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Bitcoin Mania Bubble Bursts, China Triggers Price Crash Start, ...
Market Oracle, UK ^ | 5 December, 2013 | Nadeem Walayat

Posted on 12/05/2013 8:17:24 AM PST by Errant

The bitcoin bubble appears to have burst as a stepped series of price crashes are underway with the price currently standing at 1074 down form 1240 barely a day earlier. A clue to its future direction can be discerned from the unfolding technical price patterns, that just as I wrote wrote in the run up to the peak of the Bitcoin bubble with the price converging on USD 1250 that the market was primed to crash and all it was waiting for was any even marginally negative news to act as trigger for increasing waves of market panics as GREED amongst the bitcoin mania hoarders turns into fear of loss of paper profits.

(Excerpt) Read more at marketoracle.co.uk ...


TOPICS: Business/Economy; Culture/Society; Extended News; Foreign Affairs; Government
KEYWORDS: banks; bitcoin; bitcoincrash; chinabitcoin; currency; fiat
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A pure unadulterated attack on alternative (and private) money from a banker crony who couldn't forecast his way out of a wet paper bag and who in reality only follows the dictates of his monopolistic lords.

Unlike government fiat thrown from helicopters and easily manipulated by world powers, Bitcoin will likely surge even more after proving it can survive not only the US Senate, but the Red Chinese as well.

1 posted on 12/05/2013 8:17:24 AM PST by Errant
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To: Errant

Dumb question: Who issued the Bitcoins in the first place?

Another dumb question: What’s to stop that person from issuing more?


2 posted on 12/05/2013 8:19:34 AM PST by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: All
BofAML Sees Bitcoin Fair Value At $1300

"Bitcoin could become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers, BofAML notes in a report today, adding that as a medium of exchange, Bitcoin has clear potential for growth, in our view. Despite Greenspan's inability to find "value", BofAML prefers not to call the crypto currency a bubble, and assigns a maximum fair-value of $1,300, but does warn that the 100 fold increase in Bitcoin prices this year is at risk of running ahead of its fundamentals."

3 posted on 12/05/2013 8:21:59 AM PST by Errant
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To: Errant

The golden rule:

He who controls the gold makes the rules....


4 posted on 12/05/2013 8:24:58 AM PST by Red Badger (Proud member of the Zeta Omicron Tau Fraternity since 2004...................)
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To: Revolting cat!

Is the Dutch word for Bitcoin ‘Tulip’?


5 posted on 12/05/2013 8:25:18 AM PST by a fool in paradise (America 2013 - STUCK ON STUPID)
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To: All
Bitcoin Tumbles After China Central Bank Bans Financial Companies From Using Digital Currency

The take away:

The Chinese government stopped short of banning Bitcoin altogether, saying that as an online product people were free to buy and sell it at their own risk.

6 posted on 12/05/2013 8:25:33 AM PST by Errant
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To: Errant

Much like bin laden, I was way more impressed the first 5 or 6 times it was proclaimed dead. Now these reports about bitcoin biting the dust are just getting lame.


7 posted on 12/05/2013 8:25:55 AM PST by Orangedog (An optimist is someone who tells you to 'cheer up' when things are going his way)
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To: Red Badger

Yep, and will do anything and everything to keep control.


8 posted on 12/05/2013 8:26:13 AM PST by Errant
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To: Errant
BitCoins are the new Tulip Bulbs.
9 posted on 12/05/2013 8:27:58 AM PST by dfwgator (Fire Muschamp. Go Michigan State!)
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To: BenLurkin
re: your dumb questions

I don't get it either. At least with the tulip Ponzi scheme, those who lost out had pretty flowers.

This whole thing seems a bit like Enron.

PT Barnum is smilin' in his grave <^..^>

10 posted on 12/05/2013 8:30:02 AM PST by grania
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To: Errant

It will tumble. I will be laughing while I read the tales of woe posted here and elsewhere.


11 posted on 12/05/2013 8:30:56 AM PST by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: All

I just invented Bytecoins. They’re 8 times better than Bitcoins. Want to invest in them?


12 posted on 12/05/2013 8:31:45 AM PST by McGruff (Obama lied. Period!)
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To: Errant

Half of bitcoin traffic comes from China. The Chinese are looking for a place to store their money outside of overbuilt real estate. Some are placing bets for a quick payoff. At the rates Chinese loan sharks charge (10% a month) for speculative loans, the average punter can’t stay in a bet for very long if it goes against him. Check out the average casino and it will become clear the extent to which Orientals are over-represented among problem gamblers.


