Bitcoin Mythology: Red-herrings and Bullshit

In this DTOM article I intend to examine the nature and purpose of bitcoin with reference to monetary metals, government fiat, binary codes, intrinsic value and PONZI schemes.

My conclusions will be drawn from a biased perspective – mine.  All opinions/views are biased and I hope you have learnt to describe yours as I believe the writing here describes mine.  Let’s commence with an examination of the monetary metal. 

Gold, Silver, Copper

If you believe it was through accident, fate, or manipulation that the market places throughout the world and throughout known history have preferred physical monetary metal in the form of gold, silver, and copper then you are quite delusional.

Through much trial-and-error with numerous mediums-of-exchange such as seeds, paper, tally sticks and other forms of currency, it was discovered by practically every culture in existence that a functional market place required something that was long-lasting, easily recognised, and easy to transport around.   Over time, and throughout the world, an enormous amount of gold, silver, and copper has been forged into coins and bars to facilitate trade between individuals, groups, and eventually nation states.  This isn’t an accident that occurred through chance, it happened for the simple reason that gold, silver, and copper in physical form have been the best medium-of-exchange since time immemorial.

Platinum and palladium have rarely been used since they were discovered relatively late, and because, more importantly, they are difficult to distinguish from silver.  I state above that the market place naturally craves a currency that’s ‘easily recognisable’ and as a thought experiment please place a gold coin next to a silver one next to a bronze/copper one.  They are easily distinguishable from each other and have provided many market places with a functional currency for items ranging from luxury items such as grand palaces to basic purchases such bag of potatoes.  If there’s an item for sale, one of the monetary metals can easily provide the medium-of-exchange.

To deny gold, silver, and copper are the ‘Kings of currency’ is to state that all our history books are incorrect – which may have an element of truth to it J – but not in this context.

The mistakes in the past have been to ‘fix’ the value of gold, silver, and copper in relation to each other, and in a nominal format.  Hopefully we won’t do that again and instead utilize the monetary metals on two basic principles: Purity and weight.

Binary code and perception of fiat

We’re starting to hear more-and-more about Bitcoin as time goes on and the contemporary monetary system shows increasingly obvious signs of weakness and vulnerability to collapse.

Those that encourage you to utilize the new cyber-currency called bitcoin may be well-intentioned, and indeed many bitcoin advocates are also monetary metal enthusiasts.  Although there is a strong suspicion for some regarding bitcoin, I’m philosophical towards it, although I must stress that I have no interest in it myself.

However, as many have stated prior to my rantings here, bitcoin is merely binary code and has no intrinsic value whatsoever.  Furthermore, it would appear to have pseudo-PONZI scheme qualities in which the early adopters are rewarded and the later-joining participants gaining less as time unfolds.  Bitcoin has apparently increased in price by 2000% in two years; does anyone reading this believe this trend will continue?

In the early days of my awakening to the current monetary systems in play I frequently asked people around me the simple question, “How much of £sterling is in physical notes and coins?”  I received a variety of responses with some believing that 50% is in physical form with the remaining being stored on a computer database – i.e. in binary code.  I used to examine their eyes as the individual elaborated upon the simple fact that a mere three-per-cent of £sterling is physical with the vast majority simply being a virtual currency…….”A bit like a computer game” one person responded.  “Yes, indeed” I replied.

Myth One:  The public accepts digital currency is a good thing

I would imagine if a large percentage of the population realised their wealth was in the format of intangible fiat currency, there would be a global bank-run in a matter of days.  Although our contemporary currency system has functioned like this for some time, it has worked without the general population being aware of the facts.  I would also assume most folk believe their currency is stored 100% in paper at the bank, an assumption about to be proved fatal for many throughout the euro zone area.

The criminal elite have a wet dream regarding a ‘cashless’ society and are continuously attempting to implement one without success to date.  This is because the vast majority of people have a psyche in the concrete and not in the abstract.  Bitcoin, being an intrinsically-worthless and abstract currency will not be adopted by the general population, and I personally believe that the majority of folk currently paying attention to its progress are doing so for one purpose alone – greed and the chance of making a profit.

Myth Two:  Bitcoin is a store-of-Value

People often use the shipwreck example to explain the notion that gold and silver are a store-of-value.  In essence, it’s simple:  A ship sinks in the year 1713 with one-hundred gold sovereigns and two-hundred silver florins on board.  In 2013 the ship is discovered by a team of deep-sea divers who bring the stash up to the surface.  Has the gold and silver ‘stored’ value?  The answer is of course, yes, and not only that they will probably have a ‘premium’ over their intrinsic melt value due to numismatic qualities.  What would happen to your ‘bitcoin wallet’ three-hundred years from now, or even 6000 years from now?  Yes, there are coins from 6000 years ago made of electrum in museums that have a basic melt value.  Bitcoin also requires a computer and electricity to function, which sounds, to me ate least, like a massive assumption of conditions.  Without a computer and electricity bitcoins revert to their intrinsic value of worthlessness.

