2 votes

Bitcoins $60.00... Rises while FIAT currency continue to fall

Hey Everyone,

Back here with an update on Bitcoin. It's trading at about $46.50 this morning and as I predicted well on it's way to $100 and over. Who would have thought that a currency modeled on principles held within the Austrian school of economics would flourish against those FIAT paper currencies that those Keynesians love so much.

I know for some, Bitcoins is a concept so far removed from the current paradigm it's difficult to make the mental leap. Those people will get left on the side of the road, for your own sake do some research and try to understand the mechanics behind it. If anybody should be on board with this it's libertarians. It is really an ingenious and Revolutionary concept. What's so exciting about it is we still at the beginning of it all.

Online retail stores are just beginning to accept Bitcoins. Other business are opening the doors, exchanges are opening up, and eventually it will become more popular than any FIAT currency.

Fight for Liberty use Bitcoins

http://www.iexpats.com/2013/03/bitcoins-hit-peak-as-real-cur...

http://www.forbes.com/sites/saranyakapur/2013/03/05/bitcoin-...

http://blogs.barrons.com/emergingmarketsdaily/2013/03/05/mee...

http://www.techweekeurope.co.uk/interview/bitcoin-the-curren...

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Parabolic Rises in markets...

Parabolic Rises in markets always ends with a CRASH!
Why don't you recommend getting into bitcoin after that happens?

I'm big into bitcoin and as exciting as this is, the only recommendation I have is to sell a little everyday and/or invest in Bitcoin mining (www.butterflylabs.com)

This is insanity fueled by greed that I wish you wouldn't endorse.

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

your treating this as an investment and seeing it's value

In dollars... I get that parabolic rises will crash, there probably will be a big pullback, but this shouldn't be seen as an investment. People are moving towards bitcoins because of it's utility as a currency. You are seeing the death of FIAT centrally controlled currency. Eventually people will just ignore the dollar.. Use Bitcoins. Don't value Bitcoins in Dollars.. Value it by it's utility and realize the demand for such a currency will keep it valuable.

Negged

First item I've ever negged so need to explain why. The OP seemingly has no idea what 'fiat' means or what the 'principles held within the Austrian school' are. Suggestions: look up 'fiat' in the dictionary and read Mises' _Theory of Money and Credit_. The definition is self-explanatory and the book is the foundation of Austrian thought on the topic of money.

If you/others want to pimp bitcoin, do so for it's speculative value or something else but stop talking out of your asses.

Holy cow, some of you bitcoin people are as frustrating as the rube on a sports forum I frequent who believes the Fed is a hedge against income inequality. I really expect better at the DP :/

At least it's not a monopolized fiat.

So I love it.

chart

I don't own any and would not want to buy at the top but I am elated for those who do.

Can you provide the definition of FIAT money please

So you can prove your self wrong...

Please just state the definition of FIAT money..

Noun A formal authorization

Noun
A formal authorization or proposition; a decree.
An arbitrary order.
Synonyms
order - ordinance - decree - command - edict

Well than....

Bitcoin is not fiat: only legal tender is.

Yup! Bingo Bango!

Bitcoins does not fit the defintion of a FIAT currency rather it is a spontaneous agreement for a medium of exchange. It satisfies Mises Regression theorem by it's Utility.

Facepalm :( Please folks, I

Facepalm :(

Please folks, I know this is an emotional topic for many but be *dispassionate* about it and use your heads. Escape government fiat - good. Escape the Fed - good. Meet the Aristotelian qualities of money - good.

>> It satisfies Mises Regression theorem by it's Utility.

Sorry, but WTF??? I really am trying to avoid the appearance of personal attacks, etc, but seriously - get past your passion (if you have it) and do your homework.

So you provide nothing of substance,

are completely intellectually dishonest, refute claims with baseless opinions, and are asking that we do our homework???

BWaaaaahahahahaHAhahahaha! What a Moron!

Look the whole reason for spreading the word about Bitcoins is because we have done our homework and using Logic and Reason have come to conclude that Bitcoins is a great tool!

Could better currency's exist? Absolutely but as of right now it's the best currency we have.

Here is an explanation of the regression theorem by a member XC:

The entire purpose of the regression theorem was to help explain an apparent paradox of money: how does money have value as a medium of exchange if it is valued because it serves as a medium of exchange? Menger and Mises helped break this apparent circularity by explaining the essential time component missing from the phrasing of the paradox.

