The only restrictions on bitcoin exchanges is that they will be subject to the standard internet censorship rules and they will need to get the identity of all users to prevent money laundering. Existing financial institutions will not be able to trade bitcoin, but this is a great thing for entrepreneurs.
Do people not realise that one of the main reasons bitcoin was so good was that it was supposed to be anonymous?
Does this kinda give a clue that bitcoin is not a currency?
And the headline is “good news for bitcoin?”
Bitcoin was designed to be pseudonymous NOT anonymous. Your pseudonym (i.e. wallet address) if discovered (your door gets kicked in and the feds take your computer) will not protect you, as all your related activity is right there to see on the blockchain. It amazes me that so-called ‘secure’ wallet software does not also encrypt the wallet address when not in use.
The China announcement is a massive blow to Bitcoin in China, because no e-commerce vendor will use it for transactions. If you are not a speculator and actually want to buy shit with BTC, this is bad news, especially if its the start of a bigger trend.
Once again the Keiser spin shows only one side of the coin.
In simple terms, a blockchain is a registry of all transactions carried out in bitcoins. Thus is resolved the problem of double-spending one particular bitcoin: It can’t be done (at least in theory) due to the blockchain.
But the blockchain is in fact a register—a trail—of bitcoins. So it’s a relative cinch to piece together each and every transaction of any particular wallet in the bitcoin universe. And since exchanges need detailed personal information about a bitcoin user in order to comply with money-laundering laws before issuing a new user with a wallet, the government or other interested parties could determine what any one particular person has been doing in the bitcoin marketplace.
In other words: Imagine that the government knew each and every cent you earned and spent, without a single exception.
That cannot be done with dollars, at least not easily. The dollar’s inefficiencies when compared to bitcoin or any other cryptocurrency are exactly what make tracking dollar transactions so hard. That’s why money-laundering in fact exists: Criminals are taking advantage of inefficiencies in the dollar to hide their profits and thus not get caught.
But with bitcoins as they currently exist, it is a snap to keep people compliant. Once some simple baseline limitations are imposed on users of bitcoins—such as the rules implemented by exchanges so as to comply with money-laundering laws—a user’s transactions are as transparent as glass.
Which is what a government would want, in order to get every bit of tax revenue it wants. Which is what a bank would want, in order to properly gauge the risk of a loan it is extending, and thereby maximize its profits.
Not only that, being able to track people’s spending completely, in real time, as can be done with bitcoin and conceivably every cryptocurrency, the government could easily rescind someone’s ability to earn money.
Witness how the government shut off WikiLeaks’ source of funding—took them less than a week. WikiLeaks depended exclusively on donations made via credit card payments—so by “encouraging” the credit card companies, Visa and Mastercard, to refuse to process donations to the organization, the U.S. government shut down Wikileaks just days after the first big document leaks of 2010.
With bitcoin or some similar cryptocurrency, the government wouldn’t even need to take the step of contacting credi card companies to “encourage them to do the right thing”: The government could simply make any payment to a targeted group invalid. (And perhaps get a notice of whoever it was who donated to the targeted group?)
All this is to say, bitcoins and other cryptocurrencies are potentially a great step forward for a government looking to impose a Panopticon society on the American people. We can’t travel without TSA’s approval, so why not extend that power to people’s ability to interact in the economy as well? Due to the fact that, with bitcoins, there is a trail from people to their bitcoin wallet to their bitcoin usage, a trail that is relatively easy to read, the government could have this power over each and every citizen—the power to monitor and control our interactions with the economy.
Which is why bitcoin—far from being a threat—might just prove to be the fully-compliant currency the U.S. government can come to love. A currency that will let it have unfettered access to each and every financial transaction you carry out.
Is that something that we as a people want? More power to the government? Because that’s the promise of bitcoin
Bitcoins are the product of socially naive programmers’ fantasies. They thought they could substitute algorithms for ethics, digits for legality, anonymity for custom, and dreams for responsibility. Ultimately, they thought they could substitute impersonalism for personalism. They were wrong. They merely launched a tulip mania.
If the advocates of crypotocurrency have a case for a free market social order, then they should advocate not buying Bitcoins until such an order exists. Money develops out of a social order. They have put the cart before the horse: a new monetary system before the institutional arrangements to support it. This was Mises’ argument regarding the regression theorem. A comprehensive monetary order that will replace the existing one is not going to be designed by obscure programmers. It will be the product of human action within a prevailing social and legal order.