13 posted on 12/05/2013 8:33:03 AM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: BenLurkin
Dumb question: Who issued the Bitcoins in the first place?

Anyone with a computer can issue a bitcoin.

Another dumb question: What’s to stop that person from issuing more?

It takes a LOT of processing time to generate a bitcoin. On my machine it would take about a year of calculations to solve the algorithm needed to generate a single bitcoin.

There are also a limited number of possible solutions to the algorithm, that sets a cap on the total number of bitcoins that can exist.

14 posted on 12/05/2013 8:34:24 AM PST by null and void (I'm betting on an Obama Trifecta: A Nobel Peace Prize, an Impeachment, AND a War Crimes Trial...)
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To: McGruff
I just invented Bytecoins. They’re 8 times better than Bitcoins. Want to invest in them?

I'm not ready to make that kind of a leap. Got any Nibblecoins?

15 posted on 12/05/2013 8:35:16 AM PST by Yo-Yo
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To: BenLurkin
"What’s to stop that person from issuing more?"

Oh you haven't heard of the godlike powers of:

(Blaring fan fair music)

THE ALGORITHM

It has amazing powers.

It can leap tall buildings in a single bound...

it can defy basic laws of economics...

it can cure rickets and embarrassing anal seepage.

it can even deal with the heartbreak of psoriasis.

There is no problem too tough for it.

Of course if the guys who wrote it sez "Well OK since 21 Million Bitcoins seem so popular lets get doubly popular and do it again!" There is nothing to stop them.

but shhhh don't say anything it will harsh the "true believer's" mellow and we can't have that.

16 posted on 12/05/2013 8:35:39 AM PST by Mad Dawgg (If you're going to deny my 1st Amendment rights then I must proceed to the 2nd one...)
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To: a fool in paradise
"Is the Dutch word for Bitcoin ‘Tulip’?"


17 posted on 12/05/2013 8:36:59 AM PST by Mad Dawgg (If you're going to deny my 1st Amendment rights then I must proceed to the 2nd one...)
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To: BenLurkin

Do your research on Bitcoin. Risky, but great idea. no more than 21 million can ever be “mined”, and the difficulty of mining one BC increases every day.

Here is a great article - but do your homework on understanding what it is first.....

http://www.freerepublic.com/focus/f-chat/3098466/posts


18 posted on 12/05/2013 8:39:04 AM PST by Arlis
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To: McGruff
I just invented Bytecoins. They’re 8 times better than Bitcoins. Want to invest in them?

Sure, will you take some shares in a bridge I own? It's somewhere in New York...

19 posted on 12/05/2013 8:40:14 AM PST by IYAS9YAS (Has anyone seen my tagline? It was here yesterday. I seem to have misplaced it.)
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To: BenLurkin

Dumb question: Who issued the Bitcoins in the first place?

Another dumb question: What’s to stop that person from issuing more?

Supposedly, there is a 21 million coin limit.
Other crypto-currencies and private currencies also exist.


20 posted on 12/05/2013 8:40:47 AM PST by grumpygresh (Democrats delenda est. New US economy: Fascism on top, Socialism on the bottom.)
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To: BenLurkin
Bitcoins and crypto-money are/is created, not issued, by someone using a computer to brute force solutions for "algorithms" which increase in difficulty as more and more "limited" solutions are found (about 22 million for BTC). Each "puzzle" solved gets a unique encrypted identifier which is entered into a distributed ledger worldwide (divisible up to 8 digits for BTC).

Anyone can solve (mine) for these solutions given the technical expertise and hardware. Therefore, it is individuals and not government indebting them, or bankers skimming off the creation of fiat that creates this new form of money. In lieu of government and banks, technology keeps everyone honest and provides for the distribution thereof. Basically, technology is replacing government and banking monopolies here and why the US Senate, the Red Chinese and London Banks are upset.

21 posted on 12/05/2013 8:42:28 AM PST by Errant
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To: dfwgator

We’ll see. Personally, I don’t so. I think the cat is out of the bag and there will be a heck of a fight trying to get it back in.


22 posted on 12/05/2013 8:44:49 AM PST by Errant
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To: grania

How is it like Enron?

- accounting deception?
- Special Purpose Vehicles?
- CEO calling equity analysts “a****le”?
- used connections in state & local government to secure monopoly power?

Or, none of the above. It’s just like Enron except for the fact that it’s nothing like Enron.


23 posted on 12/05/2013 8:45:34 AM PST by oblomov
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To: grumpygresh

Amazon bucks?


24 posted on 12/05/2013 8:46:49 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Mad Dawgg

>>> “Well OK since 21 Million Bitcoins seem so popular lets get doubly popular and do it again!” There is nothing to stop them.

