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Bitcoin Is The Sebastian Shaw Of Currencies And Immune To Regulation

by Trace Mayer, J.D. on January 31, 2013 · 10 comments

Reading time: 8 – 13 minutes

Bitcoin, a censorship-resistant crypto-currency, will absorb any regulatory interference and only grow stronger as a result. Blowback baby! The cost of using credit cards is being dragged out of the shadows. Germany has demanded their physical gold be moved back to the Homeland in anticipation of a currency crisis and capital controls. And the Bitcoin juggernaut continues to gain mass and momentum having reached $21.43 today.

Bitcoin, with a pitbull like grip, has attached itself to Leviathan’s carotid artery.

BITCOIN HAS SEBASTIAN SHAW-LIKE CHARACTERISTICS

Jon Matonis recently wrote how a government ban on Bitcoin would fail miserably. Sebastian Shaw is a mutant villain in X-Men: First Class and leader of the Hellfire Club. Shaw has the mutant ability to absorb energy or force and then focus it in a counter-attack.

Thus, the idle threat of force from regulators at 0:17 ‘Put that man down or we will open fire.’

If there were proposed regulation I can already see Bitcoin’s smirk coupled with the satirical response, ‘Promise?’

I would go into more depth about why this is the case but I should give you some reason to attend on May 17-19th, with about 1,500 others, the Bitcoin Conference 2013 in San Jose, California. Plus, Jon Matonis has graciously invited me to give a presentation on Bitcoin: Regulation, privacy and taxes. It should be fun and interesting!

Gold, a physical element, is the same today as it was 500,000 year ago. But Bitcoin is so much more than it was a mere four years ago when first released to the public!

By analogy, the blockchain is like DNA and the market participants of the open-source Bitcoin community are like ribosomes that read the DNA in order to craft proteins necessary to adapt to and function within whatever environment or circumstance are encountered. This organic proliferation of software code by crypto-warriors who are changing the world is a beautiful thing and a simple time function with exponential effects.

Crypto-Ancapistan is already here. It seems most do not recognize it though because it is neither across an ocean nor does it have borders. Its citizens neither secede nor declare independence plus there are no permanent residence visas or passports required. They build this new virtual nation line of code by line of code. There are even some publicly traded companies with $10m+ market capitalizations; two which earned 5k and 17k bitcoins in Jan. Cipherspace is a place where heroes live and where people who want to be heroes live.

THE COST OF USING CREDIT CARDS

Yesterday I flew around a volcano in southern Chile. I even saw magma! Then it came time to settle the bill so I got out a credit card. The proprietor stated, ‘Using a credit card will be an extra 5%.’ For a 200,000 peso flight that comes out to about $21.33!

Tonight I enjoyed a delicious congrio dinner. The waiter brought the handwritten bill. So I got out the credit card. He responded fairly vehemently, ‘No tarjeta. Pesos or dollares.’ So I scraped together a few pesos.

Well, get used to it. Many credit card merchant agreements included a clause that prevented merchants from charging a fee to use credit cards for payment. But as part of a $7.3B class action settlement starting 27 JAN 2013 merchants can begin adding a surcharge for using credit cards.

The IRS and gas stations have done it for year. Now it will likely be coming in force to merchants near you. And if your favorite merchants do not then ask for a discount if you pay with cash. After all, there is a sweet sound of cash and a reason why we offer products at about a 40% discount if paid with Bitcoin. So encourage your local merchants to talk with BitPay about accepting bitcoins.

As the currency wars escalate the currency controls will get increasingly onerous.

GERMANY DEMANDS GOLD REPATRIATED

On 16 JAN 2013 Telegraph reported that Germany would repatriate 674 tons of physical gold to the Homeland because ‘A growing chorus of lawmakers in the Bundestag has demanded a return of all Germany’s gold in case the financial crisis escalates.’ Germany can sense that the capital controls are going to intensify.

Argentina has already shown by example why one should look for ways to avoid credit cards. Jon Matonis wrote about how ‘A 15 percent tax surcharge will close some of the gap between the regulated official rate and the black market rate’. So, if you have an Argentinian bank issued credit card and use it outside Argentina then the Argentine government has a 15% tax tacked onto your bill.

As the currency wars escalate the currency controls will get increasingly onerous. If a currency or payment method is censorship-prone, like Argentinian bank issued credit cards denominated in Argentine pesos, then it will be subject to such controls. This means you could take a large financial loss.

But historians are good at stating facts from the past and not creating the future.

MONETARY HISTORIANS VERSUS MONETARY VISIONARIES

Historians really have it pretty easy since they read about what has already happened. But to be a monetary visionary requires so much more.

James Turk, founder of GoldMoney, is one of the more prominent monetary historians. In this interview on 17 JAN 2013 Mr. Turk referenced my work on the tangibility of Bitcoin but oddly did note give proper credit. Why a monetary historian would not give proper credit to a monetary visionary baffles me. But James is just one of many I have directly influenced since I began publicly recommend Bitcoin in its infancy.

For examples from articles, interviews and etc., Robert Wenzel of Economic Policy JournalChris Powell of GATALew RockwellAnti-War.comJeff Berwick of The Dollar Vigilante,The Silver Vigilante, John Rubino of Dollar CollapseJason Burack of Wall Street For Main StreetBrotherJohnF, Michael of The Daily PaulMax KeiserJames Turk of GoldMoneyKerry Lutz of the Financial Survival NetworkDaniel Ameduri of Future Money Trends and many others off record have all been influenced early on by myself and persuaded to use and accept bitcoins.

