News & Analysis
The Pure Fiat Con: Every Transaction Available for Official Scrutiny – and That's Just the Point?
Bitcoin Exchange Scam – Bitcoins Are Now Worthless ... What do you think? Would you put your life savings into Bitcoin? – NERDr.com
Dominant Social Theme: Use pure fiat and record all your transactions ... just to be sure you stay anonymous!
Free-Market Analysis: In a previous article we examined what increasingly seems to be a monetary con – Bitcoin.
Bitcoin is a pure electronic, fiat currency with no metals backing at all. It is accruing "value" and has huge exposure on such mainstream sites as Reddit.
Supposedly you can make use of Bitcoin anonymous by using Tor. We doubt it. Here's something recently posted at Reddit:
Anything in Tor is completely traceable. This is an important point, so I'll reiterate it in big scary letters:
TOR IS COMPLETELY TRACEABLE
Any low-latency mixnet is. There's no two ways about it. Anyone who can observe a sufficiently large part of the internet over time can correlate your traffic to that of the server and get a pretty good idea that it's you.
I'll observe your IP connecting to an entry node and sending 13981 bytes to it. Then I'll observe an exit node sending exactly 13981 bytes to a server a second later. That's you, with an overwhelming probability. It's a bit of a simplification, but it's really that easy. I just have to be powerful enough to be able to observe large parts of the internet, since Tor nodes are spread around the globe.
Bitcoin may well be one more way of acclimating people to using traceable actions in an electronic environment. What is not traceable may surely be traceable in the future. You just have to store the data.
People remain enamored of Bitcoin despite all the news about its manipulation. It's not like gold or silver that have a history of thousands of years of value.
In fact, Bitcoins have had significant ups and downs – and various charges of manipulation – but is continually promoted in the manner of elite dominant social themes. These are fear-based promotions aimed at pushing middle classes to give up power and wealth to elitist facilities building world government.
In this case, the fear being promoted is of central bank currency – and the solution is UN LETS currencies and pure fiat like Bitcoin.
The idea is apparently to get people used to keeping track of EVERY transaction they make – because that's how these sorts of currencies work.
At the same time as these evil people promoting these currencies – and surely evil is not too strong a word if we are correct in our suspicions this is a psy-op – advance the idea that using gold and silver only enables the power elite.
The pressure to use these ersatz currencies has been building for decades, even centuries – as good elite promotions tend to do. Now there is a virtual frenzy to use these monetary facilities.
There is a great deal of learned talk about "usury" and it suggests that people who want to charge interest to recognize the time value of money are criminals who ought to go to jail.
The Protocols of Zion are invoked by such worthies as the "inventor" of social credit, Major Douglas, and his co-authoritarian partner, Silvio Gesell – of whom Douglas was openly contemptuous for advocating a sinking-money tax beyond what any human had conceived before.
The viciousness and bile is almost endless. But perhaps that should only be expected given that these currency methodologies – criminalization of interest, for instance – were utilized by Adolf Hitler to build his command-and-control war machine.
Poison of Neo-National Socialist Public Banking
And now it would seem the power elite has brought them here – to the modern-day West – for a second run. The elites always do everything twice it seems.
Shame on these paid apologists of the elites – or so they would seem. It is said, for instance, that the use of such currencies will deal a blow to Jewish interests as "all" Jews (and surely every Jew is a Zionist) are interest oppressors. These currencies, then, are positioned as a Christian duty.
Even Ezra Pound finally recanted of anti-Semitism, realizing that to tar all people of a certain type as "evil" was a "stupid suburban prejudice." But that won't stop what appears to be the modern purveyors of hate.
We recently reported on the Socialist Party of Great Britain's posting of an article entitled "Major Douglas rides again: The revival of currency crankism." You can see our article about it here: Currency and Credit Schemes Blow Up ... and Go Green.
If anyone can recognize Fabian propaganda, it's a fellow socialist! The article begins as follows:
In the course of our nearly one hundred years of socialist activity, one of the ideas that we have had to deal with from time to time has been currency crankism—the idea that economic and social problems are caused by some flaw in the monetary system and that what is required to put things right is not to get rid of the profit system that is capitalism but mere monetary reform (of one kind or another, depending on which particular school the currency crank belongs to).
Between the wars the most popular school of currency crankism in Britain was Social Credit, based on the ideas of Major Douglas (as he was known). His explanation for the slump—of poverty amidst potential plenty, of unmet needs alongside idle factories and widespread unemployment, of piles of unsold goods being destroyed—was simple, not to say simplistic: it was due to a lack of purchasing power, to people not having enough money to buy what they needed or to constitute a market worth catering for.
