Equedia Letter

Is Bitcoin the New Stimulus?27 min read

Comments (25)
  1. Andy Appelbaum says:

    All cryp[to currencies are going to crash sooner or later, They are no different than any other new technology

  2. Doug says:

    I am so happy to be in the final quarter of my time here on earth so that I hopefully be able to escape from most of all of the new technology. The concept of even beginning to understand crypto currencies escapes me. I neither want or need to engage in social media where no one minds their own business, bitcoin and soon computers in general as there is no privacy or freedom to do or say what one feels without risking condemnation if someone is offended and we all know you can’t please everyone nor should you try to. When surfing some shopping websites to view some products I might want , they bombard me with the products I researched on other websites I use. I am so sick of being tracked, hacked, and bombarded that i will soon be tossing out all of this useless electronic baggage and withdraw into a remaining life of total privacy and serenity. No wonder people are becoming so impatient , violent and drug induced. So much for being free in a free country.

  3. Garry Nichols says:

    Compare Bitcoin with any Ponzi scheme and you will not see any difference. Its a fraud like any Ponzi scheme albeit on a greater scale. Instead of supposedly buying into a non-existent investment you are buying into an algorythim. In other words you are buying nothing with real money. Just like a Ponzi. Unforseen market fluctuations that create non-confidence in investors eventually brings a Ponzi crashing down and investors bankrupt. If confidence in Bitcoin diminishes, investors will want to cash in quickly. Do you believe for a minute that there is enough real money at Bitcoin to cover the run? Its a brilliant Ponzi scheme and if it crashes in November as you predict it will make Bernie Madoff look like a piker!

    1. m says:

      repeating Jamie Dimon of JP Morgan calling bitcoin a ponzi scheme…. two days later JP Morgan buys 2000 Bitcoin. It’s NO ponzi scheme…

    2. Alex says:

      “Instead of supposedly buying into a non-existent investment you are buying into an algorythim. In other words you are buying nothing with real money.”

      Interesting… Garry, could you please explain to me what Google (or even Facebook/Amazon) is? An algorithm maybe? Could Google possibly be the biggest websearch algorithm? All these huge digital/ no-intrinsic-value companies … just ponzi schemes on the stock market….

      Sorry buddy, you need to wake up and educate yourself a little.

  4. bohdan vysochan says:

    jeez another potential nail in the coffin known as western democratic society……pardon me nail in the coffin for any human being who wants to control their own destiny……..yes the the u.s. economic noose is slowly being loosened…..and as a consequence the noose around my neck is slowly being tightened….the top 1% in the east or west will will survive……..chinas setting world trade in terms of their currency and the ability to convert to gold and these crypto currency experiments by nation states eliminates people like me……..from feeling I have planned for the future……thanks but no thanks…..the 1% will get it all.

    why do I feel that it is all a Ponzi scheme…….. and I do not know what to do to protect me and mine……yes I have gold, silver,collectables and supposed blue chip dividend paying stocks….FOR WHAT PURPOSE I agree with you garry a grand PONZI SCHEME it is……welcome to the future of unknowns

    and mr lo thank you for your arcticles…….love them all

  5. w. c. Harvey says:

    No! cryptos are not the new QE! The total market caps of all the online coins are no enough to stimulate anything.Nor are the central banks or govrnments facile enough to create something like a Bitcoin-but they will catch up using their powers of arrest and jail time threats they maybe able to assemble a golem like coin which will surely be shunned by smart coin users the world over.On the positive side blockchain coins can be used by nations-like the Greeks-to exit the German controled Eurodollar,but only if they put a positive nationalist spin on the purchase if such coins.Cryptos are here to stay with profound changes to be sure,but this is just like the beginings of the aviation industry.Millions will become ‘banked’ without having to leave their remote locations-we cannot even imagine all the changes that this new money will bring.

  6. Stephanie Wells says:

    As a non American with an American invorporsted company can my company purchase cryptic currency stocks? And can I cash in for US$?

    1. m says:

      you cash in your bitcoin for USD at a Bitcoin exchange FYI all th enew ICO market..to use the Blockchain technology requires a token/coin hence there are over 1200 coins/tokens. Think of them as blockchain apps. Bitcoin is Blockchain genesis..the 1st and most powerful and it’s power grows with every transaction. In 9 yrs Bitcoin/Blockchain has NEVER been hacked and NEVER been taken down.. there is no single point of failure. Bitcoin network is the biggest computer network that has ever existed.

  7. Peter Carlich says:

    Yes, I definitely agree with you, decentralized money is the way of the future….

    And also to invest in these technologies, just the question of which one…??

    Peter

  8. Peter Carlich says:

    Absolutely, that governments will move against private held cryptocurrency’s with there own block chains… The only question is which to invest in to profit from the massacre that will soon start…??

    Peter

  9. Peter Carlich says:

    Of course they will……

    Peter

  10. arthur says:

    I think that the Bitcoin founders are trying to get the most of their bitcoin and I would not be surprised that teh new gold bitcoin could be corrupted

  11. sebastien mathieu says:

    Thanks for this propaganda…. and long live BTC/ETH!!!

