James Delingpole

James Delingpole: Those bitcoin weirdos might just be right

Cryptocurrencies are an enemy of state power. That's what makes them exciting – and risky

4 January 2014

9:00 AM

4 January 2014

9:00 AM

Here’s a thought to kindle a lovely warm glow of smugness and schadenfreude as we enter a new year: you didn’t lose your fortune in the great bitcoin bubble of 2013.

The reason I know you didn’t is because few Speccie-reading types of my acquaintance even understand what a bitcoin is, let alone how you might go about buying one, or why it might be important for the future of everything. So let me try to explain from the perspective of a fellow Luddite and techno-phobe.

You think about bitcoin, if at all, as one of those newfangled things that young people and child pornographers and hackers and other unsavoury types indulge in. It’s good for a blackly funny story — like the one about the Welshman who lost £4 million worth of bitcoin on his computer hard drive in a rubbish tip. But it’s not something you need to get involved with emotionally, let alone physically, because you don’t need to buy your drugs from the Silk Road, when there’s perfectly decent claret to be had online legally from Berry Bros. and Rudd.

Up to this point, I’d agree that your analysis is more or less right. And we haven’t even factored all the other reasons why you might want to avoid bitcoin — and its junior cryptocurrencies, such as Litecoin and Quark — like the plague. These include: the tremendous fiddle of buying the things; how pretty useless they are when you’ve acquired them; how hard they are to get rid of when the price starts plummeting; how vulnerable they are to theft by hackers; and the possibility that the authorities might suddenly clamp down on cryptocurrencies, as they have in China.

It’s the last one, for me, that represents the biggest long-term risk. That’s because, as Max Keiser puts it, bitcoin is the ‘currency of the resistance’. To put it in Star Wars terms, dollars, pounds, euros, renminbi and other ‘fiat currencies’ are what Darth Vader and co use on the Death Star and throughout their evil empire. But when Luke Skywalker and Han Solo and Princess Leia want to purchase more X-wing fighters or buy a round in the cantina, they pay in cryptocurrencies outside the enemy’s control.

Max Keiser, by the way, is that weird, brassy American in red braces — a bit like the Penguin from the 1960s Batman series — who was on Have I Got News For You a few weeks ago. He presents an increasingly popular TV show for Russia Today called Keiser Report, in which he talks darkly and conspiratorially about banksters and gold price manipulation and the imminent collapse of the corrupt global financial system. Probably that puts you off as much as that Star Wars analogy did. But the scary thing you need to ask yourself at this point is: what if Max Keiser is right?

Here are some questions to help you on your way. 1. Do you believe that a Chancellor who, despite talk of austerity, is still borrowing £100 billion a year is in any way serious about cutting Britain’s epic national debt? 2. And suppose Miliband and Balls were to get in in 2015, do you think this would usher in a new golden era of fiscal responsibility? 3. Either way, what do you think is going to happen to the economy, house prices, public services, law and order etc when interest rates resume their natural level? 4. Looking around the world, do you see any evidence anywhere that speech is getting freer, economies are becoming less constrained, taxed and regulated, markets less blatantly rigged and manipulated, the banker/corporatist/lawyer class less bloated and cushioned, fiat currencies less inflated, resources more sensibly allocated?

You don’t need to be a particularly virulent pessimist to notice something phoney about this glorious economic recovery we’re supposedly experiencing. All you need to understand is that since the 2008 crash, nothing has been done to address the terrifying underlying problem that got us there: governments — our government especially, since we are one of the most indebted in the western world — are spending far too much money we haven’t got on crap (from overgenerous welfare to HS2) we can’t afford. This can only end very, very nastily.

So what possible recourse do we free (ish) individuals have against the bullying might of this vast, increasingly confiscatory system stacked against us? Well this is where bitcoins, Litecoins and Quarks et al come in. They’re the monetary equivalent of that scene in Atlas Shrugged where the productive, hardworking creators revolt against the corrupt, hyper-regulated, sclerotic, wasteful, doomed system and retreat beyond the mountains to Colorado.

Cryptocurrencies were created by and for people who have simply had enough. They’ve seen the way the world is going and rather than grumble or pretend it’s not happening, they’ve decided instead to make a new one, in their own liberty-loving image. It’s a world where, by and large, Big Brother has no place — which is why, for example, it’s so popular on the black market.

But you don’t need to be a crim to see why cryptocurrencies make sense. Have you noticed how increasingly difficult it is, for example, to conduct the most basic transactions from your bank account? You want to pay for some item, perhaps by bank transfer, and the security’s so tight (thanks to onion layers of EU regulation, probably) you sometimes find yourself being shut out of your own account. Well, with bitcoin you’re your own bank: you transfer your money electronically from your wallet to the payee’s wallet, and that’s it.

