26 Reasons Why I Will Never Support Bitcoin

I received another long email from a friend trying to get me to join the Cult of Bitcoin.  

Here is my response…


I appreciate your enthusiasm for Bitcoin.

I get the idea of what it is, and wants to be, but it is not anything that I could get behind, because it is flawed in so many ways.

Let me count the ways…

1. First and foremost it has no intrinsic value. The first 6 million were produced with little or no energy.  Those that had them, set out to build the perceived value, only to sell to the greater fool for their real value.  That is a pump and dump, Ponzi scheme.

Intrinsic value of money is what it could be used for, outside of a currency.  It is easy to see Bitcoin has none, because it is just code.  Silver on the other hand has something like 10,000 uses and is used in all of the highest value goods and growth industries.  It is the second most versatile commodity in the world next to oil.  I would contend that the age of oil is dying and the uses and need of silver in the highest value industries could lead to an age of silver.  And that is just the industrial demand that has already depleted the entire stockpile of  humanity. Once the dollar paradigm collapses I believe the investment and monetary demands of silver will eclipse the industrial demand.  One could argue the subjective value story of Marx and Menger, but one cannot argue that silver has NO value and yet Bitcoin could, once illusion of anonymity and lotto fever fails.  (We have already seen it crash to $0 before…)

“You cannot solve a problem from the same consciousness that created the problem.”  Carl Jung

2. Then it is not any consciously different than the bankers who take intrinsically worthless fiat and build up the perceived value through bombs, laws and taxes to sell it to us for our real value as humans in our time, talents and energy.  Just because it is voluntary is not good enough, Enron, Maddoff and Ponzi were all voluntary schemes…

3. Then it is awful even as currency, because of the massive fluctuations in its price.  Do I need to tell the story of the $4 million dollar Pizza?  One guy was so desperate to get Bitcoin to catch on, spent 10,000 Bitcoin on a Pizza.  So an early adopter spent 10,000 on a $10 pizza that cost the pizza owner $1 to make.  It is insane to think that now 1 Bitcoin this was worth as much as an ounce of gold.

4. Look at the energy input of bitcoin versus silver or gold.  No one can deny that it took very little energy to produce the first 6 million Bitcoin and the only reason why it takes more now is because it was programmed that way.  I challenge any Bitcoin person to look at all of the time, energy and talent to find, mine, refine and coin a single ounce of silver and tell me that somehow Bitcoin is worth multiple of that in energy?

5. It is also not anaonymous. I have heard from the Bitcoin programmers themselves that there are ways to find out who is using them and how much they have.  You know that customers that buy anything online usually need to have something shipped to them, do you think it takes a genius to connect those purchases to maybe illicit Bitcoin purchases?

6. There there is the whole transparency aspect of it.  I have already stated that Bitcoin is not anonymous, especially when they buy something with it, but they transparency of the log would be a way for the government to eventually role out a currency that could be tracked, traced and tax all along the way. Your history is forever on the net.  Knowing that nothing disappears on the net and that we are entering an age of super processing power, I wonder if those that seem to dance in the dark doing illicit things realize that it is inconceivable that their actions will stay secret for long.  I am sure in the near future it will be almost sport to identify those that want to stay secret.

7. It attracts con artists. (Present company not included.) Because of it’s supposed anonymity and non recourse nature it is attracting the worst in humanity with outright fraud, drugs and now even murder for hire.

8. Then there is the fact, that since this is all open source, the barrier of entry of hundreds of new crytpo currencies being created lowers the perceived value of Bitcoin and it turns out to suffer what all new products have, the commoditization of the idea.  Knock offs will abound, more scams will spring forward and more people will get hurt and that will drive people away from the whole idea. That is until some government backs a crypto currency in a post dollar world and forces people to accept something for nothing money again.

9. Then there is the fact that this is only useful when the banking system and the dollar exist.  Bitcoin needs to use banks, business and exchanges that then need to comply to government and FINRA regulations and demands.  Do you really believe that when the larger ponzi scheme collapses that people are going to trust Bitcoin?  I believe people will not want anything but the real tangible goods in their hands. Silver will thrive in that environment.  I cannot imagine going to a farmer now much less after a collapse and trying to Bitcoin for a gallon of milk.  Or how about a gallon of gas? But I am sure I could take a silver quarter and do that now, anywhere in the world, in the past, present and future.  Exchange real value for real value is natural, but exchanging perceived value for real value is not for me.

