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Bitcoin: I’m Finally Going to Blog About It

But I promise you this:

It will be the whole next week, a fast and furious series on the very fundamentals of what money really is…and why it’s not only just a “medium of exchange,” which is only what they want you to think. That’ll be the first couple of days; because, I also have to talk about how credit and fractional reserve banking is the essential modern, fast-paced, wondrous, and ingenious creation of “money” beyond just primitive gold mining. Then, I’ll explore with you what it might be or could be; or even perhaps what it already is, embodied by Bitcoin—or something fundamentally similar that may arise in the future.

Agnosticism on that score.

I don’t care if all $12 billion already invested in Bitcoin were to vanish. In fact, I would laf uproariously because all the players are Olympians, if you know what I mean. They took one for the team in sorting it out, if you know what I mean. I’ll very much expound on that last couple of sentences, when the time comes.

I’ll also entwine and enspice with some personal experience. Ever made a million bucks?Ever made several million bucks? Ever lost a million bucks? Ever lost $250,000 in a day, 1/4 of it Other People’s Money? I’ve done them all, and so forgive me if I often tend to dismiss Internet Monetary Theorists in mom’s basement, who love to admonish me ’bout what money is and how it works. Show me you can make some fer reelz, and if you can keep it, we’ll talk. Otherwise, I have a very expensive education and I’m going with that.

By the end, you’ll see how and why I think Bitcoin expands the boundary of what we classically regard as the essential elements of “money,” beyond what the State wants you to think—and what ignorant mommy and daddy taught you it was based on…beyond the fact it doesn’t grow on trees, you can’t just write a check or, in the modern equivalent, just swipe your card indefinitely.

What are the classic elements of money?

  1. medium of exchange (get a hotrod for your flock of sheep)
  2. unit of account (dollars and cents; francs et centimes, et cetera)
  3. store of value (never mind; why we haven’t had classically defined money in a long time; and gold “backed” hasn’t really meet the definition in a long time, either) 

…As an aside, I parted with yet another anarchist friend, yesterday, that went back to 1995ish. I cannot get along well with other anarchists that I don’t have regular personal contact with. Herding cats comes to mind, so I embrace the idea that’s it’s good, not bad. Thing is, we all think a fuck of a lot independent-like, and we think about fundamentals—like money, for instance—and it ultimately gets us into conflict because we’re none of us omniscient, nor tolerant of competition for omniscience. Or, at least me, with them. I bear no grudges, never or ever, but I tend to burn bridges, forever and ever. Meh. Roll on. Not important. The cool thing about communion—for as long as it lasts—with other anarchists, is that they ultimately care just as little as I do.

A facial expression is worth a million words.

Anarchy Begins at Home.

I don’t worry about it. All I really care about are my own ideas, how they are received, or not, amongst my virtual audience; and how well I get along with my real life, in-your-face friends and family, which is most important by gobs and gobs—as well as people who actually pay me for services I’d be delighted to perform and arrange for them. For just one example: got this review on my vacation rental in Arnold, CA, yesterday. It’s the 52nd 5-Star review from my guests, of 54 total reviews: the other 2 being 4-star reviews.

We came with 4 momma’s and our kiddos ages 4-12 and had a total blast. House is open, cozy, super accessible (flat driveway), fire road to walk on, great deck, tons of movies and fun games for the kids. Beds were plentiful and cozy and the kitchen was well stocked and laid out. Perfect. And Richard is amazingly responsive and professional and easy going all at the same time! [emphasis added]

That was precipitated by this email exchange, beginning shortly after they checked in.

“Your cabin is amazing!!!”

“Ha! So you like our little slice of heaven, eh?” I replied.

“Enjoy,” I added.

Got a final email shortly after they’d left,

“Kids counted 163 bears in ur cabin including bed spreads!!”

I’ll never forget that number. Belly lafs. This is the essential difference in how I am with people who feel entitled because I write stuff for public view, and those who actually pay me to do something or provide something for them. World of difference. I’m an anarchist and I value money, what it represents, and I deeply respect when people hand it to me trusting I’ll do what I say in recompense. Medium of exchange. 

