Topic: Gold collapsing. Bitcoin UP. - page 1535. (Read 2032281 times)

Sorry, doc - gold is just now getting up to operating temperature. Only the blind are surprised.

The main reason is a lack of exposure.  I don't know what to do about it, though.

http://www.cnbc.com/id/46901357

I have been looking for signs Bitcoin assuming the role of international currency, responding to news event like this.

So far, I see none.

My impression was that Summers was referring to Bitcoin reducing current levels of friction. There will certainly be some increase over time, but it should still be far less grinding than present systems, and for far longer. There should also be an alt-chain called KY-Coin to go along with CosbyCoin.

Big Bitcoin rally by late June? I bet it coincides with a gold/silver rally like in 2011.

Edit: what Technomage said

Friction will certainly increase but as long as it's significantly lower than with competing methods, Bitcoin will have an advantage. Bitcoin mining is such a highly competitive market and transactions themselves are fairly cheap to process, as long as that is true we will have very low friction by any standards. However it could be that in the very long run (10+ years) Bitcoin could be threatened by a PoS/PoW hybrid cryptocurrency that manages to create a more secure network with lower fees. Or perhaps Bitcoin itself will switch to something like that eventually, who knows.

I am hoping this friction does not increases with the size of bitcoin economy, the era of zero transaction fee is over, the number of transactions is getting bigger. So far the most effective way to counter transaction spamming seems to be increasing transaction fee, with the cost of increasing frictions in btc system.

AAPL pulled back a bit.

While I'm here, let me clarify or correct my statement.  I would expect a person like Summers to be more turned on by Bitcoin's ability to help transfer wealth rather than store or increase it.  Just like Rickards statement that Bitcoin is a good exchange currency and a poor reserve currency.


That I doubt.  I would not expect Summers to discuss Bitcoin with Obama or anyone else besides a close group of like-minded friends.  Obama is certainly got a lot more on his plate than some fringe internet related money thing and even if he did not, it is an unusual person who takes an interest in Bitcoin anyway.  I know this from experience in the tech sector.

I suspect that a handful of people (e.g., Summers, Rickards) have a certain combination of understanding just how fucked we are with our current monetary system and understand the likely trajectories, and an interest in technology that allows them to have their interest sparked by Bitcoin.  I just wonder if and how much they actually play with it.


I remain shocked that Bitcoin has not 'caught fire' more than it has and the interest has not already translated into lower BTC/USD ratios.  Time will tell if this ever transpires.  My second best hypothesis is that those who are interested in Bitcoin's true strengths simply have no compelling need to put them to use as this time.  I'm in that camp personally.  (My first best hypothesis is that I am simply wrong in my estimates of how the currency would be used, when, and by whom.)

The sky is falling, the sky is falling 

I noticed his usage of term as well, and you're right - he apparently does get it. Any number of bankers, especially quants, should be able to quickly grasp the potential. The question is whether he's truly behind the technology as a beneficial force or has a disingenuous motive.

That takes us further into the speculative realm, questioning whether Bitcoin was introduced as an experiment, a loss-leader, or false-flag which may just have taken on more of a life of its own than expected. Kind of like that Interwebz thing. And this is how Hollywood scripts begin...

Even with unlimited fiat, maintaining unrelenting pressure on gold and the mining shares is unsustainable in the long run, especially while simultaneously propping up the broader equity markets. Letting go of support in stocks would bring the house down on the miners. Whether that's the intended effect, and whether it will work, remains to be seen. Add in the algorithmic antics with marginal human investor participation and you once again have the makings of a grand illusion.

Regardless, when you hit granite, even a nuclear blast may not be capable of doing a huge amount of damage.

I think it makes sense for Summers to view Bitcoin objectively, particularly since it can be analysed in an almost completely academic manner. He's no fool, nor are many of the others in power. Perspective can skew decisions, clouding and shielding the ivory tower from the effects of non-linear system dynamics that can't be easily observed. Therefore what they don't know, or refuse to acknowledge, will hurt them.

