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Bitcoin Is Great for Crapshooting but Little Else

By Rick Ackerman Posted on February 24, 2014, 8:17 am EST Last Updated February 27, 2014, 9:13 pm EST

This week’s discussion is wide open to anyone who can shine a positive light on bitcoin, a digitally encrypted, virtual currency whose manic popularity should vex every prudent man.  Bitcoin’s appeal as a speculative trading vehicle is understandable, given that its violent price swings promise huge profits to anyone on the right side of the moves. (And for the record, speaking as a trader, I have only respect and admiration for those who have been able thus far to exploit the hordes of greater fools who have flocked to the game.)  It’s also easy to see why bitcoin would appeal philosophically to those looking for an alternative to sovereign currencies that have been rendered hollow by the Banksters and their political lackeys.

But bitcoins as money? This makes no sense to me.  Granted, a peer-to-peer payment system that cuts out the middle man sounds appealing in theory, since, as far as swindlers go, the world’s central banks make Bernie Madoff look like a paragon of rectitude. But why would any business that offers services or products accept payment in bitcoin when the electronic currency’s value could fall by half overnight? Worse has actually occurred. In the last month alone, bitcoin has traded for more than $1000 and less than $100. Even the wackiest Nasdaq stocks never behave that psychotically.

Can You Spot a Fake?

Just this weekend, one of the busiest bitcoin exchanges, Mt. Gox, based in Japan, was on the verge of collapse due to security problems.  A “transaction malleability” flaw reportedly made it possible for crooks to trick the exchange into double-sending withdrawals. This could be likened to counterfeiting, but with a key difference: While anyone can learn to recognize a counterfeit bill, only a cryptographer can tell fake bitcoin from the real thing.  Merchants use computers to do this, of course. But even then it takes at least ten minutes to determine with reasonable confidence whether a bitcoin token is good, and closer to an hour to be nearly certain of it.  Will a liquor store take that chance if you try to pay for a $50 bottle of wine with bitcoin?

In theory, at least, my business is ideally suited for taking payments in bitcoin. It costs me nothing to fulfill a subscription electronically, and if someone turns out to have paid for it in snide, I can simply cut off his subscription. But consider the headaches and risks. For one, if I had left the payment on deposit at Mt. Gox, it would be worth only a small fraction of what it was worth when received. And although, to get around this problem, I could presumably convert bitcoin to dollars at the time of payment, bitcoin-exchange freeze-ups have been all too common.  Get caught with cryptocurrency when the music stops, and you are s.o.l.

Lucky? Think Again…

Meanwhile, anyone lucky enough to hold bitcoin when it appreciates will have a capital gain to report if it is subsequently cashed out or used in a transaction. Those who think they can hide the gain from the IRS are in for a nasty surprise if not a jail sentence, since each bitcoin comes encrypted with its entire transaction history. And if bitcoin held on deposit should fall in value, keep in mind that the loss one has incurred cannot be deducted from income, only from present or future capital gains.

Bitcoin is catching on for all the wrong reasons, and it is predictable that it will attract increasing regulatory scrutiny as its popularity grows, assuming it does. Can anyone give me a good reason why I should accept bitcoin as payment for Rick’s Picks subscriptions and the $1000 trading course I offer online?  (Before you attempt to answer that question, I’d suggest reading Karl Denninger’s detailed argument against bitcoin here.)

  • mario cavolo March 1, 2014, 6:51 am

    A friendly bitcoin clue:

    “On Friday, while fans in Hong Kong embraced the opening of the first bitcoin retail store by ANXBTC exchange in the city, Beijing-based Huobi.com, China’s largest bitcoin exchange, saw its daily trading volume surge to 69% of the world’s total trading volume. This made Huobi the largest trading platform in the world by volume, according to latest statistics of Bitcoinity, ”

    Any observer of such matters MUST understand that in China and Hong Kong too, there is a MASSIVE grey shadow economy. They love this stuff.

    On this basis alone, bitcoin is very unlikely to go off the rails to never never land.

    Cheers, Mario

  • Jason S February 28, 2014, 10:57 pm

    Look, VV. It seems deep breathing will keep JPM bankers from leaping to their deaths in the future. Deals gone south are no match for quietly counting to ten.

    http://finance.yahoo.com/blogs/daily-ticker/the-one-weird-practice-wall-street-bankers-swear-by-175231201.html

    • VILE VLAD March 1, 2014, 9:29 pm

      yes, it is very relaxing, peaceful to watch your navel, when there’s a large diamond in it.

      yet, most’ll still jump when UN-liquidity HUGE-shht finally hits the fan.
      and it won’t be a black swan. it will solely be reality.
      soon.
      $$$$$$$$$$$$

      so, sticking with this week’s subject, what’s the latest on Mt. Hoax? (er, Mt. Gox, I mean).
      they lost just a measly half a billion ussa bucks, so what’s all the big deal?

      hell, that’s nothing, ussa fed loses that for it’s citizens in just 1/6th of every work day.
      ($65 billion q.e. per mo. / 21 w.d. per mo. = $3 billion approx. per w.d., which are
      $6 half-billion per w.d.; ergo, Mt. Hoax lost 1/6 pittance, of what ussa fed loses daily.

      just have that damned ugly white-haired midget write them a rubber check from petty cash.
      (I still think she would look better with a bernanke beard, at least it’d hide her face).

  • Redwilldanaher February 28, 2014, 10:24 pm

    El douchay, if government isn’t responsible for all of the government debt then who is? Check things out pre 1913, it doesn’t have to be this way.

  • Jason S February 28, 2014, 7:54 pm

    I have to love how Wall St. gets to have it both ways just like the global warming crowd does. The economy is getting on its feet, the market goes up, the economy may be slowing meaning the stimulus continues, the market goes up. Here is the latest Bloomberg read on today’s 123 pt (so far) move:
    “U.S. stocks rose for a third day amid improving U.S. consumer confidence and speculation that the Federal Reserve will continue to support the economy.”

    Never thought I would come to live in opposite land, but here I am. I don’t have to like it but I do have to make my way in it.

  • gary leibowitz February 28, 2014, 7:14 pm

    http://finance.yahoo.com/blogs/the-exchange/a-surprising-new-way-to-cut-america-s-debt-174529518.html

    Indulge me a little. Off topic. The outcry that this government is only a debt machine should look at how profitable Freddie and Fannie created 129 billion profit in 2013 that went directly into the federal deficit reduction. No one sees these types of stories because it would make your black and white clear arguments pushed into gray.

    • Jason S February 28, 2014, 7:48 pm

      Alas, Gary, much of the profitability of Fannie and Freddie comes due to self-dealing. Because the Fed buys $40+ billion of MBS every month (based on the past reported quarters) much of this goes down as profit. GAAP would force a private company to subtract that since you cannot get profits from sales to or from a subsidiary but the Govt. doest have to account like that.

