Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #760 Bit[coin]burg–The Rebels Without a Clue

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

Lis­ten: MP3

Side 1  Side 2

Intro­duc­tion: Ronald Rea­gan observed that; “Gov­ern­ment isn’t the solu­tion to your prob­lems. Gov­ern­ment is the prob­lem.” In the decades since that utter­ance, many young, ide­al­is­tic indi­vid­u­als have embraced lib­er­tar­i­an polit­i­cal phi­los­o­phy. Well intend­ed, those adher­ents are ulti­mate­ly embrac­ing a phi­los­o­phy that will lead to a form of fas­cism.

Tak­ing a slight detour from our dis­cus­sion of “The Adven­tures of Eddie the Friend­ly Spook,” we exam­ine a clan­des­tine, online cur­ren­cy called bit­coin. Bit­coin has been hatched from the same lib­er­tar­i­an, Lud­wig von Mis­es milieu to which Eddie “get rid of social secu­ri­ty, bring back the gold stan­dard” Snow­den adheres.

Used by the Silk Road net­work for clan­des­tine and large­ly ille­gal activ­i­ties, Silk Road alleged­ly was mas­ter­mind­ed by Ross Ulbricht, an admir­er of Ron Paul and devo­tee of the Lud­wig von Mis­es eco­nom­ic and social ide­ol­o­gy.

Alone among sov­er­eign nations, Ger­many rec­og­nizes bit­coin, in keep­ing with the mon­e­tary the­o­ries of Friedrich von Hayek, a dis­ci­ple of Lud­wig von Mis­es.

Although the cur­ren­cy has usu­al­ly been attrib­uted to one Satoshi Nako­mo­to. An arti­cle in Fastcompany.com hypoth­e­sizes that the actu­al devel­op­ers of bit­coin were Charles Bry, Neal J. King (who offi­cial­ly denies any involve­ment) and Vladimir Oks­man. All three work for a Ger­man firm called Lan­tiq.

Lan­tiq is derived from Siemens, A.G. (a com­pa­ny inex­tri­ca­bly linked with the Bor­mann cap­i­tal net­work and the BND). Bit­coin may well be an Under­ground Reich/BND project.

Bit­coin’s defend­ers tout it as an alter­na­tive to fiat cur­ren­cies and some­thing that will prove a vehi­cle for eco­nom­ic sal­va­tion for the world. That claim has proved utter­ly vain, as bit­coin has proved to be, if any­thing, even more sub­ject to crooked manip­u­la­tion as oth­er cur­ren­cies.

Pro­gram High­lights Include: The role of Gold­en Gate Cap­i­tal in cre­at­ing Lan­tiq; Gold­en Gate Cap­i­tal per­son­nel’s back­ground in Bain Cap­i­tal (Mitt Rom­ney’s firm); the hope by some that bit­coin could help replace the dol­lar as the reserve cur­ren­cy of choice in the world; Peter Thiel’s embrace of bit­coin; Peter Thiel’s back­ing of Tea Par­ty favorite Ted Cruz; review of Thiel’s cap­i­tal­iza­tion of Ron Paul’s super PAC (locat­ed in Pro­vo, Utah); the close polit­i­cal rela­tion­ship between Ron Paul and Mitt Rom­ney.

1. Dis­cus­sion begins with analy­sis of the Silk Road net­work’s alleged mas­ter­mind, Ross Ulbricht. Ulbricht is a fan of Ron Paul and an adher­ent to the eco­nom­ic and social the­o­ries of the Lud­wig von Mis­es Insti­tute.

Exem­pli­fy­ing the appar­ent­ly well mean­ing but mis­in­formed young cit­i­zens attract­ed to Paul and the von Mis­es school, Ulbricht appears to exem­pli­fy the adage that “The [Silk?] road to Hell is paved with good inten­tions.”

Ron Paul is a hard­core fas­cist, joined at the hip with Nazi and white-suprema­cist ele­ments. The Lud­wig von Mis­es insti­tute is explic­it­ly anti-demo­c­ra­t­ic and is joined at the hip with the neo-Con­fed­er­ate move­ment, which jus­ti­fies African-Amer­i­can slav­ery and ratio­nal­izes a future seces­sion by the South­ern states.

Indica­tive of Ulbricht’s super­fi­cial­i­ty is his state­ment that; “Just as slav­ery has been abol­ished most every­where, I believe vio­lence, coer­cion and all forms of force by one per­son over anoth­er can come to an end. . . .” 

In addi­tion to the von Mis­es Insti­tute’s jus­ti­fi­ca­tion of African-Amer­i­can slav­ery pri­or to the Civ­il War, Wal­ter Block (and aide to Ron Paul and a Lud­wig von Mis­es Insti­tute schol­ar) has craft­ed what he calls “vol­un­tary slav­ery.”

We view “vol­un­tary slav­ery” as the ulti­mate col­lat­er­al­ized debt oblig­a­tion.

“Who Is Ross Ulbricht? Piec­ing Togeth­er The Life Of The Alleged Lib­er­tar­i­an Mas­ter­mind Behind Silk Road” by Ryan Mac; Forbes; 10/02/2013.

. . . While at Penn State, Ulbricht was also polit­i­cal­ly active. A mem­ber of the school’s Col­lege Lib­er­tar­i­ans group, he took part in on-cam­pus debates that were doc­u­ment­ed by the school’s news­pa­per, The Dai­ly Col­le­gian. In one arti­cle from March 2008, Ulbricht is iden­ti­fied as a sup­port­er of Ron Paul who had attempt­ed to become a del­e­gate for the then-pres­i­den­tial can­di­date at the Repub­li­can Nation­al Con­ven­tion.

“There’s a lot to learn from him and his mes­sage of what it means to be a U.S. cit­i­zen and what it means to be a free indi­vid­ual,” he told the school paper. “He doesn’t com­pro­mise his integri­ty as a politi­cian and he fights quite dili­gent­ly to restore the prin­ci­ples that our coun­try was found­ed on.”

In Silk Road’s com­mu­ni­ty forums, the Dread Pirate Roberts always made the lib­er­tar­i­an under­pin­nings of his orga­ni­za­tion clear. In Oct. 2012, he not­ed in a post: “Silk Road was found­ed on lib­er­tar­i­an prin­ci­ples and con­tin­ues to be oper­at­ed on them … The same prin­ci­ples that have allowed Silk Road to flour­ish can and do work any­where human beings come togeth­er. The only dif­fer­ence is that the State is unable to get its thiev­ing mur­der­ous mitts on it.” He called Paul “a mighty hero in my book” in a note from Nov. 2012. . . .

 This Is The Physics Stu­dent And Used Book Sell­er Who Alleged­ly Ran The ‘Silk Road’ Mar­ket For Drugs And Assas­sins” by Jim Edwards; Busi­ness Insid­er; 10/02/2013.

. . . . But he lost his inter­est in physics and chem­i­cals some­time after he grad­u­at­ed from Penn State in 2008, in favor of a new pas­sion — lib­er­tar­i­an­ism. He wrote on his LinkedIn pro­file:

Now, my goals have shift­ed. I want to use eco­nom­ic the­o­ry as a means to abol­ish the use of coer­cion and aggres­sion amongst mankind. Just as slav­ery has been abol­ished most every­where, I believe vio­lence, coer­cion and all forms of force by one per­son over anoth­er can come to an end. The most wide­spread and sys­temic use of force is amongst insti­tu­tions and gov­ern­ments, so this is my cur­rent point of effort. The best way to change a gov­ern­ment is to change the minds of the gov­erned, how­ev­er. To that end, I am cre­at­ing an eco­nom­ic sim­u­la­tion to give peo­ple a first-hand expe­ri­ence of what it would be like to live in a world with­out the sys­temic use of force.

He became a fan of the Aus­tri­an School of Eco­nom­ics, a con­ser­v­a­tive take on the free mar­ket. The indict­ment against him says he became a devo­tee of the Mis­es Insti­tute, and that the writ­ing of Lud­wig von Mis­es and Mur­ray Roth­bard “provid[ed] the philo­soph­i­cal under­pin­nings for Silk Road.”

Silk Road was, in many ways, the apoth­e­o­sis of free mar­ket eco­nom­ics. Because it was com­plete­ly encrypt­ed and com­plete­ly anony­mous, using Bit­coin — an uncrack­able “cryp­tocur­ren­cy” — it stood out­side any gov­ern­ment reg­u­la­tion at all, includ­ing the crim­i­nal law.

Until today. . . .

2. Next, the pro­gram high­lights a com­pelling work­ing hypoth­e­sis that bit­coin was devel­oped by indi­vid­u­als asso­ci­at­ed with the Lan­tiq com­pa­ny.

In 1985, Ronald Rea­gan incurred the wrath of many when he agreed to vis­it the Bit­burg ceme­tery in Ger­many, where Waf­fen SS sol­diers are interred.

In this post, we exam­ine the ori­gins of the bit­coin vir­tu­al cur­ren­cy, which evolved into the online cur­ren­cy of choice for the cus­tomers of the Silk Road net­work.

Alone among sov­er­eign nations, Ger­many has rec­og­nized bit­coin as legal ten­der, fol­low­ing on the the­o­ry of Friedrich von Hayek of the Autri­an school of eco­nom­ic the­o­ry, dis­sem­i­nat­ed from (among oth­er insti­tu­tions) the Lud­wig von Mis­es Insti­tute.

Cred­it for cre­at­ing this vir­tu­al cur­ren­cy is gen­er­al­ly giv­en to one Satoshi Nako­mo­to. An arti­cle at Fast­com­pa­ny hypoth­e­sizes that three indi­vid­u­als named Neal J. King, Charles Bry and Vladimir Oks­man are the true orig­i­na­tors of bit­coin. (Lis­ten­ers are emphat­i­cal­ly encour­aged to read the entire linked arti­cle to flesh out their under­stand­ing of Adam Penen­berg’s argu­ment.)

Of more than pass­ing inter­est under the cir­cum­stances is the fact that all three of the hypo­thet­i­cal cre­ators of bit­coin work for a com­pa­ny called Lan­tiq.

Lan­tiq is a Ger­man-based firm that has evolved from Siemens. Siemens spun-off Infi­neon A.G. (a semi­con­duc­tor firm). Then Infi­neon and Gold­en Gate Cap­i­tal cre­at­ed Lan­tiq.

Gold­en Gate Capi­tol was formed by alum­ni of Bain Cap­i­tal, Mitt Rom­ney’s firm.

In addi­tion to links to the death squad-man­i­fest­ing El Sal­vado­ran jun­ta of the 1980’s, Bain has links to the milieu of the late bil­lion­aire, Howard Hugh­es, as well as the milieu of Bebe Rebo­zo’s bank­ing oper­a­tions. The lat­ter appears to have had links to the Bor­mann cap­i­tal net­work.

