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 I have to admit that I never really "got" Bitcoin, or any of the cryptocurrencies. I understood why someone might want an alternative currency, but the medium seemed hopelessly flawed and ponzi-like.
   And now it appears the time for easy money is over.

 

 The bitcoin mining rush is sputtering.
   Speculators, known as miners, use powerful computers to solve complex software problems and verify transactions to unlock new bitcoins. They’re finding that the enterprise isn’t as profitable as it once was...
   “If you mine at the moment, you have to be very lucky to get anything,” said Mehmet Vatansever, who bought $16,000 worth of mining computers in February to chase after new bitcoins. “It’s a very difficult business.”
 Ebay is now flooded with around 1,600 used Bitcoin mining computers.

  The Bitcoin was never anything other than the sharing of a complex mathmatical problem.
    The implosion of Mt. Gox along with 7% of all the Bitcoins seems to be the beginning of the end of Bitcoin.
   The other day an investor group offered to buy Mt. Gox for one bitcoin.

  Bitcoin was the worst investment in the entire world in the 1st quarter of this year, down more than 60% from its all-time high, and ponzi schemes don't tolerate that for long.

 That's not to say that there aren't still believers in Bitcoin.
A Bitcoin ATM just opened on Capitol Hill.
   More interestingly, a new Bitcoin ETF (Exchange-Traded Fund) will soon be approved.
   This should match up nicely with the Bitcoin derivative. It seems fitting that there are already complex investment vehicle to a product that has not proven it is sustainable, or that it even exists.

  I know what you thinking. "Darn, I missed getting in early to the Bitcoin Ponzi scheme."
Never fear. You aren't too late.

 Because they are newer, designed differently and currently mined by fewer people, currencies such as Litecoin can be more profitable, according to CoinWarz, which tracks mining activity.
  “The new rush right now is Litecoin,” Colin Lusk, a network engineer in Portland, Oregon, said in an interview.
   While he once mined only bitcoins, Lusk now uses five of his eight machines to produce Litecoins and other virtual currencies.
 Yes, you too can jump on the next Ponzi-scheme before it bursts. So run! Don't walk!

1:08 PM PT: In Das Kapital Karl Marx writes:

"On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from the intoxicating prosperity, declares money to be a vain imagination."

  Doesn't this sound like Bitcoin?

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Comment Preferences

  •  Why Does It Sound Like Libertarian Money? nt (16+ / 0-)

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat Apr 12, 2014 at 11:18:08 AM PDT

  •  I sat this one out. (11+ / 0-)

    I get more satisfaction folding proteins to solve Alzheimer's.

  •  I've started (11+ / 0-)

    minting KosKoins™ and GOSbucks™.

    Current exchange rate is 1 KosKoin = 1 Donut Hole™.

    Here's how it works: every time I get a donut, if you plug it with a Donut Hole -  i.e. an uprate -I will credit your account with one KosKoin.

    See you in the HSM (Hidden Stock Market)!

    "Trust me... I've been right before." ~ Tea party patriot

    by Calvino Partigiani on Sat Apr 12, 2014 at 11:36:42 AM PDT

  •  In this day of the (2+ / 0-)
    Recommended by:
    Calvino Partigiani, slksfca

    security state, having a way to make untraceable purchases seemed like a good idea.

    Trust, but verify. - Reagan
    Vote, but Occupy. - commonmass

    When the rich have tripled their share of the income and wealth yet again, Republicans will still blame the poor and 3rd Way Democrats will still negotiate.

    by Words In Action on Sat Apr 12, 2014 at 11:37:25 AM PDT

  •  My son has some money in this (2+ / 0-)
    Recommended by:
    Calvino Partigiani, gjohnsit

    Its only a few thousand. he knows its a gamble. Last time we talked he said it was down. I told him don't sign his name to anything

    Happy just to be alive

    by exlrrp on Sat Apr 12, 2014 at 11:37:44 AM PDT

  •  not a green currency (4+ / 0-)

    about 30 MW is consumed 24/7/365 by bitcoin miners.

    I believe all cryptocurrencies so far are based on the same algorithm as bitcoin. This algorithm heavily favors early adopters.  As time goes on you are stuck with a rapidly decreasing return for your mining investment.

    Also insecure - Mt. Gox is not the only "exchange" that has lost bitcoins.