The solution, too, was simplistic: distribute purchasing power free to people in the form of a "social dividend" paid by the government. Douglas believed that banks could "create credit" by the mere stroke of a pen, but that they deliberately kept money scarce so as to be able to charge a higher rate of interest. Hence his solution that the banks should be taken over by the government and their supposed power to create credit exercised but in the general interest, as "social credit".
You see the essentially authoritarian nature of these people. Not only have they figured out what ails the world, they're perfectly willing to force their choices on YOU using government power.
The article also argues that banks cannot "create credit" as they are "essentially only financial intermediaries, borrowing money at one rate of interest from people with cash to spare and lending this at a higher rate to those needing money to spend or invest, their profits coming from the difference between the two interest rates."
Good for the socialists. When it comes to analyzing fraudulent promotions they have a lot of experience and good judgment, too. This was only the end result of continual research into how these currencies worked and who was behind them. Their promoters may have purposefully been brought in from abroad (an old Intel trick).
After continually researching these currencies and finding out just how deeply the UN was involved in them, we realized that the reason for the promotion might well have to do with conditioning people to accept that all their transactions were to be logged and monitored. In LETS programs these transactions may even be made public!
Bitcoin itself is just part of a larger questionable series of facilities based around pure fiat currencies that are being sponsored by the UN and were developed in conjunction with the power elite's Fabian socialists.
In our article entitled "Elites Promote Pure Fiat Currencies – Mutual and Social Credit – for Traceability?" we pointed out what seemed to us the evolution of the con.
One after the other, websites and blogs have suddenly sprung up like mushrooms dutifully prating the idea that people should not be allowed to use interest, that gold and silver were entirely controlled by the Rothschilds (they are not) and that monopoly private banking was the duty of the government (God help us) not private "banksters."
It seems to us, perhaps, to have the signature of a power elite promotion ... [Even] the US government via Lockheed Martin is anticipating the popularity of such systems as well – both Bitcoin and something called Secondlife.
Why the heck would the military-industrial complex search out specialists in such? Understanding the way these currencies work better now, we think we've figured it out.
Traceability! Almost all the modern schemes demand ledgers where transactions are recorded. It surely would be easy enough for "authorities" to gain access to these records, if they wished to.
You don't have to be doing something illegal to want anonymity. With these systems you surely don't seem to get it. Their very operation demands intensive record keeping, sometimes of every transaction.
This is a forensic financial investigator's dream situation. It is possible, perhaps, to reconstruct just about any transaction. It's not like paper fiat where greenbacks are anonymous and gold and silver are traded (often) without identifying signatures ...
When we researched these systems we were astonished to find that the United Nations was a big proponent of them and that one of the top promoters of such systems was Margrit Kennedy − who used to work for UNESCO.
Conclusion: You can see some additional articles here:
Why Is the UN Installing Mutual Credit/Pure Fiat Systems Around the World?
New Book Further Confirms Eco-Affinity of Alternative Currency Proponents
Paper Money and the UN Perfect Together? More Currency and Credit Exchanges Supported by the UN
Are 'Green' Reciprocal Exchange and Credit Systems Part of a Larger Elite Promotion?
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Posted by OptionalFred on 09/18/12 09:48 AM
This article deals in a lot of FUD and zero facts. Bitcoin undermines the power of central banks and the Elite. Why would they create a tool like bitcoin that undermines their own power base, the creation of money.
Bitcoin solved the problem of money supply, thus freeing up the currency to engage in a feedback loop of velocity and value being able to support each other. That's never been possible in any currency system in all of human history.
Ask the developers of bitcoin yourselves:
Click to view link
Or just remain living in 5000 years of Sumerian economics. Your choice.
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Posted by Don from the Republic of Lakotah on 09/18/12 11:16 AM
It starts with Bitcoin and the next thing you know the powers-that-be create their own mandatory digital money and call it iLoot.
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Posted by OptionalFred on 09/18/12 11:59 AM
Don, the powers that be can't even control bit torrent, another peer-to-peer network that gives them fits. The powers that be HATE peer-to-peer networks. They love centralized servers because they're easy to shutdown.
In terms of sheer computing power, bitcoin is the most powerful peer-to-peer network ever created.
Plus, two young businessmen in the bitcoin got to bitchslap some Federal Reserve lawyers this past Saturday:
Click to view link
I still can't believe I have to defend something that actually twarts central banking on the Daily Bell.
Reply from The Daily Bell
We are not against currencies of any kind, even unbacked currencies if the market welcomes them. But the more we examine Bitcoin, starting with its weird anonymous found "from Japan," the more questions occur to us.
