16 votes

BitCoin Myths, Questions, and the Future - Where Do I Start?

Hola my Daily Paul friends. I will be interviewing Mr. Steven Patterson from the Foundation for Economic Education (FEE) this evening regarding the viability of BitCoin, persistent myths surrounding BitCoin and crypto-currencies in general, and what the future may hold as they continue to gain popularity.

As such, I would love to be able to ask him some questions sourced from those here on the Daily Paul. So please do not hesitate to leave a question in the comments.

Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Cool, is there an archive

Cool, is there an archive of the interview? Great job on the show.

Steve's video the Truth About Bitcoin was awesome-

Check out http://ronpaulforums.com for activism and news.

Took a diversion. I set up a

Took a diversion. I set up a Litecoin wallet. Even encrypted it. Even made multiple backups. Even did multiple versions of backups. And it takes 12,500 years of brutal attack to guess my password (the coolest part of the project). The rest was kind of frustrating as I tried to move to mine, but researched my laptop isn't cut out for it. But I learned a lot, even was mining, but my output calculated to be 12 cent net loss per day. I won't do business at a loss, that is not good business, not even to speculate that that 12 cents net loss per day would be like a bitcoin boom.
I had a crash course in Linux. I had a crash course in encrypted technology. I had a crash course in security.
I learned of the frustration that comes with an open source; you don't know where to turn for help and you often deal with a bunch of smartasses that laugh at you. But then again, I have had some big help from others, and that was much appreciated. I owe helping the next person because of the true help others showed me.
I'm now trying to find someone to buy LiteCoin from (while everybody is chasing Bitcoin now) and plan on just holding it, see where it goes.
I learned a lot. I plan on writing about this competing currency and some pitfalls, as people are going to get burned, bigtime. To succeed, there needs to be elements of customer service and protocol. I mean it's great that its open source and unregulated and the wild west right now, but mark my words, people are going to get ripped off and will lose there wallets, this needs to be advised long in advance. There also needs to be trusted sources.
Who wants to invest in an overseas exchange only to be ripped off by a teenager? Who wants to invest overseas only to have the federal government not allow people to access their accounts in the states?
I found a local meetup for Bitcoin and signed up asking about LiteCoin. I saw that meetup did big brother and the person who contacted me was also a fellow member of Ron Paul meetup 2012. So I am feeling that element of trust already in this scenario. But there will be others that will sign up arbitrarily on line and people are going to get had.
But it's a competing currency to the deflationary and criminal acts of the Fed. There system lost 95% of it's value since 1913 Federal Reserve Act. Makes LiteCoin seem like a safe bet in comparison.
Time will tell, but soon I'll start tracking this currency.

Be Your Own Media!!!

Ok...for some reason and truth now,

I understand we all want to rid of the FED, however any form of currency, money, coinage, digi-coin, electro-coin is far from any solution if it is marked and determined and held to conversion of Federal Reserve Notes or means related to FRN's. The capacity for fraud is ever-increasing with digital transaction and I know because I deal with it DAILY! If your going to compete with the criminals, hide your activity and for God's sake learn how to structure your banking in accordance with the privacy you seek if you are trying to break free of the monitor of your private and public monetary exchanges.

There are a lot of people who will tell you that keeping your currency/money tucked under a mattress or locked in a safe at home is nuts. Well, they are poor of education and are hopeless in their want for financial institutions to secure their funds under the FDIC or NCUA...sardonic and sad assumption.

The answer to fighting the current system of fraudulent fiat currency isn't an electronic, digital, crypto-number with a dollar sign prefixed to it, it is learning how to make private the transactions you make in the current liars game. CTR's, SAR's, MIL's and any other government mandated means to gather your activity with Fiscal Agencies in this country are unknown to many and you all better wake up and realize that your money, once on deposit, is not yours and is used in ways you may ethically and morally find repugnant.

So my question would be to Mr. Steven Patterson, "why debase human sense, sensibility and capacity for evolution to a complex-to-most, intangible, wild, new and set-for-regulation means of barter, payment and trade"?

Father - Husband - Son - Spirit - Consciousness

bitcoin is a fraud free currency, unlike digital frn's

"The capacity for fraud is ever-increasing with digital transaction"
that's one of the problems btc and other cryptocurrency and similar protocols will remedy.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
Rand Paul 2016

The point

The point is NOT to convert the Crypto-Currency BACK to the USD. This is why the BitCoins Not Bombs Hoodie The Homeless campaign is so utterly beautiful and revolutionary.

IT, is a transaction, with BitCoins exchanged for tangible items of clothing and involves no USD. To wit said items of clothing are then voluntarily distributed to those in need.

Who said the notion of BitCoin was to forever change them back to FRN's? That totally defeats the purpose.

I hope you accept

my view as dignified for its honesty and wholeheartedness.

