Bitcoin: One scam to rule them all
Unless you've been living under a rock, you have heard of bitcoin.
Prices of bitcoin soared further into record territory Tuesday, briefly trading above $4,700, as demand for the cryptocurrency, perceived by investors as a safer assets than fiat currencies, jumped following North Korea’s missile test over Japan.
One bitcoin BTCUSD, +4.72% was up 4.3% to $4,628, bringing its market capitalization to $76.4 billion. Since the start of the month, bitcoin has gained more than 60% and it is up about 360% so far this year, according to Coindesk.com.
Prices of Ether, the blockchain currency trading on Ethereum platform, also rose sharply, up nearly 5% at $364.85. Its total value is at about $34.4 billion. Despite recent rally, Ether is still below its all-time high $383.58, reached in June. Year to date, Ether is up more than 4,000% thus far in 2017.
That's an unbelievable run. Heavy emphasis on the word "unbelievable".
On paper, speculators in cryptocurrencies are getting amazingly wealthy, which is why you see articles like this:
This bitcoin millionaire teen says he turned $1K into $1M — so he’s skipping college
Does that remind you of anything?
Bitcoin is particularly vulnerable to scams. Those weakness are features, not bugs.
Problematic Bitcoin design features include:The risk of losing a password – a lost or forgotten password cannot be recovered so all bitcoins from an electronic wallet could be rendered unrecoverable.
Insecure passwords can lead to bitcoins being stolen – for example through phishing scams.
The irreversible nature of transactions means that stolen bitcoins diverted to another wallet, due to hacking or dishonest trading partners, cannot be reversed and recovered.
With these built-in flaws, it's not a surprise that bitcoins are a target of thieves.
The schadenfreude of Bitcoin enthusiasts over Ethereum’s recent troubles ended abruptly last week. A major Bitcoin exchange, Bitfinex, was hacked and nearly 120,000 BTC (around $60m) was stolen. The price of Bitcoin promptly crashed, and Bitfinex was forced to suspend trading. Suddenly, Ethereum was not the only basket case cryptocurrency around.
...Somehow, the hacker managed to gain access to hundreds of customer wallets. Not only did the hacker gain access to the wallets, he/she also overrode Bitgo’s withdrawal limits. It was a well-planned and comprehensive security breach by someone who knew exactly what they were doing. Funds were moved to thousands of addresses over a short period of time. Bitfinex, it seems, was powerless to stop it.
This is one of the largest Bitcoin heists ever, dwarfed only by Mt. Gox in 2014. It is comparable in size to Ethereum’s DAO theft only a couple of weeks ago. And it is going to result in a lot of people losing a lot of money. All of Bitfinex’s customers, in fact. The company has announced a haircut of 36.067% across the board
Regular banks also get stolen from. But in the case of banks, customers get their money back. Even more importantly, the bank doesn't make other customers pay for the theft.
That sort of thing alone should be enough to scare you off of bitcoin. But it gets worse.
Thieves also exploit investors.
Here’s another reason to be leery of the initial coin offerings being done at a staggering pace in the cryptocurrency world: there’s a one-in-10 chance you’ll end up a victim of theft.
Phishing scams have helped push up criminal losses to about $225 million this year, according to Chainalysis, a New York-based firm that analyzes transactions and provides anti-money laundering software. In such scams, investors are tricked into sending money to internet addresses pretending to be funding sites for digital token offerings related to the ethereum blockchain technology.
More than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds this year, Chainalysis estimates.
OK. You don't mind the risk? You are smarter than the thieves?
People are getting rich and you want a piece of it.
Fine, that's your choice.
But you have to ask yourself one important question: Where will you spend your riches?
Merchant acceptance of bitcoin, the leading cryptocurrency, is at an all-time low, according to a new report from JPMorgan covered by Bloomberg and Business Insider.
Out of the leading 500 internet sellers, just three accept bitcoin, down from five last year. That decline is what the report calls a “striking discrepancy,” in light of bitcoin’s price surging to a peak over $3,000 earlier this year.
The peak is limiting the benefit for both customers and merchants in accepting bitcoin. The currency saw a 55% increase in transaction volume this year, but it's probable that volume comes from trading rather than payments.
Bitcoin is a currency that is really hard to spend at $4,700.
What do you think is going to happen when bitcoin price starts to crash and people want to unload their bitcoins?
Do you think the few merchants that accept bitcoins are going to want to hold a currency falling uncontrollably in value?
When bitcoin prices start returning to Earth, those few exit doors will be closed and locked.
Comments
Jebus
This makes the gold and real estate bubbles of the noughties look relatively normal by comparison. I think I'll sit this one out given that bitcoin isn't protected by the FDIC.
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
Libertarians are in love with bitcoin
I have to admit that the whole concept is interesting from both an economic and technology standpoint.
However, unlike online, libertarian geeks, I'm not ignoring the real world.
More technology isn't a solution for the problems of a capitalist economic system.