Oh, and another thing. And this may be the clincher: the number of retail outlets which accept bitcoin is exploding, with thousands more each week. For example, already there’s a delightful agriturismo farmhouse in Tuscany, a place by a lake in Portugal, an apartment in Dubrovnik. Paying for these in BTC is like spending Monopoly money, like you’re getting your pleasures free.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • freedom4citizens

    Great article JD.
    You are right that cryptocurrency is the future of money and will (one day) force governments to run balanced budgets, eliminate CB manipulation of interest rates, remove the massive distortions in global markets and trade, reduce the financial sector to an ideal 5% (Steve Keen) of the economy.

    Bitcoin is hard to use because it is early days, like the Internet before TBL’s WWW.
    2014 is shaping to be an exceptional development year for this new paradigm.

    • klem

      Cryptocurrencies possess no more value than paper fiat currencies, if anything cryptos will accelerate the demise of the worlds fiat currencies. If the world suddenly embraces cryptos and stop demanding US dollars, the US dollar will hyper-inflate and then collapse in value. We will then endure the greatest global depression in history. I’ve already lived through one of these (on only a local scale), I don’t want to go there again.

      The world must go back to the gold standard now, before its too late.

      • bittaker

        I cant wait to see the day cryptos will be the demise of the fiat currency. I will bask in the rubble with my bitcoin millions

        • Holly

          YEAH RIGHT.
          Like ANY government is gonna let that happen.
          Is that poor bod still down the tip?

          • erikvoorhees

            Governments’ ability to stop Bitcoin will look quite similar to their ability to stop filesharing.

          • Michele Seven

            Lol There he is! <3

          • bittaker

            Is that poor bod still down the tip? I dont know what that means. I can no longer communicate with fiat brains. A fiat brain is useless and it loses value everyday. I have evolved into a super human. You most likely work for the slave wages handed out in this country. I make my wages in the mine shafts of the web processing bitcoin transactions. Mr Erik Voorhees below is probably the smartest and wealthiest person you will ever have personal contact with, so you might want to listen up and ask him what he knows. He fled to Panama to escape the oppressive long arm of the US govt. For some reason, he still files taxes here. I would never give this country any more money if I were him, but Im sure he has his reasons. Just continue to be a programed drone the rest of your life and youll be fine im sure. Well maybe not, the stock market is supposed to crash again now that i think about it, because of all of this fake money being printed. So it could be a bumpy road, but good luck.

          • Derek Pater

            all I can say is Pirate Bay and Wiki-leaks,
            the Internet is the (GREAT LEVELLER)

            unless its turned off, Bitcoin and other Alts live on strong

      • Jimmy Jordan

        Where is the public ledger for paper money? Where can i view every transaction at anytime? Whats Gold backed by? Is Gold that rock you have been living under?

        • Q46

          Nothing has any intrinsic value, beyond that which can be obtained by exchanging it. Perception of value varies between individuals … watch an auction… and value may alter with time.

          Gold is backed by its reputation and trust in it as a universal instrument of exchange whose value is determined by the markets not individuals or Governments.. the Romans used iron.

          Whereas a Government can create currency just by will out of nothing thus devaluing it, nobody so far has been able to create gold out of nothing, so it cannot be devalued by inflation.

          • Tower Hill

            I actually agree with klem that cryptocurrencies possess no more value than paper fiat currencies… although the networks behind cryptocurrencies are way more efficient.

            Gold still has the long term store of value reputation and will probably outlive Bitcoin… it’s best to diversify.

            Governments are going to clamp down on cryptocurrency networks by first taxing it almost to death or then make it illegal for trade, you can bet on that. They might even derail Bitcoin … by making it less de-centralized (through incentivizing people and the industry to centralize)

            But they won’t win in the long term …. governments are going to collapse before all cryptocurrencies are gone. As long as the mechanics aren’t proven wrong and it can scale, Bitcoin is going to take a large part of the market share of government fiat currencies.

          • Smartmoney

            why should it be made illegal?
            on monday wallstreet move into bitcoin and litecoin and namecoin for the first time
            Wallstreet tells polticians what do to ! and in turn they tell us
            one world on currency on bank !

      • Jimmy Jordan

        When we got the internet did you have dial up or a button on your cell phone? You dont wake up to a drastic transition. You know some people still walk to the mailbox. Some people still listen to records. 10 years from now some people will still using dollars. Poor souls.

      • Holly

        A brain.

      • Q46

        Bitcoins are de facto ‘gold standard’…

        • klem

          Bitcoins have already been hacked.