Already been done.


25 posted on 12/05/2013 8:46:55 AM PST by oblomov
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To: grania
It's hard to get your head around, but easier to understand than how fiat is created. Try explaining that one... :)

For that matter, try finding out who owns the Fed!

26 posted on 12/05/2013 8:47:10 AM PST by Errant
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To: Errant

I just invented ButtCoins. You can own as many as you want. You can trade them freely. But at income tax time, the government takes them all.


27 posted on 12/05/2013 8:49:15 AM PST by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: grumpygresh

Now, ask these same questions about the US dollar.

Difference between BTC and USD? USD is inflated at the whim of the Federal Reserve, with no limit.


28 posted on 12/05/2013 8:49:17 AM PST by oblomov
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To: BenLurkin
Another dumb question: What’s to stop that person from issuing more?

It's more complicated than I can simplify in a short post. I have probably invested in about 4 hours total of research to understand the whole system. But I'll try to make it simple...

There is a controlled process set up to limit the total Bitcoins that can actually be put in electronic circulation (Capped at 250K). They are created when someone sets up a support site with a program that interacts with others to validate transactions (currently 50 Bitcoins). A person that writes the program/algorythm necessary for the system is rewarded and new Bitcoins are created. There are currently something like 125K in circulation. The system that support Bitcoins will not take more than 250K. So once the magic number is reached, all of the infrastructure (alledgedly) will be in place to support all transactions. And all transactions are are regulated and approved independently and by private consensus through the software that was set up by each of the users.

Pros - It is solid as long as there remains confidence, government doesn't regulate, demand stays consistent and acceptance expands. Cons - If you lose your wallet (figuratively and literally per the system), it's gone. There is no paper or value to hold for proof. If you lose a decryption code.... Also, trading is all speculation at the moment. The designers have tried to set it up to closely resemble the price fluctuations of precious metals. But, best I can tell, there is nothing tied to those values. The value of a Bitcoin is all confidence and speculation driven by the trading price.

Disclaimer: I am no where near an authority on this and only started researching it a couple weeks ago. So far, unless the price drops back to $1/Bitcoin, I'll not be investing. And as far as I am concerned, it is only viable as an investment. Trading them for goods would require timing purchases and sales just right to validate the value of any barter for the seller and buyer.

29 posted on 12/05/2013 8:49:55 AM PST by Tenacious 1 (Liberals can afford for things to go well, to work, for folks to be happy. They'd be out of work.)
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To: Arlis

Your great article on Bitcoin linked to the SR-71. Do you have the correct link...asking for a friend. Tanks.


30 posted on 12/05/2013 8:53:10 AM PST by Dysart (Obamacare: "We are losing money on every subscriber-- but we will make it up in volume!")
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To: Yo-Yo
I'm not ready to make that kind of a leap. Got any Nibblecoins?

I can sell you some wigits at a discounted rate. Let's talk.

31 posted on 12/05/2013 8:53:13 AM PST by Tenacious 1 (Liberals can afford for things to go well, to work, for folks to be happy. They'd be out of work.)
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To: BenLurkin
Another dumb question: What’s to stop that person from issuing more?

Not a thing. The idea behind it is clever -- attempting to mimic the mining of gold, -- but in the end it's just another fiat currency. An intangible one at that.

32 posted on 12/05/2013 8:54:41 AM PST by BfloGuy ( Even the opponents of Socialism are dominated by socialist ideas.)
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To: BenLurkin

You’ve benLurkin but you haven’t ben read’n. Just this week there’s been about 5 stories on FR explaining this.


33 posted on 12/05/2013 8:56:53 AM PST by DManA
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To: Tenacious 1; BenLurkin

.... My cap numbers are way wrong. It’s 21 million not 250K. Had something else on my mind. Sorry.


34 posted on 12/05/2013 8:56:56 AM PST by Tenacious 1 (Liberals can afford for things to go well, to work, for folks to be happy. They'd be out of work.)
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To: Dysart

Sorry about that! The article was on the screen with the link to the SR-71 article in the URL! Have no idea how that happened....

Here’s the correct link....

http://libertyblitzkrieg.com/2013/12/03/erik-voorhees-responds-to-peter-schiffs-bitcoin-criticism-in-an-open-letter-this-is-excellent/#more-9568


35 posted on 12/05/2013 8:58:36 AM PST by Arlis
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To: Tenacious 1
The value of a Bitcoin is all confidence and speculation driven by the trading price.