If you want to fix our monetary system you need to start with recognizing the flaws built into capitalism, and then address those flaws through our broken political system.
Otherwise, buy gold.
That's the problem with Libertarians/AnCaps.
They don't wanna fix it. In fact, if they had it their way, corporations and money would be the government. And honestly, that wouldn't be much of a stretch at this point with the way our political system is now. They feign denial, but this is what these assholes wanted all along.
I mean, their think tanks didn't infiltrate both main parties for nothing.
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
Might be worth gambling
a few bucks on it, just to see what happens. Nothing you can't afford to lose though. If nothing else Bitcoin is at least a very interesting experiment. Better odds than the lottery anyway.
native
Agree. It started as
Gaming currency. I believe it eventually survives, though lots of growing pains.
Linden Labs via SecondLife.com has had a "Virtual currency" since their inception, and works very well. Earn "Lindens" "In Game," convert to real U.S. Dollars (or any other major currency). I thought for certain by now that Linden Labs would start pushing their Linden $$ outside the "game" environment into RL places like Wal-Mart, but nope. Weird, that, as their currency is solid. People there make an actual living there making fake stuff for fake paeople. Those old '60s, '70s rock stars? You'll find them there, open virtual guitar case on the virtual honky tonk stage, playing real tunes from their living room or garage. "You might remember this one... "
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Converting game $ to real $ will be nothing but trouble
Neal Stephenson wrote a book, Reamde, that included such a premise:
In the book, the game/real money becomes the focus of a veritable hurricane of crooks who want to steal it.
I agree with people who say that when you mix technology and rapacious capitalism, all you get is more rapacious capitalism. We need to fix money, not make it rob us all at lightspeed. We are running on a model created by Elizabethan goldsmiths. It is inherently unstable and highly prone to blowing credit bubbles. Coding that up doesn't change anuything except the power of those who already have too much money.
speed
And the speed at which the rest of us get ripped off, which increases massively once the Elizabethan goldsmiths' system is running on internetworked computers.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Totally OT
Maybe nothing. Something to keep an eye on.
You and I see bitcoin differently
This is, perhaps, the only thing we see differently
I see bitcoin as one of the significant battlefields in the war against the plutocrats. After all, id DIRECTLY attacks capital and the control of the global bankers. Looking at your concerns one by one:
The risk of losing a password – a lost or forgotten password cannot be recovered so all bitcoins from an electronic wallet could be rendered unrecoverable.
Yes. I agree. That is a wonderful feature. It's why bitcoin is more like cash than modern financial currencies. And yes, if I lose my wallet with $300 bucks in it then I lost the $300 bucks. That is the nature of cash.
Insecure passwords can lead to bitcoins being stolen – for example through phishing scams.
Hmmmm.... yeah, insecure passwords if you host your wallet at some web site. But if you host your wallet on your own machine then it's automatically protected by the physical protections of your computer along with any network protections you might have along with whatever passphrase you've put on it.
The irreversible nature of transactions means that stolen bitcoins diverted to another wallet, due to hacking or dishonest trading partners, cannot be reversed and recovered
Yes, exactly! Nor would I want them to be reversible. It is a CASH transaction. It is also untraceable (or very hard to trace if done right), instant, and much MORE secure from the receiving side. When someone pays me in bitcoin I pretty much know I got paid. There is no "settling period". Nor are there any fees.
But you have to ask yourself one important question: Where will you spend your riches?
Well, I haven't checked in a few years but the answer to that question used to be "Anywhere I damned well please." Converting bitcoin into fiat currency didn't used to be hard. Has that changed?
Of course, if you do that, you are exposed as long as your bitcoins are on the exchange so I'd probably want to make a new exchange based wallet, transfer my coins there and immediately convert them to whatever fiat currency I want. Do I think a lot of idiots can get burnt if they go dabbling in the wild wild west? Sure. That doesn't mean I'm against bitcoin.
Using bitcoin I can pay someone in any country I want... right now... without fail... without fees... without the global elite knowing what I purchased or why. How is that a bad thing?
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
The privacy thing is certainly attractive
Maybe I just don't understand it.
It wouldn't be the first time I didn't understand something. For instance, I totally underestimated the coordinated global central bank intervention since 2008. It proved I didn't understand the role of central banks in the financial system.
That being said, I don't believe in cryptocurrencies, mostly for one specific reason: there's nothing behind them.
They are nothing but software code. It's an asset masking itself as a currency. An asset that you can't put into you hand.
You may as well being trading vintage Atari games.
Say what you will about fiat (and I have lots of problems with it), it has something behind it: debt obligations and the taxing power of the government.
Fiat has a limited lifespan of its own, but outside of precious metals, credit has always been the default currency.
Personally, when I want to operate outside of the fiat system I'd prefer PMs. I remember reading how they are in a 4,000 year long "bubble".
