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    If You Don’t Own Any Bitcoin, Read This

    This week it hit $19,000. What's next?
    by Adam Taggart

    Saturday, December 9, 2017, 12:50 AM

Wow. Just….wow.

Bitcoin's price has gone 'beyond exponential' this week. Just yesterday, as I started working on this article, it shot up 22% — from $14,000 to $17,000 (hitting an intraday high of over $19,000).

And that's after a mind-blowing upwards rocket ride over the past several months. 

I think it's safe to say that the vicious melt-up in price over such a short timeframe has surpassed the expectations of even the starriest-eyed Bitcoin fanboys.

The whole world, especially the 99.99% of us that own zero cryptocurrency, is asking: What happens next? And, What should I do?

Is this insane trajectory going to continue for a lot longer? Do I need to get in now to avoid missing this once-in-lifetime fortune-making opportunity?

Or is this a classic bubble blow-off top? Is this the deadliest time to enter, right before the price implodes?

An Expert's Take

I had the chance to ask these questions Wednesday to a long-time veteran in the digital currency space. We met at a gathering of online media 'mavens'; this guy has published news and analysis on cryptocurrencies since 2011, for both investors and developers. He knows the space exceedingly well.

Unsurprisingly, he holds a lot of Bitcoin. I didn't ask directly how much; but knowing that he was covering the space back when Bitcoin traded in the single-dollars range, my conservative mental math quickly concluded he's probably worth more than most people I've met in my life.

So here what I learned during my chat with him:

  • He thinks the current price action is "nuts": To his veteran eye, the current frenzy is a speculative mania and will end in a massive sell-off, resulting in huge losses for those buying in at these prices. He's watched Bitcoin long enough to have seen it experience several 70%+ corrections. In his mind, this will simply be the latest one. And there will be more in the future, he predicts.
  • But he's not worried in the long run: Like many longtime crypto investors, he sees a much higher price potential for Bitcoin. But to reach that level and sustain it will take years. The currency will need to be much more widely held among the general populace and used in a material percentage of transactions (i.e., not just being held by speculative investors). Until then, he expects lots of volatility (both up and down) of the sort we're seeing now.
  • He admits that Bitcoin could lose out to a superior successor: When asked if the capital currently flowing into Bitcoin could flee for a better crypto 'mousetrap' in the future, he says "sure". Which is why he has diversified holdings across a number of cryptocurrencies and watches new entrants into the the space closely. But one advantage Bitcoin increasingly has over the rest of the crypto field is scale. He gave a highly-technical argument for how the blockchain actually has limited value without a platform to offer it sufficiently critical scale. "Does Bitcoin offer that critical scale yet?" I asked. "Probably not yet" he answered, "But it's much closer to it than any other competitor at this time. And it's growing faster than the rest." Translation: Bitcoin is the odds-on winner at this point.
  • He expects the world's central banks to criminalize the cryptocurrencies: We talked about the central banking cartel's longstanding monopoly of the money supply and its historic ruthlessness for squashing all competition. He agreed that the central banks would like nothing more than to replace the current cryptos as well as all paper fiat currencies with digital sovereign versions. And he predicts they will likely try to do exactly this. How successful will they be? Uncertain. He can certainly foresee a time when they ban ownership of Bitcoin and its brethren, criminalize transacting with them, and shut down the exchanges. Though while the cartel may be able to seriously curtail Bitcoin et al, he doesn't see it succeeding in driving them to extinction for several reasons. One he offered that I hadn't heard before (but have since verified) is that private investors have put a network of satellites up in space dedicated to making it possible to transact in Bitcoin anywhere on Earth even if the terrestrial networks are taken down by the authorities or natural disaster.

His overall takeaway? Don't buy at today's prices; wait for a correction (it could be a really big one). But once it happens, buy in and hold, as he sees the price going much, much higher over the next decade.

By the way, I'd share this guy's name with you but he asked me not to. Given how stratospheric Bitcoin has risen over the past year, he says his biggest priority right now is to fly under the radar and have as few people as possible be aware of his crypto holdings. Apparently this has recently become a real concern for Bitcoin investors who have suddenly become overnight multi-millionaires (Or hundred-millionaires. Or in the case of the Winklevoss twins, even billionaires). A vast windfall like this makes you an alluring target to criminals.

Just one more unexpected consequence of this crypto mania we're watching play out in real time.

The Peak Prosperity View

The above expert's views match well with those of our team's outlook here at PeakProsperity.com.

Charles Hugh Smith, who has been writing about Bitcoin for us since it traded below $600 has long had a price target of $17,000 — which seemed unattainably high even just one short week ago. That underscores how insane the price moves of the past few days have been.

With the $17,000 milestone hit so quickly, does he think a large correction could ensue? Very possibly. (I should make clear though, he remains quite bullish about Bitcoin's long-term future potential).

Davefairtex, our resident charting expert, notes that his model now shows Bitcoin's level of overvaluation at "nosebleed" levels with a daily RSI of over 98 and the forecaster clearly predicting a reversal:

And reader mrees999, our community's most-respected educator on the cryptocurrency space — and one of the biggest advocates earlier in the year for buying Bitcoin — offered the following words of caution yesterday:

I probably wouldn't get in now. It's gotten irrational with FOMO. I'm selling into this rally and waiting for a massive correction once the bit shorts come in with the futures trading about to begin.

(Again, I should point out that mrees999 remains robustly optimistic about Bitcoin's longer-term future price potential.)

To the above, I'll simply add two additional pieces of data to show how quickly Bitcoin has outstripped any sort of rational justification for its recent price explosion.

The first is this chart below, which shows how Bitcoin's price has blown above the maximum Fibonacci extension between its previous swing low and yesterday's swing high (note: this chart was created before the price continued higher to $19,000):

(Source)

And lastly, here's a table showing the accelerating compression of time it has been taking for Bitcoin to hit each new $1,000 price milestone:

(Source)

That right there, folks, is the madness of crowds. It's a FOMO-driven mania to make the South Sea Bubble blush.

Advice For Those Who Missed The Rocket Ride

So, if you've been feeling like the loser who missed the Bitcoin party bus, you've likely done yourself a favor by not buying in over the past few weeks. It is highly, highly likely for the reasons mentioned above that a painful downwards price correction is imminent. One that will end in tears for all the recent FOMO-driven panic buyers.

To that point: as I'm finishing up this article, Bitcoin has retraced back to $15,100. That's a 21% loss in less than 24 hours for those who bought at yesterday's $19,000 high. If yesterday indeed proves to have been the blow-off top, that loss could get a lot uglier quickly.

But even if it doesn't, what can those of us who don't currently hold any cryptocurrency do as we wait for the dust to settle here?

Here's our current guidance:

  • Open an account with a crypto exchange: While we maintain Bitcoin and many other cryptocurrencies are in a bubble right now, we reiterate our position that they are worth having exposure to in your portfolio — albeit not at today's prices. So, while waiting for (possibly much) lower prices after the inevitable blow-off top, you should open an account with a leading crypto exchange (like Coinbase, Kraken, Bitfinex or Bitstamp), so that you'll be positioned to buy when the insanity is over. These exchanges require a fair amount of personal information that they use in account verification, and some of them take a surprising amount of time and effort to set up before your account is approved and/or funded to transact. So get all of that out of the way now, while your waiting on the sidelines.
  • Build cash: We've been beating this drum for a while because it's not just Bitcoin that's in a bubble. As laid out in previous reports, nearly all financial assets are dangerously over-valued in today's financial markets. Keep building your cash reserves as "dry powder" to deploy when the next big market correction hits. Chances are likely that at some point in the next 0-2 years, you'll have the opportunity to buy cryptos, stocks, bonds and real estate at generous fractions of the prices seen today.
  • Hold on to your precious metals: Holders of gold and silver have watched Bitcoin's moon-shot with a lot of understandable envy. This is the kind of massive re-pricing boom they expected the precious metals to experience as world fiat currencies inflate away their purchasing power. Were PM investors wrong? Did they pick the wrong horse in this race? Should they have piled into the cryptocurrencies instead? While it has been a painful five years, we expect precious metals holders will be rewarded in the end. Separate from the current emotion-driven FOMO blitzkreig, the reasons informed investors are buying Bitcoin have heavy overlap with the rationale for owning gold and silver. Capital will return to the PM market as soon as the current nested set of financial bubbles begins bursting. And if you think the jump in Bitcoin has been tremendous as a money tsunami has flooded into this small market, remember that Bitcoin's market capitalization is now substantially larger than that for all the world's above-ground silver. How high could we see silver go when that metal become en vogue again?
  • Practice emotional resilience: Hey, Bitcoin could still rally higher from here — much higher. It's still a small market with a lot of hot money fighting to enter it. How long the mania will last is unknowable — we could be seeing the end of it right here (Bitcoin's price dropped below $15,000 as I wrote the last paragraph), or it could still go on for a lot longer than we can imagine. If it does, don't let the twin devils of fear and greed compel you to be one of the "last fools" to jump in before a correction takes hold (remember: that's how Isaac Newton lost his fortune in the South Sea bubble). And don't beat yourself up for not being one of the very few people to make millions from this craze. It's like being jealous of lottery winners. Instead, focus on the real wealth in your life (hint: it's much more than the money in your bank account), take time to appreciate what you have, and plan on sustainable ways — instead of speculative ones — to increase it. Those looking for some guidance on how to best do this can find our thoughts here.

Don't Ignore The Revolution

While we've made the case that Bitcoin's current run-up has been "too far, too fast" and a painful correction is highly likely, the new cryptocurrency era is a bona fide revolution. The underlying technology of the blockchain will transform industry and commerce on a similar scale as the Internet has.

While we urge prudence and caution regarding the conditions under which you invest in the cryptos, we don't recommend you ignore their significance.

Charles Hugh Smith has written several reports for us designed to demystify the digital currency space and help you understand the future value that the blockchain promises to unlock for society.

If you feel you don't yet have a good grasp on all this, make his report Understanding The Cryptocurrency Boom your mandatory reading over the next few days.

Written just a few short months ago, when Bitcoin was a mere $2,600(!), this publication and its excellent companion report, The Value Drivers Of Cryptocurrency, explain in layman's terms the real utility value of digital currencies and why a long-term view can justify prices that may ultimately be much higher than where they are today.

Don't let ignorance or a sour-grapes frustration from missing out on the first big run make you blind to the revolution underway. Whether you participate in it or not, and at what price, is up to you. Just make sure your decisions are well-informed ones.

Click here to read Understanding The Cryptocurrency Boom (free to all readers).

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98 Comments

  • Fri, Dec 08, 2017 - 8:57pm

    #1

    suziegruber

    Status Bronze Member (Offline)

    Joined: Dec 03 2008

    Posts: 133

    Bitcoin Has A "Whale" Problem

    Adam,
    Thanks for a great article.  I just came across an interesting article on Zero Hedge related to this:

    According to Bloomberg, about 1,000 so-called “whales” control 40% of the bitcoin in circulation, giving them unrivaled leverage over the broader market. And because there are no laws explicitly banning collusion in digital currency markets, only the most blatant pump-and-dump operations risk being prosecuted as fraud.

    Thoughts?

    –Suzie

     

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  • Fri, Dec 08, 2017 - 11:40pm

    #2

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    the bitcoin innovation

    Suzie-

    It occurs to me that in addition to chatting with each other and organizing trading strategies, some whales might also run around the internet telling everyone about how cool crypto currencies are – most are surely true believers (why else would they own so much?), but at the same time they also are extremely motivated to move prices higher.

    I bet some are gifted communicators, while others employ the time-tested strategy of dumping on anyone who says anything negative about their favorite coin.  For some, personal attacks and other obnoxious behavior are fully justifiable, since they have tens of millions of dollars at risk.

    The existence of such a motivated grass roots sales force/influencer group is another reason why “the brand” has value.

    This is yet another reason why the true innovation here isn’t actually the blockchain – it’s the funding mechanism for the system itself.  It generates an instant sales force of people who are highly motivated to see the system succeed.

    Generally speaking, a thing doesn’t usually sell itself.

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  • Fri, Dec 08, 2017 - 11:50pm

    #3

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Typo...

    Good article, minor typo??? (Out by a Factor of 10)

    “The first is this chart below, which shows how Bitcoin’s price has blown above the maximum Fibonacci extension between its previous swing low and yesterday’s swing high (note: this chart was created before the price continued higher to $1,900):”

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  • Sat, Dec 09, 2017 - 3:01am

    #4

    paulanders

    Status Member (Offline)

    Joined: Feb 06 2013

    Posts: 6

    Bitcoin

    While I do believe Bitcoin (and the rest of them for that matter) has become frothy, people are not looking at the whole picture. We Americans seem to think the world is all about “US”.  Every country is in the same boat as we are and when they fall like dominos one by one, where do you think these people are going to go? Metals? You have to wait for them, and that’s if the exchange can even deliver them. I own gold and silver also but when it’s SHTF time, it’s not only easy to buy cryptos, but you can buy them in any denominations, and it’s instant.

    I too think they will one day fall out favor one day but for now, there are plenty of dominos yet to fall…

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  • Sat, Dec 09, 2017 - 6:01am

    #5
    Jeffleonard90@gmail.com

    [email protected]

    Status Member (Offline)

    Joined: Aug 17 2012

    Posts: 39

    Thanks

    Thank you for the article, still trying to wrap my head around this. The mining is somewhat of a mystery to me, along with the shadow figure(s) that started bitcoin.  

    Loved the article

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  • Sat, Dec 09, 2017 - 6:16am

    #6
    VeganDB12

    VeganDB12

    Status Bronze Member (Offline)

    Joined: Jul 18 2008

    Posts: 110

    thank you Adam

    Your article is good consolation. I wonder how the big winners in this will evolve, they are grass roots but are now elite. I hope they maintain their standards as some do but being worth 8 to 9 figures can really change your perspective on things (a change in perspective I wouldn’t mind experiencing LOL).  I am happy for the people here who did well, though a natural jealousy is unavoidable out of a remorse for following this for years and staying on the sidelines.  

    Congratulations to those who did well (some of whom I know had like no real money before this) it is a nice rags to riches event for some very good people who understand the message of this site. I hope they will focus their newly found power in ways that make sense.

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  • Sat, Dec 09, 2017 - 8:40am

    #7

    charleshughsmith

    Status Bronze Member (Offline)

    Joined: Aug 15 2010

    Posts: 685

    solving problems

    I want to stress that beneath all the speculative frenzy, what will retain value and remain scarce and in demand is anything that solves problems.

    Cryptocurrencies have the potential to solve two problems:

    1. reducing the cost and friction of financial intermediaries

    2. holding its value as the $250 trillion in phantom wealth created in the past 8 years vanishes

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  • Sat, Dec 09, 2017 - 9:50am

    #8
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 525

    Feel archaic? Just ask you're grandkids.

    Yesterday my grandson asked me what a bitcoin is. He’s 6 years old!

    Image result for bitcoin cartoons

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  • Sat, Dec 09, 2017 - 12:32pm

    #9
    PaulJam

    PaulJam

    Status Bronze Member (Offline)

    Joined: Dec 04 2016

    Posts: 70

    Fascinating: Bulgaria gov't has over 3 billion in siezed bitcoin

    http://www.zerohedge.com/news/2017-12-08/bulgaria-government-shocked-dis

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  • Sat, Dec 09, 2017 - 12:41pm

    #10
    alanrgreenland

    alanrgreenland

    Status Member (Offline)

    Joined: Nov 07 2010

    Posts: 5

    But is Bitcoin SUSTAINABLE??

    I admit to being a skeptic about bitcoin, and I don’t know the details of the “mining” operations.  But I have seen articles suggesting that it uses TONS of electricity (apparently to run complex algorithms for hours on servers).  One headline said that bitcoin uses more energy than Ireland!  Given that, is it even close to sustainable? 

    I often wonder whether even the internet will survive more than another decade or two, because I think it’s likely that electricity (supplied by the grid) will become unreliable.  So the last thing I’d want, at that point, would be for some portion of my wealth to be tied up in something that doesn’t exist except on my computer, and requires some unknown number of servers out there to be connected and operating in order for me to conduct a transaction.  This sounds like the opposite of simple, sustainable technology (which, I think, is all that’s likely to survive into the next century).

     

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  • Sat, Dec 09, 2017 - 7:58pm

    #11

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    bitcoin wallet hack

    A long while ago, I was having an argument with someone here about how bitcoin was unhackable.  I explained that if I were going to hack bitcoin, I wouldn’t go through the front door, but instead I’d attack the wallet code.  My proposed hack was inspired by the NSA, which seldom did brute force attacks on crypto algorithms.  Instead, they focused on key generation.  They would look to see how the key was generated, and see if they could duplicate that process.  Or, they’d sneak in and change the key generation code so that the mechanism was easily reproducible – such as, using the current time as the “seed” for the key generation, thus constructing a “predictable key”.

    Then I was told, “but for bitcoin, that’s impossible!  The code is reviewed!”  Top men, I was told, were on the problem.

    Well, apparently, someone has done exactly this.  They’ve somehow infected the “wallet generation” mechanism somewhere, and then wrote a bot that loots the contents of these “predictable wallets” as soon as they appear in the blockchain – as soon as someone uses them in a transaction.

    https://pastebin.com/jCDFcESz

    The article is long and technical, but the executive summary is this:

    Someone apparently hacked the wallet generation code “somewhere” so that the “seed” for the wallet used bits and pieces of the blockchain historical record – transaction IDs, other people’s public addresses, etc.  Then they wrote a bot that would scan the blockchain looking for anyone using on of these “predictable wallets.”  When it saw one of them in use, the bot would immediately loot the contents of that “predictable wallet.”

