Daily Digest

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Daily Digest 5/25 - America's Public Pension Crisis, Rise of Crypto Currency Means USD Rejection

Thursday, May 25, 2017, 8:25 AM

Economy

Rise of Crypto Currency Means Rejection of US Dollar - Rob Kirby (pinecarr)

Kirby says the key assets in the game for the big money players are gold and silver. Kirby contends, “The Achilles heel of this whole shooting match truly is physical precious metal. It’s the one thing you cannot paper over unless you have people willing to excuse you of making a physical delivery of metal for a premium. . . . So long as people are willing to take fiat money in lieu of physical precious metal, the game can continue. The minute someone is due a large chunk of physical metal and the seller cannot supply it . . . that’s when this whole thing unravels. That’s when we see an uncontrollable rise in the price of precious metals like we’ve seen in the last three months in the crypto currencies.”

Six Terrifying Graphs That Summarize America's Public Pension Crisis (Suzie G.)

As of fiscal year 2015, the latest year for which complete accounts are available for all cities and states, governments reported unfunded liabilities of $1.378 trillion under recently implemented governmental accounting standards. However, we calculate using market valuation techniques that the true unfunded liability owed to workers based on their current service and salaries is $3.846 trillion. These calculations reflect the fact that accrued pension promises are a form of government debt with strong rights. These unfunded liabilities represent an increase of $434 billion over 2014, as realized asset returns fell far short of their targets.

American Small Business Owner Rages At Politicians: "Quit Your Job And Try The Real World" (pinecarr)

The word “entrepreneur” is endlessly tossed around by politicians who know nothing of how hard it is to be an entrepreneur. You all love to say you encourage entrepreneurship, but the reality is you stand in the way. Most small businesses either fail or stay small because it is really hard to grow a business, and because of all the burdens you put on us.

GOP Obamacare Repeal Effort Hits Latest Obstacle With CBO Score (jdargis)

The GOP bill, formally known as the American Health Care Act, passed the House earlier this month without a score from the CBO. The agency’s harsh assessment is likely to dampen the bill’s already grim prospects in the Senate, where GOP lawmakers possess only a slim majority.

“It’s informative to know the estimated impact of the House health-care bill -- but the Senate is writing its own,” said Senator Lamar Alexander, a Tennessee Republican.

Look Who's Buying Gold Now (Tiffany D.)

Last month, the U.K.’s Office for National Statistics said consumer prices rose 2.7%, the highest such gain in nearly four years.

The reason? Britain’s politicians may have only just started negotiating the nation’s departure from the European Union, but speculators and businesses have already placed their bets by selling pounds. As a result, Britons found that a great many goods and services — from food, clothing and furniture to airfares, eating out and home prices — all took an upward lurch.

Saudi Finance Minister: “I Wouldn't Care If The Oil Price Is Zero"

Vision 2030 proposes an economic restructuring that would in theory add 6 million non-oil jobs by 2030 and generate $100 billion per year in additional non-oil revenue by 2020 by reducing subsidies for gasoline, electricity and water and introducing a new value-added tax as well as initiatives to foster more non-oil industries like mining and military hardware. They have also suggested grandiose ideas to create the world’s biggest IPO for Aramco (the world’s biggest oil company) and to establish the world’s biggest sovereign-wealth fund worth over $2 trillion to invest in a wide variety of assets.

Monsanto’s Round Up and Aluminum Now Linked to Autism, Alzheimers, Gut Dysbiosis and Pineal Gland Calcification: An Important Article Review (Arthur Robey)

One important study that echoed these results was performed by the researcher, Seralini. Sadly, it was published and then retracted from the journal. It showed rats fed GM corn and soy over their entire lifetime developed mammary tumors, liver and kidney malfunctions. The controversy stemmed from the study sample size and other fraudulent allegations about how the research was set up. However, if you know the power and political pull that Monsanto has, you would question the legitimacy of these claims. Fortunately, the same study has now been republished by another journal.

