Topic: I'm a Central Bank trying to keep Bitcoin from being adopted - page 4. (Read 13966 times)

Sorry to say it, but I am with OP here. Points:

* central banks DON'T CARE ABOUT LOSING MONEY. 

All central banks do is PRINT MONEY, and right now this is done electronically.
It costs them almost nothing to create more money, and they can do it almost instantly.
The US Fed has intentionally bought TRILLIONS of "bad debt" from financial corporations
to offload losses.  Throwing 1 billion into BTC would be a drop in the bucket.

* Central banks DO worry about any competitor to their fiat system, no matter how small.

The IMF constantly worries about bartering and the black market. The global financial
system works by keeping labor going to pay interest on infinite debt. Anyone exiting
their debt-based financial system is a threat to their dominance.

* Right now, the top level international financial networks are STRIKINGLY SIMILAR TO BITCOIN

All transactions are done electronically, and happen very quickly. Also, the parties often don't pay taxes because
funds are laundered offshore. I doubt that hedge funds and HFT traders are happy that Linux dorks now
have a rival system, that is even decentralized!

* Buying up bitcoins and running the price up over $100 can be harmful to the burgeoning economy.

"Everyone has a price" - those who won't sell at $100, will start thinking hard at $1000, etc.
Central banks don't even need to sell the BTC after blowing the bubble. Taking 40% of bitcoins out of
circulation would do damage to the bitcoin economy. They could also just create a "liquidity trap"
which results from deflation (put simply: everyone is hoarding coins so the economy stagnates).

I'm just thinking out loud here. I wonder what percentage of the worlds wealth do the central banks currently own?

If you can own a bigger percentage of the total number of bitcoins (through infinite buying now, and massive investment in mining so you control the vast majority of hashing power... you collect the majority of mining rewards and ultimately end up being the cheif beneficiary of anyone using the system through transaction fees)

I doubt the fed is stupid, so they know the dollar has a limited shelf life, taking all their soon to be worthless dollars and switching them for bitcoin now isn't such a daft idea...

In the BTC deflationary endgame. The more you own, the more you benefit from deflation? The more hashing power you own, the more of the transaction fees are headed your way.

Effectively you'd be getting richer faster than everyone else... just like the good old dollar days

What if Satashi Nakamoto is the US govt?  

Silver and Gold markets are easy to manipulate because paper promises outweigh the actual stuff by about 100x.   People only use paper gold and silver because there are real expenses associated with the trading and transport of the real physical object. 

This is not the case with bitcoin, there is no advantage at all to using an instrument to represent a bitcoin because a bitcoin is already just about as easy to transact as whatever you'd be replacing it with.  Using derivatives to buy bitcoin makes no sense at all

Would that deal with mtgox and coinbase make bitcoin susceptible to HFT manipulation?

http://www.financialsense.com/contributors/cris-sheridan/silver-manipulation-caught-in-the-act-hft-nasdaq-slv

I enjoyed it quite a bit, almost as good as a tip
13yRVRmVwiShRHBfmEFEd5zv9zhKGFUXRg

That was my way of saying that I have enjoyed your posts and pretty much agree in spirit with what you have said.

Since I couldnt post on the main forum until just now, I have spurted out all I have to say on the matter in the n00b forum. So other than repeating myself all over again, I thought I would just type something mental.

WH WH WHAT WHAT WHAT!?

How dare you suggest that Bitcoins are being manipulated. They are not being manipulated! The recent market action is all down to the people beginning to realise that they need to flee to a safe haven away from the dollar. You obviously don't understand anything about Bitcoins. To suggest that central bankers care about Bitcoin is a form of insanity! If anything, they will actually be glad that there is something that can help them fix the world and make lots of money at the same time. I am going to tell my granny to put all her life savings into Bitcoins. I feel it is my moral duty to do so!

Undermine my paradigm would you? Well, I will tell you, my paradigms are my castles, and I don't take kindly to those who attack my castles!

You are mad!

You are an idiot!

Everything you say is total rubbish!


etc etc etc.

Ahem, sorry bout that, but I do have an overwhelming instinct to adjust my posturing in accordance with whatever tune the mob happen to be playing. The fact that the mob and their group-think are nearly always wrong on most matters doesn't put me off one little bit.

In seriousness, although you may or may not be entirely accurate in terms of details, going by the way you have ruffled so many members of the Bitcoin communities feathers, and having them reveal their seriously faulty ideas about how the world works by waving them in your face, I suspect that your guesstimations will at least in spirit, be highy accurate.