Like the UN-sponsored green fascism of LETS "credit" currencies, it seems in some sense like it could be a backdoor government psyop for reasons we offer in the article ...
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Posted by freeman on 09/18/12 12:54 PM
TOR may be traceable but a what cost? I submit that the cost makes it impractical. That is why Silk Road (the online free market where drugs are also traded) is still in operation.
Furthermore, the author of this article did not take into account the numerous mixing services that obfuscate the origin of bitcoin payments.
The author also makes the fallacious argument that bitcoin is "not backed by anything". I've got news for him, neither is gold. Commodities are valued for what they are and what they enable people to do. Bitcoin is a new commodity created to serve market demand for better money. It is currently valued at around $100 million.
The author needs to do more homework before writing an article like this.
Reply from The Daily Bell
It's been claimed Bitcoin fulfills two of four criteria for money. In fact, a major part of gold's attractiveness was that it could be used for the decorative arts. This was a UTILITY.
Now it is true that money does not need utility. It simply needs to be accepted. But what if those at the forefront of Bitcoin created it in a certain manner for certain purposes.
Here's a question: Why were the feds so determined to shut down eGold while Visa is [reportedly] ready to issue Bitcoin credit?
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Posted by freeman on 09/18/12 02:05 PM
As far as I know, Visa is not issuing bitcoin credit. There is no "bitcoin" company. Tere are only services providers like Click to view link who are planning to use existing banking mechanisms (pre-paid debit cards) to service their customers and give them a convenient way to convert their bitcoin back to national currencies.
I suspect that at some point Visa would block Click to view link if bitcoin ever became a large enough threat although, by allowing these conversions, it would give Visa a way to monitor a portion of bitcoin transactions. This is why it is important for people to use non-bank exchange services altogether (see Click to view link, Click to view link, http:/Click to view link).
Also see:
Bitcoin - A New Commodity Created To Serve Market Demand
http://wp.me/p1adwa-28
Reply from The Daily Bell
We didn't write about a Bitcoin company. As for credit cards, there are various reports circulating; here's one ...
-------
Bitcoin-based credit card reportedly due in two months ... BitInstant is creating a Bitcoin-funded card that would function as a standard debit/credit card and would be honored where ever MasterCard is accepted, according to the transcript of an interview allegedly conducted wth BitInstant co-founder Charlie Shrem. During the interview, published by Coding in My Sleep, Shrem says the card might launch within the next six to eight weeks.
Click to view link
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Posted by Adam on 09/18/12 02:46 PM
SSRN: Quasi-Commodity Money by George Selgin
Click to view link
This paper considers reform possibilities posed by a type of base money that has heretofore been overlooked in the literature on monetary economics. I call this sort of money 'quasi-commodity money' because it shares features with both commodity money and fiat money, as these are usually defined, without fitting the conventional definition of either; examples of such money are Bitcoin and the 'Swiss dinars' that served as the currency of northern Iraq for over a decade. I argue that the attributes of quasi-commodity money are such as might supply the basis for a monetary regime that does not require oversight by any monetary authority, yet is capable of providing for all such changes in the money stock as may be needed to achieve a high degree of macroeconomic stability.
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Posted by obiwan1947 on 09/18/12 03:29 PM
As far as your contention that all TOR is traceable, how would you then explain the continued existence of "Silk Road," a TOR-based algorithm that exists beyond DEA traceability? Everything drug-related is sold openly (see YouTube videos concerning it), capitalistically, and apparently outside the ability of government to shut it down? Bitcoin works very well there as currency.
Reply from The Daily Bell
From Wired ...
While the hack took place quite a while ago, the basics of Tor remain the same.
Lesson From Tor Hack: Anonymity and Privacy Aren't the Same
Click to view link
As the name implies, Alcoholics Anonymous meetings are anonymous. You don't have to sign anything, show ID or even reveal your real name. But the meetings are not private. Anyone is free to attend. And anyone is free to recognize you: by your face, by your voice, by the stories you tell. Anonymity is not the same as privacy.
That's obvious and uninteresting, but many of us seem to forget it when we're on a computer. We think "it's secure," and forget that secure can mean many different things.
Tor is a free tool that allows people to use the internet anonymously. Basically, by joining Tor you join a network of computers around the world that pass internet traffic randomly amongst each other before sending it out to wherever it is going. Imagine a tight huddle of people passing letters around. Once in a while a letter leaves the huddle, sent off to some destination. If you can't see what's going on inside the huddle, you can't tell who sent what letter based on watching letters leave the huddle.
I've left out a lot of details, but that's basically how Tor works. It's called "onion routing," and it was first developed at the Naval Research Laboratory. The communications between Tor nodes are encrypted in a layered protocol -- hence the onion analogy -- but the traffic that leaves the Tor network is in the clear. It has to be ...