Myth three:  Silver has no intrinsic value

This myth of nonsense has been thrown-around by those that really should know better, and I’m extremely suspicious as this myth is used in correlation with the promotion of bitcoin.  Let us review the exact words again to put this myth to bed once-and-for-all.

Intrinsic:  belonging to a thing by its very nature: the intrinsic value of a gold ring.

Value:  relative worth, merit, or importance

Those that are perpetrating the myth that silver has no intrinsic value are attempting to get you to reason that all value is perceived…..a flip on the saying, “beauty is in the eye of the beholder” into, “value is in the mind the beholder”.  This is partly true, and, after all, most bullshit has an element of truth to it otherwise it wouldn’t work.

Most DTOM readers will be aware of the wealth cycle principle and ratio investing, and will not be surprised nor enlightened with the concept that there is an element of the human psyche involved when examining value.  However, I refer you to the definition above which specifically states ‘relative worth, merit, or importance’.  Relativity is independent of the human psyche.  For example, there is relativity in the gravitational pull of planetary bodies; a phenomenom that existed before humans, and I dare suggest such relativity will exist long after our species meets the same fate as the many species before us.

Silver has intrinsic value/importance regardless of whether the human mind knows of its existence, just like oxygen has intrinsic importance prior to human kind discovering the properties of the air around us.  To suggest otherwise is either intellectually thick-as-pig-shit, or, as I chiefly suspect, the mind or minds of those with an agenda to promote ‘value’ in an intrinsically worthless entity such as bitcoin.  Those that fall into the latter category should be fully ashamed of themselves, shunned by the other awakened folk, and have their nonsense challenged for all to see.

Myth Four:  Bitcoin is anonymous

Trace Mayer recently appeared on a BBC Newsnight interview to pump the credentials of bitcoin to the British public.  Accompanied by Mr Knowles,  a shill from the Rothschild-controlled Economist, Trace and the shill debated for a few moments.  You can review the interview for yourself by clicking here.

Trace was reasonably honest and stated he uses bitcoin as a medium-of-exchange to circumvent the banking sector, and conceded that it is indeed a speculation/investment to make a move into bitcoin.

After the interview Trace addressed some of the topics discussed, and one of the arguments the Economist’s shill made was that bitcoin could be used for money-laundering, i.e. he was stating the myth that bitcoin is anonymous.  In response, Trace wrote:

Additionally, all transactions are permanently stored in the blockchain which anyone can review. This leaves a tremendous amount of digital footprints that a competent forensic accountant can follow.”

“Consequently, I think Mr. Knowles is attributing to Bitcoin’s censorship-resistant nature a property which it does not have. Just because a payment cannot be stopped does not mean it cannot be traced.”

So there you have it from one of the most knowledgeable people on the bitcoin operations system.  Clearly, although there are no capital controls obvious to TPTB stopping a transaction in bitcoin occurring, they could if they so wished find out what coins are being used for what, where, and by which computer ISPN.

Myth Five:  Bitcoin is immune to the powers of the Banking Cartel

I’m not going to comment too much on this particular myth but would like to stress:  Are you fucking kiddin’ me?

Are you seriously trying to tell me that TPTB in the western world, the same self-professed elite that had the ability to pay programmers to design STUXNET can not, if they so wished, pay the best computer experts to completely sabotage the existence of bitcoin?

Like I stated:  Are you fucking kiddin’ me?

Summary/Conclusion:

Physical monetary metals have served the market place for millennia in various regions around the globe.  This is due to a process of trial-and-error with a variety of currencies with the outcome being the metals gold, silver, and copper becoming the ‘Kings of monetary history’.

Unlike bitcoin, gold silver and copper have intrinsic value outside of the human consciousness and although the human psyche does have a ‘value in the mind of the beholder’ effect on the monetary metals their value is not solely derived from such contemplation.  Bitcoin, on the other hand, is digital binary code with zero intrinsic value similar to digital government fiat currency.

The majority of humankind operate in the concrete rather than the abstract, and that is an explanation as to why TPTB have so far failed to implement their wet dream of a cashless society and computer-only currency transactions.  Bitcoin will meet the same reception from the general population……especially as the anger stage moves up a gear due to events in the euro area.

People will want to hold tangible wealth.

There are a few myths surrounding bitcoin and it is wise for anyone considering its usage to consider why they are interested in acquiring some:

Is it for profit?  How much longer will it rise?