    •  Like All "Wasting Asset" Resources (1+ / 0-)
      Recommended by:
      Sandino

      Of course Bitcoins are becoming rarer, if they've set up the algorithms to mimic other wasting asset resources like gold or petroleum.  As the easy deposits are depleted, the newer deposits become increasingly more difficult to locate and extract, driving up the value of the underlying resource but at a slower rate than the "production" cost.  Unfortunately, the crypto-currencies don't even offer the functionality that natural resource assets provide when backing physical currencies.  

      One could point out that the algorithms and their payback rate could be enhanced.  I suspect the crypto-currency promoters would go ballistic over that because of "inflation" fears, that bugaboo which afflicts all libertarians.  It does have the downside of reducing the return of the early investors, which is likely the only factor driving any of these scams.  Pinning any currency's value to some "thing" only guarantees that a select few make a profit, the many suffer, and the economy grinds to a halt.  Anybody who believes the gold standard helped fuel the global growth in the 19th century except by the discovery of new gold resources which temporarily boosted the supply really needs to learn how to read.  Much the same thing happened in the 16th and 17th centuries when the New World provided enormous quantities of specie previously unavailable to the global markets and produced by native slave labor.  

      "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

      by PrahaPartizan on Sat Apr 12, 2014 at 06:46:18 PM PDT

      [ Parent ]

    •  It isn't exactly wasted. (0+ / 0-)

      Mining is essentially how cryptocurrencies with a distributed ledger maintain a secured ordering. It operates essentially like lot drawing. Whoever drew the lot (found the magic number that fits a certain constraint) gets to decide which sets of transaction comes next.
      The mining system is expensive because it makes the assumption that no one is trustworthy, and therefore it requires a very competitive (and resource intensive) way to maintain the ledger. However, if one has some trust in the system, there're various ways to maintain said ledger without going through the expensive mining operation.
      Option 1: Centralized Ledger - In this case, we have a single trusted entity entrusted with maintaining a ledger. The individual "blocks" in the block-chain can simply be verified by a digital signature. Owing to the nature of the block-chain (where each block also contains information from the preceding block's signature). This system is also comparatively vulnerable in that if the private-key of the signature is "compromised", the entire block-chain will have to be frozen until everything can be "signed" against using a new key (otherwise, block-chains generated with a compromised key can be modified and regenerated until the last block in the compromised chain has the matching "magic-number" with the first block in the newly "keyed" chain).
      Option 2: Trusted Groups Ledger - A variation of Centralized ledger, but instead of a single trusted entity, we have a selected sets of trusted entity. Each block in the block-chain is then "required" to be signed by each entity with their digital signature (and the entity individually verifies that the content of the block is correct). Each entity would also have the requirement that they'll only "sign" each block once (so subsequent attacker who manager to compromise one entity's key cannot get that block re-signed by other entities). The advantage is that even if one of them is compromised, the existing block-chain can still be used (since the attacker can only forge one of the signature) until the entire block-chain can be repaired.

  •  Libertarian money designed to reinstate metals (10+ / 0-)

    Zombie Lamar Hunt and Zombie William Jennings Bryan where are you....

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013 (@eState4Column5).

    by annieli on Sat Apr 12, 2014 at 11:47:41 AM PDT

  •  I kind of feel sorry for the guys who post... (2+ / 0-)
    Recommended by:
    Mostserene1, Calvino Partigiani

    ...on bitcointalk.org. They seem like nice guys who just wanted to make a little money by buying and investing bitcoins. Sadly, some of them still think bitcoin will go up a lot in price. But I ask, "what would make bitcoin rise again to $1,000?". I mean, they are not stocks.
    Then there are the guys who got their bitcoins stolen, or lost. It makes me sad to read their stories, really.

  •  Not a ponzi scheme (0+ / 0-)

    Learn mathematics and encryption. Then you'll get it.

    •  That's the problem (10+ / 0-)

      You aren't trying to solve a physics problem. You are trying to create a currency.
         So the problem to solve is economics, not mathematics.

      "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

      by gjohnsit on Sat Apr 12, 2014 at 12:09:49 PM PDT

      [ Parent ]

    •  can I buy a Big Mac with it? (5+ / 0-)

      If not, then what the fuck good is it.