Climate Change Is Turning Antarctica Green (jdargis)

And even though plant life only exists on a tiny fraction of Antarctica, about 0.3 percent, researchers found it is likely to increase significantly as the region warms. As land cover increases and the snow and ice cover decreases, the area also absorbs more heat. That could bring an ecosystem shift to Antarctica that is more in line with what researchers have found in the Arctic.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/24/17

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

30 Comments

saxplayer00o1's picture
saxplayer00o1
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Pension Problem Looms For Sacramento

Italian finance minister reassures over liquidity of troubled banks

Financial Times-3 hours ago
The government is working to come to a solution rapidly,” the statement added. ... were hard hit during the European sovereign debt crisis and its aftermath.

China's Rating Cut Exposes Firms Hooked on Dollar Borrowing

Bloomberg - ‎17 hours ago‎
Moody's lowered China's rating to A1 from Aa3 on Wednesday, citing a worsening debt outlook. Moody's also downgraded the ratings of 26 non-financial corporate and infrastructure government-related issuers by one level. China's Finance Ministry blasted ...

Pension Problem Looms For Sacramento

Capital Public Radio News-6 hours ago
The City of Sacramento currently pays about $67 million for pensions from its general fund. Within eight ... Its unfunded pension liability is currently $718 million.

 

TechGuy's picture
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Re: Rise of Crypto Currency Means Rejection of US Dollar - Rob K

I doubt BTC rise is related to rejection of the USD. I am pretty sure is Asians rejecting the Chinese Yuan and the Indian Rupee. There are a lot of Chinese that see that writing on the Wall and are looking to get value out of the Chinese Banking and Monetary system. 

Kirby is a bit of nut, considering that he been predictiving the imminent collapse of the dollar for the past 10 years. I think Kirby makes up fake information to support his case. While I don't discount that the US has some very serious problems, Its unlikely the dollar is going to collapse this year. I believe his analysis is fundmentially flawed and shouldn't be taken seriously.

On BTC: I believe a lot of people in China are panicing, desperately looking to find ways to get wealth out of China because of China's strict currency controls. I think at lot of chinese are buying fake BTCs via Paper BTCs that is helping to drive up interest. I think of the real BTCs that the Chinese are buying will be converted into USD and to a lesser extent EUROs. Recall that the Chinese were buying a lot of real estate in China, until Canada enacted a huge tax on unoccupied homes. So instead of buying Canadian property, they are buying BTC, but its very likely that the BTC will be converted into USD/Euros or other western assets.

BTC is in a classic fast moving bubble as its increasing in value at about 8 to 20 times price increases in comparable assets (PMs, Oil, Stocks, etc). Usually when there is a buying frenzy, it quickly fizzles out leading to a massive correction. Try not to get caught up in the frenzy.

 

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Jim H
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Of bubbles, and counter-bubbles..

Techguy said,

BTC is in a classic fast moving bubble as its increasing in value at about 8 to 20 times price increases in comparable assets (PMs, Oil, Stocks, etc). Usually when there is a buying frenzy, it quickly fizzles out leading to a massive correction. Try not to get caught up in the frenzy.

While the market for Bitcoin has in fact been bubblelicious..  what is your fundamental argument against it being worth $2500 per unit.. or even more?  $5000?  $10,000?

Only 21 Million will ever exist, or which 16.3M exist or have been mined already.  That's enough coins so that everyone in the country of Niger could have..... one each.  Or maybe Taiwan (if we leave out the little kids).  

These things are rare, and their scarcity integrity is assured via their coding and decentralization.  There are 7.5 Billion people in the world.  There are 16 Million Bitcoins.  If 1% of the world population has some positive net worth that they want to invest in diversified assets (like the PM's and oil stocks you mention) then why would not owning a Bitcoin fit in to that equation?  Is it really a bubble (yet) or are we witnessing the messy and chaotic development of a newly emerging asset class? 

I am with MREES... we ain't seen nothing yet.  This does not mean I don't think we will have corrections along the way.. we most certainly will.   

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Grover
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RoundUp

Nice catch, Arthur! Thanks for submitting the article review about glyphosate. Although correlation isn't causation, there has been a remarkable correlation between increased glyphosate usage and increased incidences of ADHD, dementia, sleep disorders, and autism. I had heard of the pineal gland, but wasn't too familiar with its functions. (Now, I have something else to read about.)