Is it for an international medium-of-exchange?  The world is returning to localism, is it not?

Is it for confidentiality?  Trace Mayer states quite clearly there is a paper trail – or in this case a ‘binary code trail’.

But hey, it’s up to you if you want to speculate on whatever and whenever.  As I stated at the start of this article we are all biased and my bias motivated me to write this piece.  The thing that pissed me off was the utter bullshit being peddled about that “silver has no intrinsic value.”  If you genuinely believe that then you’re an intellectually pygmy not worthy of debating my 7-month-old son J

As always, keep safe and good luck.  Keep stacking that physical monetary metal – especially silver – and keep your wits about you as more-and-more shills and red-herrings will be released/unleashed as we go deeper into the collapse.

Peace

68 comments to Bitcoin Mythology: Red-herrings and Bullshit

  • Jim

    I think you might misunderstand or not understand cryptography and peer to peer networks. That’s where the power of Bitcoin is.

    Here’s a few of the things that Bitcoin is:

    http://peculium.net/2013/03/24/bitcoin-the-network-monetized/

    In this age, gold and silver will be the local currencies and Bitcoin is how we’ll spend money on the net. I see so many people afraid of things they don’t understand and Bitcoin is one of them, just like people used to be afraid of the net.

  • joe in myrtle

    wonderful and thanks chris,
    encrypted money, coinage so we can or it can be hidden from
    whom? all encryption can eventually be broken down, and the
    people that may wish to go after crypto money for any reason, well they
    do not have to be right. imagine the lives harmed already by aggressive
    governments that get it wrong, the rules and the technology is on the side
    of government, right or wrong you will lose. hold real money in your hands.

  • Tim

    Blunt and Brilliant! Everyone inside the bitCON craze needs to read this article to catch on to the reality of things.

  • Pedro

    Thanks for your comment. I just do not have a good feeling about bit coin. That of course does not mean that some people can buy and make money for some time (as in internet stocks).

  • GIMMEA BREAK

    Ben Bernanke uses BITCOIN, but he calls it ‘Quantitative Easing’ which is no more than electronic creation of money that never existed in the first place.

    by the way you knew that IN Q TEL and MOSSAD/CIA were early proponents of BIT COIN, right?

    just another fleecing mechanism. No more, no less. Money out of nowhere.

  • Bri 3D

    I couldn’t agree more. Great article.

    I would add one more tidbit from my own point of view.
    When you boil economics down to its very basics, it is just simply barter.
    I trade milk from my cow for eggs from your chicken. Win/Win, EVERYONE understands that.
    Straight barter is cumbersome. What if I want to sell my milk but don’t want your eggs?
    EVERYONE understands that. We have a need for money.

    This is where the intrinsic VALUE of the metals comes in handy. I give you my milk for your silver coin. We both still received something of VALUE. Win/Win.

    All other currencies ( paper, bitcoin, ect. ) only promise value in the future. They have ZERO value themselves.
    So why would I want to trade my milk for a PROMISE of something later? We all know promises get broken and history proves over & over again that these promises always get broken.

    The founders understood that the best way to preserve liberty was for the people to have the nations wealth. They wanted the valuable coins to be in the pockets of the people, not in the feds vault. It should be obvious to anyone paying attention that our liberties have been slipping away. That is because the people have no wealth. They have paper promises that are being broken.
    There are many saying that we are going to return to a gold standard. I don’t know if its true but there is a huge difference between a gold standard and gold money. A piece of paper that says its backed by gold is still just a promise. When you buy a gallon of milk and get handed back a silver coin for change, THAT is when you know the people are free from these empty promises.

  • Alex

    AMEN , . You put a $5.00 bill , $5 worth of silver or $5 worth of bit coin (in binary or coin form from a new bit coin ATM) in front of me and say take your pick I’ll take the silver and say GOD BLESS YOU SIR , Thank you P.S. Have a nice day

  • Known Unknown

    No value?

    Value does not come from matter only. Services have value. Bitcoin does that – provides a service others can’t. Buying Bitcoin = renting it’s service. Service can’t be stored for thousands of years like gold coins , doesn’t mean it has no value while it’s useful. Comparing digital currencies to physical ones is like apples to oranges. In modern world using physical metals for other than in person transactions is unrealistic. Electronic funds transfer to the rescue.
    Casino chips have no value outside of the game yet valued as money, so do bitcoins and to some extent the fiat currencies based on fractional reserve.

    Not anonymous?