If we were going to express this in bib­li­cal phrase­ol­o­gy, it would go some­thing like this: “And so Siemens begat Infi­neon. And Bain Cap­i­tal begat Gold­en Gate Cap­i­tal. Infi­neon did lie with Gold­en Gate Cap­i­tal. And thus did Infi­neon beget Lan­tiq.”

Among the points to be con­sid­ered here are:

  • Siemens func­tions as some­thing of a quar­ter­mas­ter for Ger­man intel­li­gence-the BND, the suc­ces­sor to the Rein­hard Gehlen spy out­fit. It is inex­tri­ca­bly linked with BND, as well as with the Bor­mann net­work.
  • With Lan­tiq hav­ing evolved direct­ly from Siemens, Lan­tiq’s pos­si­ble con­nec­tions with BND should be care­ful­ly weighed.
  • Lan­tiq’s links with Gold­en Gate Cap­i­tal, run by alum­ni from Mitt Rom­ney’s Bain Cap­i­tal, war­rants con­sid­er­a­tion that both Lan­tiq and GGC may be Under­ground Reich, Bor­mann enti­ties.
  • We have not­ed that Infi­neon A.G. is a lead­ing pro­duc­er of TPM chips, which were cit­ed by the Ger­man press as a back­door source for NSA snoop­ing. We won­dered if that TPM back­door might actu­al­ly be a BND back­door?
  • Neal J. King has denied Penen­berg’s mus­ings. He may, of course, be doing so hon­est­ly. IF, how­ev­er, bit­coin’s devel­op­ment was in con­junc­tion with BND, denial would be pro for­ma intel­li­gence method­ol­o­gy.
  • We will explore the bit­coin land­scape at greater length in a future post for greater per­spec­tive and under­stand­ing.

The Bit­coin Cryp­to-Cur­ren­cy Mys­tery Reopened” by Adam L. Penen­berg; fastcompany.com; 10/11/2011.

. . . I looked at the date on the patent appli­ca­tion fil­ing: 08/15/2008.

Now take a look at the domain bitcoin.org. It was reg­is­tered three days lat­er.

Domain Name:BITCOIN.ORG

Cre­at­ed On:18-Aug-2008
Now that is one hell of a coin­ci­dence. What are the odds that a phrase in Nakamo­to’s Bit­coin paper would be repli­cat­ed in a patent appli­ca­tion filed the same year? Fur­ther, what are the odds the domain name for Bit­coin would have been reg­is­tered 72 hours after the patent appli­ca­tion was filed?

Based on the tim­ing, I won­dered if one of the peo­ple on the patent application–or per­haps all three–had based the Bit­coin con­cept on research that led them to this patent appli­ca­tion. The three inven­tors list­ed on patent #20100042841 are Neal King, Vladimir Oks­man, Charles Bry, and all three have filed numer­ous patent appli­ca­tions over the years.

Neal King (he also goes by Neal J. King from Munich, Ger­many) is list­ed on a num­ber of patent appli­ca­tions, notably “UPDATING AND DISTRIBUTING ENCRYPTION KEYS” (#20100042841) and “CONTENTION ACCESS TO A COMMUNICATION MEDIUM IN A COMMUNICATIONS NETWORK” (#20090196306), both of which seem Bitcoin‑y to me.

Charles Bry, who also resides in Munich, has filed sev­er­al appli­ca­tions, many deal­ing with nodes and net­works.

Vladamir Oks­man, who lives in the U.S., has sev­er­al patent appli­ca­tions, too, and they too seem relat­ed to net­works, nodes.

I found anoth­er patent appli­ca­tion that lists the three of them as inven­tors, filed June 2008–two months before the Bitcoin.org domain was reg­is­tered.

KEY MANAGEMENT FOR COMMUNICATION NETWORKS

“Abstract One embod­i­ment of the present inven­tion relates to a method for key man­age­ment in a com­mu­ni­ca­tions net­work. In this method, a pub­lic key authen­ti­ca­tion scheme is car­ried out between a secu­ri­ty con­troller and a plu­ral­i­ty of nodes to estab­lish a plu­ral­i­ty of node-to-secu­ri­ty-con­troller (NSC) keys. The NSC keys are respec­tive­ly asso­ci­at­ed with the plu­ral­i­ty of nodes and are used for secure com­mu­ni­ca­tion between the secu­ri­ty con­troller and the respec­tive nodes.”
Could that also be relat­ed to Bit­coin?

Now, anoth­er coin­ci­dence: The Bitcoin.org domain was reg­is­tered by a Finnish provider, based in Helsin­ki.

Charles Bry trav­eled to Fin­land in late 2007, six months before the domain was reg­is­tered. In addi­tion, Bry, who is a senior sys­tem engi­neer, lists Ger­man, Eng­lish, French, and Ital­ian as lan­guages he speaks, and went to col­lege in Paris. He works for a com­pa­ny called Lan­tiq.

Then there’s Neal J. King, and there are more odd­i­ties. A Neal J. King has a Face­book page that is sketchy with per­son­al infor­ma­tion, yet if you search for “Neal J. King” in Face­book’s search box, his pro­file does­n’t pop up. His wall is filled with posts about the recent Wall Street protests, bank­ing, and crit­i­cism of the Patri­ot Act. Keep scrolling down and he “likes” blau.de, a Ger­man mobile phone sim card site. He also claims high­brow taste in lit­er­a­ture and books, and it seems he’s an avid read­er, hav­ing reviewed 46 books on Amazon–many deal with astron­o­my, biol­o­gy, cryp­tog­ra­phy, lin­guis­tics, lit­er­a­ture, math­e­mat­ics, phi­los­o­phy and physics. I read through his reviews, and his writ­ing is excel­lent. Very clean. No typos. His sen­tences are ele­gant yet there are no extra words. The writ­ing style reminds me of Satoshi Nakamo­to’s posts in the Bit­coin Forum minus British spellings, which, as I not­ed above, I believe is a canard.

Final­ly, I looked up Vladamir Oks­man­’s LinkedIn pro­file (there are a cou­ple of guys with this name, but he was easy to find). . . .

. . . [Cor­rec­tion, May 22, 2013: The Vladamir Oks­man described above is the wrong one. The right one is list­ed on LinkedIn as hav­ing worked as a tech­ni­cal mar­ket­ing direc­tor for semi­con­duc­tor com­pa­ny Lan­tiq. . . . .

3.  “Neal J. King”; LinkedIn.com.

. . . I rep­re­sent­ed Lan­tiq in Home Net­work­ing Stan­dards. . . .

. . . .

Par­tic­i­pant
IEEE P1901
2009 – 2011 (2 years)

I rep­re­sent­ed Infi­neon’s inter­ests regard­ing the broad­band Pow­er Line Com­mu­ni­ca­tion stan­dards. I was active in clar­i­fy­ing the text.

Par­tic­i­pant
IEEE P1901.2
2010 – 2010 (less than a year)

I rep­re­sent­ed Infi­neon’s inter­ests in a tech­ni­cal stan­dard for nar­row­band Pow­er Line Com­mu­ni­ca­tions.

Rep­re­sen­ta­tive for Infi­neon
ITU‑T
1997 – 2010 (13 years)

I rep­re­sent­ed the inter­ests of Infi­neon in the cre­ation and revi­sion of tech­ni­cal stan­dards on xDSL and PCM (V.92) modems. I was the edi­tor of the V.44 stan­dard on Data Com­pres­sion.

Sys­tems Engi­neer
Infi­neon Tech­nolo­gies
Pub­lic Com­pa­ny; 10,001+ employ­ees; IFX; Hal­bleit­er indus­try
March 1997 – Decem­ber 2008 (11 years 10 months)

- Analy­sis and roadmap plan­ning for secu­ri­ty tech­niques & pro­to­cols for Wire­less LAN sys­tems; cal­cu­la­tion of com­mu­ni­ca­tions capac­i­ty gained by adding a low-fre­quen­cy band; assess­ment of exter­nal tech­nol­o­gy pro­pos­als. One issued patent on emer­gency phone calls.

- Orga­nized Infineon’s par­tic­i­pa­tion in tech­ni­cal stan­dards for broad­band modems (xDSL modems): threat assess­ment, resource assign­ments, coor­di­na­tion and edi­to­r­i­al con­trol. Com­mit­tees: ITU‑T Q.4/SG15, NIPP-NAI, DSL Forum; Sec­re­tary of NIPP-NAI for sev­er­al years.

- Devel­op­ment of web-based infor­ma­tion sys­tems and tools to make tech­ni­cal-stan­dards infor­ma­tion avail­able cor­po­ra­tion-wide.
— Worked to achieve key agree­ments in the tech­ni­cal-stan­dards process favor­able to our posi­tion in the broad­band modem mar­ket by either com­pro­mis­ing with com­peti­tors and poten­tial cus­tomers, or out-maneu­ver­ing them. . . .

4.  “Lan­tiq”; wikipedia.com.

Lan­tiq is an inter­na­tion­al fab­less semi­con­duc­tor busi­ness of approx­i­mate­ly 1,000 peo­ple.

Lan­tiq’s cen­tral func­tions and the exec­u­tive man­age­ment team are locat­ed at Lilien­thal­str. 15 in Neu­biberg near Munich in Ger­many.

Lan­tiq makes semi­con­duc­tor solu­tions for Next Gen­er­a­tion Net­works and the Dig­i­tal Home and, via its Infi­neon her­itage, has an over 20-year record of tech­nol­o­gy devel­op­ment. . . .

 5. “Infi­neon Com­pletes the Sale of Wire­line Busi­ness; Lan­tiq Becomes a Stand Alone Busi­ness”; lantiq.com.

. . . Neu­biberg, Ger­many– Novem­ber 6, 2009 – Infi­neon Tech­nolo­gies AG (FSE: IFX / OTCQX: IFNNY) and Lan­tiq today announced the clos­ing of the sale of Infineon’s Wire­line busi­ness to Lan­tiq, an affil­i­ate of the U.S. based investor Gold­en Gate Cap­i­tal. . . .

6.  “Gold­en Gate Cap­i­tal”; wikipedia.com.

. . . Gold­en Gate Cap­i­tal Part­ners is an Amer­i­can pri­vate equi­ty firm based in San Fran­cis­co, Cal­i­for­nia. The firm makes invest­ments pri­mar­i­ly in mature tech­nol­o­gy com­pa­nies, as well as oth­er select indus­tries, through lever­aged buy­out trans­ac­tions as well as sig­nif­i­cant minor­i­ty pur­chas­es and growth cap­i­tal invest­ments.

The firm was found­ed in 2000, by for­mer invest­ment pro­fes­sion­als from pri­vate equi­ty firm Bain Cap­i­tal, as well as busi­ness con­sul­tants from its affil­i­ate Bain & Com­pa­ny. . . .

