Friday, November 22, 2013

Peter Schiff: Bitcoin is Tulipmania 2.0




UPDATE:

 Peter Schiff on Intrinsic Value: Is His Analysis Flawed?

21 comments:

  1. Interesting, the two libertarians with te strongest financial backgrounds, Wenzel and Schiff, are warning about Bitcoin.

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  2. I am still trying to figure out who they are warning...

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  3. A mildly interesting bitcoin story. http://www.ibtimes.co.uk/articles/524137/20131121/cryptolocker-ransomware-police-department-pays-bitcoin-ransom.htm

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  4. Alex Daley of Casey Research just wrote about Bitcoin as well. Worth reading.

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  5. The famous "Peter Schiff Was Right" video will soon be replaced with a "Peter Schiff Was Wrong" video. What a shame I kinda liked him.

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  6. Buy gold, not bitcoin, he says, logo of EuroPacific Precious Metals prominently displayed. Maybe he really believes in gold, but maybe he stands to gain from an increase in gold prices.

    Also, isn't Schiff an Austrian? He doesn't seem to get subjective value. Nothing has "intrinsic value." Not gold. Not bitcoin. Not dollars.

    Who knows what will happen with bitcoin in the near-term? Bitcoin, rather crypto currency in general is a long game.

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    1. Ive been saying the same thing for a while. It bugs me when he says intrinsic value. Glad to read your post.

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  7. Backing bitcoin by gold best of both worlds.

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  8. I can't believe Peter actually used the phrase "intrinsic value." I thought he was an Austrian. The correct term is "use value." Saying "instrinsic value" implies there is some objective value inherent in gold. No such thing. There is only the subjective value that people put on gold, whether for exchange or for use.

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  9. I don't know...

    I don't own bitcoins, and don't plan to in the near term, as much a function of unease as financial position. I have been watching its evolution and have some observations.

    It has been my impression that two attributes of bitcoins that have attracted people to it are its perceived anonymity (read: inability to track and asset security) and the inability to be manipulated by government monetary policy, both properties also attributed to gold. It's ability to be transacted electronically would place it ahead of gold as a medium of exchange should the previously mentioned attributes hold.

    I don't know enough about it to speak to its resistance to manipulation, but recent events, such as the Silkroad prosecution) have surely called into question the notion of anonymity or inability to track. Hand in hand with this is the question as to how secure the "wallet" would be from seizure by the government.

    I also wonder whether the govt has been able to track bitcoin transactions the whole time, and have just been silent, letting users think that it is secure.

    Just a few thoughts...

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  10. Best of both worlds: store your wealth in physical gold as long as you can, move it in and out of bitcoin when you have to move your wealth across borders (or you think that you'll have to do so in the near future). When you switch between PM and bitcoin, use the bitcoin equivalent of $20 bills: use many bitcoin addresses, each one with up to a fixed, small balance. Never consolidate these addresses into a single balance, spend them separately. Each bitcoin address should be used for a single pair of transactions: $20 goes in, $20 goes out, address goes away.

    ~~YL

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  11. I'm w/ Schiff and Wenzel on this one. I'll continue to average into [and hemorrhage money for the time being lol] gold, silver, and mining companies instead of bitcoin. It's funny though that Libertarians will agree on about 95% of issues, but that last 5% will cause people to draw a line in the sand and pick sides and vehemently argue amongst ourselves.

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    1. Didn't you just do that yourself?

      Either way, Bitcoin itself has nothing to do with libertarian issues. In a free world people would use the type of money they wish, regardless of how any one individual feels about it. Having nothing to do with core principles but with preferences between one non-fiat money and another, it stands to reason libertarians will argue over it.
      If Bitcoin is going to fail, then why do some people care so much? Just let it play out and see what happens.
      I suspect it is just simple emotional (or economic) attachment to the concept of gold and the fear that Bitcoin might actually succeed in some way.

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  12. Like ahhhhhhhhhhhhh, tulips actually ahhhhhhhhhhhhh, exist...

    [But I do have a virtual Lambo that I'll let go really cheap]

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  13. NSA/DARPA created bitcoin under the guidance of the IMF. The IMF has been openly calling for a digital, one-world, deflationary currency for 2 decades. OPENLY. It has been discussed and promoted OPENLY at G8 and G20 summits.from the early 90s-96 the NSA was OPENLY investigating cryptographic money networks.

    One of their researchers and investigators is a man named Tatsuaki Okamoto. When they actively started writing the code they chose the pseudonym "Satoshi Nakamura" to ultimately promote the idea that Tatsuaki Okamoto to any and all who investigated the source of bitcoin long enough. But Tatsuaki Okamoto is just a cog. He's not some rogue savoir out to topple centralized banks. Not at all. He is a crypto scientist who was paid by government and intelligence agencies to do research.