    There are numerous laundering/randomizing services. One of the major Bitcoin-based markets ,Silk Road ,has a built in Bitcoin washer – all Bitcoins passing through are automatically passed through a tumbler so that different coins are retrieved than were deposited in. Can you name a single prosecution that used publicly available info from the blockchain? Used in conjunction with other electronic currencies , such as Webmoney, Pecunix, Liberty Reserve etc. it’s untraceable as lack of prosecutions demonstrates.

    Sabotage by the banksters?

    This “argument” demonstrates lack of understanding of the bitcoin’s design. Stuxnet comparison as well demonstrates lack of technical knowledge. The futile attempts to do anything about the peer-to-peer file transfer networks ( the concept underlying bitcoin) flourishing for more than a decade is testament to it’s reliability.

    Conclusion : precious metals are not in competition with Bitcoin , comparing the two is apples to oranges. Bitcoin is in competition with the bankster’s cartel in global electronic funds transfer , offering freedom from their ( and governments’) limits and control.

    • I said no intrunsic value. Re-read what is written.

      Take-up the anonyminity debate with Trace. I suspect he’s more knowledgeable than you or I. :-)

      Arrogance is usaully the first mistake in any war situation. To assume that your bitcoins are immune from the reach of the banksters is an assumption that’s yours, mine and everyone else’s to take.

      I didn’t state that bitcoin is in competition with the monetary metasl, If it was, like any other illusory currency it will fail in such competition. Whether the bitcoin is in competition with govt fiat is unclear.

  • Not a banker

    This is a downright ridiculous piece, obviously written to the favor of the bankers.

    “pseudo ponzi” pseudo equals FALSE, a state of NEGATIVE, as in, NOT PONSI, and bitcoin is not. The people who started Bitcoin had no idea where it would go, and the fact that it succeeded does NOT MAKE IT PONSI.

    Why single out Bitcoin for ridicule just because it has vulnerabilities and is somewhat speculative. Ask the people in Cyprus how they feel about speculating on the Euro. They most certainly did not see a gain of 2000 percent on THAT “pseudo ponsi scheme”.

    • Silver Shield

      Just because we don’t buy into your scheme does not mean that we favor the bankers merely we are sick of the lesser of two evils choices that are continuously pumped as the next savior.

      We choose to stick with the Silver Bullet and the Silver Shield as the best way to provide REAL wealth ahead of the collapse of the dollar and as a mean of with drawing what little REAL capital from the much larger PONZI scheme the dollar.

      “You got to know when to hold ‘em, know when to fold ‘em,
      Know when to walk away and know when to run.
      You never count your money when you’re sittin’ at the table.
      There’ll be time enough for countin’ when the dealin’s done.” The Gambler by Kenny Rogers

    • pseudo, like many words, can be used in a few contexts, and therefore have a few definitions. One for pseudo is:

      ‘almost, approaching, or trying to be’.

      However, I will concede that the term quasi-PONZI scheme is perhaps more suitable for bitcoin :-)

      Oh, and yeah, I fuckin love the banksters LOL

      The Cypriots would do well to store monetary metal and not some other illusory currency such as bitcoin.

  • Hey, this is another route for the authorities to control the shitcoin, sorry, bitcoin. This route would only work of course if there really is a cap on their production.

    The local governments, in cahoots with broader/regional governments could simply encourage people to pay them with bitcoins, and then, voila, they can they sit-on-them a bit like the Chinese currently sit-on US treasuries. In other words, TPTB could simply get many folk to hand them over:

    http://www2.egovlink.com/press-release-bitcoin.cfm

    Sorry if this is beyond mere ‘technical attributes’, Jim and ‘known unknown’, and is a more Psychological strategy that the elite could engage in, but hey, they’re not just technocrats ya know ;-)

    • Sp

      The gov. or whoever can buy up all the bitcoins they want. Once such a move renders Bitcoin useless a clone can be started as has already happened with RuCoin, NovaCoin etc.

      And as stated above the argument that the metals are better at storing value is irrelevant – Bitcoin does not compete with the metals as a long term value storage tool, it’s a service for quick transactions. Very few speculators invest in Bitcoin as in a value storage. For the rest it’s just an instrument of convinience.

      • “Bitcoin does not compete with the metals as a long term value storage tool”

        Completely agree.

        “Very few speculators invest in Bitcoin as in a value storage”

        Any data, e.g. Q’airres supporting that claim?

  • Common Sense

    I don’t think you understand the meaning of ‘extrinsic’ and ‘intrinsic’. No physical object can have instrinic value. All spatio-temporal objects have value (and indeed all their properties) by virtue of their structural relations to other objects. Only ideal entities such as virtue, happiness, love, etc. could possibly have intrinsic value.

    You make no arguement for the intrinsic value of precious metals. You say that these metals have been selected as a store of value for a reason (recognizability, portability). This clearly establishes their EXTRINSIC value, ie, humans may easily recognize or transport these metals.

