Tuesday, March 19, 2013

Is Bitcoin the New Safe-Haven Currency? Bitcoins Surge After Cyprus Bank Raid

Activist Post

Is Bitcoin now a safe haven currency?  It wasn't long ago when it was considered merely an interesting crypto-currency to buy illegal drugs on Silk Road. Now, citizens all over Europe appear to be flocking to Bitcoin as the European finance vultures circle above.

Europeans woke up this week with a lot less confidence in their banking system after European finance chiefs and the International Monetary Fund announced their plan to steal from private bank accounts in Cyprus in the form of a one-time "wealth tax" to bailout insolvent banks.

These "taxes" will be frozen and confiscated directly out of citizens' private accounts."Most of the 10 billion euros will go to bail out Cypriot banks," according to the New York Times. Do taxes go directly to private banks now?

No wonder Europeans are furious and scrambling to pull their money out of the banking system and park it somewhere safe. And it appears that some are turning to Bitcoin to escape the clutches of the Troika.

Downloads of Bitcoin apps surged in Europe over the weekend and Bitcoin reached a record high price of $52 yesterday.


BGR writes:
Interestingly enough, several Bitcoin-related apps started spiking on the Spanish iPhone market over the weekend. Bitcoin Gold shot up in the Spanish iPhone Finance category from 498 to 72, and another app called Bitcoin Ticker zoomed from 526 to 52 in just one day. A leading service called Bitcoin App jumped from 194 to 151 between Friday and Sunday as Spaniards brooded over the Cyprus crisis.
The chart below depicts the spike in demand and price for Bitcoin since the Troika theft was announced:

Source
Bitcoin, with its lack of central authority and quasi-anonymity, has always been seen as an alternative currency for those protesting central banking.  It seems the number of people who are waking up to just how corrupt the system now view Bitcoin as viable.

Europe is not the only region to test Bitcoins. Last week, Simon Black reported that companies in Argentina are turning to Bitcoins to bypass recent draconian capital and market controls. Black features a car rental company that has not only begun accepting Bitcoins but are even offering discounts for doing so.

Black writes:
The 1-day rental rate for a basic car was 380 Argentine pesos. At the government's official rate, that works out to be $74 USD. In Bitcoins, the same car rents for 1.13 BTC... which is approximately $54 USD. This is nearly 30% cheaper!

The benefit for the rental agency is the privacy; they can avoid all the costly fees, bureaucracy, and debilitating capital controls associated with a normal transaction. Plus, they can hold Bitcoins instead of the rapidly depreciating Argentine peso.
What's more, even entire nations are interested in using Bitcoins to get around trade restrictions. Bloomberg reported on how Iranians are using Bitcoins to get around sanctions:
Under sanctions imposed by the U.S. and its allies, dollars are hard to come by in Iran. The rial fell from 20,160 against the greenback on the street market in August to 36,500 rials to the dollar in October. It’s settled, for now, around 27,000. The central bank’s fixed official rate is 12,260. Yet there’s one currency in Iran that has kept its value and can be used to purchase goods from abroad: bitcoins, the online-only currency.
....
The advantage for Iranians is that bitcoins can be swapped for dollars that can then be kept outside the country. Another plus: Regulators can’t easily track the transactions, since bitcoins aren’t issued from a central server. Bitcoin users can conduct business on virtual private networks, which hide customers’ identities.
“I believe that bitcoin is, or will be in the future, a very effective tool for individuals who want to avoid sanctions, currency restrictions, and high inflation in countries such as Iran,” Jeremias Kangas of localbitcoins.com told Bloomberg.

This unprecedented and brazen robbery in Europe may be what catapults Bitcoin to new heights. If more people view Bitcoin as a safe haven currency, how high can it go?

Max Keiser writes "Analysts now see $100 BTC within easy reach. I am sticking to my bet. I bet Warren Buffett 100,000 BTC that BTC reaches $200,000 before Berkshire Hathaway does."

