a monetary system supposedly based on that something is really a debt-based system or not.

(And as an aside, the quantity of crypto-currencies is hardly limited. There are more and more Initial Coin Offerings introducing more crypto-currencies into the market, some of which are becoming competitive with Bitcoin for places for those wanting to hold some crypto-currencies to "invest". For example, the quantity of Bitcoin essentially just doubled in this last week ... as everyone that had a Bitcoin also now has a Bitcoin Cash as well.)

The initial stock of Bitcoin has been created by miners, yes (apparently), rather as the stock of gold has been at times such as the 1849 Gold Rush in California. However that's not how most people ever got their money. Most people, most projects, most businesses, most governments, get their money as a result, directly or indirectly, of where the big banks decide to lend, or not to lend. That will not change. The Bitcoin story, that it's independent of all that, is a story that has been useful in the early life of crypto-currencies, but that story will not hold true, once crypto-currencies "hit the big time."

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Posted by Paul

Most people, most projects, most businesses, most governments, get their money as a result, directly or indirectly, of where the big banks decide to lend, or not to lend. That will not change. The Bitcoin story, that it's independent of all that, is a story that has been useful in the early life of crypto-currencies, but that story will not hold true, once crypto-currencies "hit the big time."

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You're painting a very simplified and unrepresentative picture of how these technologies are evolving - basically that there's "bitcoin" and there's "everything else" (being the global fractional reserve lending system). The reality is that the derivative layer of the cryptocurrency field is advancing just as fast - if not faster - than the base monetary layer and is just as diversified. Sure it's peppered with scams but it's also rich with new approaches which are having an equivalent impact on centralised lending as bitcoin did on the issue-mechanism of the monetary base.

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Posted by indigopete

Paul, while concurring with many (most ?) of your observations regarding the cryptocurrency phenomenon, I have to say I come to almost diametrically opposite conclusions regarding their origins, nature and ultimate intent.

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The early adopters of crypto-currencies have such intentions, yes. I've been involved with, and have held, Bitcoin since 2010. These intentions were part of the attraction for me, too.

But just as the early adopters of the Internet (which also included myself) intended that the Internet would be a free and open means for ordinary people to communicate, free of surveillance and control from existing large governments and corporations, these early intentions did not, and will not, hold up.

Most people get their Internet now via major, controlled, institutions such as Google, Facebook, Netflix, Youtube, Twitter, Wikipedia, and whatever are the (apparently even more controlled) institutions behind the Great Firewall of China.

The first Part of my opening post provides an interesting piece of evidence, a paper on the MIT website from 1998, written for the NSA, laying out a plan for converting the monetary system to a digital currency. We are well along that path.

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I am well aware that my view on Bitcoin disagrees with the views of most who are involved in Bitcoin.

I now think that predominant view is wrong (nice hope, won't happen.)

I do not disagree with the predominant view of Bitcoin out of ignorance of what that view is.

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Posted by indigopete

You're painting a very simplified and unrepresentative picture of how these technologies are evolving - basically that there's "bitcoin" and there's "everything else" (being the global fractional reserve lending system). The reality is that the derivative layer of the cryptocurrency field is advancing just as fast - if not faster - than the base monetary layer and is just as diversified. Sure it's peppered with scams but it's also rich with new approaches which are having an equivalent impact on centralised lending as bitcoin did on the issue-mechanism of the monetary base.

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Yes, the "webification" of monetary and contractual transactions, and the rich technology base that is being developed to support moving such transactions to the web, is a fertile area of technology development.

I have, I believe, been quite clear and consistent in my view, which in this respect seems to agree with your view, that there is much more to this technology than just the particular crypto-currency known as Bitcoin.

If you think I haven't been clear on this matter ... then either my writing has been poor, or you might be misreading my posts.

The whole enchilada of monetary and contractual transactions is, in my estimation, moving to the Web and moving to "blockchain" technology. This is a major step for our civilization, comparable to the previous move to Double Entry Bookkeeping, thanks to the work circa 1494 of a Venician monk Luca Pacioli.

The elite bastards are driving this transition, and the early propaganda to the contrary is in my view hype that will soon be overrun by reality, which will be the continuation of a debt-money monetary system controlled by a few powerful elite.