10. Then there is the whole notion of Bitcoin being a cheap way of moving money.  Have you ever looked at Dwolla?  I think it is much better without the currency risk and is over all cheaper because the conversion from Bitcoin to Dollars is not cheap.

11. Bitcoin is not really decentralized because there are so many choke points in the exchanges and redemption of Bitcoin.  People in China are learning just how quickly a properly motivated government can quash the perceived value of Bitcoin.

12. Decentralized is not enough, it must have real value.  You want a decentralized currency, silver is awesome for that.  It is private and can be stored for hundreds of years if necessary.  It is accepted world wide and throughout history. Bitcoin cannot even begin to touch that record.

Bitcoin Cia13. Then there is the fact that the CIA was in on this early, met with the programmers and the very next week Mt.Gox crashed to $0.  Do we really believe that these government agencies fear Bitcoin?  I believe they are simply war gaming what a post dollar world would look like.

14. That leads to the mining aspect of it.  Because of it’s nature it is very difficult to mine bitcoin and only those with high powered computers can do it and I can think of no other guys than Washington and Wall St loving that with more powerful computers and using other people’s money to mine them.

15. The there is the Bill Gates thing that has bothered me for awhile.  He talks about “digital mining techniques” hurting the demand for gold.  At the time I covered it, it did not make sense but watching the rise of Bitcoin and the fall of gold and silver, digital mining techniques he is talking about makes sense in a globalist scheme. (BTW Bill Gates invested heavily in silver the same time Warren Buffet did.)  Fortunately for the Chinese they no longer listen to these guys.

16.  Then there is the China factor.  China does not want dollars anymore, do we really thing that they would want Bitcoin or anything like it.  Why wouldn’t they just create their own?  They are going for real wealth that drives the real world powers.  Why would we do anything different given the demise of the dollar?  The Chinese are emptying the gold vaults and just closed Bitcoin.  I believe that this paper paradigm is doomed and those with real wealth are going to establish a new set of rules.  If you do not want to work for a Chinese owner you better have real wealth.

17. Then there is the tax implications.  You may have not noticed, but there are trial balloons circulating that they are going to go after Bitcoin people for unpaid taxes on their profits.  Remember, that is how they got Al Capone.  Silver is great because you never have to spend it and can transfer wealth to the next paradigm or can be used as collateral to be borrowed against.  Government gets frisky with silver then wait to pass it to your kids, it will probably be worth much more.

18. Then there is the amount of energy is needed to maintain Bitcoin.  The amount of electricity to maintain the system must be growing and we are heading into an age of higher energy costs and supply disruptions.  The wonderful thing about silver is that all of this cheap current energy is being saved in the inert, refined silver that needs no further energy inputs.

19. Then there is the counter-party risk of Bitcoin.  There are so many points of risk and as people that are in the business of Bitcoin can see that one letter from an government agency and they would stop the dealing in it.  I have already heard a could people dabbling in Bitcoin lost everything with no recourse because of suspected transactions.  I never want to have “Game Over” with my wealth.

20. Then there is that anti government aspect of it.  Really? It seems the Anglo American bankers love it, including Ben Bernanke and JP Morgan.  It is right up their alley with something for nothing.  They may crack down on Bitcoin only to launch their own brand.  Look at the Lotto.  They went after the mob for running numbers, but then made it legal for them to profit off of.  They went after Charles Ponzi and then created their own Ponzi Scheme with Social Security.  I am telling you Bitcoin or something just like Bitcoin will be used to sell to the people after the dollar collapse, a new electronic worthless currency.  Who knows maybe we will get bonus points for watching TV and using it?  They already have millions hooked on EBT cards, get the corporations involved and the government muscle and you could see the final realization of a digital currency where they can cut you off if you get out of line.  How many stories do we already hear about bank bailins and IRS and NSA messing with people’s bank accounts.  Having real wealth outside of the system is the only antidote for that.