Tor anonymizes, nothing more.
Dan Egerstad is a Swedish security researcher; he ran five Tor nodes. Last month, he posted a list of 100 e-mail credentials -- server IP addresses, e-mail accounts and the corresponding passwords -- for embassies and government ministries around the globe, all obtained by sniffing exit traffic for usernames and passwords of e-mail servers.
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Posted by TheLibertyCap on 09/18/12 03:39 PM
Why would TPTB promote a currency that cannot be inflated?
It is indeed anonymous and the only way how to properly identify someone using it is through exchanges where you can exchange these coins for dollars or other currencies. People need to be identified by exchanges to be able to get the money out of bitcoin.
Tracing in the TOR network is impractical on larger scale if not impossible. DB is hasty drawing conclusions that TOR is insecure (seems like a dominant social theme itself :) If there are some issues with the network, I am sure hackers can figure them out. Bitcoin mixing services can be also used to make transactions anonymous.
Bitcoin is backed by the hashing power of a large distributed computer network mining these coins. Everybody can join. It is very similar to how gold is backed by actual mining. Remember, gnomes, you yourselves said that TPTB just hate money that can be simply dug out of the ground!
Its nice that DB finally opened a discussion about this topic though.
Reply from The Daily Bell
See this ...
Click to view link
-----snip
The Silk Road is an anonymous hidden service that you can access via the Tor network. It allows people to sell mind altering chemicals and plants in a more private and safe marketplace. The website is only accessible via the Tor network and transactions are carried out in Bitcoin.
Bitcoin is a P2P digital cryptocurrency that helps users conduct private transactions. Bitcoin is not entirely anonymous as a transaction log is maintained by the P2P network.
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Posted by BladeMcCool on 09/18/12 03:56 PM
As Tor gets bigger and more feature rich, the type of attack you outlined will no longer be possible. extra random payloads in each layer of protocol wrappings, and random extra communications to nodes that arent really neccessary to the end-to-end communication could further obfuscate things. Add in the VPN you use before you connect to Tor. Then throw in the plausible deniablity as to whether your machine, even if somehow successfully traced, was in fact the origin of any transaction. Add to this the fact that you can't really pin a bitcoin address to a physical person and even if you could its easy enough to lose or forget the decryption keys ... come on really? ... My bitcoins or any transactions I push out with them will not be linked to my physical person unless I go out of my way to link them. And calling me "evil" for promoting a better money system is pretty sad. Usury is the central bank charging interest on money conjured from nothing, not pricing for the time prefernce of money. How can you have a time preference on something that doesnt exist yet? .. thats central bank usury. You want to run a bitcoin bank and charge interest on loans and give interest on deposits and profit off the spread, go for it, nobody can stop you.
Reply from The Daily Bell
We didn't call you evil. Our point is that if UN-sponsored LETS systems and even Bitcoin are being offered to acclimate people to keeping fullscale records of every transaction in order to be entrapped later on, that would be "evil."
We wrote, "surely evil is not too strong a word if we are correct in our suspicions this [offering pure fiat systems) is a psy-op ..."
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Posted by johnblenkins on 09/18/12 04:03 PM
If Bitcoin can be exchanged for fiat how and who sets the exchange rate?
What is the Bitcoin/gold/silver ratio? Is Bitcoin pegged to the dollar,
gold, pickled gherkins?
Funny how Bitcoin is mined: So hard work and investment is needed to extract
this precious resource. Hmm we need a new square on the periodic table.
If Only we had this last 100 years followed Sumerian economics
The FEDs takeover of a fiat world would not be in play.
I trust that Bitcoin is not the device of any centralized cartel
let suppose it is not. If people want to trade in this new found
medium of exchange please crack away, allow the same liberty
to us flat earthers to carry on calling for the return of honest sound
money.
Come and compete with Gold that is backed by nothing but 4900 years
of undisputed recognizable tangibility .
So much so our masters don't want us to have it.
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Posted by BladeMcCool on 09/18/12 04:04 PM
I thought gold-as-jewelry primarily came about because it was preciously scarce and formable so you could keep on your person funds in the form of gold jewelry that could be used to pay to bury your corpse after dying in battle/war/whatever.
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Posted by NAPpy on 09/18/12 06:27 PM
I think digital currencies are part of the solution. I'm going to wait and see, until I see the following:
-Digital currency
-linked (anonymously and encrypted) to PM warehousing services
-linked to an anonymous and encrypted clearing service
-with portable (encrypted and anonymous) cards that you used to make your transactions
When bitcoin can do this, or someone else does this, then I'm jumping in. Right now, bitcoin just doesn't provide what I consider to be prudent services (based on my economic understanding of the functions of money).
