Bitcoin: A Way to Fight Back Against the Financial Terrorists?

Although I have followed Bitcoin over the years a bit, I am admittedly pretty ignorant on the subject.  What really caught my eye in the last couple of days was an article in Forbes detailing the fact that when the big financial institutions initiated a blockade on Wikileaks, the whistleblowing organization was still able to accept donations via Bitcoin.

From Forbes:
It used to be that people had secrets and the government was transparent; now it’s the people that lack privacy and the government has secrets. Freedom of payments is an extension of financial privacy and digital cash-like transactions without financial intermediaries become a critical piece of that foundation. Money was never intended to act as a form of identity tracking or payments restriction and this is why the option for anonymous and untraceable transactions is so vital as society moves to a world of digital currency.

To those that don’t support freedom of payments, consider this financial blockade invoked in the name of political correctness before you dismiss the inherent value of a nonpolitical unit of account and of a decentralized medium of exchange. It should be offensive to most free-minded people that you are not the final arbiter of how and where you spend your money. Bitcoin restores the balance.

I don’t think Bitcoin is THE answer.  It could be part of a solution.  Gold could do it.  Silver could do it.  They key point; however, is that in a world in which payment is increasingly digital we need more options for a medium of exchange.  Governments themselves should arguably get out of the money businesses entirely and let people and business transact with each other however they deem appropriate.

One thing that each and every one of us needs to agree on is that the ability to buy and sell certainly shouldn’t be in the hands of these TBTF (too big to fail) financial terrorist institutions.  These institutions, which have raped and pillaged this country in the last several years, shouldn’t even exist let alone have this kind of power.  The mere existence of these institutions is an insult to every single American alive today and an embarrassment to the memory of our ancestors who aggressively guarded the liberty and freedom this current generation of leaders is so willing to give away.  As Neil Barofsky, the former Special Inspector General for TARP, so eloquently put it today:

As I saw first hand while providing oversight of the bank bailouts as the Special Inspector General of the Troubled Asset Relief Program and as I detail in my recently released book Bailout, this perception was embraced by both Bush and Obama Treasury officials, who repeatedly turned away my efforts to impose conditions, restrictions and transparency on the banks. They declared such measures unnecessary because the banks “would never risk their reputations” by putting profit over the public interest.

Two years after the passage of Dodd-Frank, and in the wake of the recent proliferation of scandals involving the largest banks, many are now embracing this cinematic truth, with even the banker’s Dr. Frankenstein himself, Sandy Weil (whose Citigroup was the founding model of the megabanks of today), picking up a pitchfork and joining the growing mob of academics, regulators, former bank executives, Occupiers and Tea Partiers in calling for the monster to be torn apart.

Read the Forbes article on Bitcoin here.

Read Barofsky’s piece on the bipartisan support for the financial terrorists here.

In Liberty,
Mike

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26 thoughts on “Bitcoin: A Way to Fight Back Against the Financial Terrorists?

  1. Michael,

    It’s way too early to determine Bitcoin’s long term viability, but silver and gold will never have the flexibility of a digital fiat currency. As a fellow liberty lover, I understand the appeal of silver and gold, two forms of money that have acted as stores of value for millennia. However, you should not discount the many virtues of Bitcoin. They are infinitely easier to transport and in most ways more difficult for governments to confiscate. Also, they are nearly impossible counterfeit, unlike gold which can be filled with another metal with a similar weight. Bitcoin is still a risky proposition, since, like the dollar, there is no natural backstop to keep them from going to zero value. But I have a hard time believing that silver and gold are the future of currency.

    • Thoroughly agree. I am in the mental process of evaluating if BitCoin is the equivalent of King Henry’s Tally Stick system, upon which the British Empire was born. If so, then BitCoin has my vote and the banks, especially the “central” variety can simply go to hell.

  2. to not accept that gold and silver will be the only thing to save this fiat based monstrosity of an economic system is idiotic. we are witnessing what happens when money is backed by debt and gold and silver stand ready to fill their rightful roles as honest checks and balances to the mismanagement of currencies by our current overlords

    • Not sure if that comment was directed at me.

      I certainly agree that gold and silver have a role to play. But because they are physical objects, it is easy for governments to confiscate it. If SHTF, is it going to be easier to get Bitcoins or gold through government checkpoints? Is it going to be easier to validate the authenticity of gold or a Bitcoin?

      I think liberty minded people are too quick to denounce a fiat currency and lionize a commodity based currency. The main problem with fiat currencies is that they are controlled and manipulated by a central authority. Bitcoin has no central authority.

      Liberty minded people also dismiss gold bubbles as an impossibility. This seems foolhardy to me. Gold’s price is currently driven by its usefulness in jewelry and status as a safe haven, and rightfully so. But that doesn’t mean that price of gold won’t crash if everyone gets out at once.

      Lastly, liberty minded people tend to brush off the fluctuations of gold prices as having a negligible effect on the economy as a whole when used as a currency. But that directly conflicts with their argument that the fluctuations induced by the Federal Reserve are very harmful to the economy. You can’t have it both ways.