21. Then there is the greater fool.  The guy that bought Bitcoin at $7 has a great incentive to promote the crap out of Bitcoin and as more people take a shot with it it drives up the perception while maintaining a constant supply. Of course the price will go up.  But what happens to the guy that bought at $1200? Does he really think he is going to find more people to bid $2000?

22.  Which brings us to the BitCoin calling LiteCoin a Ponzi Scheme.  It was on the official BitCoin wikipedia and has since been removed but I have a copy of it for you.

Screen Shot 2013-12-20 at 1.22.10 PM
Pot calls Kettle black…

23.  Enough of the lesser of two evils dialectics.  The Criminal Elite thrive in this by offering distractions from the opposite consciousness solutions that are at our feet.  All Bitcoiners say Bitcoin is better than the Dollar, but seem to shake and stumble on how Bitcoin is better than silver.  And given the current run up I cannot see how anyone would not dump their Bitcoins for silver given the relative price between the two.

24.  Even the most adamant Bitcoiners would never put all of their wealth in Bitcoin.  When push comes to shove they will admit that it is not something they would go all in on.  I know more than a few that have admitted to me that they are selling for silver meanwhile they are promoting BitCoin.  Watch what people do and not what they say.  The gambling mentality is attracted to stocks, options and Bitcoin.  Real people don’t mess with that and would rather in vest in real friends, real ideas and real wealth.

I have been all in on physical silver since 2005 and have never regretted it yet.  I put my money where my mouth is and have only talked about the long term store of value and non speculative logic of stacking physical metal.

Even with my coins that I sell, I am not selling my silver, we are creating an arbitrage with the customer purchase price and the cheaper spot metal price.  I have continued to stack more silver while it is still available.

And in the future I never plan on selling my silver and have created the Ultimate Exit Strategy to leverage the silver in the future.

25.  The destructibility of Bitcoin versus silver.  How many stories of stolen Bitcoin and trashed hard drives have we already heard?  Because it is just code, it will take very little to have it erased or corrupted.  I could throw an ounce of silver in a septic tank for and once it is washed off retain it’s value.  It would be fun to see all the ways you could try to destroy the value of silver by burning it, shooting it or dropping it.  Then try the same thing with Bitcoin on a thumb drive!  Magnet vs. Bitcoin could be the first episode.

26. Finally it is a digital distraction from the real wealth that will be most needed when times get tough.

Thomas Jefferson said that paper is the ghost of money.  Well I say Bitcoin is the illusion of the ghost of money since it is further removed to the real wealth of gold and silver.

Just like I am sure the Silver and Gold ETFs were used to distract real dollars from physical gold and silver, I believe this lotto fever for Bitcoin has distracted a good many freedom minded people away from silver and gold.  The good news is that as people sour on this fad, they will look to take their Bitcoins and cash them in.  I have had more than a few confess to me that they are doing just that.  And do we really believe all of these pundits that have been hyping Bitcoin aren’t doing just that?  I mean come on they made a living from pushing gold and silver, but the the real money is made in hyping Bitcoin rather than the small margins on selling real metal.  There will come a time when even the most die hard promoter of BitCoin will see the diminishing returns in pushing Bitcoin, and will move on.  I am sure a good many of perceptive eyes will see through this and these men have sold their reputation for a quick buck.

For awhile I was a lone voice, but now I see guys like Peter Schiff and many other thoughtful men come forward and voice the same concern.

I could go on and on about this, and I have no doubt that I called it first and would not participate in any fraud for any price.  I have even refused hundreds of Bitcoins as donations out of principle.

I would rather be right in hindsight, than popular in the present.

I wish you luck.



Here is a playlist of all of the videos I have done on BitCoin for further info.


Why Bitcoin Blows


23 comments to 26 Reasons Why I Will Never Support Bitcoin

  • Gareth


    Very polite response

  • Nate

    Btc is garbage. Your reasons are sound.

  • Michael

    Very poor article. Just because someone on wiki said Litecoin is a ponzi scheme, now the whole Bitcoin community thinks Litecoin is a ponzi scheme? Strange reasoning. Or what about your view on the destructibility of Bitcoin versus silver. You forget to mention I can backup my Bitcoins on a USB drive to safeguard my Bitcoins in case of a fire for instance. How do you want to back-up your silver? And what if your silver is stolen? Can you password-protect your silver?

