Category Archive : GSB daily blog

If 10% Of Humanity Become Bitcoiners, Central Banking Goes Extinct

[heading]If 10% Of Humanity Become Bitcoiners, Central Banking Goes Extinct[/heading]

Scientists have found in recent years that when a mere 10 percent of the population holds dear a certain belief, this belief will be adopted by the lion’s share. In 2011, for instance, scientists at Rensselaer used computational and analytical methods to discover the tipping point where a minority belief becomes the majority opinion.

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Gold Drops $10 In 10 Seconds As Britain Announces Gold Manipulation Investigation

[heading]Gold Drops $10 In 10 Seconds As Britain Announces Gold Manipulation Investigation[/heading]

What happens when you open up an investigation into the gold market? The price drops $10 in 10 seconds.

With investigations by the CFTC into the silver market fading in the US, regulators in Britain have decided to review whether global benchmarks tied to gold trading were manipulated. This investigations is a part of a larger investigation of potential manipulation of the $5 trillion a day currency market, Libor. Read More

Ayn Rand’s Galt’s Gulch Vision Now A Reality…And It Accepts Private Money Bitcoin

[heading]Ayn Rand’s Galt’s Gulch Vision Now A Reality…And It Accepts Private Money Bitcoin[/heading]

Jeff Berwick, CEO of TDV Media and The Dollar Vigilante, made quite a stir when he announced earlier this year his plan to open a Bitcoin ATM in Cyprus while the bankers were closed there.

Now, he’s created a place where you can go and use your bitcoins: Berwick’s created something like John Galt’s vision (from Ayn Rand’s “Atlas Shrugged), Galt’s Gulch. He’s called it Galt’s Gulch Chile. Read More

American Silver Eagle Sales Hits All Time Record

[heading]American Silver Eagle Sales Hits All Time Record[/heading]

On Tuesday silver prices were dragged down to $20.60, leading many precious metals investors to wonder where their complex would head next. The only metal which showed any strength was platinum. The soft prices in 2013 for silver did not stifle demand, as sales of the American Silver Eagle one-ounce bullion coin hit an annual record Tuesday.

The total sales to date as of Tuesday, November 12, 2013, were 40.175 million ounces, according to the Mint.

The previous annual record was set in 2011 at 39.869 million ounces. Read More

Bank Of America Tells Clients It Might Find A “Climate Far More Conducive To Embracing” Bitcoin

[heading]Bank Of America Tells Clients It Might Find A “Climate Far More Conducive To Embracing” Bitcoin[/heading]

Are you a small business discouraged at the prospect of finding an account with a bank that will accept your Bitcoin vision? Have you been rejected by Citibank, US Bank, Bank of America and/or others?

Deep breath.

There is reprieve in the offing.

Bank of America has told its small business clients that they might be surprised to find a future environment embracing crypto-currencies like Bitcoin. Read More

The State Of Major Modern Nation-State Economies & The Real Bitcoin Economy

If it weren’t for monumental quantitative easing programs, the world’s economic leaders would not be hiring the bit faster nor creating a few more jobs as they currently are.

Read More

Speculator Activity Shows Funds Selling Gold And Silver

[heading]Speculator Activity Shows Funds Selling Gold And Silver[/heading]

Speculator activity in the recent Commodity Futures Trading Commission showed that funds were selling gold and silver, while adding to their platinum group metals accounts in future and option on the Comex division of the New York Mercantile Exchange and the Nymex. Read More

Why Twitter Is No “Catalyst For A New Technology Investment Mania”

When I saw the headline that Twitter was sparking a new “catalyst for a new technology investment mania”, I spit my tea all over Apple laptop. Thanks Financial Times.

As Financial Times writes, because of Twitter, “a new era has officially begun.”

I think they’ve missed the point. Read More

What Will Come Of The Senate Hearing On Bitcoin?