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18 comments:

Anonymous said...

the only thing getting in the way of bitcoin is the lack of stores that accept it as a currency.

lets bring back the gold standard, and use bitcoin as a parallel digital cash. we just need more cash->bitcoin machines.

B7 said...

It's a bit early, but I think Bitcoin might become the new Safe-Haven Currency. It has many advantages over dollars, gold and silver:

1. No government control
2. Easily traded for goods and services over the internet
3. Easily divided into smaller amounts (which is becoming necessary)
4. Cannot be inflated like currency

Here's some more info about Bitcoin.

Anonymous said...

You need the Internet to make it happen

What if the Internet goes down? and it probably will at some time.

Michelle said...

Bitcoin how interesting!

djohnston said...

Unfortunately, there's a bit more to Bitcoin than no government control.

(1) There are no real assets behind the currency, just like Federal Reserve notes.
http://globalguerrillas.typepad.com/globalguerrillas/2011/12/bitcoin-finds-its-intrinsic-value.html

"Bitcoins have properties resulting from the system's design that allows them to be subjectively valued by individuals."
https://en.bitcoin.it/wiki/Myths

(2) Bitcoins can be stolen from a digital account. There is no insurance I'm aware of for losses.
https://bitcointalk.org/?topic=3977.0
https://bitcointalk.org/index.php?topic=16457.0

(3) Bitcoin service exchanges have been hacked, resulting in losses.
http://www.nbcnews.com/technology/technolog/250-000-worth-bitcoins-stolen-net-heist-980871
http://rt.com/usa/internet-stolen-bitcoin-currency-226/

Bitcoin does have value as a medium for digital transactions. But, if the internet is down, so is Bitcoin. The digital units' safekeeping and storage is left up to the individual. And, if the electronic storage medium (hard drive, USB thumb drive, etc.) is broken, the digital units stored there are lost, unless there is a backup.

Anonymous said...

Who wrote this article?
Who is the propagandist behind this?
Who placed this advetisment here, right in the middle of other valuable articles?
No author, of course!

Anonymous said...

It's sad that the people who had the best grasp on monetary policies and real economics have been vilified due to unrelated matters and thus their views on these important matters are ignored.

Bitcoin is not a solution to any of our monetary or economic problems, as other commenters have already pointed out it is as ultimately valueless as the fiat Fed Reserve Notes.

If anything Bitcoin assists the globalists by "pre-programming" people for a globalized, digitized(cashless society) currency.

Although I may not agree with everything they put forward the real solutions are always those that come from the people who's voices are the most censored and suppressed by the establishment.

"For the folk-community does not exist on the fictitious value of money but on the results of productive labor, which is what gives money its value.

This production, and not a bank or gold reserve, is the first cover for a currency. And if I increase production I increase the real income of my fellow-citizens. And if I reduce production I reduce that income, no matter what wages are paid out."
...

"We know that National Socialism vigorously combats the opinion which holds that the economic structure exists for the benefit of capital and that the people are to be looked upon as subject to the economic system. We were therefore determined from the very beginning to exterminate the false notion that the economic system could exist and operate entirely freely and entirely outside of any control or supervision on the part of the State."

From Adolph Hitler's speech to the Reichstag given on January 30, 1937 describing the economic and monetary policies of National Socialism.

English transcript of speech -

http://www.calvin.edu/academic/cas/gpa/hitler1.htm

Video with English subtitles -

http://www.youtube.com/watch?v=mg-v_zMEXZo

Sad that the "evil Nazi's" were the only ones with the balls to actually stand up to the international bankers, and are now used as an example to anyone else who may want to challenge them(see 'Dresden Holocaust', Hiroshima/Nagasaki or the fire/terror-bombings of most German and Japanese cities in general).

Iceland has my eternal respect, they can't even come close to mobilizing the type of citizenry and economic power the Germans were able to but they still stood up and did what they felt needed to be done - hold the bankers accountable to the people, as it should be.