  12. sebastien mathieu says:

    BTW (it’s not a token, it means by the way:-) i your ETH hack means the DAO hack in 2016, ETH was never hack but the DAO site was, not citing you’re source/event is completly dishonest., for a supposedly serious article. All traditional finance people have been saying the same time since 2013 about BTC (read the bitcoin obituaries) so c’mon man. Finally, citing the “realities of bitcoin” just as a title for a paragraphe on ICO’S (Witch every should know they are like penny stock’s: promising ideas, 90% crap) is really showing that you are on the wall street side of the gang….

    They are many more things, but i’ll stop there because nobody will read this anyway…..

    A more objective and informative article would have been welcomed.

    Anyway like it or not welcome to the revolution:-)

  13. randy a says:

    Somebody as cynical as I am. If they didnt invent it they can control it by buying up all the bitcoins in existence. Price is no object when you have an infinite ability to create money.

  14. Don Herres says:

    Dear Ivan Lo,

    I was given this newsletter as FYI, but I feel that I should respond and in detail as this demands a solid examination.

    First of all, I am glad that you have done some homework about Bitcoin and Cryptocurrencies as knowledge is key to understanding. However, when one does their homework, they must take it all the way. Remember the addage ‘a little knowledge is a dangerous thing’, most especially if the study stops halfway and speculation is used to fill in the ‘gaps’, and this is apparently what has happened here. Let me clarify by addressing key points from your newsletter…

    ——-
    >>>First and foremost, Blockchain is not Bitcoin and Bitcoin is not Blockchain<<>>But when you start adding these types of solutions, the costs associated with transacting in cryptocurrencies also goes up because these networks take a small fee for doing so. That’s why over the past year, transaction costs for Bitcoin have gone up.<<>>So the “developers,” whoever they are, have already looked at implementing solutions to this bottleneck.<<>>Once the Bitcoin community and its developers figure it out, then you can pull them out and put them back on the chain.<>>Miners Could Soon Be Out of Business<<>>And just like the dotcom bubble, it will likely end tragically for most.<<>>Right now, the creator of Bitcoin has been dubbed Satoshi Nakamoto<<>>Powers that be allow it to become so big?<<>>How does a digital currency created by no one grow to achieve a $126 billion in liquid value?<<>>I’ll be honest, I never believed crypto-digital currencies and ICO’s to be real. Because when you look at it from an honest perspective, it really is creating something out of thin air.<<>>So how can they stimulate the global economy without adding more to the already ballooned balance sheets?<<>>Bitcoin itself has already added over $120 billion in free money without affecting a single balance sheet.<<>>IMF to Create SDR Cryptocurrency?
    Could replace existing international currencies.

    Yes, I’ve been following all of that. SDR’s is your actual attempt by the system to reboot their failed fiat ponzi scheme. Not bitcoin. They are now in fear for that system with bitcoin on the doorstep threatening their new house of cards that they have worked on for decades. Hehe, not sorry for that kick in their teeth.


    >>>In other words, there could be a reason why governments around the world are letting cryptocurrencies run rampant:
    1. To temporarily infuse free money into the system “off-the-books”.
    2. To implement Cryptocurrencies on their own once the technology is proven and accepted (or once it fails and they step in to save the day).<<>>Despite the Bitcoin movement being touted as an unstoppable force, governments around the world can at any moment put a ban and implement severe penalties on anyone trading Bitcoin or other digital currencies.
    Why are they allowing these currencies to play out?<<>>Could the Fed, the IMF, or another major organization be the true creators of Bitcoin?<<>>When you consider that civilization have always had leadership, whether it’s government or other entities such as banks or secret rulers, the idea of these central banks and their intervention makes sense.<<<

    No, it doesn't make sense for the specific reasons laid out above, but additionally, we have not always had leaders. This will take some history reading and a much longer talk (more than happy to go into full detail but if I get into that, you're buying the beer) but we have not always had leaders. We are just taught we have because the system does not want you to realize that we simply do not need them, and now that bitcoin is solving the debt-based money problem, this dependency on leaders are the next problem to solve.
    ———–

    Hope all this helps to clarify, contact me anytime,
    Cheers,
    Don Herres

  15. Don Herres says:

    So sorry, reposting this as the previous post missed half of my responses…ignore the last version…
    ———————
    Dear Ivan Lo,

    I was given this newsletter as FYI, but I feel that I should respond and in detail as this demands a solid examination.

    First of all, I am glad that you have done some homework about Bitcoin and Cryptocurrencies as knowledge is key to understanding. However, when one does their homework, they must take it all the way. Remember the adage ‘a little knowledge is a dangerous thing’, most especially if the study stops halfway and speculation is used to fill in the ‘gaps’, and this is apparently what has happened here. Let me clarify by addressing key points from your newsletter…

    IvanL: First and foremost, Blockchain is not Bitcoin and Bitcoin is not Blockchain

    Not quite true. Blockchain can be simplified by recognizing it as a database. A unique form of a database but really, just a distributed database with clever characteristics.
    A database is a collection of organized data. A contact list is a database. A telephone book (remember those?) is a form of database. Ledgers – databases. If I point to a contact list and say “that’s my database” I would be correct just as I could say “Bitcoin is my blockchain.” Therefore, bitcoin is a form of blockchain. All over the news, governments, banks and corporations are trying to separate bitcoin from blockchain because they want you to ignore bitcoin and just talk about blockchain because bitcoin is the threat to their established hegemony. Why assist them with that false perception?

    IvanL: But when you start adding these types of solutions, the costs associated with transacting in cryptocurrencies also goes up because these networks take a small fee for doing so. That’s why over the past year, transaction costs for Bitcoin have gone up.