Reply from The Daily Bell
Good points. At the very least people should be careful how much they commit to Bitcoin for a variety or reasons.
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Click to view link
A risky currency? Alleged $500,000 Bitcoin heist raises questions
Bitcoin, the decentralized virtual currency whose value has skyrocketed in recent weeks, faced a key test ... as a veteran user reported that Bitcoins worth hundreds of thousands of dollars had been stolen from his computer.
Ars Technica was unable to independently verify the user’s story, and he did not respond to our request for an interview. But whether the story is true or not, it highlights a major disadvantage of the currency’s much-touted lack of intermediaries. Bypassing middlemen frees users from government meddling and bank fees. But it also deprives them of the benefits those intermediaries provide, including protection against theft and fraud ...
Some other members of the Bitcoin forum expressed skepticism about allinvain’s story, but most believed it. Another member of the Bitcoin forums chimed in to report that he’d lost a smaller amount of money to the same Bitcoin address.
Forum members discussed several options, including calling the police and asking MtGox, the popular Bitcoin currency exchange, to block the funds from being converted into more traditional currencies.
Ars Technica talked to Gavin Andresen, the leader of the Bitcoin software project, about the incident. Andresen said that it would be difficult to confirm the authenticity of the report. “All Bitcoin transactions are broadcast on the network,” he said. “So if someone wanted to claim they lost a bunch of bitcoins, they could claim that any transaction on the network belonged to them.”
Still, the kind of attack described in the post is certainly possible. Andresen says he always emphasizes that Bitcoin is an experiment, and not (yet) for the faint of heart. “Unfortunately, this is an expensive test case for the guy who lost the Bitcoins,” he said.
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Posted by chretien on 09/18/12 09:01 PM
Daily Bell I love yu and have never disagreed with a single article you put out until this one.I am a bitcoin Click to view link is the neatest thing since the internet itself.You criticise bitcoin unfairly on all points.
Reply from The Daily Bell
The main points of the article regarding Bitcoin is that it is possibly not secure despite Tor and that in fact, there could be people with non-libertarian agendas involved with the product, including the founder whom no one seems to know anything about. Sorry you feel these are unfair suggestions....
Recent Bitcoin news ...
13 August 2012
BBC ... Bitcoin users sue over funds lost in site attack
A Bitcoin website - which handles virtual currency trading - has been sued by four users who said it failed to provide adequate compensation following a security breach.
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Digital Trends September 8, 2012
$250,000 Bitcoin heist leaves virtual currency exchange safe empty
... Bitfloor founder Roman Shtylman posted an open letter on the Bitcoin forums admitting that: “Last night, a few of our servers were compromised. As a result, the attacker gained accesses to an unencrypted backup of the wallet keys… This attack took the vast majority of the coins Bitfloor was holding on hand.” A later update stated that the hackers transferred 24,000 Bitcoins — around $250,000 in U.S. currency — to an unknown location, clearing out all of Bitfloor’s virtual cash reserves.
Shtylman promises to pay back users who’ve lost their Bitcoins using “current available funds.” The speed of that repayment may be an important factor for users: Over the span of only months, the value of Bitcoins has been up and down more than a yo-yo on a roller coaster. In the last 18 months, a Bitcoin went from being worth $15, to $3, to a few cents, to today’s $10 value. So 24,000 Bitcoins tomorrow could have a very different value from 24,000 Bitcoins today, leaving even repaid users very unhappy.
Read more: Click to view link
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The Atlantic Wire – Wed, Sep 5, 2012
A BitCoin Heist ...
Last night's Bitcoin heist of $250,000 (or so) worth of the virtual currency shows that this world isn't quite ready for an online alternative to dollar bills because the promises of deregulation aren't worth the safety hazards.
What happened at BitFloor was the equivalent of an online bank robbery, but without the FDIC protection that regular banks with regular money have. Specifically, BitFloor had 24,000 BTC -- an equivalent of $250,000 at the time, according to this site -- taken from a compromised server, as BitFloor founder Roman Shtylman abashedly admits on this Bitcoin forum.
The incident has forced him to suspend the site. But more concerning than all of that is that Shtylman might not have the funds to pay back those stolen coins.
"As a last resort, I will be forced to fully shut BitFloor down and initiate account repayment using current available funds," Shtylman wrote ...
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Posted by grenadei on 09/18/12 10:51 PM
"Why the heck would the military-industrial complex search out specialists in such? Understanding the way these currencies work better now, we think we've figured it out. Traceability!"
The etymology of 'money' relates it to 'monitor'.