[heading]What Will Come Of The Senate Hearing On Bitcoin? [/heading]

The meeting in Senate on November 18 will surely be historical, at the very least from Bitcoin’s perspective. Never before has the legislator gathered ’round in such a formal manner to discuss the darling of cyberpunks everywhere, the decentralized crypto-currency Bitcoin.

As they do so, Bitcoin is on the rise to $400, and perhaps even $1,500 by the beginning of the year.  At the time of this writing, Bitcoin is at $350, according to BitStamp. (at the time of editing, $355.)  Read More

“Buy Silver” Maintains Momentum Despite Silver Prices

[heading]”Buy Silver” Maintains Momentum Despite Silver Prices[/heading]

According to Google Trends, although silver sentiment has reached levels approaching those not seen since before the metal began its current bull market in, arguably, 2005, for the search term “silver,” Google users are still engaging the search term “buy silver” on a long-term growth trend, with Google even forecasting that the trend will continue its recent uptick. Read More

Shopify Now Supports Bitcoin, Enters As One Of The Biggest Companies In The Space

[heading]Shopify Now Supports Bitcoin, Enters As One Of The Biggest Companies In The Space[/heading]

In what is huge news for the world’s most well-known cryptocurrency, Shopify has announced this evening Bitcoin integration, and that people with stores at shopify can now accept Bitcoin. The feature is currently manual, but nonetheless this huge news, as the website Shopify is one of the largest in the world.  With nearly 55,000 links linking into Shopify’s website, it easily makes it one of the biggest Bitcoin affiliated websites on the net. From their recent blog post: Read More

Bitcoin Responds To Its Environment, Gold Has Not…Yet

[heading]Bitcoin Responds To Its Environment, Gold Has Not…Yet[/heading]

I like Bitcoin and I like gold.

But as late, gold has not behaved as one would expect gold to. Of course, that gold has been so tied to the paper markets via GLD, has probably helped this.

Bitcoin has yet to weighed down so.

Read More

Is Bitcoin Responsible For Capital Controls In The US?

[heading]Is Bitcoin Responsible For Capital Controls In The US? [/heading]

With each JP Morgan business account holder who receives the letter informing them of new JP Morgan business account policies, a case for Bitcoin is made.

However ironically, could it be that this is the polar opposite of the bank’s intentions?

JP Morgan Chase’s Business Banking Division sent a letter to account holders stating, from November 17, 2013 on, the bank would no longer offer international wire transfers. Any scheduled transfers or recurring transfers would be canceled.

Further, cash activity – that is, folding, green cash and money orders – would be limited to $50,000 per statement cycle. Read More

How Bitcoin Can Help Free Radiohead’s Thom Yorke Of Spotify

[heading]How Bitcoin Can Help Free Radiohead’s Thom Yorke Of Spotify[/heading]

Thom Yorke has no problem telling Spotify to “fuck off”

Thom Yorke, Radiohead and Atoms For Peace frontman, has been vocal and active against Spotify, most recently in an interview with Mexican website Sopitas.

Yorke is succinct, calling the music service “the last desperate fart of a dying corpse.”  In July, Yorke complained, “new artists get paid fuck all with this model”. Read More

Erratic Banks Make Using Bitcoin Unpredictable

[heading]Erratic Banks Make Using Bitcoin Unpredictable[/heading]

 

Regulators, authorities and bank management have shown their hand when it comes to Bitcoin: they are nervous about what the future might hold. Read More

Tuesday Nudges American Silver Eagles Towards Record

[heading]Tuesday Nudges American Silver Eagles Towards Record [/heading]

It makes sense that American Silver Eagles are seeing a spike in demand. This week alone, the US government has almost defaulted. This week alone, one-in-seven Americans were told they might starve this winter. This week alone, JP Morgan has signaled they will institute their own capital controls.

Tuesday saw the negative credit watch decision by Fitch lead to a single day jump in the sales of American Silver Eagles of 749,500, thusly approaching 38 million on the way towards a new annual record. Read More

The Save II Act: The End of Gold And Silver Eagles?

