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 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 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 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 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 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 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 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 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 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 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 ...
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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 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 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 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 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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