    The author, looking for “treasure in the blockchain”, discovered this on his own.  “Hey, that wallet ID was constructed using someone else’s wallet ID (or one of the old blockchain transaction IDs) as a seed.  Why would someone do this?”

    Pretty much, it was about theft.  Again, this approach doesn’t attack bitcoin’s cryptography directly.  Instead, it attacks via key generation.

    True story?  Its easy to verify.  All you have to do is check all addresses ever used, and see if any of them were derivatives of blockchain transaction IDs or other people’s wallet IDs.

    Moral of the story: while we all know that you must guard your private key, its also the case that you are forced to trust the mechanism by which your private key was generated.  And you can’t tell, simply by inspection, that your private key isn’t one of these “predictable” ones.

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  • Sat, Dec 09, 2017 - 10:14pm

    Reply to #11
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Important Leeson to be learned

    Don’t trust hot wallets from any exchange or hosted wallet service.  Do your own research.

     

    Blockchain.info has had a terrible record for years. It has been hacked and wallet compromised several times. Clear back to 2014. A quick Google search will bring up dozens of accounts.  Hopefully a person smart as yourselves will at least do a google search to verify the trustworthiness of any company before they store money with them and validate their reputation. We get bad actors in all fields including casinos, banking, wall street, high speed trading bots etc.  So it shouldn’t be a surprise to see one wallet service with a bad reputation gets hacked or suffers from bad coding but it is exposed and available for anybody who spends 15 seconds with Google to learn to avoid.  

     

    https://www.coindesk.com/good-samaritan-blockchain-hacker-returned-255-b

    This might be a case of confirmation bias for somebody with an agenda?

    Or, the strawman logical fallacy.   You can decide.

     

     

     

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  • Sat, Dec 09, 2017 - 10:23pm

    Reply to #10
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Misleading headline

    Most mining comes from China. They overbuild to keep the economy afloat during the last banking crisis. They built entire citifies that are still unused today. They build several dams to power these still empty cities.  So now they have all this wasted electricity coming from clean energy and would like some productive use so the attach the bitcoin miners to capture the wasted efforts.  The mining is a layer of protection doing the complex algorithms that root the network to the physics of thermodynamics. 

     

    The other major server farms come from Iceland and other northern areas that have natural volcanic heating vents that create electricity – clean and sustainable and utilize the naturally cool climate for cooling. They do this for economic reasons – but still not unhealthy for the earth, The cost of this per transaction is expensive and hardly justifies the cost as it combines to create the most robust computer system by orders magnitude. But it could be coded in a way to include everybody in the world without any additional energy requirements. It’s just sitting there waiting for the population to arrive and utilize it. 

    Is the growth sustainable?  Not forever. It will find equilibrium as all things rooted in nature.

     

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  • Sun, Dec 10, 2017 - 8:31am

    #12

    jtwalsh

    Status Bronze Member (Offline)

    Joined: Oct 01 2008

    Posts: 263

    Open Mind

    Adam, Charleshughsmith and Davidfairtex:

    Thanks for making a very obscure topic much more understandable.  One of my issues with Bitcoin has been my own inability to understand what it is and how it works.

    At its essence Bitcoin and the other crypto currencies seem to me to be another form of fiat currency.  They are valuable only because we ascribe value to them.  The most intriguing thing about them is that they exist without the backing of any government and seem to operate outside the present banking oligarchy.  Both attributes are very appealing to someone with a libertarian bent.

    My concerns, which may flow from my profound ignorance are: First, Bitcoin and the rest exist only in cyberspace.  For someone who lived most of their life before the internet and who has been prepping for a decade for the possible collapse of the electric and communications grids it seems possible that this wealth could become as inaccessible as buried treasure on a remote island was two centuries ago. Second:  While the block chain seems to be secure, there are reports of people losing the key code to their electronic wallet which makes their wealth inaccessible, or of hackers that can break or duplicate pass codes. To me this seems that there is a risk of loss or fraud, just as there is in the currencies of the present banking system.

    I look forward to future reports on this topic so I can reach an even better understanding of the subject.

    Thanks again..

    JT

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  • Sun, Dec 10, 2017 - 8:54am

    #13

    sand_puppy

    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1945

    Automatic Earth Blog on a real role for cryptos

    (Sorry about the formatting.  I cant get rid of bold and underlining.)

    Crypto-Cornucopia Part 4 — Without It, You’re Talking Mad Max

    He reviews the ways that deliberately inaccurate record keeping is used to defraud others.  (This was quite an eye-opener to me.)

    On the geneal problem of inaccurate (fraudulent) record keeping in stock transactions:

    Without records of transfer, how do you know you own it? Morgan transferred a stock to Schwab but forgot to clear it. Doesn’t that mean it’s listed in both Morgan and Schwab? In fact, didn’t you just double-count and double-value that share? Suppose you fail to clear just a few each day. Before long, compounding the double ownership leads to pension funds owning 2% fake shares, then 5%, then 10%, until stock market and the national value itself becomes unreal.

    Inaccurate record keeping on stock prices.

    But it doesn’t stop there. You don’t only buy stocks, you sell them. And you can sell them by borrowing them from a shareholder. But what if there’s no record of delivery? You can short or sell a stock without owning any… You could literally own nothing, borrow nothing, post nothing, and with no more than insider access to an exchange, drive a company out of business. That’s how crucial recording is.

    What happened to Overstock.com

    And while for appearance’s sake, they only attack and destroy small plausibly weak stocks, Overstock.com with a $1.45B market cap fought these naked short sellers for years. Publicly, openly, vocally, with the SEC. Besides eroding their capital, besides their legal fees, besides that e.g. Amazon could pay to have their competition run out of business with fraudulent shorting.

    An honest stock market blockchain

    However, what if you created an honest stock market Blockchain that actually had the stock certificates and actually transferred them, cheaply and reliably without false duplication? This is what is happening in the Jamaican Stock Market. A new company can choose to list on the stock Blockchain and avoid the old system.

    Blockchains can also do Smart Contracts.  What is that?

    Suppose you make a bet: IF the Packers beat the Lions on November 12, 2017, THEN I will pay you $50. You set up the contract, and the bot itself can look for the headlines and transfer the money when the conditions are met.

    The value of a smart contract.

    …[H]ow about this: You run a jewelry business on Etsy and need to buy $500 in beads from Hong Kong. Normally, you would need to pay an importer, a currency exchange, bank account, wire transfer, escrow account, and a lawyer, or their proxies within the system, plus two weeks’ clearing time. That’s a lot of overhead for a small transaction. In contrast, a smart contract such as Ethereum could post the value of the coin (escrow), and when Long Beach or FedEx confirms delivery, releases the Ethereum, a coin of value, to the seller in Hong Kong. Instantly. Why? The existing financial system is charging too much and doing too little. That’s a huge incentive to get around their slow, overpriced monopoly.

    Once you cut the costs, have a more direct method, and reduce the time to minutes, not weeks, the choice is obvious, which may explain why Microsoft, Intel, and others are deep in ETH development.

    What about the end of the electrical grid?

    Another objection is that cryptos depend on electricity and an expensive, functioning Internet. True. But while I’m no fan of technology, which is full of problems, so does everything else. Without electricity, the western world would stop, with no water, no heat, and no light.

    Without Internet, our just-in-time inventory halts, food and parts stop moving, banking and commerce fail. You’re talking Mad Max. TEOTWAWKI. That’s a grave problem, but not unique to Bitcoin.

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  • Sun, Dec 10, 2017 - 9:32am

    Reply to #13
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 881

    SP, right on

    I can’t solve the next generation’s problems. We’ll be lucky to survive our own. But I can warn you that even now this generation will never accept a digital mark without which you cannot buy or sell, not voluntarily and not by force. It’s too far to reach and social trust is too compromised. But could they get us halfway there and just make it official later, when everything’s fixed again? I think absolutely.

    Once that’s in, you can finish all the plans written in the bank and government white papers: perfect, inescapable taxation. Perfect, indelible records of everyone you talked to, everything you said, everything you bought, everywhere you were, everyone you know. Not today, but in the future. And that is the purgatory or paradise they seek today. The price of Liberty is eternal vigilance. The system we have wasn’t always bad: a small cadre of bad men worked tirelessly while complacent citizens shirked their duty. So when we move to a new system softly, without real purge, real morality, real reform, what makes you think the same thing won’t happen to your new system? Only far, far more dangerous. But I can’t prevent that. Think, and plan accordingly. 

    The last two paragraphs from the Automaticearth essay,,,say it for us here at Bluestemfarms. Kelsey has settled again, all are hayed, now to get snow bound trees off the fences,,,firewood.

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  • Sun, Dec 10, 2017 - 10:35am

    #14

    Mark_BC

    Status Bronze Member (Offline)

    Joined: Apr 30 2010

    Posts: 298

    The same thing would have

    The same thing would have happened to gold a long time ago if the CB’s didn’t have digital naked futures to manage it. They will do the same to Bitcoin, they don’t like competitors.

    For bubbles to go to such astronomical levels there has to be a bunch of extra money sitting around which peopele throw at them, and we all know where that money comes from.

    All these new billionaires from Bitcoin, they aren’t billionaires unless they sell it and buy something real with it. In this era of grossly over-inflated financial assets in relation to the amount of real world wealth out there, I see a musical chair situation arising.

    Will cryptos maintain their value after the currency crash? I doubt it, people will be clamoring for real things and cryptos are about as imaginary as you can get, next to Federal Reserve notes which at least have some degree of backing by the US government and the 300 million slaves it represents. Sure it takes energy to mine Bitcoins but why would anyone want to spend (waste) money to make some digital bit when things fall apart, when they could just buy PM’s once they are set free?

    As with everything else that has skyrocketed in the financial bubble over the last years, I am just disappointed that I missed out and am labouring down here in my 8 to 5 to make ends meet. I still believe I will win out in the end but the question is whether I’ll still be alive by then to witness it.

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  • Sun, Dec 10, 2017 - 10:50am

    #15

    AKGrannyWGrit

    Status Bronze Member (Offline)

    Joined: Feb 06 2011

    Posts: 465

    RR & SP

    “And that is the purgatory or paradise they seek today.”

    Love that sentence!  Perhaps it could also be “Purgatory of Paradise”. They are both so, so appropriate!

    I would be depressed or demoralized if I didn’t believe in “the serendipity of unintended consequences” and the power of grace, and good.  

    So glad you all post, thank you.

    AKGrannyWGrit

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  • Sun, Dec 10, 2017 - 12:47pm

    Reply to #11

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    you are the bank

    So the good news is, bitcoin lets you be your own bank.

    Unfortunately, that’s also the bad news.

    When asked why he robbed banks, Willie Sutton famously answered, “because that’s where the money is.”

    And now, with bitcoin, you are the bank!

    And bank robbers are now electronic, not physical.

    And general purpose computing machines, the mechanism through which we get to play banker, are notoriously easy to hack.

    So you get to learn about being the paranoid security team at the bank.  All of us get to learn this.  Because we’re all the bank now.  And there are armies of electronic Willie Suttons out there who are looking to rob us, because “that’s where the money is.”

    And unlike with credit cards, once the money is gone – it’s just gone.

    So google before you do anything.  If you miss something, well you were pretty stupid, weren’t you?  After all, it is your responsibility to be the paranoid security team.   And never, ever, click on anything.  Remember, you’re the freaking bank!

    I have to say, I’m having a great deal of fun.  But it is also absurdly easy to move money around.  I like being the bank.  I’m also a bit paranoid about security.  How about you?

    Just one perspective.  🙂

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  • Sun, Dec 10, 2017 - 1:04pm

    Reply to #11
    Cornelius999

    Cornelius999

    Status Bronze Member (Offline)

    Joined: Oct 17 2008

    Posts: 365

    Jim Rickards says somewhere

    Jim Rickards says somewhere that btc and eth ect. will be superseded by a deeper underlying system that the likes of IBM are developing.

     

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  • Sun, Dec 10, 2017 - 1:11pm

    Reply to #14

    Afridev

    Status Bronze Member (Offline)

    Joined: Oct 11 2013

    Posts: 126

    Cryptos in a currency crash

    Would in a currency crash the cryptos not be one of the little alternatives to ‘get out’ that still present themselves? At this moment it seems that even if they are ‘imaginary’, cryptos do provide certain ‘services’ (I think proven – and in addition possibly will open up significant new ones in the future – unproven) and align to principles that other resources do not necessarily offer. So I believe that at this moment there is real value in cryptos, possibly not justifying their current value though, I don’t know…

    If some trust in cryptos can be maintained in case of a currency crash, even if only a very limited amount of resources would flow into the cryptos, they would still be exploding. But unless they can then be used for direct interactions that bypass the traditional paper stuff (i.e. crypto-to-crypto or crypto-to-real stuff), you’d still be stuck in the computer or with paper… In the end the key is what real stuff you can get for it… I suppose it all depends on what scenario(s) you think are most plausible on what decisions to take now.

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  • Sun, Dec 10, 2017 - 1:17pm

    #16

    KugsCheese

    Status Gold Member (Offline)

    Joined: Jan 01 2010

    Posts: 841

    Bitcoin Options?

    Anyone know when Bitcoin Options start trading on retail brokerages like Ameritrade/Sccottrade?

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  • Sun, Dec 10, 2017 - 3:03pm

    #17

    stevejermy

    Status Member (Offline)

    Joined: Dec 13 2011

    Posts: 13

    Hyperinflation Harbringer?

    Exceptionally interesting articles, which I need to read again fully to understand.

    Although the South Seas & Tulip nature of the Bitcoin ascent is fascinating, two interesting and interrelated questions to me, which would be interesting to explore further, are:

    • first, to what extent is the parabolic ascent of Bitcoin and its volatility consequent on the G7/G20 central banks’  inability to control it through market intervention;
    • second, to what extent is Bitcoin’s ascent actually the start of hyperinflation of the West’s currencies, as the wall of QE monies now finding another monetary class into which to descend?

    My guess is that the ascent could be a combination of Tulip and early inflation. Perhaps a good time to add to PMs, if so.

     

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  • Sun, Dec 10, 2017 - 6:43pm

    Reply to #1

    newsbuoy

    Status Bronze Member (Offline)

    Joined: Dec 10 2013

    Posts: 138

    Chino-Ruskie Blubber Processing

    Indeed the Chinese and Russian (and other) whalers are diving deep and looking for old captain Ahab. Possibly the only reason we risk blood and treasure is to protect the Petro Dollar. That is, the value of energy expressed in U.S. Federal Reserve Notes. Do a googlearch and you will now see stories about how blockchain/bitcoin will be used to buy/sell oil. Genie is out of the bag. The Petro Dollar is finito! So whether I have bitcoin cryptographs printed on a piece of 8 1/2 x 11 safely tucked away in … hey, hey, hey … or not. It will be what lies beneath most if not all transactions the way the U.S. Federal Reserve Note does today. Will this happen before events unfolding in our atmosphere make it mute is a different question. Speculate if you have the gambling disease but lets hope that somehow this tech can disintermediation the FM’res. Look’n at you Jamie.

    No, this is not Max Kieser.

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  • Sun, Dec 10, 2017 - 9:16pm

    Reply to #13
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    There is balance in the force - the resistance lives

    Some speak as if there is one side. Happy smiling faces everywhere. Where there is no conflict or disagreement and with any decent – they are left out of the system.  The technology was BORN out of disregard for the status quo. IT WAS FREEDOM FIGHTERS  escaping the exact kinds of scenarios where governments and those in authority try to impose their will. Jim Rickers is an idiot trying to sell books when he espouses this garbage. He preys on your fears because he expects none of us have done our homework.

    Study of a moment the source of this technology. The freedom fighters that were HAL FINNY who was a cryptographic activist.  His self-declared duty was to protect people like you from the exact nightmare scenario you blame on crypto. Some insult him and his achievements he did for us because they are uneducated and refused to actually learn there are two sides with many sharing the same concerns but actually doing something about it rather than just complaining and imagining without making an effort to even understand.

    He was one of the people behind bitcoin creating it for people like you and me. He fought the big brother state. ADAM BACK who was threatened with imprisonment for trying to export code that would get past the right of the people to keep their transmissions secret from “the powers that be” – as he PRINTED the SECRET CODE DECRYPTION KEY ON HIS SHIRT – he refused to remove as he crossed national lines. He went to court and won the issue as a right to wear the number as a right to free speech. His actions were was an act of defiance for the right you enjoy every time you pull up a web browser that the US Military wouldn’t allow to be encrypted past 52 bits (Easily broken these days and a source of national security hacking). These things still happen today with Senator McCain trying to reign in our rights to privacy.

     

    Without their fighting for your rights, there would be no commerce on the internet. There would be no internet in tyrant states with dictatorships. It is the reason we have HTTPS in your browser to scramble your messages that have any hope of not being eavesdropped at the first hop past your house. To this day, the military outlaws a NUMBER. They consider knowing or possessing A NUMBER to be munitions. 

    Take five minutes to understand the background of David Chaum,  Another digital freedom fighter for the internet and your rights to privacy. Without his services, your life right now might be unrecognizable.

    Privacy tokens like Monero that will be resistance to authority that keeps the common person at equal distance with the right to bare digital arms for protection. There are tokens to make switching from any of thousands into any other of thousands completely autonomously and in computer code. These things happen without money exchangers on the ground, and without borders. No apologies, no permission.  Centralized currency is already obsolete. Fiat Currency is on its last stand. 

    Some keep pretending it isn’t happening. Every day is confirmation bias. They wast their time glorifying any bad news about crypto – because it makes them feel better – trying to ignore the truth. The world around them is changing and crypto is the method that is stealing the thunder from what they’ve waited and invested for.  The role of PM was stolen from them. It sucks I know. Will you continue to ignore the truth? Time’s wasting. Did bitcoin just go up another thousand overnight? I’ve got some silver to sell you.