The Save II Act (HR 3146), introduced in the House of Representatives on September 19, 2013, carries a provision that would prohibit “non-cost effective” minting and printing of coins and currency. Read More

It’s A Woman’s World: New Fed Chairman Yellen Introduced

[heading]It’s A Woman’s World: New Fed Chairman Yellen Introduced[/heading]

Although the Federal Reserve chair is considered by many to be a figurehead, like President’s and Prime Ministers, women around the world can rejoice …finally.

As of today, it is officially a woman’s world. Read More

Bitcoin Enjoys Biggest Gains On Google Trends Since April

[heading]Bitcoin Enjoys Biggest Gains On Google Trends Since April[/heading]

Since the Federal Bureau of Investigation busted the Silk Road, attention on Bitcoin has risen sharply for the first time since the April-May price rise. From Saturday Night Live to Yahoo, Bitcoin has been mentioned throughout the mainstream media. Read More

American Gold Eagle Bullion Sales Decline

[heading]American Gold Eagle Bullion Sales Decline[/heading]

September is the second month in a row in which American Gold Eagle coins sold much fewer compared to one year ago. At the beginning of August, one month sales of the Gold Eagle reached a six year nadir.

Despite weakness in gold coin sales, the American Silver Eagle bullion coin has continued to sell and remains on pace for record annual sales. Read More

The NSA In Hollywood Films

The revelations brought forth by Edward Snowden shook the world. But should they have? What follows are many movie clips featuring the truth about the NSA, including Good Will Hunting, Enemy of the State and even The Simpsons movie.

What’s clear is that for more than a couple of decades, Hollywood has been ahead of mainstream media, showing us the power of the NSA before our very eyes. Read More

Visa/MasterCard Will Prevail In US Over Bitcoin Despite “Swipe Fees”…For Now

[heading]Visa/MasterCard Will Prevail In US Over Bitcoin Despite “Swipe Fees”…For Now[/heading]

I spend a lot of time thinking about in which frontier markets Bitcoin is going to explode and really change the game of value. What grand equation can I concoct in favor of Bitcoin’s success somewhere? Not that I am trying to make things up as I go, I am just trying to be hip. But, I thought about something Wendy McElroy from The Dollar Vigilante wrote recently:

 Simplify, simplify.” — Henry David Thoreau

Read More

The Illusion Of Tangible Assets

[heading]The Illusion Of Tangible Assets[/heading]

Gold and silver investors have taken issue with Bitcoin, claiming that it is not a tangible asset, like gold and silver.

Their hypothesis is usually stooped in the notion that anything is truly “physical” as we perceive it in the first place. What if, counter-intuitively, the entire universe was composed of 0’s and 1’s itself? What if the universe was digital? Wouldn’t that mean that gold, silver, platinum and palladium are all, in fact, digital as well? Read More

Staggering Demand For Austrian Silver Philharmonic Since April 2013, Says Mint Director

[heading]Staggering Demand For Austrian Silver Philharmonic Since April 2013, Says Mint Director[/heading]

Bullion dealers gravitate to the American Silver Eagle because it is guaranteed by the US government, but there are other options the bullion investor enjoys when it comes to government issued silver, like the Austrian Philharmonic, which for practical purposes is the American Silver Eagle’s counterpart in Europe. Read More

Payment Gateways 2013: What Options Does a Business Have?

[heading]Payment Gateways 2013: What Options Does a Business Have?[/heading]

Although Bitcoin has stolen headlines in 2013 as far as online payments is concerned, it is hardly the only option. Instead, consumers are the winners in the highly competitive market of online payments. Especially since the emergence of decentralized currencies, online payment processing – once thought to be the domain of PayPal – is a colorful world.  Here is a basic primer of online payments. Read More

South Park’s Prescient Prediction: Bitcoin & The Digital Distribution Of Media

[heading]South Park’s Prescient Prediction: Bitcoin & The Digital Distribution Of Media[/heading]

In the 2008 South Park episode “Canada On Strike,” South Park character Kyle conjectures that, back then, we were still a few years away from when digital distribution of media on the Internet would be developed to a point where traditional means were no longer needed.  The clip is called “The Promise of Future Revenue.”

