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Bitcoin - If the government hates it, don't you think you should at least consider learning about it?

I just wanted to share this blog someone wrote about Bitcoin:

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-in...

    Bitcoin - The Libertarian Introduction

What it is, how it's used, and why you should care.

Erik Voorhees - April 11, 2012

"When a state currency is challenged, the state itself is challenged,
and market forces move swiftly around sickly, depreciating inhibitors."

1 Introduction
2 What is Bitcoin?
3 How does it work?
4 Why is Bitcoin valuable?
5 No really, WHY is Bitcoin valuable?
6 How does one obtain it?
7 Being careful with money
8 What can one do with it?
9 Bitcoin vs. The State
10 Bitcoin and Disruption
11 Useful Resources

Introduction

There has been much talk about Bitcoin within libertarian and economic circles. It's becoming a buzzword, but like all new systems that break onto the public stage quickly, Bitcoin brings with it excitement, speculation, rumor, and downright confusion. To be sure, Bitcoin is complicated. After all, it's an entirely new global monetary system - both a currency and a payment network for that currency.

Like all powerful tools, it's important for those interested in using Bitcoin to spend some time engaging in the due diligence of education. Similar to a bicycle, once you know how to use Bitcoin, it will feel very easy and comfortable. But also like a bicycle, one could spend years learning the physics that enable it to operate. Such deep knowledge is not necessary to the actual rider, and in the same way one can enjoy the world of Bitcoin with little more than a healthy curiosity and a bit of practice.

This article is a primer on Bitcoin: an overview of the fascinating new phenomenon from the perspective of a humble libertarian who cares more about the ramifications for human liberty than about the technical protocol and brilliant science underlying the network.

The basics of Bitcoin are all covered here, ranging from a light technical overview to due diligence to monetary economics and theory. You'll also find an extensive list of resources to bring you up to speed on this most fascinating thing to happen in the realm of anarcho-capitalist technology since the internet itself.

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Wait a few years on that

it needs to develop trends to predict when it goes up and down so you can make big money off of it. because there hasn't been much time since it went up and came crashing down.

Mintchips

Will mintchips compete with bitcoins or are they the same thing? Competing currencies?
MintChipChallenge - http://www.youtube.com/watch?v=9PX-vW4VccY

They will compete because

They will compete because some of their features overlap in their use but they are not the same. Actually Mintchip is almost the exact opposite of Bitcoin.

Intrinsic value is a sine qua non for money.

Bitcoin is the result of the application of Labour to Land in the economic sense and it is, at one and the same time, a secure means of exchange without any intermediary anywhere in the world instantaneously, and a system of payments. It is, given its finite design, a store of value and a unit of account divisible to 21*10 to the 14th. power. This is equivalent to the existing store of gold on the planet expressed in tenths of a milligram each equivalent to 0.001543 grain.

It also cannot be counterfeited due to its mathematical properties within the network of which it is a part.

All of these features mean it has intrinsic value as money created for that purpose just as gold was at one time mined primarily for its monetary value. It is already freely traded, is accepted in payment by many merchants and presently has a value in the neighbourhood of $5.

Bitcoin will not replace gold and silver and its value can be expressed in terms of these precious metals, or vice versa, when the present fiat currency system has collapsed. It is in my view an excellent candidate as universal money in the world of the near future.

I can also see the day when someone invents a point of sale device to accept bitcoin at local shops just as there is a system for accepting debit or credit cards. In the case of bitcoin there will be no need for a teleconnection since the memory device containing the bitcoin (the wallet) will already be loaded with the purchaser's store of bitcoin.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Bitcoin will not replace gold

Bitcoin will not replace gold and silver.

Good idea to point this out explicitly because I think too many around here falsely believe that that is what we Bitcoin enthusiasts are advocating for.

I personally see precious metals as the best long term store of value bar none. But I also see a very great role for Bitcoin as a supplementing currency both as a store of value and as a convenient medium of exchange in the short term.

I mean FFS if you need anymore proof that this is exactly what we Bitcoin enthusiasts are arguing for you can just take a look at the several shops that sell precious metals for bitcoins already, one of them being: coinabul[dot]com

I take BitCoins on my site

Wallet is at the end of this article:

http://freeindependentsun.com/permanomics/bitcoin-btc-the-op...

Jack Wagner

Thanks Daily Paulers

I appreciate all the research you've done on this topic.

:-/

The difference between the value of this and the value of "paper" money?

And who sets the price?

the value of fiat currency is

the value of fiat currency is determined by government

the value of private currency is determined by private citizens

Bitcoin's value is determined by you!

Still skeptical...