    Segwit (proper designation BIP148, a core dev initiative soft fork) was only implemented in September/October, higher fees have been rising for the past 2 years. Segwit is not causing higher fees, it is striving to diminish them, and it will, same with the lightning network yet to be implemented. Segwit 2X is a contentious hard fork being pushed buy an alternative group and certain miners/companies who have since pulled their support. A smaller rouge group is still trying to push it but it is very unlikely to have much of an effect. The attempt basically failed as it had questionable implementation problems so supporters started pulling their support. Finally, Segwit 2x initiators themselves pulled out saying ‘they did not want to cause rifts in the community.’ I have not seen a single bitcoin developer with a ‘rule the world’ mentality, these are hard working and brilliant people, many with an anarchist/libertarian bent, not global domination types.

    IvanL: So the “developers,” whoever they are, have already looked at implementing solutions to this bottleneck.

    The ‘Core Devs’ are developers who contribute to bitcoin code, patches, upgrades and the like. Their names and contacts are fully transparent and they are some of the best computer engineers/developers in the world. You don’t have to care, but brushing them off as ‘whoever they are’ is counterproductive at best. Listen to some of them speak, it is well worth your time and you will learn a lot.

    IvanL: Once the Bitcoin community and its developers figure it out, then you can pull them out and put them back on the chain.

    Bitcoin never leaves the blockchain as all bitcoin is recorded on the ledger that is the blockchain. Thought I would clear that up. What you are suggestion is ‘cold storage’ or even a hot-wallet but not initiating a transaction during the problematic period shortly after Segwit 2x implementation. The important part is to have control of your private keys and not trust them to a third party. A wise stance but it is unlikely that Segwit 2x will be causing problems now that the support has melted.

    IvanL: Miners Could Soon Be Out of Business

    This is a big misunderstanding. Yes, instances occurred where unscrupulous actors were/are embedding code in their webpages to mine cryptocurrencies unannounced to the webpage visitor. It is a form of Malware. Already, most antiviruses and ant-malware programs are putting in detectors and eliminators into their packages which will minimize this problem. All the versions I’ve seen to date mine altcoins, not bitcoin as bitcoin mining requires intensive processing power that cpu’s, even distributed ones, simply cannot compete with dedicated ASIC machines which is what Miners invest heavily in to mine BTC. Miners do not see this as a threat. Best to check into these things more deeply before conjecturing.

    IvanL: And just like the dotcom bubble, it will likely end tragically for most.

    The DotCom bubble became that because unrealistic claims were being made about what the internet was and what it could do, ie: everyone could simply put any napkin designed business online and succeed, 90% was starry eyed silliness and many of us realized that while it was happening and saw the crash coming.

    Bitcoin is not a company, it is not a business, a stock, a conglomerate, a ponzi scheme or any of the long list of dream creations that people sink money into to get rich quick.
    Bitcoin is a protocol, a collection of code which simulates a ledger so that people can store and transfer value. That’s it, the whole nutshell.
    Investing in a business runs numerous risks because you have to trust so many players: The management, the staff, the workers, the accountants, the lawyers, the competition, the government, etc, etc. Endless points of failure. A company can have the best ideas, the best implementation, the best marketing, the works, and it can all be brought down by one key embezzler, mouthy CEO, disgruntled employee, etc. That is risk.

    Bitcoin doesn’t have to do anything to be a global success but keep the trustless, un-counterfeitable, psuedonoymous, transparent transactions going. Just like email doesn’t have to do anything but route messages back and forth.
    No marketers, CEO’s, embezzlers to fail.

    With Bitcoin, we are not seeing a rush to a dreammaker, we are seeing a running away from a corrupt banking system. Sure, some are riding this train for the gains but it doesn’t matter. If gains are luring people, that’s fine, it is still getting people in so that we can ultimately take down the banks. That’s what bitcoin is for. That is not a dream (well, it is my dream), rather, it is an essential accomplishment for humanity.

    IvanL: Right now, the creator of Bitcoin has been dubbed Satoshi Nakamoto

    Huh?? Not right now. Satoshi was a handle the creator used on the cryptography/developer chat boards. He/she/they called themselves that, no one else ‘dubbed’ that.
    Watch ‘The Bitcoin Phenomenon’ to get the full background story, it really is worth getting the full story.
    https://www.youtube.com/watch?v=6pWblf8COH4&t=434s

    IvanL: Powers that be allow it to become so big?

    Another big misnomer. The PTB are not allowing it, they simply CANNOT stop it. Most of them considered bitcoin a doomed joke and now that they are realizing its power, they are scared sh**tless. It’s becoming big because they just have no ability to stop it.

    IvanL: How does a digital currency created by no one grow to achieve a $126 billion in liquid value?

    No one? Satoshi was someone, a person or group that had real dialogues with the initial core developers.
    How it grows? Simple, people see it as better than that crappy fake fiat we have been controlled with. Bitcoin will have Trillions in value when billions of people start using it and leave banks to wither.