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Why I Donated Bitcoin To The Acapulco Recovery Fund

[heading]Why I Donated Bitcoin To The Acapulco Recovery Fund[/heading]

By: Justin

When The Dollar Vigilante Jeff Berwick setup a fund to help Acapulco recover from a recent flood-disaster in which eastern regions of the historic city were badly damaged, if not nearly destroyed, I felt implored to send a little bit of my digital cash reserves to aid in the effort. I wasn’t the only one.

I had been chewing on the notion as of late that, in a peer-to-peer economy, such as what Bitcoin represents, the users themselves represented the “social safety net.” Read More

Small Business Owners Speak Up: What Will It Take For Them To Accept Bitcoin?

[heading]Small Business Owners Speak Up: What Will It Take For Them To Accept Bitcoin[/heading]

BitPay recently announced their 10,000th merchant. Some reports posit the Bitcoin payment processor is growing faster than Bitcoin itself.

According to the press release, “The merchants in BitPay’s directory are diverse internationally, with approximately 50% located in North America, 25% in Europe, and 25% in the rest of the world.”


GoldSilverBitcoin recently interviewed small business owners who have yet to take the leap into the deep-end and accept Bitcoin full-time.

What we got were varied answers. There was one somewhat common theme: vendors who simply hadn’t heard of processors like BitPay or CoinBase, which allow small businesses to convert their bitcoins to cash within a few business days. Many small business owners worried about their company’s cash-flow, first and foremost. Others worried about reputation, and the reputation Bitcoin brings. Read More

American Silver Eagles Second Highest Sales Yearly

[heading]American Silver Eagles Second Highest Sales Yearly[/heading]

This past Monday, 675,000 Silver Eagles were purchased, marking one more milestone as their total this year sold has hit 34,925,000. Annual sales rankings for the bullion coins sees 2013 in second place all-time. Here are the top five annual sales years, and further information by CoinNews: Read More

RCM’s MintChip Goes Where (No Government) Has Travelled Heretofore

[heading]RCM’s MintChip Goes Where (No Government) Has Travelled Heretofore[/heading]

Fiat is getting an Information Age-style upgrade by the Royal Canadian MInt. And I can hear Alex Jones now (in my own head):

“You see what has happened is Bitcoin has caused the Powers That Be to move even quicker in their agenda to roll out a global digital fiat currency, and they’re doing it from Canada, with their songs and their queens and their ‘we’re so liberal and caring’ reputation and it will spread across the entire commonwealth, and then to Europe, then Japan and China and then the US, and then all the sudden when I go to the grocery store, I am paying in the queen’s money! Full Circle! Red Alert!! Red Alert!!! Full Circle!!”

Read More

GSBTC With Trace Mayer

You might know Trace from his work on Run To Gold. Or, you might know Trace from his work with How To Vanish. More recently, he has made waves by investing pre-Peter Thiel in BitPay, and now in Armory. We sit down now with Trace and discuss his recent investments, the Bitcoin ecosystem, MintChip and the general information age specifics with which bitcoiners concern themselves. Read More

“Ben Bernanke? Oh yeah, that bearded Jewish Guy. What’s He Do?” or The Stage That Is Economic Policy

[heading]”Ben Bernanke? Oh yeah, that bearded Jewish Guy. What’s He Do?” or The Stage That Is Economic Policy[/heading]

By: Justin

Ben Bernanke spoke today. If you don’t know who Ben Bernanke is, he is the Fed Chairman. What’s that? That’s what Alan Greenspan was before him. Yeah, we’ll get a new one soon.

When Benny & his jets (colloquial reference to his money-printing habits) speaks, the market listens.