I personally know farmers who legally spray RoundUp on their cereal crops (oats, wheat, barley) to aid with harvesting as it desiccates the seeds and allows for a more rapid and predictable harvest. (RoundUp is really cheap when buying 41% concentrate in 265 gallon returnable totes.) Because they are not subject to the vagaries of weather, farmers can let more of the crop mature ... thus increasing yields. The increase in yields pays for the spray with a nice profit margin. Who can blame them for adopting this practice? It allows high value crops to be grown under more marginal conditions.

This spraying is only used on non-GMO crops. The RoundUp Ready GMO crops have been genetically engineered to be immune to the effects of RoundUp. Essentially, RoundUp kills the plant so no more nutrients/water is made available to the seed. The problem is that some of the RoundUp gets deposited on/in the seeds in the process. It doesn't wash off later. The EPA has ridiculously high tolerance levels because animals (including humans) lack the Shikimate Pathway. Our gut biome does and is susceptible to glyphosate.

Dr. Jess' article highlights the issues in a somewhat readable manner. (It is still technical.)

Grover

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Speculation - not investing.
Jim H wrote:

These things are rare, and their scarcity integrity is assured via their coding and decentralization.  There are 7.5 Billion people in the world.  There are 16 Million Bitcoins.  If 1% of the world population has some positive net worth that they want to invest in diversified assets (like the PM's and oil stocks you mention) then why would not owning a Bitcoin fit in to that equation? 

I understand bit coin from a utilitarian issue, it facilitates trade in the same way as any currency, but it can't be money.  It has no intrinsic value, is easily duplicated (not bitcoins, but crypto-currencies) and while it has some good qualities, it also has some bad.  It is based on cryptographic technologies that can and will be broken - so at this point it has an built in limited life.  

Jim H wrote:

Is it really a bubble (yet) or are we witnessing the messy and chaotic development of a newly emerging asset class?

It is, but  it doesn't mean it will be the one to survive or be the most popular.  Lot's of choices in a "newly emerging" asset class, and I'm sure many more to come.  Like any currency it is based entirely on faith - faith that someone will think it's worth something and willing to give you a real asset for some bits of data.  At least paper currencies have intrinsic heat value and utility to wipe your butt. wink

While you may be able to make money trading it, and it has use, it's definitely a currency, not money, and it's speculating not investing.  

TechGuy's picture
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Re: the BTC Bubble Mania

Jim H. Wrote:

"These things are rare, and their scarcity integrity is assured via their coding and decentralization. There are 7.5 Billion people in the world.  "

There is already a lot of fraud. There are probably 50M paper\fake BTC coins, as fraudster create fake coins. There are a lot of people that purchase fake coin but don't have the means or understanding how to check them. A lot of fake coins are held by third party "Financial" businesses. Just about every 3 to 4 months there is a scandal involving BTC, such Hackers stealing coins from BTC banks. 

Ultimately, I expect gov't worldwide to crack down on BTC and probably ban it. BTC is the Wild West of the 20th Century. Sooner or later the gov't will crack down.It will happen after a major correction and people loose billlions. People will complain to the gov't about all of the fraud and the easy option is to ban BTC trading instead of regulating BTC banks and financial companies. BTC already has one foot in the grave because it widely used to circumnavigate money transfers, that are in place to reduce tax fraud.

"Only 21 Million will ever exist, or which 16.3M exist or have been mined already."

And probably close to a million have already been lost forever, either because of data loss (lost or failed media), Faked Hacking attempts that resulted in data loss. Over time more and more BTC will be forever lost cause by data loss or theft.  I recall reading years ago that over 100K BTC were lost when the owners Harddrive crashed and he had no backups. BTC has some flaws that will make it difficult be be broadly used. 

" Is it really a bubble (yet) or are we witnessing the messy and chaotic development of a newly emerging asset class? "

History repeatly paints a clear picture that assets that suddenly soar in value are in a bubble and eventually crash back to the mean. If People were looking to ditch Fiat Currencies all alternative assets such as PMs would have risen close to a simular pace. Consider that more people know about and how to purchase PMs than BTC. 

"what is your fundamental argument against it being worth $2500 per unit.. or even more? $5000? $10,000?"