    • “I don’t think you understand the meaning of ‘extrinsic’ and ‘intrinsic’. No physical object can have instrinic value.”

      Utter bullshit.

      Intrinsic is defined as, “belonging to a thing by its very nature”

      Nature has a few definitions:

      “noun
      1.
      the material world, especially as surrounding humankind and existing independently of human activities.
      2.
      the natural world as it exists without human beings or civilization.
      3.
      the elements of the natural world, as mountains, trees, animals, or rivers.
      4.
      natural scenery.
      5.
      the universe, with all its phenomena.”

      If you’d actually read the article with an open mind isntead of a closed one full of assumptions you would have read both silver and oxygen have intrinsic, i.e. properties “belonging to them by their very nature”.

      Furthermore, such properties exist in nature as defined by “existing independently of human activities.” In other words, silver, like oxygen, has intrinsic value independent of the human psyche.

      So:

      1. You can re-write the dictionary all you want, ‘common sense’, but that does not make you correct. In fact, it makes you extremely dishonest.

      2. I make a clear argument regarding the intrinsic value of silver. Perhaps I should set you bitcoin enthusiats – those amongst you that believe they can re-write dictionary definitions on the spot – some comprehension questions at the end of an article like a primary school student gets. Just to make sure you have actually read what is written before comment :-)

      PS I readily accept critical comments, but you my friend do not knoe your dictionary and are low down on the comprehension skills scale LOL.

  • ke

    “Like I stated: Are you fucking kiddin’ me:”

    no I’m not kidding you , Stuxnet was a simple code , read into it ,Kaspersky commented on it many times its no secret, it relied on “social hacking” in part and the specifics of the closed code in the binary systems .

    the opposite of that is an “open source” network , indeed if the supercomputers of the world are put to task , perhaps , perhaps they could create duplicate Bitcoin. but then, if and when discovered as it is open source, the game rules would change and those Supercomputers would haev to go back to work again. , it all adds up to “very difficult”

    as opposed to the fact of (can i underline fact) of physical metals short selling and paper issuance, and fiat issued buy the financial institutions that just “hair cut” depositors of 100 of thousands of dollars millions even. ]

    so? who knows.

    • Fair enough comment in many ways.

      However, you are focussing on sabotage in the technical sphere, and I only used stuxnet as an example of the extreme acts ‘they’ will go to. Stuxnet could’ve potentially triggered something major.

      This is a different, psychological, approach TPTB could use: Collect them in from willing members of the public:

      http://www2.egovlink.com/press-release-bitcoin.cfm

      “of physical metals short selling and paper issuance”

      I know, but won’t can’t go on forever, won’t. The Chinese are not playing ball with the Rothschild-controlled western banksters, and one day their ‘shorting’ will blow-up.

      “that just “hair cut” depositors of 100 of thousands of dollars millions even.”

      Again, I know, and have full sympathy for those that have failed to move their wealth out of ‘their system’ before the thieves take from them.

      “so? who knows.”

      Exactly, and that’s why I, like many others, much prefer physical assets on-hand rather than something abstract. For example, I would prefer 50 tins of corned-beef stored than a single bitcoin in a bitcoin ‘wallet’.

      Good luck, dude.

      • Sp

        Good luck paying with tins of corned beef for anything outside local market. FedEx them tins over to China for a product you need?

        • Well I would imagine I’d just use £sterling :-)

          Unless of course your referring to the upcoming capital controls and by that point no one will buying shite bar big companies that have a cozy arrangement with government.

          Furthermore, in such conditions as capital controls I’m sure customs would be interested in a package worth X bitcoins LOL

          Think i’ll stick to tangibles and use £sterling till the illusion of electronic wealth dissipates :-)

          • Fix

            Control Bitcoin how? If it was possible it would’ve happened long ago. The whole point ( at least a major one) of Bitcoin is that it’s designed to be outside gov. control. It’s not quite clear what is meant by a package worth x bitcoins, aren’t all packages ? Electronic money is not an illusion – have been around for decades, and wouldn’t be if there was no demand that gives it value. The illusion though is in equating electronic funds transfer , which is a service, with material goods such as metals. The service is in verifying that material goods have been received.
            When you hand over material money to the Western Union you’re buying their zeros and ones of the binary code that represent service of assurance to the receiver that the payment has been made. Same with Bitcoin only without the controls you fear. WU zeros and ones are an electronic equivalent of a cashiers check , bitcoins’ zeros and ones are equivalent of currency with which they’ ve been paid for.

            • Bitcoin has a net worth of approximately $1billion. That’s f’in peanuts in comparison to the global derivatives market and shadow banking sector, which is thought to be in the quadrillion ballpark area.