          • Loshan Thevanesan

            Show me proof…

          • Karpo Tow

            Search what happened August 15 2010

          • Loshan Thevanesan

            That is the thing about Bitcoin, all these ‘fake’ coins were generated, and the rest of the Bitcoin protocol couldn’t be verified…

            Meaning that the network would not accept these coins and would automatically delete them in the next update in Bitcoin, where this vulnerability would be closed.

            And for anyone else who does not know about this, here it is: “On 6 August 2010, a major vulnerability in the Bitcoin protocol was spotted. Transactions weren’t properly verified before they were included in the transaction log or “block chain” which let users bypass Bitcoin’s economic restrictions and create an indefinite number of bitcoins. On 15 August, the vulnerability was exploited; over 184 billion bitcoins were generated in a transaction, and sent to two addresses on the network. Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed and the network forked to an updated version of the Bitcoin protocol. This was the only major security flaw found and exploited in Bitcoin’s history.”

          • inpips

            So the “hack” ultimately didnt succeed, it simply made the btc protocol even stronger.


          • fgd


          • fgd

            you are confused troll.

          • klem

            Find it yourself. What, are you helpless?

          • Loshan Thevanesan

            You are a moron, look below you. Saying that Bitcoins have been hacked is very vauge.

          • fgd

            hey troll, go take your low level incarnation somewhere else.

          • klem

            I’m a troll, really?

            Wow Mr.State-the-obvious, what was your first clue?


          • Smartmoney

            klem ? really

          • klem

            Klem. Really.

          • fgd

            no, its a troll.

          • fgd

            hahhahahaaaaaa what an idiot. do you have a 2048 qbit ai?

          • klem

            Yea, I picked it up from Dwave, it was their demo. You?

      • whs1954

        We have just had Christmas here, and to celebrate it with my friends I have used a method considered the most socially acceptable, and which is exactly the same method the Victorians used. I put my name on some pieces of cardboard, had to go and buy some rectangular pieces of paper with the Queen’s head on, then I had to take the cardboard to a big shiny red thing three streets away from where they were taken to my friends within about 96 hours. The only differences from the Victorian era were that the bits of paper with the Queen on are now self-adhesive, and the postman doesn’t make the collection on a horse (and don’t make them three times a day, more’s the pity).

        This despite the enormous advances in technology in the last 150 years.

        This perhaps puts some perspective on the idea some tedious “libertarian” [sic] geeks, and a bunch of druggies using their pseudo-currency to buy coke, will collapse the dollar and the pound sterling any time soon.

        • klem

          True but back then, every single bit of paper represented an ounce of gold. Later it was reduced to one gram of gold. The world left the gold standard entirely in 1971 so that every bit of paper was not backed by gold anymore, they were only backed by a promise by the government, the government are the people who print the paper. This allowed them to print as much as they want. Which today is called quantitative easing.

          • Derek Pater

            the problem by dropping the gold standard is now the USD is a petro/oil backed dollar, Iraq war and others are oil driven

    • Count Dooku

      I agree with the theory of bitcoin but there is no way governments will give up control of their currency. In 5 years the EU, US and China will ban its use.

      This is the major issue and one that advocates of bitcoin can’t square. The US did basically the same in the 70s when is stopped the ability to exchange USD for XAU.

      • freedom4citizens

        Major governments are boosting Bitcoin because they are crushing their own currencies! Japan is printing 40% of the interest payments on its government bonds. Madness.
        Peak Debt, QE, ZIRP, bankster bailouts, saver bail-ins, are destroying faith in fiat. Competitive currency devaluation, suffocating AML red-tape, parasitic credit card fees are driving the people away from a failing system.

        • Count Dooku

          You have listed a lot of the good reasons to hold bit coin but you haven’t answered my point on governments banning its use.
          The 2 most powerful tools of govt are their abilities to tax and print currency. Both are directly threatened by crypto currencies so they either take them over or shut them down. It’s that simple.

          • inpips

            Bitcoin is p2p so effectively it cant be banned or “shut down”

            If a Government banned breathing only the most ardent statists would perish.

          • Count Dooku

            So if the UK govt said merchants can not accept bit coin and must take Sterling, are you arguing that the vast majority of law abiding merchants would disagree and break the law?
            From a technological point of view it may be difficult to disrupt (like file sharing) but if it’s banned its value will go.

          • freedom4citizens

            Last I heard the UK was a country with a legal system. Private currencies are allowed, like the Bristol pound. It would need an act of parliament to ban bitcoin.
            I can just imagine the debates, confusion and hilarity trying to get such a bill passed.