      I think Bitcoin, since it cannot be controlled by any government, cannot be inflated past its maximum level, and has no value as anything other than currency has the potential to be the ideal currency. It’s just going to take some time to figure it out.

      • I purposely made it clear there is no ONE solution, mainly so that these arguments would not dominate. The key thing is that we need to get governments and Central Banks away from currency monopolies. We can have Bitcoin, gold and silver. Whatever people want to use. That is freedom.

      • Exactly Michael,

        I was just taking issue with the part of your article where you say that you don’t think Bitcoin is “THE answer,” but you think gold and silver “could do it.” Governments already have ways to suppress and control gold and silver. Let’s not dismiss Bitcoin just yet.

        I’ll stop arguing now.

  3. You misunderstood. I meant gold and silver could also be used. Together with Bitcoin or anything else. We all need to move away from “the answer” because there is none other than freedom to use whatever means of exchange we want and take the money monopoly away.

  4. Pingback: Bitcoin: A Way to Fight Back Against the Financial Terrorists? « Silver For The People – The Blog

  5. Bitcoin also seems to be the ideal tool to use in “transfering funds” internationally without much scrutiny/regulation/etc. but I’m not knowledgable at all on the nuances of Bitcoin myself. However, I am considering learning about it in greater depth and perhaps buying five figures worth as currency diversification. As you say Mike, not a panacea but nonetheless a functioning currency and example of a paradigm shift of some sort relating to money and competing currencies? Pretty cool stuff.

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  7. I’m not sure about Bitcoin. Gold and silver will always be gold and silver. Bitcoin will always bitcoin until the day the government decides to cyberattack it like they did in Iran. If the Bitcoin code is cracked or “vaporized” (using an MF Global analogy), bye bye Bitcoin.

  8. You undermine the credibity of your own good argument about freedom of spending your own money as you choose when you say “Governments themselves should arguably get out of the money businesses entirely and let people and business transact with each other however they deem appropriate.” You will quickly find merchants don’t want the fish you caught, your pelts, or your own. Urrency issued and guaranteed by you. Even when the colonies rebelled against the British, people found state issued paper currency was almost worthless–and that was done as there was nowhere enough specie to do anything. This is one of the few places where central government DOES have a role, though unless there has been a conviction as a criminal enterprise (which has not happened with Wikileaks), then it should’ve none of government’s business how you spend your own money.

      • Barter is and always has been a valid option to currency. However, you will have a hard time finding those who are willing to barter for with you for their food or gas or other staple, and you will quickly have a hard time coming up with enough to barter that others want to make this a valid option. Even BitCoin is currency based (I doubt that they would trade your labor for value). Money is a foundation stone of what we call civilization. So where are your real options? Earn more, invest it abroad outside the reach of any one government, and in multiple currencies to avoid the collapse of any single one. What else is there?

      • The problem is that bitcoin is going to take many years to be universally accepted (I can’t buy groceries or coffee with bitcoin) and you still have to pump fiat currency into it before you have any bitcoins to make payments with. While it is excellent as a decentralized anonymous transaction facilitator that is extremely efficient and secure, governments could find a way to disrupt the network and they have a lot of resources to launch cyber attacks if they want to. Having said that, I’m still trying to get my head around it all and I think it is very promising. I think it would be cool if they launched a project to directly integrate trusted gold/silver depository accounts (such as goldmoney) with bitcoin. A kind of PM backed (measured by weight and not face value of coins) digital medium of exchange that is decentralized, secure and anonymous. That might give some people more confidence that it can be a store of value since banks could not just manufacture as much fiat currency as they want and convert it to bitcoin. That is to say they would have to convert their fiat into gold or silver first and that would result in increased demand and rising prices (for gold and silver) and therefore bitcoins would maintain there value. Just a thought.

  9. I recently heard about Bitcoin on MaxKeiser.com. I sometimes ask those around me “what is the next thing”? Maybe this is it. With its ceiling, expected to be reached around 2036,of no more more than 21 million bitcoins to be circulated and the value of bitcoins already up by huge percentages, it is a possibility. The question I have is, what is stopping anybody from forming up a bitcoin clone or clones and what would that do the the original idea?

    • In every birth of a new currency the biggest problem is to make a lot of people accept it and use it for their daily transactions.
      If you create an exact bitcoin clone, you have to gather a new audience which is infinitely more difficult when the original bitcoin is already around and working….

  10. Although I like the philosophy behind Bitcoin, the assumption of it being safe and invulnerable to attack by Governments just strains my ability to believe. If the Bitcoin concept were to grow such that it presents a significant impediment to tax collectors, a desperate Government can and probably will do everything in it’s power to unmask the identities of Bitcoin participants for the purpose of levying taxation by seizure, all of course made legal by the simple acts of creating regulations which all subjects of any given country must obey, if they live on Planet Earth. Meanwhile, adding PM backing to the Bitcoin currency ought to give many more people the confidence to use Bitcoin or clone thereof.

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