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Boycott Bitcoin!

Well, Fellow Reckoner, last week was something of a sad week for proponents of Bitcoin…

Would-be buyers of the fringy cyber experiment have had to watch as the price of their beloved currency shot to within a few cents shy of $35 per coin. No buyer wants to see that kind of action…unless they are also an ‘already boughter’.

In other words, current owners and maybe-one-day sellers are sitting fairly pretty. Since the beginning of January, the bitcoin price in dollars has rocketed roughly 270%. Not a bad move for those who spent the past couple of months ‘hoarding’ (The correct word, let it be on the record, is ‘saving’). And not bad for a currency that suffers the ignominy of existing without the indispensable aid of a central bank.

To be sure, true believers will still be scooping the controversial coins up for what they surely see today as a bargain. As we remarked in this space earlier last week…


‘Speculation about the potential value of a single coin varies widely
[in the bitcoin community]. We’ve heard wide-eyed forecasts running into the many thousands of dollars. That’s why enthusiasts are scrambling to build their stash now, before the price rockets….Get rich or die mining, as they say.’

Of course, as we all know, the Bitcoin crowd is really just a cabal of dissidents, brimming with lunatics who would trust the free market to its own devices, without the tireless vigilance and service of the government. (‘But who would build the…?’) What might happen if these malcontents were to gain traction, with their silly little ideas about ‘liberty this’ and ‘freedom that’?

Imagine for a moment, Fellow Reckoner, a scenario in which the value of a currency was determined by the people who actually use it, and not by some all-knowing, all-powerful demigod on a Federal Reserve board. What might happen to central banks as they exist today?

Imagine that fees and charges more or less disappeared, so that opening a digital wallet was as easy as setting up an email account, and sending and receiving payments as simple as firing off a text message. What might happen to banks and financial institutions that today shower their loyal customers in myriad penalties and fees?

Imagine that bureaucratic red tape vanished into the ether, so that anyone with a sound idea and the gumption to see it through could enter the self-regulating ecosystem of service providers without need of state license or permit?

What would happen to that friendly monopoly of mega banks steadfastly committed to fragilizing the global financial system…not to mention the chubby-mitted congress of politicians diligently taking bribes from them on our behalf?

Imagine that transactions of the currency were virtually anonymous, so that individuals could conduct their daily business, buying and selling goods and services, in cryptographically-ensured security and privacy.

What might happen to the lifeblood of The State when it is unable to easily invade the privacy of its citizens in order to track and steal their money for them?

Imagine that…

No! Let us imagine no more! We must put a stop to this. We must rage against these margin-traipsing ne’er-do-wells. And we must sully the name of their wretched cyber currency initiative.

And finally, we must hope the bitcoin price falls back through the floor…so a better buyer again we can be.

Regards,

Joel Bowman
for The Daily Reckoning Australia

Join The Daily Reckoning on Google+

From the Archives…

Why China’s Economy is Flashing Red
1-03-13 – Greg Canavan

Heroes and History
28-02-13 – Bill Bonner

Bitcoin: Get Rich or Die Mining
27-02-13 – Joel Bowman

Why Italy’s Gold Hoard Tells You the Precious Metal is Ridiculously Cheap
26-02-13 – Greg Canavan

Stock Prices Are Not What You Think They Are
25-02-13 – Greg Canavan

Joel Bowman
Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
Joel Bowman

Latest posts by Joel Bowman (see all)

7 Comments

  1. lucb1e says:

    I’m honestly unsure whether this article is sarcasm or not. You seem to try to come by as a respectable website (given your overall design), so I’ll assume you’re serious about this.

    You call not having a central bank an “ignominy”? I would understand if you had used the word “uncontrolled”, but this is a clear sign that you are biased and not looking at Bitcoin objectively. I myself would also not have used the word “suffers”, but I can understand your perspective. (Perhaps you should try to look at it from our perspective as well?)