    • Redwilldanaher February 28, 2014, 10:22 pm

      Sure el douchay sure, fan and Fred were at the epicenter of the plunge 6 years ago, how quickly stooges think we forget. Not on this board pardner…

  • Redwilldanaher February 28, 2014, 5:16 pm

    Q4 GDP blows up, I thought things were great, what happened? Now back to our regularly scheduled short squeeze already in progress …

  • VILE VLAD February 28, 2014, 4:41 pm

    and now for the world business news for today, feb. 28–

    1. europe–
    deflationary trend continues, current eu growth at less than 1%.
    unemployment for entire block of nations remains very high, at 12%.
    and ecb pres. draghi keeps on swearing, that there is no deflation.
    (confucius say–‘nothing in govt. is true, until it officially denied’)

    http://finance.yahoo.com/news/euro-zone-inflation-stabilizes-danger-103125064.html

    2. china–
    yuan plunges 1% in 1 day (most since 2005 revaluation), because govt. doubled it’s range of allowed fluctuation,
    to hopefully provide an inflationary spurt, to assist it’s continuing shrinking economy. (‘yuan set for worst month in twenty years’, says one headline)
    deflationary trends continue to increase–example, condo prices have fallen by 1/3, in many large cities.
    additionally, it’s already been proven,
    that data released by chinese govt., is even more manipulated, that ussa govt. released data. a mind-boggling fact.
    (confucius say–‘there are lies, damn lies, and then ussa govt. lies. but if you want even more, read chinese govt. scores’)

    http://www.bloomberg.com/news/2014-02-28/china-yuan-set-for-worst-month-in-20-years-on-band-widening-bets.html?cmpid=yhoo

    3. ukraine–
    country is insolvent bankrupt.
    (eu banks very worried of this.)
    country is in midst of civil war.
    (putin behind pro-russian faction.)
    country soon ceases to be a country.
    (mother russia wants your ports back.)
    (confucius say–‘back in the u.s. … back in the u.s.s.r. … you don’t know how lucky you are, uklainian boy…’)

    http://finance.yahoo.com/news/russia-flag-aloft-gunmen-ukraine-090753422.html;_ylt=AwrBJR5sjhBT4U4A4GiTmYlQ

    4. turkey–
    turkey is preparing for war, over next few years.
    first, they placed an order earlier this year with spanish ship builders, to build them an aircraft carrier.
    second, news come out this week, that they’ll be placing a big order from lockheed, to buy f-35 jet fighters.
    (confucius say–‘this dumb. evelybody know turkey can’t fly’)

    http://finance.yahoo.com/news/turkey-likely-order-lockheed-f-35-fighters-2015-161634617–sector.html

    5. japan–
    mt. gox files for bankrupty protection, says the got no moh ‘moolah’ (or is it no moh ‘bitcons’?)
    wait, isn’t that the name, ‘bitcons’? cause you get conned, a bit at a time? (btw, all data erased off their site. blank page.)
    so you see, at least they were honest in naming them ‘bitcons’, yet in nothing else.
    a half billion ussa dollars vanished. wooosh. gone.
    and this site’s nsa host chooses this week for his ‘bitcon’ blog… (vely intelesting…)
    (confucius say–‘he who like to con, will find jap con-altists, to con him’)

    http://finance.yahoo.com/news/mt-gox-files-bankruptcy-protection-094811743.html

    6. united kingdom–
    it has been shockingly discovered this week, that big bankers manipulate prices of anything they can get their hands on, for at least a decade, they say.
    shocking, just shocking. wonders never cease. imagine that. big bankers cheat. shocking.
    and this time it was gold.
    so it seems that the paranoid repeated claims of gold bugs, that their metal was being manipulated regularly, seems to be true… what a shocker).
    (confucius say–‘you put money in big bank, you deselve what you get’)

    http://finance.yahoo.com/news/gold-fix-study-shows-signs-090756962.html

    7. mexico–
    more big banker cheating news, another big shocker, and this one from citicorp-mexico.
    (confucius say–‘it easiel to cheat who eat hot tamale daily’)

    http://finance.yahoo.com/news/citi-discovers-fraud-mexico-unit-134759049.html

    8. ussa–
    ‘ussa retail chains see first profit decline since the recession’

    http://www.bloomberg.com/news/2014-02-27/u-s-retail-chains-seeing-first-profit-decline-since-recession.html?cmpid=yhoo.inline

    ‘chart of the day: the mortgage market´s plunge’

    http://www.cnbc.com/id/101447833?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101447833%7CChart%20of%20the%20Day:%20The%20mor

    ussa interest rates keep slowly rising. and no one pays attention. 30-yr home loan rate up to 4.37%, while exactly this time last year, it was 3.51%. meanwhile, big banks still give customers nothing in return, other than ‘holding’ their money, ‘safely.’

    http://www.marketwatch.com/story/30-year-mortgage-rate-rises-to-437-2014-02-27?siteid=yhoof2

    and finally, the ussa poor couple that found on their land ‘the greatest buried treasure ever unearthed’ (current valuation of 10 mil ussa fiat bucks, in gold coins), owe the i.r.s. half of it (5 million ussa fiat bucks), to be paid this year, according to this article, and this is whether they sell the coins, or not–

    http://blogs.marketwatch.com/themargin/2014/02/27/tax-collector-is-coming-for-greatest-buried-treasure-ever-unearthed/

    (confucius say–‘bet on ussa stockmalket, it alway go up, no mattel the news’)

  • Murray February 28, 2014, 2:09 pm

    Tounge firmly in cheek…
    http://www.coindesk.com/cash-invented-seen-media-today/

  • gary leibowitz February 27, 2014, 11:18 pm

    Greed is exactly why individuals place their money there. As for the valuations of web based companies I was assured right here that Facebook would flame out and not earn money. Someone should look at Google for example. Are they over valued? Some models work extraordinarily well, while others don’t. An industry that has instant viewership to a billion people can’t easily be valued. New era, new industry, new valuation rules. The dot.bomb era was not a washout. Some were while others did very well. It’s all about understanding the new model. It all boils down to future earnings.

    Please show me where corporate earnings are not exposed the minute it shows up as a quarterly report. Everything is up front and dissected by analysts. If a company buys back its own share you can decide if that masks the numbers. If a company increases profit without revenue growth, you can decide whether to own that stock.

    As for the game that companies play, yes that has gone on for as long as I can remember. They are extremely conservative, and will try their best to not disappoint wall street. That is why when a company hits their target 8 out of 10 times it stays flat or drops on the news. Baked in for better numbers. If a company exceeds the street expectations and the stock falls, I would expect more bad news in the future for that stock. So far, for 5 years, the market is not being manipulated by fake earnings. Nothing fake about it. In fact please explain why gross margins are so good? You complain about lack of jobs but isn’t that a major cost to companies? How can you take both sides of the issue and complain about them?

    As for the next drop, I believe it will be all earnings news, and related economic events that will impact the earnings. China and most of Asia is now experiencing a slow down of some sorts. China might try once again to devalue their dollar. The interconnection of world economies is here to stay.

    I still expect one more leg up, but in my mind it better happen soon.

    Does anyone look back thru the years and see all the nonsense claims being wiped out? Anyone adjust to these errors? How can you keep a failed premise? The facts you use might very well be right. Debt, and the policy to keep increasing that debt will eventually fail. The assumptions of immediate impact on the economy have been wrong. What is needed to push the economies back into a calamitous drop? Can you assume that debt will continue to increase in the future?

    So far my naïve understanding of how markets behave have shown that emotional responses are much more immediate, while market reaction takes into account how it ultimately affects corporate earnings. I stated years ago that the stock market was in a “sweet spot” where earnings will do very well even as talks of human suffering continue. I don’t make any moral judgment. If I was in charge I would force policies that help individuals over corporations, and target the safety of future generations. That would mean an immediate impact on earnings. But alas that is one of my fantasies that will never happen.

    Musing number 3,235

    • gary leibowitz February 28, 2014, 2:24 am

      OUCH! My response “was” a reply to ??? regarding a zerohedge post informing us that corporate earnings are faked. Not sure who since it was another new moniker.

      • Redwilldanaher February 28, 2014, 5:47 am

        They’ve been faked for a longtime, only a disingenous uninformed gubmint shill fool would argue otherwise. Stop with the pathetic propaganda and act like a real man for a change.