Why isn't Gold at $5K an ounce, and silver over $100/ounce? It may very well double in price before crashing. However, Today it took about a 13% dive, and recovered some its losses. Such large and rapid swings is just more evidence that its in a bubble. The thing is that with FIAT currencies, is that gov't will manipulate valuations by changing policies to stablize them when there is a selloff. For instance a Gov't can raise interest rates or buy back its own currency using foriegn reserves. There is no such system for BTC. I would expect that when BTC does eventually correct its likely to go into freefall if there is no big backer or means to halt the decline. BTC price is 100% dominated by liquidity. Currently there is a liquidity shortage driving up prices. At some point the will be a liquidity glut causing BTC to crash.

I also think there are serious convertablity problems with BTC. If you decide to use some of your BTC its unlike that most retail and business will except BTC. for instance, US business owners have to pay employees in Dollars. so if they accept BTC they will have convert some of it into USD to pay thier workers & taxes. As long as BTC remains volatile, no major gov't backer, I doubt it will ever be used for everyday purchases. Just as PMs are not available for everyday purchases. Currently 99% of BTC tranactions is currency transactions where BTC is converted into FIAT currencies. If a retailer excepts BTC, you can be assured that the retailer is converting all it back into FIAT currency, most likely using a third party,

 

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bitcoins vs dollars

the daily quotes we see for the value of bitcoin are in dollars..we never see the value of dollars quoted in bitcoins...that should tell you something...

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Mohammed Mast
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btc misinformation

I find it truly remarkable that people still make ridiculous statements about BTC. It can " be broken" , it has never been "hacked" And my all time favorite of "it has no intrinsic worth". Well in relation to the "intrinsic worth" of all fiat currency, ie the btu's to be extracted by burning them that may hold some water. what has happened is people have been careless with their BTC. Of course no one ever was careless with their fiat currency. No banks ever got robbed. No fraud was ever committed using fiat currency. It's okay I will just continue to hold my BTC just as I have for the last 6 years

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correction

Tat should read It can be "hacked" when it reality it is virtually impossible

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rhare
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Hmm, "virtually impossible" as been used a lot in the past.....
Mohammed Mast wrote:

Tat should read It can be "hacked" when it reality it is virtually impossible

As were many of these:

https://en.wikipedia.org/wiki/Category:Broken_cryptography_algorithms

Did you look at the link I included above:

http://valerieaurora.org/hash.html

I would like to direct you to the bottom with the snarky comments table - I believe the above fits into the 3rd column, General Acceptance row. cheeky

I think I'll stick to useful assets/means of production for investments, PMs for money, and for now the US $ for immediate trade.  If I want to speculate I guess BTC, Greek bonds, or some of the unicorn stocks are good choices. wink

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Intrinsic value?

I'd hate to try and stay warm burning any of the new polypropylene bank notes circulating through the world. I'd probably asphyxiate myself.

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Suspect we best side with Delmar from "Oh Brother"

"Ain't no kinda man if you ain't got land".

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virtually impossible

rhare-

Yeah.  I never like to put the words "virtually impossible" anywhere near the words "breaking cryptography."  Or the words "hacking."  Unless the target is air-gapped.  And even then, They Have Their Ways, as we saw with stuxnet.

Best I'd say is "so far, so good."  And, "we haven't yet identified the holes."  Heck, the mining machines could already be owned by NSA and they're just waiting to get the signal from Trump to shut it all down. :)

I'm waiting for our current PK crypto systems to get broken somehow.  If we go 20 years and its still intact, I'll be very surprised.  Stuff we were suspicious of a few decades ago is now on the ash heap of history, much as your chart points out.

I remember using MD5, and now its just a bad joke.  Humility is the key, I think.

Then again, I'm a luddite.

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Getting everybody on the grid

So what is the big picture?

Lets go with the hypothesis that the elite are trying to establish a global control matrix.  This includes:

1.  gathering in and mining all electronic communications over the internet, phone, banking and wireless networks

2.  tracking personal location with cell-phone tracking function.

3.  highway surveillance camera that recognize the cars and license plates of vehicles traveling that highway.

4.  FAST PASS data is gathered every time your auto crosses a toll bridge.

5.  A cashless society where all commercial exchanges are done electronically.

6.  Biometric databases so facial features, gait analysis, retinal scans, etc., can identify people walking along the sidewalk in a public place.