Bitcoin is not money
Here is the problem in one sentence: a modern division of labor economy is very close to all or nothing. You cannot have a monetary system that does not apply across the board, yet still defend the concept of the division of labor through competitive pricing. You cannot have a currency that applies to illegal drugs, programming services, and almost nothing else, and expect that currency to replace the existing currency, which is a fiat money-based currency. There has to be a transition from the fiat-based currency, in which there are hundreds of billions of transactions a day worldwide, which in turn provides a comprehensive system of pricing and information feedback, in order for the present system of the division of labor to be maintained.
Any suggestion that Bitcoins can move from the modern system of integrated currencies, prices, and contracts, to get to an equally comprehensive system in which you could make a pencil, without the pricing system that is provided by the existing fiat money order, is simply utopian.
Most of all, Mises argued, socialism has no means of pricing capital. There are no capital markets.
The same is true of the as-yet nonexistent Bitcoins economy. It cannot do without the pricing system provided by central banking. It cannot produce goods and services without converting Bitcoins’ digital fiat money into the banking system’s fiat money. You cannot produce real goods with virtual money.
You have no capital markets without the monetary system. Capital markets are all based on contract. Bitcoins are based on a rejection of contracts. Capital is based on responsible owbnership: public claims on assets, enforceable by law.
Bitcoins are based on a rejection of enforcement by law.
Bitcoins relate only to consumer goods, and hardly any. Yet even these cannot be delivered by sellers without selling Bitcoins and buying dollars to fulfill contracts. Sellers cannot replace sold assets unless they have bank money to buy them in the real world economy. This economy operates in terms of real money, which today is central bank money.
Bitcoins represent zero threat to the central banks. Bitcoins are used by most owners as ways to make money: to buy more dollars than they paid. It is just another investment asset — one based initially on a complete fantasy, namely, that Bitcoins will somehow remove people from central banking.
Bitcoins are valued in terms of dollars. The mania is fueled by their rising dollar-denominated price. They provide an investment medium for high-risk speculators. They are nothing more than a way to get into a tiny market, and then ride the wave up, as more people get into it. There is no payoff in terms of the economic value of autonomous Bitcoins that are held only because they will serve as an alternative currency. They are held as a way to make money by selling to the greater fools, who will pay real money — dollars — for them.
It’s tulip bulb market. It rests entirely on getting back into the dollar economy.
Bitcoins will have no impact at all on the monetary base. They will have no impact on the capita; markets.
Capital is valued in terms of central bank money. Bitcoins will not change this, for they cannot reduce the size of the monetary base. They do not pull money out of the fractional reserve banking system. The quantity of real money is in no way affected. The investors remain in the central bank economy, in which capital is priced. Capital is not priced in terms of Bitcoins.
This is why Bitcoins’ economy today cannot produce even a broken pencil. It is giving Bitcoins far too much credit to say that they can produce a broken pencil. There is almost no division of labor based on stand-alone units of Bitcoins. To move to Bitcoins’ realm of virtual money for real products, other than maybe programming services, is a fantasy.
You’re missing one important factor: I can create unlimited wallet addresses, move money between them and other outside addresses, form dark pools (i.e. dark wallet) to preserve some real anonymity. Dark wallet’s centralized (thin client) nature is a bad idea, but the concept is a great one overall.
Eric King: “Bill, Bitcoin, do you have any thoughts on that?”
Fleckenstein: “Yeah, it’s a giant chain-letter. Everyone will lose all of their money that puts money in it. It’s a complete joke. Even a crappy currency has government taxing ability behind it, or some sort of a standing army or something like that.
Bitcoin is nothing. It’s dot-com mania 3.0 just moved one step over, right? People are so enamored with communication with their phones and online commerce and all of that. Now they’ve invented what they call a currency to mess around with it, and people are speculating in it the same way they speculated in this other crap. It’s not a currency at all, it’s a complete joke
Baidu has ceased accepting bitcoins now – that was the initial trigger for the massive rally wasn’t it?
Let’s allow BTC to go back to where it belongs today, in the single digit dollar range – a valuation based on the dollar value of transactions and the liquid available BTC to carry those out.
Unfortunately, if it goes there, the psychological effect is for people to abandon it to choose better, more appropriate coins for transactions which are around the same value. That opens the flood gates of all the billions and billions of coins – try working out a future value from that! They will end up staying down low if they all get taken up.