     

     

     

     

     

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  • Sun, Dec 10, 2017 - 9:27pm

    Reply to #12
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Answers for JT

    Mistaken for fiat is one of the first mistakes people make in gaining an understanding. Here’s what I wrote about that:

    https://medium.com/@mreespublic/why-bitcoin-is-not-fiat-currency-c3d1996

    Cryptocurrencies like powerledger are changing everything – including the electrical grid. See microgrids now made possible because of crypto: https://web.powerledger.io/

    To keep crypto safe from hackers, and lost passwords – there is a tool for that: https://www.ledgerwallet.com/

    People can still trick and con you so it is still important to be educated. But these links will help you on your path to understanding.

     

     

     

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  • Sun, Dec 10, 2017 - 9:50pm

    Reply to #11
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    You are probably not ready to be a bank

    Let’s face it. Crypto currencies are a hard topic to grasp. It is largely uncharted territory. There are land minds next to gold minds. We are in the wild wild west. I don’t think anybody would argue those points. I would not trust my 92 year old father with a digital hard wallet. There are many ways you can make a mistake by not using a copypaste function correct for example. There are fake websites – snake oil salesman, and a host of ways people will try to trick you out of it.

    If you leave it with banks and exchanges, I don’t suspect we’ll have much better success trusting them with this form of money that we’ve had with any other form we’ve used for 5,000 years. It might not become mainstream for a decade. By them in might be waterdowned, and made as easy as sending an email on your iphone today. But – by then all the big money smart people will have made their fortunes.

     

    You’ll get paved roads, instead of wagon wheel roads.  You’ll get fancy smartphones when the pioneers in the field had to make due with walky-talky.  You’ll have airconditioning while those that explored the uncharted territory and took the pains of learning through blood sweat, tears, pain, loss, errors, to actually find the treasures to be found.

    Adventuring isn’t for everybody. Some want to be pampered and just be wealthy without needing to earn it themselves. Others want to be responsible for taking the hard road and earning the rewards for being first. It can be bloody and bruising going to the school of hard knocks. But if it were easy – everybody would be doing it. What kind of person do you identify with? Perhaps your hands are too soft, or your neck and backache. Maybe you’ve given up?  Maybe you already think you know everything you need to know. At some point, all the new technology just doesn’t matter anymore. Right?

    I would say for the vast majority of people – just wait.  Wait until it’s handed to you gently. For your own good, by people that have earned the right to portion it out to you as they see fit. There are those that do and those that do not. For every go get-em – “die with your boots on” type of guy, there are a hundred that want to die peacefully in their bed without the need of a story to tell their children about the fight they made to get to the top. Those stories are for other people.

    Perhaps you’re too old.

    Or too distracted

    Or too dumb

    or too tired

    or too discouraged, resentful, suspicious, doubtful, untrustful. We can think of a thousand reasons not to do something.

    But.

    We are fortunate to be alive during the great wealth transfer of the millinia. I tiny smiggen of life sliced in a way that we are allowed perhaps a decade or two in all of world history to be in the right place at the right time, with the right tools and the right education and being fortunate to have health and education and an open mind to actually make a life-change with a life-changing amount of wealth for not just ourselves, but for generations of our family that follow. 

    What will you do with that fortunate opportunity?

    Ah shucks, it might be scary to be your own bank. Go watch history being made rather than taking part. It’s dangerous. There’s a rocking chair waiting somewhere for you right now.

    Which one are you?

     

     

     

     

     

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  • Sun, Dec 10, 2017 - 10:33pm

    #18

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    do molecules still matter?

    That’s my question.

    Bitcoin is a claim on real wealth.  A bitcoin is a claim on the operating bitcoin infrastructure, which itself is a claim on the properly functioning internet, your connectivity to it, and the functioning power grid.  While the bitcoins themselves will survive any sort of internet outage (on the disk drives of all the servers), their utility is questionable if the outage persists.  If your transaction can’t be verified, or if the worldwide internet ends up being fragmented for some reason, double-spending problems appear.  Blah blah blah.  Bottom line is, if you don’t have connectivity, you can’t execute transactions, and so your personal “realtime” utility from your bitcoins is zero.

    A US dollar is a claim on the functioning US economy, the strength of the US military, as well as the open-ness of the US capital account.  Of course, when the government (or the Fed) prints up more claims, that’s dilution for existing holders of claims.  Bitcoin doesn’t have this problem.  When it comes to discipline of new claims production, bitcoin can’t be beat.

    However, both USD and bitcoin are still both just claims.  They should not be mistaken for underlying real wealth.  In bitcoin’s case, the “underlying real wealth” are the functioning servers, clients, and the fully-connected Internet.  (We can debate if “the Internet” represents real wealth; I think it does, but it too is a derivative/depends on reliable power generation.)

    But maybe that doesn’t matter.  Maybe claims are all we need.

    Ultimately that leads me back to my question: do molecules still matter?  Houses, food, farms?  And the portable molecules: gold? Or are digital claims the ultimate in what we should focus on?

    See the log chart below of the gold/bitcoin ratio.  Once again, its a LOG chart.  A regular chart simply looks ridiculous, with the ratio being a flat line right at the bottom – looking exactly like the EKG of some patient that has died.

    So right now, molecules just don’t matter.  As in – they really, really don’t matter.  Monthly RSI: 14, weekly RSI 19, daily RSI 21.  That’s capitulation territory for molecules.

    Me, I love tech.  Its what I do.  Bitcoin is tons of fun.  I’m learning more and more about the details as time passes.  I’ve worked in the networking field since the dawn of time.  I have to constantly adapt.  I’ll be writing python (or its successor language) from my rocking chair, quite possibly until I keel over dead.  Why?  Because for me, its just that much fun.  It always has been, ever since I was a kid.

    So, my question again: do molecules just not matter anymore?  Should you sell your silver at $15.90, and buy bitcoin at $16,230?

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  • Mon, Dec 11, 2017 - 12:23am

    Reply to #18
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Silver Molecules VS Electrons

    Silver and bitcoin – that’s a fun one to compare. I own both. I have owned silver many years before bitcoin was a thing. 

    I bought silver under $10 in the 2000s. Bitcoin was technically born in 2009, but had no price until mid-way through 2010 when it was used to buy a pizza. No fiat or declaration. Doing the math for 10,000 bitcoin to buy $40 worth of pizza put the price at about one-quarter of a penny. It went several thousands of percent in the first bull run of its life lifting the value to 8 cents in weeks. As a full bitcoin is just another name for 100 million satoshis (units of value 8 decimals in) we could measure those 8 cents needing many leading zeros.

    But we are looking at silver in its relation in US dollar terms. What can we trade them for as a currency. The can both act as unit of account and store of value. So we need something in relation we can buy with both so we can triangulate meaning.

    Let’s use the standard median house price for the years both had established value. As they both have fluctuating prices throughout each year, I’ll look at December 31 of each year. The price of housing comes from the St Louis Fed  https://fred.stlouisfed.org/series/MSPNHSUS

    We will measure each in quantity of units required to purchase the house for each year – silver measured in troy ounces. Bitcoin measured in a full bitcoin. We can separate a troy oz into 33 grams, and bitcoin into 100 million sub units called ‘satoshi’s as we can buy these in their equivalent portions but let’s stick to the full until as commonly know for ease.

               
    Year Median US house price  SLV  Price   BTC Price  SLV Needed BTC needed
    2010  $        241,000.00 30.63  $      0.08            7,868.10  3,012,500.00
    2011  $        218,600.00 28.18  $        4.25            7,757.27 51,435.29
    2012  $        258,000.00 29.95  $          13.51            8,614.36 19,096.97
    2013  $        275,500.00 19.5  $        757.00          14,128.21                363.94
    2014  $        301,000.00 15.97  $        319.00          18,847.84                943.57
    2015  $        297,000.00 13.82  $        430.00          21,490.59                690.70
    2016  $        327,000.00 15.99  $        968.00          20,450.28                337.81
    2017  $        312,800.00 15.95  $  16,940.00 19,611.29                   18.47

    The silver I purchased I own and poses. It’s now dustier and fighting mildew. It’s dark, and nobody seems to want to talk about it or show any interest at all except my old Uncle Rocky. Even the shiny pieces straight from the US MINT for less than half of what I paid for them on Ebay. Yep, the molecules are still there- I counted the silver and it llooksto weigh the same if anybody cared to check.

     

    The bitcoin I own is invisible. It exists everywhere and nowhere at once. and EVERYBODY wants to talk about it. I find people all over willing to sell their homes and cars for bitcoin.  Bankers have wwhiteboardsand swat teams put together trying to figure out how they can cool it down. Central bankers are scratching their heads. Government officials are creating teams trying to harness its technology to make government more efficient. Speculators are having a hey-day.  Millionaires from all walks of life are have become millionaires.  

    Now that mutual funds, retirement funds all a wall of money can just now begin to invest in it – many predictions from reputable predictors in the space call bitcoin at $40,000 each next year. That would put the estimated house at about 8.5 bitcoin – or near 20,000 ounces of silver. 

    So speaking of networking – one is electronic and fancy computer systems, and one is social. Social networks bring consensus. Human-relatable and agreeable networks of friends and family. Those over 70 might have a sense of nostalgia from when they were young and silver was an actual thing they could use to buy a bag of penny candy or shop the five and dime stores.

    Most can’t get their kids interested in it because they can’t relate. Sure, it has industrial uses – but so does copper and zinc and that makes them about as excited – which is to say they aren’t interested. As I grow older and wiser it becomes easier to spot the patterns of life. One is up and coming with hopes and dreams, grown and excitement with a world of possibilities. One is a relic. I struggle to stay interested as I go visit the old boxes less frequently. My magnifying glass and books with holes ready to be filled with coins yet unfound. 

    I walk past the old coin store occasionally and see an older gentleman or couple in the quiet store from time to time. Only very rarely do I see a young person enter the forgotten store with the elderly owner. I guess it’s a sign of the times. They are moving on. The social networks of silver (and gold) are growing older and weaker each year. A lot of those social networks are getting shorted out as people fade away leaving only memories behind- for a while at least. Their loved ones will soon follow but the silver molecules will remain, dark, damp, and unappreciated. It claims the past.

    Bitcoin is just a cryptocurrency. Who knows if it will live a long life. But it is made of energy which refuses to lie at rest. Its decedents are claiming the future.

    I expect in my lifetime that a child will find it unbelievable that it once took more than one whole bitcoin to purchase a house. She might also find it equally unbelievable that people once were expected to use those old silver-colored round discs to actually pay for something.  

    Today an ounce of silver will claim 259,625 Satoshis flying around as measured electrons in a worldwide accounting book. How long before the silver is a claim on only 1,000 as the bitcoin price continues to soar? More importantly – will anybody still care?

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  • Mon, Dec 11, 2017 - 1:03am

    Reply to #18

    Afridev

    Status Bronze Member (Offline)

    Joined: Oct 11 2013

    Posts: 126

    Very good question...

    The moment molecules don’t matter anymore we’re done for. Last I checked my kids were still built up of molecules, as was the food we grow and eat, the water we drink, the air we breathe, and the heat we need to survive has its source in molecules. I work with resilience, and one of the things that are often overlooked in that domain are the chains of dependency. As Dave indicates above, even cryptos ultimately depend on molecules (as unfashionable as they may have become).

    I like certain aspects of what cryptos can do, part of their message, and a potential level of freedom they possibly can give (though I haven’t even scratched the surface to really understand the potentials cryptos have – or the threats they could bring). Based on discussions on PP I put some fiat into cryptos beginning of the year – the equivalent of an old bashed-up clunker – which now would be a more recent clunker with a funky stereo. So I’m pretty happy; it’ll never be ‘big’ what I’ll get out, but that’s OK, I feel (sideways) part of the movement. Cryptos (for me) will always be a mean that leads to ‘molecular’ ends. I’m uncomfortable with the seemingly in-baked tendency of society to always push further toward abstract ‘things’ while losing the bigger picture. This is part of what got us into this mess in the first place. I think a solid grounding in ‘molecules’ is key to our survival and well-being. Our vegetable garden will always be worth more to me then cryptos.

    I understand that cryptos are potential game-changers, but let’s not separate this development from the ‘real world’…

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  • Mon, Dec 11, 2017 - 2:13am

    Reply to #18

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    molecules are for grandpa

    I confess, while my code is grunging through the blockchain in the background, I’m doing everything I can to prod Mark into sending me that skeleton again.  If bitcoin breaks out above 16,700 (bitstamp price) maybe he’ll finally give in and send it one more time.  I want my skeleton, and I won’t stop provoking him until I get it!  🙂

    If I’m really pushy, maybe he’ll even post a picture of a dusty, moldy box of silver coins.  [Mark: you just know you want to!]

    You read his article.  Doesn’t it feel right to you?  I mean – I feel like that grandfather with dusty old gold and silver, an old has-been, behind the times.

    We should all sell our dusty, moldy, reeking-of-decay gold and silver and swap them for shiny new invisible bitcoin, nowhere, yet everywhere, a handful of bits in a ledger residing in a collection of servers on the Internet.

    Seriously.  I feel the pull to do this.  Bitcoin is exciting.  Everyone is talking about it!  His argument resonates on an emotional level.  It is persuasive.  [Most likely, something similar has been said on websites around the world by a collection of bitcoin whales.]  Given how emotion tends to drive the herd, what does that say about where we are in this particular cycle?

    So forget buy-low-sell-high.  That’s grandpa’s mind-set, sitting in his rocking chair, thinking about “business cycles” and other ancient belief systems that no longer apply to the modern age.  You don’t want to be a fossil!  You want to be young, dynamic, a kid again, willing to jump into bitcoin at $16,500 because its sure to go to $40,000 due to a wall of money about to hit it from pension funds who are eager to cash in on bitcoin’s rise.

    Your takeaway today: molecules are for Grandpa!

    As a trader, you need to interpret your emotions properly rather than being led by them.

    I can just feel the low coming.  Can’t you?  But first, we need as many goldbugs as possible to capitulate.   They need to bail out here at the ratio-lows.  They need to give up on gold, swap it for bitcoin, here at $1250/$16,500.  They need to swap 13 ounces of gold for one bitcoin.

    You do feel like capitulating, right?  I sure hope so.  That’s what lows feel like.  The more of us that feel like that poor, deluded, ancient, behind-the-times grandpa, the happier I become.  Once the goldbugs sell, that will mark the low.

    Armstrong calls that “the slingshot move.”

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  • Mon, Dec 11, 2017 - 4:40am

    #19

    Afridev

    Status Bronze Member (Offline)

    Joined: Oct 11 2013

    Posts: 126

    Yeeeeh, I got promoted from a

    Yeeeeh, I got promoted from a (digital) bronze to a (digital) silver member devil

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  • Mon, Dec 11, 2017 - 4:42am

    Reply to #18

    Afridev

    Status Bronze Member (Offline)

    Joined: Oct 11 2013

    Posts: 126

    Grandpa's are great!

    They have the wisdom to know where to fish, where to find mushrooms, and when to say ‘drop it, it’s not important’. Would have wanted to have had more time with my grandfathers, so much more to learn… I hope with time to grow into a grandpa myself to whom (grand)children will turn for some wise words or mental support, work in progress wink. Besides molecules and bits, there are other things that give depth to life, wisdom, meaningful connection…

    I like Taleb’s view (from ‘Antifragile’): ‘For the perishable, every additional day in its life translates into a shorter additional life expectancy. For the nonperishable, every additional day may imply a longer life expectancy‘, i.e. if it has weathered and survived serious stuff being thrown at it, it probably is pretty resilient (though Taleb doesn’t seem to like the term). The ‘molecular’ world has proven itself to be quite ‘antifragile’. The jury is still out on cryptos…

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  • Mon, Dec 11, 2017 - 7:31am

    Reply to #18
    DennisC

    DennisC

    Status Bronze Member (Offline)

    Joined: Mar 19 2011

    Posts: 101

    No Money, No Problem, No Credit, No Problem

    Remember that advertisement?  I’ve been thinking along the same line with regards to the wall of pension money hitting the shore.  Why not use (more) taxpayer money?  It would require (perhaps) some additional tweaks to either version of the Pension Rehabilitation Trust Fund bill (H.R.4444 or S.2147), in my opinion, to make it happen; specifically, this section (in H.R.4444):

    (3) USE OF LOAN FUNDS.—

    (A) IN GENERAL.—The loan received under subsection (a) shall be used to purchase annuity contracts which meet the requirements of subparagraph (B) or to implement a portfolio described in subparagraph (C) (or a combination of the two) to provide the benefits described in paragraph (1).

    (B) ANNUITY CONTRACT REQUIREMENTS.—The annuity contracts purchased under subparagraph (A) shall be issued by an insurance company which is licensed to do business under the laws of any State and which is rated A or better by a nationally recognized statistical rating organization, and the purchase of such contracts shall meet all applicable fiduciary standards under the Employee Retirement Income Security Act of 1974.

    (C) PORTFOLIO.—

    (i) IN GENERAL.—A portfolio described in this subparagraph is—

    (I) a cash matching portfolio or duration matching portfolio consisting of investment grade (as rated by a nationally recognized statistical rating organization) fixed income investments, including United States dollar-denominated public or private debt obligations issued or guaranteed by the United States or a foreign issuer, which are tradeable in United States currency and are issued at fixed or zero coupon rates; or

    (II) any other portfolio prescribed by the Secretary of the Treasury in regulations which has a similar risk profile to the portfolios described in subclause (I) and is equally protective of the interests of participants and beneficiaries.