7.  “Infi­neon Tech­nolo­gies”; wikipedia.com.

Infi­neon Tech­nolo­gies AG is a Ger­man semi­con­duc­tor man­u­fac­tur­er found­ed on 1 April 1999, when the semi­con­duc­tor oper­a­tions of the par­ent com­pa­ny Siemens AG were spun off to form a sep­a­rate legal enti­ty. As of 30 Sep­tem­ber 2010, Infi­neon has 25,149 employ­ees world­wide. In fis­cal year 2010, the com­pa­ny achieved sales of €3.295 bil­lion. . . .

8.   “Bit­coin Rec­og­nized by Ger­many as ‘Pri­vate Mon­ey’ ” by Matt Clinch; CNBC.com; 8/19/2013.

Vir­tu­al cur­ren­cy bit­coin has been rec­og­nized by the Ger­man Finance Min­istry as a “unit of account”, mean­ing it is can be used for tax and trad­ing pur­pos­es in the coun­try.

Bit­coin is not clas­si­fied as e‑money or a for­eign cur­ren­cy, the Finance Min­istry said in a state­ment, but is rather a finan­cial instru­ment under Ger­man bank­ing rules. It is more akin to “pri­vate mon­ey” that can be used in “mul­ti­lat­er­al clear­ing cir­cles”, the Min­istry said.

“We should have com­pe­ti­tion in the pro­duc­tion of mon­ey. I have long been a pro­po­nent of Friedrich August von Hayek scheme to dena­tion­al­ize mon­ey. Bit­coins are a first step in this direction,“said Frank Scha­ef­fler, a mem­ber of the Ger­man par­lia­men­t’s Finance Com­mit­tee, who has pushed for legal clas­si­fi­ca­tion of bit­coins. . . .

9. Not sur­pris­ing­ly, bit­coin is show­ing all of the cor­rupt, high­ly spec­u­la­tive char­ac­ter of the very cur­ren­cies that the very “tech­no-lib­er­tar­i­ans” who sup­port the “alter­na­tive cur­ren­cy” crit­i­cize.

Fol­low­ing our posts on Silk Road and Bit­coin, we explore the phe­nom­e­non of bicoin against the “shut­down” milieu of the GOP, itself inex­tri­ca­bly linkd with the ele­ments sur­round­ing and pro­mot­ing Edward Snow­den. Review­ing pre­vi­ous points of infor­ma­tion:

Alleged mas­ter­mind of the Silk Road online clan­des­tine funding/merchandising net­work, Ross Ulbricht is a devo­tee of Ron Paul and the Lud­wig von Mis­es school of social and eco­nom­ic the­o­ry.

Exem­pli­fy­ing the appar­ent­ly well mean­ing but mis­in­formed young cit­i­zens attract­ed to Paul and the von Mis­es school, Ulbricht appears to exem­pli­fy the adage that “The [Silk?] road to Hell is paved with good inten­tions.”

Ron Paul is a hard­core fas­cist, joined at the hip with Nazi and white-suprema­cist ele­ments. The Lud­wig von Mis­es insti­tute is explic­it­ly anti-demo­c­ra­t­ic and is joined at the hip with the neo-Con­fed­er­ate move­ment, which jus­ti­fies African-Amer­i­can slav­ery and ratio­nal­izes a future seces­sion by the South­ern states.

Indica­tive of Ulbricht’s super­fi­cial­i­ty is his state­ment that; “Just as slav­ery has been abol­ished most every­where, I believe vio­lence, coer­cion and all forms of force by one per­son over anoth­er can come to an end. . . .” 

In addi­tion to the von Mis­es Insti­tute’s jus­ti­fi­ca­tion of African-Amer­i­can slav­ery pri­or to the Civ­il War, Wal­ter Block (and aide to Ron Paul and a Lud­wig von Mis­es Insti­tute schol­ar) has craft­ed what he calls “vol­un­tary slav­ery.”

We view “vol­un­tary slav­ery” as the ulti­mate col­lat­er­al­ized debt oblig­a­tion.

Alone among sov­er­eign nations, Ger­many has rec­og­nized bit­coin as legal ten­der, fol­low­ing on the the­o­ry of Friedrich von Hayek of the Autri­an school of eco­nom­ic the­o­ry, dis­sem­i­nat­ed from (among oth­er insti­tu­tions) the Lud­wig von Mis­es Insti­tute.

Cred­it for cre­at­ing this vir­tu­al cur­ren­cy is gen­er­al­ly giv­en to one Satoshi Nako­mo­to. An arti­cle at Fast­com­pa­ny hypoth­e­sizes that three indi­vid­u­als named Neal J. King, Charles Bry and Vladimir Oks­man are the true orig­i­na­tors of bit­coin. (Lis­ten­ers are emphat­i­cal­ly encour­aged to read the entire linked arti­cle to flesh out their under­stand­ing of Adam Penen­berg’s argu­ment.)

Of more than pass­ing inter­est under the cir­cum­stances is the fact that all three of the hypo­thet­i­cal cre­ators of bit­coin work for a com­pa­ny called Lan­tiq.

Lan­tiq is a Ger­man-based firm that has evolved from Siemens. Siemens spun-off Infi­neon A.G. (a semi­con­duc­tor firm). Then Infi­neon and Gold­en Gate Cap­i­tal cre­at­ed Lan­tiq.

Gold­en Gate Capi­tol was formed by alum­ni of Bain Cap­i­tal, Mitt Rom­ney’s firm.

In addi­tion to links to the death squad-man­i­fest­ing El Sal­vado­ran jun­ta of the 1980’s, Bain has links to the milieu of the late bil­lion­aire, Howard Hugh­es, as well as the milieu of Bebe Rebo­zo’s bank­ing oper­a­tions. The lat­ter appears to have had links to the Bor­mann cap­i­tal net­work.

If we were going to express this in bib­li­cal phrase­ol­o­gy, it would go some­thing like this: “And so Siemens begat Infi­neon. And Bain Cap­i­tal begat Gold­en Gate Cap­i­tal. Infi­neon did lie with Gold­en Gate Cap­i­tal. And thus did Infi­neon beget Lan­tiq.”

Among the points to be con­sid­ered here are:

  • Siemens func­tions as some­thing of a quar­ter­mas­ter for Ger­man intel­li­gence-the BND, the suc­ces­sor to the Rein­hard Gehlen spy out­fit. It is inex­tri­ca­bly linked with BND, as well as with the Bor­mann net­work.
  • With Lan­tiq hav­ing evolved direct­ly from Siemens, Lan­tiq’s pos­si­ble con­nec­tions with BND should be care­ful­ly weighed.
  • Lan­tiq’s links with Gold­en Gate Cap­i­tal, run by alum­ni from Mitt Rom­ney’s Bain Cap­i­tal, war­rants con­sid­er­a­tion that both Lan­tiq and GGC may be Under­ground Reich, Bor­mann enti­ties.
  • We have not­ed that Infi­neon A.G. is a lead­ing pro­duc­er of TPM chips, which were cit­ed by the Ger­man press as a back­door source for NSA snoop­ing. We won­dered if that TPM back­door might actu­al­ly be a BND back­door?
  • Neal J. King has denied Penen­berg’s mus­ings. He may, of course, be doing so hon­est­ly. IF, how­ev­er, bit­coin’s devel­op­ment was in con­junc­tion with BND, denial would be pro for­ma intel­li­gence method­ol­o­gy.
  • “Tech­no-Lib­er­tar­i­ans” have sug­gest­ed that bit­coin might be an alter­na­tive to the dol­lar as the reserve cur­ren­cy of choice. Their views echo Ronald Rea­gan’s state­ment that “Gov­ern­ment isn’t the solu­tion to your prob­lems. Gov­ern­ment is the prob­lem.”
  • The dol­lar’s sta­tus as a reserve cur­ren­cy has been under crit­i­cal review as a result of the “shut­down cri­sis,” pro­voked by the same polit­i­cal forces engener­ing Eddie the Friend­ly Spook’s “op.”
  • Bit­coin has been sub­ject to some of the same wild swings in val­ue as main­stream cur­ren­cies.
  • Those swings in val­ue appear to have been delib­er­ate­ly engi­neered by what one observ­er terms “the shark squad.” It is unclear who they might be. One won­ders if the shark squad might be Ger­man, per­haps the BND. The manip­u­la­tion of bit­coin is ille­gal in for­mal cap­i­tal mar­kets. Those machi­natins are, to an extent, rem­i­nis­cent of the maneu­ver­ing that occurred on 11/22/1963 and on 9/11/2001.
  • Peter Thiel is a big fan of bit­coin.

“World to Wash­ing­ton: ‘Real­ly?’ ” by Serge Schme­mann; The New York Times; 10/20/2013.

Some of the more alarmed and out­raged voic­es rose from Chi­na, the coun­try hold­ing the largest share of Amer­i­can debt. One com­men­tary from Chi­na that attract­ed atten­tion in Europe was by Liu Chang of Xin­hua, the offi­cial Chi­nese news agency, who called not only for the diver­si­fi­ca­tion of Beijing’s huge dol­lar hold­ings, but for a “de-Amer­i­can­ized world.” That, he wrote, would include “new inter­na­tion­al reserve cur­ren­cy that is to be cre­at­ed to replace the dom­i­nant U.S. dol­lar, so that the inter­na­tion­al com­mu­ni­ty could per­ma­nent­ly stay away from the spillover of the inten­si­fy­ing domes­tic polit­i­cal tur­moil in the Unit­ed States.”

From Athens — where an Amer­i­can default could have turned an unend­ing eco­nom­ic cri­sis into cat­a­stro­phe — Nikos Kon­stan­daras wrote in the dai­ly Kathimeri­ni that Aristo­phanes, the mas­ter of ancient Greek com­e­dy, “would have loved the idea of a group of law­mak­ers exploit­ing their posi­tion to abol­ish the state they are sworn to serve. For Greece’s ancient trage­di­ans, the vain indif­fer­ence, the igno­rance of dan­gers caused by our char­ac­ter and actions, was famil­iar mate­r­i­al.” The ques­tion, he added, was whether Amer­i­ca is “the scene of com­e­dy or tragedy.”

When the deal was reached in Wash­ing­ton last Wednes­day, the world exhaled. But nobody believed it was over. “There is noth­ing more tem­po­rary than the defeats and vic­to­ries in Wash­ing­ton,” wrote Le Figaro, the Paris dai­ly. Even if civ­il ser­vants are back at work for now, “America’s finan­cial cred­i­bil­i­ty is dam­aged and its demo­c­ra­t­ic sys­tem has revealed to the world its gap­ing block­ages.”

The ques­tions abroad will con­tin­ue; answers, how­ev­er, are hard to find.