I think a lot of people don't understand bitcoin
In fact, the arguments that you made (based on nothing) have been made many times. The thing is, it IS based on something. It's based on scarcity, just like gold. Except in this case the scarcity isn't a fiction, it's a mathematical fact.
But in the end does any currency have value outside societal agreement? How much is that $1 bill in your wallet worth to some remote tribesman in the amazon? Bitcoin has value because people agree that it does. It won't if people stop agreeing.
In the meantime, I remain highly in favor of anything which is so directly subversive to the plutocrats. Think about it. Us plebes could make an entire hidden economy and use currency rather than barter to do it. And we can do our transactions without Wall Street skimming their take off the top every time.
Do I have any idea why the value of bitcoin is currently so high? No, not really. But the one thought I do have is that only the wealthy could've driven it up like that. That makes me wonder why wealthy people are putting money in alternate currencies.
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
@SnappleBC
Speculators driving up the price for a crash from which they can profit when they all sell in unison?
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
You can buy people, so they say
Hmmm, I wonder if Podesta uses bitcoin when he orders pizza for his pool parties.
Seriously though, last I looked into BC, one was like $600. Sure wishing I'd bought at least one, but couldn't afford it at the time. Hell, I can't afford $600 now lol.
Wikileaks etc
have long established that every internet connected device and every communication made is transparent and captured by the spy agencies; and from there likely also vulnerable to access by other nations and criminal outfits.
It's impossible that "the global elite" is ignorant of what you buy, and where. And that they can't steal it at a whim.
Orwell: Where's the omelette?
That's not exactly correct
They have the capability to infiltrate any device pretty much anywhere they can lay their fingers on it and a lot of devices remotely. Of course, the world's most sophisticated safe can be cracked. That doesn't exactly make it useless.
Bitcoin transactions are HARD to trace and they require investigative efforts, usually boots on the ground as well as cyber. It's kind of odd since the entire thing is public... every transaction ever made is right there in my bitcoin wallet. I can see everything I want to see except WHO those transactions belong to.
Nothing is perfect and if the US government wants you, they're almost certainly going to get you unless you're prepared to flee to a remote embassy somewhere. But things like bitcoin make their life harder and that's a good thing.
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
No. The backdoors
are built into the devices. Before any one key is typed the means to capture the stroke is there. And when the strokes are sent through the net, they're captured too.
It's entirely at someone's discretion in some location somewhere whether or not to do anything at all with the information we provide, whether the providers are a person or a class of people. You've got to come from somewhere on the net and you've got to go somewhere on the net if you want to do Bitcoin. That's all captured.
Orwell: Where's the omelette?
Agree. One of the attractions
is "Fucking the Man (globalists)." I'm sure they'll do all they can to fuck bitcoin. Great to see that it's growing! For awhile there it looked toes up. Maybe I can convert some Lindens. You just know that's going to happen, just a matter of time.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
OMG LINDENS!
LOL, I just logged in for the first time in more than a year and much to my surprise I have like 7200 lindens.
I was also quite surprised that I have about $275CAD in bitcoin. I have 0.04805001 BTC.
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
I dj on there once
or twice a month these days as time and energy allow. Was once on there I DJ'd at four different Clubs, 5, 6 nights a week (back in 2007-'09), one of which simulcast our sets to a real NYC Club. (or Staten Island or Queens). The Lindens were pretty good! Then I bumped into a place called Cafe Wellstone (named after Paul Wellstone) (which still is active these days), and finally found a spot to hang out with fellow progressives.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Could you please give examples (> 1) of where to do that?
If you haven't checked in a few years (and your entire paragraph is past tense) does that mean you never spend bitcoins? only spend bitcoins at bitcoin retailers?
Just trying to understand why you are so clear about this.
bitcoin exchanges
A quick resort to good ol' ixquick yields numerous sites listing exchanges where you can buy "real" currency for bitcoins (BTC), BTC for "real" currencies, and even invest in BTC derivatives (shudder!!).
One good listing is here and another here. If you're in the USA, I recommend the former as it lists more exchanges for USA users.
I'm not SnappleBC, but I suspect (s)he's "so clear about this" because (s)he knows this information is out there, easily to be had.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Thanks for ixquick. Will check it out.
I've been using DuckDuckGo, but it seems like its bots/crawlers are not as dense as Google's. So, less comes back than I am used to. Not saying that's unworkable, but it is noticeable.
ixquick
...... is an "anonymized" version of Google, with some additional crawlers of its own. Unlike Google itself, ixquick doesn't track its users.
One downside: ixquick re-evaluates all results for "relevance". So Google might find stuff that won't show in ixquick's output. To get at this stuff, you need to search directly on Google -- with all its downsides.
(I hate evaluation for "relevance". If I ask for "caucus99percent", I don't want Daily Kos. The address of this site should show up first, but often doesn't; the search engine, not you, gets to decide.)
