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How to Get Rich Investing in Stocks by Riding the Electron Wave

Bitcoin Ebola GFC ISIS: Phase Two is Begun

Currencies / Bitcoin Oct 06, 2014 - 01:05 PM GMT

By: Mark_Blair

Currencies The cryptographic-currency phenomenon is characterised by a binary that is little mentioned beyond the crypto-sphere. The binary is 'libertarian-commercial.'

Thesis:

if, as seems increasingly likely, the world economy becomes significantly destabilised, the balance between libertarian and commercial crypto-use will shift significantly towards the libertarian.


Here are 'The Major Players':

(a) 'Anonymous' coins like Bitcoin Dark and Stealth Coin and Dark Coin:

these coins' communities couldn't care less about Bitcoin Foundation spokesperson and Electronic Commerce Association guy. These coiners have talent out the wazoo, and need only wait for Constable Klumzeeguvv to kick in the doors of a few more fence-sitting middle-class citizens who are already red-eyed from poring over The Regulations.

The worst -- below -- might not happen here; but my point is that the thinly-veiled hostility of 'regulation' may well be enough to spark a rush for the libertarian fire-doors.

In Bangladesh, ' . . . the act of using a digital currency could be punishable by as much as 12 years in prison.'

http://www.coindesk.com/bangladesh-outlaw-bitcoin-jail

And Russia is considering legislation that would ' . . . effectively ban the creation and distribution of software that allows for the use of [Bitcoin] . . . ' (which is gonna come as a shock to its computer industry!).

http://www.coindesk.com/russia-proposes-fines-bitcoin

(b) Mining set-ups:

you can now invest (with fiat or cryptos) in mining-pool set-ups that provide long-term returns.

Now, Australians who use B-trade have just begun paying a 10% tax because Bitcoin is a 'commodity.' (But if I then buy a loaf of bread with that same Bitcoin, I pay Sales Tax because Bitcoin is a currency.) And there is the '4% in' cost of buying Bitcoin through banks.

It's at least a year since I spoke to a westerner who owns an exchange in a western nation, but lives in Asia, where he has an array of miners connected to the cheap local electricity. The coins mined are transferred straight to the exchange.

And check out Nxt's 'ForgeCoin.' (I am not recommending it.)

Onerous Government regulation makes these mining-setups attractive.

Finally for this section, check the article below. It's excellent. Consider the implications: an entire 'rogue' Bitcoin-mining world in a nation ostensibly opposed to cryptos:

http://blogs.wsj.com/moneybeat/2014/09/19/bitbeat-more-pain-for-bitcoin-prices-are-chinese-miners-to-blame

(c) 'P2P':

the trading-volumes that you see are exchange volumes. But what percentage of all trading do they represent? Have you ever visited Localbitcoins? LocalBitcoins is an on-line facilitator of P2P-trading.

There is a range of technologies that enable one type of P2P-trading or another. Cloak Coin has an 'in-wallet' marketplace where you can trade cryptos and goods and services. Stealth Coin is an anonymous coin that is also Tor-friendly. That is, it is 'dark in the dark,' and includes a facility for encrypted SMSs.

Two 'appcoins' that provide encrypted SMSs linked to an android wallet are due for release. (Go, Nxttycoin!)

However, intent + Any Basic Crypto is all that is required. I lived for years in Indonesia, and ran a business under a klepto-regime. The fact is, almost the bulk of the system can be outside the system.

Thus, commercial enterprises, particularly SMEs, can keep, say, 80% of transactions on the books, but maintain a 'byway' in their system ('highways and byways') into which 20%, accepted in cryptos, can be 'run.'

(d) 'price-independence':

until about a year ago, it was the case that Bitcoin was the 'pole' coin, and all others were a shapelss blob around that pole, and ALL 'differentially' priced against Bitcoin.

No longer. Apart from the increase in crypto-fiat trading-pairs, a range of coins offer other trading-pairs, such as crypto-gold, crypto-silver, even crypto-urea fertiliser.

The point here -- whether these coins succeed or fail -- is the overlap with P2P-trading. Consider a coin-community that enthusiastically trades bullion -- or rubber or oil or sugar -- for its coin. Where you have trading-pairs like 'Our Coin-rubber' or 'Our Coin-gold,' the byways option is much easier. The Government 'crypto cctv' system will be pointed at the (public) automated-exchanges, and businesses like B-trade, where cryptos are exchanged for fiat.

However, cryptos that focus on 'price-independence networks,' which involve trading the coin for a 'basket' of commodities and currencies, should ultimately enjoy -- apart from lower price volatility and greater overall volumes of trade -- much greater opportunities for P2P-trading.

(e) 'assets':

please don't be frustrated by any apparent repetition here, readers. P2P and price-independence and tor-capabilities and encrypted sms-es are a mosaic, one piece of which is 'assets.' For example, Nxt's 'SAE' has dozens.

https://trade.secureae.com/#4551058913252105307

Coinmarketcap's list of assets -- issued by BitsharesX, Counterparty Coin, Nxt, and Mastercoin -- has grown to two dozen in a matter of weeks. (Go, JL777!)

http://coinmarketcap.com/assets

Let's consider an imaginary SAE asset, 'Mynewcafe Coin' Instead of venture capital being raised in fiat, an asset is launched. The asset is a cryptographic currency, and is traded as such. The business's owner can, as the coin appreciates in price, sell parcels of coin to raise capital. They can trade the coin. They can accept the coin in the business, and then trade or sell THAT coin. They can approach their suppliers to accept the coin as payment.

It's a revolution!

Mark Blair

Mark has a three-decade background in libertarian politics and activism. Cryptos snared him early last year. You can find him here:

https://bitcointalk.org/index.php?topic=527500.new#new

Copyright © 2014 Mark Blair - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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