    IvanL: I’ll be honest, I never believed crypto-digital currencies and ICO’s to be real. Because when you look at it from an honest perspective, it really is creating something out of thin air.<<<

    You do not believe it to be real because you do not understand it. It is a common misunderstanding. Let's clear it up…
    Do you believe math to be real? Of course, it is a tool we use to quantify the world around us and communicate that understanding.
    Do you believe email to be real? Of course, it is a tool we use to communicate thoughts and ideas around the world in seconds (so we can add chat, skype etc).
    Bitcoin is a tool for communicating value. I reiterate: Bitcoin is a protocol, a collection of code which simulates a ledger so that people can store and transfer value.
    That is a real thing. It is not physically tangible but it is nevertheless, quite real and has real impact on people's lives.
    Computer programs are created out of thin air and do amazing things that people and companies pay real money for to get things done and there is value in that.
    Music, art, writing, philosophy, speeches etc. All out of thin air. Still all useful and valuable. Mmmm, thin air is not looking so thin. 😉

    IvanL: So how can they stimulate the global economy without adding more to the already ballooned balance sheets?

    So banks are not altruistic entities who want the economy stimulated for yours, mine or the masses benefit. They want the economy stimulated using their fool's paper (fiat) so they can keep control of everything. Again, it is not about running 'to' bitcoin, it is about running away from the corrupt banking system. This is why they fear bitcoin, why bank CEO's around the world decry bitcoin as fraud/ponzi/tulip-bulbs/bubble/failure because they fear it. They would be most happy if not one other person entered bitcoin. Kind of self-defeating if you want people to run to it. If at this point a reverse psychology argument is raised, you will lose all credibility.

    IvanL: Bitcoin itself has already added over $120 billion in free money without affecting a single balance sheet.

    Actually, not. Bitcoin is purchased with fiat,which was bought by people who have generated that money with their labour. Bitcoin's market cap valuation is a transfer of wealth not a magical creation of wealth. It shows as a real entry on my balance sheet.

    IvanL: IMF to Create SDR Cryptocurrency? Could replace existing international currencies.

    Yes, I've been following all of that. SDR's is your actual attempt by the system to reboot their failed fiat ponzi scheme. Not bitcoin. They are now in fear for that system with bitcoin on the doorstep threatening their new house of cards that they have worked on for decades. Hehe, not sorry for that kick in their teeth.

    IvanL: In other words, there could be a reason why governments around the world are letting cryptocurrencies run rampant:
    1. To temporarily infuse free money into the system "off-the-books".
    2. To implement Cryptocurrencies on their own once the technology is proven and accepted (or once it fails and they step in to save the day).

    Mmm…
    1. Answered the 'off the books' claim above.
    2. Why would gov/banks need to implement a 'dangerous to themselves' system to get people used to cryptocurrencies? Why not just implement it on their own and not give people an idea that they can control their own money themselves and leave gov/banks out of the whole mix? That's like saying the post office created email to get people to become used to electronic communications so that they can implement their own version of email and trap everybody on their walled garden system. Ooops, that didn't work so well.

    I'll let Andreas Antonopolous (a core developer of bitcoin) explain it better…Love the clapping scene…
    https://www.youtube.com/watch?v=ncPyMUfNyVM

    Actually, watch anything by Andreas to get a clear perspective on what bitcoin is and is not, and why it is the probably the most brilliant human invention since fire, I kid you not.
    https://www.youtube.com/user/aantonop/videos

    IvanL: Despite the Bitcoin movement being touted as an unstoppable force, governments around the world can at any moment put a ban and implement severe penalties on anyone trading Bitcoin or other digital currencies.
    Why are they allowing these currencies to play out?

    From the top — They CANNOT stop it. Banning it and severe penalties will not stop bitcoin and cryptocurrencies. Prohibition did not stop drinking, the war on drugs did not stop drugs, laws do not stop crime, shall I go on? Governments can only curtail but they cannot stop, and often they fail to curtail. And when they try and fail to stop, they look impotent so they ultimately stop trying and make it 'legal' but it still goes on no matter what. This is an old and failed argument and just let it die here and now.

    https://www.youtube.com/watch?v=LIQkuF_I5Xo
    https://www.youtube.com/watch?v=AecPrwqjbGw&t=146s

    Could the Fed, the IMF, or another major organization be the true creators of Bitcoin?

    Conceivably, to the drug/alcohol soaked mind. But seriously, I've heard the speculation many times, and even studied the possibility for my own clarification. The result, it just makes no sense at all and even if they did, as silly as it would be for shooting themselves in the foot, it just doesn't matter. What is unmentioned or forgotten when this speculation is brought up, is that the bitcoin protocol is 'open-source'. The code is fully transparent to anyone who wants to look at it. There is no back door, trip wire, malware, trojan, booby trap. There just isn't. And this gets back to my previous statement about the post office creating email. It just doesn't make the slightest bit of logical sense. Prove me wrong, I will listen to ANY argument, but bring out the solid proof because speculation doesn't cut it.

    IvanL: When you consider that civilization have always had leadership, whether it's government or other entities such as banks or secret rulers, the idea of these central banks and their intervention makes sense.