What does it mean when the market listens?

It means that everyone gathers around television cameras and pundit typewriters and yells or types really loud and eventually certain screams and typing become louder (EVEN ALL CAPS). And then the robots take over. Read More

Marijuana Laundered Bitcoin: A Tale Of The Disbanked

No, this isn’t some story about how Bitcoin was used to launder marijuana.

This is a story about something different. A story of US-based small business owners yearning to make something of themselves, yearning to do what their immigrant forbearers did and dream big and then realize those dreams.

For small business owners in Colorado and Washington, as bitcoiners look on with jealousy, these dreams might be an inch closer to coming true. Read More

What Bitcoin Knows Gold Does Not: The Syria Outcome

The last two weeks have seen Bitcoin climb back to $130 after collapsing from $266 to $80 in April. Since then, due to diverse hands entering the market, a sense of stability fell upon the Bitcoin market.

Then, in the wake of Syria war chanting, Bitcoin steadily moved beyond $100 and did not pause for perspective until $130. At time of this writing, Bitcoin stands at $122.

But, why? Read More

IMF Reassess Global Economic Fate

[heading]IMF Reassess Global Economic Fate[/heading]

The IMF has changed their prior view that emerging markets were to rescue the world from global depression.

A confidential note on world economic prospects was seen by the Financial Times. In this note, the IMF imparts that it believes emerging economics are no longer the dynamic engine of global growth. The fund instead wrote,  “momentum is projected to come mainly from advanced economies, where output is expected to accelerate”. Read More

Federal Government Must Decide If Bitcoin Can Be Used For Political Donations

[heading]Federal Government Must Decide If Bitcoin Can Be Used For Political Donations[/heading]

Cyber-anarchists (and the legions of diverse Bitcoin users) could find themselves with a seat at the table of political campaigns for the 2013-2014 election cycle.

To underscore the potential Bitcoin has to disrupt current ways of doing business, the Federal Election Commission is determining rules governing donations made in Bitcoins and how to apply these to political campaigns, according to POLITICO. Read More

NASA In Search Of Internet’s Next Generation

[heading]NASA In Search Of Internet’s Next Generation[/heading]

The question “Is Bitcoin here to stay?” is a common refrain. One that an enthusiast hears often.

It is here to stay, believe many. After all, isn’t a bet for decentralized virtual currencies like Bitcoin merely a bet for the Internet?”

Currently, NASA has developed plans to test a potential new system of human communications, with implications for terrestrial and extra terrestrial data transfer.

NASA plans on launching a new communications technology this Friday which will allow for a record-smashing 600 megabits-per-second downloads. The resulting probe will orbit the moon and send communications back to Earth via lasers. Read More

What Was The Silver Republican Party?

[heading]What Was The Silver Republican Party?[/heading]

In the 1890s, the Silver Republican Party rose out of a split from the Republican Party. The main issue the two disagreed on was “Free Silver” and bimetallism.

During that period, goldbugs and silverfish had been pitted against each other. Some, namely city interests, called for a gold standard to stem inflation. This harmed farmers who held much of their savings in silver until that time. These interests longed for a bimetallic standard. Read More

Silver Quietly Sneaks Back Up, Probably Never To Be This Low In Our Lifetimes Forevermore

[heading]Silver Quietly Sneaks Back Up, Probably Never To Be This Low In Our Lifetimes Forevermore[/heading]

It has been a long, winding road for silver, but it appears the most recent run up from the bottom of around $18 to nows’ nearly $25 has tickled the excitement of silverbugs.