The CIA's involvement:
http://www.tribbleagency.com/?p=8341
Bitcoin "crashing" to $0.01 last July:
http://www.youtube.com/watch?v=T1X6qQt9ONg
And again last August:
http://www.guardian.co.uk/technology/2011/oct/18/bitcoin-val...
Bitcoin implodes in Oct.:
http://arstechnica.com/tech-policy/news/2011/10/bitcoin-impl...

With CISPA around the corner, hackers at every door, or some solar flare (or foe/false flag) causing an EMP, your "virtual" money is gone... Maybe that's been the plan all along?

If you don't hold it, you don't own it. I'm keeping my land and all things physical, thank you.

"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost." -John Quincy Adams

Land?

Land is the easiest thing to tax and take.

If the politicians ever read about Georgism, they would know the government could eliminate all the nasty inefficient methods of collecting taxes and go over to a single property tax for everything except rolling stock and import taxes.

A property owning tax mark such as yourself, can choose to hide from the government, but the assesment can usually be made by looking at google street view, and that taxes can be collected by paypal, credit card or wire transfer.

If you don't pay, the government simply auctions your digs online to the next person. If you physically interfere, a drone flys over and fires rubber bullets and mace at you as a warning the first time, and blasts you out of your shoes the second.

This is a gross oversimplification but Henry George had some interesting ideas that are even more interesting in a modern context.

http://www.wealthandwant.com/docs/Nock_HGUA.htm

"Timid men prefer the calm of despotism to the tempestuous sea of liberty" TJ

Way before they start

Way before they start confiscating everyone's land, the "landless/renters" of this country will either be roaming or rounded up to into relocation/refugee camps. Why do you devalue owning your own land besides the perception of taxes (regulated by individual states)? Of course you must already be in a state where "liberty" is concern No. 1 and the local elected officials and sheriffs openly or not are ready to protect it's citizens from any "federal" land grab. Bit coin is one step closer to a "global currency". Good luck with that and I hope you find your way to a "free state".

"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost." -John Quincy Adams

Bitcion

Bitcoin didn't crash, an exchange got hacked. People need to know the difference between bitcoin itself and exchanges.. They are 2 totally separate things. Bitcoin went from a nerd currency that noone cared about to mainstream in a very short period of time and noone was ready for it especially the exchanges. Since then they have increased security dramatically.

I agree physical things are best to have first and foremost.

It was only a matter of time before the internet came up with its own way to transfer value.. even though it might not be "real". E-mail isn't "real" but people seem to use that quite well.

As far as the CIA, I'm sure they are interested in Bitcoin, why wouldn't they be? What better way to move their dirty money around?

People also tend to forget that bitcoin is open source which means anyone can review the code. I can't read code but there are hundreds of nerds (libertarian nerds) that do know how to read it, in the bitcoin forums. If there was anything malicious in there you would know about it pretty quickly.

Still too many flaws for me...

"It didn't crash, it got hacked." Either way, it dropped from around $30 to ONE CENT. Crashed/hacked--money gone. It is worth $5 today.

"Email isn't 'real' but people seem to use that quite well." Yeah, but it's not a store of wealth--that's just a non-sequitir.

"I'm sure [the CIA} is interested in Bitcoin, why wouldn't they be?" They've been moving dirty money for years without Bitcoin. Now they can tap into the database like the "hackers" did, launder their dirty money and take yours while they're at it. Sweet!

"I can't read code, but there are hundreds of nerds that do know how to read it." Put the power in your own hands. Why are people relying on others to figure stuff out for them? And if it's not easy to understand in general, then not everyone can participate. Is that planned, too?

You seem like you really did your homework, so now it's time to look at the pros and cons. Good luck and choose wisely...

"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost." -John Quincy Adams

MtGox is not bitcoin

""It didn't crash, it got hacked." Either way, it dropped from around $30 to ONE CENT. Crashed/hacked--money gone. It is worth $5 today."

What if someone hacks apmex.com and sets the price for all their gold coins to $1/oz? What if someone manages to buy a couple coins at that $1/oz price and the company ships before discovering the mistake? Did the value of gold crash? Was gold hacked? Of course not.

That's pretty much what happened to MtGox, one of many exchanges that deals with bitcoins. Other exchanges that deal with bitcoins continued trading at a reasonable price, with only a small dip because of panic sellers and arbitrage attempts. The actual bitcoin network was not hacked. If you held bitcoins in a wallet in your own possession, you weren't directly affected, just like holding gold.

Yes, the market value of bitcoin (vs FRN's) over the next few months did drop further down to $2 and now back up to $5. $2.00/BTC was real. $0.01/BTC was just one hacked website. In 1980, the market value of gold (vs FRN's) got as high as ~$850 and then "crashed".

