Bitcoin Is Backed By Me

by Bitcoin Merchant

A lot of people fret over the idea that bitcoin is “not backed by anything”. Well, I’m here to tell you that it is. It is backed by my products and services. And it is also backed by the products and services of a bunch of other people. Together we form a market.

Currently, we look to the major exchanges to help determine our exchange price but what if the exchanges are shut down or regulated out of business?

Not to worry. There are those of us who value bitcoin as a commodity. We like it for what it is and for what it allows us to do. If the prominent exchanges are taken away from us, we – the users in this small but growing community – will arrive at an exchange value on our own. Come join us, it’s not so bad.

Author’s Note: Please repost this to your website if you accept bitcoin.

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The Sunset of the State

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Bitcoin: The Ultimate Offshore Bank Account?

By Anthony Freeman

In my previous posts (here, here, here, here and here) I’ve highlighted the many benefits of bitcoin and I recommend you review them for further understanding. In this post I will focus on what I believe gives bitcoin the potential to become The Ultimate Offshore Bank Account.

First, we have to ask – why do people go offshore in the first place? Here are what I believe to be the top reasons people choose to move their money offshore:

  • Financial Privacy
  • Protection from Theft
  • Protection from Litigation
  • Currency Diversification
  • Jurisdictional Diversification
  • Global Access to Funds

Here is how bitcoin satisfies each of these goals:

Financial Privacy

Out of the box bitcoin is pseudonymous and very private. Bitcoin is essentially digital cash. When you download the application you can physically store* the funds on your computer, a flash drive, or even upload them to the cloud. Current projects under development hold the promise of making bitcoin totally anonymous (see Open Transactions: link 1, link 2) .

Protection from Theft

Bitcoin is protected by the peer-to-peer network with no central authority. Combining this network with high-grade encryption makes it virtually impossible for any person, or group of persons, to take your money without your permission.

Protection from Litigation

This falls under the rule of “what they can’t find they can’t get”. By moving your money into bitcoin and obfuscating its whereabouts you become virtually “judgement proof”.

Currency Diversification

Every national currency is manipulated by central banks and governments. Bitcoin is limited in supply and cannot be inflated like national currencies can. This gives it potential to be an excellent store of value.

Jurisdictional Diversification

Bitcoin can be hidden behind encryption and stored in cyberspace – making it everywhere and nowhere at the same time. What existing power structures cannot find they cannot steal.

Global Access to Funds

Bitcoin can be accessed anywhere in the world. Not even an internet connection is necessary.

Additional Benefits:

No Counterparty Risk

When you store assets in any bank or gold-storage facility, those funds are an asset on your financial statement but they are also a liability on the financial statement of the other party. This exposes you to the risk of default, bankruptcy or fraud by the other party. When you retain physical possession of your assets through bitcoin – you eliminate this counterparty risk. Like physical possession of gold and silver, bitcoin is an asset with no corresponding liability.

Ease of Use

While there is a slight learning curve required to use bitcoin, you don’t have to fly to another country to open an account – nor do you have to provide any type of identification or tax number to own bitcoin. You do not need anyone’s permission to use bitcoin. It is truly “the people’s money”.

Mobility

You can cross borders with no physical currency on your person yet you can literally have access to a fortune via a flash drive or a simple internet connection.

The Network Effect

If more people across the globe discover the value and usefulness of bitcoin it will rise in value and usefulness to you.

Conclusion

Cyberspace is the ultimate offshore and bitcoin has the potential to become the ultimate offshore bank account.

*Technically, you do not store funds on your computer or other device. What you actually store are your “private keys” which give you title and control over the accounting units referred to as “bitcoin” which are tracked on the peer-to-peer network.

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Financing the Revolution

http://vimeo.com/27653912

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A step in the right direction – the path towards self-government

Watch parts 2 – 7 here

 

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Expect bitcoin to be “banned” – expect the ban to be ignored

by Anthony Freeman

Man, by nature, wants to be free. He wants to choose how he lives his life. He wants to choose with whom he will associate. He wants to choose with whom he will trade. He wants to choose how his money is spent. Bitcoin gives him a greater ability to do all of these.

In my previous posts (here, here, here and here) I point out the endearing features of bitcoin and the direct threat of bitcoin to governments and central banks. Because bitcoin has the potential to make these institutions obsolete, expect them to attempt to ban and restrict bitcoin anyway they can.

The incentives to use bitcoin are too great. Yes, I expect bitcoin to be “banned” and restricted by central planners in many ways. I also expect these bans and restrictions to be ignored and circumvented. The incentives are too great. Man wants to be free.

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Bitcoin: A New Commodity Created To Serve Market Demand

by Anthony Freeman

Proposition: Bitcoin is a new commodity invented to address the market demand for a better medium of exchange.

First some definitions for terms that I will be using in this post:

  • Commodity: a) an article of commerce; b) something of use, advantage, or profit; c) economics – an exchangeable unit of economic wealth, esp a primary product or raw material
  • Medium of Exchange: a) anything generally accepted as representing a standard of value and exchangeable for goods or services; b) a tool or means of exchanging what you have for what you want
  • Hampered Market: a market where the voluntary exchanges between individuals are prohibited or restricted
  • Government: a gang of individuals who collectively act to force their opinions and objectives upon everyone else

Background

The great Austrian Economist Ludwig von Mises theorized:

“Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange-value has ceased to exist.”

I believe this theory (it’s only a theory) is false for the reasons I will describe below. But first, the elevation of an economic good to monetary status works best in an unhampered market. In this instance I further define the “hampered market” as one that prevents individuals from using their preferred medium of exchange. When individuals are hampered (restricted) from using their preferred medium of exchange they begin to look for alternatives that allow them to operate within the hampered market. In any market a new commodity can be created with its sole purpose being to serve as a better medium of exchange.

Enter Bitcoin

Bitcoin is a new invention, or creation, designed to address this market demand for a better medium of exchange. As a new creation, with its own use value, it becomes a new commodity.

Here is a list of several features and benefits that make bitcoin a highly desired medium of exchange:

  • increased privacy – allows people to trade more freely with less interference by third parties
  • lower transaction costs – saves money
  • person to person payment functionality – bypasses traditional middlemen
  • limited supply – may help preserve and even improve purchasing power over time
  • compact – incredible wealth can be stored on a small area of disc space or flash drive
  • portable – wealth can be transferred across the room or across the globe via an internet connection
  • defensible when using encryption and other forms of concealment
  • added protection against theft (which includes taxation)
  • decentralized – less vulnerable to attacks since there is no central depository. Any seizure of bitcoin only serves to limit the supply further and increase the value of the remaining supply.

Conclusion

Bitcoin is a new invention created to serve the market demand for a better medium of exchange. It derives a great portion of its value from governmental restrictions on voluntary exchange. As long as governments interfere with individual voluntary exchange there will be demand for inventions like bitcoin. In the event of the disappearance of governments, bitcoin (or something similar) is likely to continue as a desired medium of exchange because it makes it difficult, if not impossible, for new governments to gain control of the monetary system.

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