As Rothbard explains in Man, Economy, and State (p 270),
"...a money price at the end of day X is determined by the marginal utilities of money and the good as they existed at the beginning of day X. But the marginal utility of money is based, as we have seen above, on a previously existing array of money prices. Money is demanded and considered useful because of its already existing money prices. Therefore, the price of a good on day X is determined by the marginal utility of the good on day X and the marginal utility of money on day X, which last in turn depends on the prices of goods on day X – 1. The economic analysis of money prices is therefore not circular. If prices today depend on the marginal utility of money today, the latter is dependent on money prices yesterday." [all emphasis added]

Rothbard then goes on to explain that in order for money to emerge from a barter economy, it must have a preexisting commodity value. This commodity value arises from barter demand for the potential money in direct consumption (i.e. ornamentation). This value seeds future estimations of the value of the money as a medium of exchange. The natural market emergence of money is thus fully explained.

The Monetary Economy
However, once an economy has been monetized and a memory of price ratios for goods and services has been established, a money may lose its direct commodity value and still be used as a money (medium of indirect exchange). Rothbard explains (p 275):
"On the other hand, it does not follow from this analysis that if an extant money were to lose its direct uses, it could no longer be used as money. Thus, if gold, after being established as money, were suddenly to lose its value in ornaments or industrial uses, it would not necessarily lose its character as a money. Once a medium of exchange has been established as a money, money prices continue to be set. If on day X gold loses its direct uses, there will still be previously existing money prices that had been established on day X – 1, and these prices form the basis for the marginal utility of gold on day X. Similarly, the money prices thereby determined on day X form the basis for the marginal utility of money on day X + 1. From X on, gold could be demanded for its exchange value alone, and not at all for its direct use. Therefore, while it is absolutely necessary that a money originate as a commodity with direct uses, it is not absolutely necessary that the direct uses continue after the money has been established."

This explains the history of fiat currencies. They originally started off as simple names for weights of commodity money (silver) that developed out of the pre-monetary barter economy. Despite later losing their ties to direct commodity value through state interference, paper currency retained status as money because of memory of previous money prices. This factor is so strong that the relationship between gold and the USD, for example, is somewhat inverted. Gold no longer circulates as a common medium of exchange. Prices are set in USD, not in gold. Most individuals wishing to trade in gold do so based on their knowledge of USD/gold price ratios. ("Hey, let me buy that $100 couch from you in gold?" "Ok, USD/gold is $1000/oz. Give me 1/10oz of gold.") Legal tender laws, state taxation, and the entire financial regulatory environment maintain this inertia of USD prices and make it challenging to return to gold money directly, despite the destructive inflationary nature of fiat currencies.

The Emergence of the Bitcoin Economy
The very first businesses in the Bitcoin economy were exchangers (NewLibertyStandard, BitcoinMarket, BitcoinExchange,....). This is not an accident, but flows from the analysis above. In order for Bitcoins to serve as a medium of exchange without commodity value for uses besides indirect exchange, there must be a translated knowledge of money prices. Market exchangers fill this gap and give Bitcoin users access to this knowledge. Bitcoins may therefore currently serve as a money intermediary for paypal dollars\pecunix\euros. But why is there demand for Bitcoin over USD?? This is a subjective valuation arising from properties such as anonymity, decentralized system of clearance, cryptographic trust, predetermined and defined rate of growth, built in deflation, divisibility, low transaction fees, etc.... inherent to the Bitcoin system.

The essential point is that once exchange can occur between a money (USD) and Bitcoins, providers of goods have a means by which to value Bitcoins as a potential medium of exchange. The money regression is satisfied, because taken back far enough we reach traditional commodity money: BITCOINS -> USD -> MONETIZED GOLD & SILVER [start monetary economy] -> [end barter economy] COMMODITY GOLD & SILVER.

Of course, if a major meltdown occurred and knowledge of all price ratios was wiped out, Bitcoin probably would NOT directly emerge as a money (assuming Bitcoins have limited value outside of exchange). Fiat currencies with zero direct barter value certainly would not. Commodities such as gold and silver that have widely recognized direct value in barter would likely emerge first. The economy would then be monetized with price ratios in gold and silver. Bitcoins then, being valued for intrinsic properties amenable to exchange, might then become prevalent in trade. Initially, creators of value would continue to make their price value ratios in terms of the true money (gold oz/BTC ratio), but with time Bitcoin prices (BTC) can emerge (see vekja.net as example). We are in this initial phase now.

Therefore, so long as exchange of BTC and USD/Euros/etc… occurs, knowledge of existing price ratios can be utilized in the Bitcoin economy. In time as Bitcoins become increasingly marketable, these fiat<->BTC price ratios will seed direct BTC price ratios. The Bitcoin Economy thus emerges. The Misean regression theorem is satisfied.

Great response. But after all

Great response. But after all that is said and done, aren't you just gambling against the USD? If the USD flops tomorrow, BTC would too right? Buying BTC is basically saying "ok the USD is going to die, gold/silver will take over, then BTC will take over because gold/silver aren't really good for anything besides local bartering, and I'll be rich! Muhahaha!." Does that sum it up pretty well?

