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Satoshi Nakamoto’s Silence: Why Gold and Silver are Money and Bitcoin is but Thin Air
New York Sun ^ | 03/12/2014

Posted on 03/12/2014 6:44:31 AM PDT by SeekAndFind

One of our favorite japes is about the group of scientists who figure out the secret to life — a way to make a human being from nothing but dirt. When they’ve worked it all out, they are so excited they go directly to God to announce their discovery that He is no longer necessary. He appears a bit surprised, but they offer to demonstrate. He nods. One of the scientists bends down and scoops up a fistful of dirt.

“Oh, no,” God exclaims. “You’ve got to make your own dirt.”

This is how we feel about bitcoins. The idea that one can make money — specie — out of thin air just strikes us as illogical. The money is gold and silver. Bitcoins, as we comprehend the whole business, could be a form of currency. But money is a different matter. It’s not merely the scarcity of gold and silver that make them money. It’s their innate qualities, which have endured over millennia.

What put us in mind of this today is Newsweek’s scoop in tracking down the founder of bitcoins, Satoshi Nakamoto. It found him standing shoeless at the end of his “sunbaked driveway” looking “timorous” and “annoyed,” it says. It describes Mr. Nakamoto as “tacitly acknowledging his role in the Bitcoin project” by looking down and “staring at the pavement” as he “categorically refuses” to answer its questions. “I am no longer involved in that and I cannot discuss it,” Newsweek quotes him as saying.

(Excerpt) Read more at nysun.com ...


TOPICS: Business/Economy; Computers/Internet; Society
KEYWORDS: bitcoin; gold; money; satoshinakamoto

1 posted on 03/12/2014 6:44:32 AM PDT by SeekAndFind
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To: SeekAndFind
The US dollars is but thin air as well.
2 posted on 03/12/2014 6:50:59 AM PDT by E. Pluribus Unum (If Barack Hussein Obama entertains a thought that he does not verbalize, is it still a lie?)
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To: SeekAndFind; RKBA Democrat; Kartographer

The currency of the future is chicken eggs and neosporin.


3 posted on 03/12/2014 6:56:04 AM PDT by KC_Lion (Build the America you want to live in at your address, and keep looking up.- Sarah Palin)
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To: SeekAndFind
It’s not merely the scarcity of gold and silver that make them money. It’s their innate qualities, which have endured over millennia.

There's a non-sequitur in there somewhere.

4 posted on 03/12/2014 7:02:53 AM PDT by Fester Chugabrew
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To: E. Pluribus Unum

Exactly, the same argument applies. US Dollars can be currency, but they aren’t money.


5 posted on 03/12/2014 7:30:06 AM PDT by Boogieman
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To: SeekAndFind
There are also a lot of Americans who say they "own gold."

Many of them don't. The have pieces of paper that says there is a company that sold them shares with several other organizations in the pyramid that promise there is some physical gold somewhere that someday they can take possession of.....unless the government says they can't in a Emergency.

6 posted on 03/12/2014 7:48:05 AM PDT by SkyPilot
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To: SeekAndFind

I just looked at the gold and silver price and it seems to be rising rapidly this week. Gold is outpacing silver?


7 posted on 03/12/2014 8:44:48 AM PDT by CivilWarBrewing
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To: SeekAndFind

Very good post. Many thanks.


8 posted on 03/12/2014 8:48:48 AM PDT by Salvavida (The restoration of the U.S.A. starts with filling the pews at every Bible-believing church.)
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To: CivilWarBrewing

currently,
April gold up 1.37%
May silver up 1.63%


9 posted on 03/12/2014 8:59:24 AM PDT by glock rocks (If you like your health plan, you're a racist !)
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To: SeekAndFind; Lurkina.n.Learnin; nascarnation; TsonicTsunami08; SgtHooper; Ghost of SVR4; ...