      It's like the "Bone Bucks" the local pet store used to give out--you could redeem them at the shop for free doggie treats. But that's all they were good for.

      In the end, reality always wins.

      by Lenny Flank on Sat Apr 12, 2014 at 12:21:13 PM PDT

      [ Parent ]

    •  Then you'll get what? The idea of creating an (8+ / 0-)

      arbitrarily scarce, artificial commodity in order to use it as a currency basis? A commodity whose arbitrary scarcity was, in the end, based in nothing other than a "guarantee" to maintain its arbitrary scarcity?

      Why bother? Why not just use real scarcity, like a vault full of gold?

      To put the torture behind us is, inevitably, to put it in front of us.

      by UntimelyRippd on Sat Apr 12, 2014 at 12:42:52 PM PDT

      [ Parent ]

      •  the whole "fiat money!!!" thingie always makes (5+ / 0-)

        me laugh. ALL money is fiat money.  It's ALL money only and solely because we say it is. Gold doesn't have any magical powers. It has no inherent value--you can't eat it, can't wear it, and can't make a winter shelter out of it. It doesn't come pre-stamped with, "I am money". It's money only because we SAY it's money, and we only use it for money because it's (1) easily minted into coins, (2) easily subdivided into precise measures, (3) imperishable and untarnishable, and (4) scarce enough that you can't just pick it up somewhere.  Clam shells, cattle, salt, deer hides, tobacco--all can be, and have been, used as "money" in the past, and all were every bit as much "fiat money" as anything else is.

        Magical thinking is always silly.

        In the end, reality always wins.

        by Lenny Flank on Sat Apr 12, 2014 at 01:00:33 PM PDT

        [ Parent ]

        •  Karl Marx wrote (2+ / 0-)
          Recommended by:
          Sandino, BusyinCA

          "On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from the intoxicating prosperity, declares money to be a vain imagination."

            That sounds like Bitcoin to me.

          "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

          by gjohnsit on Sat Apr 12, 2014 at 01:09:09 PM PDT

          [ Parent ]

        •  Milton Friedman (not one of my heroes) tells of (3+ / 0-)
          Recommended by:
          gjohnsit, Jay C, BusyinCA

          the islanders whose exchange medium consists of large, flat, round stones with holes drilled through the middle so they can be slid onto a staff and carried by two people. By large, I mean, the "coins" can be multiple feet in diameter. Each coin's value is determined by its size.

          The stones must be quarried from a special site on a different island -- so if you want to increase your wealth without producing something useful, you're damned well going to have to work hard at it, paddling the long way over to the other island, hammering out a new disk, and hauling it all the way back.

          Of course, it's way more trouble than it's worth to carry the damned things around all the time, so folks keep track of who owns how much of each disk by making marks on the disks.

          According to Friedman, the wealthiest family in the community owns an ENORMOUS disk that lies at the bottom of the sea. Nobody else in the community has ever seen that disk, because the canoe carrying it from the quarry sank. They have only the word of the men who went to quarry it that it ever existed.

          Now that is magical thinking -- but it is astonishingly illuminating in terms of what it teaches about the "meaning" of money.

          There is no significant distinction between those stone disks and bitcoins: objects of arbitrary scarcity that are employed to represent wealth exactly because they are arbitrarily scarce, though in theory anybody can create more if they think it's worth their time and effort.

          To put the torture behind us is, inevitably, to put it in front of us.

          by UntimelyRippd on Sat Apr 12, 2014 at 01:34:25 PM PDT

          [ Parent ]

          •  According to Marxian economics (1+ / 0-)
            Recommended by:
            PrahaPartizan

            the value of everything is determined by the amount of labor put into it.
              Thus gold is valuable because it takes an immense amount of labor to find it, dig it up, smelt it, and coin it.

              Bitcoins, OTOH, you create by turning on your computer and letting it run for a while.

            "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

            by gjohnsit on Sat Apr 12, 2014 at 01:45:06 PM PDT

            [ Parent ]

        •  There is a qualitative difference in notes (1+ / 0-)
          Recommended by:
          gjohnsit

          that represent a fixed quantity of a practical commodity such as cotton or tobacco -- particularly, a fixed quantity of a perishable, consumable practical commodity; and especially so, if such notes are only issued to represent real, physical instances of the said commodity. Things get weird if a tobacco warehouse burns down.