    The beauty is that all the hands that fondle the fund stream get their vig.  What’s not to like? If things don’t work out too well, there is always the “forgiveness” part [section (e) Loan Default].

    (refer to https://www.congress.gov/bill/115th-congress/house-bill/4444/)

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  • Mon, Dec 11, 2017 - 8:17am

    #20

    sand_puppy

    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1945

    Sitting this one out

    I have ridden that rocketship of “exponential price increase euphoria” before and been crushed.

    So I won’t be participating in this one.  Goes High or low.  Doesn’t matter.  I’m sitting this one out.

    However, after some semblance of stability returns, I will follow CHS, DaveF, The Saker, Raul Meijer’s general suggestion that cryptos can be useful in commerce and keep a crypto account open for transactions.  Won’t store much money there, though.

    And I feel comfortable sitting on the sidelines and missing out should it go much higher.

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  • Mon, Dec 11, 2017 - 8:49am

    Reply to #18
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    What I would Tell Grandpad about his retirement account

    Dennis is using an old logical fallacy of setting up a straw man defense. He must be new to these parts because I get quite an enjoyment of calling these out and making one feel a bit silly for trying these dumb tactics.  The basics of straw man.

     

    From Wikipedia: straw man is a common form of argument and is an informal fallacy based on giving the impression of refuting an opponent’s argument, while refuting an argument that was not presented by that opponent.[1] One who engages in this fallacy is said to be “attacking a straw man”.

    He presents these laws and formal declarations not based on anything I said or suggested. It’s often used by unintelligent people trying to confuse the facts and build a case for no argument based on completely unrelated topics. But our audience is much smarter than that. So I supposed he has more success trying tactics like this on Hip Hop Forums.  Go get giggy with it.

    My grandpa was an excellent man with a lot of good idea and a heart of gold. He was full of sage advice. He often said “By the Great Horn Spoon!” when I would tell him some new thing I had discovered as a child. Nobody else I knew used that expression. I loved him for it. It was “our thing’. I could count on it all through my teenage years.

    One bit of advice he told me in all seriousness while taking my hand he would look me in the eyes and remind me that it wasn’t the things he did that he regretted. It was the things he didn’t do. Because he was scared, or it was new, and he wasn’t confident. He just didn’t want to make a mistake. In the process, he led a very conservative and unremarkable life. There’s nothing wrong with that. This could describe – by far, most people in life.  But with regret. What could have been. We can all look back and find moments of decision – where making a different choice would have likely lead to amazing adventures, or opportunity for wealth. But we were risk adverse.

    As many of you know, I teach community classes on this technology. I haven’t made a dime doing it. In my class, I volunteered on Saturday I met a great older gentleman of 70 years old. He was still bustling even helping me carry my equipment to my car. He told me that he decided to take law classes at the age of 51. By 54 he had spent the happiest three years of his life not being the same realtor that he had spent his life. But he found out the hard way that there weren’t any job openings for a 54-year-old lawyer with no experience that would pay near enough to sustain his lifestyle. 

    But here he was – front row learning about the world of blockchains. Soaking in every world but obviously confused at times and I took the time to repeat sections until the light bulb went off. I told him that it’s a rinse and repeat kind of thing. But this was one I admired. Living life on his terms – continuing to progress and not missing new opportunities. In our conversations after class, he realized I’m a never-ending student of life as well. The things I learned from him…. exciting times are ahead.

    So what would I tell my grandpa about spending his retirement account on crypto?  The same thing I told my 92 year old father.  Use the money you wouldn’t lose sleep over – and are comfortable loosing if it just doesn’t work out. Then, let somebody experience and trusted help you.

     

     

     

     

     

     

     

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  • Mon, Dec 11, 2017 - 10:37am

    Reply to #18
    DennisC

    DennisC

    Status Bronze Member (Offline)

    Joined: Mar 19 2011

    Posts: 101

    Okey Dokey

    You got me there, as in confused.  Not quite sure where I was referring to grandpa and bitcoin but thanks for your response.

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  • Mon, Dec 11, 2017 - 10:44am

    #21

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    straw men

    Mark, I’m really not sure who you were responding to.  Dennis said nothing about Grandpa.  Or bitcoin.

    Hint: you were probably responding to me.  I’m Dave, not Dennis.  And you were the one that started talking about rocking chairs.  I just took what you said, owned it, and moved it a bit further down the road.

    If there was an explicit response to something I said in all that text you wrote in your latest response (absent your using the wrong name), I’m missing it completely.

    Simple question.

    Would you tell Grandpa to buy bitcoin here, now, at $16,500?

    Or would you tell him to wait for a better entry point?

    I want my skeleton!  Now!!

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  • Mon, Dec 11, 2017 - 11:33am

    #22

    Mark_BC

    Status Bronze Member (Offline)

    Joined: Apr 30 2010

    Posts: 298

    Regarding waiting for a

    Regarding waiting for a pullback for an entry point, just a question. They said that about gold 5 years ago and it dropped and languished at $1200 since then due to naked shorting. Since the banks will have the same shorting mechanism in place for bitcoin, is it possible that bitcoin will never go back up because they can provide an infinite amount of naked futures?

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  • Mon, Dec 11, 2017 - 3:08pm

    #23

    thc0655

    Status Platinum Member (Offline)

    Joined: Apr 27 2010

    Posts: 1486

    Bubble or no bubble?

    Smart money or dumb money?

    https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html

    Bitcoin is in the “mania” phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday.

    “We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines,” said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.

    I do have to confess that I’ve told my wife on multiple occasions that we will one day regret not selling our house, buying and living in an RV, and using the rest of the proceeds to buy gold and silver.

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  • Mon, Dec 11, 2017 - 3:23pm

    Reply to #21
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Skeleton man

    In all honesty, I wouldn’t recommend to anybody getting into the market now. Just like the class I taught Saturday. Unless you’ve been in the market a long time and have a lot of financial cushion and have plenty of patience to learn – take time to learn the technology.

     

    I advised (actually provided) them hard wallet we gave them $15 worth of Ether and taught them how to move it around between accounts. We even showed them how to exchange some of it using shapeshift and right back to the safety of their wallets. We advised them to stay out of the markets but to learn to watch them and learn from them. I don’t just leave it at that with just enough information to be dangerous. I then have them follow me and my newsletter from Facebook “Watchmywallets” so they get some experienced guidance. And then I teach patience. 

    I actually never advise them to get in the market at any point as I’m not a financial advisor. I just point out interesting changes I see coming and new technologies over the horizon I find interesting that they can watch for themselves. The new internet will be built on the technology of blockchains, so I point at the technologies and the people and teams that are competing to build and connect their visions. 

    We are likely going to be heading soon into the trough of disillusionment soon. That will give us three to five years to take a breather and watch the real productive work begin. There in the dot-com years were when the pets.com went away- but the Amazons and Ebays and Netflicks grew from whacky ideas into fruitful ( world largest) companies using the new paradigm. Those that were paying attention and not looking at the paradigm we just left – did very well. Stay alert.

    Don’t take advice from strangers.

    Sorry about the mixed up message – I actually was talking to Dennis, but the thread had been about Gradpas so it appeared he shifted gears without a clutch. But – it was nice to talk about my grandpa and pass the message anyhow. 🙂

     

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  • Mon, Dec 11, 2017 - 6:10pm

    #24

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1089

    thoughts on litecoin?

    mrees999 (and others), I’d be interested in your thoughts on litecoin, which went up over 40% today (at $227 as of this post).  Like many others, I’ve avoided getting into the crypto-currencies because they aren’t a real store of wealth, and seemed too risky to me.  But I am now considering a small purchase (not more than I could stomach losing) for diversification purposes and -to be honest- to take a shot at riding a bubble up for a change. 

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  • Mon, Dec 11, 2017 - 6:26pm

    #25
    Andrewbradnan

    Andrewbradnan

    Status Member (Offline)

    Joined: Oct 31 2012

    Posts: 5

    Bitcoin

    There’s about 330 oz of gold for each bitcoin.  No one trades in gold and the price is suppressed.  So par is $400,000.  Bubble is what 1-2 million?  Granted this napkin computation is for the whole market of cryptos.  It could go really high in any case.  Governments could lose power (God I hope).

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  • Mon, Dec 11, 2017 - 6:27pm

    #26
    Andrewbradnan

    Andrewbradnan

    Status Member (Offline)

    Joined: Oct 31 2012

    Posts: 5

    Bitcoin

    There’s about 330 oz of gold for each bitcoin.  No one trades in gold and the price is suppressed.  So par is $400,000.  Bubble is what 1-2 million, maybe way over that?  Granted this napkin computation is for the whole market of cryptos.  Bitcoin could go really high in any case.  Governments could lose power (God I hope).

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  • Mon, Dec 11, 2017 - 7:09pm

    Reply to #24
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    litecoin

    I think litecoin is ok. I mined it years ago when it was under $2 and got a few a day. It would be fun to still have those today.  It’s a good honest technology. It was created very early by a well known programmer from Google. People make way too much out of the secret identity of the original coder of bitcoin -but the code has been copied and forked thousands of times so it doesn’t matter in the slightest as everybody just uses the principals – the stick figure’ he used that just combined two decades of work from others before him. Charlie was one of the first to give the code a face and name as it is almost exactly bitcoin but on a faster timescale. It has evolved quicker since then.

    It is kind of an experimental chain. They try new ideas on litecoin before the try it on bitcoin to make sure it works well. They’ve got a top-notch team with Charlie Lee at the helm. He used to work atop Coinbase and likely convinced them to start doing business with Litecoin as an option. Because it is an option on the world’s easiest exchange, it is very easy to buy with dollars. People see it is perceived to be inexpensive and want the thrill of the thought that it might reach Bitcoin price levels.  They can buy a WHOLE COIN. Which probably what attracted you to it.

    So I’m ok with it. It doesn’t light my imagination on fire like Ethereum. It has surprised me the legs it has had over the last few weeks. And people piling into cryptos is all it takes for mass phycology to make a self-fulling prophecy. With expectations from those that are finally convinced, there is something to this whole crazy idea. If you think about it – religions have been based on far less that can last centuries.

    Nobody I know is planning on building the next internet on it – but it’s training wheels. for the newbies. And that’s something.

     

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  • Mon, Dec 11, 2017 - 7:12pm

    Reply to #24

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1089

    Thanks mrees999

    Thanks mrees999; I appreciate your insights on litecoin, and crypto-currencies in general.

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  • Mon, Dec 11, 2017 - 7:12pm

    Reply to #24

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1089

    Thanks mrees999

    Thanks mrees999; I appreciate your insights on litecoin, and crypto-currencies in general.

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  • Mon, Dec 11, 2017 - 7:40pm

    Reply to #11
    Mohammed Mast

    Mohammed Mast

    Status Bronze Member (Offline)

    Joined: May 17 2017

    Posts: 113

    Nice try

    nice try Dave but the discussion was not about wallets . It was about the blockchain. 

    The blockchain has never I repeat never been hacked. Wallets? yes Exchanges ? yes The blockchain never. Is it possible ? Not until quantum computers come along. By then i will be on my island sipping cool drinks with umbrellas in them.

    S o Dave I am sure that your charts have made you oodles in the last year. Was it Bitcoin? Ethereum? Litecoin perhaps? Which is your favorite?

    https://theoutline.com/post/1618/how-hackable-is-bitcoin

     

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  • Mon, Dec 11, 2017 - 9:13pm

    Reply to #10
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    This one says it all. HAHAHA Sustainable just the latest...

    There you go Alan Greenland. Your arguments in a nutshell.

     

     

    You have 16 group think likes – if that’s your thing to be proud of.  But what’s really going to get your panties in a wad is this……

     

    By the year 2020….

    The bitcoin network….

    will use the same amount of electricity…..

     

     

    as

     

     

    the

     

     

     

    entire

     

     

    USA!!!!!!!!!!

     

    🙂

     

    Now, where do I find chicken little?

     

     

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  • Mon, Dec 11, 2017 - 11:27pm

    #27
    David Allan

    David Allan

    Status Member (Offline)

    Joined: Nov 15 2009

    Posts: 27

    Its all a matter of focus and balance

    I think alanrgreenland (comment 10) is dead right about the big picture but what about the short term? Where should we put our effort and attention?

    To me its a matter of balance and focus.

    In terms of focus, some years ago I asked myself some tough questions. I know others here have done the same. Where do I set my intention? Where should I invest time, energy and money. My own personal decision was to focus on transition, homestead, orchard, gardens and new skills.

    In terms of balance it seem sensible to have one foot anchored in the present and the other firmly planted to be supportive in an uncertain future. This is based on a fundamental martial arts principle – if you get caught out with all your weight on the wrong foot you’re gone. So in my case the ‘leading foot’ part of life is involved with growing food and building soil and managing animals and saving seeds. The ‘trailing foot’ still needs to deal with the realities of present day living – making some money off-property and paying the bills. Investigating opportunities like bitcoin are no longer on the radar screen

    BTW another part of balance in the peak everything world is to enjoy the incredible abundance that is available. In our case this includes dark chocolate, good cheese, red wines from around the world, and the occasional trip away. Enjoy it while you can.

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  • Mon, Dec 11, 2017 - 11:48pm

    #28

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Futures prices are HIGHER!

    Weirdly relatively stable BTC action since the new CBOE XBT futures launched, End of Jan ’18 contracts forecasts 10% HIGHER than current price..

    Adam, Mark, CHS, any thoughts on this?

    Yes with people lending money to buy more, I do believe BTC is definitely in part a bubble, just like everything else in our weird world created by Central Bankers..

    Also for a bit of a thought provoking comment, currently trending…  🙂 

    Trending BTC saying...

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  • Tue, Dec 12, 2017 - 1:45am

    #29

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    long term view

    Mark-

    Thanks for your longer term view on where we are in the current market cycle.

    I agree with your viewpoint entirely.  It totally does remind me of what happened to dotcom.  Some super valuable things came out of that cycle, but people hopping onto individual stocks in 2000 generally did…poorly.

    I look forward to the cycle of disillusionment.  That’s when the real fun things will start – the stuff that will actually make it through that period will end up being the stuff that changes the world.

    I think there’s an equally important revolution happening in AI.  It isn’t quite the speculative frenzy, but it will be equally disruptive.

    I am saddened, however, to learn you are resigning as my personal, contrarian “market top detector”.  I sense that no skeleton will be forthcoming this time around.

     

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  • Tue, Dec 12, 2017 - 7:24am

    Reply to #27

    Tycer

    Status Silver Member (Offline)

    Joined: Apr 26 2009

    Posts: 206

    While I agree with you I find

    While I agree with you I find that Cryptocurrency and blockchain are very much the present and the future and worthy of my time. It’s a global phenomenon that might just support me during the collapse that I thought would have happened already. I’ve been so wrong on that timing that I will not be surprised if the collapse happens after my grandchildren are grown. Feet planted lightly here. Like a tree in the wind. 

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  • Tue, Dec 12, 2017 - 5:47pm

    #30

    westcoastjan

    Status Bronze Member (Offline)

    Joined: Jun 04 2012

    Posts: 181

    food for thought...

    https://philosophyofmetrics.com/ethereum-and-the-artificial-man/

    Jan

     

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  • Wed, Dec 13, 2017 - 1:30am

    Reply to #29
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    contrarians of the contrarians

    I picked this place because I like the thought of being the contrarian of contrarians. People share a common vision supplanted by Chris and Adam who’ve done a great job cultivating that spirit and keeping it alive. It is an easy item for me to adapt as I’m also the contrarian in my circles.  I prefer to engage those that don’t agree with me as I learn much more than those who waste their time in an echo chamber of likewise though and opinion.

    This is my litmus test. This is where I can find people that fit many criteria I look for. They are stubborn and view the world differently – as ones preparing for the banking crisis environmental breakdown.  What I knew in the crypto space was a Epiphany after months spent studying it. In my mind, it was obvious and the draw was just a matter of time. 

    I’m persuasive in person. I can be persuasive in my writing as well.  But trying to persuade the same folks who think we will have no electrical grid, no internet and are saving seeds and being self-sufficient might have been the most difficult crowd to win over for an electric internet-based technology with its own currency systems.

    I’ve taken a role in having them share my vision. But there is stil an overwhelming wall of worry most people have to get over. I think it’s still at least 10 to 1 for people thinking i’m crazy to those that have see the light. I use the to gauge how close we are to a bubble. We are still defiantly in the wall of worry stage. Most of the news is still negative. we may see some significant setbacks on the way up. but i think we have years. I still take joy in stirring the pot in these parts so people don’t forget who I am, and I leave an impression. So I’m the Moracle for detecting these sentiment shifts. When we get half of the contrarians heading y advice The usually do it in private or join my other programs – then I think we might be nearing a top.

    Etehr just hit the price Bitcoin was at a year ago. New bitcoin might look like it’s fading just by people wearing down the price, just to re-enter the altcoins and Ether. Walk up the street an by far more people don’t know what Ether and most of the world’s countries are still warning people to stay way. Not bubble talk. 3-4 more years.

     

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  • Wed, Dec 13, 2017 - 6:49am

    #31
    kglad

    kglad

    Status Member (Offline)

    Joined: Sep 08 2017

    Posts: 1

    Interesting Take On Bitcoin

    https://www.coindesk.com/bitcoin-investing-10000-year-view/

     

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  • Wed, Dec 13, 2017 - 6:49am

    Reply to #29

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    the flaw

    Mark-

    Flaw in your thinking is assuming business as usual.  I actually agree with your timeline and “ultimate bubble” assessment if we keep business as usual going.