              The qusetion isn’t so much ‘how’ at the moment but more ‘why would we bother’. I’m sure TPTB have more on the plate at this moment in time.

              But hey, if you’re using bitcoin to send currency overseas then I could understand that if it’s cheaper.

              By ‘package arriving with X bitcoins’ as value I’m refering to customs VAT. Specifically, if I purchased a product from China I would be subject to a 20% inport VAT aling with a ‘handling fee’. For customs to calculate such a volume they would’ve already accepted bitcoin as a legitimate currency. What would they charge the 20% in, £sterling or bitcoin?

              • Accidental Mistress

                How does customs determine the total the 20% of which they intend to charge?
                What proves that the package was paid for? What if the receiver is paid to receive the package by the sender does it mean the customs will add the negative 20% of the negative total , that is the positive 20% to the receiver?
                It’s getting more confusing rather that the opposite.

            • PS Electronin money is an illusion as it’s an:

              a. An erroneous perception of reality.
              b. An erroneous concept or belief.

              http://www.thefreedictionary.com/illusion

              Just because something has been around for decades does not render it a correct perception of reality, neither does the majority having such a perception – through group processes – render it correct.

              I find it rather strange than many bitcoin enthusiates are perfectly willing to accept that government fiat paper is an illusion of wealth but not bitcoin. Strange.

              I suggest you revise the work of Maloney et al, and Charles Mackays legendary book, “popupar delusions and the madness of crowds”, and then perhaps you’ll understand the concept a little better.

              • Accidental Mistress

                “I find it rather strange than many bitcoin enthusiates are perfectly willing to accept that government fiat paper is an illusion of wealth but not bitcoin. Strange.”

                The fiat paper of fractional reserve is a partial illusion to an extent, as far as it’s partially backed up by something of real value. It’s material backing by gold is gone or almost gone and it’s main value like Bitcoin is in service it provides. Also it unlike Bitcoin can be inflated at will by issuing more fiat. Bitcoins value on the other hand comes from the service it provides , the market demand for which drives up the value of Bitcoin. Again unlike the gov/banksters fiat Bitcoin can’t be inflated at will , the new bitcoins are created as payment to the maintainers of the system and at an ever greater effort provided by the maintainers/service providers. Fiat issued at will backed up by nothing is indeed an illusion. The ever decreasing payments to the Bitcoin service providers are quite the opposite just like the deflation-oriented Bitcoin is the opposite to its inflation-oriented gov/banksters competitor. Simplifying further – Bitcoin is not fiat. Fiat = the ever increasing wealth to the issuers, Bitcoin = the ever decreasing wealth to the issuers. Service of the medium of exchange provided by fiat costs more and more due to inflation, the opposite with Bitcoin.

  • Peter Norton

    In the fog of information re bitcoin, this is THE most educational writing I’ve seen on the subject. The perceived rising “value” of bitcoin makes me shudder. Someone somewhere is getting it deep and painfully in the ass…though they may not have yet learned of it.

    Bravo.

  • Sp

    Bitcoin is useful when done right

  • Sp

    There is no reason to buy bitcoins other than immediately prior to using them for a desired transaction, thereby reducing the chance of losing to a potential devaluation (however paranoid such fear might be) to virtually zero.

    P.S. something is wrong with this commenting section – all comments are invisible until one is posted.

    • I don’t see the point of buying bitcoins to immediately purchase something unless the good or service MUST be purchased with bitcoin……..which isn’t usually the case.

      Dunno about the commenting section, I’m not the site administrator.

      • Fix

        That’s a good point – the MUST. The banksters cartel must be disempowered , gov. jackboot must be lifted off individual financial ( and other) freedom and Bitcoin is a tool to accomplish that. Transacting without the banksters fiat and without the gov. limits renders them laughable in their irrelevancy.

        • “The banksters cartel must be disempowered”

          Completely agree. What is the best strategy through:

          A: Using $90 to purchase three physical ounces of silver to aid the collapse of their derivatives market, or

          B: Using $90 to purchase a bitcoin and buy something that I may or may not need in an ‘act of defiance’.

          I think ‘A’, as do many others.

          But hey, it’s up to you what you do with your fiat, ‘Fix’.

          G’luck.

          • Accidental Mistress

            Why both. And both depend on the number of participants – the derivatives market will not be brought down without enough
            silver bought and the banksters cartel will not be affected until enough people abandon their “services” in favor of alternatives such as Bitcoin. And besides one can not only buy something worth $90 in Bitcoin but sell as well. Furthermore one can kill 2 birds with one stone by buying and selling metals with Bitcoin. Google ‘ buy sell gold silver Bitcoin’ .