On Facebook, author Tarrin Lupo (Pirates Of Savannah) even boldly proclaimed that “The price of Silver is quietly sneaking back up, probably it’s the last time it will be this low in our lifetime.” Read More

Silverbugs Guilty Until Proven Innocent

[heading]Silverbugs Guilty Until Proven Innocent[/heading]

Looking for drugs, drug detection officers in Newcastle found something quite different on a 34-year old man they searched: a stash of silver bullion. No mind-altering substance in tow, it did not matter, for the man had his silver taken and must appear in court. Read More

What Was “Free Silver?” A Look Back At The Free Silver Movement

[heading]What Was “Free Silver?” A Look Back At The Free Silver Movement[/heading]

The late nineteenth century was a curious time for the US. One of robber-barons and captains of industry, the late nineteenth century was also a time of “free silver”, a central American policy in favor of inflation by silver, which might be a foreign concept to todays silver bugs. What did the opponents of free silver support? The gold standard. Hmm…

The supporters of the the inflationary monetary policy of free silver were known as “Silverites,” and they were in favor of bimetallism. That is, the use of silver and gold as currency. Their ratio is familiar to those in the precious metals circles: 16 to 1. Read More

Update On Bitcoin Foundation Trip To Washington DC

[heading]Update On Bitcoin Foundation Trip To Washington DC[/heading]

The pleasant thing about Bitcoin, perhaps the most important, is its’ ability to bring people together across diverse backgrounds. The last two days in Washington DC proved just that, as The Bitcoin Foundation was invited to a meeting with some of the US’s top agencies, as GoldSilverBitcoin reported here.

The sober perspective on the meeting is that it is something that happens all the time. The Bitcoin Foundation was not issued a subpoena. The tone of the meeting was one of men with different worldviews, at least in many cases, coming together to discuss something some knew much about, and the others did not. According to the following account, it was a peaceful endeavoring. Read More

Mathew 13:12, Bitcoin Style: The Rich Get Richer

[heading]Mathew 13:12, Bitcoin Style: The Rich Get Richer[/heading]

The rich are only getting richer in Bitcoin, as the Mathew effect is clearly demonstrated via the public ledger. But, is this a bad thing?

The public Bitcoin ledger gave Daniel Kondor and others at Eotvos Lorand University in Hungary an idea to download the complete list of transactions and reconstruct the entire financial history of each account in the Bitcoin market.

With this data, they have recreated the flow of digital cash through the network and studied the resulting patterns of wealth creation and accumulation. Read More

Bitcoin Foundation Meets With Regulators Across US Government Offices

[heading]Bitcoin Foundation Meets With Regulators Across US Government Offices[/heading]

With increasing amounts of pressure being put on the decentralized virtual currency Bitcoin, representatives of the Bitcoin Foundation – a California based nonprofit – have organized an event bringing them together with officials across governmental bodies, from the Federal Reserve to the IRS.

“Look guys, Mr. Federal Reserve, Mr. IRS, let’s be honest….how many users will ACTUALLY be using VPN?”

Read More

Bitcoinomics Chapter 18: Conclusion

[heading]Bitcoinomics Chapter 18: Conclusion[/heading]

As Trace Mayer points out, if Bitcoin enjoys the same success as Skype, then it will become a 8 billion dollar market cap in about six years. That means that each Bitcoin will be worth about $800.


Unlike Skype, Bitcoin participants will get to taste that growth in the form of appreciation they hold, control or own. As Trace laments, Skype never paid him a dime for being one of their first 50,000 users. The theory of network effect has implications for the future of Bitcoin. Some people believe Bitcoin will be supplanted by competition by other virtual currencies. But, the network effect can be seen in effect with immaterial goods, thus pointing towards Bitcoin longevity.

For instance, there are a small number of general purpose operating systems (Windows, iOS, Linux), a small dominant number of languages (Mandarin and English most widely spoken, then Spanish and Hindi next, and those four account for about half of the world population, approximately.  There is one general purpose communication protocol in the internet. Sure, things can metastasize within these spaces, but this generally takes much time.

The network effect also predicts path dependence. Or, in other words, the order in which choices are made affect the end result.  Bitcoin, under this line of reasoning, then has first mover advantage.