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Posted by Paul

But just as the early adopters of the Internet (which also included myself) intended that the Internet would be a free and open means for ordinary people to communicate, free of surveillance and control from existing large governments and corporations, these early intentions did not, and will not, hold up.

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Well, I'd say you're wildly over categorical with your conclusions - both with regard to the crypto phenomenon and with the internet itself.

Contrary to your assertion, the "early intentions" of the internet have probably held up beyond the original creator's wildest dreams. It's just that everyone gets a stake in it - localists and globalists. That's what you're really complaining about, that it's not exclusive.

In that regard, I suppose the irony of the context of this very exchange won't be lost on you ! (even though is appears so from your last post).

Technologies are not supposed to be 'saviours' in and of themselves. They are tools for societies to deploy as they see fit. They should be judged on that basis and not on whether they facilitate a particular outcome that one section of society favours. We are here, discussing these topics freely. That in itself is a successful outcome as far as the phenomenon known as "the internet" is concerned. The rest is politics.

Similarly, the technology called "bitcoin" has the potential to liberate large parts of the financial markets from the control of a few players. Don't blame bitcoin if there isn't instant eradication of poverty and peace on earth. It works as intended. Now lets move on to the next problem.

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Posted by indigopete

The first is kind of obvious if you look at Figure 1: there is a great big bank in the loop. i.e. this is a blueprint for debt-backed money, not an unbacked bearer-token.

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Yes - I am aware that the 1998 paper I reference does NOT represent the blockchain "distributed database using untrusted and unreliable parallel computers" technology. Yes, that paper presumes a more old fashioned collection of trusted bank computers hidden from view.

As I wrote in my opening post:

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This NSA paper does not spell out the distributed nature of the database used by Bitcoin and subsequent crypto-currencies. Rather this paper presumes that one or banks will provide the robust and secure transactional databases needed to implement this. But other key crypto-currency features are there.

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The distributed nature, requiring less trust and allowing for the use of open software and protocols, of blockchain technology, as introduced by Satoshi Nakamoto in his 2008 paper, is an important advancement, and has seemed to provide a technology that would free humanity from the grasp of the elite banksters.

It will not free us, just as the printing press, firearms, electricity, radio, TV, and the Internet has not freed us. Rather all these technologies have all been coopted by, and largely controlled by from nearly their inception, institutional extensions of the elite.

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Posted by indigopete

Contrary to your assertion, the "early intentions" of the internet have probably held up beyond the original creator's wildest dreams. It's just that everyone gets a stake in it - localists and globalists. That's what you're really complaining about, that it's not exclusive.

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That's not what I am complaining about.

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Posted by indigopete

Technologies are not supposed to be 'saviours' in and of themselves.

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I didn't say they were.

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Posted by indigopete

Similarly, the technology called "bitcoin" has the potential to liberate large parts of the financial markets from the control of a few players.

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That's the dream ... that dream will fail, but not in a simple way. Rather it will remain, as have earlier technological advances, a complex struggle between humanity striving for their own freedom, and the elite striving to extract the wealth of labor, resources and ingenuity from this planet and its people.

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Posted by indigopete

Don't blame bitcoin if there isn't instant eradication of poverty and peace on earth. It works as intended. Now lets move on to the next problem.

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Please don't put words in my mouth that I did not say nor imply.

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Posted by mgray

Yes I have written about all these being the reason behind it rising, but on a day-to-day basis and the moves today (Monday) there is no economic or financial reason for it to jump today. That's what I am getting at. It rises more on whim.

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My hunch is that the rise this Monday was a combination of

1. people converting their new found "wealth" (the newly created Bitcoin Cash they got, matching their Bitcoin holdings) back into Bitcoin,
2. "investors" who might have held back for the last few weeks, waiting to see what became of this fork, and
3. more manipulation by the "big boyz" from behind the curtain.

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Posted by Paul

Whether or not the quantity of something is supposedly limited or not has little bearing on whether or not a monetary system supposedly based on that something is really a debt-based system or not.