    No, it doesn't make sense for the specific reasons laid out above, but additionally, we have not always had leaders. This will take some history reading and a much longer talk (more than happy to go into full detail but if I get into that, you're buying the beer) but we have not always had leaders. We are just taught we have because the system does not want you to realize that we simply do not need them, and now that bitcoin is solving the debt-based money problem, this dependency on leaders are the next problem to solve.
    ———–

    Hope all this helps to clarify, contact me anytime,
    Cheers,
    Don Herres

  16. Gfield says:

    I guess, the initial intention of crytocurrency is probably good. The first reason is they evade paying tax and fees to the so called “not so deservings”. The second reason is people in the loop transact unnoticed, anonymously. There is no secrete how many transactions are done without the knowledge of the governments or the public. The advance underground technologies are way beyond the ability to catch up by modern world known to the public. But the key focus here when it first started was probably: it was a focus group, small-specific group of people are included in the loop, not everyone. Therefore, every transaction can be monitored easily because they are related, with no secrete. It’s probably like a private bank minus the fees and tax, for a few friends and families. Operation based on trust and righteousness.

    The opening to the public created problems. The big data base and number of unselective inclusions created unforeseeable hurdles in data handling and monitoring. Re-categorization is probably necessary to make transaction and monitoring easier. Because there is no physical property to be owned, there is a risk……….. How long can the trust hold before problems occur or things change hands and problems occur, is an unknown. Top personnel are the lucky ones, regardlessly.

    Instead of chasing over things that way beyond catch up and causing the trusting public to probably fall prey at the end, why not refurbishing the tax and fees systems? The creation of cryptocurrencies aims to evade payment of tax and fees, or is it not?? Why are people so reluctant to pay? Imagine a farmer working his ass off from morning till evening. After he gains his harvest, one third or half of those have to be forced to be delivered to some one or a group of people who are there because they are rich and have more manpower to beat him up when he does not comply?? For good service rendered, people are willing to pay. But not by forced, without justifiable reason. Therefore, give people a reason not to evade paying is the best solution by far?? Cryptocurrencies offering to the public must be monitored because people’s hard earn money are there based on TRUST. Something that is intangible and delicate. Valuable to many, especially the underground world; but not by some….. When things are delivered as promised, it’s a win win situation that makes everyone happy. On the other hand, what could be done when things are not delivered?? Why are we encouraging a crowd change now?? And who or what is there to safeguard the functionality and sustainability of it?? A few questions to ponder, before we jump into the conclusion to have paper backed or cashless society based on TRUST……….

    1. Don Herres says:

      GField,

      You’re post must have gone through a few renditions of Google Translate, it is barely understandable. I’ll take a shot at a couple of points though.

      GF: The first reason is they evade paying tax and fees to the so called “not so deservings”.

      DH: Kind of like dollars. There are those that keep cash so as to avoid being tracked. Crypto was not designed to evade taxes, but it does allow one to keep full control over their money. Taxes should be voluntary. If a government uses taxes for the benefit of the people, then the people are more willing to give government taxes to ‘do the job.’ Government forces taxation on threat of kidnapping and theft of property and because of this, wastes vast amounts of what it collects. Government doesn’t care how much it wastes as it can just milk more from the people. If taxes were voluntary, government would HAVE to be far more responsible with what it gets. Crypto cannot be ‘confiscated’ like gold/silver/dollars because it cannot be physically found. This helps to make taxation more accountable, government has to make taxation ‘appealing.’ But as I said, it is similar to cash in this regard.

      GF: The second reason is people in the loop transact unnoticed, anonymously. There is no secrete how many transactions are done without the knowledge of the governments or the public.

      DH: Yup, kind of like dollars. So what has changed?

      GF: The creation of cryptocurrencies aims to evade payment of tax and fees, or is it not??

      DH: No, it aims to give people control over their money so it cannot be arbitrarily confiscated. Most of us work very hard for our money and we do not want a bank, a government, a police agency or a criminal to just take our money. Look at Asset Forfeiture for instance. Only a tiny proportion of the public are drug runners. Yet some states are financing up to 60% of their budgets using trumped up Asset Forfeiture legislation and raids, the vast majority of which are set upon innocent people, and with no recourse to recover their assets. If government didn’t act like mafia gangs, we wouldn’t need to go to the measures that cryptocurrencies give us to protect our hard earned money. But they do and we need to.

      GF: Why are people so reluctant to pay?

      DH: Taxes? Have you seen the obscene level of waste by government? Truth is, most do pay tax. But by giving individuals protection from arbitrary confiscation means government has to be more accountable.

      GF: Valuable to many, especially the underground world;

      DH: Criminal use of cryptocurrencies is actually minimal and minute. News stories tell you otherwise(without proof) but do the research. Criminals love dollars. Harder to track. Yet we are not berating dollars for their use by criminals. The biggest money laundering tool by criminals is VISA and MASTERCARD prepaid cards. Completely un-trackable, can be brought across boarders without being checked, pretty much as good as cash, etc, etc. It is the tool of choice by drug runners and the underground. Yet do we hear a SINGLE word about how they are being used to launder money? Absolutely not. Why not? Because VISA and MASTERCARD take a solid cut at the point of sale and they do not want their apple cart upset. Crypto is picked on because it is a threat to the banks, it takes away their reason to exist, that is why the banks attack crytpo.

      Additionally, bitcoin is not good for laundering as all transactions are registered on the blockchain and visible for ALL to see. What idiot criminal (though there are many) would post large transaction on the blockchain where it is instantly visible to authorities to focus on and investigating to attach the transactions to individuals? Better to use VISA/MC prepaid cards, nothing to connect.

      GF: And who or what is there to safeguard the functionality and sustainability of it??