  • Michael

    Also very sad that you start of by saying “the cult of Bitcoin”. Experts agree that the Bitcoin protocol is a great innovation which has a great potential. But the experts also agree that there is a long way to go to make Bitcoin successful and that there is no guarantee Bitcoin will be a success.

    So if you think that people who support Bitcoin are a “cult”, then maybe you should find yourself some new friends. The people I speak to about Bitcoin are very level-headed and open for discussion.

  • “First and foremost it has no intrinsic value.”

    I hear this a lot from the critics. First of all, what they’re not appreciating is that no good has inherent value, there’s no such thing. Instead value is subjective and imputed to goods according to how serviceable the subject believes them to be in satisfying his wants. The dynamic whereby gold becomes valuable in a person’s eyes is exactly the same as the one by which bitcoins becomes valuable.

    It’s true of course that gold is valuable for some people independent of functioning as a medium of exchange, but all this means is that in the event of a loss of confidence in gold as money, it’s price will not drop entirely to zero. If we assuming that bitcoins are sought only for trading with (a claim which is false), a similar loss of confidence might mean a price drop to zero. If this is true, then we could say that gold has a minimum likely price while bitcoin doesn’t. So what?

    Many critics believe that the lack of non-trade related uses for Bitcoin means that it can’t be a viable currency. Far from it. All this means is that there’s a marginal advantage that gold has over Bitcoin in the ‘bootstrapping’ phase (which Bitcoin has already passed) and in apocalyptic scenarios.

  • Big Picture Guy

    The 26 points about Bitcoin are valid, however it still has its uses.

    BitCoin (or any digital medium of exchange) is NOT money

    However it’s CURRENCY.

    It is however based on a market to set its exchange value.

    I would not write it off for use as electronic payment or moving funds
    DISCREETLY out of the system (or country) WHILE the computer network infrastructure is in place.


    I would not hold any significant amount of them for long periods of time
    since there is no intrinsic value (you can’t use it outside of the BTC network) and it is HIGHLY dependent on computer network infrastructure (to “create” and
    to “verify”).
    The COUNTER PARTY risk for BTC is the COMPUTER NETWORK infrastructure itself.
    This is through OBSOLESCENCE (think of all the old software you can’t run on your new computers from 5+ years ago), RESOURCE requirements (i.e. computer hardware, power) even STANDARDS and PROTOCOLS (changes in encryption standards, network addressing standards, rewriting for bug fixes, etc.)

    I believe Bitcoin and other digital currency has its role, but just remember
    when you are done using it, exchange it quickly for things that have REAL
    TANGIBLE value.


  • Joseph

    This is why I follow you Chris! Your sincere logic and practicality only strengthens my love of silver as a sound store of value and long term investment. I will be sure to pass on your 26 reasons to potential bitcoin suckers.

    Thank you…..AGAIN!

  • Shawnster

    from Frank Shostak (Von mises Institute)
    “Contrary to the recent hype, we hold that Bitcoin is not money but rather a new way of employing existent money in transactions. The fact that the price of bitcoins has jumped massively lately implies that people assign a high value for the services it offers and nothing more.”

  • shawn

    Merry Christmas Chris! I’ve often wondered why gentlemen like you, Schiff and others – instead of bashing bitcoin, don’t buy a few of them – even 10 or so. That way if the price does go to zero you aren’t out much. But if like many think the price goes much higher, you will be in on the action and won’t feel so bitter towards this new technology. Even if bitcoin gets a slice of the global remittance market the benefits for poor countries would be dramatic and who knows what the underlying value would be. It would be a bummer to see in a few years bitcoin north of $10,000 and silver south of $10.

    for consideration,

    • Silver Shield

      So basically drink the Kool Aide and buy some…
      I don’t want them for free out of principle.
      If you don’t stand for something…
      You will fall for anything.