    Bitcoin is an NSA/DARPA lab set into the wild. Scientific technology grants issued by government and intelligence agencies are how these labs are funded and promoted. The regulation and control of bitcoin has been actively developed alongside the development of the network. In fact, the controls, policy and regulation are WAY WAY more mature than the bitcoin protocol itself. That's why we see things like Greenlist written into law without a mention of bitcoin until recently.

    This is not tinfoil hattish. This is just reality. No one forced ANYONE to believe the Satoshi fairytale.. The libertarian Satoshi myth has been promoted in stealth to specifically promote ADOPTION and DEVELOPMENT. It's no different than the internet and WWW itself. EXACTLY the same. That is why you see many www early adopters saying bitcoin "feels" the same as the early internet. I am one of those people.

    In 94-96 the public internet was ALL about freedom of information. FREE COMMUNICATION. It was ALL about liberty and freedom. I wish i could transport some of you back in time so you could see for yourselves. The promise of free phonecalls with the freeworlddialup, free media with IUMA and the MBONE. All this freedom and liberty had people pouring their heart and soul into developing it. Now look at it. Facebook, google.. it is a GIANT SURVEILLANCE grid. And if you look for and read DARPA/NSA docs from the 80s and early 90s that was what it was always meant to be. I am not discounting all the socially great things that happen online.. But from the perspective of DARPA/NSA and control freaks.. it was created for the express purpose of control. A military purpose. A strategic purpose.

    What is bitcoin? Bitcoin IS the one world digital currency. We all have a deterministic UUID that has been generated from our biometric data. This UUID will be related to all your datastores. This UUID is your mark. This UUID is what is used to buy and sell online and in the real world. This UUID is the primary key in your Greenlist identity.

    Coinbase, blockchain.info and it would appear Coinsetter are inline to be the first to roll out the incoming policy and regulation. This policy and regulation is WORLD WIDE. It is CORPORATE. It is not about governments. Governments ADOPT corporate organized policies. If you think this is new than you need to investigate ACH and NACHA.

    Bitcoin is THEIR network. And for the minority early adopters that is going to be a hard pill to swallow.. But for those in the know.. Like Gavin, it's PAYDAY. Realization and monetization of their massive bitcoin holdings is being guaranteed by regulators. That is why they are all literally RUSHING to regulate.

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    1. And yet you provide no credible sources, eh?

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    2. Totally agree.

      Would not touch this thing with a 10 to the power of ten, foot pole. Sinks like shit in the hot summer sun. This obscenity reeks of their handy work. Honestly, a totally secure system that permanently tracks everywhere it goes and everyone who uses it?

      HELLO!!!

      "Run Forrest, RUN... "

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  14. gold and silver have intrinsic value. They are used in jewelry, electronics, solar panels, health care etc.Both were accepted as having value for thousands of years.

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    1. So are most base metals, so if the "backed by" factor is their intrinsic value, then the face value would surely plunge? If the economy as is exists, has been powering along since the gold standard was removed in 1971, I just cannot see why the so called "precious metals" can remain precious.

      The national holders would need to reinvent in some way. Perhaps the irony of ironies, to back the likes of bitcoin.

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  15. I see it a bit differently. Bitcoin HAS great value, gold HAS great value. They both have there unique strengths and weaknesses. It could be pointed out they hedge eachother quite nicely, and are both worth collecting and transacting with. Correct me if im wrong but you can buy gold with bitcoin, there are dealers who do it. Ultimately, gold is a better "store of wealth" because once that gold coin is struck it requires no more energy to keep it in existence. How do you trade your bitcoin without internet connection? What if your phone battery dies and your wallet is on your phone? What if your computer has a fatal malfunction? These bitcoin weakness attributes are offset by bitcoins strengths, namely, fast long distance transactions, low fees, mobility. Gold coins will be around for thousands of years still, long, long after, your computer dies, your cell phone dies, the power grid dies. (the power grid is a never ending battle against natures never ending chaos), there will always be the necessity to keep so many systems alive (ultimately costing money (overhead)) for bitcoin to survive. With gold however, the energy required to keep a coin it bar "alive" is a past fully completed event. The idea that there is no overhead cost for bitcoin is not well thought out. Whats the computer cost to his the bitcoin? The electricity cost to check a wallet? The cost of the cell phone? The cost of internet service? That being said gold has its drawbacks as well. Difficult to transport in great amounts, difficult to protect securely, and others. The best thing to do and what id bet many are doing, is to have both precious metals, and digital currencies. It doesnt have to be one or the other.

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