If ignorance is bliss, Washington DC must be heaven.

Good questions

Those are the types of questions people should be asking and thinking about (even though I'd put them a bit differently, you're on the right track).

>If the USD flops tomorrow, BTC would too right?

If the fiat currencies bitcoin derives it's value from flop, of course bitcoin will flop. It implies as much in that post when it alludes to changes when bitcoin actually becomes money (ie, generally accepted). Followup food for thought... the exchange value of bitcoin is *solely* derived from fiat currencies. What does that say about the nature of bitcoin and what does it say wrt the regression theorem?

>gold/silver aren't really good for anything besides local bartering

That's completely wrong - gold and silver have become money exactly because they have non-monetary uses.

>aren't you just gambling against the USD?

No, you are gambling against the speculative value of bitcoin. Bitcoin is a novelty and has interest among speculators and enthusiasts - how long that interest will last is the gamble. If Misesian theory is correct it is doomed as a viable money.

I'm sure this will be lost in

I'm sure this will be lost in the comments pretty soon so I'll go on and respond in the assumption that you agree with my first comment.

I kinda agree with you. In the since that I personally think the dollar will flop but, I doubt, regardless of whether the dollar flops or not, bitcoin will become the dominant form of currency. Not being tangible is my main concern. Sure we just change numbers now as well but i can go to the bank and make those numbers turn into cash. What would BTCs come out of the atm like? Second thing I'd be afraid of is the time it will take to rebound from the gold/silver/barter stage back to using a more practical currency. Personally I like the USD. They got old famous people on them, green like the trees, they don't way much (not in the quantities I have anyway) and they're small. Our currency now does great. We just screwed up when we untied it from gold. I personally think reigning back in the dollar and tie it to something again would be the best option. The only people that really had a problem with it back then was the banks and governement, who shouldn't have gotten a say anyway.

If ignorance is bliss, Washington DC must be heaven.

>>are completely

>>are completely intellectually dishonest, refute claims with baseless opinions

The only opinion I stated was that many are a little over passionate about the subject.

>>BWaaaaahahahahaHAhahahaha! What a Moron!

There you go.

You should carefully read your paste job, there's a lot of good information in it. If at the end you still think bitcoin is in line with Austrian thinking something is seriously wrong with your Logic and Reason. Another opinion of mine - if bitcoin ever becomes money then a lot of Austrian thinking on monetary theory will need rethinking. And that's fine with me, because that's how students of Austrian econ roll.

Peace.

I bought a new dog, its the best dog ever

It is the new dog of the liberty movement. The breeder i got it from told me he wont breed and sell more than 500 of them, and he said hes the only breeder who has this particular dog.

I know a few people that trade these dogs for big items, maybe ill get a 2nd dog and keep one and trade the others, my money is worthless, at least i can trade the dog. Liberty Dog FTW!

The value of the dog is still GOING UP!! SCORE FOR LIBERTY!! I bought 3 more dogs because i swear it will go up until infinity!! THE BREEDER SAID HE WONT BREED MORE! AND MORE AND MORE PEOPLE WANT ONE! This only just proves this dog is indeed the new dog to promote liberty!

^If you like bitcoin, but think this is foolish, take a long hard look in the mirror.

Your analogy is intellectually dishonest

There is no Central "breeder" here. No one controlls the production of Bitcoin.

You obviously have no idea how computers work haha

You also have no idea how the economy works.

Bitcoin has been hacked more than once, and I garrantee if I wanted to, I have the skill to do so. But I guess you can continue with your "Ignorance is bliss" standpoint.

I fully understand how bitcoin works, I understand how "security" works. I also know the basic principles for defining money, bitcoin fails 3/5. Not exactly a good starting place.

LOL.

You say you've done your homework, which is clearly a lie.

Bitcoin itself has never been hacked. (In fact, we're approaching a point where it would be cost-prohibitive for even the US government to build a machine capable of hacking Bitcoin, but that's another story.)

3rd-party Bitcoin EXCHANGES were hacked because they failed to properly protect their users' accounts. Completely different.

But you, apparently, "know how computers work" so go on thinking what you think, despite the fact that it's completely incorrect.

All i will say

Your all being fooled, your simply playing a market, stay in too long and you will get burned.

Bitcoin has the same reception now that the dollar had when it first was printed. Of course its value will go up, and they said the same thing, they wouldn't print more dollars.

Now the dollar is failing and you think bitcoin is the answer. HA

Play your market games, your welcome to it, but don't even try and think for a second someone could not simply change their mind, or change the code, and you would be "coin-less."

Bitcoin is like trusting Obama from 2008:

"If the war is still going on when I am elected, i will bring the troops home, and you can take that to the bank"

Have you ever studied economics? What causes a boom?