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A dollar is debt-based because in theory it represents a debt owed to someone, and the paper is supposed to have no inherent value of its own. It was originally just a receipt that the storekeeper signed when you wanted to come back and exchange it for something. Bitcoins aren't created or traded on the idea of a Bitcoin being debt that is owed, but something that does have inherent value because those trading it have agreed upon a value and the free market proves it correct.

Like Indigopete said above, our financial systems are layers upon layers, so going back through the history we could impose all sorts of interpretations upon the US dollar, but in the end is it really worth anything more than what we simply say the paper itself is worth? In that respect it is similar to Bitcoin: only worth what we agree it's worth, with no other use or value besides that. You can't eat, ride it, it or even trade it in for slightly less useless gold anymore.

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(And as an aside, the quantity of crypto-currencies is hardly limited. There are more and more Initial Coin Offerings introducing more crypto-currencies into the market, some of which are becoming competitive with Bitcoin for places for those wanting to hold some crypto-currencies to "invest". For example, the quantity of Bitcoin essentially just doubled in this last week ... as everyone that had a Bitcoin also now has a Bitcoin Cash as well.)

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I was only talking about Bitcoin. There is a hard limit programmed into the blockchain for the maximum number of Bitcoin. I'm sure you're familiar with how all that works. I was just pointing out that this, combined with increase in demand over time, is why the price will keep getting driven up, until something breaks the pattern.

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Most people, most projects, most businesses, most governments, get their money as a result, directly or indirectly, of where the big banks decide to lend, or not to lend. That will not change.

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That hasn't always been true in the US, especially during the periods when we had no central bank. If Bitcoin lives up to its ideals, it will also be decentralized.

By the way, think of the positive benefit of a nationalized bank that is controlled directly by the elected government: we could loan money out to projects that we as a nation have elected people to accomplish, such as the wall. Why not? If we are going to nationalize anything I say we should start with the banks.

The federal reserve banks are corrupt and doing exactly what you say, controlling investment. At least Congress would be more accountable if they voted on what to invest money into directly.

Any form of "currency", whether it be bits, sea shells, gold coins, or credits in a bank account, can be used by a debt based monetary system.

The question is how the major supply of that currency is generated. The current market cap of Bitcoin is about $55 Billion, and of the other crypto-currencies quite a bit less. This is tiny compared to the "market cap" of US Dollar denominated instruments, which include the bonds, mortgages and other debt paper of many individuals corporations, nations and other governments, the stocks issued by many corporations, major pension and insurance accounts. The US Dollar market cap is on the order of a quadrillion dollars, or about 20,000 times larger.

The manner in which Bitcoins and the lesser crypto-currencies have been generated so far will bear about as much resemblance to the manner in which most digital transacted money is generated as various early individual efforts to "index" parts of the Web bear to the present day CIA-friendly Google search engine.

My point is, in part, that Bitcoin will not live up to its ideals ... not even close ... not a chance.

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Posted by Paul

But just as the early adopters of the Internet (which also included myself) intended that the Internet would be a free and open means for ordinary people to communicate, free of surveillance and control from existing large governments and corporations, these early intentions did not, and will not, hold up.

Most people get their Internet now via major, controlled, institutions such as Google, Facebook, Netflix, Youtube, Twitter, Wikipedia, and whatever are the (apparently even more controlled) institutions behind the Great Firewall of China.

The first Part of my opening post provides an interesting piece of evidence, a paper on the MIT website from 1998, written for the NSA, laying out a plan for converting the monetary system to a digital currency. We are well along that path.

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I was very concerned about communist Chinese influence over Bitcoin too, considering 90% of transactions on exchanges are out of China. Since I don't speak Chinese I had to look for articles and analyses already done by people with similar concerns, and I found something that eased my concerns somewhat: Corrupt Chinese government officials themselves are responsible for much of the money bleeding out of their country, just as wealthy Americans had been stashing their money in off-shore accounts. However they have already put some barriers in place to complicate this for the common Chinese "citizen" or "comrade" or whatever they consider themselves in their communist hierarchy.

The NSA was likely just reading the writing on the walls and preparing to co-opt what would have been inevitable anyway. In the 1990's didn't we already have credit card systems sending data over telephone lines? That's already money traveling over telecoms. The Internet is just the next obvious step.