      • gary leibowitz February 28, 2014, 7:03 pm

        Just as Rick if this is considered manipulation. He was in the business a long time. Stop trying to create something that is not there. BTW, did you answer me on the earnings front? Hidden? Manipulated? Golly gee wiz, you found the scandal of the century. Surely after decades of faked earnings someone somewhere would uncover the truth. I have been waiting for an answer to this mystery for years. No one has yet to come forth and explain it. This ONE question that can’t be answered dismisses all arguments of manipulation. If earnings are the drive of markets, it has to be manipulated for your conspiracy theories to work. Am I the only one that sees this?

        =====================================

        BTW, did you just read the “Exposed” truth about decade long manipulation of GOLD by 5 banks. Yup, no that’s something to talk about. Sure looks like the conspiracy, once again, is related to private greedy unregulated powerful companies. NOT government manipulation. It is indirectly their fault by allowing them to get so powerful without real restraints. Once again it fits right into my argument for very strict enforceable rules and regulations. The result of all this would be only a spanking. Nothing changes on where the real power is. Governments should take back the power mandated by their citizens to look after the masses, not private entities.

      • Redwilldanaher February 28, 2014, 10:28 pm

        Clueless to end or just playing possum? Marshall McLuhan may own “the medium is the message” but I own “the government IS the front.” Learn it, know it, since we all, live it…

      • VILE VLAD March 1, 2014, 9:03 pm

        correct. the govt. IS the front.
        (and I mean ANY govt., not just the wholly corrupt ussa).
        front for big money, true power. big banks and big corps.
        both internationally and locally.
        for you’d be surprised how many non-ussa local monopolies price-fix as they wish.
        and they’re 100% protected by the local govts. with heavily greased palms, of course.

      • mava March 1, 2014, 8:00 pm

        OMG, are you serious?

        Awful stuff happens because the government is NOT in complete control?

      • ELIV DLAV March 1, 2014, 8:08 pm

        el mentiroso el garo,
        you continue to obsfuscate eternally, like a splitting amoeba, to divert and divert.

        you have a brain (I think), so you tell me, buffoon, what is the difference, between–
        big banks and big goverment and big corps.
        and the answer is simple, since you have a brain (I think), but you refuse to see.
        (no, you see it, but you refuse, to admit it).
        because the difference between big banks and big govt and big corps is……….
        none.
        none.
        they are one and the same.
        and the only purpose
        of all those many rules and regulations that they and you want,
        are–
        solely THE main method, to destroy any opposition. any freelance competitors.
        because, trust me, liar el garodiot, big banks and big corps., ARE the big govt.
        they are all in big bed together. always have, always will. and they use clowns like you,
        paid clowns, to ever disseminate, the big bro agenda; so they keep power, and ever grow.

        this week there was an article on yahoo finance how largest ussa corps. pay ZERO taxes.
        enough said. concentration of 1% power continues. until ussa citizens grow a pair,
        and 21st century bastille day comes. can’t wait. hope intl. youtube shows all details.

        red, el garo is a paid shill, don’t waste your time more on him, for he is paid by word tripe.

    • Redwilldanaher February 28, 2014, 6:18 am

      Companies don’t hit their targets, they consistently “beat” the “estimate” by 1 or 2c. WTF up.

  • Jason S February 26, 2014, 7:19 pm

    For what it is worth, Mt. Gox website has been shut down. Not a good sign.

    http://money.cnn.com/2014/02/25/technology/security/mtgox-bitcoin/

    • Anonymous Coward February 26, 2014, 11:20 pm

      Like the marked predicted after Gox closed bitcoin withdrawals: The law of one price no longer worked because of that, and price of bitcoin on the Gox exchange dropped to around 20 percent of the price in other exchanges before trading was halted at MtGox.

      In another reply here that was not made public I warned that they probably lost a lot of bitcoin due to inadequate internal controls. Now we can be pretty sure about this.

      A “back of the envelope” calculation of the information and credible rumors I have on MtGox tells me they need a capital injection of about 4-500 million dollar just to restore liquidity. There is a plan to reconstruct them, but this involves an seven times increase in revenues for the next year compared to the last year. And even with this ambitious plan they will only have an EBITDA of 2 million in the coming year. IMHO just not possible.

      MtGox is dead for good. Their loss is about 6 percent of all bitcoin in existence.

    • mario cavolo February 27, 2014, 4:08 am

      I wonder, as bitcoin becomes more established, if a site like a Mt. Gox “goes down”, then in terms of perception will it be perceived in the future the same way a bank closing is? Banks go down every year, yet nothing else happens. The system goes on. Will bitcoin be the same?

      I looked at http://www.bitcoinwisdom.com earlier, there was no plunge to $100 blah blah…its at $500 plus…

      Cheers, Mario

      • mario cavolo February 27, 2014, 4:10 am

        oops I stand corrected, there was one volatile spike down on the 10th…

      • Phil Champagne February 27, 2014, 5:31 am

        Correct
        Mt Gox was the very first exchange and unfortunately run by amateur. Reminds me of how email and email clients were rough on the edge in the early 1990s.

    • Phil Champagne February 27, 2014, 5:29 am

      Actually, a very good sign.
      It was a bad actor, and many were wrongly associating Bitcoin with MtGox.
      (Imagine if Google was associated with email, and google was hack- there is a difference between the protocol and a service provider)

  • John Jay February 26, 2014, 5:51 pm

    Speaking of currency, I am sure you all have read about the California couple that discovered $28,000 face value worth of 19th century US gold coins buried on their property.
    Face value $28,000.
    Auction value estimated at $10,000,000.
    There is a lesson in there somewhere!

  • dupere February 26, 2014, 9:08 am

    A future topic of the week ?– google “” peak oil exploring the risk factors hirsch””. A video by the famed robert hirsch that did the government “hirsch report” in 2005? Imbalanced global trade, debt and a liquid fuels problem all collide…..

  • redwilldanaher February 26, 2014, 4:27 am

    Related to your prior topic Rick. ACA is “good” for the stockmarket! It’s all good!

    You will love this one.

    http://video.cnbc.com/gallery/?video=3000248755

    • Redwilldanaher February 26, 2014, 6:22 am

      Another appropriate one:

      http://www.zerohedge.com/news/2014-02-24/conspiracy-theory-true-agents-infiltrate-websites-intending-manipulate-deceive-and-d

      • VILE VLAD February 27, 2014, 3:33 pm

        I think this is the best link I have read not just from you, redwill, but for years.

        http://www.zerohedge.com/news/2014-02-24/conspiracy-theory-true-agents-infiltrate-websites-intending-manipulate-deceive-and-d

        because it explains, both conceptually and graphically, exactly, using media,
        how disruptive organizations work, be they already in power already, or aiming to do so,
        be they extreme leftist, or rightist, in their daily manipulation of the scared masses,
        that they seek to wholly control, via fisted philosophical/psychological pressure,
        specially at right moments, or consistently, alinsky-style, to get and/or stay, in power.

        your link is perfect breakdown study, of how ‘big brother’ works, to keep all oppressed.
        in daily fear. not to open their mouths. p.c. always corrected. don’t think, or talk–obey.
        and now, with the internet, as it’s medium. and it’s many agents. like el garo. and others.