The only counter to your arguments that I have find to contain any substance, is the idea that a much cheaper and more certain method of taking down Bitcoin, would be too simply invest in a megafarm, build up a huge hoard of Bitcoins, then dump on the market on a down day one day. With the real underlying economic activity representing a mere fraction of the total Bitcoin trade volume, the ensuing rush to sell in order to minimise losses and/or maximise profits would take this eagle down.

Your argument would make more sense if bitcoin wasn't infinitely devisable, if 90% of the bitcoins were owned by one shadowy entity unbeknownst to the rest of the market then the remaining whatever% in circulation would be exceptionally valuable, and the amounts being traded for commerce would be .000000xwhatever bitcoin.   There are already plans to move the decimal point once the value gets high enough to justify it.  21 million coins becomes 210 million or 2,100 million or whatever and the 0.1 becomes 1.0 becomes 10.0.

I think by forcing a massive bubble over a long enough period of time would encourage EVERYONE to get into bitcoin,  you need volatility to scare people out otherwise it's stupid to keep your money in anything BUT this perpetually rising currency, that works against my purposes.

And your assumption that bankers care about profit should be dispelled by the last 5 years of world events - Bankers want to stay at the top, the gatekeepers of finance, able to make and break companies like pieces in a game of chess.   Making profits is secondary to that.

I still have yet to see why my arguement is "silly" perhaps you can explain instead of just insulting?

Hey,
I understand it's a long thread but I've gone over this at least 4 times in previous answers:

it is BETTER if the price increases because it will PULL IN MORE NEW USERS who don't want to miss out on the speculative gains to be made.  Then when I dump all my accumulated bitcoins, the biggest buyer goes to the largest supplier, and walks away from the table with all the money people buy back bitcoins with.

This would cause MAJOR depression in bitcoin because
a) all the liquidity provided initially would be completely removed - People just assume it all stays in the same pool, but if I were a CB I would want to make things as painful as possible and that's the way to do it.  Create false demand that  people get used to, then dump it all to create a HUGE oversupply, which makes all the coins plummet in value as people struggle to sell before it goes to zero.

There will be winners in this scenario, people who buy when the price is low and they will get wealthy  - But I don't care about that.  I care about the majority of average, every day people being TERRIFIED of bitcoin and any other cryptocurrency because the last time they invested and thought it was going up forever they lost a large amount of their investment.    People don't forget losing money, especially when they don't understand why the market moves like it does.  Those people who get burned bad enough will stay away, which is why I win.

As to people finding out about Bitcoin, the fed has zero control over that.  Can't spend money and stop people from figuring out Bitcoin is worthwhile, and since it's fundamentals make it look so good in this time when other money is so bad, how do you stop the awareness?  That's why the only way to do it is seemingly ignore the issue, then when things inevitably go haywire you caution people against investing in unsafe and volitile assets, why not just put your money in the good ol' dollar? is the inferrence.

The problem with the strategy suggested by the OP is that the initial buying of Bitcoin will increase the price which will increase the awareness for Bitcoin.

That is what they *do not* want to happen. They want people to think Fiat currency is the only kind of money possible.

It does not matter if Bitcoin itself is successful or not, once enough people understand the concept of a decentralized cryptocurrency and its advantages, then all is lost for the central bankers. Alternatives cryptocurrencies can appear and take the place of Bitcoin if necessary.

So what the actually are hoping for is that awareness and understanding of Bitcoin stays as low as possible. They are two ways to acheive this, no information or misinformation on Bitcoin.
Both have been attempted, obviously the "no information"-tactic is working less and less.

Sorry for arriving late to this thread... but I think your plan is silly.

Why not simply allocate some small percentage of fiat and use it to buy and hold bitcoin... throw enough money at it, drastically deflate it...

Say central banks now own 90% of btc.

How much of what's left is horded? How much is actively being traded?

By forcing a massive bubble over a long enough period of time you might actually slow down the growth of the bitcoin economy. Since the supply is fixed - eventually it gets to a breaking point - where you have to start selling some of your holdings (for insane profits I might add) or stagnate the economy.

So if we give the bankers a choice between making an insane profit over a period of 30 years or consuming their investment to kill competition... which are they more likely to choose?



~



Also, this isn't about "real market value" in the same way a commodity is. . . bitcoin isn't a basket of goods. Even bubbles that exist for long enough will persist after you 'pop the bubble'. It's all about how people perceive the value - so there's no inherent value to a bitcoin.