I'd give Bitcoin 50/50 odds of staying decentralized. There are concerns but I don't see any reason to lose complete hope yet.

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Posted by A Voice from the Mountains

I'd give Bitcoin 50/50 odds of staying decentralized. There are concerns but I don't see any reason to lose complete hope yet.

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I'd give Bitcoin less than 1 chance in a 100 of even surviving the shift to the "big time." Just as Marc Andreessen's Mosaic browser has faded into history, so will Bitcoin, once the "big boyz" unveil the new world monetary system, to replace the failed US Dollar Reserve based world monetary system.

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Posted by Paul

Any form of "currency", whether it be bits, sea shells, gold coins, or credits in a bank account, can be used by a debt based monetary system.

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They can, but in actual point of fact here I don't understand why you are calling Bitcoin itself a debt-based currency. How are you defining "debt-based"?

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The question is how the major supply of that currency is generated. The current market cap of Bitcoin is about $55 Billion, and of the other crypto-currencies quite a bit less. This is tiny compared to the "market cap" of US Dollar denominated instruments, which include the bonds, mortgages and other debt paper of many individuals corporations, nations and other governments, the stocks issued by many corporations, major pension and insurance accounts. The US Dollar market cap is on the order of a quadrillion dollars, or about 20,000 times larger.

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I don't get your point, starting off here talking about how the currency is generated (which is the mining process) but then going off into market caps and saying Bitcoin is tiny by comparison. Yes, Bitcon's current market cap is tiny in comparison to the US dollar, but I also agree with what you said to begin with, that whether or not it's debt-based depends on how it's generated. The market cap isn't how the currency is generated.

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The manner in which Bitcoins and the lesser crypto-currencies have been generated so far will bear about as much resemblance to the manner in which most digital transacted money is generated as various early individual efforts to "index" parts of the Web bear to the present day CIA-friendly Google search engine.

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The difference is that the US dollar is generated by the Federal Reserve, in unlimited, unpublished quantities, and this the centralized bank of the US and has enormous central power.

What is the equivalent centralized power in the world of Bitcoin?

The closest thing to a centralized power in Bitcoin is communist China, which is what I've been talking about above. China is trying to corner the market but it hasn't done anything to radically change how this whole decentralized blockchain system works .... yet.

¤=[Post Update]=¤

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Posted by Paul

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Posted by A Voice from the Mountains

I'd give Bitcoin 50/50 odds of staying decentralized. There are concerns but I don't see any reason to lose complete hope yet.

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I'd give Bitcoin less than 1 chance in a 100 of even surviving the shift to the "big time." Just as Marc Andreessen's Mosaic browser has faded into history, so will Bitcoin, once the "big boyz" unveil the new world monetary system, to replace the failed US Dollar Reserve based world monetary system.

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You may be absolutely correct, but it depends on everyday geek developers and what kind of pushback they can give. You shouldn't throw in the towel so quick! You give away victories to the enemy that way. They should have to fight for every inch on every front.

i always thought that the notion of Bitcoin being decentralized was just a facade for people wanting to move away from the system to buy into. I always thought that there wasn't a way for TPTB would ever let this happen.

maybe they can't control it, and have other means to dominate the world and finance is no longer needed? I am a layman when it comes to what the elite are actually doing. it is a bit overwhelming to rustle through the crap that is being put online and decipher what is truth and what is controlled opposition.

i personally think that bitcoin is a way to get away from the dollar and cash all together. it reminds me of the movie Fortress. all in a barcode aka bitcoin per say.

something is fishy about bitcoin to me, that is for sure. I do appreciate the conversations being had about cryptocurrency though.

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Posted by A Voice from the Mountains

They can, but in actual point of fact here I don't understand why you are calling Bitcoin itself a debt-based currency. How are you defining "debt-based"?

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Bitcoin as it currently exists is not a debt-based currency. If I wrote that it was, my words were woefully botched.

My expectation (which is not shared with most in the crypto-currency world) is that the world's monetary system will shift from using the US Dollar as its "reserve currency" to using crypto-currencies as the technology implementing the main currency or currencies.