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Cryptocurrencies
Are useful to move money across borders to circumvent currency controls. And of course as a speculative instrument . But little else at this point. Complicated, hard to understand and fiat. There are over 100 or more of them and their quick proliferation makes me wary. Extremely useful to high money individuals in niche circumstances otherwise not so much! Just like gold and diamonds someone can put a gun to your head, or take your children and rob you of them. If they become popular sovereign states will ban them and make their own block chain fiat.
We are at a time when PTB will initiate kill squads to take out hackers correctly identified or not. Crypto makers will follow with extreme sanctions. States simple won't allow this end around.
That's why the Chinese love bitcoin
China is in a massive credit bubble, so the Chinese government has increasingly applied capital controls to contain the outflows.
Besides speculators, this is one of the key drivers of bitcoin.
Well, the U.S. Dollar
is a "fiat" currency - Gold Standard been gone forever now. As for TPTB protecting what's theirs - our money - that's true, but they're gonna need a big army to stop this juggernaut. Not to say it won't happen, becuz they have more money than God Almighty. But, it ain't gonna be their usual cakewalk.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Exactly
It is both distributed and anonymous. It's just as hard to kill as P2P. Could they do it if they "released the hounds"? Sure. The US Government is big like that. But man it'd be an awful lot of hounds they had to release and an awful lot of secondary consequences to that. They already tried simply making it illegal and that went nowhere.
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
"If they become popular sovereign states..."
The idea that governments or multinational corporations will leave this field to libertarian amateurs is quite conceited, but what else does one expect from techno-utopians? On the currency markets, e-fiat currencies are lost in the noise. The big boys, who always want to be first in line for new ways of separating suckers from their assets, are in the planning stages for their own currencies.
The bottom line on e-fiat currencies are that they will simply move money creation from theoretically accountable governments to unaccountable multinational corporations. Has no one noticed Apple cash, Samsung cash, etc.? Has no one noticed all of Wall St. piling into ICOs?
The romantic, wild west aspect of bitcoin is a momentary blip at the beginning of more confiscation by computer. There is no freedom to be had by these technological means. e-fiat devotees think a bunch of hackers can out-resource and out-think Wall St, who buys hackers by the division.
A
from priceless to valueless
As I've said before here on c99, from priceless to valueless in less than one hour.
The only question: what hour.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
@thanatokephaloides
Would that be any harder for a group of big speculators to rig than the stock market?
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
rig the crash
No, it wouldn't.
My point being: once a cryptocurrency becomes so valuable that trading in it stops, its value instantly falls to zero by itself. Cryptocurrencies only have value while they're still being traded. The second they stop moving, they die -- just like sharks and rays!
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Yeah, that's another part of the equation
Does bitcoin have vulnerabilities? Yes. Can crooks have their way with you? Sure if you're not careful and maybe even if you are.
But consider the alternative. I KNOW crooks have my money as long as it's in Wall Street's hands. I watched them steal 40% of it only a few years ago. It's hardly like USD is safe & secure in the hands of the criminals on Wall Street.
That being said, I'm not rushing to turn all my retirement funds into BTC. I'll stick with my 0.04805001 BTC and buy some more if I need to do a purchase.
A lot of wanderers in the U.S. political desert recognize that all the duopoly has to offer is a choice of mirages. Come, let us trudge towards empty expanse of sand #1, littered with the bleached bones of Deaniacs and Hope and Changers.
-- lotlizard
I thought bitcoin was
dead three years ago. It's still here. And likely to be here. If nothing else as a "Gaming" currency, but it very likely survives. If it were gonna be dead it would have been.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
How does one actually spend bitcoins?
I mean is there some kind of debit card that gets issued, that works in card readers?
native
spending bitcoins
No.
Bitcoins are transferred directly through the internet between encrypted files called "wallets" which exist on users' computers and/or similar devices. The Bitcoins themselves are unique strings of digits.
The task performed by Bitcoin "miners" is to make sure that the string of digits remains unique and only exists in one wallet at one time. This takes enormous amounts of computing resources. Owners of such "miner" systems are permitted to create one new Bitcoin for a certain amount of this work accomplished.
If that's as clear as Mississippi mud to you, don't feel bad. You actually understand it!
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
That's a badass description, thanatokephaloides!
You should write . . . for Dummies books! Or maybe just one with all sorts of explanations of things you know about. Sure wish I had one of the latter from my dad.
@Deja
Great idea - as long as thanatokephaloides continues to educate dummies here like me who can't afford to buy books, lol.
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
Or, like any other
currency. Goes from your "wallet" to some human or store or bank that accepts it, just as they accept Visa. Your "wallet" "attached" to your RL bank card or Apple Watch, or...
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
attached
I may not have this detail "nailed down" as well as I'd like, but I believe bitcoin wallets exist in the bitcoin system only. This is, again, because there's no central bank in bitcoin, and other currencies are simply merchandise in the bitcoin world.
However, it is entirely possible that one or more of the exchanges have enough counter-parties wanting to sell bitcoin that they can offer a service like you suggest; hence my hedging. So if you uncover an actual offer of an "attachment" service like you describe, I'd be interested in knowing about it.