          • john vile

            If Bitcoin is a networked protocol Governments could block it simply by creating some law that forbade ISP from transmitting the protocol. Maybe? My ISP already has me verify my age for adult content.
            If it is possible to block Bitcoin as a protocol then it will be possible to pass it through a filter that collects tax on transactions, through the ISP.
            If any of that is possible very soon Bitcoin et-al will be dead. All the coinage will eventual end up in the hands of the Banks.

          • Derek Pater

            so what about pirate bays new system, that would effect your theory correct?

          • john vile

            Well my ISP “shapes” BitTorrent traffic, it auto shapes the type of information packets being sent to and from any given p2p client.
            Whether that counts as it being intercepted is another thing. Though it can never know what the eventual file will be when its send over the BitTorrent protocol so can have no lawful means to interfere with the process, but it doe’s slow it down as a “fair use” of bandwidth issue.
            The thing with piratebay is that most of the files being shared R in some kind of copy-write violation.

            Bitcoin is a cryptographic protocol so like BitTorrent the traffic can be shaped and intercepted.. so a law could be passed where an ISP would intercept your Bitcoin traffic and slice a bit off for taxation purposes.

            But again they would have to prove it was a taxable transaction which would be impossible.
            So I guess I answered my own question with this gibber gabber.

            Taxation would be impossible to collect from a crypto because there is absolutely no way to prove a taxable transaction took place in the first place.

          • Derek Pater

            all good comments, I was reading the other day about WIFI based internet, phones and laptops for example creating their own separate system, or everyone could join the below,

            what would happen then?


            I have no idea if its possible, new systems are created online everyday so who knows

          • fgd

            Their is a project in the works that the internet will run on bitcoin blockchain, today blockchains power is rated at 5 Petra flops, freeing us from the NSA and the earth prison.

          • fgd

            piratebay is banned in the UK, so you use a VPN, so your ISP has no idea what the packets contain, you should be using a VPN service in light of the NSA/GCHQ spying anyway. And if you are using bitcoin it is best practice to use VPN to mitigate hacking.

          • fgd

            Then you use a VPN, simple.

          • coinosphere

            And what do you suggest they are going to do about the mathematical formulas you think of as bitcoin? Point a gun at them? They have no power over it.

          • Count Dooku

            All that’s needed is a law banning the use of crypto currencies for trade and that’s it. Worthless.

          • coinosphere

            Like laws against alcohol made it worthless? Like laws against Gold made that worthless? To make this point you have to both argue that the people always follow the law, and you also must assume that the whole world follows the laws of your nation. -You’re clearly wrong on both counts.

          • Derek Pater

            old school mindset, look the USA government tried their best to shut down wiki-leaks and pirate-bay?.

            they plain failed,

          • fgd

            it will never happen, lol

          • Derek Pater

            yeap, and the smart Chinese just worked around it,
            unless every country on the planet and island passes laws, it’s not going to happen, by then there will be a moon base connected to the internet and other planets .MARS

          • john vile

            All they did it stop it from trading. I doubt very much they did any more than that.

      • Q46

        In times past a person in England might have said, ‘no way absolute monarchs will give up their power’.

        Certainly many of us thought, ‘no way Communism will collapse in the USSR’, then it did.

        Change happens serendipitously because the people outnumber those ‘who would be king’ and like water dripping onto a rock, the rock inevitably gives way over time.

      • Derek Pater

        (peer to peer) its bullet proof

        • fgd

          so many people have no idea how bitcoin works, dont worry bud, we will cure the world of the elitist cancer ridden fiat ponzi scheme and be rewarded handsomely. PS if you did not know you can use bitcoins on PAPER! FFS!

      • Derek Pater

        the difference from the 1970’s is the internet,

        originally created to make the military nuclear proof, now is the perfect tool to keep governments honest, yes they watching us but more voting people are watching them, that change who is in power.

  • fred quimby

    “Here’s a thought to kindle a lovely warm glow of smugness and
    schadenfreude as we enter a new year: you didn’t lose your fortune in
    the great bitcoin bubble of 2013.”.



    In 2013 Bitcoin went from $20 to $1200 – Hardly a fortune losing situation Sir! (unless you bought-in for the first time at the highs between Nov 19th – Dec 15th 2013 of course), but most of us wierdo’s have been supporting the bitcoin network for a couple of years already (some for 4 years!), so we also understand it is more than about the btc/usd exchange rate that most are focussing on when they first discover bitcoin and it’s brothers.

    Check out invictus innovation’s DAC’s that are based on the bitcoin blockchain principle for example:


    Also, their tongue in cheek parable about crypto-currencies is a real eye-opener. It was for me when I read it anyway.




