Bitcoins - Trial Run for Cashless Currency

January 19, 2014

precius.jpg

Far from a challenge to the Illuminati bankers, Anthony 
Migchels thinks it's an experiment in achieving
their long-term goal, a cashless, global currency.







By Anthony Migchels
(henrymakow.com) 

After five years, the verdict is out on Bitcoins: they represent a 'free market' Globalist dream, paving the way for a global cashless currency.

Its rise in value is quite stunning. Bitcoin started trading in early 2009 at just a few cents. Later in 2011, a Bitcoin was worth $6 and today people pay about $650. Recently, it reached $1000, when Chinese buyers started weighing in but took a big hit when the Chinese Government clamped down, citing 'lack of consumer protection'. Bitcoin has crashed a couple of times on the way up, but has always rebounded.

Major retailers all over the world are now starting to accept it.

But while this remarkable appreciation is the key to its perceived success, it's actually symptomatic of its main problem: it was designed to be scarce. Only about 20 million can ever be mined. Its rising price is a reflection of supply and demand.

When money rises in value, all other assets decline. It is good for those holding money, bad for those offering labor or goods and services, i.e. the real economy. In this way it behaves very much like Gold, which is also infamous for its deflationary nature.

Because it is appreciating so strongly, hardly anybody is paying with it. While the total outstanding value of Bitcoins is now somewhere between five and ten billion dollars, real trade is minimal. Who's going to pay with Bitcoin, when it is going to be worth another hundred times more in two years?

To be effective in servicing real trade, the money supply must grow and shrink with economic activity, allowing stable prices.

As it stands now, Bitcoin is a wholly bogus speculative item, with no real economic significance at all.

And it's a pure ponzi scheme, of course. Later adapters pay for the gains of those holding Bitcoin from the early stages. As long as there are new buyers, it's party time, but it's ultimately unsustainable.


MONEY POWER CONTROL

Money Scarcity is, together with Usury, the hallmark of Money Power control. This week the story broke that Wells Fargo is now considering offering Bitcoin services. Undoubtedly they'd be interested in offering saving and interest-based lending 'services'.

Bitcoin is spent into circulation debt-free, but it will be lent out at interest by the bank. Compound interest lending will allow the banks to gobble up the whole money supply in just a few years. 

This is why an interest-free credit based money supply is better than a 'debt-free' one: The debt free money is only debt free at the moment it is spent into circulation.

The CIA's In-Q-Tel investment arm was involved with Bitcoin from the early stages and while it's speculation, I'd be willing to bet a fiver the market has been cornered already.

bitcoins.jpg
Left, Gold vs. Bitcoin: both are artificially scarce


Bitcoins are 'mined': computers must solve complex algorithms to acquire new Bitcoin. Clearly this is an irrational way of creating money, again mimicking Gold. Every new Bitcoin comes with a more complex algorithm, requiring more computing power. At this point only major players (like banks) have the computing power to mine new ones.

Clearly there are better things to do for supercomputers than such an artificial procedure. The more so since we can create abundant, interest-free money through bookkeeping.

A few weeks ago it transpired that JP Morgan filed a patent for a Bitcoin like architecture.

But already in 1998 the NSA wrote an extensive report, 'predicting' (or planning) a peer to peer electronic unit, quite similar to Bitcoin.

Bitcoin's appreciation is of course an excellent marketing gimmick: the Libertarian techies who picked up on it early are now rich and are a good fan base to build on. There is a vibrant Bitcoin community, keeping the dream alive. This is quite similar to what happened in the Bush years, when the Money Power controlled potential opposition by selling them a few ounces of Gold, creating a large base of faithful pseudo-opposition clamoring for the 'reform' they want anyway.

The Mass Media have welcomed Bitcoin. Sure, in the early stages there was some bewilderment and scepticism, but we have seen huge media coverage for Bitcoin from the word go. Had it been a threat, it would have been ignored and if that hadn't worked, attacked.

Bitcoin is not anonymous, although many believe it is. All transactions are publicly logged. While it's possible to operate discretely, if the community sees a problem, they tend to find out quickly who's who. Centralist control of its use is thus possible, notwithstanding its peer to peer character.

And Bitcoin is a global phenomenon, which obviously is very pleasant for our globalist masters.

CONCLUSION

Bitcoin is driven by greed, it's in no way a rational solution to our monetary problems. It's global, scarce, cashless and soon the first banks will provide usurious lending.

The lesson is: as long as we hope to breed money from money, not realizing it's usually our own labor that breeds money for those holding a lot of it, we will be fooled by units like this.