      • Redwilldanaher February 28, 2014, 6:12 am

        El garo sickens me if I read his BS without first reaching for my rocks glass filled with Kentucky Straight. There is an infamous Stalin quote regarding false flags/ manipulation through fear, can’t recall it now. The Rockefellers are literally on video admitting that they are elitist manipulators but el douchay would even deny that after having seen it with his own eyes. The reason we have no chance in the end is that the bootlicker sheep have us vastly outnumbered and they will treat us all like Kevin McCarthy when the collectivists have the boxcars rollin’. With all due respect to Rick and his site, I wonder if there is enough traffic to justify the paid presence of el garo and other assorted comrades. Then again, if you can extort limitless money “legally” and imagine money into existence, and centrally plan markets as the gubmint can, I suppose you can pay an el garo to show up at Rick’s to function as an indefatigable fool. I have told him several times over the years that I believe the markets are a fraud but that I can see them being moved higher and if enough time passes that eventually a fraud rally can become real due to pent up demand etc., essentially that kick the can could work though the thought of that sickens me. I justify this because I know that laws, rules and econophysics do not apply where the federal corporathugs are involved. YET, el garo still claims that I’m a permabear that insisted the markets couldn’t rally. I produced proof that Rick published. Still though, el garo can’t be a real man, he still maligns in the face of the truth. So yes, he may just may be a paid provocateur a la the ZH link. What is the real difference between Vito Corleone and Chuck Schumer?

      • Jason S February 28, 2014, 8:59 pm

        The Rockefellers is a great example of how the upper echelon think. Just go read the book, “War Against the Weak”, the best historical account of America’s desire to generate a master race using their masterminded eugenics program. Rockefellers were the key funders of that. Those were the progressives of the early 20th century. In fact, it was California’s eugenics program that Hitler modeled his after. They are still around, manipulating bastards!

    • mario cavolo March 1, 2014, 5:41 am

      the disinformation games referred to in that article are a macro-sized version of a woman going into divorce court and outright lying about her husband, for example saying straight out or implying that he “hit them too hard” , that he neglected them, that he sort of “touched our children inappropriately”. to gain leverage, to play the game to her advantage.

      Its lying, plain and simple. Its without morals and ethics. Its common practice amongst many human beings in all walks of life and at all levels from micro to macro.

      Cheers, Mario

  • Phil Champagne February 26, 2014, 4:04 am

    Excellent presentation
    http://www.youtube.com/watch?v=bTPQKyAq-DM

  • Phil Champagne February 26, 2014, 4:02 am

    I keep reading articles after articles bitching on bitcoin. From Peter Schiff to Paul Krugman.
    All have one thing in common when you read them: flaws in understanding the fundamentals.
    There is no problem with delays as credit card does. Rick, CC will have charge back that can show up 1 month later, not the case with bitcoin. Bitpay insures you, they check the transactions, confirmation can be done in less than 30 seconds.
    Try it first then write an article criticizing it after, not the other way around like Peter Schiff does. Open a wallet, let us know your bitcoin address and I’ll gladly send you 5 mBTC for you to experiment. Or have fun buying something from overstock.com, go first get some bitcoin from coinbase.com.

    Oh and about the CIA thing, you will note that Satoshi Nakamoto (the creator) added one more layer of fog. A bitcoin address is not the Elliptic curve public address but rather a 160-bit has of it.
    Don’t know what those terms means? Oh! Well let’s ask Denninger, I mean, if he wrote something negative about it, I’m sure he understood the fundamentals — NOT

    BTW, it didn’t go to $100 this month, check out bitinstant chart.

    &&&&&&

    Thanks, Phil. I’ll be in touch about your offer. Bitcoin administrative technology aside, the Mt Gox incident has infected the herd with the spore of panic. It will lie dormant until the next time, which will be worse. I seriously doubt that bitcoin will survive the ‘next time’.

    Meanwhile, does anyone, including you, actually believe the bitcoin spokesmen who have attempted to mitigate the Mt Gox collapse as simply a case of “bad management”. As Mt Gox has pointed out, its ‘malleability’ problem is still the problem of every bitcoin exchange and user. As long as there are Russian hackers, no bitcoin exchange is safe.

    Regarding Denninger, Schiff et al., you are right, we don’t fully understand the technology. But we fundamentally distrust any ‘money’ that needs technology to enable and sustain it. Bitcoin will turn out to have been a passing fad — a superfluous, scandal-prone ‘money’ that was called into existence simply because the technology to do so existed. RA

    • Phil Champagne February 26, 2014, 7:00 pm

      “that needs technology to enable and sustain it”
      Sure indeed, if you expect Mad Max scenario with no communications, etc. But then, gold and silver would be very valuable – which I own.
      On the other hand, if we do not perceive technology as the Luddite did for the industrial revolution, distributed virtual currencies are complementary to gold and silver.
      Just as gold and silver absolutely need an electronic derivative form to be transmitted, Bitcoin is a fish in the water in this environment. On the other hand, to use Bitcoin (so far) without communication requires a derivative.
      As opposite to gold and silver (or any current national currency), we have to trust someone in electronic transfer, which leads to the possibility of cheating. Yes, just like the MtGox, but that’s because of the interfacing with dollars which requires a trust.

      As for the panic from Mt Gox, this isn’t it the first time we had a crises and Bitcoin was written off, only to come back. (See July 2011 where Mt Gox was hacked, see April 2013 when there was an issue with the block chain that split).
      At 4:00 minutes here, good points:
      http://www.youtube.com/watch?v=wzwWIDIVSTo

      As you will see when you make your first purchase, you won’t have to stress that Target might have its CC database hacked.

      Take care

    • Phil Champagne February 26, 2014, 11:06 pm

      Hi Rick

      I encourage you to look at this PDF report I just came across now
      http://www.coindesk.com/bitcoin-2014-report/

    • John Jay February 27, 2014, 7:18 am

      Rick,
      “Bitcoin will turn out to have been a passing fad — a superfluous, scandal-prone ‘money’ that was called into existence simply because the technology to do so existed. RA”

      Isn’t Bitcoin “Backed” by the founders promise not to digitally print more than the 22 million original units?
      Somehow, that brings back memories of “Beanie Babies” and their “Scarcity” of certain characters.
      I still don’t get the concept.

      It must be due to my “Nerds on the couch at the Delta House Frat Party” view of most of us here.
      What the hell is going on???????????
      And why are all these drunks dressed in bed sheet togas?
      Hmmmmmmmmmmm……………….

      • Phil Champagne February 27, 2014, 3:56 pm

        It brings together several theoretical concept and amazingly, solves the infamous “Bizantine General’s Problem” (google it). A problem established in the 1970s by network communication researchers which said had no possible solution.
        See “Illustrating the problem”
        http://en.wikipedia.org/wiki/Two_Generals%27_Problem

      • mava February 28, 2014, 8:38 pm

        Exactly, John Jay!

        Where are we going to find Satoshi Nakamoto to hang him?

        A guarantee given by an anonymous entity is no guarantee at all, because there is no consequence to that entity.

  • Mario February 26, 2014, 1:31 am

    Hi mava and thanks, its great to have you on this board. Occasionally I put forth my attempts at sarcasm and wit and even a bit of arrogant anger, but I’m never offended here. Good heavens, age and experience thickens our skin.

    Same point easy to agree with, why aren’t any big players seeming to be creating their own if it’s such a fine idea?

    Disruptive technology throws the world for a loop, like e-cigs have in that sector. Must suggest that crypto currencies are also a new disruptive technology, etc.

    Have to run now…cheers, mario

  • ELIV DLAV February 25, 2014, 9:55 pm

    3pm et tuesday 25.
    VILE VLAD WRITES–

    THE KING IS DEAD (BITCOIN).
    LONG LIVE THE KING (BITCOIN 2).

    seriously. news came out today that bitcoin is dead. turned off. mt. gox blank page. and it’s not april fool’s.