    P:S If you heard/saw Max Keiser in 2013, he very publicly (and repeatedly) called for Litecoin (a plague!) to explode in value and hit $50 as it gains mainstream recognition; he called this way back when it was under $5.00 – It made it to $46.88 in 2013. A better call than any call made by any other financial analyst/journalist/commentator on the planet in 2013 perhaps? (If not show me a better one!)

    • john vile

      you talk the talk, but.. How is bitcoin going to escape the markets. for a coinage to truly set a slave free it has to be divorced from the highly volatile gambling market system.
      it’s early days. But the internet has a kill switch and a finite power supply.
      don’t get me wrong I love the idea of bitcoin but when certain agents can bye up the lions share of the coinage just by inventing fiat. you have to wonder.
      these fuckers are not going to rollover they will fight or destroy.

      • Michele Seven

        Free yourself and stop paying for the weapons, soldiers, and jailhouses with the fruit of your labor. Stop being lazy, cowardly, and boring, expecting someone else to free you.

        • john vile

          thankyou. your contribution to the debate was pointless. Actually I feel a little bit stupider having read it.

  • klem

    Absolutely not. Bitcoin is no better than any regular currency, Bitcoins are backed by nothing. They must be backed with gold to be real money. So you might enjoy trading them for goods and services, but unless they are backed by something in the real world like gold they are just another fiat currency, worth nothing. They aren’t money.

    We must go back to the gold standard. Otherwise were are doomed to repeat the hyperinflation of the Weimar Republic, and Bitcoins will not save us.

    • Terry Field

      To suggest a currency needs to be backed by gold to be ‘real’ is truly stupid.
      Beyond stupid.
      Bloodi ignorant.

      • Jimmy Jordan

        Hes desperate to hold onto his Gold holdings. I love the depseration in his post. Hilarious.

    • cognoscente

      Gold, silver, other precious metals, diamonds, art, etc. are not backed. They are what they are: extreme rarity, beauty, and superiority among other qualities..
      Eventually, almost everyone will recognize these qualities in bitcoin above all other forms of trade, credit, currency, cryptocurrency, barter, pork bellies, guns, alcohol, and all other comers. For those who don’t…… there’s always welfare (maybe).

      • erikvoorhees

        Bingo, nailed it.

    • Jimmy Jordan

      Please get help. If we lost all power tonight potatoes and water would be “money”. You must be an old gold bull. Sorry my friend the age of the stmaps and post office are over. You did get email did you. How do I send Gold to Germnay is seconds for pennies?

    • Zen Magnets

      All hail gold. The yellow metal that is the life blood of the economy. Gold will forgive your sins and save your soul. – Klem

    • JackCuntsler

      Bitcoin is backed by the trust it’s owners have in it. The trust in the system and it’s ability to not be controlled, devalued or counterfeited is what people find valuable. That is all that is necessary.

    • Theodor Adorno

      Bitcoin is backed its open source, secure, global P2P payment network protocol and global name recognition.

      Arguably worth ~%1 of global GDP one day.

      • klem

        Bitcoins already been hacked.

        Try hacking gold sometime.


        • inpips

          Websites get hacked, Bitcoin has never been “hacked”

          • klem

            Yea I guess you’re right, its because cryptocurrencies are all like encrypted and junk. I forgot.

          • inpips

            You wouldnt buy Gold and leave it with someone you dont know would you? Same thing with BTC.

            People who dont understand how to use BTC safely should stay away for the time being. Services such as Coinbase, Bitpay etc are being developed for the uninitiated, and to help BTC go mainstream.

            At the end of the day its about choice, those who dont see the obvious advantages dont have to participate.

          • Derek Pater

            bitcoin is backed by mathematics

        • dodgy
    • fanax

      Wrong. Cryptocurrencies are backed by computation. Everything is computation – including the process by which gold is created by nature – and computation is a finite and scarce resource. This is the genious, beauty and paradigm shift of bitcoin and cryptocurrencies in general.

      • klem

        The brilliant thing about cryptocurrencies is that our regular dollars are already cryptos. We only print 3% of our dollars on paper and metal, the rest are ones and zeros. Bitcoin is a bit late to the show.

        • Derek Pater

          well, the difference is bit-coin is not loaded with greedy banks charges, for moving currency worldwide and bitcoin is super fluid,bitcoin has no printing costs either for traditional money

          • klem

            “bitcoin is super fluid,bitcoin has no printing costs either for traditional money”

            Just like traditional money. Almost all of our currencies today are ones and zeros, we actually print very little on paper and coins nowadays (less than 3%). I have no idea what the difference is between our traditional currency and so-called cryptocurrencies like Bitcoin (there are many).