Something like PPC at least has a distributed DNS system attached to it so has a second use/value.
I like strong investigative journalism going on on this site!
A headline made from some random reddit user who happens to read Chinese yet embellishes the press release with his own spin..
Please can we just have a balanced view rather than all this desperate-to-be-prooved-right one sided, ego driven propaganda?
I’ll start – I think it will float around the $700 mark for a fair while with a fair bit of volatility. Then might start to sink slowly as people need their money back out for Xmas or people are wanting to cash in their big gains (if they’ve not done so already) or simply because the money isn’t making gains and so might as well be invested in something else.
Of course any BTC news could move it fast either way.
to bad Max didn’t tell his followers to sell at 1200$ he should have given you a sign or something…
I believe that describing Bitcoin as a commodity, rather than caling it a currency, is an improvement. However, historically speaking, it is one of the stranger commodities.
I like reading the discussions on this site. Can you imagine these Keisersite-types of, largely, consistently-intelligent comments on MSM sites? Or even on Drudge and Infowars? I can’t.
…still hoping to see what a Bit-O’-Coin looks like before it is classified out of existence altogether. I want to be able to tell my grandchildren about it. A little help, please?
they have a right to determine what a currency is within their system which is what they are doing here and defining bitcoin instead as a commodity but it is rich of them to claim they can define what a currency is for people in general for that is their choice and freewill is the supreme law.
bitcoin is indeed a currency it has all the attributes but of course if a private system such as the banking system decides it doesn’t want to incorporate bit coins into it that’s perfectly fine what’s not fine is that private system claiming you cannot use bit coin as a currency when outside if their jurisdiction.
The hardware investment in the BTC network is pretty significant. I think fair-value is more than single digit because of this. Certainly not the 1300$ max fair value of BofA: https://www.documentcloud.org/documents/885843-banks-research-report-on-bitcoin.html
Remeber that namecoin can be merge-mined with BTC, not just PPC. Btcguild alone has now almost 2 petahash that is simultaneously supporting the BTC and NMC network. NMC has ridiculous potential as an application utilty.
Here’s some anti-BitCoin propaganda:
Oops,didn’t see that Nat already covered that. I’m pretty useless.
I have read articles saying that when the bitcoin bubble pops there will be nothing to support the dollar price.
Obvious potential of going to zero.
Anyway,I googled the price today, about 2 mins ago.1 Bitcoin = $734.58
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Wasnt bitcoin $1200 a couple days ago? This could be the crash, gonna take real “kahoonees” to stick with it now I think.
Right now I am so glad I never had any use for it.
Ya never know tho, it may stabalise and actually hold a place in society yet.
I sure hope the holders of these crypto currencies have a % in gold to preserve their wealth.
The value of bitcoin has dropped by $300 and continues to fall following a clampdown on the controversial crypto-currency by the Chinese government.
China’s central bank, the People’s Bank of China, and five government ministries have said they do not view bitcoins as a real currency, as they have “no legal status or monetary equivalent,” and have warned local banks and businesses against using it.
The announcement saw the digital currency crashing on the MT.Gox Bitcoin exchange from a record high of $1,216 to $870.
The value of one bitcoin then bounced back to $1,045 for a short period of time, before dropping again to less than $660 on the night of December 7.
France’s central bank also had some harsh words to say about bitcoin this week, calling it an unreliable and risky means of investmen
Wasnt the title of this thread,
“Excellent news for Bitcoin”?
Geez, it will be interesting should we ever see bad news.
ALARM: Go short! Go short! Go short!
My God, and Max was positively the Matthew Lesko of Bitcoins for the last few weeks. I myself nearly bought into Max’s more high-pitched than normal hype over this.
Max is no better than your average huckster – though I can personally never get enough for him screaming for hanging bankers, so I continue to watch.
But Max’s investment advice? Surely he is only looking out for number one. Joe Bag-of-Internet-Clicks can go to hell, right Max.
The question on this bitcoin stuff is – what did Max know, and when did he know it?
Bitcoin will not go to zero any time soon. Let’s see what happens after the holidays when another US debt ceiling and budget battle hits. Anyone holding BTC should do so at least through that time.
Also, look at fiatleak.com, there are basically the US and China, with some Europe, buying BTC. If this takes off in India that will easily offset China losses.