            • “the derivatives market will not be brought down without enough
              silver bought”

              Exactly, so why waste excess fiat on bitcoin? Keep stackin, and encourage others to stack too :-) Apparently if each European bought one single oz the system would implode in days.

              I agree that alternative methods of commerce outside of the banksters clutches should be sought, but with bitcoin being a mere $1billion compared to an estimated quadrillion$ in derivatives and shadow banking it would take a helluva an increase in bitcoin’s value to have any effect whatsoever.

              • Accidental Mistress

                With less demand for the banksters services ( overtaken by the alternatives like Bitcoin) the banksters quadrillions will depreciate … eventually to zero at the same rate as the bitcoins $1bln will rise – a two wAy vector , accordingly faster. Very likely in a bell curve progression. Silver is not seen as a convenient medium of exchange as cashless electronic currency. Most people value comfort over justice and it can be given them to achieve both – lured by convinience and other attractive properties of Bitcoin etc. they’ll be bringing down the banksters cartel by making it irrelevant whether the bitcoins users want it or not. The world is moved toward cashless society by the banksters exploiting people’s preference for comfort over higher ideals and Bitcoin is a way to beat the banksters at their own game.

  • Chris

    Excellent article. TPTB would love for everyone else to be chasing an asset whose value could disappear in the blink of an eye (legislation change, power outage or EMP burst), while they accumulate more real hard assets.

    • Accidental Mistress

      Bitcoin is immune to legislative change. Power outage and EMP affects all electronic finance, not only Bitcoin. And since Bitcoin is so widely distributed its more likely to survive than the more massively clustered bankster’s system. There are likely multiple back ups worldwide of the Bitcoin database on invulnerable to EMP optical media.

      • “Power outage and EMP affects all electronic finance, not only Bitcoin.”

        Yes, that’s why here at DTOM we suggest holding some physical cash along with physical precious metals.

        In the US, a power outage may be uncommon at the present moment which will encourage a ‘normalcy bias’ that the electricty will always be on. Travellors of the world know full well that power outages can and do occur – frequently in some parts.

        How useful would bitcoin be in such conditions, AM?

        • Accidental Mistress

          Those same parts of the world with electricity shortages are the ones that require more protection for the physical money, i.e. one better be well armed in addition to well heeled. The better electrified parts of the world are the main financial battlefield.

          • You still appear to be assuming that you yourself will not encounter any electrical shortages, Accidental Mistress.

            In the early 70’s, the UK wasn’t exactly a third world country, but economic conditions ushered in the three-day-week. No electricity was provided to residential housing as the energy was prioritised to ‘key’ industries. To assume this couldn’t happen in your neck of the woods is perhaps just hopeful.

  • Fix

    Posted this to see the comments invisible otherwise. Someting is broken here

  • Accidental Mistress

    How interesting. I’ve used Bitcoin for 2years. No complaints.

  • @ Accidental Mistress.

    You wrote above but there wasn’t room to reply there:

    “How does customs determine the total the 20% of which they intend to charge?
    What proves that the package was paid for? What if the receiver is paid to receive the package by the sender does it mean the customs will add the negative 20% of the negative total , that is the positive 20% to the receiver?
    It’s getting more confusing rather that the opposite.”

    I’m not sure where you’re located and can only comment on imports to the UK. Here, the item must have a value on it or it’ll be flagged, opened, and someone from customs will place a value on it. Items that have been valued by the sender as under £36 will be allowed in VAT free. Items above that will be subject to taxation , whether they are also labelled ‘gift’ or not.

    In the specific example above an item from China with a value of X bitcoins, or no value, would indeed get flagged at customs. If govt authorities decided that bitcoin was a legitimate currency, and the package was labelled X bitcoins, then they could place a nominal £sterling value or bitcoin value at 20%. How would they request it though, in bitcoin or £sterling? If, on the other hand, they didn’t recognise bitcoin as a legitimate currency the package would be treated the same as one without any label and provided a nominal value by a customs officer.

    Is that clear or not?

    • Accidental Mistress

      Understood. Perhaps the UK has no small claims court to sue the customs forcing them to prove the package wasn’t free or even paid for to the receiver , making them lose thereby setting a legal precedent to stop this unreasonable practice.

  • You keep writing at the end of posts in which the ‘reply’ option is unavailable, Accidental Mistress :-)

    Anyway, both government fiat and bitcoin is an illusion of wealth, I could be rude and state they’re both delusions of wealth, also, but I won’t, oh wait – I just did.

    It is true that as the issuance of bitcoins progresses the volume increases, but if the pumping continues to the public the value doesn’t go down, it will go up.