The fact it is difficult for the bankers to vilify Iceland also makes their actions even more important, they aren't exactly in the running to become a major world power any time soon.

It may not be a perfect paradise but by golly they deserve to be held up as the key modern example of how a nation can protect it's citizens from the international banking criminal cartels.

I highly doubt National Socialist Germany will become a major beacon of activism any time soon, so Iceland is key... it's not just "evil Nazi's" that oppose their monetary and economic terrorism.

The people of Iceland have gotten far too little respect or even attention, even the activist movement seems to dislike discussing this key victory against the bankers for some reason.

Peace,
Jonny

Anonymous said...

Bitcoin is 100% dependent on the internet.

Shut down the internet, or significant parts of it, and you shut down bitcoin. Any number of events could result in an internet shutdown, regionally, nationally, or globally.

To have redundancy in the system, a way must be devised to move bitcoin off the internet.

Anonymous said...

False, bitcoin can survive a full internet shut down. A permanent shutdown would make us worry about other things alot more.

Anonymous said...

"False, bitcoin can survive a full internet shut down."

True to some extent, but also false. Bitcoin may survive a temporary shutdown of the internet but during that shutdown Bitcoin would be non-operational.

Being able to survive it doesn't make it useful during that time.

And since a temporary internet shut-down is most likely to accompany a natural or man-made disaster, the time when people need their wealth and resources available to them the most, it leaves anyone who relies on Bitcoin in an extremely unstable position, not just financially but for survival in general.

Bitcoin is a nice initiative in my opinion but the result is an extremely unsecured, unstable, easily manipulated/hacked system that actually helps the international bankers by helping to 'warm up' people to the idea of a global, digitized currency.

Currency will always be worthless unless backed by actual human resources/labor.

If good intentions and noble ideas could be the backing of a strong currency then Bitcoin would be a very good system, but as it is currently it's actually a step backward in my opinion not a step forward.

Even gold and silver have values that are largely inflated by simple perceptions of it's value rather than real market conditions and values.

The value of human labor however is not a matter of perception(how it is directed is), without it modern human civilization would not exist, nor would any form of currency.

It is odd to me that it is considered 'radical' to suggest reverting to a system that was the original basis for the invention of currency in the first place - work.

I don't agree with everyone having the slave mentality of working for the system, the people should be working to maintain the system that supports and assists them.

Peace,
Jonny

Anonymous said...

I find it very strange when people say 'but Bitcoin will be useless in the event of an Internet shutdown' , erm well sorry to enlighten you but that would also mean every single bank , cash point , cash register , supermarket checkout would also stop working , plus a lot more besides. If anything the current electronic banking system we have is so fragile , that the slightest problem with 1 small bank in a tiny country could start a total economic collapse of an entire currency. If anything Bitcoin is the complete opposite , every node which is added increases the strength and resilience of the network. Even if the traditional Internet is shut down , backups will be in place quickly , through satellite's and land-based radio connections , telephone lines , whatever is available , one of the beauties of the TCP/IP protocol is that it can be routhed over almost anything , even CB radio , it was deisgned to withstand a Nuclear Attack , it can even work over USB thumb drives through the Postal network without any internet connection whatsoever.

Also , the people who see this as another Fiat Currency forget that the definition of a Fiat Currency is that all units of a Fiat Currency are LOANED into existance , and have to be paid back with interest. In other words , they are all Ponzi Schemes. Bitcoins are not loaned into existance , they exist as a credit , not a debt and therefore they fit the description of a money far better than any Fiat Debt based currency. There is a finite limit available and if they are owned there is no debt left behind.

canobs said...

___Peace Jonny is right___Real economy is production vs consumption of products, certainly not speculation on the stock market and especially not by thebanksters, government has to control, not bailout the fraudulous banksters___Iceland had the only solution, Cyprus should do the same before it is too late___Bitcoin should already have a controlled organized backup system actually nonexistent and is subject to speculation, should be seen as a temporary solution only___Read more at - webofdebt.com/articles - globalresearch.org - canobs.livejournal.com

Anonymous said...