    (btw, I would not trust any information from any company, with ‘trust’ in their name)–

    http://finance.yahoo.com/blogs/daily-ticker/bitcoin-mt–gox-deleted-141110461.html

    and here are the dastardly thieving ‘foreign’ villains, that ‘supposedly’ drained it dry–

    http://finance.yahoo.com/news/pony-botnet-steals-bitcoins-digital-193830503.html

    I am surprised no one has posted this yet, it’s been all over the news, since early this morn.

    $$$$$$$$$$$

    mava, you are 100 percent correct, this has the cia’s fingerprints all over it,
    including world dissemination of information, of the ‘scam’ pulled off by bitcoin.

    so now we can all be glad, we got the dollar, the euro, the yuan, etc, to happily ever rely on.
    ha.
    and right before all bloated-debt world markets finally fully crack, IMO. bitcoin ‘wags that dog.’

    just in the nick of time.
    for all to cling to govt. fiats, as world implodes. including, even the crappiest 3rd world pesos. ha.

    $$$$$$$$$

    so damn, ackerman, your timing is impeccable, posting this current blog on bitcoin, this week.

    so tell me, host, how long you been a cia agent?
    did they recruit you when you made headlines, uncovering that poison pill scam?

    &&&&&&&

    College professors who act as talent scouts for the CIA passed over me for some reason. Seems odd, since I was a Russian studies major for a while.     RA

    ps: Great new name, Vlad. At first glance, I thought you were an Israeli and new to the group.

    • gary leibowitz February 26, 2014, 2:16 am

      Always assume conspiracy by BIG BROTHER, oh brother!

      • VILE VLAD February 27, 2014, 3:01 pm

        yes, el nonsenso garo, conspiracies are all around you, every day, yet, you do
        always keep assuming that–“we’re from the govt., and we’re here to help you,” is true.

        damn, boy, I take back what I wrote about you a week ago. for you are for sure, a mole.
        and probably not only mole, on this site. btw, mole, what happened to your alias ‘jill’?

        redwill’s greatest ever conceptual link below, woke me up, as to moles like you, garo.

    • VILE VLAD February 27, 2014, 3:04 pm

      ackerman, I am an Israeli. though not in this lifetime.

      btw, my bad on you being offshore cia. for you work for nsa, think-tank intelligence.

  • gary leibowitz February 25, 2014, 7:39 pm

    Bitcoin can only survive if there is trust in their system. Virtual money with no accountability and security is not something I am willing to venture into. The Black Market would naturally gravitate to this type of system until government rules and restrictions make it unfeasible. I think it is a novel idea that will fade out.

    While credit cards can have the same security problems, they are trusted to protect your purchase liability and account balance. Bitcoin is the wild west right now where money can be transferred or created without detection for years. Is the reduced transaction costs worth the risk? How does this virtual currency get valued? What is the cornerstone for valuing their currency? Is it just a hedge against government currency collapse?

    I believe we are stuck with the government backed world currencies.

    • Phil Champagne February 27, 2014, 5:27 am

      I think I understand what is the misconception from you and Gary North and many others.
      You have to understand several concept that are missing in your knowledge:
      1) What does “open source” means and its implication? (Check Linux versus MS Windows)
      2) How does the Bitcoin protocol allows for this security and accountability from a distributed decentralized system?

      Start with that, and you will have more trust in Bitcoin than storing gold at any storage facilities in the world.

  • mava February 25, 2014, 6:37 pm

    And here is another reason that some agency may have created the Bitcoin for:

    Prolonging the reign of the USD.

    For there is only one weakness in the Dollar, which can destroy it – that if we were to account for how much Gold is behind the Dollar, we would find that there is almost none left. Official backing vs. Non-official backing arguments aside, the truth is that the Central Bank cannot be in business without having gold in possession.

    The gold futures trading, the precious metal ETFs, all designed with one benefit to USD in mind – that those wishing to have gold receive just another paper certificate instead. To this end the Bitcoin is a clear benefit to the Dollar. It acts as a dumping ground for those dollars that may have been exchanged for gold bullion. The more Bitcoin is out there the less gold is demanded, modulated by the BTC rate of exchange.

    Having Bitcoin account is no different than having yet another bank account. Suppose a new bank has sprung up, one that is unlike the Chase doesn’t limit your foreign transfer, more or less anonymous, and with a promised total issue cap. That is the Bitcoin, there you go. It does not threaten the Dollar System, because in the end, like Gary North had explained in detail and some of the commenters above had mentioned, all Bitcoins will have to be converted to USD, directly or through other currencies.

    I propose, that even ignoring all other possibilities, the Bitcoin is the best friend of USD, the Central Bank, and therefore is the worst friend of my bottom line. It would be only due to sheer incompetence that one of the alphabet soup agencies tasked with guarding the Dollar supremacy weren’t ordered to create the Bitcoin.

    • Phil Champagne February 27, 2014, 5:23 am

      I’m sorry but this is ridiculous.
      How the heck could bitcoin be friend of the US $, it is competing against it, just as gold and silver.
      “Having a bitcoin account is no different than a bank account” !!?!?!?! That’s hilarious. Ask that questions to the people of Cyprus? Ask that question to the guy who tried to move a few bars of gold from Italy to Switzerland and got them seized at the border (versus a USB Key for bitcoin)

      • mava February 27, 2014, 6:31 am

        With regards to “moving” gold with Bitcoin, you actually “move” nothing. You sell gold and buy gold.

        The same exact thing can be accomplished with Dollars.

        Compare that with being held at the customs trying to move “few bars” of gold.

        You think Bitcoin is competing with USD?

        [Cough]
        How can it be competing with USD, when it doesn’t even have half of the stability of USD? Compare the price of gold in USD vs. in Bitcoin. Remember, that
        it is not money without stability. Not money, but only an instrument, like a stock. It is wanted not for itself, but for some other UNIT first, namely, for USD. USD, is wanted for itself, as far as money go. So is gold.

        (There is one more step, one can say that the Dollar and Gold is wanted for the goods one can buy with them, yes. But this true with any money. However, the instrument is always wanted for the money it can buy, not for the goods directly.)

      • Phil Champagne February 27, 2014, 3:51 pm

        Funny, but I would have assumed people here would be sharp enough to recognize a tiny market is much more volatile than a large market. Also, the instability has been introduced partially by Mt Gox poor system. The other trading platforms are much more resilient to attacks, at least so far. And as the market grows, big names will be added to this.
        And you think the US dollar is stable now, wait in a few years. You can ask Rick A about that, I’m sure he will agree.

        &&&&&&

        The U.S. dollar will remain stable — and undeservedly popular –until the day it is not. As for other bitcoin trading platforms being more resilient to attacks, I very seriously doubt this. We shall see, and probably soon. RA

  • mava February 25, 2014, 5:41 pm

    Please, don’t be offended, Mario. We didn’t mean to overlook China and its importance in the world.

    It just that if Bitcoin is fake, as I think it is, then what does it matter if China is a big player in Bitcoin?

    Let us say that the Bitcoin was created by the DARPA (as suggested above), in order to artificially create a vivid example of how one can lose money with non-government backed currency.

    If Bitcoin is cracked and the CD with the image of a cracking software is distributed in 2017 to anyone who can figure out how to boot to Linux….

    Who will China weight on? Cause DARPA would appropriately tell China to look for one … Satoshi Nakamoto.

    If China wants to play with a crypto currency, then it’s own secret agency should create one. They shouldn’t play with a crypto-currency honey-pot created by some other secret agency. For that would be the absolute folly.