      DH: The Users and the Miners. It is a trustless system(trust not required), run by mathematics with built in incentives to keep it going on in perpetuity. That is the brilliance of it. Watch this documentary to get a proper idea of how it works before disparaging it…

      https://www.youtube.com/watch?v=6pWblf8COH4&t=434s

      Fear comes from lack of understanding. Learn about bitcoin to understand how it works and why it is so brilliant and why it will free humanity from the enslaving bonds of the banks.

      Cheers,
      Don

  17. Don Herres says:

    To the moderator: Please replace the previous response to Ivan with this response. In the previous response, your system deleted half of the text. This response has the full text. Thanks.
    ————————-
    Dear Ivan Lo,

    I was given this newsletter as an FYI, but I feel that I should respond and in detail as this demands a solid examination.

    First of all, I am glad that you have done some homework about Bitcoin and Cryptocurrencies as knowledge is key to understanding. However, when one does their homework, they must take it all the way. Remember the adage ‘a little knowledge is a dangerous thing’, most especially if the study stops halfway and speculation is used to fill in the ‘gaps’, and this is apparently what has happened here. Let me clarify by addressing key points from your newsletter…

    IvanL: First and foremost, Blockchain is not Bitcoin and Bitcoin is not Blockchain

    DH: Not quite true. Blockchain can be simplified by recognizing it as a database. A unique form of a database but really, just a distributed database with clever characteristics.
    A database is a collection of organized data. A contact list is a database. A telephone book (remember those?) is a form of database. Ledgers – databases. If I point to a contact list and say “that’s my database” I would be correct just as I could say “Bitcoin is my blockchain.” Therefore, bitcoin is a form of blockchain. All over the news, governments, banks and corporations are trying to separate bitcoin from blockchain because they want you to ignore bitcoin and just talk about blockchain because bitcoin is the threat to their established hegemony. Why assist them with that false perception?

    IvanL: But when you start adding these types of solutions, the costs associated with transacting in cryptocurrencies also goes up because these networks take a small fee for doing so. That’s why over the past year, transaction costs for Bitcoin have gone up.

    DH: Segwit (proper designation BIP148, a core dev initiative soft fork) was only implemented in September/October, higher fees have been rising for the past 2 years. Segwit is not causing higher fees, it is striving to diminish them, and it will, same with the lightning network yet to be implemented. Segwit 2X is a contentious hard fork being pushed buy an alternative group and certain miners/companies who have since pulled their support. A smaller rouge group is still trying to push it but it is very unlikely to have much of an effect. The attempt basically failed as it had questionable implementation problems so supporters started pulling their support. Finally, Segwit 2x initiators themselves pulled out saying ‘they did not want to cause rifts in the community.’ I have not seen a single bitcoin developer with a ‘rule the world’ mentality, these are hard working and brilliant people, many with an anarchist/libertarian bent, not global domination types.

    IvanL: So the “developers,” whoever they are, have already looked at implementing solutions to this bottleneck.

    DH: The ‘Core Devs’ are developers who contribute to bitcoin code, patches, upgrades and the like. Their names and contacts are fully transparent and they are some of the best computer engineers/developers in the world. You don’t have to care, but brushing them off as ‘whoever they are’ is counterproductive at best. Listen to some of them speak, it is well worth your time and you will learn a lot.

    IvanL: Once the Bitcoin community and its developers figure it out, then you can pull them out and put them back on the chain.

    DH: Bitcoin never leaves the blockchain as all bitcoin is recorded on the ledger that is the blockchain. Thought I would clear that up. What you are suggestion is ‘cold storage’ or even a hot-wallet but not initiating a transaction during the problematic period shortly after Segwit 2x implementation. The important part is to have control of your private keys and not trust them to a third party. A wise stance but it is unlikely that Segwit 2x will be causing problems now that the support has melted.

    IvanL: Miners Could Soon Be Out of Business (referencing malicious webpage mining)

    DH: This is a big misunderstanding. Yes, instances occurred where unscrupulous actors were/are embedding code in their webpages to mine cryptocurrencies unannounced to the webpage visitor. It is a form of Malware. Already, most antiviruses and ant-malware programs are putting in detectors and eliminators into their packages which will minimize this problem. All the versions I’ve seen to date mine altcoins, not bitcoin as bitcoin mining requires intensive processing power that cpu’s, even distributed ones, simply cannot compete with dedicated ASIC machines which is what Miners invest heavily in to mine BTC. Miners do not see this as a threat. Best to check into these things more deeply before conjecturing.

    IvanL: And just like the dotcom bubble, it will likely end tragically for most.

    DH: The DotCom bubble became that because unrealistic claims were being made about what the internet was and what it could do, ie: everyone could simply put any napkin designed business online and succeed, 90% was starry eyed silliness and many of us realized that while it was happening and saw the crash coming.

    Bitcoin is not a company, it is not a business, a stock, a conglomerate, a ponzi scheme or any of the long list of dream creations that people sink money into to get rich quick.
    Bitcoin is a protocol, a collection of code which simulates a ledger so that people can store and transfer value. That’s it, the whole nutshell.
    Investing in a business runs numerous risks because you have to trust so many players: The management, the staff, the workers, the accountants, the lawyers, the competition, the government, etc, etc. Endless points of failure. A company can have the best ideas, the best implementation, the best marketing, the works, and it can all be brought down by one key embezzler, mouthy CEO, disgruntled employee, mis-visioned executive, etc. That is risk.