Generating crypto-currencies by paying those running the distributed compute nodes in newly generated coinage is a short term expedient during the current early phase of crypto-currencies, when it is important to get technical savy early adopters involved.

The fundamental power to control civilization using debt-based monetary systems is a power that the elite will not let go of.

They get to control whose project's, wars, technologies, businesses, etc get funded and whose don't. They get to run their favorite boom-and-bust games, where they gain control over more resources both on the rise and the fall. They get to collect interest on the money they "lent" into existence, to control the livelihoods of those individuals, corporations and governments who are in debt trying to make payments, and to collect the repossessed collateral when the bust bankrupts the individual, corporation or government.

I am anticipating that digitized currencies, settled using the blockchain technology running on the computing, networking and storage resources of cooperating consortiums of service, governmental, corporate and financial institutions, handling high volumes for very low cost very quickly, world-wide, will form the basic "currency technology" of the new world monetary system.

The bankster's will still decide when to boom and when to bust, who gets funding and who goes bankrupt.

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Posted by A Voice from the Mountains

I don't get your point, starting off here talking about how the currency is generated (which is the mining process) but then going off into market caps and saying Bitcoin is tiny by comparison. Yes, Bitcon's current market cap is tiny in comparison to the US dollar, but I also agree with what you said to begin with, that whether or not it's debt-based depends on how it's generated. The market cap isn't how the currency is generated.

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The market cap doesn't generate currency. But when the elephants decide to run where the mice were scurrying about ... the dynamics become those of the elephants, not the mice.

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Posted by A Voice from the Mountains

The difference is that the US dollar is generated by the Federal Reserve, in unlimited, unpublished quantities, and this the centralized bank of the US and has enormous central power.

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That's the common view ... one that I would disagree with.

Dollars are not printed as Parker Brothers prints Monopoly money.

Dollars are almost always lent into existence. Lending involves two offsetting book entries. The lender gets a bond, mortgage, IOU or other form of debt paper representing the debtors promise to pay certain amounts under certain conditions at certain times in the future. In return for that, the debtor gets some immediate monetary credit.

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Posted by A Voice from the Mountains

What is the equivalent centralized power in the world of Bitcoin?

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Current bitcoin does not have such a debt-based central power.

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Posted by A Voice from the Mountains

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Posted by Paul

I'd give Bitcoin less than 1 chance in a 100 of even surviving the shift to the "big time." Just as Marc Andreessen's Mosaic browser has faded into history, so will Bitcoin, once the "big boyz" unveil the new world monetary system, to replace the failed US Dollar Reserve based world monetary system.

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You may be absolutely correct, but it depends on everyday geek developers and what kind of pushback they can give. You shouldn't throw in the towel so quick! You give away victories to the enemy that way. They should have to fight for every inch on every front.

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Of course us geeks will continue to fight for human freedom.

On the large scale, the bulk of humanity will continue to be mostly controlled, and most of the victories of us geeks will be limited and local, as is the case in most guerilla warfare.

Just figuring out what's going on (as this thread exemplifies) in the face of all the confusions, myths, and conflicting memes will ensure that we never win, even as the irrepressible urge to freedom of the individual human being ensures that we never lose.

The first duties of anyone engaged in love or war are to understand one's self, and to understand the other.

False bravado, based on false myths (such as I am finding rampant in "Bitcoin mythology" and am trying to dispute and dispell here), is an anathema to such understanding.

Any crypto has no intrinsic value until you convert it into the debt-based currency of choice.

To that end there is very little room for arbitrage since BTC traded in yen holds a similar value in dollars, despite moving values of the two currencies.

This is what I was getting at earlier. There is little underlying financial impetuses for the price moves on BTC. Compare the dollar index chart with BTC price chart, the dollar doesn't move while BTC soars over any time frame. No correlation.

With that type of sentiment, you are bound to get these wild swings in pricing. As it matures I feel this could get more volatile, since more buyers and sellers will be in the market.

Just some thoughts.

There's nothing wrong with so called "debt based" money per say. Debt based money is an essential component of any economy that changes in size because the monetary base is always an interplay with economic activity.