These kind of peoples' existence is basically to ensure control and order. If the methods being used to maintain the status quo are being threatened, it's time to modify the methods. They've been doing a spectacular job of that. Few today think gold will continue its ascent; even fewer are even aware of Bitcoin, much less how it works and what its potential is. Preparing in the shadows where nobody is aware makes the job of maintaining control easier.

Here's a tin-foil nutcase scenario for you: Satoshi was CIA/NSA (take your pick of shadowy organisations) and introduced the Bitcoin system with banks and government having full knowledge of its potential and statistical variance for how it would propagate. Since they have foreknowledge, it would be a sure thing to hold the majority of Bitcoins in existence while slowly restraining its growth via constant pressure; the same strategy as is seen in gold/silver/etc.

For the above situation, the resultant factors would be a refreshed economic structure allowing the world to reinvigorate its productive capacity and an acceleration in speed of transactions. In addition, it would allow the status quo to persist during a paradigm transition. Most of the work subsequent to introduction will be done voluntarily, and any internal divisions would likely leave the leadership in a position of apparent weakness, at which point new ones may emerge. The new leadership could be composed of savvy individuals demonstrating proficiency and maybe bringing a powerful innovation that placates and ingratiates them to the community, or sleeper(s) already part of the community.

Overall, it may not even matter - the Bitcoin paradigm and decentralisation of most elements in human society could prove too great of a transition to be properly harnessed.

look at the phrasing Summers uses.  he understands Bitcoin.  i count 4x he uses the term friction.  thats a Bitcoin term as far as i'm concerned:

the processes of commerce changing fundamentally when people are able to store value on their cell phones, when people are able to take payments digitally with minimal friction or red tape.

Square's innovation is fundamentally about making it easy for a piano teacher or tutor to get paid, or reducing the friction involved in using a car service. I was excited about the idea of financial innovation for the benefit of regular people.

Today, money can get transferred from any part of the planet to any other part of the planet, essentially instantaneously. I think for the most part that's a positive thing. People can see prices more easily, they can act on their desires more efficiently; friction is rarely a good thing.

Conceptually, money can exist without a central authority. The United States only got a central bank in 1913, and we were a country with a functioning economy before 1913. There are also private issuers of things that function very much like money—think about Crimson Cash here at Harvard, or American Express traveler's checks.

Bitcoin is one of many innovative technologies that are going to seek to take friction out and provide services to people.

Everyone thought New Coke would be better than old Coca-Cola and take things by storm, and [former IBM CEO] Tom Watson thought there was only demand in the world for 10 or 12 computers. And so I think history teaches that you can't really forecast which kinds of innovations will ultimately become networked and get to scale

 I think many of the basic principles underlying money that economists understand—that if you create too much of it you will get rising prices, for example—actually are constant even as technology does change.

I don't think there's any question that it was broken—otherwise we wouldn't have had the kind of financial crisis we've had from 2007, which still has carry-over effects right now.

Certainly no one's fully satisfied with how the economy is performing, but if you look at the six months from the fall of 2008 to the spring of 2009, they show deterioration on almost every economic statistic more rapid than during the Depression—the first six months after the fall of 1929.

i've been meaning to expound on this; if Summers knows about Bitcoin, then Obama knows, and every other political leader in the Western World.  and i have to believe every banker since money is their business.

i find it naive when i hear so many folks around here thinking bankers or our politicians have never even heard about Bitcoin.

and if everybody knows about Bitcoin now, there must be a significant portion of ppl that think like us, and that ultimately will have to change your outlook on its prospects.

Thanks for the interesting find.

Summers joins an interesting list of very bright and well connected individuals who are clearly aware of, and surprisingly circumspect about, Bitcoin.  I'm tempted to believe that they would not mind seeing an increase in the value of their own stashes, but I'm probably just projecting.

it IS a surprise.  the gold bulls have somehow come to rationalize it in their own minds.

the market is down, equity ETFs will as well, that's no surprise.

GDX breaking to new lows led by NEM, the market leader.

not much more to say than what i have already.

At below $5 after waiting for so long, I don't think Bitcoin is really "UP"