    • VILE VLAD February 27, 2014, 3:15 pm

      mava, presently, china is not important at all, they have many problems of their own,
      and can’t save anybody from anything. that includes world economy, usa, europe, etc.

      therefore, discussing present china is a bore. just look at whom represents them here.
      that should tell you enough in itself. a bow-tied ever grinning, cheap used car salesman.

      however, chinese do plan longterm, and without doubt, they are world’s future.
      yet 20 years from now, not now. after ww3, when they nuke out usa, especially nyc.
      and that’s why I asked ever happy boy-mario, to tell me, about miles of chink bunkers.

    • mario February 27, 2014, 5:56 pm

      Mava listen very carefully to VV.

      China is adding $700 billion USD to its GDP base every year even as growth slows.

      They are the world’s banker, the only one swimming in cash.

      Their very wealthy rising middle class is now larger than the entire population of the U.S.. . They bought 21 million cars last year, 80% of them cash.

      China has 800 million mobile phone users and the largest online e-commerce platform on the planet which is somehow still growing at over 40% per year.

      The amount of credit their have extended over the past few years to stimulate their economy makes Bernanke blush.

      Mava, I have a gorgeous Ford Pinto I know you can’t refuse. It even has new tinted windows for privacy. You’ll be the talk of the town for only $3900. All that talk about exploding gas tanks, ah come on, you know Ford’s engineers are the best of American ingenuity.

      China is half of the world most contentious economic political relationship called the U.S. Sino something or other.

      And China is exactly as VV told you; not important at all.

      All my love from Shanghai VV…I’d been waiting for your next call with bated breath…

      • VILE VLAD February 27, 2014, 7:50 pm

        mario, you never get it. but you never get it, because you don’t want to get it.
        china is not important at all, I repeat. because all that matters, is the ussa.
        until ussa implodes, which it will, soon, deservedly so, then china’s big turn, will come.
        I repeat: china will not save anything, in ussa nor europe. period. end of story.
        no one cares about china. until, they are bosses. meanwhile, unfortunately, ever-liars in ussa, are still king. with europe 1%ers, second. You should just try to survive, like most chinese.
        chinese have long multi-century history of silence, in order to survive. learn it. confucius says, ‘mouth not open, does not fill with swarming cloud of locust.’
        meanwhile, tell us all about, the many circular miles of chinese bunkers for ww3.
        and by us, I mean westerners. tell us all about chinese preparations, for big nukes ww3.

      • mario March 1, 2014, 1:39 am

        Kudos VV. Your point of view of view has some good points and depth here. But you’re missing the good insights in with one’s that don’t add up.

        What you’re trying to say is that it’s all about the ussa, I get it, but it’s too narrow. Globally the systems are now more integrated and linked than ever, even with separate govt and fiscal policies taking place.

        It makes sense as you are to single out the ussa because for example their currency is the world’s reserve currency. But if any major economic block were to have a catastrophe, humpty dumpty will fall all over the planet.

        Let me ask, what would be worse news tomorrow impact wise? That ussa or China or Europe has some type of black swan system collapse? I would say damage impact would be in that same order.

        The currencies are interlinked, any idea that one will collapse and be worthless is senseless.

      • mava March 1, 2014, 7:25 am

        How did I get into this?

  • mario February 25, 2014, 2:36 pm

    Funny, not a word yet from any of you that China is by FAR the largest bitcoin player. Along with everything else I’ve told you about China, just maybe that is a meaningful point. It amazes me how people only look at what’s happening on the entire global connected planet through the filtered eyes of their own country. Woe to you..

    Cheers, Mario

  • John Jay February 25, 2014, 6:35 am

    I fail to understand why any “Player” with deep pockets couldn’t easily duplicate the Bitcoin concept.
    GS, JPM, Pimco, Vanguard, you name it.
    What are the barriers to entry for an encrypted digital currency?
    So why over pay to use Bitcoin when half a dozen heavy hitters could start their own version tomorrow morning?
    And any of the “Players” named above could do it with the blessing of Uncle Sam and the Fed.
    I just don’t see Bitcoin as having a monopoly on the digital currency concept.

    • Craig February 25, 2014, 8:16 am

      Kinda like Facebook….content doesn’t matter, popularity does. Facebook is useless with just one user. Crypto currencies will compete for acceptance as…currency. Kinda sounds like wildcat banking in the wild west….and in the end what would everyone accept…gold and silver.

    • mario February 25, 2014, 3:33 pm

      A fabulous point JJ what to make of it? All I can think of in response is that there are another dozen cryptocurrencies which have come out and are establishing since. But none of them on the surface seem to be backed by “big” players. Yet often someone small is perhaps setup as a front for big players banking it? Nothing to surprising about that, all who knows.

      Cheers, Mario

  • Craig February 25, 2014, 4:42 am

    Let’s see, bitcoin flys as gold dives. The Internet is free and anonymous at the start then it is not and is tracking everything you do and can even record your every move and conversation. Bitcoin is anonymous in a group of people that still think the Internet (the world wide web aka trap) is. If it is DARPA created it might just be three things an IRS trap AND and vehicle to distract the masses to gold AND to set the precistent for a cashless system. In the end everyone will flock to Gold (and then silver) at the end like most Americans do when gold is 60k an ounce and silver 6k an ounce (aka too late) as the “new” cashless system currency is strengthen everyday through use, backing and propaganda as gold declines after the masses finally see it was right and there all along….way after the gold train leaves the station…..and the bankers win again. Final score: Bitcoin millionares, in jail. Bankers richer. Dollar holders, broke. Land holders, taxed to death. Small business owners, taxed out of business. Stock holders poor but broke even. Gold and silver holders the demonized middle class, possibly in jail too on retro windfall profits taxes. They will screw you unless your on the team by making everything illegal retroactively and have those “crimes” SELECTIVELY enforced. I must quote a great movie….”evil will always triumph over good, because good dumb” – Lord Helmet, Spaceballs

  • RickN February 25, 2014, 3:25 am

    Mr. Ackerman

    Thank you for the opportunity to voice my opinion on your fine website.

    &&&&&

    Be pleased to have you join us any time, Rick. RA

  • RickN February 24, 2014, 11:05 pm

    Mr. Ackerman, I read your commentary regarding Bitcoin and just had to weigh-in on this topic. Qualifier: I do not currently own any Bitcoins as of this moment, and like many people, am watching as Bitcoin goes through some intense growing pains. I have to say that the fear of the unknown and the weighted risks (especially investing your old-hard cash) in something like Bitcoin is about as much risk as watching your money in somebody’s (someone else’s pocket whom you don’t know) and hope it grows exponentially.

    I would like to say however that new currency’s like Bitcoin are here to stay. Whether it’s this Bitcoin or some modified version yet to come, you have to come to terms with the future and what computers have brought with them Bitcoin. It may take another 10-20 years to prove this method is more secure more stable and less costly than the existing financial system but the process is still underway and the genie is definitely out of the bottle. The credit card companies and their boastful number of transactions remind me of old AT&T, the introduction of the internet and future of things to come. (Think of traveling by stagecoach vs. an airplane.)

    There is no stopping or halting the (peer-to-peer) network and the creative genius in individual mines that continue to work (none-stop) while we sleep, eat and look for upsides. The thought of regulation of Bitcoin is laughable…..Just try regulating the internet…

    If you could stop the internet (just try taxing it)… I would completely agree with you and your commentary but you can’t so brace yourself for things to come…were already here.

    &&&&&&&

    Call me old-fashioned, but I think the fascination with high-tech money will not survive the coming global financial collapse. RA

    • orig Dave February 25, 2014, 6:52 pm

      Napster, a peer to peer music sharing service, was shut down by legal action of the RIAA Recording Industry Association of America. China seems to be able to regulate the internet….