Money must be cheap (interest-free) and plentiful, but stable. Only then can it be a good medium of exchange, allowing the producers of society the benefits of their labor, instead of the providers of capital.

Bitcoin offers none of these features. It has the Money Power's fingerprints all over it.
---

Anthony Migchels is an Interest-Free Currency activist and founder of the Gelre, the first Regional Currency in the Netherlands. You can read all of his articles on his blog Real Currencies


Related:

Is the National Security Agency behind Bitcoin?
Baffling Bitcoin
Bitcoin, Impressive but Flawed
Cause and Effects of Money Scarcity

First Comment from Eliezer:


There is a widely held confusion of basic terminology, specifically the difference between money & currency. Although both money & currency may serve as mediums of exchange, currency may not be "Money." Indeed, the term "Legal Tender" was once expressed as, "This Note is "A" Legal Tender." A deletion of the word "A" from the structure of a Note, is an obfuscation with far reaching consequences. The primary effect is, to remove Money as a discipline of honest weights & measures, thereby commodifying the Note itself. But THIS "Note," is neither a "Note" nor Money, because for a Note to be a Note, it must be payable in real Money. Lawfully understood, even though it has become fashionable to allegedly pay debts with debts, a Note cannot be settled or paid with a Note.
 
One may ask, "A" Legal Tender for what? Historically, when one submitted a "Note" or a "Bill," one was deemed to have made "A" Legal Tender or "Demand," for payment in real Money, i.e., "This Note Is "A" Legal Tender For Ten Dollars" in real Money, ostensibly meaning Ten Dollars by weight of either silver or gold (Like a "Quart" of milk, 1 "Dollar" = 371.25 grains, a "quantity," of pure silver, or, 15.43 grains of pure gold). What is real Money? Real Money is minted or "coined" in a mint, & has an intrinsic or earned value. One may not create Money out of Money, but rather, by issuing "A" Legal Tender, Note or Bill, make a claim UPON real Money, or conversely, one may by an issuance of more Notes than there is Money on deposit, debase the Money itself. This is known as "Fractionalized" Banking, or more correctly a nefarious slight-of-hand, or system of currency by which the medium itself may be expanded, contracted or debased.
 
Finally, as a discipline of honest weights & measures, a "Dollar" is a quantity, not a value. The numbers of Dollars traded in any purchase fluctuate, there quantity depending upon supply & demand - the self-regulating mechanism of an open-ended & fair market economy. Today's "Dollars" are not Dollars, but rather like Bitcoins, are TOKENS, each serving as an undisciplined commodified medium of exchange. Real Money or Dollars, are not only "mediums" of exchange, rather, they ARE THE MONEY. Obviously, by referring to Bitcoins as if they had been "mined," its creators are seeking to CAPITALIZE upon the perception of Money & its association with mines, mints & a measured minting of gold & silver coins. However, as with our current "Dollars," Bitcoins also, are those things that appear to be but are not.
 
No doubt, as a system of shuffling energy or moving"currency," Bitcoins are the ideal structure by which a Global medium of exchange may be enacted. So, on this point, I am in complete agreement with Anthony. The issuers of a System of Tokens, as a commodified medium of exchange, DO have familiar "fingerprints," maybe even footprints.



Comments for "Bitcoins - Trial Run for Cashless Currency"

Dan said (January 20, 2014):

THANK YOU Anthony Migchels.

The bitcoin has very clever branding, with buzz words like 'open source' and 'P2P'.

Those terms evoke a vaguely rogue glamor perhaps.
In an article last September, Rick Falkvinge of the Swedish 'Pirate Party' explained that the bitcoin is vulnerable to price fixing. Bitcoin is basically a gimmick to exploit the principle of 'velocity of circulation of money'. That's basically how many times a currency changes hands in a given time time frame.

Falkvinge noticed streams of purchases that were .00001 Bitcoin. This indicates a team of buyers working in cahoots to drive up the value.

There's not room to present Falkvinge's math here, but the bottom line is that Bitcoin has an overvaluation problem.

Hm. Now where have we seen that before?


CK said (January 20, 2014):

A couple of other interesting tidbits for your entertainment:

http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12

(a sure sign of a classic ponzi scheme)

The encryption is quite weak (today), it's only 256 bits. The quantum computers at the NSA and other large spy agencies can break this stuff while snoozing.

As they pointed out another big weakness is the blockchain, which tracks every transaction and is NOT anywhere near anonymous. There will be fixes for that in the future, however if you store every transaction and do it in real time (or people could easily double spend their "coins", you'll end up with today's VISA database with 100TB+ and thousands of transactions per second. You can't do that in a garage and you know the banks will end up owning it.