10. “The Fed­er­al Gov­ern­men­t’s Reac­tion to Bit­coin Is an Acknowl­edge­ment of the Dol­lar’s Vul­ner­a­bil­i­ty” by Peter Fer­rara; Forbes; 8/25/2013.

The Sen­ate Home­land Secu­ri­ty and Gov­ern­ment Affairs Com­mit­tee has pri­vate alter­na­tive cur­ren­cies in its crosshairs.  The Chair­man, Sen­a­tor Tom Carp­er (D‑DE) and Rank­ing Mem­ber, Sen­a­tor Tom Coburn (R‑OK), sent a joint let­ter to sev­en fed­er­al agen­cies last week ask­ing for feed­back and pol­i­cy pro­pos­als for reg­u­la­tion of vir­tu­al cur­ren­cies, like Bit­coin.

Bit­coin has surged in val­ue and pop­u­lar­i­ty recent­ly as it has come to be embraced by more users across the plan­et.  In a world of gov­ern­ment fiat cur­ren­cies, Bit­coin is an admirable inno­va­tion.  But in a sense it extends the cur­rent cur­ren­cy frame­work, as opposed to rev­o­lu­tion­iz­ing it.  It was cre­at­ed out of less than thin air when cybergeeks who saw it as a nat­ur­al pro­gres­sion of the mod­ern web spec­i­fied the cre­ation and dis­tri­b­u­tion of the new cyber­cur­ren­cy in a paper post­ed on the Inter­net in 2008.  The vir­tu­al cur­ren­cy was then launched into oper­a­tion in 2009. . . .

. . . . The econ­o­my is already bare­ly grow­ing, if infla­tion is cur­rent­ly mea­sured cor­rect­ly.  If the Fed fur­ther desta­bi­lizes the econ­o­my, the dol­lar will prob­a­bly fur­ther decline, as who will want to buy dol­lars to invest in a declin­ing econ­o­my only con­tin­u­ous­ly threat­ened with even high­er tax and reg­u­la­to­ry bur­dens?  But if the Fed redou­bles on its cur­rent poli­cies, the dol­lar will prob­a­bly decline fur­ther under the threat of even­tu­al infla­tion.  Who will want to hold dol­lars under this increas­ing­ly nar­row­ing conun­drum?  That is when the world may turn to some­thing dif­fer­ent.

It is not Bit­coin that will arise as the alter­na­tive glob­al reserve cur­ren­cy, because as dis­cussed above, it has no inher­ent val­ue either, so it is sub­ject to wide swings in mar­ket val­ue too.  The real threat to the dol­lar is a dif­fer­ent, pri­vate, alter­na­tive cur­ren­cy that can arise, that is based in real com­modi­ties with inher­ent val­ue. . . .

11.  “The Anti­so­cial Net­work” by Paul Krug­man; The New York Times; 4/14/2013.

Bitcoin’s wild ride may not have been the biggest busi­ness sto­ry of the past few weeks, but it was sure­ly the most enter­tain­ing. Over the course of less than two weeks the price of the “dig­i­tal cur­ren­cy” more than tripled. Then it fell more than 50 per­cent in a few hours. Sud­den­ly, it felt as if we were back in the dot-com era.

The eco­nom­ic sig­nif­i­cance of this roller coast­er was basi­cal­ly nil. But the furor over bit­coin was a use­ful les­son in the ways peo­ple mis­un­der­stand mon­ey — and in par­tic­u­lar how they are mis­led by the desire to divorce the val­ue of mon­ey from the soci­ety it serves.

What is bit­coin? It’s some­times described as a way to make trans­ac­tions online — but that in itself would be noth­ing new in a world of online cred­it-card and Pay­Pal trans­ac­tions. In fact, the Com­merce Depart­ment esti­mates that by 2010 about 16 per­cent of total sales in Amer­i­ca already took the form of e‑commerce.

So how is bit­coin dif­fer­ent? Unlike cred­it card trans­ac­tions, which leave a dig­i­tal trail, bit­coin trans­ac­tions are designed to be anony­mous and untrace­able. When you trans­fer bit­coins to some­one else, it’s as if you hand­ed over a paper bag filled with $100 bills in a dark alley. And sure enough, as best as any­one can tell the main use of bit­coin so far, oth­er than as a tar­get for spec­u­la­tion, has been for online ver­sions of those dark-alley exchanges, with bit­coins trad­ed for nar­cotics and oth­er ille­gal items.

But bit­coin evan­ge­lists insist that it’s about much more than greas­ing the path for illic­it trans­ac­tions. The biggest declared investors in bit­coins are the Win­klevoss broth­ers, wealthy twins who suc­cess­ful­ly sued for a share of Face­book and were made famous by the movie “The Social Net­work” — and they make claims for the dig­i­tal prod­uct sim­i­lar to those made by gold­bugs for their favorite met­al. “We have elect­ed,” declared Tyler Win­klevoss recent­ly, “to put our mon­ey and faith in a math­e­mat­i­cal frame­work that is free of pol­i­tics and human error.”

The sim­i­lar­i­ty to gold­bug rhetoric isn’t a coin­ci­dence, since gold­bugs and bit­coin enthu­si­asts — bit­bugs? — tend to share both lib­er­tar­i­an pol­i­tics and the belief that gov­ern­ments are vast­ly abus­ing their pow­er to print mon­ey. At the same time, it’s very pecu­liar, since bit­coins are in a sense the ulti­mate fiat cur­ren­cy, with a val­ue con­jured out of thin air. Gold’s val­ue comes in part because it has non­mon­e­tary uses, such as fill­ing teeth and mak­ing jew­el­ry; paper cur­ren­cies have val­ue because they’re backed by the pow­er of the state, which defines them as legal ten­der and accepts them as pay­ment for tax­es. Bit­coins, how­ev­er, derive their val­ue, if any, pure­ly from self-ful­fill­ing prophe­cy, the belief that oth­er peo­ple will accept them as pay­ment.

How­ev­er, let’s leave that strange­ness on one side, along with the pecu­liar “min­ing” process — actu­al­ly a process of com­plex cal­cu­la­tion — used to add to the bit­coin stock. Instead, let’s focus on the two huge mis­con­cep­tions — one prac­ti­cal, one philo­soph­i­cal — that under­lie both gold­bugism and bit­bugism.

The prac­ti­cal mis­con­cep­tion here — and it’s a big one — is the notion that we live in an era of wild­ly irre­spon­si­ble mon­ey print­ing, with run­away infla­tion just around the cor­ner. It’s true that the Fed­er­al Reserve and oth­er cen­tral banks have great­ly expand­ed their bal­ance sheets — but they’ve done that explic­it­ly as a tem­po­rary mea­sure in response to eco­nom­ic cri­sis. I know, gov­ern­ment offi­cials are not to be trust­ed and all that, but the truth is that Ben Bernanke’s promis­es that his actions wouldn’t be infla­tion­ary have been vin­di­cat­ed year after year, while gold­bugs’ dire warn­ings of infla­tion keep not com­ing true.

The philo­soph­i­cal mis­con­cep­tion, how­ev­er, seems to me to be even big­ger. Gold­bugs and bit­bugs alike seem to long for a pris­tine mon­e­tary stan­dard, untouched by human frailty. But that’s an impos­si­ble dream. Mon­ey is, as Paul Samuel­son once declared, a “social con­trivance,” not some­thing that stands out­side soci­ety. Even when peo­ple relied on gold and sil­ver coins, what made those coins use­ful wasn’t the pre­cious met­als they con­tained, it was the expec­ta­tion that oth­er peo­ple would accept them as pay­ment.

Actu­al­ly, you’d expect the Win­klevoss­es, of all peo­ple, to get this, because in a way mon­ey is like a social net­work, which is use­ful only to the extent that oth­er peo­ple use it. But I guess some peo­ple are just both­ered by the notion that mon­ey is a human thing, and want the ben­e­fits of the mon­e­tary net­work with­out the social part. Sor­ry, it can’t be done.

So do we need a new form of mon­ey? I guess you could make that case if the mon­ey we actu­al­ly have were mis­be­hav­ing. But it isn’t. We have huge eco­nom­ic prob­lems, but green pieces of paper are doing fine — and we should let them alone.

12. “Bit­coin’s Vast Over­val­u­a­tion Appears Par­tial­ly Caused by (Usu­al­ly) Ille­gal Price-Fix­ing” by Rick Falkvinge; Falkvinge.net; 9/2013.

. . . . In secu­ri­ties trad­ing, the expres­sion paint­ing the tape is used for any trad­ing activ­i­ty that is intend­ed to manip­u­late the trad­ing sta­tis­tics (price, vol­ume, oth­er met­rics) rather than to exe­cute a trade. It is high­ly ille­gal, jail-time ille­gal, in all civ­i­lized parts of the world. The expres­sion comes from the ancient price tick­er tape, and how it could be “paint­ed” with false data.

I’m going to illus­trate how this Shark Squad has oper­at­ed recent­ly to fix the price in lur­ing oth­er traders of their mon­ey and hik­ing the price. (While lur­ing oth­er traders of their mon­ey is part of the game, there are legal and ille­gal ways to do so. Insid­er trad­ing, for exam­ple, is one of the bet­ter-known ille­gal ones – our legal frame­work gen­er­al­ly fights hard to cre­ate a lev­el play­ing field for all traders.) The squad is a small team of col­lab­o­rat­ing traders.

In Step 1 of the cycle, the shark squad makes a large buyup, caus­ing prices to sky­rock­et. Illus­trat­ed here, the buyup at 10:00 Euro­pean time on Thurs­day Sep­tem­ber 12, 2013, from USD 135 to 145.9, an instant 8‑percent increase. This caus­es a lot of down­ward-bet­ting traders to flush out.

In step 2, the shark squad revers­es this trend by caus­ing a slow pull­back, caus­ing those who bought in greed to sell off in pan­ic as the mar­ket has reversed and caus­ing more stop loss­es to trig­ger and peo­ple to sell to the squad‘s bids. Note that I write caus­es a pull­back – this is not a nor­mal mar­ket pull­back. Let’s look at the big pic­ture first as dis­played by the site bit­coin­wis­dom, which dis­plays much more detail than most sites. You can see the pull­back over Thurs­day lunch-to-after­noon (blue box, right half), and there is also a dis­play of the cur­rent order book (yel­low box) and the recent trans­ac­tions (red box) which we will look at short­ly. Note how the recent trans­ac­tions in the indi­cat­ed red box are all red, red, red, indi­cat­ing a mas­sive sell­off – there’s nobody buy­ing at all on cur­so­ry inspec­tion, only sell­ing, and a lot of sell­ing.