          The financialists, of course, can alway create "derivatives" of such notes, and such derivatives are indeed largely indistinguishable from fiat money.

          To put the torture behind us is, inevitably, to put it in front of us.

          by UntimelyRippd on Sat Apr 12, 2014 at 01:41:35 PM PDT

          [ Parent ]

      •  LOL gold is scarce LOL (0+ / 0-)

        Gold used to be scarce...now with 100:1 LBMA leverage, unlimited "paper gold" like GLD, tens of thousands of naked short futures contracts dropped by unknown and impossible holders on a Sunday night...it's not "scarce" any more. If it was, with all of this money printing gold should be $10,000 per ounce. Bitcoin has a much better chance of remaining scarce.
        And if I hear another  "OMG Bitcoin is dead it's a Ponzi" I'm gonna retch. 8 months ago is was $85 bucks...what is it today, $400? Please try to control yourselves and only post about something you have at least an inkling of knowledge about, thank you.

        •  uh, huh. (2+ / 0-)
          Recommended by:
          gjohnsit, BYw

          yer smart an i'm dum.

          though, i do understand the difference between real gold and paper gold, and that there's nothing stopping anybody from filling a vault with real gold and handing around pieces of paper or cunningly-encrypted computer hash codes that represent a claim on the real gold in the vault.

          the funny thing is, though, if you did that the folks would probably demand that you agree to give them the gold if they show up at the vault with the pieces of paper. mysteriously they have no similar qualms about their bitcoins being backed by nothing at all, at all.

          the mere fact that the people most interested in bitcoins appear to be not consumers and merchants but speculators tells you everything you need to know about the damned things.

          To put the torture behind us is, inevitably, to put it in front of us.

          by UntimelyRippd on Sat Apr 12, 2014 at 10:45:17 PM PDT

          [ Parent ]

        •  OpenThePodBayDoorsHAL (0+ / 0-)

          UID: 1011962
          Joined: Apr 12, 2014

           Did you create your account just to post this?

          "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

          by gjohnsit on Sun Apr 13, 2014 at 10:29:09 AM PDT

          [ Parent ]

        •  I'm sorry Dave, I can'r do that. (0+ / 0-)
    •  more a hall of mirrors (2+ / 0-)
      Recommended by:
      gjohnsit, Calvino Partigiani

      grope for it, and nothing's there.

      The cold passion for truth hunts in no pack. -Robinson Jeffers

      by Laurence Lewis on Sat Apr 12, 2014 at 01:37:56 PM PDT

      [ Parent ]

  •  I never understood just what problem Bitcoins (9+ / 0-)

    were supposed to be solving. Other than (1) making the ideological libertarian kookers happy by privatizing "money" itself and eliminating government, and (2) a convenient way to pay for illegal guns and drugs.

    In the end, reality always wins.

    by Lenny Flank on Sat Apr 12, 2014 at 12:16:51 PM PDT

    •  what they're supposed to be solving (5+ / 0-)

      is wealthy libertarians' need to avoid doing anything productive with their lives.

      The cold passion for truth hunts in no pack. -Robinson Jeffers

      by Laurence Lewis on Sat Apr 12, 2014 at 01:39:07 PM PDT

      [ Parent ]

    •  It was the "problem" (4+ / 0-)

      of the lack of yet another speculative pseudo-currency to attract sophisticated investors rook the rubes over - this time hoked up with "libertarian" bafflegab and exoticized with high-tech hoo-ha to disguise the fundamentally bogus nature of its inherent valuelessness.

      IOW, basically what most of Wall Street  does for a living....

    •  I'm not sure what bitcoin is trying to solve. (0+ / 0-)

      But cryptocurrencies, in general, is a very interesting idea of a currency that essentially cannot be counterfeited (or is computationally prohibitive to be counterfeited).

      Put it this way, let's say that we've a new cryptocurrency backed by US Government (USBit?).
      The government has multiple independent authorities that has a digital signature.
      Each block in the block-chain have to be signed by all the authorities to be valid.
      Periodically, an agency will change out its signature to sign new blocks with.
      So, in order for anyone to counterfeit any money. They'll have to.
      A. Compromise all authorities' signature.
      B. Compromise all authorities' past signature (that they may have destroyed).
      In essence, as long as the signature is updated frequent enough, there's simply no way for any attacker to counterfeit USBit without having a nearly instantaneous knowledge on what private key all signing authority is using since the creation of the USBit's blockchain.