            BTW, if people think Bitcoins are secure, think again. Its well known that the NSA pays companies to embed their code into encryption software so that the NSA can crack into computers.

            If the NSA can do it, so can anyone else.

            Read it here : http://www.reuters.com/article/2013/12/20/us-usa-security-rsa-idUSBRE9BJ1C220131220


          • Derek Pater

            Thanks for the link, great work Edward Snowden,

            The difference is clear for bit-coin it will turn back the clock

            to remove the problems and greed caused by 1913 Federal reserve that was taken over by private banks,

            LOL, the picture in the below link


            and the printing percentage % do you have a link for that
            it seems real low,


          • klem

            No, I don’t have a link, not sure where I read it now.

            But here’s a link which should fill you with confidence regarding our currency. http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=AMBNS

    • Derek Pater

      bit coin is better than gold now, for example gold can be mined from other planets and some asteroids, moons etc,

      bit-coin is capped at 21 million coins, my only concern is what happens then?

      all the bit coins are made?, Peer-coin is a clear Favourite of mine, prime coin also, great work sunny king, see the white paper below,




      I have read the peercoin white paper, but not sure how to find that link


      • klem

        So we are still mining gold after 5000 years, but there will be no more Bitcoins?

        I somehow doubt that.

        • Derek Pater

          well people are predicting, bit coin will be worth $10,000-
          to $700,000- for each coin.

          a good way to predict change is to watch these new websites for bit coin and other coins with Alexa traffic rank, and wow, the tide is shifting,

          value for traffic is critical to change, the mindset off the masses and not of the one person,

          • klem

            Since Bitcoin is worth so much and is indivisible, how then does one buy a loaf of bread with it?

          • Derek Pater

            with the services like coinbase and others, this
            not a problem, look at http://www.overstock.com
            they have just started using bit-coin, the sky s the limit.

            so the fluctuations in bit coin are not relevant,
            thanks coinbase

          • klem

            Ha! That’s fantastic. I like that coinbase web site and the Overstock site. Thanks.

          • Derek Pater

            The CEO from Overstock says, Amazon will be following soon, the market share of bit-coin sales is small but its growing everyday

  • pa2013

    To understand Bitcoin, see Konrad Graf’s tutorial: http://konradsgraf.com/bitcoin-decrypted/

  • Murray

    Good article. The only negative comment I’d have is the praise of Max Keiser.

    I love bitcoin. You could even call me an enthusiast. However, Max is a complete nutjob and not the guy who I would want representing me or other bitcoin believers.

    • mj

      Mostly agree about Keiser. But even worse was plugging Quark. It is a pump & dump coin solely designed to make some people rich.

      Otherwise, I do agree with Mr. Delingpole. Since mid-2008, nothing has been done to wean the system off its debt habit. In contrary, the bubble has been made worse. We’ll likely end up with either Cyprus-style money confiscation, asset price collapse, hyperinflation, or any combination of those three.

      • Gettin Quarky

        mj, your comments about quark could have been about bitcoin a few months ago before you became just a bit more enlightened than you were then. Don’t be a drink-soaked ex- crypto hatin’ popinjay and spout off about hating quark.

        I mostly agree with you… your 2nd paragraph is spot on.

        • mj

          Bitcoin is five years old now, and half of the coins are yet to be mined. The last ones will come into existence around 2040. Quark is not even six months old, and almost all coins have already been mined. Quark is heavily, heavily skewed to favor early adopters.

          There was no other logical reason to skew it like that, except to make the early adopters rich. Now they just need to find somebody to buy their quarks. Enter Max Keiser, whom I suppose has a financial interest to plug that otherwise unknown alternative coin on his show.

          • Gettin Quarky

            mj, your ignorance continues only providing limited understanding and coming to illogical conclusions. Quark’s distribution has been far and wide, and much more distributed than bitcoin. Hardcore alternative crypto mining occurred during the last 6 months for all coins which greatly more widely distributed alt coins than the first 6 months of bitcoin. The fact that bitcoin continues to be created is certainly good, the fact that you have a quark currency that’s now fully mined (with some coins still be mined yearly) is another method.

            Calling Max Keiser’s integrity into question is rather rich considering most people thought he was a schill for bitcoin when he first started mentioning it a couple of years ago. Bottomline, your opinion is but one and mostly uninformed. Let us watch in wonder as the market decides now.

            I’m going with bitcoin as my gold, litecoin as my silver, and investing heavy in quark in the same way that I diversify my commodities investments with copper.

            Peace, brothers and sisters.