    On the other hand, if we have a recession – or something I’d call a “major unpleasantness” – your timeline will almost certainly not work out in the orderly way you suggest.  I have said innumerable times that, “we have no idea how bitcoin will do during a recession.”  I suspect volatility will go through the roof, and price will drop substantially faster than the standard asset classes.

    I enjoy you coming here too, for much the same reason.  You’re my primary top (and bottom) indicator.  You were 2 for 2 with crypto – nailed the top both times.  The fact you refuse to send me that skeleton makes me think that we might have another 100% gain ahead of us yet, in the time before the next unpleasantness hits.  I tried really hard, but you just wouldn’t bite.  Most likely: more upside ahead.

    But that’s not the case with silver.  You felt free to hose silver with your full persuasive power.  (It was very poetically written.). Your comment about not visiting your moldy box of silver coins – and how the only people who cared were these ancient, dusty, people-relics makes me think we’re probably at – or near – a low for silver.  Your max bearish confidence says: we’re at or near a low.

    After all – if the world truly is as you paint it, who is left to sell?

    That’s the bottom.  Nobody left to sell.

    So you may think of yourself as a contrarian of contrarians – but to me that reduces down to “the public”.

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  • Wed, Dec 13, 2017 - 12:06pm

    #32

    stevejermy

    Status Member (Offline)

    Joined: Dec 13 2011

    Posts: 13

    HMMM ... FIAT, BITCOIN & ENERGY

    Been thinking more on Bitcoin – Tulip bubble or currency revolution – and in particular about Bitcoin and energy. All money and currencies – fiat, gold, silver, Bitcoin – are not wealth, but a claim on value, be that work, or the consequences of work i.e. capital. Work, in turn, is the consequence of expended energy. So by deduction, all money and currencies are a claim on energy, expended in the past or to be expended in the future.

    So perhaps we are all thinking about this the wrong way round. Or more accurately, without having thought about the long term energy picture. Which is not great.

    I work in the energy sector, offshore renewable energy to be precise, so I know it much better than I do finance, although I’m not uninterested or unexposed to the latter.

    The context for the future of these various forms of currency and money will be rapidly falling fossil fuel energy supplies, which will not be replaced by nuclear or renewables. Don’t get me wrong, its not that we don’t want to do our best in these non-fossil fuel sources, but the simple fact is that we’ll never be able to scale to match the drop down the other side of peak fossil fuel energy. Its just not possible. Even if it were, we still haven’t worked out how to replace gasoline and diesel with non-fossil fuel substitutes, so we’re in for an energy crisis. Starting year after next probably, but almost certainly in 2020.

    So the $64K question is how will these forms of money and currency adapt to an energy crisis, and energy crisis that will come no matter what our politicians and central bankers do. Because you can’t print barrels of oil or megawatts.

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  • Wed, Dec 13, 2017 - 12:49pm

    Reply to #18

    Pipyman

    Status Member (Offline)

    Joined: Apr 24 2011

    Posts: 65

    Chuffing A!  That’s

    Chuffing A!

     

    That’s anothother 25kg and 5ozs In the kitty!

     

    thanks for the pep!

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  • Wed, Dec 13, 2017 - 1:20pm

    Reply to #32

    stevejermy

    Status Member (Offline)

    Joined: Dec 13 2011

    Posts: 13

    MORE HMMM ...

    Thinking further …

    Money and, less so, currency are classically successful because they are fulfill the following roles: store of value; unit of account; means of exchange. So how will Bitcoin, gold, silver, and fiat currencies measure up against these purposes in an accelerating energy crisis? In this, we need to distinguish between electronic fiat currency and physical cash, for obvious reasons.

    The key point about an accelerating energy crisis is that we will see the reduction in the use of energy for discretionary purposes, as we necessarily focus on the essentials of life, food, water, energy, shelter, and all those other key areas in Maslov’s hierarchy. The reduction in oil – in particular diesel – will make five core activities significantly more expensive: energy production; agriculture; mining; transport; construction.

    This will have multiple impacts, but the most immediate will be a reduction in international trade, as it transport becomes more expensive. What is more difficult to forecast is the impact on the international IT-Comms infrastructure, which includes the payment system, banking be it corporate or Bitcoin.

    Gold and silver? Not much use if held far from home, or in units that are unmanagably large, but otherwise pretty resistant to any problems in the comms & IT infrastructure, and to inflation. Physical cash also pretty resistant to comms & IT infrastructure problems, less so to inflation.

    Bitcoin and electronic cash held in electronically … $64K question squared …

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  • Wed, Dec 13, 2017 - 3:03pm

    Reply to #29
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Contrarian, or public view. You decide.

    Dave,

     

    From a networking perspective, I think you closed a circuited on me. Being a contrarian of contrarians doesn’t run full circle. It goes deeper into the unknown. In truth, I can’t think of anything at a deeper level that cryptos can mimic.  As a technology, a lot of people want to compare them to the internet bubble and with the hype cycle I can see some of those points.

     

    But I think deeper than that. I’m actually long past that. I learned monetary theory before and during the banking crisis. I owned physical gold and silver (and still do) before those shocking events, that actually weren’t all that shocking to people in PM.  But I’m also a futurist and enjoy learning about technology that the main stream won’t learn about for a decade. I then try to puzzle out how many technologies might converge.

     

    I’ve said this many times in the past, but we don’t see reality as it is. We see our version of reality and ourselves being projected into the reality. We take our experience, history, biases and decisions including our sense of selfpride given to us as a protection for our ego which is necessary to survive.  We have a need to remain consistent with ourselves and what we say. It’s hard to admit when we are wrong. That might mean giving into the thought that we might lose hard earned respect to those around us that listen to our advice. Even harder as we become older and wiser. These self-protection sense of self go deeper. That’s why it’s harder to change somebody’s mind because they are so called “Set in their ways”.

     

    So it’s true that it’s hard to teach a dog new tricks. I find through the eyes of somebody just turned 50 that I sense “I’ve seen this before” because history ‘rhymes’ as Mark Twain advises.

    Your background is in computer programing and logic, you likely try to find patterns as we all do to clean up the clutter of all the noise in our lives. But wetechnology background guys have it on in heightened mode. It’s what allows us to excel. So I get it. You want to complete the circuit and think logically that if one is a contrarian to a contrarian – that goes 360 degrees. If-Then-Return.

    But where we are going is never-never land. Alice can kiss Wonderland bye-bye. Because we are now talking about blockchain – not just being a technology a network databaseor protocol. It’s much deeper because of the world it threatens. The ripple effects go far deeper and wider than the readers here can barely perceive. This goes to one of the deepest and precious commodity of our lives.

     

    Trust.

     

    When people in power are no longer trusted, they lose the power of influence. People in power are in general a bit (or a lot) narcissistic in nature. They tend to think it is their ‘DUTY’ to take charge and get intoxicated with the feeling of respect and honor of having people rely on them and their decisions. Even if they are evil or misdirected “See North Korea”. History is full of people that would kill their own brothermotherfatherfriendscountrymen to stay in power and keep the overbearing sense of self-respect and ego we all try so hard to maintain. The bigger the ego, the harder (I imagine) to let go.

     So a technology comes around, and the world can use it to trust and verify transparently without the need for somebody in the center to take charge. This is now a possible threat to everybody in power and their sense of self. This goes all the way down. People at all levels have a sense of power and responsibility that they identify with. As soon as they are put in charge of of a sibling, then child as a parent, then office manager, or supervisor, up to managerpolitics CEOs etc. The stronger the personality, stubbornness, or charm, the further they go.

     

    The blockchain technology can take away a lot of the need for a ‘data supervisor’ or somebody that is paid by causing ‘friction’ or Data Silos that only they can access. Men especially identify with their job. What are you?  – Is generally answered by men by what their job title or job description is. The label, Is a sense of self. Men are mostly judged by this criterion, any follow up is kind of ignored. We’ve made up our mind about them. What education level they probably obtained, a citizen class, how much influence they may have, their approximate net worth ability to purchase can fairly be surmised for most people with that simple question.

     

    On a deep level, far deeper than 99.9% of the readers here understand, is that lawyers, accountants, judges, juries, auditors, cyber security experts, portfolio managers, stock traders etc won’t need a job when the blockchain performs the function for them. Almost every government function involves a contract and verification of the terms being met.

     

    People talked in the last  paradigm change about the Internet “eating” certain kinds of businesses that weren’t needed any longer. Local Video Rental stores being just one example of thousands. This blockchain invention will cut much, much deeper. The internet was all about moving information around and giving regular people the power to publish and be heard rather than information centers like the big three TV networks.  The powerful centers of information control mostly lost their power of influence as Youtube, blogs, newsletters, Facebook decentralized all of it

     

    Now, I can scarcely think of any industry that will remain unaffected by this new technology because it cuts to the core.  Trust. Without it, marriages don’t work. The most basic human nature and sense of belonging falls apart. Businesses can’t operate without trust, governments fall apart. Blockchains decentralize this. Combined with AI – it becomes binary. Yes or know. Provable trust – or not. One or zero.

     

    To a degree that most people cannot yet fathom, the blockchains to come will be world-wide and bring benefits of anti-corruption, and in game theory, trust – beats the unknown or deceived every time. Crime and corruption require darkness, blind spots, misdirection – this might be much harder and rare without collusion. Collusion will be much more difficult when the public demands transparency. Transparency is a core principal of a blockchain, and by extension – trust.

     

    The nature of money requires trust and confidence. The first application built with this new technology was a machine that spit out predictable numbers in a timeframe that was predictable, and uncounterfeitable, and witnessed by all that could understand how to read it. Once it spread big enough and decentralized enough it was considered impossible = or at least near impossible to stop for any length of time. Now the idea was born and the genie was out of the bottle. A new Principal was born.  Perhaps a physical components of a blockchain could be suspended – and bless your heart, you’ve pondered this aspect for years. But in our friendly sparring – I keep going back to the human elements that cannot be stopped. The need for people to understand the truth. The social consensus that forms around this principal, once understood is possible – will be unshaken.

     

    Blockchain implementations will come and go – and with all things rooted in principals – the principal need will not be shaken. You can’t put the genie back in the bottle. So this goes back to humanity. This goes back to the principal of trust, and the sense of being needed and wanted. It’s a very personal level.

     

    Most people look at just the surface level and understand that the first app (Money) was so outside their established definitions that they didn’t stop to wonder how they got those definitions and how few people really, I mean really, understand the nature of money, why it was created, the ancient and primal need for it to exist, even to the point of intelligent animals and tiny children creating them.

     

    So this is just briefly touching the tip of the snowflake, that gently lands on the fluffy piece of snow sitting on the hard packed ice that is cemented onto the tip of the iceberg.  These ramifications are what I contemplate for hours each day when others are watching pointless television shows, or breathlessly following the latest political scandal – or most of the other frivolous chatter of the world.

     

    So we are starting to get close to the point of this. The skeleton you seek is nowhere in sight in the big scope of things. Sure, I can sense when things are getting overheated a bit on the small scale. But they will be just temporary tiny bumps in the big picture regarding the newly discovered principals 99.9999% of the world has yet to discover. Satoshi Nakamoto set off a slow chain reaction nuclear bomb just starting with money – then to trust, then to business, governments and humanity itself, based on the root primal commodity itself needed for humanity since its birth.

     

    Trust.

     

    Depending on your point of view, that started when Adam first spoke to Eve about this forbidden fruit – or somewhere out of Africa a few million years ago. But it is one of the building blocks for every living creature. This invention fundamentally changes the nature of mass verification and won’t be stopped.

     

    The sudden change in the concept of money that has always needed faith to begin with- won’t be stopped. All the businesses that rely on it and will resist the change… but can’t stop it for long. What we see are just the beginning of the final throes, of money based on custom and shared illusion of fiat moneys breaking itself over a new unchanging principal. Decentralized and transparent trust. The weakest ones will likely go first. People now, mistakenly, measure the bitcoin against their own currency as if it where the principal. But we all know – it is an illusion – not a principal. So we change our perspective and view the world from its point of view and you really see what is happening. It’s not the price of bitcoin going up and down, but the fiat currencies that are reacting to it.

     

    Fiat currencies are the waves of the ocean breaking up against the rocky solid shoreline of trust-based principal.  

     

    So I see parabolic moves in price used to measure the bitcoin blockchain (and soon the Ethereum public blockchain).  And people wonder if it’s a bubble by their terms. In their minds – reporters and analyst, CEOs, and even Presidents are framing the wrong question. They are projecting their own personal experiences and biases into what they are seeing but without knowing the true form of the thing they think they see as “magic internet money”, or “a fraud” or “no intrinsic value” – without understanding the intrinsic value of trust- is likely the most precious of all commodities as expressed as a primal human need.

     

    Do I really expect somebody new to this space to understand and contemplate the meaning of all of this complex ripple effects that go down many layers deep? No of course not. I dream about this stuff day and night to comprehend it and try to explain it in words that don’t come easy.  Even the very shallow base-entry level material I cover as a volunteer takes many rinse and repeat cycles before the ‘aha’ moment hits.

     

    Now I tell you these things  to bring light to just a whisper of an echo left in a shadow of what I’ve come to understand through endless hours of contemplation through the last few years. I suddenly recognized it about myself recently. As I reminisced with my Uncle Rocky- I was bitten again with the bug of coin collecting and he asked me what coins I still needed. It was only that spark that made me send the time to look and then recognize and evaluate my own life sudden change in direction.

     

    I was going through my silver proof coin sets still in their official US Mint packaging. 1998, 99, 2000, ect ect etc… all the way up to 2012 where it stopped. It was March 2013 that I discovered Bitcoin through an online article with the headline asking the question of if it was time to take bitcoin seriously. The author was AMAZED that people were willing to pay $30.. for one bitcoin. I had to find out why. That was the question as simple as it sounded that spun me into this strange obsessive journey that I had no idea would be so deep, even after I spent the next five days unable to sleep with the excitement of what I discovered. My once proud silver collection never made it to 2013 or beyond. There is sits in the dark, still frozen in the year 2012.

     

    So are those thoughts “main-stream”? Does that sound like somebody who thinks like the masses? Does it even sound like the rational thoughts of somebody that considers themselves a contrarian? How does one take a journey of deciding whether or not an invisible made up digital currency could be worth anything at all – down to understanding the technology could change the fundamental view of our own human dignity and sense of self-worth with imperfect thoughts, emotions, prone to make mistakes because of emotions rather than logic?

     

    Nope, we are way off the reservation now. Peak Prosperity members are just one-layer contrarians. They have no idea yet how many more deeper levels there are – only measured against what the ‘public’ yet understand.  I only get to where I am based on several levels of thought experiments ‘it stands to reason’ and find the most logical outcome against the alternatives at each level. Perhaps this takes decades? Perhaps lifetimes? So I’m the contrarian of the seventh order (I don’t know – I just made that up). Call it what you will, it is definitely not the U-turn you imagined.

     

    So, how can this help you today with your strategies and investments? And what about that darn skeleton your looking for?  My advice is that you don’t bet against principals. They will always win in the long run. There will be convulsions, shrieks, gasps, screams and more as money as we know it dies a hard death fighting the inevitable conclusion. People in this paradigm with power and authority will try to retain it as long as possible but human-created laws won’t win over fundamental principals in the end. The next guy will use the principals of provable truth to root out the predecessors. That will become the new normal people expect. How does corruption and those that got powerful and rich using it fight back?

     

     

    Trying to guess when one of the shrieks, gasps, or convulsions that are viewed as a temporary top are challenging when seeing the principals of truth work their magic world-wide when dot coms where generally US – business only and measured in trillions. This whole blockchain business is still written off by most of Wall Street and so called ‘experts” they have no idea of the magnitude of the monetary super volcano about to swallow them whole. They are no longer rearranging chairs on the decks of the Titanic.

     

    It’s more like they are throwing glasses of water at a super volcano.

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  • Wed, Dec 13, 2017 - 3:22pm

    Reply to #32
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Energy Crisis fiction

    A perfect storm is heading this way.  A three-headed monster that will change the energy equation.

    1.  Artificial Intelligence

    2.  Robotics

    3. Blockchain

     

    AI will make many jobs obsolete. Already it has proven to be better at diagnosing brain damage and x-rays and well, if it can perform brain surgery better than a brain surgeon. I work with people that build neural networks, much of humanity will need to find something better to do. That will involve a lot less traveling to work as there won’t be enough jobs for the rest. Your next rocket science might be the rocket.

    Robotics already can do manual labor much better than people. 100 to one?  Manual labor jobs are the least desirable so perhaps we are getting people out of the ‘near slave’ business. The efficiency for automated driving alone will close much if not most of the wasted energy sources now.  And also leave a lot of people that depend on the jobs to do this unemployed, finding other jobs that don’t require thinking that AI can do for them.

    Blockchains will reduce the need for clerical work. If a person’s job is to be a silo for access to data – there will no longer be a need. Blockchains are the strange things that can be the most public, or private at the same time. They are adjustable. Sells of company stocks won’t need to prove of ownership to trade Notary of property can be proven in real time without agents to validate. Court matters requiring proof of actions and ownership will be largely unnecessary. Many government functions will become obsolete. There will be a massive consolidation of jobs that the blockchain can function as a machine of trust. They can always go get manual labor j…oh wait.  Well, there is always the highly skilled professionals that need years of university train… Oh, those are gone too – Darn AI. So we are going to have to retrain like…half? of society in jobs that don’t exist yet? 

    Well, idle hands are the devil’s workshop they say. We are going to have to find something to keep us all busy. But something tells me that energy won’t be at the top of our lists to worry about as machines and robots and computers can do things without needing to travel, and use a lot less energy than humans do.

    Peak Prosperity might have a whole new meaning.