"John Locke's currency is nothing more than a mechanism for human branding and activity grouping and measuring. Human activity exists independent of that which is measured in monetary exchange units. But, what is important to recognize is that the essence of money is monitoring."
Click to view link
Reply from The Daily Bell
"Manipulating the course of streams is a game to those who own a share in the fortunes of ships in all oceans. The waters of human life flow regardless of the circulating wheels and the moneyed ships – and the monsters of the deep lurk undetected, ready to smash even heavily armed, ironclad machinery to the depths should their arrogance overtake their ignorance."
Interesting ...
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Posted by dave jr on 09/19/12 07:50 AM
The socialist says,
"banks cannot create credit as they are essentially only financial intermediaries, borrowing money at one rate of interest from people with cash to spare and lending this at a higher rate to those needing money to spend or invest, their profits coming from the difference between the two interest rates."
Well, that is the way it is supposed to be, but that is not what we have today and that is the problem. Central banking is rigged in favor of a high and widespread monopolized system of criminal activity.
Bytes in, bytes out. Bytecoin assigns value to certain bytes in and out of your machine. It is monitored, it has to be. If not, then what exactly is reportedly worth 100 million dollars? The monitoring ability. Maybe no member is personally identified but each member machine and/or each leased operating sytem must be... seems to me.
So if the IRS can kick down your door and confiscate your machine on a whim... I'm just say'in.
Remember, the federal reserve note started out as a legitimate, redeemable in gold, currency. Over time the criminal members of the elite encroached and morphed the system, using crises after crises, into the banking system of today. They know after 100 years, their jig is almost played out.
So what do I have against bitcoin? Absolutely nothing. Just don't tell me it is a perfectly safe way to make private transactions. I do not believe it is immune from the information gathering, control freaks, of a criminal class of elitists.
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Posted by Peter_Surda on 09/19/12 11:51 AM
Referring to the card being launched by Bitinstant as a "credit" card is a misnomer. It's a prepaid card, with base units denominated in fiat, and is loadable with Bitcoin. At some stage before being spent (based on the publicised information, the relative timeframe has not been yet decided), the Bitcoin will be converted into fiat at market price, BitInstant pocketing a fee. The advantage is that preloading is doable at Bitcoin-speed, i.e. between instant and an hour. The purpose of the product is to increase comfort and create a wider choice for Bitcoins to be spent, as debit cards are accepted almost everywhere. The purpose is not to extend credit with Bitcoin, which would be extremely difficult, most likely impossible.
Tis is just one of the imprecisions in the post. If the author is not able to navigate in the increasingly complex Bitcoin ecosystem, I recommend to interview one of the people who did some economic research of Bitcoin, for example Jon Matonis, Michael Suede, Trace Mayer, or even me. I have been writing a book about economics of Bitcoin and had a presentation about some of the topics at the Bitcoin Conference last weekend. The conference, by the way, had a very high representation of anarchists, possibly only exceeded by the activities of the Mises Institute or Porcfest.
Reply from The Daily Bell
By "author" you must mean Bitcoin CEO Charlie Shrem as he is the one who referred to a "credit/debit" card - or so it was reported.
By "imprecisions" do you mean the certainty expressed by people like yourself that Bitcoin is unhackable and untraceable? Were such assertations expressed at a conference full of "anarchists?"
You know, as a publication, DB is actually generically supportive of the Bitcoin concept. We support competing currencies. But the knee jerk reactions in favor of Bitcoin are not very impressive. There are plenty of questions about Bitcoin's security, untraceability and its mysterious founder.
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Posted by when on 09/19/12 12:32 PM
Um, "fiat currency" means that the money has value because a government says it has value - "you must pay taxes in X currency or we will kill you."
Bitcoin is therefore by definition not fiat as no government mandates its use nor accepts it for taxes.
If an article gets such a basic fact wrong it is seriously not worth reading the rest.
Reply from The Daily Bell
Um, the term "fiat" has evolved in literature well beyond the definition you cite. "Fiat" in fact can generically refer to unbacked currencies - not just currencies inflicted at the barrel of a gun. (It is true in the modern era government has mostly issued "fiat" - but that may change in the 21st century.)
[Fiat: Medieval Latin, from Latin, "let it be done."]
Noted economist George Selgin has described Bitcoin as partially "fiat" - in our sense.
We would refer you among many examples to an article promoted at "IDEAS" (at the Research Division of the Federal Reserve Bank of St. Louis) and published by Elsevier in its journal Journal of Monetary Economics entitled ...
"Private fiat money with many suppliers"
Click to view link
In the abstract: "each supplying its own brand-name currency." A form of "private" fiat.