How­ev­er, let’s take a clos­er look at the minute details of the recent trans­ac­tions in the bot­tom right cor­ner, dis­play­ing time, price, and amount of the last bit­coin trans­ac­tions:

Do you see a pat­tern here? All the trans­ac­tions are for exact­ly one bit­coin, and the trans­ac­tions are spaced exact­ly five sec­onds apart. This pat­tern can con­tin­ue for hours, a claim ver­i­fi­able by check­ing the MtGox trans­ac­tion his­to­ry. This is not mar­ket trad­ing; this is one (1) auto­mat­ed process intend­ed to give the illu­sion of many dif­fer­ent play­ers pan­ic-sell­ing. Fur­ther­more, let’s take a clos­er look at the order book:

Do you see the num­bers below and to the left of the cur­rent big red price? That’s the bid order book. That’s the cur­rent buy orders. Note how the cur­rent­ly exe­cut­ing buy orders are at 7–8 bit­coin each, placed just 0.0001 (!) bit­coin apart in price, evad­ing detec­tion on most sites. This is coor­di­nat­ed with the sell­ing per­son. Those buy orders keep replen­ish­ing as the sales orders keep tick­ing one bit­coin per five sec­onds; they are coor­di­nat­ed. This is one per­son in the Shark Squad sell­ing to anoth­er per­son in the Shark Squad, to give the illu­sion of mar­ket down­ward pres­sure and sell vol­ume.

Both of these activ­i­ties – split­ting an order to give the illu­sion of many trades, and trad­ing with­in a group to give the appear­ance of increased vol­ume and a cer­tain mar­ket direc­tion – are con­sid­ered paint­ing the tape and high­ly ille­gal. (I’m going to stop writ­ing “usu­al­ly ille­gal” now, as it’s ille­gal in prac­ti­cal­ly all coun­tries where you can read this.)

So, how can I state with cer­tain­ty that the sell­er and buy­er are con­spir­ing? Based on only this screen­shot, the evi­dence could be improved, but hav­ing watched the mar­ket at this lev­el for some two months and seen how these kind of buy and sell orders fol­low each oth­er very close­ly, it’s obvi­ous there is talk­ing and coor­di­nat­ing with­in a team ded­i­cat­ed to fab­ri­cat­ing a mar­ket impres­sion. Nor­mal­ly, you would need to see how they moved in lock­step to iden­ti­fy this coop­er­a­tion, but it’s par­tic­u­lar­ly vis­i­ble in this snap­shot. (Besides, the vis­i­ble order-split­ting is enough to con­sti­tute tape-paint­ing entire­ly on its own.)

Here’s the kick­er, then: we have observed that the buy orders being exe­cut­ed – the ones with 7, 7, 7, 7, 7, 8, 8, etc. bit­coin at the moment at a price of 137.64xyz – belong to this shark squad. What hap­pens when a trad­er sees the (false) image of a mas­sive sell­off going on, and sells in pan­ic? Well, he’s sell­ing his bit­coin into those buy orders to the shark squad, at the price they have set. Here, the price is 137.64. So the obvi­ous ques­tion is, what hap­pens next? Well, a fab­ri­cat­ed price hike, of course, trick­ing oth­er traders to buy those same bit­coin at high­er prices from the coor­di­nat­ed shark squad. We’ll be return­ing to when and how that hap­pens in step 4.

In Step 3, the shark squad puts up an enor­mous bid­wall – so large it’s effec­tive­ly a lid on the mar­ket – and lure oth­er traders to sell into it, intend­ing to sell the bought bit­coin at a high­er price after the next fab­ri­cat­ed hike. There is plen­ty of fake trad­ing going on into these bid­walls as vis­i­ble in step 2. We can also see that this lure is effec­tive – look at the trans­ac­tion his­to­ry of bit­coin around these walls, and you can eas­i­ly find trades of hun­dreds of coins amid the fake trad­ing. Or per­haps it’s the shark squad sell­ing to itself again with the trans­ac­tions in the hun­dreds. Hard to know – most like­ly a mix of in-group trad­ing and oth­ers being lured to sell. In any case, unsus­pect­ing traders are sell­ing into the shark squad‘s bid­walls. These lure­walls are eas­i­ly iden­ti­fi­able in the close-up mar­ket his­to­ry, as well as when they were removed:

In Step 4, final­ly, the price is hiked to new highs and the shark squad begins offload­ing its booty at high­er prices, and the cycle repeats with them trad­ing in-between them­selves to give the appear­ance of mar­ket activ­i­ty. That price hike hap­pened at 15:25 Thurs­day, Euro­pean time, up to 145 USD for this cycle, as also vis­i­ble in the image above.

This cycle has repeat­ed very vis­i­bly at least five times in the past weeks, and like­ly since much ear­li­er in a vari­ant ver­sion:

This – this ille­gal activ­i­ty – is very trou­bling for the bit­coin ecosys­tem. . . .

13. “Dark Wal­let: A Rad­i­cal Way to Bit­coin” by Michael del Castil­lo; The New York­er; 9/24/2013.

. . . . Wil­son believes Bit­coin should remain the back­bone of a sep­a­rate econ­o­my that under­mines the government’s abil­i­ty to col­lect tax­es and to con­trol the val­ue of currency—not be sub­sumed into the main­stream econ­o­my.

“The state is basi­cal­ly allowed because we have all cho­sen to use these cer­tain insti­tu­tions to chan­nel our activ­i­ty and com­merce,” he told me. “But when we are enabled, through alter­na­tive means and tech­nolo­gies, to chan­nel our com­merce as we will, chan­nel our pro­duc­tion as we will, the state sim­ply dis­ap­pears.”

Not every­one agrees, of course, that soci­ety would ben­e­fit from the dis­ap­pear­ance of gov­ern­ments. Wil­son used the Lib­er­a­tor to make the point that the gov­ern­ment shouldn’t reg­u­late the flow of infor­ma­tion; he wants to use Bit­coin to help build an econ­o­my out­side of the government’s reach.

But his ide­ol­o­gy, tak­en to its log­i­cal con­clu­sion, would also leave ser­vices like roads, libraries, fire fight­ing, and polic­ing in the hands of the pri­vate sector—whose inter­ests may not be aligned, Wilson’s crit­ics argue, with those of the pub­lic at large.

Wil­son knows that he could see blow­back for his stance against the foun­da­tion: as a self-described “cryp­to-anar­chist,” per­haps he shouldn’t be so con­cerned with who is or isn’t deter­min­ing the currency’s future. And if the U.S. gov­ern­ment attempts to reg­u­late the cur­ren­cy, which seems like­ly, Wil­son will also find him­self once again in direct oppo­si­tion to the gov­ern­ment. . . .

14. “For­mer Pay­Pal CEO Signs Off on Bit­con” by Sam Bid­dle; Val­ley­Wag; 5/16/2013.

Before he was one of the most pow­er­ful VCs in the world, Peter Thiel cre­at­ed Pay­Pal, which deals in real dol­lars and boomed accord­ing­ly. If you think this might make him wary of unreg­u­lat­ed inter­net fun­ny mon­ey, you’re wrong: $2,000,000 wrong.
Thiel’s Founders Fund just wrapped a $2 mil­lion round for Bit­Pay, which helps oth­er com­pa­nies accept Bit­coin payments—namely for things “like elec­tron­ics, pre­cious met­als, and oth­er low-mar­gin prod­ucts,” says TechCrunch.

The cash infu­sion comes only a week after Fred Wil­son led a $5 mil­lion round in anoth­er com­pa­ny that does pret­ty much the exact same thing, and at a time when the most pow­er­ful Bit­coin exchange in the world is get­ting its ass kicked by the US gov­ern­ment. [This is a ref­er­ence to Silk Road–D.E..] . .

15. Despite press cov­er­age rep­re­sent­ing Ron Paul and Mitt Rom­ney as oppo­nents, the two are close polit­i­cal allies.

“For Paul and Rom­ney, a Strate­gic Alliance between Estab­lish­ment and Out­sider” by Amy Gard­ner; Wash­ing­ton Post; 2/1/2012.

. . . Despite deep dif­fer­ences on a range of issues, Rom­ney and Paul became friends in 2008, the last time both ran for pres­i­dent. So did their wives, Ann Rom­ney and Car­ol Paul. The for­mer Mass­a­chu­setts gov­er­nor com­pli­ments the Texas con­gress­man dur­ing debates, prais­ing Paul’s reli­gious faith dur­ing the last one, in Jack­sonville, Fla. Imme­di­ate­ly after­ward, as is often the case, the Pauls and the Rom­neys grav­i­tat­ed toward one anoth­er to say hel­lo.

The Rom­ney-Paul alliance is more than a curi­ous con­nec­tion. It is a strate­gic part­ner­ship: for Paul, an oppor­tu­ni­ty to gain a seat at the table if his long-shot bid for the pres­i­den­cy fails; for Rom­ney, a chance to gain sup­port from one of the most vibrant sub­groups with­in the Repub­li­can Par­ty.

“It would be very fool­ish for any­body in the Repub­li­can Par­ty to dis­miss a very real con­stituen­cy,” said one senior GOP aide in Wash­ing­ton who is famil­iar with both camps. “Ron Paul plays a very valu­able part in the process and brings a lot of vot­ers toward the Repub­li­can Par­ty and ulti­mate­ly into the vot­ing booth, and that’s some­thing that can’t be ignored.” . . .

16. The pro­gram con­cludes with more exam­i­na­tion of Peter Thiel, the bankroller of Ron Paul’s Super PAC. Thiel is a big backer of bit­coin.

17. Thiel is also a finan­cial angel for Sen­a­tor Ted Cruz.

In FTR #‘s 758759, we looked at the pro­found con­nec­tions between the GOP fis­cal ter­ror­ists of the “Paulis­tin­ian Lib­er­tar­i­an Orga­ni­za­tion” and the milieu of Eddie Snow­den. It should come as no sur­prise that Peter Thiel is a major backer of Ted Cruz.

Cruz, of course, is the GOP Sen­a­tor from Texas who was at the fore­front of the “shut­down milieu.”

Thiel is inex­tri­ca­bly linked with Palan­tirRon Paul, the seast­eading move­ment and Face­book.

In our dis­cus­sions of Thiel, NEVER for­get that he explic­it­ly rejects democ­ra­cy, in no small mea­sure because he does­n’t think women should be allowed to vote.

“Reminder: Peter Thiel Is Ted Cruz’s Gay Bil­lion­aire Ally” by Sam Bid­dle; Val­ley Wag; 9/2/2013.

Where does a man like Ted Cruz get the con­fi­dence to IRL troll the Unit­ed States Sen­ate for 21 hours? Know­ing that Pay­Pal bil­lion­aire and Sil­i­con Val­ley king­pin Peter Thiel has his back sure­ly helps. . . .

Discussion

11 comments for “FTR #760 Bit[coin]burg–The Rebels Without a Clue”

  1. You sound bet­ter and bet­ter with each pro­gram and I am real­ly glad about that. But try­ing to keep up with you is like try­ing to keep up with the road run­ner on speed. what I need is some­thing like SPITFIRELIST FOR DUMMIES. because one read­ing does not do it for me to get all this infor­ma­tion in my head. it is hard to believe that you are just one guy. but I am sure glad you are doing what you are doing, even if I have trou­ble keep­ing up with you.

