Ben Bernanke: Bitcoin Has 'Serious Problems' – XBT.MONEY

What if cryptocurrency was originally a Federal Reserve experiment?

So I saw a FOIA request to the NSA about bitcoin the other day. Perhaps a more appropriate recipient would have been the Fed. Here's my story on how it would have gone down.
Back in 2009, some bright spark at the Fed went to then Chairman Ben Bernanke and told him about the wonders of Austrian economics and how terrible it was that the US left the gold standard - that Austrian economics would fix the country's economic woes. Ben, a dyed-in-the-wool Keynesian, scoffed at the lad and told him that currency backed by a deflationary asset, or even a deflationary currency itself, would invariable fail. It would lead to even more of the inequality that the Occupy Wall Streeters, audible due to some protest outside, were protesting. Forget the 1% - it would be more like the 0.001% and the rest would be serfs.
The young central banker - still with his newly minted MBA - still didn't get it, and secretly, even Ben thought that it would be interesting to see an Austrian economic experiment in action. And the root would be to start with a currency that would be finite in supply, like the barbarous relic those Austrians praised so much. But how to do it? To make any public attribution to the Fed for dabbling in such fringe economic theory would be a disaster, and make him an even worse joke amongst his buddies at the next BIS meeting - they were already calling him "helicopter Ben", after all.
No, it would need to be secret. The Fed, as a non-government entity, didn't really operate classification systems in the same way as the federal government. So Ben told his protégé to adopt a fictitious identity instead, and put together a whitepaper outlining the functions of a new digital currency. The founder's name would be Satoshi Nakamoto - after all, wasn't everything futuristic out of Japan nowadays? - and the currency's name would be Bitcoin.
It would have everything Mises would have dreamed of. It would be decentralised, it would have limited supply, and anyone could be their own bank instead of relying on those wicked banks that made up the Fed. It would also be highly anonymous, because Austrian economists and liberatarianism were pretty much entwined and besides, if it failed in a public way, he didn't want it leading back to him.
"Let use see", thought Bernanke, "if such a things takes off, and if the public accepts it."
Uptake was slow initially, and predictably, the new coin was primarily used for drug trafficking, sex crimes, and other detestable behaviour on the dark web. Reminded of the arguments he was using to eliminate cash, Bernanke was pleased.
Around two years into the project, Satoshi, working from the bowels of the Federal Building at 20th Street and Constitutional Avenue, alerted his boss that one of the fellow developers in the Bitcoin project - Gavin Andreson - was going to give a talk at the CIA. "Shit," thought Bernanke. Whilst the project itself had cost the Fed virtually nothing, and so wouldn't appear on any public balance sheets he had to present to either the public or Congress, having the CIA, or worse, the NSA, get wind of the project and being able to finger the Fed for conducting economic games with public cash - or even selling unregistered securities - would risk either public exposure, potentially costing him the chairmanship, or blackmail material, perhaps for some off-the-book funds they needed for their operations.
"Shut it down." Ben instructed.
Satoshi explained that allow he could withdraw from the project, he could not "shut down" Bitcoin itself. It was running on too many nodes now, and the price was rising on specialist exchanges that had been set up. Some website that apparently was previously used for trading Magic the Gathering cards, could you believe it. What a joke.
The Fed chairman sighed, and then glanced at the Bitcoin wallet Satoshi had brought up on the computer for him. One million BTC, just shy of 5% of the total supply. He could just sell it all and kill the market dead, but he decided to leave it. After all, the experiment wasn't necessarily over. What would happen if we did surrender everything to market forces? he wondered - though he anticipated the outcome - a massive pump and dump similar to dotcom stocks, beanie babies, tulips, the South Sea bubble, junk bonds, and many more besides.
He decided to bury the seed key on a golden plate amongst the gold bullion below the NY Fed. After all, Bitcoin was deflationary. If it was digital gold, as a new breed of anarcho-capitalists were telling everyone on the internet, surely it deserved to be stored here?
And that was the end of the Fed's involvement. They still wait, they still watch, mining comedy GODL along with buttcoin from underneath a portrait of John Maynard Keynes.
submitted by Modja to Buttcoin [link] [comments]

Bitcoin does not need a fees market.