  • Cory

    I know someone that works with company that hosts their servers. They deal with big companies. He said that Bitcoin signed a 2 year contract (which is not common to sign that short of contract). They paid cash. From the sounds of it he said maybe they know they are only going to be around a couple more years.


    We are living in a finite world with finite resources.
    The planet will not expand at all, contrary to the paper and virtual moneys who can be expanded to infinite, it costs no work to do it, just add zero after the 1.
    Virtual world is what it is: virtual.
    But at the end, you must drink and eat, it is the basic.
    By principles, I don’t want be a victim or benefit from victims of Bitcoin, Littlecoin, Virtualcoin, ChickenCoin, VirtualCoin, Coincoin or whatever name can be invented.
    History simply show that physical reality has always win over builded utopia.
    Raises yourself a simple question: You are going to dead next day and you have the choice of having your two childrens receiving both a USB key with 100 bitcoins, plus the code or the location of a box containing 100 silver (or) gold (or) palladium or platinium coins.
    What you will decide honestly?

  • Ken Danagger

    Chris, I’m a big fan of your work, but I think it’s possible you haven’t put enough time and research into understanding bitcoin and crypto-currencies on your own. You shouldn’t take the word of others – do your own research.
    I’m a die-hard libertarian who is also a big fan or Ag – have been for years. I will never sell any of it for another currency. However, I can find flaw in most of your 26 points. The arguments are either circular, outright flawed, or irrelevant.

    Let me pick on just one big one… #5 and #6 (basically the same concern).
    Crypto currencies can be as anonymous as is physically possible. Nothing else can do better – that includes silver coins, fiat paper, barter, etc. If either the buyer or seller maintains a record of the transaction, and those records can be seized, that transaction can be scrutinized. Bitcoin is no more vulnerable than any other form of private barter.
    Anyone making bitcoin purchases can use a different sending address everytime. If seized purchase records can link a purchase to a particular bitcoin address (assuming a merchant maintains records of sending addresses – which is really a pointless thing to do), it doesn’t connect to any other transactions a person makes with a different address. The original address that was the source of the funds for that address is irrelevant if there is no name connected to it through another seizure of records containing THAT address. The funds could have come from anywhere in the world. You see, there are many millions of bitcoin addresses in use, and there are greater than 10^47 power possible bitcoin addresses. The overwhelmingly vast majority of them are not connected to anyone – and never will be. Many are generated on the spur of the moment, used once, and then never used again.
    Basically, the only way to be traceable with bitcoin is by being stupid and leaving the gate wide open. Even then, it takes massive resources to track someone down. This was exactly the case with the dummy who was running Silk Road.
    Taking things one step further – many people trade bitcoins for cash or other items through contacts made through localbitcoins.com or craigslist. These transactions take place on public WiFi networks in such places as internet cafe’s or even a McDonalds. There are a LOT of possibilities. Don’t underestimate the technology and awareness of people to protect their privacy.

    • Silver Shield

      When a few get something for nothing, the rest will get nothing for something.
      Bitcoin is a digital distraction from the real wealth that will save you.

  • Robert M Stahl

    You are up against Max Keiser, who appears to be very credentialed, and the numbers match. Competitive currencies are one answer, to be certain, and form is the issue, not words (“In the beginning, all was mush and without form,” not, “..beginning was the word”). The real question is stability, where very apparently, the second law of thermodynamics is not the answer it thought it was (time being confused for limitless), although the precept of the transformation is key. As a diversion to know-it-all individuals, try taking a fresh look at physics that is physics, not math, GUTCP. The concepts are quite refreshing. “Precious, oh my precious.”

    What about Karen Hudes concept of gold backwardation? One cannot ignore the formal precepts, particularly in the light of Diana West’s formal presentation of the communism in the White House in the day of FDR leading to what? Do you know, now, that the dismissals of the officers controlling the nuclear arsenal is akin to the same issues with Pearl Harbor, those dismissals, putting all the ships in harms way? Why did one of ours detonate the nuclear bomb headed for Charleston, SC 600 miles off the coast, just to be dismissed with nearly 200 other military on the side of the commonwealth? WHAT IS NEXT?!!!

    • Silver Shield

      Listening to Cyber Christ and Hudes…
      I guess listen to all and follow none applies to them too.

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