The problem is that the liquidity providers are highly centralised (basically you need a banking license) and that they charge interest on the liquidity when in fact it has to initial value other than that which the debtor provides as an underwriter.

But even there there are lots of new approaches on the horizon. For example the Bitshares platform decentralises that whole liquidity provision process so that it's granular and no longer in the hands of a private entity. There are even cryptocurrencies that track the value of national currencies so that you can hold value in any denomination that suits the particular economic activity concerned.

I don't think we can say bitcoin has been successful or it hasn't. It's only 8 years old. It takes a couple of generations for genuine change to manifest itself and it comes in many forms at many levels. Also the whole "centralised/decentralised" way of appraising things is very un-instructive since it implies that one is good and the other is bad which is nonsense. Just because a service provision or access to a resource is centralised doesn't automatically mean that corruption is involved. There have been huge successes for both approaches.

http://www.zerohedge.com/news/2017-0...-bitcoin-price

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It was over three years ago, back in May 2014, when we wrote "How Bots Manipulated The Price Of Bitcoin Through "Massive Fraudulent Trading Activity" At MtGox" in which we first demonstrated one of the more striking observed "bot-driven" bitcoin manipulation schemes, in this case related to the infamous collapse of the now defunct Mt.Gox bitcoin exchange.

As we wrote at the time, a number of traders began noticing suspicious behavior on Mt. Gox. Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January, by what appeared to be two algos, named later as "Willy" and "Markis." Each time, (1) an account was created, (2) the account spent some very exact amount of USD to market-buy coins ($2.5mm was most common), (3) a new account was created very shortly after. Repeat. In total, a staggering ~$112 million was spent to buy close to 270,000 BTC – the bulk of which was bought in November.



"So if you were wondering how Bitcoin suddenly appreciated in value by a factor of 10 within the span of one month, well, this is why. Not Chinese investors, not the Silkroad bust – these events may have contributed, but they certainly were not the main reason. But who did it? and why?"

Of course, in the end this alleged manipulation did not help Mt.Gox which eventually collapsed in what has been the biggest case of cryptocoin fraud in history.

We bring up this particular blast from the past, because in the latest case of bitcoin market abuse - with Bitcoin trading at all time highs above $3,000 - Cointelegraph reports of rumors swirling about a trader "with nearly unlimited funds who is manipulating the Bitcoin markets." This trader, nicknamed "Spoofy," received his "nom de guerre" because of his efforts to “spoof” the market, primarily on Bitfinex.

Of course, spoofing is what Navinder Sarao pled guilty of last year, when regulators inexplicably changed their story, and instead of blaming a Waddell and Reed sell order for the May 2010 flash crash, decided to scapegoat the young trader who allegedly crashed the market due to his relentless spoofing of E-mini futures (and also making $40 million in the process of spoofing stock futures for over five years).

It now appears that a spoofer has once again emerged, only this time in Bitcoin.

For those unfamiliar, spoofing is simple: it is the illegal practice of placing a large buy order just below other buy orders, or a large sell order just above other sell orders, then cancelling if it appears that the order is about to be hit or lifted. The idea is to make traders think that somebody with deep pockets is getting ready to buy or sell, in hopes of moving the market. If traders see a sell order of 2000 Bitcoin they may rush to panic sell before the whale crashes the price. And vice versa on the bid-side.

As an example of Spoofy's trading pattern, here is a breakdown of a typical "trade" by the mysterious entity as noted by BitCrypto'ed who first spotted the irregular activity: Spoofy is a regular trader (or a group of traders) who engages in the following practices:

Places large bids ($2 million and up) for Bitcoin, usually just under a smaller bid order, only to remove them once someone starts to sell. These orders usually have a lifetime of minutes, or sometimes as short as 5–10 seconds to manipulate the price up (more common)
Places large asks ($2 million and up), for Bitcoin when he wants the price to go down, or stop going up (less common)
Occasionally ‘Spoofy’ will allow orders deep in the orderbooks to remain for a few hours, usually $50–$100 below the current price. For example, during the recovery above $2,000, he had roughly 4,000 BTC of false orders in the $1,900 range that were unlikely to execute, and ultimately were never executed.