Currency for currency exchange is a good way to earn money, if you think its value will hold in the long run, or go up enough to cash out on it, but stop trying to push it as the new currency that is the end all be all replacement. <-If you think this, you are the biggest fool to ever live.

Stop saying Bitcoin stands for liberty, it has nothing to do with it you uneducated hacks.

Total Ignorance and factless information...

Ok, you try and compare the situation between the emergence of Dollars and Bitcoins. lol... What a horrible analogy. Bitcoins is coming about totally on it's own. It's a product of the free market while FIAT paper dollars came about through collusion, conspiracy, control and so on..

You mention that they fooled the people saying that they wouldn't print anymore dollars but they did and somehow want use this as a comparison to Bitcoins. If you are unaware.. No one centrally controlls Bitcoins. It's algorithm is set at a schedule for Bitcoin creation.

Bitcoins is a filling a demand in the free market, A demand for an honest uncorrupt uncontrolled currency that offers easy world wide transaction.

If you want to use Gold and Silver to transact I commend you, but good luck with that. You will have to use dollars at some point. However, you could opt for a viable alternative like Bitcoin, bypass the dollar, and fight for Liberty.

i know. if i had any money i

i know. if i had any money i would have bought bitcoin a few weeks ago. i just called a friend. you're right. it will double to 100 by the end of the month. i would sell it off when it triples within 2 to 2.5 months, and buy silver.

Do you think bitcoin will triple in the current value within 2 months? or 2.5 months?

lawrence

You have stated exactly what

You have stated exactly what I try to tell people.Owning of bitcoins is only to increase your fiat dollar profits and then to buy real assets.Anyone buying bitcoins as a form of savings or thinking that bitcoins will become a currency are dead wrong.This is only a temporary gambling game that is only going to last until the last bitcoin is created then the whole thing collapses much like a ponzi scheme.The banks can just buy up all the bitcoins in one fell swoop with digital money if they threaten their monopoly.The only way we get out of this corrupt banking system is with real assets.

The last Bitcoin gets created in 2041

So according to you Bitcoins will be around for a while. Your whole argument is all opinion based and really displays your ignorance on the matter.

I think it could possibly go to infinity

What that means is I think it could get to the point that people will not even want to use dollars because Bitcoins is much more efficient, empowering, honest, and reliable.

but just look at the dynamic pushing the price of Bitcoins, right now everything is denominated in dollars, so It doesnt matter the price a person buys Bitcoins if they are going to purchase something denominated in dollars. as an example lets look what happens If I'm going to buy 1000 ounces of silver for $3000 dollars and the merchant only transacts in Bitcoins. I first have to convert my dollars to Bitcoins, so I take $3000 go to a Bitcoin market and let's say Bitcoins is trading at $300, So I have to buy 10 bitcoins to purchase silver. Now let's say Bitcoins is trading at $1000. Should that deter me from buying Bitcoins? no because I'm still buying in dollars. So I purchase 3 bitcoins and buy the same silver. Whether it's 10 bitcoins or 3 bitcoins I still got the same amount of silver. As long as people use dollars to denominate their goods Bitcoins can go to any price. Eventually the dollar will be cut out from the equation and people will wish they acquired Bitcoins when they could.

Imagine that.

In your example, the bitcoin gains on the dollar from $300 to $1000, while at the same time silver makes no gains against the dollar.

Projecting to infinity against silver, I think is impossible, but I'll help the bit coin cause through the following promotion.

GET ON THE BITCOIN TRAIN PEOPLE... BUY ONE BITCOIN TODAY AND A YEAR FROM NOW HAVE A BRINKS TRUCK OF SILVER DELIVERED TO YOUR HOUSE.

pick any silver price in dollars you want

the principle of the arguemtent still holds.

why are there people pushing

why are there people pushing another currency based off of nothing on here?????

It is not based on "nothing"

,rather it is based on how many blocks are solved by collective bitcoin miners; which is better than limitless, debt-based fiat money.

What's the alternative?

One that empowers Central Bankers who look to undermine our Liberty?

Wouldn't you rather transact in a currency that bipasses the evil federal reserve systems stripping them of their power?

Look if you want to transact in Gold and Silver that's awesome! but try shipping 10 ounces of silver to a Japanese company for some headphones. See how much more expensive that transaction is and most likely not even accepted. but send some bitcoins almost for free and in a few minutes transaction complete..

Get on the side of Liberty use Bitcoins.

based off of nothing, maybe,

based off of nothing, maybe, but based off of the promise that a small group of people will not be giving themselves a trillion bitcoins to use as leverage against the populace.

internet kill switch be damned. but i think it will have to be implemented the more mainline bitcoin becomes.

lawrence