      Furthermore, we also now have an interesting method of money creation (basically, a very controlled form of inflation so that money supply matches the need of the overall economy). All US Citizen will simply register the public key of their wallet, with their identity attached (to prevent multiple wallet registration), with whatever money creation authority. Than, with each block-chain generated, it will "create" a certain set of money in a randomly drawn "wallet". Overall, each individual's expected return would be very small. But in aggregation, it would be a very fair system of adding money into the economy.

  •  I was always confused by it as well (4+ / 0-)
    Recommended by:
    La Gitane, gjohnsit, ferg, PrahaPartizan

    but wasn't it "legit" early on? As in, "a threat to other currency" on some level--mind you, a really low one, but one that initially had some kind of long-term potential?

    Wish I'd learned more about it/paid more attention when I first heard of it, since this outcome rather makes me wonder if perhaps Bitcoin was once legit, but then it got--damn, this is not quite the right terminology, but it's the best I got--co-opted by Big Banks, who figured out a way to make more money off it and render it worthless.

    Who knows? I agree with the "Libertarian" bent here, though, that's why I'm making note at all. I first heard of Bitcoin a good long while before "major media" in the US ever talked about it--and had heard about it from a Libertarian family member.

    (yeah, lucky me, my relatives and I are blessed with the whole fandamily of political spectrum...fortunately, Libertarian Larry is a lone wolf ;))

     

    This all started with "what the Republicans did to language".

    by lunachickie on Sat Apr 12, 2014 at 12:22:22 PM PDT

  •  At its best (8+ / 0-)

    Bitcoin would not be anything more than bartering or a credit card, depending on how it was used. As it was actually used, it's a scam targeting the paranoid libertarian mindset. That so many fell for it is a good reason why libertarians should never rise above assistant manager at Kroegers.

    Do Pavlov's dogs chase Schroedinger's cat?

    by corwin on Sat Apr 12, 2014 at 01:12:38 PM PDT

  •  There goes our best chance at taking down the Fed. (2+ / 0-)
    Recommended by:
    Calvino Partigiani, Lenny Flank

    Dang.

    "Fragmented and confused, we have no plan to combat any of this, but are looking to be saved by the very architects of our ruination."

    by BigAlinWashSt on Sat Apr 12, 2014 at 01:31:53 PM PDT

  •  I always feel sullied (2+ / 0-)
    Recommended by:
    gjohnsit, Calvino Partigiani

    after reading their forum.

    But real time histories of a scam, from scam unveiled to scam collapsed, are just so dramatic and fascinating.

    And they have so very many histories of a scam to read.

  •  bitcoin advocates come across as members of a cult (4+ / 0-)

    they claim to have special knowledge (as, for example, in post above "Learn mathematics and encryption. Then you'll get it.") which the despised non-initiates lack, but which is necessary for salvation (= appreciating the marvel which is bitcoin)

    Yawn...

    We're shocked by a naked nipple, but not by naked aggression.

    by Lepanto on Sat Apr 12, 2014 at 03:10:52 PM PDT

  •  What is so very libertarian here? (0+ / 0-)

    I fail to understand what is so very libertarian about a third world currency that will forever be unfit for pure trade into silver or gold? Bitcoin is not an alternative currency to USD but is a suicide cult that worships the United States Dollar. Bitcoiners are afraid to move at any point in time without an escape route immediately back into the United States Dollars that come from the next fool on the exchange. Bitcoiners are just little punks who will make up any lie required to sell their hoax.

    America already has a limited issuance, diminishing available currency with no central authority control. That American currency is Confederate Dollars printed by the South during the Civil War. I believe Bitcoin is far more a Confederate philosophy than a libertarian ideology.

    And I also don't believe California is exactly a hotbed of libertarians. California is all a bunch of collectivists. But California is where all the propaganda comes from. Why is it so very important to California to teach everybody else how Bitcoin is not a hoax? Something must be wrong over there in that state.

    Another thing that blows my mind is when I see a Republican from Texas taking Bitcoin vending machines to Washington D.C. California liberals and Texas Republicans ARE WORKING TOGETHER to make this hoax look like it is something real????? Wow. Nobody in this world is making any sense to me.

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