Now you may recommence reading ... even if the content upsets your preconceived notions. Pay special attention to the idea that Bitcoin is neither untraceable nor unhackable.
And here is a question for YOU now:
Who is Satoshi Nakamoto? Intrepid entrepreneur? Mysterious genius? Or, hhhm ... something else?
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Posted by BladeMcCool on 09/19/12 03:13 PM
@DB re: 'By "author" you must mean Bitcoin CEO Charlie Shrem' ...
please ... PLEASE telle this was an honest slip and that you dont really think 'Bitcoin' has a CEO. Mr. Shrem is CEO of BitInstant, a service that makes use of the bitcoin system. Bitcoin has no CEO, no board to arrest, no office to raid, and no server farms to destroy. Its just a piece of open source software. A super cool one that will kill central banking dead.
Reply from The Daily Bell
Reply from The Daily Bell
Yes, sorry ... we know what Bitcoin is (see our explanation in article) ... and we know who BitInstant's Shrem is ... (see our response - previous - in thread below) ...
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We noticed a trend here ... One person writes in that we misused the word fiat (we didn't). Another that it was erroneous to mention a Bitcoin-based credit-debit card though BitInstant (as we mentioned below) is reportedly creating just such a card. You apparently wish to accuse us of mis-stating Shrem's affiliation, though we have previously described Shrem's company and title in this thread.
None of these accusations, even were they accurate, are going to do anything to explain away what some would perceive as some difficulties with Bitcoin, as we've discussed in this article and in this thread.
Who founded Bitcoin? What if the powers-that-be helped develop Bitcoin with certain flaws in order to ensure a pressure for further regulation down the road? ... or to delegitimize electronic currencies altogether. We speculate on elite dominant social themes. Should Bitcoin be exempt?
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Posted by Peter_Surda on 09/19/12 05:42 PM
Shoddy journalism, I am appalled.
Shrem said they were launching a debit card. Someone reporting it misrepresented it and used the word "credit", and DB now uses this as an "evidence" that there is a secret plan of Bitcoin credit expansion (which, as I already said, is borderline impossible irrespective of what Shrem or some reporter claims).
I do not recall claiming that Bitcoin is unhackable. Furthermore, the examples presented by DB do not show that Bitcoin is hackable, but that, in principle, any good can be stolen.
I do not recall claiming that Bitcoin is untraceable. Yet, as far as I know, apart from the unclear Zhou Tong / Chen Jianhai situation, no Bitcoins were traced without cooperation of the possessor thereof.
The identity of Satoshi is irrelevant, similarly as the validity of calculus is not influenced by whether it was Newton or Leibnitz who first discovered it.
Based on the abstract, the paper you reference, "Private fiat money with many suppliers", appears to assume that each money is issued monopolistically (i.e. that copying is labeled "counterfeiting" and is illegal). Whether this is called fiat money or not, it is not representative of Bitcoin, at best it is similar to what Hayek proposed. While not exactly central planning, in Hayek's proposal, the production is determined for each money centrally, either by a peg to a commodity basket, or credit. Bitcoin is produced by competing producers, and the production equilibrium is determined by marginal production costs compared to the market price. This is the same with how commodity money is produced. It is not determined by a peg, by credit, or by a central planner. Copying has no effect on the money supply so there is no reason for the legal system to address it. Arbitrarily labeling Bitcoin "fiat" and then deducing its evilness is again just a rhetorical trick.
Bitcoin is more resistant to interference, either by the states or by the banks, than the alternatives. Presenting this as a new world order plot is completely baseless. Quite the opposite, it is the greatest threat to NWO.
I don't blame you for ignorance, I blame you for parading your ignorance as wisdom.
Reply from The Daily Bell
PS: Shrem said they were launching a debit card. Someone reporting it misrepresented it and used the word "credit", and DB now uses this as an "evidence" that there is a secret plan of Bitcoin credit expansion (which, as I already said, is borderline impossible irrespective of what Shrem or some reporter claims).
DB: We relayed what was being reported. It is done millions of times around the world every day. Seek perfection in journalism somewhere else. Or go complain to the writers.
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PS: I do not recall claiming that Bitcoin is unhackable. Furthermore, the examples presented by DB do not show that Bitcoin is hackable, but that, in principle, any good can be stolen.
DB: Please actually read this thread: It is not all about YOU. (And we wrote people "like" - such as - you.) Anyway, the combination of Bitcoin with Tor and perhaps some other overlays is often heralded as virtually unhackable. Sorry!
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PS: I do not recall claiming that Bitcoin is untraceable. Yet, as far as I know, apart from the unclear Zhou Tong / Chen Jianhai situation, no Bitcoins were traced without cooperation of the possessor thereof.