    > “their silly little ideas about ‘liberty this’ and ‘freedom that’”
    Consider Iran. Dollars are hard to come by there, and international trading all but impossible. Bitcoin offers a *working* and almost free alternative for them. I can see your point when you talk about the western world (ignoring the continuous insults towards all Bitcoin users), but not every country has a government providing “tireless service”. Besides, even in countries with decent governments, how could “libery this” and “freedom that” hurt? You never explain your actual, factual, problem with Bitcoin. For example, would you also ban cash? It’s even less controlled because people can print money, something that is mathematically impossible with Bitcoin.

    > “What might happen to banks and financial institutions that today shower their loyal customers in myriad penalties and fees?”
    I think I don’t understand you. How is a myriad of penalties and fees a good thing? I would almost begin to think this entire article is sarcasm, if it wasn’t published on a financial website.

    Actually, I think that’s where the problem lies. You’re an economist, keeping our money and advising us what to do with it, meanwhile charging for it and living off our back. Bitcoin is a threat to you; when it succeeds you will have to find another job. That must be why you respond this way. I cannot see think of any other explanation. Please correct me if I’m wrong.

    I’m also not allowed to comment on your Google+ channel for some reason. Talk about liberty and freedom of speech…

  2. Dookie says:

    excellent article :) kudos!

  3. Atlantis says:

    Bitcoins on the rise!

  4. slewie the pi-rat says:

    very thought-provoking.

    but, i don’t even understand the US laws about money and currency. and why i hafta pay sales tax if i “buy” a US mint-produced 50-cent piece from ’59. how something which is “money” in the Constitution becomes “a collectible” is waaay above my pay grade.

    oh man! does it hurt to think about this stuff!

    my current “operational hypothesis” is that “the LAW” is something which the “top dog” people who pay online publishers push around for their own benefit. same as MSM publishers, basically.

    as long as whoever is actually responsible for someone ELSE’s “bitcoin” account doesn’t do a marketing ploy with “TEN DOLLARS” on their “US product”, he/she/they will stay outa the vonNutHause, we might hope, and on the side of game shows/gaming/games.

    no tax consequences there, either, of course! /s/ L0L!!!

    but i pray that no one feels defrauded after buying at these levels by putting cash INTO one of their ATMs. (!)

    b/c then, the nannies might want to regulate “bitcoin”, too? my money is that it would fall under the FED in the US.

    bong-ho!

  5. thoughtfan says:

    I’d be intrigued please to be pointed to some proponents of Bitcoin sensible arguments as to why the last week was sad for them? Most people in my experience who spend time thinking through this stuff are not at all sad because it is a sign of demand and, along with the news that keeps coming in, is a sign of increasing acceptance and decreasing risk.

    You mention Bitcoin as potentially cutting off the ‘life blood of The State’. I will grant you it cuts off most current sources of public revenue but it is my opinion everybody including those dependent on public services, would be better off if the state just butted out of what individuals and public earn and what individuals and public spend!

    But how, I hear you protest, would the state then raise money? Simply! Land Value Taxation People who want to live in the ether can live tax free. No problem. Who are they hurting? Nobody. But if someone decides for a home or for their business to take land that another would otherwise be able to make use of they need to pay rent on any increase in the value of their land that IS NOT as a consequence of their own activities. It’s the way forward!

    As I understand it you guys down under have some experience and some following for this. I’m looking forward to governments having to face this solution to so many problems that has been staring them in the face for so long – and being forced into as more and more people decide to make their financial activities invisible :)

  6. reasonableoptimist says:

    @lucb1e

    >I’m honestly unsure whether this article is sarcasm or not. You seem to try to come by as a respectable website (given your overall design), so I’ll assume you’re serious about this.

    It is absolutely, most definitely, sarcasm.

  7. Joel Dalais says:

    Fiat is dying a slow painful death, true economist know this and have observed it over the last dozen years as inflation sky rockets. If you are an economist (author and everyone else), surely you understand inflation? And the divide and destruction it causes to production and especially to the people. How do you think your precious banking elite will survive when their foundations collapse, rise up and throw them in prison (Iceland). It IS in the best interest of the people (and tbh the banks before the people copy Iceland) to forget fiat.

    When you understand inflation, fiat control, debt prison and the true merits of bitcoin, then you will understand that it is inevitable.

    But hey, if you want to cling onto your fiat until its worthless, no ones stopping you ;)

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