Click to be Added / Removed.
10 posted on 03/12/2014 9:09:14 AM PDT by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: SeekAndFind
If Newsweek asked him about gold, the story has no mention of it. Yet our own sense of bitcoins is that they are a commentary on a phenomenon of the age of fiat money. They are similar to the money being issued by the Federal Reserve, in that they are electronic files generated on and transmitted via computers. Federal Reserve notes are redeemable, as a matter of statute, in lawful money, meaning other electronic files or paper scrip or base metal slugs.

That's the first thing they got wrong. They give a nod to "mining" but obviously don't trust it (i.e. they don't understand it). Given that bitcoins are mined to create artificial scarcity, there's a second quality that they don't mention in the article. That is that the mining algorithm is used to automatically validate transactions which means that the bitcoin network can easily be used for automated payments on delivery of any kind of digital goods.

Suppose I wanted a software widget that does "X". I would set up a server that tests for X and the first person to upload a program to the server that passes the test automatically gets the promised bitcoins. Once the server is set up I don't have to lift a finger and undoubtedly third parties will set them up (for a fee of course).

11 posted on 03/12/2014 9:47:50 AM PDT by palmer (There's someone in my lead but it's not me)
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To: SeekAndFind
Deluded Currency Cultists Believe The Dollar Is Invincible
12 posted on 03/12/2014 11:29:01 AM PDT by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: SeekAndFind

I’m 99.9% against fiat money (buy $1,200 of silver in CAL, skip a hefty tax).

But I need to answer 1 Keynesian claim:

Limiting the money available for capitalization to sound money, puts a cap on investment.

The Answer?


13 posted on 03/12/2014 11:42:33 AM PDT by CharlesOConnell (CharlesOConnell)
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To: CharlesOConnell
Limiting the money available for capitalization to sound money, puts a cap on investment.

The Answer?

The answer could be all of the other coins (i.e., mediums of exchange) making an appearance on the currency scene. The competition will help to keep Btc in check, price wise, and prevent hording of BTC to some extent, IMO.

In other news:


14 posted on 03/12/2014 11:57:40 AM PDT by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: CharlesOConnell
Limiting the money available for capitalization to sound money, puts a cap on investment.

The Answer?

Money is divisible.

A limit on the upper boundary number of units is not a limit on the value it can represent.

15 posted on 03/13/2014 7:04:11 PM PDT by Gunslingr3
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To: SeekAndFind
This is how we feel about bitcoins. The idea that one can make money — specie — out of thin air just strikes us as illogical. The money is gold and silver. Bitcoins, as we comprehend the whole business, could be a form of currency. But money is a different matter. It’s not merely the scarcity of gold and silver that make them money. It’s their innate qualities, which have endured over millennia.

Let's consider those characteristics that are valuable to the market process of elevating gold and silver to money.

They are durable. Gold won't rot or rust away. If you are preparing for a Mad Max scenario you might not be interested in bitcoin as a store of value, but if you're preparing for a Mad Max scenario you'll want lead and brass over gold anyway.

They are divisible. 1 gram of gold can be combined into 1 ton of gold, or separated down to a single atom (but that is the lower bound, bitcoin has a lower bound as well, but if the community accepted a modification to the protocol it could be subdivided even further), and recombined with no change to its nature. That's hard to do with a cigarette or cowrie shell.

They are transportable. I'd rather carry a million USD on my person in gold than a million USD of pig iron. Bitcoin is actually more transportable than gold, because it can be sent anywhere in the world in a matter of minutes, with no transportation risk. If I had to get 1 million dollars out of Argentina I'd rather do it with bitcoin than try to smuggle gold or suitcases of govt. fiat currency across the border.

It's really on the transportability and transferability of bitcoin that it shines over gold and silver. Couple that with governments around the world in a race to debase their currencies, and their inability to debase bitcoin, it's possible, even likely, that at some point they'll decide to make it illegal or order to better extract the inflation tax.

16 posted on 03/13/2014 7:15:53 PM PDT by Gunslingr3
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