Bitcoin implodes and the banking crisis

The easiest way to invest in the growth of Bitcoin & the Crypto Currency Sector. — BitCoin Capital

Max Keiser lost all credibility when a few weeks ago he claimed rouble a strong currency. You could almost see Vladimir Putin pulling the strings.

Ностальжи / Nostalgia

Ностальжи / Nostalgia

This latest Keiser Report is another example of nonsense being peddled, this time on bitcoin.

Skirting over in this discussion that bitcoin has run into technical problems, mere hints of the intercine warfare between core bitcoin developers. And that is only the tip of the iceberg of the problems facing bitcoin.

Bitcoin has failed miserably as a currency.  It fails to meet the basic criteria of a currency:

  • store of value
  • unit of exchange

Bitcoin is highly volatile, it lacks utility. Where is the baker where I can use bitcoin to buy a loaf of bread?

Bitcoin has been hijacked by spivs and parasites, all out to make a fast buck. One of who was a guest on the programme.  And who was this guest? Why none other than Simon Dixon, a vulture capitalist, who co-manages a vulture  capital fund trying to make  a fast buck out of bitcoin, co-manages with none other than Max Keiser himself. If, and a very big if, the investment goes well, investors are paid, please do not laugh, in bitcoin.

We offer a unique model whereby we invest one third of all funds in mining (The process used to create new coins) that is used exclusively to pay daily dividends to investors (in Bitcoin) for as long as the mining process is profitable.

This is a great way to accumulate Bitcoins without having to get deep into the geeky part of the process.

We mine a portfolio of coins and always look for the most profitable opportunity through our algorithm. Eventually the mining process can become unprofitable, so we utilise the latest technology with mining rigs in Iceland that optimise every penny of profit and we pay the coins generated through mining out to investors until the process is no longer profitable where the costs of running the rigs exceeds the value of the coins produced.

Our goal is that if the market conditions are right, investors receive a chunk of their investment back through Bitcoin, unlike any other investment fund.

Located in Iceland as one of the few places energy costs are low enough to make bitcoin mining feasible.

Max Keiser remarkably coy about the fact he is a bitcoin millionaire, indeed a deafening silence.

And where is BitCoin Capital based? Er, the tax dodging Cayman Islands.

Invest in a Ponzi scheme, attract more investors to inflate the price, and then you get a return, only the return is in the very thing you are investing.

You could not make this up if you tried.

Someone exposing that bitcoin is heading towards a brick wall due to technical problems, is not going to go down too well with a vulture capital fund where two of the people on the programme, including one of the presenters, have  a direct vested interest.

Yes, we should be very concerned by the activity of all these players, especially the criminal banks trying to grab a piece of the action.

The New York Times article  ridiculed, was actually quite a good article on the current problems with bitcoin. That Mike Kearn working for R3, irrelevant other than it indirectly highlights one of the problems with everyone associated with bitcoin, all out to line their own pockets.

This is not the mindset to be expected of people working on an Open Source, Open Protocol project located in the collaborative commons.

This is not the mindset of Open Software, Open Protocols, where you freely contribute your time to the collaborative commons, in order that all can benefit and in turn draw from the collaborative commons.

The mindset of the bitcoin developers is the opposite to that in The GNU Manifesto.

Software illustrates the dichotomy of the free flow of information. In one corner of the ring Bill Gates, who argues:

most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?

In the opposing corner of the ring Richard Stallman, who argues:

If anything deserves a reward, it is social contribution. Creativity can be a social contribution, but only in so far as society is free to use the results. If programmers deserve to be rewarded for creating innovative programs, by the same token they deserve to be punished if they restrict the use of these programs. … Extracting money from users of a program by restricting their use of it is destructive because the restrictions reduce the amount and the ways that the program can be used. This reduces the amount of wealth that humanity derives from the program. When there is a deliberate choice to restrict, the harmful consequences are deliberate destruction.

Bill Gates was arguing for commercial software, Richard Stallman Open Source software.

What Richard Stallman saw, was if knowledge freely flows, we all benefit. We contributive freely to the collaborative commons, and in turn draw from the collaborative commons.

Opens Source software, for example Apache, runs the internet, powerful supercomputers run on Open Source software Linux.

Bitcoin was developed as Open Source, Open Protocol. It has failed as a currency, but it has also failed because the Bitcoin developers have failed to comprehend the basic premise that Richard Stallman outlined in The GNU Manifesto. They are funded by vulture capitalists, parasitic start ups, all who are looking for means to profit from Bitcoin.

Bitcoin was an interesting proof of concept, nothing more. Coherent noise.

The only use of bitcoin is as a quick and dirty means to transfer out of a currency, across a border.

There has been no re-branding of bitcoin as the blockchain. The blockchain is seen as useful in its own right as a means of recording transactions in digital assets, open, secure and transparent.

Mycelia to track music uses the blockchain.

What relevance the number of transactions of bitcoin, best performing currency? All this tells us is that it attracts the interests of a lot of spivs and speculators out to make a fast buck.

How many of these transactions were using bitcoin as a currency to buy goods and services?

Bitcoin may work as a vehicle for the nefarious activities of spivs and speculators, as a currency it has been a complete and utter failure.
 

As a currency, the Brixton Pound is more of a success story than bitcoin. But then the Brixton Pound has not attracted the activities of spivs and speculators out to make a fast buck. It is used as a local currency, to buy goods and services within the local Brixton economy.

Bitcoin fails the basic requirements of a  currency:

  • store of value
  • unit of exchange

Yes, there is a problem with the banks, lax regulation, they should have been broken up, casino banking split from retail banking, but that is an entirely separate issue, a side show and a distraction from the problems facing bitcoin.

In PostCapitalism, Paul Mason exposes the criminal activities of the bankers. He also shows that all the conditions are in place for yet another banking crisis, only this time there is no money to bail out the banks, and if there was there would be riots in the streets.

It is a moot point, that with the exception of Iceland, no bankers have gone to prison.

Clearly the banks have woken up to the fact that a functioning Bitcoin 2.0 would pose a real threat.  The nearest we have to Bitcoin 2.0 is faircoin.

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