After all, I only learned yesterday that some exchanges were offering transactions in bitcoin derivatives, so.......
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Dunno, they might not
be, I'm just using the Linden method. Or, maybe it's just "wallet" to "wallet." But, if bitcoin is accepted in RL there has to be some way - those circle scanner thingys, wallet-to-wallet, something - to do that. Retailers now use Apple Watch, so... And, Apple is Yuuuge enough these days to "cover" bitcoin purchases via their watch. Would be a Very Smart move on their part in my less-than-humble opinion. It would "legitimize" the currency, then watch the rush to "get in on the ground floor." And buy a watch. Damn I should be in marketing. or not.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
I have never understood how bitcoin works
If people want to cash out their bitcoins, how do they do it, or is that even an option? And if only 5 places on the internet accepted it, then what's the draw?
How much was one worth when this first started, and why would anyone buy one for close to $5 thousand dollars if there's a chance for it to go down?
Am I even asking the right questions?
@snoopydawg
It's a gamble. And if I had any money, I certainly wouldn't use it to buy virtual money...
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
Exactly. It's like Vegas.
You take $2,500 to Vegas every 2, 3 years expecting to get home wth a dime in your pocket. Anything more is "profit" (or savings) for the next trip.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
snoopydawg's bitcoin questions
Cashing-in and cashing-out of bitcoin is done at exchanges set up for this purpose. The problem here is that one needs to have a counter-party at the exchange willing and able to perform the opposite side of the transaction with you. There is no central bank in bitcoin; it is a totally self-determining fiat currency.
Again from the Wikipedia article: "The value of the first bitcoin transactions were negotiated by individuals on the bitcointalk forums with one notable transaction of 10,000 BTC used to indirectly purchase two pizzas delivered by Papa John's." I shudder to think that today each of those pizzas would have cost 25 million dollars!
Yes, indeed, and then some!
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Thank you for the explanation
I think I'll stay with regular money for as long as we are able to do so.
Anyone know how far away or how many years our cashless society plans are?
gjohnsit?
Ten years. Tops.
Banks don't even bother handing out checkbooks anymore. "Here's your new Debit card, have a good day." Checkbooks already history.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
paper checks
Actually, I do business with merchants who still don't take cards. So I still need paper checks!
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Well, those fogies in for
a rude awakening, becuz checks going the same way as cash. When cash gone checks gone. When I opened a "checking account" at my local yokel Credit Union 4 or 5 years ago, having moved it from the Giant Monster MegaBank - Key Bank - to the C.U., the C.U. gave me a Debit card and a thank you. No checkbook. Now, I suspect and expect that if one asked for one they would oblige. But I didn't ask - assuming the obvious, that I would get one - and didn't get one. I suspect and expect that's the way ALL banks do business these days. Don't get one unless you ask for one. And, I'm betting the "kids" (under 30) don't even know what a checkbook is, or how to use one, exclusively live on plastic.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Cash out versus spend
Bitcoins are merely tokens that are traded. If you want to "cash out", you have to find someone willing to trade cash money for bitcoins. Otherwise, to "spend" you find someone who will trade bitcoins for groceries, airplane tickets, hotel rooms, guns, drugs, blood diamonds, etc.
Bitcoins, like fiat money, are only valuable to the extent that society (or some large enough segment of it) says they are valuable. Unlike hard money (gold, silver, diamonds, platinum...), which have intrinsic use value.
Some claim that "mining" bitcoins creates intrinsic value because the number mined stands for a lot of computer work. But, absent the bitcoin system, its just a number. Just as, absent the Confederate States of America, a Confederate dollar is just a piece of paper.
Actually, as a physical object, a Confederate dollar has value as a "collectible" (antique), so it is worth more than a bitcoin.
Why would any pioneer
part with whatever real item of value (fur) they had for the first paper US Dollar bill? Currency has to start somewhere.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
I take your point, but the timing is off
The original US money was hard money
Until Federal Reserve Notes, only greenbacks, printed during the Civil War (?and withdrawn soon after it?) were fiat money. Fur trading days were over well before the Civil War:
So, just to be pedantic, the only government money available to fur traders in their heyday was US gold and silver coins.
End of pedantic quibbling. I do take your point.
Good points. I was just
trying to make the point that somebody had to accept the first Paper dollar as something of value. Coins, of course, being around for centuries. However, I thought paper money appeared long before the Civil War. Imagine the first yahoos taking a gander at a paper bill. "What the hell do we do with this, wipe our butt?" Thanks!
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
currency start
Because that bill had printed clearly something like "payable in lawful money (i.e., precious metal coin) on demand".
The "Federal Reserve Note", where the bill is the money rather than something that represents the money, was invented well inside living memory. Silver Certificates, redeemable in silver coin, were still being issued into the 1960s.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
price of stocks and banks fictitious creation
of money is more of a worry.
http://www.oftwominds.com/blogaug17/world-domination8-17.html
The 5 Steps to World Domination
August 29, 2017
You don't need an army to achieve World Domination; all you need is enough cheap credit to buy up everything that generates the highest value and/or income.