Value is also reflected to a large degree by supply and the cost to produce them. The cost to produce Bitcoins has risen substantially and now requires expensive and limited ASIC miners to generated profit beyond even what the electricity would cost using the most efficient GPUs, and forget using CPUs - even for mining Litecoins.

36 posted on 12/05/2013 9:01:09 AM PST by Errant
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To: Tenacious 1
"If you lose your wallet (figuratively and literally per the system), it's gone. There is no paper or value to hold for proof."

Bitcoins are vapor...

37 posted on 12/05/2013 9:02:00 AM PST by cincinnati65
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To: Errant

All Your Bitcoin Are Belong to Us. You have no chance to survive make your time!


38 posted on 12/05/2013 9:05:46 AM PST by antidisestablishment (Islam delenda est)
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To: Mad Dawgg
THE ALGORITHM

My wife and I used to watch the CBS show "Numbers".

We invented a drinking game where anytime someone on the show uttered the word 'algorithm', everyone would shout out "Algorithm!"

The last person to say it had to take a swig.

Sort of like the German 'Good Burp' sign.


39 posted on 12/05/2013 9:08:21 AM PST by Bloody Sam Roberts ("It does not take a majority to prevail, but rather an irate, tireless minority...")
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To: cincinnati65
There is no paper or value to hold for proof.

Sure there is, you only have to create a paper copy and store it like you would paper money. Someone is even selling plastic Bitcoins you break open to get to the code hidden inside.

40 posted on 12/05/2013 9:09:51 AM PST by Errant
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To: Tenacious 1
"There is a controlled process set up to limit the total Bitcoins that can actually be put in electronic circulation (Capped at 250K)."

Total bitcoins in circulation as of December 2013 12 Million Plus...

41 posted on 12/05/2013 9:10:59 AM PST by Mad Dawgg (If you're going to deny my 1st Amendment rights then I must proceed to the 2nd one...)
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To: Errant

how does one short the Bitcoin?


42 posted on 12/05/2013 9:13:10 AM PST by The_Media_never_lie (Actually, they lie when it suits them! The crooked MS media must be defeated any way it can be done!)
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To: antidisestablishment
All Your Bitcoin Are Belong to Us.

Tell those "fat bastard" Asians running roughshod and enslaving their people to come take 'em... ;)

43 posted on 12/05/2013 9:13:14 AM PST by Errant
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To: oblomov

When Enron collapsed, there was nothing of substance left. What’s going to be left when bitcoins collapse?


44 posted on 12/05/2013 9:14:52 AM PST by grania
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To: The_Media_never_lie

As far as I know, there isn’t a market that allows for that, yet, but there has been talk of creating something similar to COMDEX which could allow for it.


45 posted on 12/05/2013 9:15:25 AM PST by Errant
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To: Errant
try finding out who owns the Fed!

How that scam can keep going and going and going is beyond comprehension.

46 posted on 12/05/2013 9:17:15 AM PST by grania
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To: Errant

Move Zig.
For Great Justice.

I hear that Fat Bastard makes decent wine.


47 posted on 12/05/2013 9:18:18 AM PST by antidisestablishment (Islam delenda est)
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To: Mad Dawgg

I did correct that in a succeeding post. Thank you.


48 posted on 12/05/2013 9:19:46 AM PST by Tenacious 1 (Liberals can afford for things to go well, to work, for folks to be happy. They'd be out of work.)
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To: Errant

Please.

Bitcoins are the WORST form of fiat currency. They aren’t backed by tangible assets. They aren’t back by force of law. THEY ARE BACKED BY WASTE.

Yes, that’s right - WASTE.

How is a Bitcoin created? By wasting computational cycles on a computer performing an algorithm with no value other than to create the Bitcoin. The electricity and CPU productivity is completely wasted to create VAPOR VALUE which people says has value because it is scarce? Puh-lease.

At least the fiat currency created by the U.S. government has legal backing. At least it says “The note is legal tender for all debts public and private.”

The Bitcoin has no such protections. If you owe someone money and try to give them Bitcoins, they can refuse. They cannot refuse dollars. The law will at least back you up and absolve you of your debt.

Just like junk stocks, anyone holding Bitcoins will soon find themselves holding the bag. Bitcoins are worse than a joke. They are a wasteful disease.


49 posted on 12/05/2013 9:31:49 AM PST by bolobaby
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To: antidisestablishment

I have a deep and strong respect for all Asian people, and many close friends, it’s those who take advantage of their hard working and good nature that disgusts me. Kind of like what our leaders are doing in our country today...


50 posted on 12/05/2013 9:33:30 AM PST by Errant
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