    Posted by David | October 31, 2013, 3:26 pm
  2. One of the inter­est­ing aspects about the bit­coin phe­nom­e­na is that the more peo­ple that start using bit­coin the greater the defla­tion­ary pres­sure on the val­ue of the bit­coins. That’s because there’s a fixed max­i­mum of 21 mil­lion bit­coins that can ever exist, so the greater the demand for bit­coins the more each bit­coin will cost in oth­er cur­ren­cies. With the Chi­nese mar­ket now warm­ing up to bit­coin, and all those new poten­tial users, we might see a fas­ci­nat­ing exam­ple of a hyper­de­fla­tion­ary vir­tu­al gold bub­ble:

    Bloomberg
    Bit­coin Climbs to Record on Wider Accep­tance, Chi­na Trade
    By Olga Kharif — Nov 6, 2013 5:38 PM CT

    Bitcoin’s price hit a record at $265 on the Bit­Stamp online exchange, dri­ven by wider accep­tance of the vir­tu­al cur­ren­cy.

    The dig­i­tal mon­ey, which can be used to pay for goods and ser­vices on the Inter­net, has risen 20-fold so far this year, as trad­ing activ­i­ty has increased. Bit­coins were trad­ing at $251.36 apiece at 6:30 p.m. in New York on Bit­Stamp, one of the more active Web-based exchanges where Bit­coins are trad­ed for dol­lars, euros and oth­er cur­ren­cies.

    The ral­ly comes a month after the clos­ing of the “Silk Road Hid­den Web­site,” where peo­ple could obtain drugs, guns and oth­er illic­it goods using Bit­coins. The vir­tu­al cur­ren­cy lost a third of its val­ue in the days after the web­site was shut down. Bit­coins are becom­ing increas­ing­ly pop­u­lar, par­tic­u­lar­ly in Chi­na, said Ugo Egbunike, direc­tor of busi­ness devel­op­ment at Index­U­ni­verse, an index-fund researcher.

    “I thought Silk Road is going to do some dam­age to the price,” Egbunike said. “But with BTC Chi­na buy­ing this up — they seem to have picked up the slack.”

    BTC Chi­na is now the world’s largest Bit­coin exchange, Nicholas Colas, a Con­vergEx Group ana­lyst, wrote in a Nov. 5 report.

    The vir­tu­al cur­ren­cy exists as soft­ware that’s designed to be untrace­able, mak­ing it an attrac­tive ten­der for those seek­ing to trade anony­mous­ly via the Web. There are about 30 trans­ac­tions per minute, at an aver­age amount of 16 Bit­coins, accord­ing to a report today by the Fed­er­al Reserve Bank of Chica­go.

    ...

    Since any­one could con­ceiv­ably cre­ate a com­pet­ing ver­sion of bit­coin with dif­fer­ent fea­tures, it’ll be inter­est­ing to see how long the bit­coin bub­ble will last. For instance, what hap­pens if some­one devel­ops a dig­i­tal cur­ren­cy where the trans­ac­tions are much more anony­mous than bit­coin’s. Or low­er com­pu­ta­tion costs? The val­ue of most mon­ey is backed by a gov­ern­ment run­ning an econ­o­my that the mon­ey can be spent in but bit­coins are sup­posed to be desir­able for their util­i­ty (like anonymi­ty) and the 21 mil­lion cap that pre­vents the hyper­in­fla­tion­ary hor­rors of fiat cur­ren­cy. Will bit­coin have a point any­more if a bet­ter anony­mous dig­i­tal sys­tem comes? Can exist­ing bit­coins be upgrad­ed to a bet­ter sys­tem or will they be stuck as a low-tech pseu­do-anony­mous crap cur­ren­cy? That seems like a big ques­tion that needs to be answered by bit­coins long-term investors.

    Posted by Pterrafractyl | November 7, 2013, 12:29 pm
  3. It would be pret­ty hilar­i­ous if Bit­coin, a cur­ren­cy cher­ished by haunt­ed by hyper­in­fla­tion­ary fears, because an object les­son in the dan­gers of defla­tion. But it’s hard to see how this les­son will be avoid­ed if Bit­coin ever real­ly caught on because one of the main fea­tures of the the cur­ren­cy is that it’s capped out at 21 mil­lion coins but you can divide each coin up into small­er and small­er pieces. There­fore, the rea­son­ing goes, Bit­coin has defeat­ed the infla­tion beast while still main­tain­ing the scal­a­bil­i­ty required to han­dle the vol­ume of trans­ac­tions in vir­tu­al­ly any sized econ­o­my! Rev­o­lu­tion awaits! And this is sort of true of Bit­coins but the vic­to­ry over infla­tion also comes at the cost of built-in defla­tion cor­re­lat­ed to the growth of the Bit­coin econ­o­my (imag­ine if dol­lars grew more expen­sive with the growth of the US econ­o­my). So the more Bit­coin grows in pop­u­lar­i­ty the greater the defla­tion, the greater the pay­out to the ear­li­est bit­coin investors, and the greater the temp­ta­tion to keep hold­ing onto those Bit­coins:

    Busi­ness Insid­er
    If You Believe In Bit­coin, You Should Nev­er Buy Any­thing In Bit­coin
    Joe Weisen­thal Nov. 10, 2013, 5:42 PM

    Many Bit­coin believ­ers think that the dig­i­tal cur­ren­cy will one day become the pre-emi­nent cur­ren­cy of the inter­net. They basi­cal­ly see it becom­ing the inter­net’s ver­sion of gold in that it’s nat­u­ral­ly scarce, inde­pen­dent, vir­tu­al­ly impos­si­ble to manip­u­late, and cru­cial­ly suit­ed for a dig­i­tal world when mon­ey ought to be able to be moved seam­less­ly and at no cost.

    Well here’s a tip: If you think that this is true, then nev­er use Bit­coin in a trans­ac­tion.

    As more peo­ple have got­ten into Bit­coin, the price has gone way up.

    Vir­tu­al­ly every­one who has ever bought any­thing in Bit­coin has been a huge los­er, who would have been bet­ter suit­ed just hold­ing onto the Bit­coins instead.

    Remem­ber the piz­za that was pur­chased for $25 in Bit­coins years back? Had the per­son not bought that piz­za, it would be worth near­ly $3 mil­lion. That pur­chase was a cat­a­stroph­ic deci­sion, as that was prob­a­bly the most expen­sive piz­za of all time.

    Of course this presents a Catch-22. How can Bit­coin become a real cur­ren­cy if it’s not used in trans­ac­tions? And why would any­one use it in trans­ac­tions if becom­ing a real cur­ren­cy offers so much more price appre­ci­a­tion? This con­tra­dic­tion is a core prob­lem, and it’s a rea­son why it’s prob­a­bly doomed to fail (real cur­ren­cies don’t have this issue, since cen­tral banks pre­vent rapid price appre­ci­a­tion, and they man­date that the cur­ren­cy be used).

    But real­ly, if you’re think­ing that Bit­coin is going to be huge, it’d be insane and irre­spon­si­ble to buy any­thing with it.

    Part of what makes Bit­coin an extra fas­ci­nat­ing pyra­mid scheme to watch unfold is that, unlike most pyra­mid schemes, Bit­coin could con­ceiv­ably func­tion as a viable cur­ren­cy but only if it’s not act­ing like a pyra­mid-scheme. It can’t do both at once. But it can poten­tial­ly oscil­late back and forth between the two...at least until a more anony­mous com­peti­tor comes along and steals the entire mar­ket.

    Posted by Pterrafractyl | November 11, 2013, 3:56 pm
  4. The Win­klevoss twins, big Bit­coin investors, have a “bull case” sce­nario val­ue for the entire 21 mil­lion Bit­coin econ­o­my: $400 bil­lion, which is 100 times more than the cur­rent $4 bil­lion cap­i­tal­iza­tion. That’s ~$19,050/coin. At that point it’ll pre­sum­ably be one big sta­ble bub­ble:

    CNBC
    The Win­klevoss­es: Bit­coin worth 100 times more
    Pub­lished: Tues­day, 12 Nov 2013 | 9:19 AM ET
    By: Matthew J. Belvedere | Pro­duc­er, CNBC’s “Squawk Box”

    The Win­klevoss twins are scream­ing bulls on bit­coin.

    Cameron and Tyler Winklevoss—big investors in the dig­i­tal currency—said Tues­day that bit­coin should be worth 100 times more than it’s val­ued today.

    “The bull case sce­nario is a $400 bil­lion mar­ket cap. So the mar­ket cap is around $4 bil­lion right now,” Tyler Win­klevoss said in an inter­view at the Deal­book con­fer­ence that aired on CNBC’s “Squawk Box.”

    The twins, who famous­ly bat­tled Mark Zucker­berg over the ori­gins of Face­book, brought $11 mil­lion worth of bit­coin in April, when the vir­tu­al cur­ren­cy hit record highs of $266. It then plum­met­ed.

    But bit­coin has surged into record ter­ri­to­ry again, hit­ting $385 in ear­ly Tues­day trad­ing on Mt. Gox—one of the many exchanges for the dig­i­tal cur­ren­cy.

    Cameron Win­klevoss said he views their invest­ment in bit­coin as a gold 2.0‑play but also a bet on the tech­nol­o­gy: “The idea that pay­ments are increas­ing­ly going to use a net­work like the bit­coin net­work to move mon­ey around the world.”

    The Win­klevoss­es want to cre­ate a bit­coin exchange trad­ed fund (ETF), acces­si­ble to all investors. “We filed an amend­ed S‑1 in Octo­ber. And we’re just still going through the process,” Cameron said.

    He explained how bit­coin works: “Min­ers mint bit­coins every 10 min­utes. It’s basi­cal­ly a com­put­er algo­rithm.” He said the com­put­ers built to mine are so spe­cif­ic “you could­n’t real­ly do it as a hob­by­ist.”

    ...

    Last month, bit­coin plunged after U.S. author­i­ties shut down the Silk Road site, an accused online pur­vey­or of drugs and oth­er ille­gal ser­vices. Bit­coin had been hit by the per­cep­tion that it was used pri­mar­i­ly for trans­ac­tions on Silk Road, and many had expect­ed demand to dry up after the web­site was closed.

    But Tyler Win­klevoss said those con­cerns were nev­er real­ized: “Prices are dou­ble what it was before Silk Road was shut down. So the demand to use bit­coin for illic­it activ­i­ty was clear­ly almost zero.”

    Main­stream mer­chants are slow­ly adopt­ing bit­coin. Cameron point­ed out that e‑commerce plat­form Shopi­fy announced it will accept bit­coin, and so has Chi­na por­tal Baidu.