World Domination--it has a nice ring, doesn't it? Here's how to achieve it in 5 steps:
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
@ggersh
Nice to see it laid out like that and I wish everyone could... thanks for posting it!
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
One of my insuperable arguments when dealing with
libertarian doofuses dedicated to the privatization of everything is the simple observation that auctioning off every last natural resource to the highest bidder presupposes that the wealth of the highest bidder is a satisfactory representation of the value of the natural resources.
It's pretty trivial to demonstrate: imagine a bronze-age desert village where the libertarians gain control and demand that the rights to draw water at the oasis be auctioned off. So the guy with the most goats bids all of his goats, and acquires the water rights. He now owns (in practice at first, in deed eventually) everything, because the real value of that water was never limited to the number of goats owned by the guy with the most goats at the moment they held the auction, the real value of that water was, is, and for the foreseeable future would be 100% of the economic output of that village for all the rest of time.
Add in the concept of financialized credit, never mind actual physical wealth like goats, and the truth of your comment becomes crystal clear -- everything will end up in the hands of those to whom such credit is offered. This is pretty much what happened in the aftermath of both the S&L disaster and the real estate collapse -- foreclosed properties were bundled into large holdings (by the Resolution Trust in the S&L debacle, by the banks themselves -- I think -- in 2009) and offered up at dimes on the dollar to large scale operators who had the resources and the credit to manage such acquisitions.
The irony of Hayek's famous title is that he was indeed spelling out the Road to Serfdom -- he just had everything exactly backwards.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
financial engineering built the impossible
a system based on GIGO, garbage in garbage out.
and to this day and forward the wardens of WS/DC/NYC
believe in it's total assumption that "greed is good",
but also on steroids believing "greed is owed to us"
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
yep. by the undeserving
sloth at the bottom of the troth (sp).
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
C.H. Smith is sometimes wrong, but in this case...
I tend to agree.
We have lost control of credit creation, and the counterfeit money has been buying everything in sight for the last forty years.
We don't want to go back to a hard-currency (gold) standard because that would just lead to known bad outcomes - hoarding, market cornering, deflation as the economy grows.
As I said above, we need to rethink money. We need an alternative to the "goldsmith receipts" that are the idea behind fractional reserve banking. We need to spend money into circulation via the citizenry, not some privilged bankers who get to charge interest on the nothingness that they have been given the right to materialize into "money".
There's no going back
on the gold standard. And that's not a bad thing. The bad thing is in "Government" pretending there's some sort of cap that prevents gov't from expanding Social Security and changing to Single Payer health care becuz, "the country is broke and even if it weren't we can't afford it. We've reached the cap" Which is total horse$h!t. There is no cap, country not broke, can "afford" it.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Exactly.
The MMT people are mostly right.
It gripes me no end that the government allows banks to actual spend the money into existence, and then collect interest on that which was created out of thin air.
Even in the current version of fiat currency capitalism, we could simply create money directly into individual citizen accounts, and let the interest flow to the citizens not the bank. If the bookkeeping overhead per citizen is too high(given computers tracking everything, I doubt bookkeeping would be too expensive), citizens could be pooled into groups. For example, a bank wants to loan company X $1 M. It takes $1,000 from each of 1,000 citizens accounts to make the loan. Then it divies up the principal and interest as it is paid and puts in back in the citizens' accounts.
This scenario debunks the "if the government could just create money, people would vote themselves all to be millionaires" lie. If the citizens' income depended on loans being paid back, they would be as tough on lending as the banks are.
yep. And your Loan
example is as it should be. Have account holders set up a separate "Loans" account, the money in there Cannot be used by the account holder until it hits a certain amount - and then only 25%. Bank takes equal amounts from user Loan accounts... Excellent idea. Will never happen, becuz banks want it all, but is the way it Should happen. American citizens Should get a slice of the American pie. This is a pretty good way to get a slice!
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
Except for the hackability they're basically cabbage patch dolls
Oh, and after they're worthless, you can't give them to your 3-year-old niece to play with.
Heh! Russia backpedaling on Bitcoin
Only a few hours after I posted above about governmental mischief related to crypto currencies. zero hedge posts http://www.zerohedge.com/news/2017-08-29/russia-backpedals-bitcoin-unvei.... No prescience on my part since my observation is an obvious one when central banks and their PTB feel threatened they act. If they can't take your Bitcoin they will regulate or shut down the exchanges.
Except, of course, it doesn't
require Exchanges, can survive P-2-P. Not that your news is good, Exchanges would be prefered, just that they're not required to survive. Bitcoin essentially is a p-2-p currency.