Everything is ON THE GRID where a model of total informational awareness can be built for the monitoring and control of populations in real time. 

Did the street cameras see you walking in a prohibited section of the city after curfew?  A $50 fine is deducted from your account and your gas allowance is decreased. The doors to the subway cars will not admit you this week.

So now a new, electronic currency (bitcoin) is launched into public awareness with enough exponential features to rivet our fascination in greed and fear.  This is the absolute antithesis of an off the grid private exchange mechanism.

This is how the sheep are lead.  The sheep don't have the big picture.  They just see the immediate stimulus and react.  So those with a long term vision and a strategy can guide them.

And terrorism is everywhere.  The people cry out in fear and rage for protection.  "Chip us all so that the bogeymen can be controlled!"  Protect our children!

 

 

 

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Re: Getting Everyone on the Grid

...and then fast track a controlled population reduction program via severe rationing or any one of a number of creative approaches once the population is totally dependent and unable to resist.

I.e. Kill a few people. Maybe 7 billion or so. Enslave most of the rest.

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Mohammed Mast's picture
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BTW

BTW Dave you are a computer expert so why don't you outline how you would hack the bitcoin network or better yet why don't you do it? It would be worth around 45 billion to you. I guess holding all that gold and silver is more worthwhile. Never mind. 

 

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virtually impossible = Dave can't hack it

MM-

Right.  So because *I* can't hack the thing, *today*, from my *room*, that therefore means that hacking is "virtually impossible"???

Did I get that right?

If I wanted to destroy bitcoin, and I had the resources of the NSA, you damn betcha I could take it down.  At the very least, I could end up transferring all the bitcoin to my organization - or to some other set of organizations - just to show that "I could."

Own the top 3 miners (that 51% attack), inject the set of transfers of your choice, and Bob is your uncle.  I'm sure the community could come up with a fix, in time, but it would have an impact on confidence, don't you think?

And it would certainly qualify as a hack.  A "virtually impossible" hack.

Perhaps you can choose different words next time.  If you frame things more carefully, you won't get any pushback from me.  Its the "virtual absolutes" that encourage me to comment.

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Timing is Everything
Mohammed Mast wrote:

BTW Dave you are a computer expert so why don't you outline how you would hack the bitcoin network or better yet why don't you do it? It would be worth around 45 billion to you. I guess holding all that gold and silver is more worthwhile. Never mind. 

Mohammed,

You should consider that Dave may have a conscience that matches his abilities to program. How many people in the world are capable of programming? It looks like more and more of these folks are joining the crypto currency bandwagon and starting their own. Of course, there still aren't millions of these being minted. So what are the other programmers doing?

When you buy one of these coins, you are putting your faith to the test that no one will be able to corrupt the coin before you sell. You have much more faith than I do!

Unless you know the value of these coins, you are just speculating. Teasing Dave is fun while the prices keep escalating, but what happens when the prices start dropping in earnest? What would happen if one of these genius programmers hacked the code? What if they were smart and actually kept quiet about their discovery?

We've all heard stories about disk drives that contained bitcoin pass codes that have been lost. What if someone were able to commandeer these coins and present them on the open market? Who would be the wiser? Then, there are the 5 million +/- coins yet to be mined. What if someone was able to spoof their existence to the system. Would you be any wiser? I know I wouldn't be.

I remember an old family friend who tried to teach me about investing. He said that very few people actually sell at the top. The remainder either sell too early or too late.

Grover

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TechGuy wrote: Kirby is a bit
TechGuy wrote:

 

Kirby is a bit of nut, considering that he been predictiving the imminent collapse of the dollar for the past 10 years. , it quickly fizzles out leading to a massive correction. Try not to get caught up in the frenzy.

 

I find the above statement pretty funny since this entire site was founded and is populated by people anticipating the collapse of the dollar for 10 years. After all the seminal work here is "The Crash Course". I doubt seriously one could find a week maybe a day here where there is not one mention of said collapse

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Conspiracy Theorist

So now we have the NSA hacking cryptocurrencies. Nice. Must be "virtually impossible " to get any sleep Dave worrying about that evil NSA. However you did not answer the question. Getting control of 51% of the miners to launch  51% attack is no easy feat. In 8 years Dave no one has hacked BTC. As time goes on it gets harder and harder. Is it possible? Yes. It is also possible to mine platinum from asteroids and make trillions. Have a blessed day Dave. 