    The dig­i­tal cur­ren­cy has even made steps into the phys­i­cal realm, with ATM man­u­fac­tur­er Robo­coin launch­ing the first bit­coin ATM in a Van­cou­ver cof­fee shop.

    $19k Bit­coins, here we come!

    And there they go...

    ZDNet
    Hong Kong Bit­coin trad­ing plat­form van­ish­es with mil­lions

    Sum­ma­ry: As much as 30 mil­lion yuan (US$5 mil­lion) of invest­ment could be lost in lim­bo as a Hong Kong-based Bit­coin trad­ing plat­form van­ish­es.

    By Liu Jiayi for View from Chi­na | Novem­ber 12, 2013 — 02:18 GMT (18:18 PST)

    When ardent Chi­nese Bit­coin investors found that they could no longer access the web­site of Glob­al Bond Lim­it­ed (GBL) in the ear­ly morn­ing of Octo­ber 26, it was already too late.

    One investor under the pseu­do­nym of South Amer­i­can Vicu­na orga­nized an online group for the los­ing traders and told IT Times on Mon­day that more than 30 mil­lion yuan from 500 investors, many of whom sold homes to get in the vir­tu­al cur­ren­cy trade, could nev­er be retrieved.

    Accord­ing to the Vicu­na, after the GBL’s web­site shut­down, it left only one mes­sage, say­ing that the site was com­pro­mised and investors who want to get back their invest­ment data shall trans­fer mon­ey to a des­ig­nat­ed account. Now all con­tacts are not respond­ing, and the com­pa­ny office in Hong Kong is as emp­ty as the traders’ pock­ets.

    GBL self-pro­claimed that the local gov­ern­ment had approved vir­tu­al cur­ren­cy exchange back on June 8, and lured buy­ers in with high lever­age rate and high yield. How­ev­er, the too-obvi­ous-to-ignore trad­ing loop­hole in its trad­ing sys­tem raised con­cerns, but the “always-win­ning” traders were too obsessed to get out, accord­ing to Vicu­na.

    Vicu­na, who is also the admin­is­tra­tor of btcmini.net, anoth­er Bit­coin trad­ing plat­form, is now help­ing vic­tims scav­enge evi­dence, if there was any­thing sub­stan­tial.

    Many investors in Shang­hai tried to ask the local police to inves­ti­gate but failed. “When I told them GBL’s dis­ap­pear­ance, the police asked me what is Bit­coin, and how many coin could peo­ple buy with one yuan,” said an investor to IT Times.

    Vicu­na said that at the moment vic­tims could only pro­vide screen cap­tures of trans­fers, account details, and IP address­es, none of which would be use­ful with­out police inves­ti­ga­tion.

    ...

    Yikes! Still, unscrupu­lous Bit­coin exchange oper­a­tors are known dan­ger to unreg­u­lat­ed Bit­coin design. A new, greater dan­ger for Bitopia might be emerg­ing: Unscrupu­lous Bit­coin “min­ers” that become Bit­coin monop­o­lists. Researchers have found that there is a math­e­mat­i­cal advan­tage to “self­ish min­ing” (Bit­coin min­ing coop­er­a­tive) and it does­n’t require many min­er work­ing “self­ish­ly” to under­mine the sys­tem. Con­sid­er­ing that Bit­coin is, in part, a cel­e­bra­tion of Lib­er­tar­i­an ideals it would be some­what iron­ic if self­ish­ness kills Bit­coin:

    MIT Tech­nol­o­gy Review
    Emerg­ing Tech­nol­o­gy From the arX­iv
    Novem­ber 8, 2013

    Bit­coin Vul­ner­a­bil­i­ty Could Allow Mali­cious Min­ers to Seize Con­trol

    One of Bitcoin’s big advan­tages is that it is decen­tralised with nobody in over­all con­trol. But now a sim­ple strat­e­gy has emerged that could allow almost any group to take over, say com­put­er secu­ri­ty ana­lysts.

    The dig­i­tal cur­ren­cy Bit­coin is one of the zeit­geist phe­nom­e­na of our time. Since 2009, it has grown from a dig­i­tal curios­i­ty to an online phe­nom­e­non. There are now some 11.5 mil­lion Bit­coins in cir­cu­la­tion and each one is worth over $300.

    The Bit­coin sys­tem is specif­i­cal­ly designed to over­come one of the seri­ous flaws of pre­vi­ous dig­i­tal currencies—the pos­si­bil­i­ty of dou­ble spend­ing; that two peo­ple could spend two copies of the same cur­ren­cy at the same time. It is also decen­tralised so that no sin­gle organ­i­sa­tion or organ­ised group of indi­vid­u­als can con­trol the cur­ren­cy and pre­vent cer­tain types of trans­ac­tions.

    But Bit­coin may not be quite as secure as every­body thought. Today, Ittay Eyal and Emin Gun Sir­er at Cor­nell Uni­ver­si­ty in Itha­ca say they’ve dis­cov­ered a flaw that allows any organ­ised group of Bit­coin min­ers to take over the cur­ren­cy. And they say that some groups today are already big enough to do the job.

    First some back­ground. Per­haps Bitcoin’s biggest advan­tage is its unique approach to pre­vent­ing dou­ble spend­ing. It does this by record­ing every trans­ac­tion in a sin­gle log known as a blockchain. An indi­vid­ual account can only spend a Bit­coin if the blockchain records that it owns the Bit­coin in the first place.

    This log is pro­tect­ed by cryp­top­uz­zles that can only be solved by large scale num­ber crunch­ing. When any­body solves such a puz­zle, they can record new trans­ac­tions and are reward­ed with a fee in the form of new Bit­coins.

    Hence the emer­gence of Bit­coin min­ers. These are peo­ple who devote com­put­ing pow­er to solve cryp­top­uz­zles and are paid for their work in Bit­coins.

    If you’re think­ing of a career as a Bit­coin min­er, you’ll imme­di­ate­ly run into a prob­lem. The cryp­top­uz­zles are so dif­fi­cult that the chances of solv­ing one by your­self is tiny. So Bit­coin min­ers work togeth­er in groups so that they can solve the prob­lems more quick­ly. If any one of them solves a puz­zle, they all share the pro­ceeds.

    There are lots of groups to join and there’s no advan­tage in join­ing one over anoth­er. The received wis­dom is that this keeps the min­ing decen­tralised.

    But now Eyal and Sir­er say that’s not true and have worked out how a self­ish group of min­ers could take over the cur­ren­cy. “We show that the con­ven­tion­al wis­dom is wrong,” they say.

    The trick is to mine for Bit­coins but to keep the results secret. This cre­ates a fork in the blockchain so that one half of the fork is pub­lic and the oth­er half is secret.

    The Bit­coin sys­tem has a way of resolv­ing these kinds of forks, which occur by acci­dent from time to time. It requires min­ers to join the longest fork. The trans­ac­tions in the oth­er fork are then resub­mit­ted for res­o­lu­tion.

    If the self­ish min­ers make their fork longer than the pub­lic one, it becomes the cho­sen chain.

    The prob­lem is that the num­ber crunch­ing done on the fork that is aban­doned is wast­ed. So the self­ish min­ers end up get­ting more than their fair share of Bit­coins. This “enables pools of col­lud­ing min­ers that adopt it to earn rev­enues in excess of their min­ing pow­er,” say Eyal and Sir­er.

    Hav­ing skewed the sys­tem in favour of self­ish min­ers, oth­er min­ers see that they can make more Bit­coins by join­ing this group. The result is a tip­ping point in which the Bit­coin min­ing sys­tem sud­den­ly becomes dom­i­nat­ed by a sin­gle group. And this group can exer­cise what­ev­er con­trol it likes over how trans­ac­tions are record­ed.

    Of course, self­ish min­ing only reach­es a tip­ping point if the self­ish group con­sists of a cer­tain frac­tion of Bit­coin min­ers. Groups that are small­er than this can­not force the sys­tem to tip.

    The key result that Eyal and Sir­er have cal­cu­lat­ed is that the tip­ping thresh­old is close to zero zero. So almost any group could adopt the self­ish min­ing strat­e­gy and end up con­trol­ling the sys­tem.

    Eyal and Sir­er have a solu­tion of sorts. This involves a chang­ing the sys­tem so that it choos­es one fork over anoth­er at ran­dom (rather than choos­ing the lon­er one). When this choice is ran­dom, then it is hard­er for the self­ish min­ers to take con­trol.

    But not that much hard­er. Eyal and Sir­er cal­cu­late that this rais­es the tip­ping thresh­old to groups that con­trol around 25 per cent of all Bit­coin min­ing. “Even with our pro­posed fix that rais­es the thresh­old to 25 per cent, the out­look is bleak: there already exist pools whose min­ing pow­er exceeds the 25%,” they point out.

    ...

    Inter­est­ing­ly, if this is true, the investors try­ing to cre­ate Bit­coin’s com­peti­tors (like Peter Thiel who is bet­ting both for and against Bit­coin) actu­al­ly have an incen­tive to start their own Bit­coin Bankster car­tel in order to under­mine their exist­ing Bit­coin com­peti­tor. But if you were able to cre­ate a Bit­coin Bankster car­tel, would you even want to kill it? It’s kind of a Gold­en Goose at that point.

    Posted by Pterrafractyl | November 12, 2013, 10:18 am
  5. Final­ly, an econ­o­my wor­thy of Bit­coin’s awe­some­ness: Galt’s Gulch is for sale and they’re accept­ing Bit­coins:

    Galt’s Gulch Chile Becomes First Lib­er­tar­i­an Com­mu­ni­ty Accept­ing Bit­coin
    Galt’s Gulch Chile, a Lib­er­tar­i­an real estate project in Chile, has become the first real estate project of its kind to accept bit­coin. Designed as a res­i­den­tial organ­ic farm­ing com­mu­ni­ty with clean waters, organ­ic foods, and renew­able ener­gy, the project rais­es the ques­tion: What can’t you buy with bit­coin now?

    San­ti­a­go, Chile (PRWEB) Novem­ber 13, 2013

    As a philoso­pher and inven­tor, it is like­ly John Galt would have hap­pi­ly accept­ed bit­coin for the Galt’s Gulch depict­ed in Ayn Rand’s land­mark nov­el “Atlas Shrugged”.

    Although Galt’s char­ac­ter did not know of bit­coin, his vision has become a real­i­ty with the Lib­er­tar­i­an- fash­ioned com­mu­ni­ty, Galt’s Gulch Chile. Today Galt’s Gulch Chile becomes the world’s first Lib­er­tar­i­an real estate project to accept bit­coin.