    Sorry, Accidental Mistress, but I wish to frank with you now as it’s late this side of the pond: I view bitcoin as a pump&dump scam, and the more I read/learn/debate it with others the further I’m convinced that is a not only a pump and dump scam but a delusion.

    Read Charles Mackay’s book :-)

    • PS Accidental Mistress.

      Government fiat isn’t partially backed by gold, and hasn’t been since 1971.

      Two primary factors back governmnet fiat. The issuing government’s 1. ability and 2. willingness to tax rape their population.

      • Accidental Mistress

        Bitcoin and other electronic finances can help avoid taxes. So of course can metals and fiat cash in local transactions.

        • I wouldn’t worry about all that too much. They will never be able to extract the taxes necessary to pay the govt debt. It’s increasingly like ‘trying to get blood out of a stone’.

          The bubbles are about to pop.

          Prepare yourself accodingly.

          g’luck accidental mistress.

  • @ Accidental Mistress:

    I agree that the banksters would absolutely love a cashless society, but it won’t happen. Indeed, I foresee a reverse of the past two decades in just a few months/years as people desire physical money/currency in the form of cash, bullion, etc.

    Have you ever read ‘the silver bomb’?

    One important aspect they discuss is the ‘trust bubble’. Fact is we’ve had a faith-based, i.e. trust-based, system for a long time and such trust will evaporate when TSHTF. At this point people will want physical possession of items, including their money/currency.

    This is a quote from an individual that lived through a hyperinflatinary collapse, it’s related to the ‘trust bubble’ I mention.

    “It was me against my brother
    Me and my brother against my cousin
    Me, my brother and my cousin against the neighbour
    All of us against the foreigner”

    In a nutshell, in a SHTF scenario bitcoin will be rendered useless instantaneously. i suppose was we all need to devide is whether TSHTF scenario is on the horizon. I, like many others, believe it is.

    I’ll stick to silver :-)

    G’luck

  • whats up

    53 comments and not one displayed?

  • Chumbawamba

    You fail to mention anything intrinsically valuable about silver, so here are some admirable attributes that reinforce the claim.

    Properties of silver:
    – it possesses the highest electrical conductivity of any element
    – it has the highest thermal conductivity of any metal
    – it is anti-microbial
    – it is anti-bacterial
    – it has one of the highest optical reflectivities

    You are welcome.

    • A few of us tried to explain it in that context, bud, but we still hit a brick wall with some people. I, like a few others, received the nonsense that ‘value is only in the mind’ etc.

      Thought I’d try a different approach that’s all.

  • Mark

    Hi Gareth,

    An excellently written article, with a bit of good humour :-)

    I see no problem having a bias, when it keeps you financially alive. I am going to quote you from your article:

    ‘Bitcoin also requires a computer and electricity to function, which sounds, to me ate least, like a massive assumption of conditions.’

    That statement pretty much drives a ‘Silver Stake’ into the heart of Bitcoin.

    Finally, I have read that when the ‘£’ and ‘$’ had two lines through their symbols, this signified they were gold backed. When the Euro was launched it was backed by gold too (though it still has two lines through its symbol – ?). Who are these Bitcoin proponents kidding trying to pass it off as a medium of exchange having substance?

    Peace

  • jonnyfram

    Enjoyed your article. But I’d add that if it wasn’t for TPTB getting greedy for their pound(s) of flesh that a cashless society would be pretty easy to maintain- as we are way more than half way there, and regardless of what I personally think- it is much more efficient. But I have little to no doubt that when the rapacious over-class over reach themselves that the paper electric ponzi fraud of frac-reserve will be exposed.

  • Motoicon

    Everyone can argue all they want over semantics and definitions, etc. For me, I just dont trust bitcoin or any other diget or piece of paper.

  • Bob

    Where is my previous comment?

  • Ray

    I agree one hundred percent. This all value is subjective bullshit is what feeds pigheaded ideas about what money really is.

  • rev. dave

    I have to wonder how much Bitcoin will be worth in terms of barrels of oil when the world’s supply of oil is near dry and there’s no electricity available from all the oil-fired generation stations to even take your own inventory, let alone trade anything on-line. Of course, at that point a live chicken will probably be worth it’s weight in silver too, but how many bitcoins will it take to equal the weight of that chicken?

  • […] Bitcoin Mythology: Red-herrings and Bullshit | Don't Tread On Me In this DTOM article I intend to examine the nature and purpose of bitcoin with reference to monetary metals, government fiat, binary codes, intrinsic value and. After the interview Trace addressed some of the topics discussed, and one of the arguments the Economist's shill made was that bitcoin could be used for money-laundering, i.e. he was stating the myth that bitcoin is anonymous. In response, Trace wrote: “Additionally, all transactions are permanently stored . […]

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