    Bitcoin doesn’t have to do anything to be a global success but keep the trustless, un-counterfeitable, psuedonoymous, transparent transactions going. Just like email doesn’t have to do anything but route messages back and forth.

    No marketers, CEO’s, embezzlers to fail.

    With Bitcoin, we are not seeing a rush to a dreammaker, we are seeing a running away from a corrupt banking system. Sure, some are riding this train for the gains but it doesn’t matter. If gains are luring people, that’s fine, it is still getting people in so that we can ultimately take down the banks. That’s what bitcoin is for. That is not a dream (well, it is my dream), rather, it is an essential accomplishment for humanity.

    IvanL: Right now, the creator of Bitcoin has been dubbed Satoshi Nakamoto

    DH: Huh?? Not right now. Satoshi was a handle the creator used on the cryptography/developer chat boards. He/she/they called themselves that, no one else ‘dubbed’ that.
    Watch ‘The Bitcoin Phenomenon’ to get the full background story, it really is worth getting the full story.
    https://www.youtube.com/watch?v=6pWblf8COH4&t=434s

    IvanL: Powers that be allow it to become so big?

    DH: Another big misnomer. The PTB are not allowing it, they simply CANNOT stop it. Most of them considered bitcoin a doomed joke and now that they are realizing its power, they are scared sh**tless. It’s becoming big because they just have no ability to stop it.

    IvanL: How does a digital currency created by no one grow to achieve a $126 billion in liquid value?

    DH: No one? Satoshi was someone, a person or group that had real dialogues with the initial core developers.
    How it grows? Simple, people see it as better than that crappy fake fiat we have been controlled with. Bitcoin will have Trillions in value when billions of people start using it and leave banks to wither.

    IvanL: I’ll be honest, I never believed crypto-digital currencies and ICO’s to be real. Because when you look at it from an honest perspective, it really is creating something out of thin air.<<<

    DH: You do not believe it to be real because you do not understand it. It is a common misunderstanding. Let's clear it up…
    Do you believe math to be real? Of course, it is a tool we use to quantify the world around us and communicate that understanding.
    Do you believe email to be real? Of course, it is a tool we use to communicate thoughts and ideas around the world in seconds (so we can add chat, skype etc).
    Bitcoin is a tool for communicating value. I reiterate: Bitcoin is a protocol, a collection of code which simulates a ledger so that people can store and transfer value.
    That is a real thing. It is not physically tangible but it is nevertheless, quite real and has real impact on people's lives.
    Computer programs are created out of thin air and do amazing things that people and companies pay real money for to get things done and there is value in that.
    Music, art, writing, philosophy, speeches etc. All out of thin air. Still all useful and valuable. Mmmm, thin air is not looking so thin. 😉

    IvanL: So how can they stimulate the global economy without adding more to the already ballooned balance sheets?

    DH: So banks are not altruistic entities who want the economy stimulated for yours, mine or the masses benefit. They want the economy stimulated using their fool's paper (fiat) so they can keep control of everything. Again, it is not about running 'to' bitcoin, it is about running away from the corrupt banking system. This is why they fear bitcoin, why bank CEO's around the world decry bitcoin as fraud/ponzi/tulip-bulbs/bubble/failure because they fear it. They would be most happy if not one other person entered bitcoin. Kind of self-defeating if you want people to run to it. If at this point a reverse psychology argument is raised, you will lose all credibility.

    IvanL: Bitcoin itself has already added over $120 billion in free money without affecting a single balance sheet.

    DH: Actually, not. Bitcoin is purchased with fiat,which was bought by people who have generated that money with their labour. Bitcoin's market cap valuation is a transfer of wealth not a magical creation of wealth. It shows as a real entry on my balance sheet.

    IvanL: IMF to Create SDR Cryptocurrency? Could replace existing international currencies.

    DH: Yes, I've been following all of that. SDR's is your actual attempt by the system to reboot their failed fiat ponzi scheme. Not bitcoin. They are now in fear for that system with bitcoin on the doorstep threatening their new house of cards that they have worked on for decades. Hehe, not sorry for that kick in their teeth.

    IvanL: In other words, there could be a reason why governments around the world are letting cryptocurrencies run rampant:
    1. To temporarily infuse free money into the system "off-the-books".
    2. To implement Cryptocurrencies on their own once the technology is proven and accepted (or once it fails and they step in to save the day).

    DH: Mmm…
    1. Answered the 'off the books' claim above.
    2. Why would gov/banks need to implement a 'dangerous to themselves' system to get people used to cryptocurrencies? Why not just implement it on their own and not give people an idea that they can control their own money themselves and leave gov/banks out of the whole mix? That's like saying the post office created email to get people to become used to electronic communications so that they can implement their own version of email and trap everybody on their walled garden system. Ooops, that didn't work so well.

    I'll let Andreas Antonopolous (a core developer of bitcoin) explain it better…Love the clapping scene…
    https://www.youtube.com/watch?v=ncPyMUfNyVM

    Actually, watch anything by Andreas to get a clear perspective on what bitcoin is and is not, and why it is the probably the most brilliant human invention since fire, I kid you not.
    https://www.youtube.com/user/aantonop/videos

    IvanL: Despite the Bitcoin movement being touted as an unstoppable force, governments around the world can at any moment put a ban and implement severe penalties on anyone trading Bitcoin or other digital currencies.
    Why are they allowing these currencies to play out?

