Crypto-Currencies Will Destroy The Banksters' Monopoly On Money
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zerohedge.com / by Tyler Durden on 12/13/2013 15:34 -0500
While 6% believe Bitcoin is an “Xbox game”, we are impressed that 42% of Americans polled by Bloomberg know what the virtual currency is. Furthermore, 55% believe it is “not better” that Bitcoin be regulated…
Can you imagine participating in a protest outside the White House and forcing the entire U.S. government to resign? Can you imagine a group of randomly chosen private citizens rewriting the U.S. constitution to include measures banning corporate fraud? It seems incomprehensible in the U.S., but Icelanders did just that. Icelanders forced their entire government to resign after a banking fraud scandal, overthrowing the ruling party and creating a citizen’s group tasked with writing a new constitution that offered a solution to prevent corporate greed from destroying the country. The constitution of Iceland was scrapped and is being rewritten by private citizens; using a crowd-sourcing technique via social media channels such as Facebook and Twitter. These events have been going on since 2008, yet there’s been no word from the U.S. mainstream media about any of them. In fact, all of the events that unfolded were recorded by international journalists, overseas news bureaus, citizen journalists and bloggers. This has created current accusations of an intentional cover up of the story by mainstream U.S. news sources.
An “iReport” on CNN, written by a private citizen in May 2012, has questioned the reasons why this revolution has not been widely covered in the U.S., suggesting that perhaps the mainstream media is controlled by large corporate interests and thus has been unwilling to report on Iceland’s activities. That report is currently making its way around social media. CNN today placed a statement on its website saying: “We’ve noticed this iReport is being shared widely on Facebook and Twitter. Please note that this article was posted in May 2012. CNN has not yet verified the claims and we’re working to track down the original writer.” It is interesting to note that CNN’s European version, CNN Europe, already covered the story of the protests and the government’s resignation, leading many to question why CNN would now need to “look into” the claims.
Besides CNN Europe’s own coverage of the scandal, the events in Iceland were widely covered by international media and are easily verified by a simple search on Google which leads to a variety of reputable international news sources that ran numerous stories on the Icelandic revolution. A whole documentary has been made on the governmental overthrow called Pots, Pans and Other Solutions, and now, the conversation is focused on whether or not the citizens’ actions actually worked to make Iceland a more equitable nation.
blogs.wsj.com / By PAUL VIGNA / Dec 12, 2013 2:23 pm
Bitcoin’s had just a bit of a big year. The value of the currency has risen exponentially; it’s been taken seriously by government officials and central bankers (not always favorably, but seriously) the world over; and it’s sparked excitement among the financialpress and blogosphere, certainly. But, in absolute terms, it remains a tiny phenomenon, and for all the attention it gets, there’s just as much misunderstanding.
“The ‘bitcoin bubble’ meme has become the financial equivalentof a viral online cat video – wildly popular but pretty vacuous,” Nicholas Colas, ConvergEx’s chief market strategist, wrote in his morning note to clients.
forbes.com / By Tim Worstall / December 12, 2013 9:57AM
I’m always a little worried when the Financial Times echoes something that I am already thinking. It means that either I might have, inadvertently, had a good idea or that I am having the sort of ideas that are supported by the Financial Times. Either way, a surprising finding. But they are indeed stating something I agree with today. That even if one buys into the ideas of the digital currency brigade why would you invest in Bitcoin, which is looking a bit toppy, rather than one of the other digital currencies?
Buying Bitcoins while their price is so bubbly is nothing more than a gamble. Investing in other online currencies, or in companies that can help the Bitcoin economy develop, looks like a sensible use of a venture capitalist’s money.
Certainly some of the VCs are moving this way. We’ve only just had the announcement that Andreessen Horowitz has invested in Coinbase:
If you’re a bitcoin doubter, you might want to turn away. The doors to venture funding in bitcoin startups are about to swing wide open.
Andreessen Horowitz has led a $25 million Series B investment in San Francisco-based Coinbase, the companies are announcing today, in what may very well be the largest-ever venture investment in a bitcoin-related company. Coinbase previously raised nearly $7 million.