     

     

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  • Wed, Dec 13, 2017 - 5:00pm

    Reply to #29

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    the public

    Ok, I confess, tl; dr.

    Entry points matter.  When Charles bought his bitcoin, he pretty much nailed the entry point.  He didn’t buy during a period of max hype, he bought after a smash, but after prices had started to move higher.  This is the least stressful time to buy.  You get more of the item you’re buying, and you don’t have to endure an emotionally stressful drawdown.

    For me, you operate as “the public” because you tell us when the wrong time to buy is.  Several times in the past, I saw that the Mark Smug-O-Meter was pegged at maximum right at the top.  (And the other day, here, with silver – I speculate at the bottom too).

    Should I sell my silver when Mark is maximum-smug?  Probably not.  Likewise, should I buy crypto at Mark’s maximum smug point?  Likewise, probably not.  Those are likely to be “local minima” or “local maxima.”  I’d have to endure a ton of regret in either case as prices moved against me soon after I made the trade.

    And that’s just no fun.

    So I stand by what I said.  You are a fantastic guide to the highs and lows because of your projected emotional state.  (Turns out, you’re human – just like the rest of us.). And you have a massive position, so it follows that when you’re demonstrating maximum-happy, that’s a really, really dangerous time to be buying whatever it is you are holding.

    So if I use your emotions as my guide, I know where we are in this particular cycle.  That’s where you are “the public” to me.

    The part where you aren’t “the public” is your understanding of your market – because you really do know the ebbs and flows in your particular market a whole lot better than I do.  I’m trying to use my AI to close the gap in that area.  I don’t think that will work big-picture wise, but it might work tactically.

    The risk of course is that by saying all this, the output of the Mark Smug-o-Meter will be altered.  You will end up restraining yourself, and your utility as a detector will be reduced.  If I were wiser I’d just keep my observations to myself.  But it turns out that I too just can’t resist… 🙂

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  • Wed, Dec 13, 2017 - 7:29pm

    Reply to #29
    Mohammed Mast

    Mohammed Mast

    Status Bronze Member (Offline)

    Joined: May 17 2017

    Posts: 113

    Entry Point

    As I recall Dave you asked about the entry point some time ago when BTC was 

    around $2,300 it dropped to $1,800. shortly after. From your posts it would seem you have not entered. I have no problem with that. BTC is not for everyone. Certainly this being a doomer, prepper gold bug community I fully expect a great deal of resistance. 

    The entry point you are attached to is sort of an irrelevant item to consider in regards to cryptos. There are over 800 now so the entry point is not just related to BTC. You have the opportunity to use your mega abilities to chart any umber of coins and enter when your charts line up with the stars. 

    Is ETH a good buy at $745? Perhaps, it is but not for you because for all your talk about entry points you will never enter. It is clear you just wish to play Devil’s advocate and have no interest in being a participant. That being said I really do value the role you are choosing to play. As you noted there is a great deal of emotionalism in the crypto market. Your role perhaps functions to bring more rationality to the scene. 

    Unfortunately the Devil’s advocate role has perhaps cost you a great deal of money but as you stated you don’t mind missing a trade. No problemo. Just think of how much gold and silver you could have purchased now if you had entered one year ago. Just think how many seeds, pumps , solar panels acres chickens etc, the preppers here could have bought with just a small investment in cryptos.  Launched in 2015 for ..35 each and selling now for $745 ETH was perhaps the opportunity of a lifetime. Well the next ETH is still out there. This is a new technology and I am surprised that not only did you miss it but thyat you remain skeptical. I have met few people in the tech world who hold a dim view of cryptos. 

    It is a young technology and is and will be going through growing pains, but like Mark I recommend people with some fiat currency that they can afford to lose take the plunge into this brave new world.

    As for the many objections I hear everyday from ponzi scheme to bubble, ( it was called a bubble at $90. $270, $ 1,100, $2,000 etc. etc etc) fraud, etc., and some new ones here like electricity usage and that when the internet goes down it will be worthless, maybe my favorite is the internet going down( solar flairs, electromagnetic storm, nuclear war ) well I hope the preppers realize that if any of that happens the entire planet will resemble a Mad Max sequel. Just consider there is only 3 days of food on the grocery shelves, when people cannot buy food after a short time the social fabric which is thinner than Himroo silk will completely unravel. The least of our worries will be whether our cryptos will be worthless. Gold and Silver will likewise be worthless as there won’t be anything to buy. It turns out that that the world everyone here is preparing for will not be any friendlier to their preparations than it will be to the present digital world. In essence we are all in the same boat. I am choosing to use the motor. Some can abandon ship, paddle some hoist the sails, but we are all hoping to find a safe island

    All the best

    Mo

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  • Wed, Dec 13, 2017 - 8:05pm

    Reply to #10
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Bitcoin Sustainability - answered beautifully.

    I did use some of this reasoning to help make the point, but listen to the master make the case much better than myself.  Let me know your argument against his point if you can think of one.  Good luck.

     

    https://www.youtube.com/results?search_query=andreas+antonopoulos

     

     

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  • Wed, Dec 13, 2017 - 8:39pm

    Reply to #29
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    TL DR

    I don’t blame you, it was more of a rough draft for an article I’m planning out, I usually start long and free-flowing before trimming it way back. So, there’s your director’s extended cut if you ever get interested.

     

    A couple of points you made, based off from incomplete information you would have had – was that there is now a different kind of Mark than you were utilizing before. The “Smugness” scale. You were probably making some good calls on that because there was a certain satisfaction of becoming wealthy despite the critics – and a bit of mental ‘revenge’ for all the times we ‘believers’ get put down. Yet I don’t quiet down that easily. I’m anti-establishment at heart.

    So, now I’m at a point I’m wealthy enough to not have to work another day in my life. And I’ve largely proven my point, what else is there? There was more reflection on the silver ‘downs’ or ‘low smugness’ as you would have seen the introspection and realization of the moment of change in my mind from one paradigm to the next. It wasn’t a knife stab, or ‘gotcha’, it was a humble reflection. 

    Likewise, you would have read why you can’t find the old Mark Highpoint smugness you could count on as I reflected back the uncertain regret for the future that I have felt might be coming that nobody is talking about. For me, the chase is over. Now I give somber advice to those that want to repeat what I did. Now I realize it’s already too late for most regular people to ever own one bitcoin. I was telling people just a few months ago to put away a little at a time with the goal of just owning one – would be all they would need to retire comfortably – and watched as that goal slipped away for them as we hit $19,000 at one point. Those goalposts are effectively out of reach, and much, much further from here on out.

    Instead of a smug Mark you could count on, you have a wiser Mark that realizes he was really lucky to be at the right place at the right time. Sorry, but I doubt I’ll much use as a leading indicator. Money changes people.

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  • Wed, Dec 13, 2017 - 8:54pm

    Reply to #29

    Mark_BC

    Status Bronze Member (Offline)

    Joined: Apr 30 2010

    Posts: 298

    Mohammed Mast wrote:As for

    Mohammed Mast wrote:

    As for the many objections I hear everyday from ponzi scheme to bubble, ( it was called a bubble at $90. $270, $ 1,100, $2,000 etc. etc etc) fraud, etc., and some new ones here like electricity usage and that when the internet goes down it will be worthless, maybe my favorite is the internet going down( solar flairs, electromagnetic storm, nuclear war ) well I hope the preppers realize that if any of that happens the entire planet will resemble a Mad Max sequel. Just consider there is only 3 days of food on the grocery shelves, when people cannot buy food after a short time the social fabric which is thinner than Himroo silk will completely unravel. The least of our worries will be whether our cryptos will be worthless. Gold and Silver will likewise be worthless as there won’t be anything to buy. It turns out that that the world everyone here is preparing for will not be any friendlier to their preparations than it will be to the present digital world. In essence we are all in the same boat. I am choosing to use the motor. Some can abandon ship, paddle some hoist the sails, but we are all hoping to find a safe island

    I’m fully expecting a mad max scenario when fiat goes down. At that time I doubt cryptos will be useful. As you say, gold and silver will have limited usefulness, but I argue a bunch of old silver dimes will be about the best money you could own at that time. The question is what happens after that crash; what will the new currency be based on. Money that has been used for 5000 years, except for the last 40? Or new cryptocurrency that only came onto the stage a few years ago? I am certain PM’s will be a part of that. Will cryptos? Maybe, probably, in some way.

    I don’t think the mad max scenario is going to be short lived; there are fundamental inequities and structural problems in our economies with regards to wealth distribution and the simple fact that there simply won’t be jobs available for 70% of the population once growth stops due to resource constraints, and once the financial sector pops into the ether. You can’t have a functional society with 70% unemployment and our “leaders” don’t seem to have any clue whatsoever how to deal with it.

    Yes, I’m disappointed (bitter?) about missing out on the crypto bubble (and despite what anyone says, it IS a bubble because it is loose central bank credit which is creating the money to fuel it). I have grossly mistimed the currency crisis. Should I buy cryptos? I’d like to see what the futures market does to it. Also, I have no money…

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  • Wed, Dec 13, 2017 - 9:40pm

    #33

    Barnbuilder

    Status Member (Offline)

    Joined: May 07 2014

    Posts: 23

    Another viewpoint

    I don’t own any cryptos. I am thinking of taking Adam’s advice and opening an account to invest if the price drops.  I would have a lot of learning to do before investing.  Here is an article I read that I am posting as food for thought.  I do not have an opinion on cryptos I am just putting this out there to see what the PP community thoughts are.  Thanks to all of you who have commented on this very dynamic situation.

     

    The Virtual Economy Is The End Of Freedom Wednesday, 13 December 2017 06:35 Brandon Smith

     

    There is one simple rule to follow when understanding the tragic history of economies: Never put blind faith in a system built on an establishment-created foundation. You would think this would not be a difficult concept to grasp being that we have so many examples of controlled economies and collapse to reference over the centuries, but in our era more than ever the allure of a virtual world with promises of endless wealth and ease is overwhelming. Yes, I am referring primarily to cyptocurrency “tulip-mania” (sorry bitcoiners, the description is too fitting, it isn’t going away), but not this issue alone. I am also referring to a far-reaching problem of which cryptocurrencies are a mere reflection.

     

    Namely, the fact that humanity is swiftly losing sight of what a true economy is and what it is supposed to accomplish. It is because of this reality that crypto is thriving.

    First, let’s be clear, fiat currencies are one of the first machinations of the virtual economy. Once paper currencies printed from thin air by central bankers were separated from tangible backing and accepted by the masses as “valuable” and worth trading labor for, the seed of financial cancer was planted. Today, there is one final step needed for the establishment to accomplish complete tyranny in global trade and that is to disconnect the masses fully from private transactions. In other words, we must be tricked into going digital, where privacy is an absurd memory.

    Virtual economics is appealing for several reasons, most of them bad. Americans and much of the west in particular are increasingly uncomfortable with the idea of real production. The latest generation coming into political and social influence, the millenials, is a perfect example. Surveys show American millenials more than any other generation lack basic workplace competency skills, including scoring low on arithmetic and reading comprehension. Often portrayed as “tech savvy” in popular culture and the media, millenials are quite inept when it comes to core skills that fuel strong business and trade, which is part of the reason why the U.S. is falling into the shadow of foreign workforces.

    Millenials in the West also exhibit abysmal technical skills in international testing and lag far behind foreign peers. This has come as a surprise to many mainstream economists and social analysts, primarily because millenials are also considered the “most educated” generation ever. But, of course, we have not only been given a virtual economy in recent decades, but also a virtual educational system. A majority of millenials are lacking when it comes to key production skills and entrepreneurship methods because they have been trained to dismiss such skills as negligible. In other words, millenials have been conditioned to be academic idiots.

     

    Why go through the struggle and hardship required to become an effective producer of tangible necessities when it is far easier to join a collectivist drive for socialism and a structure in which little to no work is required to obtain such necessities? Why not steal from a productive minority and spread it thinly enough to keep the unskilled majority fed? It is only within this kind of culture that virtual production, a virtual society and virtual “money” is seen as an ideal solution.

    The notion is becoming more and more prevalent in our popular media, and I believe this is rather symbolic (or ironic) of our conundrum.

    For example, consider the book Ready Player One, a pop-culture craze and archetypal zeitgeist for millenials soon to be released as an intended Hollywood blockbuster directed by Steven Spielberg. The novel depicts the world of 2045, a world in which fossil fuel depletion and “global warming” have triggered economic and social decline (Remember in the 1980s when they used to tell us that global warming was going to melt the polar icecaps and we would be under water by the year 2000?). A totalitarian governing body controlled by corporate behemoths rules over the dystopian sprawl.

     

    In response to an ever painful existence in the real world, the masses have sought to escape to a virtual world called “the Oasis,” created by a programming genius. The Oasis becomes a nexus for the global economy and a virtual society.

    This sounds like a rousing background for a story of rebellion, and it is about that… sort of. Unfortunately, here is where the disturbing ties between our world and the fictional world of Ready Player One meet. The “rebellion” is for all intents and purposes also virtual, and for millenial audiences in particular, this is supposed to be inspiring.

    Perhaps this is why cryptocurrencies are so appealing to the millenial crowd in particular. Think about it — the dismal economic doldrums of Ready Player One exist NOW; we don’t have to wait until 2045. Millenials are already feeling disaffected, indebted and disenfranchised, and most of them are also skill-less. Self reliance to them is an idea so alien it rarely if ever crosses their minds. So, how do they fight back? Or, how are they tricked into thinking they can fight back against a virtual system that has left them in the gutter? Why, with a virtual community and a virtual currency, of course.

    Millenials and others think that they are going to rebel and “take down the banking oligarchs” with nothing more than digital markers representing “coins” tracked on a digital ledger created by an anonymous genius programmer/programmers. Delusional? Yes. But like I said earlier, it is an appealing notion.

    Here is the issue, though; true money requires intrinsic value. Cryptocurrencies have no intrinsic value. They are conjured from nothing by programmers, they are “mined” in a virtual mine created from nothing, and they have no unique aspects that make them rare or tangibly useful. They are an easily replicated digital product. Anyone can create a cryptocurrency. And for those that argue that “math gives crypto intrinsic value,” I’m sorry to break it to them, but the math is free.

    In fact, for those that are not already aware, Bitcoin uses the SHA-256 hash function, created by none other than the National Security Agency (NSA) and published by the National Institute for Standards and Technology (NIST).

    Yes, that’s right, Bitcoin would not exist without the foundation built by the NSA. Not only this, but the entire concept for a system remarkably similar to bitcoin was published by the NSA way back in 1996 in a paper called “How To Make A Mint: The Cryptography Of Anonymous Electronic Cash.”

    The origins of bitcoin and thus the origins of crytpocurrencies and the blockchain ledger suggest anything other than a legitimate rebellion against the establishment framework and international financiers. I often cite this same problem when people come to me with arguments that the internet has set the stage for the collapse of the globalist information filter and the mainstream media. The truth is, the internet is also an establishment creation developed by DARPA, and as Edward Snowden exposed in his data dumps, the NSA has total information awareness and backdoor control over every aspect of web data.

    Many people believe the free flow of information on the internet is a weapon in favor of the liberty movement, but it is also a weapon in favor of the establishment. With a macro overview of data flows, entities like Google can even predict future social trends and instabilities, not to mention peek into every personal detail of an individual’s life and past.

    To summarize, cryptocurrencies are built upon an establishment designed framework, and they are entirely dependent on an establishment created and controlled vehicle (the internet) in order to function and perpetuate trade. How exactly is this “decentralization”, again?

    TOTAL information awareness is the goal here; and blockchain technology helps the powers-that-be remove one of the last obstacles: private personal trade transactions. Years ago, a common argument presented in favor of bitcoin was that it was “completely anonymous.” Today, this is being proven more and more a lie. Even now, in the wake of open admissions by major bitcoin proponents that the system is NOT anonymous, people still claim anonymity is possible through various measures, but this has not proven to sway the FBI or IRS which have for years now been using resources such as Chainanalysis to track bitcoin users when they feel like doing so, including those users that have taken stringent measures to hide themselves.

    Bitcoin proponents will argue that “new developments” and even new cryptocurrencies are solving this problem. Yet, this was the mantra back when bitcoin was first hitting the alternative media. It wasn’t a trustworthy assumption back then, so why would it be a trustworthy assumption now? The only proper assumption to make is that nothing digital is anonymous. Period.

    With the ludicrous spike in bitcoin prices, champions of the virtual economy are unlikely to listen to any questions or criticisms. I have never argued one way or the other in terms of bitcoin’s potential “market value,” because it does not really matter. I have only ever argued that cryptocurrencies like bitcoin are in no way a solution to combating the international and central banks. In fact, cyrptocurrencies only seem to be expediting their plan for full spectrum digitization and the issuance of a global currency system.

    Bitcoin could easily hit $100,000, but its “value” is truly irrelevant and consistently hyped as if it makes bitcoin self evident as a solution to globalism. The higher the bitcoin price goes, the more the bitcoin cult claims victory, yet the lack of intrinsic value never seems to cross their minds. They have Scrooge McDuck-like visions of swimming in a vault of virtual millions. They’ll only accuse you of being an “old fogey” that “does not understanding what the blockchain is.”

    The fact is, they are the one’s that do not really understand what the blockchain is — a framework for a completely cashless society in which trade anonymity is dead and economic freedom is destroyed.

    Ask yourself this: Why is it that central banks around the world (including the BIS and IMF) are investing in Bitcoin and other crytpocurrencies while developing their own crypto systems based on a similar framework? Could it be that THIS infusion of capital and infrastructure from major banks is the most likely explanation for the incredible spike in the bitcoin market? Why is it that globalist banking conglomerates like Goldman Sachs lavish blockchain technology with praise in their white papers? And, why are central bankers like Ben Bernanke speaking in favor of crypto at major cryptocurrency conferences if crypto is such a threat to central bank control?