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Posted by mgray

TC traded in yen holds a similar value in dollars, despite moving values of the two currencies.

This is what I was getting at earlier. There is little underlying financial impetuses for the price moves on BTC. Compare the dollar index chart with BTC price chart, the dollar doesn't move while BTC soars over any time frame. No correlation.

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I like to think of the BTC market as being somewhat like the market for Picasso paintings, or, in their time, Beanie Babies. The volume of money at the fringe, making sudden moves in or out, is substantially larger in proportion to the volume of money tending to act as stabilizing ballast in the market, than is the case in more stable markets. Also, as Carmody notes in his post, some of that hot money on the fringe seems to be deliberately agitating the market, which is a lot easier to do in the Bitcoin market than in, say, the market for ten year US Treasuries.

Or, another analogy, a skiff in a storm moves about a lot more than an aircraft carrier in calmer weather, both because the skiff is smaller and the weather is more violent. The controversies surrounding crypto-currencies are more violent, and the stable money in them serving as ballast is much smaller, than in the larger Dollar denominated stock and bond markets.

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Posted by indigopete

There's nothing wrong with so called "debt based" money per say. Debt based money is an essential component of any economy that changes in size because the monetary base is always an interplay with economic activity.

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Whether debt-money, as a mechanism, is good or bad isn't the point, indigopete.

A key point of mine is that debt-money has been for hundreds of years at least, and in my expectations will continue to be, one of the most powerful tools for controlling human civilization that the elite bastards have.

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Posted by Paul

Clif is selling (over selling) cryptos and silver ... so that's part of the elite's next bubble/scam.

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Just to be clear, I am not predicting that silver will actually be a real "core asset" in the next monetary system ... only that there are some elites who would like some of us to think that.

Many, perhaps the majority, of Clif High's boldest predictions to not come to pass. Rather they turn out to be, or at least seem to be in light of hindsight, examples of grand fakes, leading those who enjoy listening to articulate old codger computer geeks (such as myself) astray in our expectations.

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Blockchain technology has a bright future; Bitcoin perhaps not so much.

What I am increasingly expecting is that blockchain technology, just like some other major technologies in prior years, will become an important component of transactional systems, world-wide.

I expect that Bitcoin will turn out to have been a way for blockchain technology to be developed, in its early years.

I also expect that blockchain technology will find a wide variety of uses, rather in the way that SQL relational databases, cloud data storage, and http protocol based web browsers have in recent decades (all technologies on which the ProjectAvalon.net forum depends.)

Blockchain technology is fundamentally a way of implementing robust distributed transaction databases, using a loose consortium of somewhat untrusted computers connected by a network. The transaction history is robustly maintained and updated, without requiring any single point of trust or exposing any single point of failure. It enables world-wide, fairly rapid, quite inexpensive, transaction processing.

For example, here's a new article explaining how China plans to use blockchain technology when collecting taxes: China Will Use Blockchain To Collect Taxes.

The phrase "the blockchain" is misleading:

I do not expect that there will be "one blockchain", holding all that is recorded about each of us and all transactions we make. Blockchains are vastly, many orders of magnitude, to cumbersome to do that.

Rather I expect that, just as now with SQL relational databases, there will be many, many blockchains, handling various bits and pieces of our online affairs and records.

Activity that primarily involves individual clients interacting with a single provider (for example, posting on ProjectAvalon.net <grin>) will continue to be stored in SQL relational databases or similar, just as such activity is now.

But much of the activity that spans multiple providers or interactions between multiple clients and providers, will migrate from such SQL databases to blockchain technology, over time, as that technology provides a more suitable foundation for conducting and recording such transactions.

What does this have to do with the New World Monetary System?

Part of moving us from the current US Dollar centric monetary system to whatever comes next will involve physically (or electronically) replacing what people use now, with something representing the tokens of value in the next system.

Rather clearly, as can be seen from the rapid development and deployment of computer, networking, smartphone and other such technology, world-wide, over the last few decades, our overlords are keen to get humanity connected into the Web.

I have no doubt that this includes getting our monetary transactions, savings and debts online.