It is also important to note that the value is still double what it was worth three weeks ago, after the China “crackdown.” This thing may be a fad, but it definitely hasn’t run its course yet, and anyone holding on for the moment has good reasons to do so.
Of course if you are adverse to risk then this isn’t a wise investment, but a couple thousand dollars with the potential of multiplying your investment isn’t a bad bet in the grand scheme of things.
A lot of people getting their knickers in a twist over nothing. Soon enough it won’t matter what the Chinese govt. thinks or does, the people will have spoken, with their bitcoin.
The federal reserve will not be compensated with a digital currency know as bitcoin. If they refuse they do not get paid.
Crimecoin is a currency that all felons must use. They will pay higher fees and rates and will be unable to trade their own currencies. (Serious motivator to not commit crimes?)
As you drive your car and speed you will receive digital “warning deductions”. Continue to speed and those deductions skyrocket. (sloooooow down)
Businesses decide the fees and risks NOT credit card companies or banks. All that money goes back to the businesses. Over $100 Billion would go back into the economy and not the banks!
Businesses will alert you when your currency has risen and to “come on in” and take advantage of the increased buying power!
Bit coin a commodity? Absurd! Bit coin is encrypted computer code posing as a currency and is not backed by gold or silver.
As a currency it is a rather poor quality currency.
I figured it out, plebs. Here is what will happen: The U.S. governement, FIRE industry and Krugman will wait until 1 BTC = 1 trillion USD (who needs a platinum 1 trillion USD coin?). Then, they will pay off their outstanding debts (around 155 trillion USD including unfunded liabilities) using 155 BTCs. Problem solved!
Hopefully Baidu and China Telecom and Suning (electronics retailer who was considering accepting Bitcoin before the PBC announcement) will make a deal with BtcChina or OKCoin, as now Bitcoin is regulated by the Chinese ministry that regulates commodities, and Bitcoin will be back on their front pages again.
For now they take the cautionary route which is fair enough.
“to bad Max didn’t tell his followers to sell at 1200$”
Do you think he might even say, “grazie”?
To make better use of Bitcoin you need to become
and look into ‘DarkWallet’
Lots of shrieking going on on both sides of this fence. I still think that this fight will go many rounds. Collectivists hate competing currencies and have fits about anything they can’t control.
The thing about bitcoin is that it’s not really the desire for bitcoins that drives the market cap. It’s other events occurring in the collapsing fait system. Bitcoin started it’s latest run as a reaction to the Bail in in Cyprus. Even those not bailed in had ATM restrictions that was a wake up call.
Now we have bail in plans which can hit the EU, UK or the US and Canada unannounced on a Friday evening. To anyone paying attention, the rule now is that whatever money you have deposited at a bank is not your money and you are a juniour unsecured creditor.
When a major EU nation bails in it’s depositors and robs millions of their life savings bitcoin will surge again. This is not because of how marvelous bitcoin is but an act of self preservation to get cash out of the banks and thieving hands whilst having the ability to travel with or transfer funds without suffering confiscation.
When they do a bail in, they have to do withdrawal restrictions for all customers because the amount of cash in circulation is only about 10% of the deposits so the banks will run out of cash if they don’t limit it. This means, someone with a fat Btc wallet is in a much better position then someone who is caught in the fait.
IMO, Bitcoin will go on because its like something a prepper would go to as an act of self preservation. It’s going to be attacked, vilified and maybe flash traded to increase volatility. Sure it’s risky from some angles but beats the shit out of been robbed of all your wealth.
Good points Danny.
If I could actually get my hands on one I might, just for the reasons you state.
Alas, my pewter must be too old as trying to download a “wallet?”
just doesnt happen.
This makes bitcoin only available to pewter “geeks” imo. Thus limiting its value.
I live in Alberta Canada. If the world shut dow,went to heck, I ask myself where would people go for food?
The answer around here is farmers, Hutterites, and as far as I know they dont accept bitcoin, around here nobody does actually. Not that I have seen.
Bitcoin might be a good thing for some people, but it is far from whats actually needed.
As far as a currency goes anyway. Congrats to all that made money on speculation tho, but…thats not currency.
I hear its a good money transfer vehicle too, but again, thats not a currency.
But like I said, if it was actually possible for me to own one, I probly would, but I wouldnt be buying it to use as a currency.
I’m gone to say to my little brother, that he should also pay a visit this web site
on regular basis to get updated from latest information.