Will government move to regulate alternative currencies? One can only conjecture that, yes, eventually government will move to contest alternative currencies such as Bitcoin as being treasonous or counterfeit or fraudulent or terrorism.  At the very least, regulated by AML and KYC legislation.

We have seen this in the case of Von Nothaus, who coined “Liberty Dollars,” which the US recently deemed a form of counterfeit. To be sure, he used the actual dollar symbol and was an outspoken proponent of undermining US dollar strength. The thing it seems with Bitcoin is that it would be very, very difficult to prevent from flourishing. Some believe the state does have the computer technology available to to infiltrate a system as elaborate as Bitcoin, while others either believe they do not have the technology or the organization to compromise it meaningfully.

Some believe they might not yet, but one day will. The methods available to the government depend on the security of private websites interacting within the overarching Bitcoin network.

For example, private websites on a hosted server can be demanded to be taken down. The server, not affiliated with the Bitcoin website, must comply or face penalty.

It should be assumed that the government can take down any website it wishes. But, websites can be mirrored, copied and saved easily. The publicity brought to Bitcoin by government attempts to control it will create an arm’s race in which not only does the government and other monied-interests try to take out Bitcoin websites in more wide-ranging and effective ways, but so too will Bitcoin followers then race to create new Bitcoin innovations.

What does surely happen in such a scenario is that Bitcoin will become more well-known and perhaps more widely used even. Despite this assumption, that the government can take down whatever website it pleases, certain sites have not been so easily taken down.

In fact, Silk Road has proven thus far impossible to take down, even if Tor has in some ways been compromised.

So, if aboveground Bitcoin websites are all attacked and muted, the underground Bitcoin economy will flourish, and perhaps even propel prices due to the supply issues.  To be sure, i’d rather stick to straight cash transactions in this case. But, since the majority of Bitcoin users do not participate in illicit transactions,

the majority have little to concern themselves over.

 

A government could prohibit business and individuals from transacting in Bitcoin, but who cares?

They can’t trace the bitcoins and would have to develop some new space-age technology to detect the radius of Bitcoin transactions, and even then, how are you going to know which individuals hold Bitcoin in a packed city subway?

While the price might fall due to a drop in demand, the Bitcoin economy will surely persist. While centralized systems such as PayPal, Visa and others can be shutdown, the Bitcoin network is not susceptible to such an unfolding. MP3 file sharing has demonstrated as much.

There is no central command for Bitcoin. Nobody is responsible for Bitcoin, and those who transact in bitcoins do not necessarily own the bitcoins, they just control the bitcoin wallet holding the bitcoins.

Transactions are between two parties, peer-to-peer, so no third party or governing body must approve them. Accounts do not get frozen, for nobody holds that power  as it is not a sequence in the overall Bitcoin algorithm. If Bitcoin does not fail, then it will be thrust into a situation where it could reasonably supplant the dominant financial system as we know it today. Many of the burdensome and Too Big to Fail institutions of today might go extinct in a world of alternative currency.

At the very least, we will watch them adapt before our very eyes. The first businesses to feel the burn of Bitcoin competition would be the status-quo in current money transfers, such as PayPal and Western Union, as well as SWIFT.

How will they compensate their business models when they are competing with Bitcoin, a thing that transfers value at virtually zero cost? In fact, the main service of these companies will be made redundant. That will mean that customers have billions of more dollars in their pocketbooks each year, making them more likely to venture into economic independence by starting their own (perhaps Bitcoin-centric?) businesses and investing their money for their futures.

Humanity will also gain the energy resources freed up by the ease of transaction offered by the Bitcoin network. Just like cars enriched humanity by lowering the cost of transportation, and Email by cheaper and faster communication, Bitcoin can make the world richer by enabling instant money transfers at low cost.

In a Bitcoin market big enough to supplant old school financial transaction networks, the volatility will lessen and Bitcoin will become an even better solution for store of value and money transfer.

The next to go are central and commercial banks and then national currencies altogether.  All bank work can be done within the Bitcoin framework.