So ... whatever are the new currencies that we adopt, to replace the US Dollar, there will be a strong web-centric element to them. Blockchain technology is clearly intended to be used in such systems. This will apply both at the individual level, such as when I purchase some electronic trinket on eBay from a small vendor in China, and at the international level, such as in the manner of holding and transacting national central bank reserve holdings. In the later case, something more "webified" and robust will replace T-Bills and SWIFT.

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Posted by Paul

I am anticipating that digitized currencies, settled using the blockchain technology running on the computing, networking and storage resources of cooperating consortiums of service, governmental, corporate and financial institutions, handling high volumes for very low cost very quickly, world-wide, will form the basic "currency technology" of the new world monetary system.

The bankster's will still decide when to boom and when to bust, who gets funding and who goes bankrupt.

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So you think this is more of an issue with blockchain tech in general than Bitcoin in particular?

Edit: Nevermind, I read your later posts so I understand what you are saying now.

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The market cap doesn't generate currency. But when the elephants decide to run where the mice were scurrying about ... the dynamics become those of the elephants, not the mice.

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It would only take the sale of about 1%, or maybe not even that, of the total Bitcoin being held in order to trigger a crash, from what I've read. But if there is still demand after such a sell-off, the price will eventually go back up just like it did back in 2014. The demand for Bitcoin (so far) is separate enough from purely long-term investments that I think even that kind of crash wouldn't necessarily be fatal, again as long as that demand is still there. That demand to circumvent the centralized system is like the constant trickle voltage that is charging the capacitor, so to speak.

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That's the common view ... one that I would disagree with.

Dollars are not printed as Parker Brothers prints Monopoly money.

Dollars are almost always lent into existence. Lending involves two offsetting book entries. The lender gets a bond, mortgage, IOU or other form of debt paper representing the debtors promise to pay certain amounts under certain conditions at certain times in the future. In return for that, the debtor gets some immediate monetary credit.

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Right, the debt still exists, but we don't get to see all of it because we don't even have any public accounting for what is brought into circulation. Last I heard, as of a few years ago, the Fed and US Mint literally stopped publishing the amount of money put into circulation every quarter. We all know this is a disastrous monetary policy. The debt still exists, they are keeping track of it, and this is obviously going to create a major problem somewhere along the line. It devalues our entire currency and makes people work hard as hell for a little of nothing.

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Posted by mgray

Any crypto has no intrinsic value until you convert it into the debt-based currency of choice.

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That's not true. There are sites online where you can purchase physical gold directly with Bitcoin. There are a surprising number of things you can already buy directly with Bitcoin online, and in Japan it's officially legal tender in physical stores.

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Posted by A Voice from the Mountains

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Posted by mgray

Any crypto has no intrinsic value until you convert it into the debt-based currency of choice.

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That's not true. There are sites online where you can purchase physical gold directly with Bitcoin. There are a surprising number of things you can already buy directly with Bitcoin online, and in Japan it's officially legal tender in physical stores.

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Actually, I don't think you're disagreeing with mgray, A Voice from the Mountains.

Apparently you both agree that a crypto currency, in and of itself, in its native "bucket of crypto bits" form, is worth nothing more than a bucket of bits.

But you likely both agree that, at present, crypto currencies can be exchanged for interesting things, such as the gold you cite in your example.

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Posted by Paul

Actually, I don't think you're disagreeing with mgray, A Voice from the Mountains.

Apparently you both agree that a crypto currency, in and of itself, in its native "bucket of crypto bits" form, is worth nothing more than a bucket of bits.

But you likely both agree that, at present, crypto currencies can be exchanged for interesting things, such as the gold you cite in your example.

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Well maybe I'm just trying to put a different spin on it, because I don't see the "bucket of bits" as inherently different than the "rectangle of paper" or the "block of relatively useless metal." In fact gold is less in demand industrially, and is less rare in the Earth (so I've read) than silver. So go figure on that one.


Also maybe this is a generational thing. You have to remember that the younger generations have grown up with digital money already and it's just as normal and "base line" to them as any other form of currency. Credit cards over the telephone line, credit cards over Internet data, electronic withdrawals from your bank account through an ATM, etc. The idea of a "bucket of bits" as money is not at all alien to us. It's normal.