      • Derek Pater

        And that’s why when Cyprus happened in March/April 2013 I took
        Notice, because 1 billion was quicky added to the market cap of bitcoin

        I invested in peercoin at 24 cents back in May 2013, best move,
        My order took 6 hours to fill at the time, it was for 1k worth

        This just shows us it’s all changing

  • bhanwara

    Somebody give the “interpreter of interpretations” a phrase book.

  • Holly

    Thanks Mr D.

    I read the entire thing and still have no idea about how to ‘get’ these new fangle bitcoins, whether I need real money, somewhere along the line, to legally have purchased something. I have never been to Tuscany, or anywhere near a lake, (does the local canal count?) so how would I ‘spend’ this imaginary Krypto currency?
    AND, more importantly how does the farmyard in Tuscany, or the ‘place by the lake’ feel about imaginary money?

    All clear as mud, and for me, and anything that clear needs steering clear of.

    As you say, ‘like Monopoly money’, for folks who go to Tuscany, or a place by a lake….Mmmm…..
    Bound to catch on.

    • margh

      You need a wallet, which can either be a piece of software you download to your own existing personal computer or an account on someone else’s server. So that’s one step. You also,need to buy the bitcoin to put in it, which, unless you know people with bitcoin who are willing to trade with you, will require an account with a trading service. Do a Google search for the relevant page on the Bitcoin wiki-site for information about reliable, recommended services to use for these two requirements.

    • Chris Lees

      The article doesn’t intend to explain how to get bitcoins. It’s actually easy. Get a Bitcoin “wallet” either by downloading the software or by using a free online service such as Coinbase or Blockchain. Second, tell one of the online exchanges how much Bitcoin you want to buy and what your wallet “address” is, and then walk to the bank with cash and make a deposit into the exchange’s bank account. By the time you get home, you will have Bitcoins. I did it yesterday – it’s easier than getting a personal loan, for instance.

      There are quite a few online shopping sites that accept Bitcoin, and some real-world food and coffee outlets.

      Bitcoin can’t be equated with Monopoly money. Fifteen bitcoins – maybe less these days – are created every ten minutes. That’s a hard technical limit. By contrast, the US government and banks create money out of thin air, or print banknotes, pretty much as they please. That’s partially where inflation comes from.

      • ithinkerer

        Just one correction: currently there are about 25 BTC created every 10 minutes, not 15. This will continue for another 3 years and then it will halve to 12.5 BTC, and it will continue to halve every 4 years after that.

  • john vile

    1. it is my understanding that liberty is given to the none free man. no free man loves liberty. liberty is an a front to freedom. free men love freedom. #bitcoin is about freedom not liberty.

    2. “Black market”? as in children, dollars, gold, slaves blah blah blah. when any tyrant can gain capital over another he takes it. The verbosity of the leverage is irrelevant.

  • IBWT, UK Exchange

    “In Bitcoin We Trust.”

  • EWorrall

    l wrote a piece on Bitcoin recently, from a software developer’s perspective. http://desirableapps.com/can-my-mobile-phone-mine-bitcoins/

    I suspect Bitcoins will rise and fall – the current prices is IMO a bubble. But they are not going to go away – Bitcoins or a derivative will be the currency of the future.

    The reason is traditional currency will become untenable – off the shelf printers will be able to create perfect counterfeit banknotes, and bank hacking will rise until it creates a crescendo of unsustainable inflation, as “magic” amounts of currency are added to criminal’s accounts.

    Bitcoins however will go on – while other currencies are crashing and burning, Bitcoins will become a safe haven.

    The reason – Bitcoins can’t be forged. They can be stolen – hacker attacks will be an issue. But you can’t mint new Bitcoins simply by adding new numbers to some bank account – you have to actually go to the trouble of creating the Bitcoins.

    There is one criminal shortcut to creating new Bitcoins – if you steal the computing power required to mine them. For example, plenty of workplaces now have bitcoin mining equipment covertly connected to the power supply by an employee, stealing their electricity. Very profitable if you get away with it. And botnets, vast armies of slave computers subverted by a virus infection, can also be used to mine Bitcoins.

    But both of these techniques are difficult, compared to playing monopoly money with a hacked bank computer.

    • Theodor Adorno

      12 million crypto ‘wonks’ with $1000 in BTC is not too hard to fathom.

  • Jct: Isn’t it sad to see people focus on tokens based on a computer wasting time doing nothing useful while LETS timebanks abound with their poker chips based on time at useful toil doesn’t get noticed. All the successful local currencies during recent crashes have been based on LETS timebanks and MainStreamMedia keep focusing on the valueless Bitcoin model.

    • Chris Lees

      It does contain an element of “make-work”, but mining also helps validate Bitcoin transactions and ensure the Bitcoin network is correct and consistent. It’s necessary.