But the point is that four years (someone may want to tell Mr. Turk who stated two years in the interview … maybe that was the first time he heard about it) after Bitcoin was released to the public GoldMoney has finally started to mull Bitcoin integration. Sure, a true monetary visionary would already have the gold vaulting service integrated with Bitcoin. But historians are good at stating facts from the past and not creating the future.

Because what customers need is to have their bullion integrated with a censorship-resistant currency that will be much more malleable as currency controls are ratcheted up. You can bet that more restrictive currency controls and capital controls will be placed on gold if a real monetary crisis appears. A crisis Germany is preparing for by taking physical possession of the gold.

CONCLUSION

Bitcoin, with a pitbull like grip, has attached itself to Leviathan’s carotid artery. Bitcoin, a sophisticated cryptographic protocol and the largest distributed computing network in the world, is immune to force. Threats of regulation, which are really just threats of force, are idle because of these Sebastian Shaw-like characteristics.

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Germany is preparing for a major currency crisis by repatriating 674 tons of physical gold. Currency controls will only raise the cost of using credit cards which are currently far more expensive than Bitcoin in terms of time, money and privacy. And when currency controls are ratcheted up it will be Bitcoin that allows holders of capital to have monetary sovereignty and portability.

Sure, gold is collapsing against Bitcoin but the real question is why are Bitcoins trading at a mere $21. Perhaps the monetary visionaries need to do more work teaching, training and influencing the monetary historians and others? To start, check out pages 72-78 of the February edition of Open Skies, the Emirates Airlines magazine. You will get to read it before millions of wealthy businessmen stuck on transoceanic flights who are used to being economically censored.

Get a copy of the Free Bitcoin Guide (recently updated), see you in San Jose and bring quesitons!

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10 comments

ABOUT THE AUTHOR: Trace Mayer, J.D., author of The Great Credit Contraction holds a degree in Accounting, a law degree and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. Follow him on Twitter. This is merely one article of 241 by .
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{ 9 comments… read them below or add one }

1 Dookie February 1, 2013 at 2:20 am

[quote]
Why a monetary historian would not give proper credit to a monetary visionary baffles me.
[endquote]

I think the answer is really easy, a person without the IT background could not yet comprehend what BTC is and what will it bring. Many will join this party fashionably late.

2 Steven February 1, 2013 at 4:28 am

Good article. I am really starting to understand the strength of BItcoin. I am grateful Anthem Blanchard told me where to find your wisdom and clear explanations of the monitary situation.

Keep up the good work as I continue to help others understand the sevarity of the situation and promote to merchants to use bitcoins.

3 Bitcoin Bug February 1, 2013 at 7:31 am

“…someone may want to tell Mr. Turk…”

Trace, perhaps you should consider reaching out to Mr. Turk. We all make mistakes. I believe James Turk is one of the good guys and is honestly trying to help protect people from the pending fiat currency collapse. After all, you can catch more flies with honey than with vinegar and he has demonstrated a willing to discuss Bitcoin in the past. I don’t think he’s deriding Bitcoin, he just can’t quite wrap his head around it.

Thanks for all of the work you’re doing to help spread the word and inform people about Bitcoin.

4 BlackVoid February 3, 2013 at 2:47 pm

Bitcoin is not immune to regulation, the government can simply outlaw it. Or ban cryptographed content ,although this could be circumvented in theory by hiding the information in other files.

But if you are prosecuted if you use it, then it cannot work.

5 Teva February 5, 2013 at 10:14 am

Trace, thank you for introduction to bitcoin. I am working through the steps in your bitcoin guide and I am most interested in the brain wallet concept. The article you cite says this “i add the serious disclaimers that hashing/address generation should not be performed online and, ” Where is a good tutorial to teach you how to convert your phrase to the encrypted password so you can do this offline and not with a generator.

6 Miroslav February 8, 2013 at 1:36 am

Thank you for another article Trace.

I dare to guess majority of Bitcoin’s users consider Bitcoin as real threat to Banks-Government cartel. Therefore they discuss government ban, you also.

My understanding is that you agree with opinion, that once Bitcoin is banned, it becomes even more desired. Such argument is often used when talking about gold.

Gold and BC is different:
You can keep physical gold and exchange it for cash (or for whatever). Hard to imagine to do the same with BC. US Gov can freeze bank accounts virtually of any entity around the World and doesn’t need legitimate reason. If such event happen to BC exchanges, people can not exchange BC for much more loved US$ and confidence in BC is lost.

7 Trace Mayer, J.D. February 8, 2013 at 1:12 pm

Miroslav, I think bitcoins are just as easily, if not more so, exchangable for cash as gold is. This is because you can instantly verify the quantity and quality of the bitcoins in the blockchain. With gold it takes a little more effort to verify the quantity and quality. Plus, with sites like LocalBitcoins and the Silk Road one can easily trade bitcoins for cash. In just the last week I have had requests for about $15k worth of bitcoins via Local Bitcoins.

8 Trace Mayer, J.D. February 8, 2013 at 1:17 pm

Teva, in the Free Bitcoin Guide I have a link to Brain Wallet. You can download the brainwallet source code and do the hashing/address generation with the HTML/Javascript download without having to connect to the Internet. The generator is not the problem since it is just running a predictable algorithm.

9 Trace Mayer, J.D. February 8, 2013 at 1:19 pm

BlackVoid, the Cryptowars of the 1990s have resulted in widespread cryptography because it is essential for major business so that is highly unlikely to be outlawed. There are many different governments and a world-wide ban on all cryptography by all governments is even more unlikely. Plus, as the War on Drugs, Prohibition and plenty of other examples have proven; just because you can be prosecuted for something does not mean it cannot survive and thrive.

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