Rich said (January 20, 2014):

A virtual currency designed by a Japanese pseudonym? We don't even know who really built Bitcoin. This stuff will eventually be counted, taxed, and subject to interest payments like anything else. And what about Grandma? Who is going to set up her Bitcoin wallet and teach her how this stuff works?

Hell, I still have a dumb phone, and I 'm a heck of a lot more tech savvy than Grandma. But I don't have time to teach Granny Bitcoin basics. Heck, I got a job seven days a week, how am I going to learn? This stuff may make you think you are free, but you are not. It was sacks of gold for the cowboys before you,and rolls of green cash was the closest you will ever get, and its going to be gone soon. This will not give you outside the banking system economic freedom. Its on your computer! LOL! They see everything on you computer. Bluffdale, Utah!. That is where bitcoin was probably made. In fact, it probably sucks every dirty word off your computer and stores it while you sock bitcoins away.

And another thing, why would anyone ever loan out any money without receiving interest. I agree the money should be issued debt free, but after that, wouldn't it be ok to make what you can on it? I mean if it was issued debt free and you earned it you should own it until you spend it, right? Was there not a parable of the talents where one made no return on his money and was punished by his lord?


JG said (January 20, 2014):

Bitcoin has obviously been designed to become the "fiat currency" of the world.

Being a "debt free" currency it wouldn't carry the trillions of dollars of debt that plagues the balance sheets of the nations of the world that will never be repaid back to the lender.
There's not enough money in the world to pay it back.

Bitcoin will obviously have to be controlled by an International Central Bank and I wonder who that might be?

One guess!

What a better cushion for the protection against the devaluation of gold than to create a "fools gold" like Bitcoin.


Cartier said (January 20, 2014):

@Tom: (Below) For all your blithering, Tom, and boasting of your credentials, you have not included ONE reference or link to even one of the original studies you profess to be quoting from.


Sugamari said (January 19, 2014):

totally agree with Tony's assessment. Bitcoin is totally an exploit on our greed which is exactly how the controllers usually behave.

What if they are also exploiting peoples anger and hatred towards the established bankster system?

There's plenty of reasons to be suspicious.

https://sugamari.wordpress.com/2014/01/10/is-satoshi-nakamoto-a-secret-agent/

Then again, what if it is the final nail in the establishment coffin? Sure would hate to misplace the hammer for that event.

I think it's a distraction, as much as anything, at the moment.

It's not going to disappear anytime soon and I think it'll be a good hedge to store some of your wealth - gambling budget that is LOL.

It will be very telling to see what happens with the FBI's silk road wallet in the near future.

And, Canada declaring it "not legal tender" is getting on the bandwagon with it's own digital currency called mintchip.

Also, I think the Verizon "victory" in the net neutrality arena might very well be setup for a strike on bitcoin considering the timing.

In any event it's a very interesting time to be aware.

Keep up the open minded analysis!


Robert K said (January 19, 2014):

Conceptually, Migchels seems to be living in the Nineteenth Century: "...allowing the producers of society the benefits of their labor" is worn-out Marxist/Fabian-inspired drivel.

The vast majority of "labor" nowadays is performed by machines, and only an artificial preoccupation with the need to provide human "employment" (individuals apparently being perceived as being incapable of "employing" themselves!) prevents this from being essentially all "labor". We're drowning in production because of automation and robotization, but ideological primitives like Migchels are fixated on interest being the primary conundrum of economics.

People like him--alien to message of Love--have not advanced in their thinking from the time of the Great Depression, when people went hungry at the same time as foodstuffs were intentionally destroyed on a massive scale.


David said (January 19, 2014):

Although Anthony may be right about some aspects of bitcoin he is missing the point that there are now hundreds of alternative currencies just like bitcoin which means this kind of currency is not scarce at all, in fact we the people can make as many of them as we like. The only thing that needs to happen is for people to agree to use them rather than fiat currencies and power could possibly move in new directions.

The idea for his interest free credit based currency is great but this will still entail a governing body to choose who gets the credit and obviously a governing body is always corrupt as has been proven throughout the ages. What we need is anarchy, not government control and crypto's could offer a truly free anarchist economy not burdened by regulators. His idea may work on paper but until he can get all the governments to stop being corrupt and start issuing his interest free credit based currency its just a pipe dream.

Crypto's on the other hand are here and now and we could use them to create a free world economy not burdened by regulation, corruption and tax.


Henry Makow received his Ph.D. in English Literature from the University of Toronto in 1982. He welcomes your comments at