      • Jct: No, it’s not necessary that your Bitcoin chips be backed up by wasted computer time when I can email IOUs for real time too. I’m talking about the collateral in the cage backing the chips. In a LETS, it’s human time delivered at useful work, in Bitcoin, it’s worth nothing.

  • Maximus Max

    @MaxKeiser IS right, as are you. This will end “nastily”.

  • You Clueless Pigs

    Fuck your pay wall. you are losing money because people don’t give a shit about your content and leave. This is the internet. It’s not exactly hard to get information for free.

  • Jim Franko

    Bitcoin may be the saviour from these corrupt, wasteful goverments, we can only hope.

  • Theodor Adorno

    The giant vampire squid is going down.

  • Theodor Adorno

    Imagine when some one figures out a gasoline coin.

  • Michele Seven

    Hello from the other side of the pond. The Bitcoin protocol can free everyone who wants it. Contracts can be hashed in to the Blockchain therefore making patents, copywrites, etc redundant. And lawyers, banks, govts are right behind. Govern yourself…you are the one most qualified. @BitcoinBelle

  • Chas999

    I’m afraid that the only thing we know for certain about Bitcoin and all other cryptocurrencies is that they will crash and disappear into oblivion sooner or later. Lousy though our old-fashioned fiat currencies may be, they at least represent their respective country’s economy, the wealth it generates and the confidence (or lack thereof) in it. Most western currencies are therefore broadly stable, not because the economies have low debt, but because they produce things and there is a degree of confidence in their continued solvency. If a country’s economy goes to hell, its currency goes with it. On the other hand, if a country is doing well, the currency broadly follows suit. The great vaunted strength of cryptocurrencies is that they don’t represent anything – nothing whatever stands behind them, so they are free from government meddling, and the hyperinflation of Weimar Germany or Mugabe’s Zimbabwe, which caused those countries currencies to become worthless through hyperinflation. However, this strength of independence which cryptocurrencies enjoy is also its mortal weakness. Because they are not tied to anything, nothing stops them from rising when they are bolstered by confidence. Sterling or the dollar may go up 30% in a good year but then exports suffer in the UK or US and an equilibrium is established: the currency stabilises or falls. Bitcoin does not have this check; confidence will only breed more confidence. This has already happened. Three years ago one Bitcoin was worth less than a dollar, now it stands at nearly $1000. Why? No fiat currency could possibly rise a thousandfold in three years. Confidence, nothing else. And so Bticoin will continue inexorably to rise and rise and rise, and huge fortunes, mostly on paper, will be made by its investors. Until one day some event (such as a story, true or otherwise, that computer fraudsters have introduced ‘counterfeit’ Bitcoins into the market) will trigger a panic, and greed will turn to fear as owners scramble to sell their Bitcoins at ever lower prices. Bitcoin is the South Sea Company; it is Dutch tulip bulbs. Mark my words.

    • Simon_in_London

      I tend to agree, as far as I can tell, a currency backed by nothing other than its own scarcity must inevitably trend towards zero value. Utility – if fiat currencies are really getting hard to use – and network effects may give it some value, though.

  • I mined litecoins last summer. acquired 40 of them. waited till the christmas bubble to peak, traded them for bitcoins, invested in some software to help trade (using some of said coins) and have already earned a cool 8% since the 1st of december.. looking good for 2014.

    “this time next year, rodney” and all that.

    I’ll be the one in the cardboard box under the westway next christmas

    • Derek Pater

      considered Mining, but I will stick to trading coins, cashed out 900% profit Jan 2014,
      with another 900% worth of profit in coins in the system.

      that’s since may 2013

  • jorjun

    Biggest worry is NSA intrusion. Not holding BTC until I can work out how to guarantee security. Stealing entire wallets is as easy as determining their private keys.

  • Phil Swift MBCS ITIL

    This article needs citations. Quite a lot of information in it is conjecture and inaccurate. The whole angle on crypto currencies within it are flawed. For example, someone in China just bought $2 million USD of Quark. Emotion has no place in business or wealth creation so excitement should not enter the debate. I don’t think I have ever been ‘shut out’ (needs explanation) of my Lloyds account. You certainly do not want to avoid Quark like the plague. May I humbly suggest research and fact finding then running trials yourself and avoid opinion and conjecture. Stick with facts, facts you have mined yourself.

  • neilcraig

    I suspect that when most of our electricity is supplied by solar power satellites, built by private companies and most mineral resources come from asteroid mining, also beyond the reach of government, the concept of government being able to inflate fiat money to steal from us will be regarded as quaintly old fashioned.

  • Derek Pater

    I just got earth coin also, the issue with some of these coins is transaction speed