Father - Husband - Son - Spirit - Consciousness

I understand your point Allison...

however, the overwhelming majority of people and the persons they conduct commerce with, i.e. corporations, associations, organizations, not-for-profit financial institutions, for-profit financial institutions, municipalities, cities, counties, registered businesses of respective States, etc. are dead-brained anesthetized to the idea of the necessity for fiat currency and still actually believe in its value and remain impressed by the continual reprint of bills to include more "secure" details to fend off "terrorists" and "criminals".

The FED must be brought asunder before mass monetary advancement can happen in any form.

In nine years of dealing directly with and consulting on financial solutions, one thing is clear: most people are more fascinated with the color schemes and stylization of the FRN's rather than the fact that the paper they hold in their hands are nothing more than instruments of debt and fraud.

Father - Husband - Son - Spirit - Consciousness

Be Positive

See, that is the beauty here, it does not take a majority, and even if a majority do not see the fatal flaw in the fiat dollar, they as were Germans will be forced into such a position.

Yes, my position is often countered with "well the dollar is the WORLD'S reserve currency - ta-dah. THese folks say this as if it could never lose such status, and truth be told it only holds this status thanks to the agreement to price OIL in dollars for international transactions.

But as more and more countries move away from this pricing regime by negotiating DIRECT treaties for trade [read: China-Aus/China-Bra] the dollar get just a tad more tarnished. Further, the motivation for these countries to negotiate their own trade agreements is the US central bank now literally "prints" money out of thin air utterly unabaded, ergo the outcome here is eventual hyper-inflation. When? I don't know a precise date. However, as this devaluation continues, more and more will look to crypto currencies or some other form of money, anywhere but the dollar.

100% agreed...

"When? I don't know a precise date. However, as this devaluation continues, more and more will look to crypto currencies or some other form of money, anywhere but the dollar."

100% agreed. Peace.

Father - Husband - Son - Spirit - Consciousness

And as more and more look to crypto currencies

we need to make sure that the cryptos they find useful are only the ones that work for us, not the NWO.

I tried getting set up with

I tried getting set up with Litecoin....problem is still learning Linux and Bitcoin/Litecoin at same time.

I can see why I have technical difficulties.

I am trying to open up the Litecoin CGMiner and I get access denied, as its trying to open up in archive manager for what I am thinking file? That stuff is throwing me for a loop.

Anybody help me past this first hiccup? I want to set up and mine for Litecoins.I am going to skip Bitcoin for now.

Be Your Own Media!!!

If bitcoin's value is created by invented scarcity

based on mining a limited number of coins by wasting electricity to solve math problems that don't need to be solved, are there any barriers to entry to do it yourself currencies?

Could we see currencies limited in supply based on
-how many Dos Equis the most interesting man in the world drinks during his lifetime?
-how many times the President says "ah" during the term of his Presidency?

Please subscribe to smaulgld.com

your glass is always half empty because you just don't get it

mining bitcoins and more so other altcoins will save tremendous amounts of electricity by decentralizing banking and making it more efficient. and that's just the start of the uses of this kind of software protocol.

you do realize that the miners are helping process money/btc transfers more than or equal to that of western union, right?

guess what, it takes a lot of energy to power those huge bank buildings you adore so much. they also have to build them and pay for tellers that steal and make mistakes. those tellers and bank workers don't magical teleport to work they drive and you guessed it... use energy and on and on and on.

so if you are worried about energy waste (except gold-mining etc) then you should support a more efficient money transfer system be it btc or other cryptocurrencies that will in the near future allow the mining power to be resold in the free market to the highest bidder.
also, according to kurzweil efficient solar energy is just around the corner, welcome to the future.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
Rand Paul 2016

I don't agree, central control is never good

I don't agree that anything in bitcoin is any good. As long as it is tied to central control it has failed. Once these things are decentralized freedom will take its course.

Good question

I was wondering about that myself.

There may be only so many bitcoins out there but there are other crypto-currencies that I can obtain at a lot lower price and use, if I so choose.

There may be a few more places right now, that I can spend bitcoins at, because they had a head start, but I have no reason to believe that will be that way forever.

There might be 1000 different crypto-currencies out there next year that you can do the same thing with, if not more, than you can do with a bitcoin.

the answers

btc can now buy anything on the internet using snapcard or gyft. the only other altcoin that comes close is litecoin.
still, litecoin is pretty limited but with more and more adoption everyday. now you can sell litecoins at litecoinslocal.org and get cash or other money transfers. litecoin is a good ways behind bitcoin but could catch up relatively fast and i think it will.
the rest of the altcoin you will need to transfer to btc or ltc to cash out unless you go through an exchange and do a wire trans to your bank.
so btc and to a lesser degree ltc have a strong adoption rate and advantage with more people working on related project to support their ecosystems.
cryptocurrencies are like start up internet companies and the ones with the best ideas and devs and support team will win, do your homework and invest wisely and you will too.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
Rand Paul 2016

bitcoin ip logging

bit of a technical question but one that should be explored more and explained.