I am tired of reading a whole lot of theoretical nonsense about a fee market for Bitcoin. It is economic gobbldegook. Some people are saying that capitalism and price discovery only work in a market situation. This is rubbish. Imagine the following conversation -
At the bank. Question, how much to send $100 to Australia. Answer, well it depends on how busy the network is. If we are busy it will cost you more if we are not busy then it will cost you less. You name an amount and we will see if it works.
At the hairdresser. Question, how much for a haircut. Answer, well $20 is usually enough but just a minute while I see if someone wants to pay more, if they do you will have to pay more too or wait.
At Western Union. Question, how much do you charge to send $50 to my impoverished friend in The Philippines. Answer, well if lots of people want to send $50 to the Philippines it will cost you a bit more. You have to guess and if it doesn't work, just pay a bit more and eventually it will work.
At the lawyers office. Question, how much do you charge to notarize this statement. Answer sometimes $10 and sometime $15. If you want to be sure then pay me $20 or if you want to save money pay me $5 but if you pay $5 I might not do it till next week or maybe I just won't do it at all.
At the Credit Card office. What are your fees on each transaction. Answer. That's up to you but if you don't pay enough we won't accept your transaction. Question, well how much is enough. Answer, I don't know it depends on how busy we are.
Clearly in all the cases above a fees market is not practical. What happens is the business sets a fee that enables them to make a profit, yet remain competitive and declares it up front. Any other approach would not be accepted by the vast majority of people.
I agree eventually Bitcoin fees will have to rise to keep the network secure. Trying to establish a fees market, particularly while the mining rewards are so high seems like a waste of time and energy. As mining rewards reduce, fees should rise by voluntary consensus of the providers (miners) to a level that is sufficient to keep the market secure.
When I first used Bitcoin the consensus was that the fee should be 0.001. Later this changed to 0.0001. There was no market to decide this consensus, just common sense as the value of bitcoin increased. Now my wallet tells me that 0.0001 fee will be included or if I want a higher priority then I can choose 0.0002. Great simple to understand and easy to execute.
If miners decide they need 0.05 to make it worth their while then they should say so. I can then decide to use bitcoin or swift or credit cards or whatever.
There is already a very efficient bitcoin market and that is the one that decides what the price of a bitcoin is. In the same way as the stock market decides what the price of a stock is. However my stockbroker charges a published fee to do the transaction. He is not stupid enough to try and establish a secondary market for his own fees. If he did, I would find a new stockbroker.
I am a firm believer that Economics is at best a soft science and at worst a load of cow faeces. I tend to the cow faeces end of the spectrum. The world economy has been totally screwed up by Economists with models that are never accurate and do not reflect reality. Chief screw ups being Alan Greenspan, Ben Bernanke and Janet Yellen.
Let's not let people like that screw up bitcoin.
submitted by PattayaPete to Bitcoin [link] [comments]

New release of paper wallet software allows you to enter your own private keys, generate aliases and export public keys and keep a backup stub of each set of keys.

We've released a new version of the OpenPaperWallet software. Download for offline use, or test it on the site.
Screenshot of new software
New features:
Test it here:
We are already planning several more releases to follow. Some of the planned features:
Screenshot of pick a design beta
... and more.
Please feel free to send comments and feedback.
submitted by andreasma to Bitcoin [link] [comments]