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Seculation

There are too many red herrings to respond to all of them. Your point about speculation and prices falling is probably the largest one. I have had crypto currencies for 6 years. I have witnessed wild gyrations in price on a regular basis. I have made a lot of money while the gold bugs here have watched gold and silver crash from $!,900 AND $50 respectively and then go sideways for years (losing money to inflation) That to me seems like pretty silly speculation to me. mrees has responded very well and intelligently to all of the objections raised so I have no need to do the same.  The fear here on this site is palpable. I have bought and sold goods with BTC. There is actually quite a bit of commerce conducted with it. If you and Dave etal are so fearful of the NSA, CIA, Goldman Sachs, JP Morgan etal (collectively known as the powers that be) Then why not look for ways to actively create a third way. Why just hunker down with your gold, guns and grub waiting for the Book of Revelations to come to fruition? Have a blessed day

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BTC Myths

For those who have an interest in a rational less emotional understanding of BTC. I suggest reading the following or just google hacking the BTC network. https://en.bitcoin.it/wiki/Myths

 

 

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Soccer versus Football: Approaches to Discussion

I would like to point out again the fundamental differences between these two games and the way that discussions can be run either by football or soccer rules.

1.  In soccer, you can only attack the ball, but may not attack the person handling the ball.

2.  In football, you stop the movement of the ball by attacking the person carrying the ball.

Discussion forums run by one set of rule or the other.  Zerohedge is football all the way with belittling, profanity and accusations of sexual deviance being a common responses.  So far, PP has done well to stay (mostly) to soccer rules.

We are a very diverse group.  A respectful discussion style focused on the IDEAS themselves makes this possible

 

 

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more (virtually) unhackable bitcoin

MM-

[Thanks for the reminder SP; I'll give him one more "soccer response".  I'm trying harder to stick with "forgiving tit for tat."]

I couldn't quite tell from your flurry of responses if you agreed with me or not.  Let me try again.

Any serious nation-state actor (such as NSA) could hack bitcoin by breaking into "enough" of the servers that run the mining effort.  This is true not only of bitcoin, but of any other "online service" out there in the world.

A general rule of security: if you can own the server, you can, as a follow-on action, hack any service it provides.  If it is a distributed service, you are required to own (in bitcoin's case) servers totaling 51% of the mining capacity of bitcoin, and at that point, you can execute arbitrary transactions on the bitcoin network.  You will at that point own bitcoin.

Do you agree or disagree with this statement?

[own = pwn = hacker term of art: to take control of a piece of computing machinery]

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Hack

Sorry Dave we are talking apples and oranges. I do not consider the vulnerability to a 51% attack a hack on the network. A 51% attack is certainly possible. I call it  a vulnerability not a hack. The protocol cannot be changed w/o the consensus of the miners. The blockchain is "virtually impossible " to hack and every minute that goes by only increases its strength.

Your application of the term hack is akin to saying the international banking cartel based in Basel "hacked " the international banking system. 

If the NSA attempted to do what you are suggesting the consequences would in all likelihood be far worse for the US than BTC.

One mining pool,Ghash has already had  51% control of the  network. There was no change to the protocol. I suppose another mining pool could acquire 51% again and destroy BTC. That is a possibility and that would be more masochistic than I can Imagine, but if I put on my tinfoil hat I believe anything is possible.

http://www.zerohedge.com/news/2015-11-19/bitcoins-computing-network-more...

BTW for anyone who cares I don't like soccer or football. I prefer golf

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Hack

Sorry Dave we are talking apples and oranges. I do not consider the vulnerability to a 51% attack a hack on the network. A 51% attack is certainly possible. I call it  a vulnerability not a hack. The protocol cannot be changed w/o the consensus of the miners. The blockchain is "virtually impossible " to hack and every minute that goes by only increases its strength.

Your application of the term hack is akin to saying the international banking cartel based in Basel "hacked " the international banking system. 