Bitcoin: Protect your privacy from the New World Order Panopticon

Bitcoin is often perceived as an anonymous payment network. But in reality, Bitcoin is probably the most transparent payment network in the world. At the same time, Bitcoin can provide acceptable levels of privacy when used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your privacy.

Your IP address can be logged:

Because the Bitcoin network is a peer-to-peer network, it is possible to listen for transactions' relays and log their IP addresses. Full node clients relay all users' transactions just like their own. This means that finding the source of any particular transaction can be difficult and any Bitcoin node can be mistaken as the source of a transaction when they are not. You might want to consider hiding your computer's IP address with a tool like Tor so that it cannot be logged.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
Rand Paul 2016

How can Bitcoin

or any electronic currency be private on an internet that is totally under surveilance?And how can you spend or cash them out privately? If you spend them online you have to give the merchant your name and address to mail it to you.If you sell them for cash,you have to wire it to your bank account which leaves a paper trail.And if the only way for it to truly be anonymous and private is to trade with someone in person,then why just not use cash?

Good questions

All good questions. Bitcoin is not really private, but for those that know what they are doing and wish a transaction to remain anonymous, there are ways using bitcoin. Bitcoin has the potential to do to banks, what email did to letter writing. Reduces the cost of the transaction to zero. Furthermore, the fact that it is decentralized, means no one person or government can control it. Governments can outlaw it, sure, but that will only push it underground, just like the drug trade. To me the strongest arguments in favor of bitcoin is:

1. Cannot be controlled by anyone or any govt.
2. Cannot be counterfeited (inflated).
3. Cannot be stolen (unless your careless).
4. Can be transferred quickly for low or zero cost, anytime.
5. Totally portable.
6. No counter-party risk.

The downsides are:
1. Requires electricity and the internet (or at least connected computers).
2. Can be lost, I mean really lost… like "can never be found" kind of lost (don't lose that private key!)
3. Currently requires special knowledge to use securely.
4. If exchanging on the internet, one must trust who you are transferring bitcoin to.

Precious metals and bitcoin are quite complimentary to each other and I believe can work splendidly together to provide the backbone of a financial system and trade in markets.

Jim Clark <><
Ron Paul for President!

" Reduces the cost of the

" Reduces the cost of the transaction to zero. "

there is definitely a cost associated with using bitcoin. since it is highly volatile, the price of a coin you purchase may go down by the time you get to spend it, therefore, you lose money. or if you get paid in bitcoin, by the time you get to spend them, they have lost half their value---another cost.


"Reduces the cost of the transaction to zero."

There is definitely not a mandated cost associated with using bitcoin. Since it is volatile because it's still in its infancy, and the price changes some between the time you purchase it and the time you spend it, you MAY lose money. You also MAY gain money, which has been the case for 99% of the time it has existed.

Also, getting paid in bitcoin and having it lose money (or gain it as above) is not "another cost", it is THE SAME cost. Just because you received it two different ways doesn't make it twice as bad that it has this volatility you fear.

who says it's going to get

who says it's going to get less volatile? why not more volatile as the profit realization grows larger among more people? we've already seen the price decrease by half a few times, the volatility isn't getting better.

and it is a cost--you are less likely to accept dollars if their potential value tomorrow was half of what they are today. that's why bitcoin makes a terrible currency, and merely a speculative asset at best. it's just beanie babies 2.0 as far as i'm concerned.

If you're permanently leaving

If you're permanently leaving Argentina, Greece or the US for Uruguay, which would you rather have on you... A giant suitcase full of cash or gold, or a small set of paper wallets containing your secure, secret digital equivalent of your wealth?

Neither! I would rather have

Neither! I would rather have an encrypted usb drive.

That also works.

How many people are in that situation

Is that convenience the justification for the massive rise in price?

Please subscribe to smaulgld.com

Don't accept the framing of the question

The demand pricing is not driven by ANY one issue. But counting the people "in the situation" is easy. Refer to the census of the USA, China, Greece, etc. Bitcoin is a risk but I am intimate with the Soviet era and can tell you FATCA smacks of it. The greenback curtain goes up in June and you are not leaving until you are debt free and empty handed. ANYONE who stays is unamerican by definition.

No way to know without asking

No way to know without asking people why they buy/sell/trade.

I assume there is a large "gold rush" component right now, but it's certainly not the only reason.


Back to your original question, suppose you are leaving the US for good to go to Uruguay. You sell your house, etc., and have $500,000 in USD. What would you do?

My answer, under current conditions, wouldn't involve bitcoin because there's no reason to add the risk of BTC/USD fluctuation to everything else. If you had put it all in bitcoin in early December you might have stepped off the plane in Uruguay to find that you'd lost 30% or more of your buying power. Of course on some other day you might step off the plane to find yourself 30% richer, but most people don't want their money transfers to have a gambling component. Exchange rates for relatively stable currencies already do enough damage as it is.