Banks will be diminished, and they will now perform services to cure demand, and not simply because their services face no competition due to government cronyism.

In the world of Bitcoin, to be certain, banks would still exist: people would still want loans and lots of services provided by banks. But, these banks would not grow dependent upon taxpayer money and fleecing their customers like the banks of today.

One thing banks could offer in a world of alternative currencies is safe and secure placement for funds. That is, a customer could pay insurance on his or her Bitcoin account and thus, in the event of fraud or error, be entitled to recompense. But, of course a regular old insurance company could do the same thing for those bitcoins held on a home PC. Bitcoin, or any populist driven alternative currency,  quickly leads the populations of the world to question national sovereignty in money printing matters.

Just like people left the recording industry supply-chain in favor of free music, people again would leave the dominant banking system and nation-states in favor of free banking.

The true question is whether or not Bitcoin can represent a reasonable store of value over time. If this question is answered in the positive, then there is virtually no reason to stick with fiat currencies of nation-states and superstates such as the European Union. The worst case scenario is that they attempt to destroy bitcoin itself, and there are numerous strategies they could use. But the point is, the idea will never die. Even if bitcoin dies, an alternative will rise, one that addresses the vulnerability that was previously exploited in the Bitcoin version of decentralized cryptographic technologies.

Then you get Bitcoin 2.0.  It’s not about how much bitcoin is worth. The exchange rate is irrelevant. It’s about the concept of a peer-to-peer ledger keeping system.  In the case of BitTorrent,  billions have been spent fighting it and failed. BitTorrent is still rampant. In the case of Bitcoin, could the same true?

Bitcoinomics, Chapter 17: The Internet Is Down, Bitcoin Over? No.

[heading]Bitcoinomics, Chapter 17: The Internet Is Down, Bitcoin Experiment Over? Not With These Solutions[/heading]

“Bitcoin is technology.”  – Justin O’Connell, CEO GoldSilverBitcoin Read More

Bitcoinomics, Chapter 16: A Menu of Cryptograhic Currencies

[heading]Bitcoinomics, Chapter 16: A Menu of Cryptograhic Currencies[/heading]

 Without getting into all the arcane questions about where money comes from and what it really means, I think, as a first cut, decentralizing that and giving people the choice of which currency to use is an important starting point.” – Peter Thiel

Read More

Bitcoin Vs. Fiat’s Best: The Norwegian Kroner

[heading]Bitcoin Vs. Fiat’s Best: The Norwegian Kroner[/heading]

A “safe” fiat currency? There can be no such thing…

Or can there?

First of all, a nation’s currency is issued by its central bank, and a central bank, just like an ordinary bank, has assets and liabilities.

Assets that a central bank might have are things such as government bonds and gold. A central bank’s liabilities include the nation’s money supply, known as central banks ‘notes,’ even though most of these exist digitally these days. Read More

1 Big Reason September Could Be Silver’s Month

[heading]1 Big Reason September Could Be Silver’s Month[/heading]

Silver has corrected since its’ 2011 high of nearly $50 an ounce. At that point, “49ers” ran in droves to the devil’s metal, only to lose considerable amounts of wealth, vanished in the Sunday selloff on MayDay of that year.

Now, more than two years later, many silverbugs learned a lesson that many people in the banking crisis learned: cash is King. In other words, those who control the cash are in control. Read More

Big Banks Prepare To Exit Physical Commodities

[heading]Big Banks Prepare To Exit Physical Commodities[/heading]

JPMorgan made headlines last month with an astonishing announcement that it would be getting out of physical commodities. This was shocking for everyone who had followed the contentions that the bank was in fact manipulating the commodities, like silver.

Then, revelations about how banks were manipulating the storage warehouses and aluminum markets of some commodities. All of the sudden, banks were coming under mainstream pressure for physical commodity manipulation. No explicit mentions in the mainstream regarding silver. After all, the SEC had already let JP Morgan off the hook. Read More


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