If the NSA attempted to do what you are suggesting the consequences would in all likelihood be far worse for the US than BTC.

One mining pool,Ghash has already had  51% control of the  network. There was no change to the protocol. I suppose another mining pool could acquire 51% again and destroy BTC. That is a possibility and that would be more masochistic than I can Imagine, but if I put on my tinfoil hat I believe anything is possible.

http://www.zerohedge.com/news/2015-11-19/bitcoins-computing-network-more...

BTW for anyone who cares I don't like soccer or football. I prefer golf

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ok great

MM-

Ok, we have basic agreement - NSA could surreptitiously break in, and take over enough servers (until it got 51%), and then it could then quietly substitute a fragment of its own code to replace a part of the server's code, and then run that code to execute arbitrary transactions on the blockchain.

I'd call that hacking.  What do you call it?  Maybe we can call it not-hacking.  NSA has the capability to not-hack bitcoin, and execute arbitrary transactions, and this would seem to be a problem.

So under what conditions would they do this?  And what consequences would people in the US suffer?

Bitcoin is 40 billion, depending on the day.  If 40 billion simply goes away, so what?  That's 0.2% of one year's GDP for the US.  Its a blip.

If you think otherwise, can you lay out the disaster scenario you see?

As for tinfoil hats - we seem to love talking about tinfoil hat topics here.  I suspect that's because sometimes we see people use the word "tinfoil hat" in an attempt to shut down conversation about a really interesting topic that they find uncomfortable to think about.

So when you say something is tinfoil hat, it more or less immediately doubles my interest level, because it is often a conversational "tell" that is effectively pleading with me not to look under this particular rock.  Its a reverse-trigger of sorts.

So now that I've been triggered, please tell me more about the disaster that would befall the US by the NSA not-hacking bitcoin?

Mohammed Mast's picture
Mohammed Mast
Status: Bronze Member (Offline)
Joined: May 17 2017
Posts: 99
Pricing

That is a very interesting point rjs. I have often wondered why the price of gold and silver quoted oon this site in the precious metals report are always priced in USD. Curious. Why not priced in Rubles, Rials, or Rupees? Or perhaps cowrie shells. Currency traders price various currencies off the price of the USD. I suppose everything has a value in relation to something else. In a barter system I might wish to trade a pound of grapes for say a head of broccoli. I think that is why money was invented, as a medium of exchange. It kinda smoothes things out. So looking at the entire economic system (just a snapshot) we have things of value globally priced in USD, such as oil the well known petro dollar,( which is why every Amerikan president kisses the hand of the king of the house of Saud) Gold, Silver, sugar, iron ore, etc, etc, etc. My suspicion is that the USD happens to be the world's reserve currency. I do not think it has anything to do with the intrinsic value of the pixels on the screen of USD versus say the Yuan.

It would seem you are placing some intrinsic worth to the USD as opposed to cryptocurrencies. Since there is absolutely zero of intrinsic value "backing" the USD I have a hard time seeing your point. A cryptocurrency such as Ethereum on the other hand has far more intrinsic worth due to its utility. The USD is the global medium of exchange for now (and I believe most people here including the owner of this site are preparing for its collapse). For now the USD is a store of value thanks to it being the best looking horse in the glue factory. Again how long will that go on before we have a hyperinflation event?  As a measure of wealth or say a ledger the USD currently numero uno based on its reserve currency standing. 

Ethereum fulfills many of those functions far more efficiently due to its utility. Blockchain technology may turn out to be the number one technology of this century. Early adopters include Microsoft, JP Morgan, Goldman Sachs, BOA, 

So thank you for your comment and the opportunity to respond.Have a blessed day

 

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 772
It isn't fifty one percent.

Okay, I know next to nothing about bitcoin, but a little about math. So let me propose a possible weakness. Maybe it's nothing.

If you can make and break internet connections at will, which DDOS attacks can do, I suspect it isn't a 51% vulnerability; give me how many miners/servers there are, and we can get a number, but by selectively breaking the internet, reconciling the miners at 51%, and then reconnecting, it might be a 2% vulnerability. At that point, it's no longer a vulnerability; it's a hack.

A+A+B-> 3A. 3A+2B->5A.5A+4B->9A ...

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