So I'm assuming you don't pay much attention to world events? 

Exactly what do you think is happening with the Euro right now?

 Hint: It's not trying to stay a joint currency because it's in the best interest of its people over the long term.

You may view this as academic, but it is not.

 Don't prescribe malice where incompetency could be substituted, but similarly don't assume benevolence when the actions taken don't appear to be in  your best interest.  They're usually not.

My problem with your argument is that once Money stops being important to you because you have so much, Power is all that remains. 

The power of a central bank is to control the issuance and the interest rates of that money, so anything that threatens that control cannot be allowed.  In this scenario, bitcoin is cutting in on a zero sum game - People conducting transactions or keeping their savings in Bitcoin of course do NOT keep that same value in another currency. In our current monetary reality, virtually every transaction in one way or another is enabled by the US dollar.  Most currencies around the world use the US dollar, and US treasury debt as the backing of their own currency.

Also lets keep in mind those "old ideas" were abandoned to remove the controls they put on the Central Bank.  It used to be they weren't allowed (but did it anyhow) to create more money than they could back with gold and silver.  That was inconvenient because what if they really wanted to print more money but didn't have more gold? It needed to be removed so the "proper" actions could be taken.

Bitcoin is like that, except when they want to "do it anyhow", they have to actually tell people their plan, explain the reasoning, and then hope enough participants will think it's a good idea and adopt it as their own.  Compare that to the system now where 12 unelected bankers sit around a table making arbitrary decisions that further their personal goals?  It wasn't until very recently that normal citizens even got to know what was said at these meetings, and now it's with a FOUR YEAR LAG.

If I were a central banker, I would be terrified of two things: Sunlight and Bitcoin

But you have to get everyone to use it for that to work    The manipulation won't work if it's recognized and becomes a known factor, people will just work it into their assumptions.  Microsoft took people from a somewhat open platform to a closed platform with better usability, I don't think that same transition can happen here.

Agree with your banker buddies to clone bitcoin, but with a fresh blockchain.  Slightly change the mining algorithm so bitcoin mining setups don't work.  Integrate the new coin with your online banking software and offer it as an option when nonchargebackability is desired (such as for international settlements or when a merchant requires it (scammer prone industries)).  Create financial products based on the new coin that can be traded by anyone with a brokerage account.

Same as the Microsoft strategy for open source: embrace and extend.  Sure it only works if you own the market, but there is no industry more locked down than the finance industry. Even putting themselves into bankruptcy wasn't enough for banks to lose their place at the table.  The strategy isn't working for Microsoft anymore, but that's because the market they own (desktops) is being replaced by mobile devices where other OSes took root first.

Have read the whole thread.

This dude above has the best strategy, because the ASICs are factorially more powerful, and moreover, prisoners work for .50 cents an hour or less in Marxist countries, so an utterly phenomenal amount of hashing power will be fielded in the next 24 months.  It takes maybe 60 days to ramp up a chip factory if you throw X billions of dollars at the problem (an assumption on my part) and can get silicon, and college kids, etc.  So this is a battlefield shaping up.

OP, I agree with you in this respect:  Bitcoin is a threat to those who run the traditional money making machines: Coin mints and paper printers.  The money issuing class, cannot allow bitcoin to survive for let's say 100 years, but they have that long, to effect your plan.  Yes, I agree with your strategy, the guy arguing with you above, doesn't think long term and doesn't understand warfare.  You do.

Indeed, this is a generational war, as Rothchild himself started as a coin collector and became the richest man on Earth.  It took generational breeding his kids into royal familes, selling out to Satan on every level, but he succeeded.  This is the essence of the power which will oppose bitcoin, which effectively will end debt-as-money.

To illustrate the point simply, I can hold an FDR dime from 1963, when JFK was killed, and it's worth about 2.00 US.  But the face value is ten cents, and at the store, the FDR 1963 dime can only get me ten cents worth of product.  No cashier can give me 2.00 worth of product for it, or they will be fired.  Even if the owner allows his cashiers to accept FDR 1963 dime as 2.00 worth of goods, the Treasury lawyers can shut him down and jail him for doing so.  But, the 1965 FDR dime, is worth less than ten cents, and so the face value is what matters.  The coin itself is worth about 3 cents in moly weight melt value.