    Answer — because it is not a threat.

    They benefit from a cashless system, and liberty champions are helping to give it to them

    . Above all else, the virtual economy breeds weakness in society. It encourages a lack of tangible production. Instead of true producers, entrepreneurs and inventors, we have people scrambling to sell real world property in order to buy computing rigs capable of “mining” coins that do not really exist. That is to say, we may one day soon be faced with millions of citizens expending their labor and energy in order to obtain digital nothings programmed into existence and given artificial scarcity (for now).

    It also encourages false rebellion. Real change requires actions in the real world. Removing banking elitists and their structures by force if necessary (and this will probably be necessary). Instead, freedom activists are being convinced that they will never have to lift a finger to beat the bankers. All they have to do is buy and mine crypto. The day will come in the near future when the folks that embrace this nonsense will wake up and realize they have wasted their energies chasing a unicorn and are ill prepared to weather the economic reset that continues to evolve.

    To maintain a real economy in which people are self reliant and safe from fiscal shock, you need three things: tangible localized and decentralized production, independent and decentralized trade networks that are not structured around an establishment controlled system (like the internet is controlled), and the will to apply force to protect and preserve that production and those networks. If you cannot manufacture a useful thing, repair a useful thing or teach a useful skill, then you are essentially useless in a real economy. If you do not have localized trade, you have nothing. If you do not have the mindset and the community of independent people required to protect your local production, then you will not be able to keep the economy you have built.

    This is the cold hard truth that crypto proponents do not want to discuss, and will dismiss outright as “archaic” or “not obtainable.” The virtual economy is so much easier, so much more enticing, so much more comfortable. Why risk anything or everything in a real world effort to build a concrete trade network in your own neighborhood or town? Why risk everything by promoting true decentralization through localized commodity-backed money and barter systems? Why risk everything by defending those systems when the establishment seeks to crush them? Why do this, when you can pretend you are a virtual hero wielding virtual weapons in a no risk rebellion in a world of electronic ones and zeros?

    In truth, the virtual economy is not legitimate decentralization, it is a weapon of mass distraction engineered to kill legitimate decentralization.

    If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage. You can contact Brandon Smith at: [email protected]

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  • Wed, Dec 13, 2017 - 10:11pm

    #34

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    ok

    Well, your use to me as a coincident indicator is truly over then.  🙂

    However, the comment about silver (whatever the reason) was actually quite helpful to me.  I absolutely didn’t take it as a jab – even if it might have been intended that way.  Which you say it wasn’t.  I found it useful because I sensed it contained genuine emotion, and that underscored just how tired the silver group is about the perennial downtrend.  You weren’t just speaking for yourself, you were speaking for them too.  That’s a sign of the low.  If you had sold your silver – perhaps buying bitcoin with it – it would have been even better.

    I have an utterly unrelated question to ask you.  Do you know where I could find some high performance code to scan my local copy of the blockchain?  The two open source packages I have tried end up core dumping on the August 24th block.  I know a bunch of you guys in the whale group watch the blockchain – you must have code you use for this.  Is it all home grown and private, or do you guys all use some open source codebase for your scanning efforts that you could point me to?

     

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  • Wed, Dec 13, 2017 - 10:30pm

    Reply to #34
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Bad news good news

    The bad news is that I’m not in the Whale group – I think I do qualify as a 1 percentor according to an article on Medium, but sadly not by much-  And I’ve not coded for any blockchain group. Two strikes.

     

    Possibly good news…

    However, I did sell silver for bitcoin on two occasions if that is helpful.  Back in 2013 out went a few hundred ounces to jump-start the bitcoin craze when paychecks quit being enough.

     

    And last spring when I found I could put around $10,000 worth of junk silver proceeds into the bitcoin IRA and proudly stashed 9 bitcoin in the IRA fund for my trouble. That was back last spring at $1,100 bitcoin.

    The GREAT news!

    Flash forward 8 months and the IRA has jumped in value to around $150,000ish. Saving me about 35 years it would have at 8% annual.

    Perhaps gauging my sentiment back in March is helpful? – or Fall of 2013?

     

    uh..probably not.

     

     

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  • Wed, Dec 13, 2017 - 10:47pm

    #35

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Generalisations?

    Mark – “Peak Prosperity members are just one-layer contrarians.”

    Is that a deliberate generalisation?

    To prod & annoy us all?

    To shake us up?

    Clearly it’s inaccurate, as you know the likes of CHS and his history with BTC, etc.

    But I welcome it, especially if it’s to get us to consider that a portion of assets should be held in certain selective Cryptos even as a partly a short term speculative play along side longer term positions.

    As you know, like many I capitulated out of fear, ignorance & lack of time to study. I also came to thinking the Crypto space is definitely in a bubble..

    And I do think it is, but as the article says if less than 1% of the population is involved, how the hell does it compare to stock markets, gov & private debt, housing, etc, etc.

    It”s trying to identify where we are in that bubble that interests me. 3% of searches relating to crypto are how to buy on credit cards, some even remortgaging. And New Crypto products will allow leveraged buying based on cash loans from the balance of your existing cryptos.

    IMHO based on my limited research, we are still early, way before Newton’s first exit point for his South Sea bubble.

    As others have commented, the long term sustainability does concern me. Where is all the required energy to run the blockchain going to come from? Maybe a more efficient economy, reduction in human travel, less buildings needed, etc, etc? I’ll now gratefully go away and investigate the YouTube links above.

    Lastly thanks to all on here, please keep this going, it’s good natured healthy challenges that we need and should be having. I’m still grateful that I’m learning from all your views.

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  • Wed, Dec 13, 2017 - 11:08pm

    Reply to #29
    Yoxa

    Yoxa

    Status Silver Member (Offline)

    Joined: Dec 20 2011

    Posts: 286

    Quote: now I'm at a point

    Quote:

     now I’m at a point I’m wealthy enough to not have to work another day in my life

    Enjoy the moment! But think carefully about where to go from here … you have a lot of eggs in one basket.

    Look for ways to turn some of your tertiary-wealth gains into primary and secondary wealth, not just more cryptocurrency. My own preference is investments that pay ongoing dividends based on real-world productivity, regardless of speculative ups and downs. Assets that send checks!

    Also, buy some nice presents for your significant other.

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  • Thu, Dec 14, 2017 - 6:06am

    #36

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Crypto Energy Consumption

    As hinted above, one thing that concerns me is how and where is all this increase in energy consumption going to come from?

    https://www.networkworld.com/article/3241848/data-center/data-tsunami-to-absorb-20-of-world-electricity.html

    Conversely, to turn this around and look at it from another perspective, is the acceptance of certain BlockChain technologies actually going to reduce growth in Energy Consumption overall?

    Thoughts?

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  • Thu, Dec 14, 2017 - 8:31am

    #37

    sand_puppy

    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1945

    Pay off home mortgage and car

    If I had just had a magnificent run up in paper wealth (or “electron wealth” in the case of BTC) I would take some of the gains and pay off my home mortgage, car loans, several acres of gardenable land and move to real stability in the real world.

    It is a strategy of hedging for a very wide range of possible futures.  And get my wife a present. (Thanks Yoxa.)

    This is what I did NOT do myself during the telecom run-up of ’98 and ’99.  Instead I stayed fully invested during the crash waiting for that “one more doubling.”

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  • Thu, Dec 14, 2017 - 9:08am

    Reply to #37
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    I'm with you SP

    Now, I ponder a new question – I plan to do this in places I haven’t yet (already out of debt, mortgage mostly is gone. As I did the math, paying 3.5% interest on a loan versus receiving 2,000 to 10,000% interest favored holding on to some crypto a bit longer. 

    What I really wished for is a way to cash some out, but not miss out on the next round of amazing gains. There’s a point where pigs get slaughtered and it’s all a big lotto – where you’re a winner each week. How can I have my cake and eat it too? I have to cross some point and then say enough is enough and I’ve been borderline to that number.  But this was all the means to an end. I share the same end games as most everybody here.

    Land, cash flow, a self-sustaining happy life. So easy decision right? Back it all up and move on.  But wait, before I change gears and go one…there’s just.   one.   more.    thing….

     

    SALT Lending.

    The organization put out its own tokens used for membership on their platform. This now allows me to essential ‘mortgage’ my bitcoin. I can now take a cash loan, paid directly to me using some of my bitcoin as the collateral. The best part about taking a loan rather than just sell out and pay the huge tax bill?  Most of my gains will have to be considered short term- as I swapped out some older long term for newer ICOs that looked promising.  35% (or worse) taxes. If I cash out everything at once, it will be much worse.

    But you don’t need to pay taxes on loans of course.  What if I take out a 36 month loan on say… one million dollars backed up by bitcoin. *actually more like 1.2 million in bitcoin to smooth over the big bumps mini crashes we often have.  I would probably need another cool million as backup in bitcoin to feed the loan and keep it above water.  Just in case, if I wanted to maintain it. But I get one million in cash to buy real world assets. Including the cash-flow creating property that is completely unrelated to crypto?  The worst that can happen is I don’t make any payments? I lose 1.2 million worth of deflated bitcoin if it’s a major crash – but I have a million dollar cash-flow property. 

     

    SALT Loans require no credit checks, the asset is put into a new ‘smart contract’ that I can set up to pay down the loan automatically if the price of bitcoin goes up. If I’m lucky enough for the price to double yet again, I can draw out enough to pay off the original loan. No prepayment penalties and I can close the loan after just one hour. I continually own the asset if I’m making my payments on time and keeping the loan to value ration in order. If any crypto keeps doubling that I simply use those winnings’ to satisfy the loan. In the real world, I’m living the good life with the cashflow replacing a salary and enough cash flow to also pay off the loan on the property in the real world.

    Now crypto and SALT have just created another new paradigm that could change banking and peer-to-peer lending forever (assumping the world of crypto won’t simply come to an end) there’s too much momentum and half TRILLION invested by some very, very big companies and financial institutions working on solving next-generation problems, including medical research, world poverty and hunger all using this blockchain technology. Too many life-changing, society-changing benefits and happening all over the globe at the same time. 

    So I’ll take my cake (The SALT LENDING load) to cash some out, tax-free,  and I’ll have it too (I still own the bitcoin). They will be adding etherem and some more of the top 10 digital assets in the near future and will be going worldwide. They’ve already got the securities, banking, licenses for the US finished. The loan platform goes live within the next few weeks. Win-Win.

     

     

     

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  • Thu, Dec 14, 2017 - 9:10am

    Reply to #37
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    I'm with you SP

    Now, I ponder a new question – I plan to prepare in places I haven’t yet (already out of debt, mortgage mostly is gone. As I did the math, paying 3.5% interest on a loan versus receiving 2,000 to 10,000% interest favored holding on to some crypto a bit longer. 

    What I really wished for is a way to cash some out, but not miss out on the next round of amazing gains. There’s a point where pigs get slaughtered and it’s all a big lotto – where you’re a winner each week. How can I have my cake and eat it too? I have to cross some point and then say enough is enough and I’ve been borderline to that number.  But this was all the means to an end. I share the same end games as most everybody here.

    Land, cash flow, a self-sustaining happy life. So easy decision right? Back it all up and move on.  But wait, before I change gears and go one…there’s just.   one.   more.    thing….

     

    SALT Lending.

    The organization put out its own tokens used for membership on their platform. This now allows me to essential ‘mortgage’ my bitcoin. I can now take a cash loan, paid directly to me using some of my bitcoin as the collateral. The best part about taking a loan rather than just sell out and pay the huge tax bill?  Most of my gains will have to be considered short term- as I swapped out some older long term for newer ICOs that looked promising.  35% (or worse) taxes. If I cash out everything at once, it will be much worse.

    But you don’t need to pay taxes on loans of course.  What if I take out a 36 month loan on say… one million dollars backed up by bitcoin. *actually more like 1.2 million in bitcoin to smooth over the big bumps mini crashes we often have.  I would probably need another cool million as backup in bitcoin to feed the loan and keep it above water.  Just in case, if I wanted to maintain it. But I get one million in cash to buy real world assets. Including the cash-flow creating property that is completely unrelated to crypto?  The worst that can happen is I don’t make any payments? I lose 1.2 million worth of deflated bitcoin if it’s a major crash – but I have a million dollar cash-flow property. 

     

    SALT Loans require no credit checks, the asset is put into a new ‘smart contract’ that I can set up to pay down the loan automatically if the price of bitcoin goes up. If I’m lucky enough for the price to double yet again, I can draw out enough to pay off the original loan. No prepayment penalties and I can close the loan after just one hour. I continually own the asset if I’m making my payments on time and keeping the loan to value ration in order. If any crypto keeps doubling that I simply use those winnings’ to satisfy the loan. In the real world, I’m living the good life with the cashflow replacing a salary and enough cash flow to also pay off the loan on the property in the real world.

    Now crypto and SALT have just created another new paradigm that could change banking and peer-to-peer lending forever (assumping the world of crypto won’t simply come to an end) there’s too much momentum and half TRILLION invested by some very, very big companies and financial institutions working on solving next-generation problems, including medical research, world poverty and hunger all using this blockchain technology. Too many life-changing, society-changing benefits and happening all over the globe at the same time. 

    So I’ll take my cake (The SALT LENDING load) to cash some out, tax-free,  and I’ll have it too (I still own the bitcoin). They will be adding etherem and some more of the top 10 digital assets in the near future and will be going worldwide. They’ve already got the securities, banking, licenses for the US finished. The loan platform goes live within the next few weeks. Win-Win.

     

     

     

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  • Thu, Dec 14, 2017 - 10:40am

    Reply to #37

    davefairtex

    Status Diamond Member (Online)

    Joined: Sep 03 2008

    Posts: 3156

    i dunno

    Mark, I haven’t done the math, but if I were you, I’d emulate my hardware-engineer friend who top-ticked the 2000 bubble by selling his (ISO) QCOM shares at the high.

    He moved to Oregon, bought a 10-acre ranch, and never looked back.  He then went off and got a masters in Fine Arts, and now he does painting, sculpture, and gardening.  That’s been 17 years now.

    At some point you gotta figure, “how much is enough?”

    “Everything we want in life, we want it because we think it will make us happy.”

    From what I’ve seen, you can short-circuit that game of “wanting stuff” and just be happy.  You’ve got nothing left to prove on the bitcoin project.  Say to yourself, “yep, I was right”, and then ride off into the sunset and do whatever it is you’ve always wanted to do.

    Is there life after bitcoin?

    Just my suggestion.

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  • Thu, Dec 14, 2017 - 11:10am

    #38
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 881

    Is satisfaction the symptom of enough

    is enough? Is so then I’m there. And here is a hero of mine, http://www.yesmagazine.org/issues/solidarity/the-woman-beside-wendell-berry-the-most-important-fiction-editor-almost-no-one-has-heard-of-20171212

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  • Thu, Dec 14, 2017 - 12:58pm

    Reply to #38
    Cornelius999

    Cornelius999

    Status Bronze Member (Offline)

    Joined: Oct 17 2008

    Posts: 365

    This is heady stuff Mark.  It

    This is heady stuff Mark.  It makes the Klondike gold rush sound like paint drying.

    I’m wondering what are the implications for science and technology and hermeneutics if that’s the term for how we grasp reality?

    Trying to hug reality, I’m naturally biased towards Barnbuilder’s worldview, but wanting to avoid pain, I’ll jump the odd chasm when the ground is going from under my feet.

     

     

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  • Thu, Dec 14, 2017 - 6:08pm

    #39

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    De ja vu?

    Sure this has been posted before, but its worth repeating that Mark Baum from the movie the Big Short believes the next big short is the loss of faith in central banks. Whilst he doesn’t say specifically I’m counting on certain cryptos along with other assets (PM’s, etc) being on his mind…

    The real Mark Baum aka Steve Eisman on ZH
    http://www.zerohedge.com/news/2016-09-19/big-shorts-steve-eisman-reveals

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  • Thu, Dec 14, 2017 - 7:53pm

    #40
    Mohammed Mast

    Mohammed Mast

    Status Bronze Member (Offline)

    Joined: May 17 2017

    Posts: 113

    Mad Max

    If anyone is truly wishing to prep for the future I suggest buying farmland in the US is actually a rather retro move. There was a person named Eric Townsend who posted here quite frequently. (I believe he was a fairly large financial supporter of this site) He caught a lot of flack for his positions but I think he was quite prescient. He lived in Hong Kong. Jim Rodgers sold his property in the US and moved to Singapore. He got his daughter started learning Mandarin.

    These are just two examples of real “preppers” for what is coming and coming sooner rather than later. The New American Century will exist in the shadow of China. Coincidentally the largest mining enterprises for BTC are in China. The large run up of Bitcoin cash was/is fueled   by South Korea.

    There is a tectonic shift taking place and it is shifting east. Were Horace Greeley be alive he would be saying go east young man. 

    The smart money is following the gold east not following charts.

    If a small investment in crypto can get you there then so much the better. As the collapse happens and picks up speed Mad Max might seem tame as Amerikans elect hyper Trumps promising a return to happy days.

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  • Sat, Dec 16, 2017 - 4:48pm

    #41

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Gold for BitCoin?

    Discuss…
    https://steemit.com/bitcoin/@keiserreport/dump-gold-buy-bitcoin

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  • Sat, Dec 16, 2017 - 11:18pm

    Reply to #40

    Mark_BC

    Status Bronze Member (Offline)

    Joined: Apr 30 2010

    Posts: 298

    Mohammed Mast

    Mohammed Mast wrote:

    @23:10. “Obama decided that the Middle East was a strategic dead end for America. Now that we were energy independent, we had no real strategic interest in the Middle East.”