Either way, it dropped from

Either way, it dropped from around $30 to ONE CENT. Crashed/hacked--money gone.

You are wrong. It only temporarily appeared to have dropped to one cent because of what the hacker did once in control of someone's account at the biggest exchange. Once the exchange rolled back his actions because of their prudent withdrawal limits, the only bitcoins actually stolen were worth about $2000, basically nothing compared to how much they were holding.

If anything this hack wastly improved the security of Bitcoin exchanges because it woke people up to the very real risks and motivated them to take a lot more precautions to ensure a repeat doesn't happen.

And yes there was a speculative bubble like in any other market which popped and bottomed at $2.2 but has now since grown more than 100% and has been around $5 a pop for over 3 months now.

I'm not saying Bitcoin is flawless but if you are going to list flaws, at least stick to the facts..

"Bitcoin didn't crash, an exchange got hacked."

So just the stock was worthless, every one who was holding bitcoins could still get $15 a coin for theirs....

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

CIA is involved

I was intrigued by this article and decided to do some snooping.

Please check this information out and make your own decisions, I just thought you would want to know this since the article really pushes the fact of how free Bitcoin is of government intervention, and how it's so private. I am not detracting from Bitcoins, I love the idea, but please take heed:

The original Youtube video has since been removed, but I managed to find a downloadable link to the CBS interview video...it doesn't paint a pretty picture for the future of Bitcoin as far as being free of government...(it's about ~70mb, 56k users beware)

http://cdn17.castfire.com/video/305/2242/8032/627455/cbsnews...

The troubling bit can be found at ~7:00 in the video.

Interviewer: "Are you worried about the government shutting you down?"
Jeff Garzik: "We're actually working with the government to register Bitcoin exchanges as MSB's, or Money Service Businesses; To make sure that the long arm of the government can indeed reach Bitcoin..."
Jeff Garzik: "The only way Bitcoins are going to be successful is working with regulation and with the government..."

Also...I found this (self-explanatory, just visit the link):

http://solidcointalk.org/topic/529-did-gavin-andresen-push-s...

The MP3 audio is interesting, but I would listen to it last, AFTER reading the forum thread and following the other links...regarding Gavin Andresen's visit to the CIA building at Langley.

So to sum it up. The Project Developer (Jeff) admits he's interested in working with the government and regulations. The Lead Developer (Gavin) admits to giving a presentation to the CIA in a closed meeting. And lastly, the brains behind it all, Satoshi Nakamoto gives Gavin the special Hash Key in confidence, then Gavin decides it'd be a great idea to go talk privately with the CIA and POOF! Satoshi drops off the face of the Earth.

Tread carefully my friends in Liberty.

New owner of Bitcoins...

I recommend for those curious about this...you investigate http://www.bitinstant.com

I was able to make a cash deposit in to a bank account (not mine), without giving my name or any information about me. Following this, I was notified by email (I used an anonymous, spoof email) that the funds had been deposited and it was onward to the next step. I opted for my newly purchased BC to be delivered to that same spoof email address during the initial purchase. I received an email with a link I could click once the funds I deposited cleared (less than 30min). This link gave me the opportunity to enter my BC account ID, or any BC account ID I wanted. The BC were there waiting to be claimed, and so I did.

The most painful part of this whole process was driving to the ATM. Without the driving, it would have taken me less than ~10min to purchase and receive my BC, completely anonymously.

Transactions are public knowledge, there is a vast log of transactions. However, if you do it correctly, there is a very real possibility of complete anonymity.

As I highlighted, yes the CIA is involved, but who doesn't want a piece of anonymity pie? No one I'd imagine. Now, the other question is, who doesn't think BC will hold value any amount of time? I feel at a time like this in the history of humanity, with a worldwide debt crisis on our hands, why not take a chance on something "crazy"?

Remember "Crazy old Uncle Ron"? Just my 0.02 BC.

.

.

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”

You guys are hilarious

Downvoting facts. I love it! Liberty is as Liberty does!

I think this guy got an

I think this guy got an earful on the forums after that. As of now I think the exchanges do have to work with their local governments in some way or they will be shut down. There is alot of money that goes through them.

I think there is some work being on done on decentralized exchanges.. and there are also sites like BTCNearme.com and of course craigslist if you want to bypass the exchange thing all together and go person to person.

Someone actually posted an interesting thing on the forums the other day when it came to bitcoin and taxes.

Someone went to H&R block and wanted to know how to declare bitcoins.. he said it took a few days for them to get back to him (and several people up the chain being asked), but their final conclusion was that it was a "hobby" whatever that means in tax world. :)

Yes exchanges are working

Yes exchanges are working within government regulations but this has no effect on the rules of Bitcoin itself and it's transaction.