DB: Hm-mm ... Leaving aside the larger argument, we have this: Because they have not been traced, they shall not be ... A tautology.
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PS: The identity of Satoshi is irrelevant, similarly as the validity of calculus is not influenced by whether it was Newton or Leibnitz who first discovered it.
DB: It is not irrelevant. Newton's and Leibnitz's backgrounds seem fairly well known.
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PS: Based on the abstract, the paper you reference, "Private fiat money with many suppliers", appears to assume that each money is issued monopolistically (i.e. that copying is labeled "counterfeiting" and is illegal). Whether this is called fiat money or not, it is not representative of Bitcoin, at best it is similar to what Hayek proposed.
DB: We merely pointed out it is "fiat." It is "proclaimed" to have value. Selgin used the same term in the same way, while also speculating Bitcoin has some commodity like qualities. But people CAN do THINGS with commodities. We're not sure what else you can do with a Bitcoin than use it for its perceived purpose.
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PS: Bitcoin is produced by competing producers, and the production equilibrium is determined by marginal production costs compared to the market price. This is the same with how commodity money is produced.
DB: The "production" is generated by solving mathematical problems. If you wish to compare this to mining gold and silver, go ahead.
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PS: It is not determined by a peg, by credit, or by a central planner. Copying has no effect on the money supply so there is no reason for the legal system to address it. Arbitrarily labeling Bitcoin "fiat" and then deducing its evilness is again just a rhetorical trick.
DB: Arbitrarily taking our words out of context is also a rhetorical trick. We regularly argue for competing currencies including pure fiat along with gold and silver. Our argument in the article was a GENERIC one - that these systems including Bitcoin seem to demand a very precise level of record-keeping. In discussing these issues, and perceiving the level of ONGOING theft (and the steady stream of articles calling for Bitcoin and its vendors to somehow be regulated like banks) it occurred to us that one could hypothetically speculate a currency like Bitcoin might have been set up to fail by those that wish to attack the Internet and its products while promoting 'Net regulation. You seem to believe the Internet can provide strong encryption. This may be a misundertanding. What the Internet surely provides is strong INFORMATION.
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PS: Bitcoin is more resistant to interference, either by the states or by the banks, than the alternatives. Presenting this as a new world order plot is completely baseless. Quite the opposite, it is the greatest threat to NWO.
DB: We didn't "present" Bitcoin as NWO plot. We pointed out the amazing level of UN involvement in LETS systems and speculated that both Bitcoin and LETS systems could be offered with ulterior motives - to get people used to the idea of detailed record keeping for every transaction. The mystery of the founder of Bitcoin plays into this speculation. In fact, that's what we do: analyze elite dominant social themes and speculate about them. If this upsets you, sorry.
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PS: I don't blame you for ignorance, I blame you for parading your ignorance as wisdom.
DB: It is always unpleasant to perceive a challenge to one's beliefs, even if only speculatively. If we were to blame YOU for anything, it might be for confusing familiarity with certainty.
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Posted by BladeMcCool on 09/19/12 06:54 PM
@DB sorry I missed that you already stated you are aware of how the Bitcoin ecosystem is composed. I didnt mean to accuse, I was just responding to that one comment without re-reading the article again. I have a lot of work to do all over the web correcting any errors I see with regards to folks' (mis)understanding of the bitcoin system as it can be very confusing for new people and I like to try and help make sure everyone knows how things really work.
Regarding Satoshi Nakamoto and his creation ... If you were unleashing a piece of software upon the world which was capable of giving humans (finally) the tools they need to utterly destroy the very foundations of nationalism and central banking, would you want the world to know your face? I know that I wouldnt. Who he is doesnt really matter when you take the time to read the source code and see what it does. This has been done by many and in fact some have implemented their own versions that follow the same rules (libbitcoin, bitcoinj). In the end it is just a protocol for writing in a ledger, just a set of rules. Rules that IMO are far better than anything ever offered to us by a central bank. IMO, promoting bitcoin and silver and gold is one of the best strategies to achieve liberty. If Bitcoin is developed as an 'elite dominant social theme' then they've already lost control of it. Any attempt to stop bitcoin at this point will go about as well as attempting to stop heroin.
Reply from The Daily Bell
OK, point taken ... We often propose that in the Internet era, certain false flags that the elites introduce tend to backfire due to the superiority of the "group mind" of the Internet itself.
However, even assuming Bitcoin is exactly what it seems to be, we'd caution the game is not over yet and in some quarters the knives are already out. The record-keeping elements alone are in a sense a tax agents dream ...
... But here's hoping Bitcoin DOES take down our current form of monopoly central banking. That would certainly be a welcome miracle.
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