@ Anon 1:19 PM - You seem to have some gross misunderstandings or alternative definitions for certain words and terms.

For one "Fiat currency" has nothing to do with loans whatsoever, it is simply any currency that has no real backing of commodities but relies on the promises of the issuing authority to uphold the stated 'face value' of the money.

A fiat currency is simply a currency issued by way of a fiat -

From dictionary.com:

"fiat:
— n
1. official sanction; authoritative permission
2. an arbitrary order or decree
3. literary chiefly any command, decision, or act of will that brings something about"

http://dictionary.reference.com/browse/fiat

Bitcoins have no commodity backing of any kind but are simply backed by the fiat/decree that the money will be upheld to the standard value assessed to it by the issuers/controllers of the currency.

Thus Bitcoins are 'fiat currency', just not government regulated fiat currency.

Also, according to Black's Law dictionary circa 1914 "credit" is defined as "debt owed to a merchant", so your statement that "they exist as credit, not a debt" is contradictory.

Or an even better definition from InvestorWords.com -

"A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some later date. When a consumer purchases something using a credit card, they are buying on credit (receiving the item at that time, and paying back the credit card company month by month). Any time when an individual finances something with a loan (such as an automobile or a house), they are using credit in that situation as well.

http://www.investorwords.com/1193/credit.html#ixzz2O7uwW8xw

Hence "credit" generally means debt, either by a customer to a merchant or vice-versa as you can get 'store credit' in places whereby the debt is owed to the customer rather than the merchant, but it's still debt.

In the case of people giving away their hard-earned money for non-physical digital Bitcoin "credits" which also only have perceived value they are falling victim to the exact same system they are trying to escape.

Bitcoins are NOT MONEY, they are credit - debt - the issuer(s) take your money and give you a Bitcoin "credit" through a fiat or promise to uphold the stated values of the money when it eventually is re-exchanged for 'real' currency.

Until that money changes hands and is re-exchanged for "hard currency" those Bitcoin credits ARE NOTHING BUT DEBT being transferred around, the same as our national fiat currencies(IOU's).

The lack of a central authority and "quasi anonymity" are actually major drawbacks to such a system as it lacks accountability even more so than the existing system - hence why it is bound to be exploited by the corporations to their own benefit as bad or worse than the existing systems.

If people want to trust this Bitcoin system that is their prerogative, but it most certainly is a fiat currency, and it is a debt-based system as well, and I personally won't trust such a system with little or no accountability.

Regardless however the idea of Bitcoin possibly being a 'safe haven' currency is ridiculous, it's even less stable and secure than any national currency and owes it popularity only to skewed public perceptions.

Peace,
Jonny

djohnston said...

One aspect of bitcoins has not been discussed. That is, how bitcoins are created.

"New bitcoins are generated by the network through the process of 'mining'. In a process that is similar to a continuous raffle draw, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network."

https://en.bitcoin.it/wiki/FAQ#How_are_new_bitcoins_created.3F

In other words, bitcoins are "created" by solving a computer algorithm. Not much real world intrinsic value there.

Anonymous said...

Bitcoin is another fiat digital money not worth the paper it's not printed on, how can people be so stupid as to buy into another worthless currency that you cant even buy anything with, are you seriuosly going to buy food on the internet?, especially when you could be buying valuable items like storable food, gun stuff, survial supplies, or real money like gold or silver.

Anonymous said...

Lol, cool down goldbugs :) We know that you are prepared for the zombie apocalipse (well, you aren't because you wouldn't eat it)

Anonymous said...

Bitcoin is a bubble and it's growing exponentially. Why can't anyone see it?

George Bracken said...

I believe that bitcoin has many advantages that we shouldn't underestimate. Bitcoin might become the new Safe-Haven Currency or even the future currency. And yes, "Bitcoin is a bubble and it's growing exponentially". Everyone should see that, this is one big opportunity.

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