Yes Gavin, the now lead developer of the official, client gave a presentation to the CIA at their forum for new technologies, and yes Satoshi gave Gavin the skeleton key that had the power to temporarily disable old versions of the Bitcoin client which the user could manually override.

All of this was done with notice well in advance, everything in the face of public scrutiny of the whole community, with the entire code of the Bitcoin client always available for anyone in the world to inspect and with other clients being coded by other people who also follow the same rules and are as equally open.

There absolutely nothing sinister even possible in any of this.

LOL

"All of this was done with notice well in advance, everything in the face of public"

You guys are too much.

I'm not sure what happened to the bill but there was once one that went before legislative procedures to demand that all crypto keys were to be handed over to the government.

They do something now when there's a "crime" that has been committed of course.

http://en.wikipedia.org/wiki/Key_disclosure_law

Do you know why he was even talking to the CIA to begin with? Was he forced to turn over a copy of the master or were they getting together over coffee to talk about electronics and how cool they were?

I'm going to start my own internet currency that will overtake his. Mine will be called batcoin.. You'll have to "mine" through a computer software by posting randomly on forums, proving that you're naive, gullible and batshit crazy..

While doing this over a period of 24hrs you will net you roughly 1.5 batcoins that you can then trade for useless shit online and even trade in for useless fiat cash from fiat countries that are about to go bankrupt. In time you'll be able to point to my guaranteed success by giving examples of how much we should all trust it because the very people who made out like hard up John's at an all you can eat brothel buffet for a trillion Zimbabwae US dollar bill that you bailed them out with, are also doing it.

No expensive hardware needed. :)

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

Some might say you are crazy

Some might say you are crazy for owning gold and silver which is heavily manipulated. Owning gold and silver has never freed man from the tyranny of governments and banks. Probably not something I should say on a Ron Paul site, but its true.

I see bitcoin as a good idea at least. I think the backlash comes from people who don't understand how it works, as stated by how you would invent your own currency.

(Disclaimer) I own some gold and silver.

It's not hard to understand you all just believe it's

complicated and THAT'S why we are "against" it.

Bitcoins come into life arbitrarily. They are created on a computer by a computer after the CPU or other electronic brain is taxed by doing an arbitrary mathematical problem.

Despite my mocking, I do find it attractive because there are a lot of suckers out there that buy into this fiat system. I could probably buy a few machines to invent me some bitcoins that I could then trade for another fiat currency which I could use for a wider variety of products before it also crashes.

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

I thought I was clear

When I said "I am not detracting from Bitcoins, I love the idea, but please take heed..."

Sinister? Who knows, probably not. Possible? Anything is possible.

You're correct it was all done in public, and Gavin highlights that fact in the thread that I linked to when he says:

"If talking to them makes y'all trust me less... then good! I'd like to see more careful code review, and, as others have pointed out, if bitcoin can be destroyed by one person, or requires the leadership of one person, then it has failed to be the strong, decentralized system that I think it is."

Just think it's sort of important for people to know this side of the story before getting romanticized by a blog that repeatedly points out how free of government it is, or how private it is. That's all.

Hell, if you hadn't posted this I wouldn't have learned any of this, so thank you!

I just wanted to keep your

I just wanted to keep your post that I thought missed the other half of the story balanced, that's all.

And you're welcome. ;)

This is deeply troubling.

So many people have been wrapped up in this lunacy, because they don't understand the "form of money".

I believe it's "money"

It has an intrinsic value, and people are trading it for real world items. I read a huge thread about it on http://www.mises.org last night and decided to do some more snooping today before I dove in. I was swayed in to the belief that Bitcoins ARE actually money. Here's an excerpt from what I read that helped me understand just where do Bitcoins get their 'value' when they aren't backed by 'anything':

Pre-existing use is not necessary for a good to become a money. It is not necessary because the markets are able to recognize the value of a good in terms of its use as a money based on the good’s properties of fungibility, divisibility, scarcity, and recognizability. Once the market recognizes the value of a potential money product for its own sake, people will be willing to trade goods and services for it.

Prices in terms of the new money product can be established without having to reference pre-existing use values, in the same way prices for fine works of art can be established without anyone having to reference pre-existing values for other works of art. The value calculations are internal to each individual who is willing to accept the currency based on the properties of the currency being offered for trade.

If you want to read the whole thing for yourself, here's the link, it really helped open my eyes to the whole idea. If it hadn't, I wouldn't have bothered alerting anyone to the fact that the CIA is involved, because well...I wouldn't have been curious enough to even figure that out in the first place...

http://mises.org/Community/forums/t/25411.aspx