    Galt’s Gulch Chile is a self-sus­tain­ing organ­ic farm­ing com­mu­ni­ty locat­ed with­in the mild Mediter­ranean micro­cli­mate of cen­tral Chile. This real­iza­tion of John Galt’s vision holds title to over 11,000 acres of pris­tine land with near­ly 800 liters per sec­ond of reg­is­tered under­ground and sur­face water rights. Galt’s Gulch Chile presents, for the first time, the oppor­tu­ni­ty to pur­chase real estate with the rev­o­lu­tion­ary new vir­tu­al cur­ren­cy bit­coin.

    Bit­coin has soared past all-time highs in recent weeks, reach­ing a price of near­ly $400 in ear­ly Novem­ber. Many ana­lysts have repeat­ed that one bar­ri­er to bit­coin’s main­stream accep­tance is one’s inabil­i­ty to spend it on prac­ti­cal things.

    Along­side hun­dreds and thou­sands of oth­er bit­coin busi­ness­es, Galt’s Gulch Chile has changed that.

    Galt’s Gulch Chile spokesper­son Jeff Berwick, founder of Stock­House, TDV Media & Bit­coinATM, has played a sig­nif­i­cant role in the ear­ly stages of bit­coin Berwick has been on Fox News, CNBC & Bloomberg to dis­cuss the rise of bit­coin.

    “I can think of no bet­ter way to invest bit­coins than on real estate, espe­cial­ly legal­ly pro­tect­ed land with clean water and organ­ic farm­land in quick­ly devel­op­ing mar­kets, like Chile” explained Berwick at a recent Spring Event at Galt’s Gulch Chile.

    “Just like bit­coins, I think land in emerg­ing mar­kets will only increase in val­ue over the com­ing years. The US dol­lar and oth­er fiat cur­ren­cies will con­tin­ue to col­lapse and we rec­om­mend those hold­ing dol­lars to divest them­selves of those dol­lars as soon as pos­si­ble. We also want to show our com­mit­ment to bit­coin and accept it very hap­pi­ly as pay­ment for land at Galt’s Gulch.”

    With archi­tec­tur­al and eco­log­i­cal mas­ter plan design under­way, Galt’s Gulch Chile has already invest­ed many months of effort into mak­ing Galt’s Gulch a true non-fic­tion real­i­ty.

    Please refer to the GGC web­site for fur­ther details on the project and also reg­is­ter for on-going updates and oppor­tu­ni­ties for liv­ing in the com­mu­ni­ty.

    Posted by Pterrafractyl | November 13, 2013, 7:36 pm
  6. Sweet! There are about to be two more bub­bles to invest your Bit­coins in: Chi­na’s hous­ing bub­ble and DC’s moral­i­ty bub­ble.

    Posted by Pterrafractyl | November 15, 2013, 12:35 am
  7. Anony­mous online mar­ket­place that replaced Silk Road VANISHES... tak­ing $100MILLION of users’ mon­ey with it

    Read more: http://www.dailymail.co.uk/news/article-2517244/Illegal-online-marketplace-replaced-Silk-Road-VANISHES–taking-100MILLION-users-money-it.html#ixzz2mUE3J7zp

    Posted by Vanfield | December 3, 2013, 10:52 pm
  8. On a side note, it looks like Gold­en Gate Cap­i­tal did well for itself in the US frack­ing boom:

    Decem­ber 8, 2013 5:21 pm
    Gold­en Gate Cap­i­tal sells US Sil­i­ca stake

    By Ed Ham­mond in New York

    Gold­en Gate Cap­i­tal is sell­ing its stake in US Sil­i­ca in a deal that will make the San Fran­cis­co-based pri­vate equi­ty group close to 10 times its ini­tial invest­ment.

    Gold­en Gate, which has been work­ing with Jos A Bank on its bid to take over rival suit retail­er Men’s Wear­house, dis­posed of the remain­ing 8.5 per cent of US Silica’s shares that it had not already sold, accord­ing to a Fri­day fil­ing.

    The pri­vate equi­ty com­pa­ny bought US Sil­i­ca, which pro­vides sand and oth­er chem­i­cals need­ed for frack­ing, for $120m in 2008. The sale of its remain­ing stake takes its total pro­ceeds to $1.15bn.

    Gold­en Gate has also teamed up with fel­low pri­vate equi­ty group Bain Cap­i­tal to con­sid­er mak­ing a bid for Com­puware, the busi­ness soft­ware mak­er, in a deal that could cre­ate a $9bn tech­nol­o­gy busi­ness
    ...

    Posted by Pterrafractyl | December 14, 2013, 6:51 pm
  9. It’s worth not­ing that the CEO of But­ter­fly Labs, one of the main bit­coin min­ing hard­ware com­pa­nies, appears to back the the­o­ry that Satoshi Nakamo­to is real­ly the cre­ation of a group of peo­ple affil­i­at­ed with the finan­cial sec­tor and prob­a­bly from Europe:

    Inter­na­tion­al Busi­ness Times
    Bit­coin Inven­tor Satoshi Nakamo­to is Anony­mous-style Cell from Europe
    Expert says a group, with strong foot­ing in finan­cial sec­tor, could be behind Bit­coin phe­nom­e­non

    By Vasude­van Srid­ha­ran | Decem­ber 16, 2013 08:16 AM GMT

    As the mys­tery sur­round­ing the iden­ti­ty of Satoshi Nakamo­to, the cre­ator of the dig­i­tal cur­ren­cy Bit­coin, con­tin­ues to grow, it is believed that the ‘inven­tor’ could infact be the cre­ation of a com­put­er col­lec­tive, IBTimes UK under­stands.

    Josh Zer­lan, the Chief Oper­at­ing Offi­cer of But­ter­fly Labs and a per­son famil­iar with the Bit­coin net­work, has said it is high­ly like­ly that Nakamo­to could be a group of peo­ple work­ing the finan­cial sec­tor.

    Speak­ing to IBTimes UK on the side­lines of a Glob­al Bit­coin Con­fer­ence in Ban­ga­lore, India, Zer­lan said: “One of the pre­vail­ing the­o­ries, I think has cred­i­bil­i­ty, is that it was some group of peo­ple from finan­cial sec­tor that cre­at­ed this. They released it and stepped back and let it go. So, Satoshi Nakamo­to is a group of peo­ple, I think, is a rea­son­able pos­si­bil­i­ty.”

    When quizzed where the group of peo­ple might be based, Zer­lan indi­cat­ed they could prob­a­bly be from the Euro­pean con­ti­nent.

    How­ev­er, Zer­lan from But­ter­fly Labs, which is involved in sup­ply­ing hard­ware for min­ing Bit­coins, con­ced­ed: “Nobody knows who he real­ly is. The name ‘Satoshi Nakamo­to’ is more like John Smith in Eng­lish. So, it’s kind of a gener­ic name.”

    He added that the recent spec­u­la­tion that Nakamo­to could be the Japan­ese blog­ger and pro­gram­mer Nick Szabo does not seem plau­si­ble, con­sid­er­ing the style of writ­ing.
    ...

    Posted by Pterrafractyl | December 17, 2013, 1:53 pm
  10. @Pterrafractyl–

    Don’t fail to note the lat­est FTR show, #764, fol­low­ing up on bit­coin.

    I’m pro­duc­ing shows on an almost week­ly basis, so the “Update on For The Record Pro­duc­tion” posts have been dis­con­tin­ued.

    Check the bot­tom of the front page of the web­site for the lat­est FTR pro­grams.

    765 should be up soon.

    Best,

    Dave

    Posted by Dave Emory | December 17, 2013, 6:11 pm
  11. @Dave: Yep, I did­n’t see 764 all last week and just noticed it over the week­end. Excel­lent con­tent in 764 ;).

    Anoth­er inter­est­ing fun-fact about Satoshi Nakamo­to: who­ev­er they are they have a lot of bit­coins. About 1 mil­lion of them:

    Wired
    Who Owns the World’s Biggest Bit­coin Wal­let? The FBI

    By Robert McMil­lan
    12.18.13
    6:30 AM

    Who owns the sin­gle largest Bit­coin wal­let on the inter­net? The U.S. gov­ern­ment.

    In Sep­tem­ber, the FBI shut down the Silk Road online drug mar­ket­place, and it start­ed seiz­ing bit­coins belong­ing to the Dread Pirate Roberts — the oper­a­tor of the illic­it online mar­ket­place, who they say is an Amer­i­can man named Ross Ulbricht.

    The seizure sparked an ongo­ing pub­lic dis­cus­sion about the future of Bit­coin, the world’s most pop­u­lar dig­i­tal cur­ren­cy, but it had an unfore­seen side-effect: It made the FBI the hold­er of the world’s biggest Bit­coin wal­let.

    The FBI now con­trols more than 144,000 bit­coins that reside at a bit­coin address that con­sol­i­dates much of the seized Silk Road bit­coins. Those 144,000 bit­coins are worth close to $100 mil­lion at Tuesday’s exchange rates. Anoth­er address, con­tain­ing Silk Road funds seized ear­li­er by the FBI, con­tains near­ly 30,000 bit­coins ($20 mil­lion).

    That doesn’t make the FBI the world’s largest bit­coin hold­er. This hon­or is thought to belong to bitcoin’s shad­owy inven­tor Satoshi Nakamo­to, who is esti­mat­ed to have mined 1 mil­lion bit­coins in the currency’s ear­ly days. His stash is spread across many wal­lets. But it does put the fed­er­al agency ahead of the Cameron and Tyler Win­klevoss, who in July said that they’d cor­nered about 1 per­cent of all bit­coins (there are 12 mil­lion bit­coins in cir­cu­la­tion).

    In the fun house world of bit­coin track­ing, it’s hard to say any­thing for cer­tain. But it is safe to say that there are new play­ers in the Bit­coin world — although not as many peo­ple are buy­ing bit­coins as one might guess from all of the media atten­tion.

    Satoshi stores his wealth in a large num­ber of bit­coin address­es, most of them hold­ing just 50 bit­coins. It’s a bit of a logis­ti­cal night­mare, but most savvy Bit­coin investors spread out their bit­coins across mul­ti­ple wal­lets. That way if they lose the key to one of them or get hacked, all is not lost.

    “It’s eas­i­er to keep track of one address, but it’s also most risky that way,” says Andrew Rennhack, the oper­a­tor of the Bit­coin Rich List, a web­site that tracks the top address­es in the world of bit­coin.

    Accord­ing to Rennhack, the size of the bit­coin uni­verse has expand­ed over the past year, but the total num­ber of peo­ple on the plan­et who hold at least one bit­coin is actu­al­ly pret­ty small — less than a quar­ter-mil­lion peo­ple. Today, there are 246,377 bit­coin address­es with at least one bit­coin in them, he says. And many peo­ple keep their bit­coins in more than one address. A year ago, that num­ber was 159,916, he says.

    ...

    Posted by Pterrafractyl | December 18, 2013, 10:20 am

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