OP makes a good point in that he describes full on warfare, where money is no object, and winning is the objective.  OP describes simply, that to destroy to idea of bitcoin, at any cost, at any length of time, is a win.

when debt=money, there is no limit to the amount of money you can "make" because humans will always dig deeper into debt.  In fact if you look closely enough, a "Constitution" is a debt document, and WARFARE is what creates the debt, that causes nations to need "Constitutors" who then form a "Constitution"  ...Notice that the IMF could not en-debt Egypt until some men would stand up to pay the debt.  That is the legal definition of a Constitutor, "One who agrees to pay the debt of another, and this is always the primary obligation" - Bouvier's Law Dictionary.

So OP is thinking tactically correct.  However, OP, I would say that plain old guns and poison and particularly public shame (associating bitcoin with pictures of naked kids or meth/heroin) via the HDTV network of mind control, will accomplish the pariah-effect that you seek and will cause people to hate bitcoin much quicker.  The TV lemmings have a great power in mobs, and in the end, you could just hire 1,000,000 soldiers for a cheaper cost, to police your anti-bitcoin laws.  I am thinking of something like the SS and what Himmler/Goering accomplished.  Sure it was a loss for them as two men, but Bretton Woods was a very big win for the money powers, so you could ditch your whole army at the end.  Bankers fund warfare, of course.

Assuming Leo Strauss and Edward Bernays are correct in understanding herd mentality and core-hypocrisy of the human being (not saying I agree with them, but so far they are right), I expect a mass media blitz of negative bitcoin-hating propaganda, over say two years, would accomplish your goals.  It would be combined with shame and legislation of painful prison sentences for bitcoin users/miners (bribes to politicians are fairly cheap), while secretly the prison powers like Wackenhut (who changes their name every year it seems) and Bechtel and so forth, will simply use prisoners and mega-tech, to mine coins and this will give them bitcoins and will increase difficulty for other non-cartel miners who are jailed or hunted, and also by running their own secret bitcoin farms in prisons, they work 24/7 on a path toward the 51% moment where they poison the chain, long enough to shake the system, and scare people or just fork it toward destruction.

So yes, from the perspective of generational warfare, public shame of bitcoin users/miners, combined with jailing them or straight up assassinations and pogroms, combined with secretly putting mega-billions into secret bitcoin mining operations with prisoners (like the ones who now build Patriot missile parts for Ratheon for example) would produce good results that you seek.

The people, as such, overestimate their ability to fight long term wars.  Typically the people, will not want to keep fighting.  They will sue for peace and accept war debt, just to have fifty years of "peace".  But OP speaks for powers that are not human.  Central bankers like Rothschild and the shecklemonger class of people, live only for money.  Mammon itself, demands they sell their own children into the fight.  And bitcoin is a threat unlike any they have ever seen.  If OP's words are grasped, then perhaps bitcoin can be a weapon wielded by the people, to their advantage, but the key is that you can only "make profit" when you SELL.  And how shall the people, NOT SELL THEIR BITCOINS at 1,000,000 USD per coin?

That's the key, if it takes 100 years, and starvation, and nuclear meltdowns, that all will be done, anything it takes to get the regular plebes, to part with their coins.  If the people can never sell their bitcoins, then all that will happen is that they will keep the banker class at bay, but this battle can never be won.  Even Jesus threw over the moneychangers, but guess what?  He died, and they won.

The game is (was) to figure out a reason why an entity like a central bank would not be able to basically control the market and intentionally cause bubbles and panics, assuming they wanted to throw something like 10 billion at the problem.

It is of course a losing strategy, because Bitcoin can't be shut down or effectively regulated without causing a fork that's even more difficult to deal with.  Really all governments have to do is stop printing money and start acting responsibly, then Bitcoin is a huge boon to them as well because of the easy commerce it enables.

But unfortunately it doesn't look like they plan to stop any time soon, so it's in their best interest to make Bitcoin look as risky as possible.   They can't just come out and say "don't buy that, buy dollars instead" because addressing the problem gives it legitimacy so better to keep the market unregulated, buy into it with the intention of being disruptive and scaring out less sophisticated users.

The end game is the fall of the dollar, but if we have serial bitcoin bubbles that always end very badly for lots of newbies, that will really hurt adoption in the medium-short term.

If it were an actual strategy, it is already a losing strategy.  Bitcoin is gaining a lot of adoption.  Granted, it is still very small, but it used to be a lot smaller...

PS: Apologies if I repeated someones argument, this thread was tl;dr for me.