Virtual currency Bitcoin has attracted increasing media attention over the past year. It’s also soaring in value, with a single bitcoin surpassing $1,000 (£613) for the first time in November. So has the media hype driven the price hike?
To the average man in the street, Bitcoin is a complicated concept.
You might grasp what a typical currency is. The pound is influenced by a central bank – the Bank of England. When it puts up interests rates, or it’s expected to, the value of the pound might subsequently go up.
If the Bank of England prints more money, or there is speculation that it will, the value’s probably going to go down. Ultimately, the value’s determined between buyers and sellers on the international markets.
Bitcoin’s a bit different. There’s no central bank. It’s stateless. And the supply of Bitcoin is determined by an algorithm that allows computers around the world to “mine” the currency at a set rate per day. There’s a limit – about 21m – to how many can ever be mined and no way to issue a flood of new Bitcoins and devalue those already in circulation.
The currency’s value – according to about 60 exchanges around the world where Bitcoins are bought and sold – is volatile. Unlike with the dollar or the pound, prices can vary considerably from exchange to exchange, sometimes by as much as $200.
upstart.bizjournals.com / By Michael del Castillo / December 12, 2013, 6:33pm EST
Where do Bitcoins come from? Massively powerful computers churning through algorithms in a race to be the first to solve a problem. A Bitcoin is the reward those computers receive for their work. It’s a process called “Bitcoin mining” and its byproducts—in the form of carbon emissionsgenerated by the massive amount of energy it takes to “mine” the crypto-currency—could soon dwarf the environmental damage of entire nations.
Guy Lane, a 46-year-old carbon auditor and environmental scientist believes the time is past for entrepreneurs to build the next big thing, whatever that is, without also considering how the planet operates.
“Bitcoin is a currency that has been designed by Trekkies who think they live in an orbitingspace station powered by a fusion reactor,” said Lane, the founder of BitCarbon, a Townsville, Australia based startup that tracks the impact of the production of Bitcoins on the environment, in a Skype interview with UpstartBusiness Journal today. “It is not a system meant to be used by humans living in a biosphere.”
Lane says that the same complex algorithms that “gobble up” an ever increasing amount of energy, and limit the number of Bitcoins to 21 million (theoretically controlling inflation) are also draining the earth of its finite resources.
Fred Wilson, co-founder of Union Square Ventures, speaks during a discussion at the Future of Media event during Advertising Week in New York, U.S., on Wednesday, Sept. 29, 2010. The mobile advertising market may more than double in the U.S. to almost $500 million this year, researchers say. Photographer: Andrew Harrer/Bloomberg
upstart.bizjournals.com / By Michael del Castillo / December 12, 2013, 3:20pm EST
Some of the biggest names in Bitcoin today joined Coinbase as part of a $25 million Series B fundraising round to help the company scale its growth: Andreessen Horowitz’s Chris Dixon and Union Square Ventures’ Fred Wilson will join the board. Plus, Gavin Andresen—Bitcoin creatorSatoshi Nakamoto’s hand-picked successor—joins as an advisor.
Earlier this year Dixon, whose investments include OMGPOP, Foursquare, and Kickstarter, said he would start investing in Bitcoin startups. Since then he’s put money into OpenCoin Inc.
“Bitcoin needs a killer app,” Dixon wrote today on his personal blog. And the venture capitalist seems to think this most recent investment is that app. “Consumers can use Coinbase to convert to and from other currencies and to pay for goods and services… Merchants can use Coinbase to accept payments and convert currencies. Developers can build new services using Coinbase’s API.”
Fred Wilson, partner at Union Square Ventures, was already an investor in Tumblr, Twitter, Zynga, and Kickstarter when he too turned his attention to Bitcoin earlier this year. In May, his firm lead Coinbase’s $6 million round of fundraising.
theconversation.com / By David Glance / 13 December 2013, 12.45pm AEST
As Bitcoin’s backers push for it to become acceptable mainstream currency, its value has become increasingly tied to attempts to break the public image that it’s just a currency for cyber criminals.