    DH: From the top — They CANNOT stop it. Banning it and severe penalties will not stop bitcoin and cryptocurrencies. Prohibition did not stop drinking, the war on drugs did not stop drugs, laws do not stop crime, shall I go on? Governments can only curtail but they cannot stop, and often they fail to curtail. And when they try and fail to stop, they look impotent so they ultimately stop trying and make it 'legal' but it still goes on no matter what. This is an old and failed argument and just let it die here and now.

    https://www.youtube.com/watch?v=LIQkuF_I5Xo
    https://www.youtube.com/watch?v=AecPrwqjbGw&t=146s

    Could the Fed, the IMF, or another major organization be the true creators of Bitcoin?

    Conceivably, to the drug/alcohol soaked mind. But seriously, I've heard the speculation many times, and even studied the possibility for my own clarification. The result, it just makes no sense at all and even if they did, as silly as it would be for shooting themselves in the foot, it just doesn't matter. What is unmentioned or forgotten when this speculation is brought up, is that the bitcoin protocol is 'open-source'. The code is fully transparent to anyone who wants to look at it. There is no back door, trip wire, malware, trojan, booby trap. There just isn't. And this gets back to my previous statement about the post office creating email. It just doesn't make the slightest bit of logical sense. Prove me wrong, I will listen to ANY argument, but bring out the solid proof because speculation doesn't cut it.

    IvanL: When you consider that civilization have always had leadership, whether it's government or other entities such as banks or secret rulers, the idea of these central banks and their intervention makes sense.

    DH: No, it doesn't make sense for the specific reasons laid out above, but additionally, we have not always had leaders. This will take some history reading and a much longer talk (more than happy to go into full detail but if I get into that, you're buying the beer) but we have not always had leaders. We are just taught we have because the system does not want you to realize that we simply do not need them, and now that bitcoin is solving the debt-based money problem, this dependency on leaders are the next problem to solve.
    ———–

    Hope all this helps to clarify, contact me anytime,
    Cheers,
    Don Herres

  18. Gerald Antoniak says:

    The short answer is YES Bitcoin will continue falling in price likely to under $1000. US.
    The reasons are : as popularity increases cost of the transactions increases. Electrical power is very expensive already as Block Chain uses a lot of current on an escalating scale.
    The insiders are selling at a tremendous profit, the market makers will short into Bitcoin as it falls as they don’t have sufficient funds to buy back the coins from anyone getting out at a profit.
    These are just a few. In my mind, the concept of Bitcoin was promoted to high. As the markets open up to other bitcoins wanting to raise fresh cash, there is nothing backing the coin value. I call it the Shoebox valuation.

    1. Don Herres says:

      GA: The reasons are : as popularity increases cost of the transactions increases.

      DH: Like Email? Like Internet? It’s popularity increased to encompass the planet – has transaction prices increased? Pure IT technology always increases to meet the demand and reduce costs. Let history be your guide, not false analogies. Bitcoin’s raw blocksize can handle 7 transactions per second. VISA/MC can handle at maximum, 64,000 transactions per second. When the latest improvements get added over the next 1.5 years, bitcoin will handle 10s of millions of transactions per second, leaving VISA/MC and every other banking system in the dust. Transaction prices will fall to pennies again and the take-up rate will go ballistic. Do you really want to stand on the sidelines for that? Be my guest.

      GA: Electrical power is very expensive already as Block Chain uses a lot of current on an escalating scale.

      DH: Do you have any idea how much power it takes to run the current banking system? The buildings, lights, heating, etc? BTC is a drop in the ocean by comparison. The power consumption helps to secure the network and is bound into the price of bitcoin. It is an ecosystem and it works. This is a non-argument propped up by terrified banks.

      GA: nothing backing the coin value…

      DH: Obviously you did not read my response to Ivan. Go back and read it as it shows this position to be devoid of substance. Let me save you the time…here it is…

      You do not believe it to be real because you do not understand it. It is a common misunderstanding. Let’s clear it up…
      Do you believe math to be real? Of course, it is a tool we use to quantify the world around us and communicate that understanding.
      Do you believe email to be real? Of course, it is a tool we use to communicate thoughts and ideas around the world in seconds (so we can add chat, skype etc).
      Bitcoin is a tool for communicating value. I reiterate: Bitcoin is a protocol, a collection of code which simulates a ledger so that people can store and transfer value.
      That is a real thing. It is not physically tangible but it is nevertheless, quite real and has real impact on people’s lives.
      Computer programs are created out of thin air and do amazing things that people and companies pay real money for to get things done and there is value in that.
      Music, art, writing, philosophy, speeches etc. All out of thin air. Still all useful and valuable. Mmmm, thin air is not looking so thin. 😉

      So stop with the silly responses that only prove that you have not done your homework and due diligence. The world needs considered thought, not empty sound bites.

      Regards,
      Don

  19. Jose Torres says:

    I believe in bitcoin and what is going to replace the money like the way we been used to, like it or not ours governments.

  20. Don says:

    Follow-up:

    $290 Million Transaction for Four Cents, Where Else Can You Do That?
    JUNE 28, 2018
    https://www.newsbtc.com/2018/06/28/whale-moves-48000-bitcoin-for-4-cents-in-fees-as-scaling-solutions-develop/

    So much for the ‘bitcoin fees are too high’ argument. Now do you see why Banks are scared sh**less?

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