    • Jason S February 26, 2014, 7:17 pm

      I think that RickN’s assessment is probably correct as long as Bitcoin (or some descendent of) remains a proxy for US dollars. As soon as it competes against the dollar I fully expect Uncle Sam to KO it. Another way it could be impacted is if hackers find ways to impact it, then I can see the new Bureau of Consumer Protection flexing its muscle.

  • Rich February 24, 2014, 10:22 pm

    Aloha All

    Since opinions are free and bitcoin is not, will nominate bitcoin for the Dot.com/MLM mark of this market top, which could come as soon as today, although my crystal ball is broken.

    As KD noted, the bit has no intrinsic value. For that reason, only gold and silver are legal tender, according to our Constitution.

    Bitcoin has two inherent flaws, mathematical limits on required petroflop computing power, and internet power outages.

    Both suggest this bit dies well before the 2017 design maxima if the power is turned off.

    NSA may well be the Devi/Siva of bitcoin. I do not know.

    Certainly the FBI already took bit down. Can the IRS be far behind with a government that does not respect Constitutional rights?

    Speaking of which, we were pleased to be nominated by the Nevada Libertarian Party for US Rep in Las Vegas Congressional District 1, Harry Reid’s old sinecure.

    Finally, we note RA’s idea RPMGF is +120% above .113 lows three months ago, maybe due for a retest, not too shabby for a precious metals miner market also apparently bound for new glory highs.

    Regards*Rich

  • Chuck February 24, 2014, 6:30 pm

    just a note on some commodities…..I have small positions in both of these – just think if you had big positions in coffee starting late last year:
    ETFs
    Fund Price Change % Change Expense
    ratio Volume YTD change
    JO iPath Dow Jones-UBS Coffee Tot… 35.49 +2.06 +6.16% 0.8 322.9K +63.55%
    URA Global X Uranium ETF 16.23 +0.42 +2.66% 0.7 80.7K +6.29%

  • mava February 24, 2014, 6:14 pm

    Theoretical Advantages:

    Finally a currency not manipulated by the governments. Security, privacy (with some care)…, speed.

    Practical advantages:

    Quickly transfers amounts across national borders. If you need to transfer gold from country A to country B, you sell in increments in A, and immediately buy in B.

    Negatives side:
    Everyone know the few disadvantages by now, such as governments slamming down on exchanges, wildly fluctuating price, etc.

    For me, however, there had always been these two questions.
    1. Who created Bitcoin? Yeah, supposedly it was this Japanese guy. This, however sounds like a bridge for sale. I think it could just as easily be the CIA. Tell me it is not.
    2. I am good at math. Very good. I can pull an equation that is a page long and has symbols most people never saw, and be comfortable with it. Yet, I am not good enough to personally insure that the publicly made statements about the anonymity and security of Bitcoin are true. In using Bitcoin, I therefore, have to rely on what other people said, who in turn rely on what someone else said. Again, that venerable bridge for sale.

    I am sorry to say, but to me, anyone who can’t personally prove the answer these two questions, and yet, thinks or says the Bitcoin is what purports to be is just a greater fool or a player himself.

    I am optimistic. I believe, some day, the new crypto currency will arise, and it will be somehow verifiable as to who and for what purposes created it, and it will have a mechanism built in, that would allow folks to benefit from security testing it.

    Until that day…

    • VILE VLAD February 24, 2014, 7:57 pm

      mava, you never cease to amaze me. for you see ussa cia conspiracies, behind everything,
      even more than me. wag that dog. and your bitcoin theory makes 100 percent sense, to me.

      for I am already on record herein, stating the ‘ex’-cia snowden, was a total ‘wag the dog’,
      to get attention away from king obumba, for his many anti-constitution criminal acts,
      in 2013, I think there were about five, and his impeachment was being discussed,
      but then, boom, this guy ‘ex’-cia snowden, appears out of nowhere, revealing, front page,
      what all already knew, all that were not living in a deluded dreamland, like most ussa sheep.

      and then, of course, for several months on end, ‘ex-cia’ bebop snowden, was here or there,
      with righteous obumba, tracking him down (which btw, no one even discusses anymore),
      so bottomline, no one gives a crap any longer about obumba’s crimes, nor even of snowden.

      so cia job well done. spy who came in from cia cold, wins again, protecting corrupt oligarch.

      and now, with bitcoin craze, makes total sense, to scare world, about new net currencies,
      so to invent, create, a fiasco of a net currency, so that then, all fiat govs. can earnest say,
      you see? you must trust govts. only, we know what’s best for you–our fiats will save you.

      so as always, well said, mava. you are the one 2 years ago, that got me to look at facebook,
      as just another cia info collection agency. and you are 100 percent correct, on that one.

      only thing I have always disagreed with you, was on your hyperinflationary manic belief.
      but all else, I agree with you, 100 percent.

      and now about bitcoin, too. cia-created. to fool world absconders, avoiding iron-fist govts.

      • mava February 24, 2014, 10:07 pm

        Yes, you’re right. I haven’t mention the purpose for creating the Bitcoin honey-pot, but you have nailed it.

        Except, I think, there might be more to it. For instance, the encrypted bits may actually incorporate your IP settings, haw about that. For the ones willing to use the Bitcoin for anonymity, will be exactly the ones agencies might be interested in. They might “fight it” at first, banning Bitcoin use, to win the support of “anti establishment folks”. They might plan to use it even as a stage during the USD collapse.

        Here is one even crazier for you:
        Why did Russians built double-seater restrooms for Sochi Olympics?
        I know, that it is very natural to discount that for the Russian idiocy. However, being Russian myself, I am not readily believing in this. Especially, when you look at the toilet being divided nicely by a wall. This just doesn’t happen on accident. Then who and why would do it on purpose?

        Well, you do it on purpose, because this is how you use guerilla marketing to become watched / tracked / popular. And then, when they all are sitting on their twitter (no pun intended), you give them the “revellation” about athletes being watched even in their showers.

        Cost to Russia? None. It’s a dictatorship, no one surprised, and no one cares. In fact, Putin’s next cannon fodder growing up immersed in chauvinist ideology is most likely to be positively impressed by Putin watching those Americans.

        But you, on your comfy American couch, watching the Kozak conference, did you not suddenly feel like: ” Boy, it ain’t all that bad in the good ole USA, after all, just you look at those Russkies watching you in the shower! “? I think Obama asked Putin for a favor, Putin delivered, and we swallowed.

      • mario February 25, 2014, 2:31 pm

        Britain’s provided a fresh way for the players to play, and I suspect many of those players are at very echelons of society, govt and the economy.

      • VILE VLAD February 27, 2014, 3:51 pm

        mava, further proof bitcoin is a world cia scam, to strengthen power of govt. fiats.

        http://finance.yahoo.com/news/u-attorney-subpoenaed-mt-gox-040023380.html

        so now ussa cavalry, get’s to ride in, to punish the UNREGULATED bitcoin villains.
        with intl. subpoenas (never knew you could subpoena another country, but hey, it’s ussa).

        continuing saga, of those that lost all their money,
        of their NON-‘fdic INSURED’ accounts.

        http://finance.yahoo.com/news/mt-gox-bitcoin-customers-could-050219174.html

        $$$$$$$$$$$$$

        meanwhile, here is bob prechter’s (40+ market vet) opinion, on fdic’s ability to pay–

        http://www.elliottwave.com/freeupdates/archives/2014/02/14/Read-This-If-You-re-a-Depositor-in-One-of-the-Top-20-Banks.aspx#axzz2uWvfUZDD

  • VILE VLAD February 24, 2014, 6:04 pm

    myself, IMO, a true alternative private international currency, should primarily be STABLE,
    and also, 100% lock-down SAFE, vault-like cryptic protected, from easy, massive, net theft.
    (like current internet gold-trading world-vaults accounts already are, since 10 years ago).

    but neither ‘stable nor safe’ is true, about bitcoin. actually, bitcoin reminds of tulip mania.
    yet, people worldwide are so starved for a currency not tied to corrupt ever-diluting govt fiats,
    that they’ll gamble all they’ve got on this, as you say, even worse scam, than madoff’s many.
    another huge pyramid scheme, 21st century’s tulip mania, even worse than current dji.

    prechter wrote a free article about a month ago, on bitcoin, saying roughly about the same.
    if you want to read his opinion on it, I will dig it up on the ewi site, and post the link herein.