It’s for this reason that every suggestion the currency is gaining acceptance by governments sends its price soaring. In November, US Federal Reserve Chairman Ben Bernanke released a letter stating there was no need to regulate Bitcoin and that virtual currencies like Bitcoin held promise as a more efficient and more secure payment system.
This morning Glenn Stevens, Reserve Bank of Australia governor,told the Australian Financial Review virtual currencies like Bitcoin have long-term promise, “particularly if the technology leads to a faster, more secure and more efficient payments system”.
Bernanke’s oblique endorsement of Bitcoin helped lift its price to about US$1200 per Bitcoin. Conversely, negative statements like that made by China’s Central Bank that Chinese financial institutions should not accept Bitcoin sent its value plummeting by over 30% to a low of $814.
It’s not every day you get to see a machine designed to mintmoney. KnCMiner is a Stockholm-based hardware companythat has single-handedly changed the face of Bitcoin mining. Their products sell out almost instantly. The $5,000 Jupiter is already gone and, amazingly, the company actually ships. John Biggs met with Alexander Lawn of KnCMiner who gives a hands on look at the hardware in the Jupiter Bitcoin Miner.
“We demand that the overreach by the Fincen administrator declaring Bitcoin businesses buying and selling bitcoins to be money exchangers be immediately reversed. It was an overreach of her authority in an evolving field of future commerce that may dwarf even the internet in its startup company potential and commercial impact. Congress should not cede their important regulatory authority in such a tremendously important area for the United States’ future to any one person or small group of people.
wired.com / BY KIF LESWING / December 13, 2013 6:30 AM
Can you buy and sell digital currency on eBay? Sure you can. In fact, the popular auction site could eventually become a big player in the trading of dollars and yen and other fiat currencies for bitcoins, the world’s most popular digital currency.
With PayPal under its wing, eBay is registered with state and federal governments as a bona fide money transmitter, and that gives the site a leg up on many of the early Bitcoin exchanges, which were built by independent computer geeks unfamiliar with the world’s rather complicated financial regulations.
The trouble is that selling bitcoins on eBay is sometimes a dicey proposition. EBay doesn’t include tools for verifying digital transactions, so if you send some bitcoins to a buyer via the net and the buyer claims he never received them, eBay will claw back the payment you received. But bitcoins can’t be clawed back. That means you lose both the payment and the bitcoins themselves. Just ask James Larsich, who lost about $2000 in bitcoins this way.
Watch the full Keiser Report Episode 536 on Saturday!
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the debt incest cult operating on Wall Street in which JP Morgan’s Sons and Daughters mate two units of related debt for four generations and thus spawning a deformed and cross-eyed credit market. In the second half, Max interviews Jeff Berwick of DollarVigilante.com about the great Bitcoin divide in the libertarian community and about the great migration from the USA to Mexico and beyond by Americans seeking more liberty and freedom.
images.infoworld.com / By Simon Phipps / December 13, 2013
Once considered a curiosity, the digital currency bitcoin has held the mainstream media spotlight the past few weeks. Its price reached parity with that of gold at one point; then last weekend skittish speculators dumped huge quantities in response to negative news from China. Meanwhile, the financial world has been paying closer and closer attention. Don’t be distracted by the Silk Road bust – bitcoin is becoming a mainstream phenomenon.
What exactly is bitcoin? On one level, it’s an alternative currency that is managed not by a bank but by the consensus of its users, backed by a completely transparent ledger and open source implementations of the code that regulates it. You can buy a bitcoin in one place using your local currency and send it anywhere in the world to anyone without the intervention of authorities, at which point that person can sell it in their local currency. At a deeper level, it’s more: A clever system of messages and digital signatures that allows global proof of any kind of action or transaction that can be documented.
ibtimes.co.uk / By ALISTAIR CHARLTON / December 13, 2013 12:55 PM GMT
It has been eight months since bitcoin first made headlines in the mainstream press and it has remained there pretty much ever since, yet it has taken until now for the European Banking Authority to merely recognise the currency’s existence - yet alone attempt to regulate it.
While entrepreneurs from the US, UK, Far East, and everywhere inbetween work to earn a living from bitcoin and other virtual currencies – by honest means, or otherwise – the banking regulators and watchdogs are keeping quiet in the hope this will all blow over.