    LOL

    The scale is a little confusing since the consumption line is scaled down. It should go quite a ways higher than the other lines if it isn’t scaled. But look at imports, the blue bars. The Great Oil Swindle continues…

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  • Mon, Dec 18, 2017 - 3:12am

    #42

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1089

    CHS Article on regulating Cryptocurrencies

    Charles has a new article out, Regulating Cryptocurrencies–and Why It Matters.  Excerpt:

    Governments tax income and capital gains. This is how they fund their activities. Clearly, gains reaped from cryptocurrencies are no different from gains reaped from other speculations and investments, so they should be recorded and taxed in the same manner.

    Some enthusiasts of cryptocurrencies seem to think that regulations requiring the reporting and taxation of gains made buying and selling cryptocurrencies is tantamount to destroying cryptocurrencies.

    I think this view has it backwards: fully legalizing and regulating cryptocurrencies as financial instruments legitimizes them in a much wider circle of potential users, and common-sense regulations are to be encouraged and welcomed, not viewed as threats to cryptocurrencies.

    I want to stress that beneath all the speculative frenzy we see in the cryptocurrencies, what will retain value and remain scarce and in demand is whatever solves problems.

    Cryptocurrencies have the potential to solve two problems:

    1. reducing the cost and friction of financial intermediaries.

    2. holding value as the $250 trillion in phantom wealth created in the asset bubbles of the past 12 years vanishes.

     

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  • Mon, Dec 18, 2017 - 5:52am

    #43

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Diversifying out of Gold/Silver with BitCoin is Old news...

    Mike Maloney of GoldSilver.com, he’s also been recommending BitCoin and Cryptocurrencies for 3.5 years, here’s his latest video out today.

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  • Mon, Dec 18, 2017 - 6:16am

    #44

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    Interview with HashGraph Inventor

    Very interesting, also answers the question on the massive energy that BlockChain based systems use.  What does this mean for the price of BitCoin and other AltCoins???

    I suggest its well worth watching how this progresses..

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  • Mon, Dec 18, 2017 - 6:22am

    #45

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 186

    HashGraph vs BlockChain

    More info on a technology that could replace BitCoin and other Blockchain coins?

    https://cryptoslate.com/hashgraph-vs-blockchain

    Mark – if your reading, how many layers of contrarian is this idea?

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  • Mon, Dec 18, 2017 - 11:41am

    #46
    agitating prop

    agitating prop

    Status Silver Member (Offline)

    Joined: May 28 2009

    Posts: 286

    Bitcoin as it is currently

    Bitcoin as it is currently configured, makes some economic sense but zero political sense. Central banks will not sit idly by and allow capital flight to take place, nor vast pools of taxable money tied up in it, go unaccounted. That’s just for starters.

    My intuition is that governments are allowing Bitcoin to prototype digital currency, soon to be replaced by their own highly regulated form of same.

    I watched a film about crypto a few days ago and was struck by how remarkably naive the techno-libertarians involved with these schemes are.  

    It is most likely this will follow the telecom collapse trajectory, with a lot of carnage and tears.  Out of the ashes will emerge a crypto currency that is a joint govt/big bank venture.  Likely Goldman, but could be JP Morgan.

    Fade libertarian viewpoints.  They are not describing the world as it is or even should be, but their version of Utopia which is at odds with reality.  

     

     

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  • Mon, Dec 18, 2017 - 5:46pm

    Reply to #46
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 881

    Agitating Prop?

    You know what the needs are, now how are you gonna settle YOUR mare? no need to answer publicly, just think about it.

    Am appreciative of your insight!

    husband,father,farmer,optometrist,robie

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  • Mon, Dec 18, 2017 - 10:06pm

    Reply to #46

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    NSA Plot?

    agitating prop,

    Let me butcher one of Winston Churchill’s quotes: Libertarianism is the worst form of political philosophy, except for all the rest. Last I saw, nothing was perfect. Please correct me if you think your personal choice of political philosophy reaches perfection and comports with reality. (I won’t hold my breath.)

    I saw an article that fits with your intuition: https://www.naturalnews.com/2017-12-10-evidence-points-to-bitcoin-being-an-nsa-psyop-roll-out-one-world-digital-currency.html. Granted, the article is almost all speculation. It is just a few printed pages long and worth the read. Here’s what I consider the meat of it.

    Ten steps to crypto-tyranny: The “big plan” by the globalists (and how it involves Bitcoin)

    In summary, here’s one possible plan by the globalists to seize total control over the world’s money supply, savings, taxation and financial transactions while enslaving humanity. (And it all starts with Bitcoin.)

    1) Roll out the NSA-created Bitcoin to get the public excited about a digital currency.

    2) Quietly prepare a globalist-controlled cryptocurrency to take its place. (JP Morgan, anyone?)

    3) Initiate a massive, global-scale false flag operation that crashes the global debt markets and sends fiat currencies down in flames. (Hoax alien invasion, hoax North Korean EMP attack, mass distributed power grid terrorism network, etc.)

    4) Blame whatever convenient enemy is politically acceptable (North Korea, “the Russians,” Little Green Men or whatever it takes…).

    5) Allow the fiat currency debt pyramid to collapse and smolder until the sheeple get desperate (i.e. Venezuela-style desperation with people eating out of dumpsters).

    6) With great fanfare, announce a government-backed cryptocurrency replacement for all fiat currencies, and position world governments as the SAVIOR of humanity. Allow the desperate public to trade in their fiat currencies for official crypto currencies.

    7) Outlaw cash and criminalize gold and silver ownership by private citizens. All in the name of “security,” of course.

    8) Criminalize all non-official cryptocurrencies such as Bitcoin, crashing their value virtually overnight and funneling everyone into the one world government crypto, where the NSA controls the blockchain. This can easily be achieved by blaming the false flag event (see above) on some nation or group that is said to have been “funded by Bitcoin, the cryptocurrency used by terrorists.”

    9) Require embedded RFID or biometric identifiers for all transactions in order to “authenticate” the one-world digital crypto currency activities. Mark of the Beast becomes reality. No one is allowed to eat, travel or earn a wage without being marked.

    10) Once absolute control over the new one-world digital currency is achieved, weaponize the government-tracked blockchain to track all transactions, investments and commercial activities. Confiscate a portion of all crypto under the guise of “automated taxation.” In an emergency, the government can even announce negative interest rates where your holdings automatically decrease each day.

    With all this accomplished, globalists can now roll out absolute totalitarian control over every aspect of private lives by enforcing financial “blackouts” for those individuals who criticize the government. They can put in place automatic deductions for traffic violations, vehicle license plate taxes, internet taxes and a thousand other oppressive taxes invented by the bureaucracy. With automatic deductions run by the government, citizens have no means to halt the endless confiscation of their “money” by totalitarian bureaucrats and their deep state lackeys.

    How do you feel about your Bitcoin now?

    Grover

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  • Mon, Dec 18, 2017 - 11:41pm

    Reply to #45
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Silly bait and switch

    I like Mike Maloney.  But after this, I want to call him Mike Baloney

    The first half, great. Second half, I think what????

    Blockchain is protocol that should survive anything that is thrown at it. It’s like a language. There is nobody controlling it, nobody forcing it, and impossible to stop. Who do you point a gun at then demand they tell everybody to stop speaking English?

     

    Languages have a network effect. If you want to be included in the language of business, you are better off learning English. Putting a gun in English Speakers Faces and demanding everybody speak Chinese isn’t going to do much for you.  Maybe China’s power and influence will attract most people to do things the Chinese way and it’s beneficial to learn and speak Chinese. 

    Distributed Ledger Technology is NOT blockchain. They want you to believe it is-  but it’s not. This is a COMPANY not a language. It has a CENTER, not an outgrowth of network effect. 

     

    Open, public, free to develop and CAPITALISM is why blockchains grow and people innovate on them. They include a VALUE TOKEN to keep people all aligned through Crypto Economics. These are basic principals Mike continues to struggle with.

    Metcalf’s law continues to work as expected. Then some centralized company thinks they are going to get everybody to unhitch their wagon and move to something that continues to use FIAT and run the status quo has another thing coming.  

    Maybe the next episode Mike Baloney can consider the entire show in trying to understand the concept of crypto-economics.  That will help him evolve.

     

     

     

     

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  • Mon, Dec 18, 2017 - 11:51pm

    Reply to #46
    mrees999

    mrees999

    Status Gold Member (Offline)

    Joined: Aug 16 2013

    Posts: 375

    Cowboys and indians

    Crypto world moves very fast. 1 month in crypto-time is about 10 years of ‘regular time’.  Set your stopwatches. You watched a show about the beginning history of bitcoin’s early beginning. In the first few years, you saw the only population that might actually give something like bitcoin a chance as it met their political views.

    In just a few years, the Libertarians have been supplanted by Wall Street and the rest of the world that caught the bug. Many of the early Libs are now rich and playing with their Lambos, they were ahead of the game – but you don’t see a ton of them touting the benefits any longer as it’s moved mainstream.

    Think of it as watching an old movie about cowboys and indians and thinking that is the current state of the USA.  You’re several decades behind in crypto-time.

     

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  • Tue, Dec 19, 2017 - 11:55am

    #47
    gkcjrrt

    gkcjrrt

    Status Member (Offline)

    Joined: Sep 20 2016

    Posts: 18

    I'm all for freedom and

    I’m all for freedom and letting people do what they want … with their money, but not “our” money.

    If folks want to speculate on BTC, I say, you are braver then I , but have it and good luck!

    In the modern era of seemingly infinite available credit, the leverage problem always can creep in to make any “investment” a systemic risk requiring a bailout.

    Say 10 million people max their credit card (or even helocs) to buy bitcoin, say $500 billion of leverage is uses to buy BTC – and then BTC crashes, the borrower’s default on their loans and then the banks are insolvent and we have voila, systemic risk entailing a gov bailout.  – Same pattern of the 1920’s, and 2007 RE bubble, and same result.

    This is not about bitcoin per se; this is the fraud that is modern finance/banking/gov; failure to regulate and failure of those who provide credit from doing their due diligence to prevent losses, and everybody loves it – just gamble and maybe win, but worse case get bailed out;  privatize the gains and socialize the losses.

    The old rule applies, never, ever use your own money to speculate – use someone else’s money – Bastiat wrote about plunder, and this is what we have to day, everyone trying to live off of everyone else.  

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  • Fri, Dec 22, 2017 - 9:25am

    #48

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2620

    "Later" has just arrived

    You never know exactly what’s going to happen after you stick your neck out by making a declarative near-term forecast.

    But this warning from the original article above turned out to be quite timely, given the ~40% price decline in Bitcoin that has happened since it hit its $19K+ high two weeks ago:

    It is highly, highly likely for the reasons mentioned above that a painful downwards price correction is imminent. One that will end in tears for all the recent FOMO-driven panic buyers.

    Bitcoin and its crypto siblings are in a major downdraft today. Where will the carnage end? And will margin calls on the new futures exchanges add to the selling pressure from here?

    We shouldn’t have too long to find out.

    But as I wrote in the article:

    If you’ve been feeling like the loser who missed the Bitcoin party bus, you’ve likely done yourself a favor by not buying in over the past few weeks. 

    John Hussman nailed how bubble markets force you to make a choice: to look like an idiot now, or an idiot later. For those who have felt an idiot by sitting on the sidelines, perhaps it’s time to take off the Dunce cap and hand it over to the cryptomaniacs. It’s increasingly looking like “later” has just arrived…

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  • Sun, Dec 24, 2017 - 9:18am

    #49
    mEad0w.larK

    mEad0w.larK

    Status Member (Offline)

    Joined: Oct 30 2016

    Posts: 6

    Hashgraph

    https://hashgraph.com/

    Hashgraph The Future of Decentralized Technology

    Hashgraph is data structure and consensus algorithm that is:

    Fast: With a very high throughput and low consensus latency
    Secure: Asynchronous Byzantine fault tolerant
    Fair: Fairness of access, ordering, and timestamps

    These properties enable new decentralized applications such as a stock market, improved collaborative applications, games, and auctions.

    See 51min and 50sec

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  • Sat, Dec 30, 2017 - 5:57am

    #50
    PaulJam

    PaulJam

    Status Bronze Member (Offline)

    Joined: Dec 04 2016

    Posts: 70

    bitcoin zombies

    Reading this, I wondered whether the fact that it is getting harder and harder for millennials (and others) to financially make their way in the world is making manias like bitcoin even more pronounced than they would have otherwise been.

    https://www.zerohedge.com/news/2017-12-29/stunning-look-inside-world-sou

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  • Thu, Jan 18, 2018 - 4:11pm

    Reply to #46
    agitating prop

    agitating prop

    Status Silver Member (Offline)

    Joined: May 28 2009

    Posts: 286

    Libertarianism and bitcoin

    Libertarianism is the worst form of government. Period. Totally brain dead.

    What you have in the U.S is a society where some states, like Ohio, are  becoming more libertarian by default. The state is falling apart because those who could support the social and physical infrastructure would rather see the place turn into a rotting carcass of ideology based on greed than pay taxes to support it.  

    You can bet that “less government,” will always end up equaling more coercive control.  Prisons will never be underfunded. What looks good from a philosophical perspective isn’t mirrored when put into practice. 

    And thus you have Bitcoin. Same.  Operating as if the founders are above nation states and nation states will just allow them to undermine the financial system. And why?  Because they have somehow been outsmarted?  Or because the government that has committed all kinds of atrocities to maintain their hold on financial dominance has just shrugged and gone, “whatever!?”

    I suspect a certain amount of this thinking comes from the fact that many of the nerds who have promoted this currency live in an almost purely digital parallel reality that doesn’t intersect with the real world very often.  There is nothing to stop them from doing whatever they want, in simulations — but it just isn’t real. 

    Block chain prototyped  with the enthusiasms of the freedom loving will be outlawed after being allowed to prototype the tech and act as a Guinea pig.  Then governmental controls with no freedoms whatsoever will swoop in and create a digital big brother coin that we will be forced to use  

     

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  • Fri, Jan 19, 2018 - 2:01am

    Reply to #46

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Really ???

    agitating prop wrote:

    Libertarianism is the worst form of government. Period. Totally brain dead.

    That’s quite the declaration! (Were you referring to yourself in the bolded portion above?) What are your thoughts on the paradise flourishing under Kim Jong Un’s North Korean government? Need any more examples?

    agitating prop wrote:

    What you have in the U.S is a society where some states, like Ohio, are  becoming more libertarian by default. The state is falling apart because those who could support the social and physical infrastructure would rather see the place turn into a rotting carcass of ideology based on greed than pay taxes to support it.

    Could it be that Ohioans can’t afford the government previous politicians “gave” them? Politicians are really good at seeing a problem, creating a bureaucracy, taking credit for “solving the problem”, and delaying as much of the costs as possible to future taxpayers. Look at the pension crisis as a prime example. By underfunding pension promises, those same politicians were able to get even more stuff done (and saddle future taxpayers that much more.)

    Eventually, those bills come due (as they are now.) Ohioans are paying for services rendered long ago. Meanwhile, their infrastructure needs attention – bridges crumble, pipes burst, and roads need to be repaved. Oh, wait. They’re still paying for the long term bonds that funded many of these projects.

    Choices were made in the past when the future seemed limitless to the manufacturing juggernauts. Those days are long gone in the Rust Belt. Wouldn’t it have been much better if a smaller, Libertarian minded government had prevailed during the halcyon days? Hmmm.

     

    agitating prop wrote:

    You can bet that “less government,” will always end up equaling more coercive control.  Prisons will never be underfunded. What looks good from a philosophical perspective isn’t mirrored when put into practice. 

    Here’s a map of incarceration rates by country copied from https://en.wikipedia.org/wiki/List_of_countries_by_incarceration_rate. Imagine how much worse it would be if Libertarians ran the show in the US?

    agitating prop wrote:

    And thus you have Bitcoin. Same.  Operating as if the founders are above nation states and nation states will just allow them to undermine the financial system. And why?  Because they have somehow been outsmarted?  Or because the government that has committed all kinds of atrocities to maintain their hold on financial dominance has just shrugged and gone, “whatever!?”

    I suspect a certain amount of this thinking comes from the fact that many of the nerds who have promoted this currency live in an almost purely digital parallel reality that doesn’t intersect with the real world very often.  There is nothing to stop them from doing whatever they want, in simulations — but it just isn’t real. 

    Block chain prototyped  with the enthusiasms of the freedom loving will be outlawed after being allowed to prototype the tech and act as a Guinea pig.  Then governmental controls with no freedoms whatsoever will swoop in and create a digital big brother coin that we will be forced to use  

    agitating prop, you seem to have missed the point of the article I posted. I was actually supporting your intuition that you stated in post #88. I’ve never liked bitcoin (or any of the other kleptocurrencies) and have stated on other threads that it will end in tears. The setup is just about ideal for eventual government takeover of the cryptoverse. Let people’s greed drive learning and acceptance. Then, when enough people are involved, crash the system and let people’s fear drive the government solution of the digital big brother coin.

    Imagine what a power mad government (and aren’t they all power mad?) could do to subversives who spoke out against the government. They would just need to freeze the bank account or make it so the big brother coins wouldn’t clear when the subversive wanted to buy something. Wow! That’s power!

    In Post #90, Grover wrote:

    Let me butcher one of Winston Churchill’s quotes: Libertarianism is the worst form of political philosophy, except for all the rest. Last I saw, nothing was perfect. Please correct me if you think your personal choice of political philosophy reaches perfection and comports with reality. (I won’t hold my breath.)

    Still waiting and still breathing,

    Grover

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