Edit: wouldn't > would
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
somewhat tragically, i begin to sense that i'm going to have
to write a couple of fairly dense essays here about what money is and what money isn't, and vice versa, but the lead is this: Whatever cryptocurrencies are, what they are not is feasible exchange media for the vast majority of all ordinary human economic activity, and they never can be unless and until some fundamental changes are made in the way they function -- changes that are not necessarily possible.
As a teaser, I will confidently state, without doing a single second's worth of research, that no "currency" or other medium of exchange has ever experienced a rate of deflation comparable to that of bitcoin in all the history of Modern Money, as the MMT'rs would have it; conversely, a handful of currencies have experienced rates of inflation comparable to bitcoin's deflation, with disastrous consequences for the holders and the issuers.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
not feasible
In bitcoin's case, several of these problems are actually there by design. Example: the planned deterioration and eventual extinction of the creation of new bitcoins. This feature guarantees the trajectory of bitcoin to be continuous deflation followed by irretrievable systemic collapse. As I've remarked before, bitcoin (BTC) only has any value as long as it is being traded. Once a BTC becomes so pricey that trading halts, its value plunges to zero, all by itself. As others have remarked in this thread, the "exit doors" will be locked, bolted, and welded shut at that point. Exchanges won't work, as there will be no counter-parties wanting to acquire more bitcoin.
Even bitcoin's official voice offers this caution:
That last sentence is key. It is entirely possible that the bitcoin protocol may be modified in the future to fix the problems we see so clearly here. But it isn't likely, considering how hard it is to make major changes in the bitcoin protocol.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
You are absolutely correct about the established
limit on the eventual size of the circulation.
Such a policy is inevitably deflationary, and inevitably favors the wealthy. That was the entire source of the Gold vs. Silver debate in the US in the late 1800s, and the motivator of WJB's famous "Cross of Gold" speech.
We might hate our current central banking system, but it exists as a response to fundamental problems with any unregulated system of money. It is in the interest of the masses to be able to regulate the money supply -- to increase AND decrease the circulation in response to market conditions. While it conceivable that a central banking system can be reformed to operate so as to respond sensibly to the needs of the people, it is very difficult to see how a decentralized cryptocurrency can be similarly controlled. This is perfectly in keeping with libertarian macroeconomic ideology -- an ideology that is simultaneously infantile and criminally insane.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Any indication that bitcoin should EVER be treated as
an "investment", presumably to generate new wealth rather than simply to hedge against inflation in sovereign fiat currencies, violates the first principle of any "good" currency. You shouldn't be able to make a fucking dime buying and selling bitcoins, and if you can the system fucking sucks, having failed at the single most important reform that we need with respect to our current fiat currencies -- that bloodsuckers can pull real economic value out of the system via arbitrage and gaming the exchange system.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
@thanatokephaloides
Someone commented that all they need to do is change the exchange rate (computer work needed per bitcoin created) in order to basically confiscate your "money". It would be the e-money version of a negative interest rate.
change the mining exchange rate
And that change is baked in to the bitcoin protocols. As time goes on, fewer new bitcoins will be provided for a given amount of mining work. To insure that miners stay on the job, they are also paid transaction fees (i.e., old bitcoins) for that work. Eventually, these fees are supposed to become the sole reward for bitcoin mining.
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
@UntimelyRippd
Not to mention that it's incredibly stupid to have a medium of exchange dependent upon power supplies/internet, especially in a world of increasing disasters and ever-increasing hacking and 'legalized' theft by financial institutions... the 'cashless' society can only be intended for the dispossessed to wind up destitute, one way or another.
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
Exactly. It is the Only
reason for Cashless. The same reason major Employers of min. wage workers - I'm looking at You, Walmart - pay those employees with their own Money Card or Debit Card. So they can skim a penny here or nickel there - per transaction. And do. Once banks go Cashless they can raise ATM fees another dime or three. Hell, when they first came out ATMs were Free to use. Then they tacked on a quarter... now it's more like a Dollar or more. Even at 25¢ per trans that's a Lot of money they're getting back on the backs of the poor and working poor, middle class even.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
As long as the government exists...
...and as long as you cannot pay your taxes with Bitcoin, Bitcoin is functionally worthless...
I want my two dollars!
Nonsense.
It's every bit as legitimate a currency as the U.S. Dollar - both fiat currency.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
No. The law says only US currency can pay taxes.
That is the way currencies, whether hard money or fiat money, get a grip on society. You are forced to use them.
This has been true since the British invented backing the Bank of England with tax revenue back in 1694. The pound is backed by the entire British economy and the state's ability to tax that economy. Bitcoin is backed by nothing.
To expand a little on the power of a government-backed currency, the British used the demand that taxes in India be paid in British currency to force farmers into very unfavorable prices for their goods. Indians would have been perfectly happy to just trade among themselves and ignore British currency. It was only the law, backed by military force, that imposed the British economic dominance of India and incidentally destroyed the Indian cloth industry.
Bitcoin is not a fiat currency in the nation-state sense. No one is forcing anyone to pay in bitcoins under penalty of law.