Reading like The Dummy’s Guide to Bitcoin, the ERA’s warning explains how these currencies are not protected by any EU law or regulatory protection, and concludes that consumers shouldn’t invest any real money - pounds, dollars and the like – which they cannot afford to lose.
Sound advice, perhaps, but the bigger issue here is how it seems regulators and watchdogs are scared to react to something which prominent and respected investors describe as Gold 2.0, and one which is gaining legitimate uses by the day.
reddit.com/r/Bitcoin / by KimJongSurge / December 12, 2013
My company is a US based manufacturing operation, which ships directly from the our U.S. factory throughout the world. We manufacture scientific instrumentation which is in fairly high demand – it’s a niche market, and our main competition is based in the U.S., EU, and to a small extent China.
Since it’s a very technical product, we place the onus on the customer to do their due diligence regarding the exact configuration of the equipment. The average sticker price is about $2500; we will answer any and all questions – and provide extensive pre-sales support – to ensure that what you’re purchasing will perform to your expectations.
Since shipping back and forth across oceans is so expensive, and the product is so technical, we require 100% prepayment via wire transfer before we will ship to you – no LCs, no 50% upfront, no exceptions. By imposing this condition, potential buyers are extremely meticulous. We typically go back and forth via email at least dozen times over a period of many months, but the process works; we understand the needs of the customer, and they provide the detailed application information that we require.
Because of the nature of our product, and that’s it not standardized, we require prepayment via wire transfer for ALL international orders.
In the last 7 years, while we’ve had a handful of warranty issues, there hasn’t been a single misunderstanding regarding getting the equipment configured properly. Think about it – if you were about to buy something that expensive from a foreign country, and you knew it wasn’t returnable, and that you had to prepay 100%, you’d probably be pretty careful about making sure you got it right.
The emergence of the bitcoin is a big story of 2013. One currency strategist from a large bank says fair value is $1300. Another currency strategist has suggested that central banks don’t want to be the last to use it and may put it into reserves, which would challenge the US dollar.
I remain skeptical of both of those claims. That a fair value can be assessed is incredulous. It has no intrinsic value. It generates no income/earnings stream. It has limited utility, that just got even smaller when China’s largest internet platform indicated it would no longer facilitate the use of bitcoins. That the bitcoin (or any so-called digital currency) will be a reserve asset is incredible in the sense that it lacks credibility. The market is too small (overall size and trading volume), too shallow (no bonds, let alone seasonedbond market, or interest bearing securitie), too volatile and does not improve, existing currencies (as it too is not backed by gold or silver). The bitcoin should not even be spoken of in the same breath as central bank reserves.
coindesk.com / By Jon Southurst / December 13, 2013 at 13:57 GMT
Representatives from the central banks of New Zealand and Australia have issued their own official warnings on bitcoin, terming the currency “interesting, but risky”.
The banks’ comments come hot on the heels of the European BankingAuthority’s stance today. Both comments echo the public statement issued by Chinese authorities on 5th December, which led to the price of bitcoin falling by $300 on popular exchange Mt. Gox.
John McDermott, assistant governor at the Reserve Bank of New Zealand (RBNZ), said banks and businesses should “tread very carefully” with the digital currency, ina report by the Wall Street Journal. He added:
“You have to worry about [...] the supply, how it’s controlled, how it’s monitored. Who knows at this point? There is still a lot for the world to learn on this issue.”
"At any rate, the spook spoke the truth: cryptology represents the future of privacy, and more. By implication cryptology also represents the future of money, and the future of banking and finance. (By "money" I mean the medium of exchange, the institutional mechanisms for making transactions, whether by cash, check, debit card or other electronic transfer.) Given the choice between intersecting with a monetary system that leaves a detailed electronic trail of all one's financial activities, and a parallel system that ensures anonymity and privacy, people will opt for the latter. Moreover, they will demand the latter, because the current monetary system is being turned into the principal instrument of surveillance and control by tyrannical elements in Western governments." - J. Orlin Grabbe