The Ledger Oligarchy: Bitcoin's NWO

The Ledger Oligarchy: Bitcoin's NWO 1PV5dzDJbwVgDsxt1sPHm8ehz5CUFX8zUz
(This is for entertainment purposes only)
“Trout, incidentally, had written a book about a money tree. It had twenty-dollar bills for leaves. Its flowers were government bonds. Its fruit was diamonds. It attracted human beings who killed each other around the roots and made very good fertilizer.” Slaughterhouse 5, Kurt Vonnegut
It is the year 3030. Bitcoin is dominated by few hands: The Rockefellers, the Rothschilds, the Carnegies, Warburg's & Nakamoto, according to YouTube.
Bitcoin had been an experiment in decentralized currency. But, by 3030, it had been adopted by the banking system which had reigned before it, and forever been changed.
Before this, an intermediate dynasty, the "old guard," had reigned for approximately 100 years: The dynasties of Andresen, Garzik, Ver & Mayer.
The abovementioned dynasty "Nakamoto" was created by splicing the genes of the so-called "old-guard."
That happened in 3020, the year the House of Winklevoss had their BTC wallet fortune hacked by a clone of Mayer Rothschild, whom had pulled the stunt while drinking whisky and entertaining a hologram of Johnny Depp, his favorite actor.
This could be seen by the public ledger, which had since began recording via laptop data as "extra-data."
The NSA (former US gov agency), it had been uncovered after the fall of the Great Mexican Border Wall while its offices were raided in a scene reminiscent of the Stasi offices in 1990, had actually stolen the code from Satoshi Nakamoto days before the protocol was to be released, and then released it itself and mined the genesis block. Nakamoto was devastated.
Satoshi Nakamoto had actually been hired by Ben Bernanke, a Federal Reserve (long story) President at the turn of the 21st century, who met Nakamoto at an orgy hosted by Google.
Nakamoto had covertly received bailout money during a bailout program in the US in 2008. He was high when he wrote the code and was given 49% stake in "Bitcoin" by Bernanke in the infamous communication intercepted by the NSA's "Follow The Money" division and later leaked by the Pravda of the time, the Genesis
Although neither Bernanke nor Nakamoto knew who had hijacked the protocol, they were early in, and Bitcoin was deliberately helped by Bernanke's economic policies.
Over time, the block chain grew so large that few users chose to download its client on their machine.
Bitcoin wallets floating in the cloud became the preference of the usermasses: There was Wallet of America; US Wallet; Wallet Fargo; Deutsche Wallet and CitiWallet. There were a few others, but these were subsidiaries of the others.
Mining long ago had ceased to be profitable except for those who could implement it on a large scale due to indulgences in the form of charity to "The New Bitcoin Foundation," a liberal think-tank dedicated to BTC.
There was the Federal Miner, and central miners of all nations, all members of the Federal Miner System and united under the Miner of International Settlements. The United Nation-Wallets held a bug that had been created in the US in 2020, the year before its fall and resurrection as "NAW" (North American Wallet), known as the "Wallet Kill Switch." Nobody knew if it worked.
But, off-chain, The Resistance - the so-called "old believers" who had read on the Internet about a decentralized Bitcoin which died long ago - loosely organized.
They had their work cut out for them, for in school the users of different nation-wallets were taught normal users shouldn't ever download the blockchain, and be using wallets and other technologies. Each morning they convened in the school auditorium and sang a song to the school's offline wallet. The song went like:
"Ohhh, Satoshiii." (repeat 21 times)
Why 21 times? Nobody knew why. There were, in 3030, 32 million bitcoins in existence. On the eve December 24, 3021, the protocol had been "tuned-up" as Moderators on BitcoinTalk termed it.
All the users needed were bitcoins, not clients. Bitcoins had never been so easy to procure. All one had to do was go into one of the aforementioned banks, open an account, and presto. It took a couple days for the DNA test to come back, to be sure.
But, on the cusps of the gray culture, The Resistance did what they could to mine chips they themselves manufactured. There was risk in this, of course, as jurisdictions had state vans which drove around and detected excess electricity, such as would be used for mining bitcoins, growing marijuana or drying freshly printed $100 bills (these were sold as historical artifacts for $50. They were,after all, the last paper money). They were last used 110 years ago.
Electricity, also, cost an arm and a leg, sometimes literally. One had to have "blat" as the soviets called it - connections - in order to get electricity off-grid (not through the state provider). Still raids and mass power outages undermined this effort of The Resistance.
Unknown to The Resistance: they had help. Nakamoto had gained a sense of themself, and had stealthily began coordinating to return Bitcoin to its original state.
One night he bought 14 of the most beautiful prostitutes he could find on, a classifieds site. When they showed up, he realized they weren't ideal.
Still, the guards fell for it.
He had gained access to the protocol. He had already written a code, which was to return all coins stolen in the Crime Of 2018 when all Bitcoin users - except for those, of course, with access to Bitcoin Airlines - were purged. The coins were returned to their future families.
He then returned the protocol to the original 21 million coin programming, undid some other stuff, and typed a PR Web blast. The title of the Press Release?
"Chancellor Satoshi Nakamoto on brink of second end for banks"
It was dated January 3, 3031.
The Resistance understood. Nakamoto had referenced the note left in the code of the original Bitcoin protocol. Everyone knew that. In 3026 the headline had been changed to "Online wallets are safe."
The Resistance began travelling first to their families houses, then to their neighbors. Once there they downloaded Bitcoin-QT and began showing their loved ones how to use it and care for their savings.
The online wallets pushed for a bailout, but they had essentially been bankrupted when the code went back to the original 21 million coins because most of their profits had been from the Federal Miners "philanthropy" system of automated tax. They held little political clout.
Bitcoin-QT reached the number 1 spot on Google Trends for the first time in history.
submitted by SilverVigilante to Bitcoin [link] [comments]

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