    [Would appreciate the link, thanks. I said in the first sentence that bitcoin should vex every prudent man, so it doesn’t surprise me that Bob Prechter is no fan. I’ll be interested to see whether bitcoin actually does achieve the notoriety of Tulipmania. My hunch is that the bitcoin concept is too opaque and arcane to seize the proletarian mind in such a big way. RA]

    $$$$$$$$$$$$$

    btw, talking about the dji, sort of being a mini-bitcoin scam,
    I got in my 10 dia puts this morning, 23% below friday’s close, but for march expiry, not april.
    that’s how strongly I feel this market is about to swan dive, so I pushed pedal to the metal.
    got 4 weeks.
    I expect and 8 to 1 minimum return. and potentially much more, from all see and read.
    I think dji top is in. and only break above my often cited target h&s ‘left shoulder’ 16.2k zone,
    will convince me, that I was wrong. however, I don’t think so still. so we shall soon see.
    for I now see that this morning it was off to the races, in the s&p 500, breaking record high.

    [Good luck, Vlad. The last five years have not been kind to put buyers. RA]

    however, both dji and djt, have not yet confirmed, so, a fractured market, is worst market.

    the AAII latest survey, has 42 percent bulls, and amazingly, only 22 percent bears.
    20 point differential, very rare. I’ve only seen it about 3 times, in 30 years. uber bull confidence.
    so a big fast fall is still straight ahead.
    IMO.

    [No question that sentiment figures are skewing toward Armageddon. But like a stochastic indicator, they can remain in the overbought ozone while the market completes a blowoff phase to DJIA 17622. We shall see. RA]

    • VILE VLAD February 24, 2014, 9:25 pm

      ackerman, tried for an hour, but can’t find the free prechter bitcoin put-down ’14 article.

      did find original ’13 article, where minion stokes cites prechter’s prior bullcall, on bitcoin.

      http://www.elliottwave.com/freeupdates/archives/2013/12/26/The-Bitcoin-Craze-What-s-Next-for-the-Digital-Currency.aspx#axzz2uGWpheDN

      and at the bottom of this free article, it say this–
      “December Elliott Wave Theorist explores that question. The issue devotes 2.5 pages to bitcoin..”

      and what I read free in early ’14, cites these 2.5 pages from 12/’13 ewt, which I can’t find now.

      however, from what I recall, prechter takes a huge dump on bitcoin, at current valuations.
      $$$$$$$$$$$

      however, here are couple of interesting free articles I found in ewi, while looking for bitcoin.

      turns out genius newton lost equivalent of a million ussa dollars, on the south sea bubble.

      http://www.elliottwave.com/freeupdates/archives/2013/06/10/Why-Brilliant-People-Often-Fail-in-Financial-Markets.aspx#axzz2uGbO8atE

      plus prechter says, when crash shtt finally hits, then it will be ‘da boyz’ time to pay bigtime.

      http://www.elliottwave.com/freeupdates/archives/2013/11/20/The-Next-Downturn-will-Reveal-a-Financial-Crime-Wave.aspx#axzz2uGauFWMX

      &&&&&

      Thanks for the links. Hard to predict who the big losers will be if and when faith in bitcoin collapses, but it’s a safe bet that it won’t be farmers, nurses, plumbers and shoe repairmen. RA

      • VILE VLAD February 24, 2014, 9:33 pm

        btw, ewi does recently accept bitcoins, for subscription payments.
        don’t know what that means, pro or con. but they do accept them, as money.

        &&&&&&

        I may decide to do so myself, depending on what I glean from this discussion. Converting bitcoin to gold at the time of the transaction seems like a promising way to go. RA

      • mario February 25, 2014, 2:29 pm

        Lots of other reputable companies-subscriptons accepting them. It’s a choice and risk like anything else Rick, I’ll leave it at that.

  • orig Dave February 24, 2014, 5:40 pm

    Bitcoin madness could be useful for reefer madness since banks are leery of accepting new pot money.
    Rick, since you’re in Denver, what’s your toke, uh, take?

    http://www.cnbc.com/id/101418265

    &&&&&&

    There will be recreational marijuana for all when other states see how much money it brings in. No parent of teenagers should be pleased. RA

    • Chuck February 24, 2014, 6:28 pm

      not only is it going to be prolific……the quality and price of the product (which is just a weed) will make all users very pleased indeed……

    • mario February 25, 2014, 2:25 pm

      And they’re talking about banning e-cigarettes?…hysterical.

  • Jake February 24, 2014, 1:00 pm

    “I could presumably convert bitcoin to dollars at the time of payment, bitcoin-exchange freeze-ups have been all too common. Get caught with cryptocurrency when the music stops, and you are s.o.l.”

    3rd parties will do this for you and carry the risk as well. Companies such as Coinbase and Bitpay convert bitcoin for fiat immediately and have the dollars in your account the next day. No risk, no charge backs, cheaper than credit cards, and paypal.

    &&&&&&&

    Okay. But have you any tips on dealing with the IRS? RA

    • mario February 25, 2014, 2:24 pm

      Yea, move to China and marry a Chinese, or similar. Other than that, the IRS is on you like a cheap suit.

      • Jason S February 25, 2014, 5:45 pm

        Mario, my Italian/American wife is not fond of your solution and my Lutheran pastor says my soul will be in real jeopardy too. Do you have a plan B?

      • mario cavolo February 26, 2014, 3:34 am

        I assure you many a foreign man’s soul burns in hell after he arrives in Asia where the very nature of femininity still thrives as it should…

        On a more serious plan B?…there is none that are legal. EVERY single interest you may have in every single asset overseas is legally reportable to the IRS one way or another for an American no matter you haven’t lived there for a zillion years. You even have to report your bank balance if its over $10,000 just because it exists, no matter where it came from. Foreign banks all over the world are now cancelling American client accounts simply because they don’t want to deal with their reporting requirements to the IRS for their American bank account clients, ridiculous but true and a lousy state of affairs, leaving an American overseas with their pillow as the only place they can make a deposit. I don’t have a comprehensive list of which countries and banks are doing this.

        The only saving grace is that if you have an official income/salary as a qualified resident there with an overseas company the U.S. offers the income tax exemption on the first $95k or so.

        Having a foreign citizen wife legally bypasses most such issues in a reasonable way. For example, if YOU have a business idea to start a company, that’s fine. The company will be registered in that country in her name. Her company could make millions. You are neither a shareholder nor employee, you truly have nothing to report to the IRS. However, as distasteful as it is to say, you do then have a real world risk that your wife wigs out for any reason and leaves you with all your money in her account, etc.

        Cheers, Mario

        Cheers, Mario

    • Phil Champagne February 26, 2014, 3:49 am

      There is no IRS for you. I’m sure Bitpay will let you know about this.


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