Bitcoin is S&H greenstamps - some token that some people have agreed to trade with. But it is not a fiat currency. Nobody demands you must pay in greenstamps. That is why I call it an e-fiat currency, to distinguish it.
Of course, the game plan is to get the suckers in with "freedom". Then, some outfit like Goldman Sachs will grab control of the board of Bitcoin, do a deal with the government they bought, and we will wind up with true e-fiat money owned by Wall St. instead of the citizenry.
So, if it isn't accepted
as payment of ones taxes it ain't "real money?"
US currency is backed by the country. Essentially our GDP.
Our GDP doesn't have a damn thing to do with taxes.
Hell, our taxes aren't even used to balance the budget.
I don't own bitcoin or even know where to find any to buy,
have no dog in the fight. But, if it can be exchanged for goods or services I would call that money, albeit fiat money, same as US currency. The fact that the IRS doesn't accept it as payment of taxes... what the hell does that have to do with the price of tea? Our taxes don't back our currency. I don't own any, but I cheer it on, wish it success, 'cuz it's one of the damn few processes challenging the High and Mighty, PTB. May they eventually win! And win big.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
"Taxes are the price of civilization."
When a foreign government or a bank buys US Treasury bonds, it expects to be paid with tax dollars. If the government can't collect enough taxes, the bond market will stop buying the bonds, or demand higher interest rate for the risk that our GDP+government will not make the payments.
It is naive to think that the credit of the US government has nothing to do with its ability to collect taxes. Its naive to think we would have a civilization if public funding (taxes) was replaced by billionaire "investment". If you think the government doesn't matter, you could be a Libertarian ;-).
First, as one conversant with MMT, you know the budget doesn't have to exactly balance. I do agree that the deliberate refusal to balance the budget, along with the refusal to invest in infrastructure (roads, education, healthcare) is all part of TPTB's plan to destroy the government and replace it with corporate feudalism - with Wall St. at the top of neofeudal heap.
As I said above, there is no guarantee that Bitcoin cannot be hijacked by Big Money. The end result is simply a privatized money system, completely controlled by TPTB with zero input from the citizenry. There is no guarantee that the government(s) cannot simply start their own e-money systems, privilege them, and simply move money online.
Myself, Ponzi schemes and crooks aside, I find Bitcoin and its ilk to stink of Libertarianism. Its the same kind of "freedom" (for people with lots of money) talk that the Libertarians are always screaming about. Its the same kind of "I hate the government" rhetoric that they use to emotionally appeal to suckers.
The concept of blockchain is OK. Its all in the implementation. Just as the concept of iron was OK, but its first implementation (after swords) was chains to hold slaves captive. I do not see Bitcoin as enabling democracy as much as it enables Libertarian fake-anarchy to the benefit of the already well-off.
ultimately, anyone who espouses libertarianism
on the grounds that governments are run by bad people who will exploit the system for their own gain (or that of their patrons) is living in a fantasy world. at least there's a possibility for the people to wrest away control of the government and arrange for it to operate in their best interests. in the absence of such an institution, all wealth will rapidly concentrate into very few hands indeed, and having thus concentrated will reduce the masses to serfdom -- thus my recent comment on the irony of Hayek's famous title, affixed to a book that gets its causes, effects and predictions exactly backwards.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
it is not even approximately as legitimate a currency
as US dollars. not even barely. it's closer to Magic the Gathering cards than to US dollars.
just because it's created by a strange algorithmic fiat doesn't make it just like some other thing that's created by fiat.
everyone gets excited about the "fiatness" of most sovereign currencies these days, as if there weren't an essential element of imagination in the assignment of central significance to "precious" metals or any other "non-fiat" currency basis. consider that all over the world, folks feverishly work to extract gold and silver from the earth's crust, in order to lock that gold and silver up in vaults where it will never find any useful application. what, precisely is the point then of extracting the gold and silver from the earth's crust? as i've noted before, you could just leave the stuff locked in the "vault" where it was found (we can pretty reasonably estimate quantities in well-defined and measured lodes) and use that as the basis of non-fiat "wealth". as it is, "mining" for bitcoins is exactly as pointless as mining for gold -- a squandering of resources (accompanied by obnoxious and dangerous pollution) undertaken to bring into existence an arbitrarily scarce commodity that has no essential purpose.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
It (bitcoin) can easily exist
"In World" or "In Game." Whether or not it can exist in RL depends on many factors, one of the most important ones being the faith of the holders. The other being who in RL accepts them. Lindens have been around a long time now, and they easily transfer to my bank (Debit) card to then use anywhere in RL. I've always thought that Second Life is a Great Place for the Mob to "clean" money, with little taken off the top. Was even better there 10 years ago when they had all the "Games of Chance," Carnivals and prostitution - just like Vegas without leaving home. Alas, Linden Labs put an end to that. And lost a lot of netizens. Ahh, the good 'ol days...
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.