Hard to trade a flock of sheep for a hotrod.

…Blog admin wise, I’m delaying Duckie’s Part 2 about how Zero Carbers—with their Inuit and Masia fantasy—are just jerking off in front of everyone, without the decency to cover themselves. It’ll be up tomorrow while Part 1 continues to get the play it deserves.

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More

20 Comments

  1. rs711 on March 7, 2014 at 01:08

    I highly recommend this (llooonnnggg) discussion about Bitcoin between Joe Rogan & Andrea Antonopoulos:

    Also, if you want a more ‘objective’ understanding of the concept behind it (it’s universal, not specific to Bitcoin in any way) then the paper from which it sprung is available:

    I understand the basic concept but not the ‘ins & outs’ – suffice to say, it F*CKING BLEW MY MIND.

  2. Todd on March 6, 2014 at 15:26

    I’ve been waiting for a series of money posts from you for some time based on a few of your other money posts. Lookin’ forward to it.

  3. Woodchuck Pirate on March 6, 2014 at 15:33

    Richard,

    An interesting way to describe an event, “I parted with yet another anarchist friend”. I’ve held close the concept that I do not believe there is such a thing as friendship. It remains clear that there are “only the ties that bind”. I’ve never heard anyone invoke “ties that bind” as an excuse to justify their aversion to principle. Neither have I seen anyone invoke “the ties that bind” as an excuse to tolerate aggression served upon them by others. It seems to me that when “friendship” is a vehicle for hypocrisy and aggression then in reality the ties that bind don’t exist.

    The majority of self-professed anarchists I’ve observed, are fully complicit in collectivism, suffering cognitive dissonance, implementing socialism, while posturing as anarchists. No one is ever entitled to socialism. Between them and I are no ties that bind. None. Zero. They can call me friend until the cows come home. They’re wolves. I don’t part ways with them. They hate my ways. I call them out every chance I get, and run their facade thin until they scab. They tell me I’m hard on my friends. Fucking wolves. I remind them that they hate me. It fits.

    Anarcho-Capitalism or else.

    Woodchuck Pirate
    aka Raymond J Raupers Jr USA
    http://www.woodchuckpirate.com

  4. Kenny on March 6, 2014 at 16:01

    As long as there’s opinions flowing based on an understanding of cryptographic primitives, I can listen to, and appreciate, any theories on the future of “money”.

    • Woodchuck Pirate on March 6, 2014 at 16:27

      I find banks are now obsolete.

      1) In the newest, deeper level of current despotism, “bail ins” dispel faith that banks keep money safe. Banks are obsolete.

      2) The major role of banks operating under socialism (mixed economy model) consists of making unsuitable recommendations (in violation of fiduciary responsibility) in order to grow customer debt combined with strategic inflation/deflation tax theft. This has been primary role since the 80’s in accord with federal gov’t deficit spending. Again, banks from a productive sustainable benchmark are obsolete.

      3) If one has made it to 2014 and doesn’t realize central banks are military outposts currently engaged in WW3, then they may as well put all their money in a bank, ask their financial staff for fiscal guidance, and get what they deserve. The human life-form is statistically obsolete.

      4) There is no future, there is only the present moment. “Gimme your money please.” – BTO

      Woodchuck Pirate
      aka Raymond J Raupers Jr USA
      http://www.woodchuckpirate.com



    • SteveRN on March 7, 2014 at 00:51

      Woodchuck (or Richard, if so inclined) any advice on somewhere/someone I could go to and pay for some advice on my particular financial situation? Last time you responded to me you suggested zerohedge.com. Got to say, that site and some others has left me with some sleepless days (I work nights). I am taking some steps to prepare as much as possible, but some of the options leave me a bit flummoxed, especially as they go against conventional wisdom, and the consequences of a wrong move could be immense. Thanks for your time.



    • Woodchuck Pirate on March 7, 2014 at 04:59

      SteveRN,

      I have been unable to satisfy the needs of others wishing to understand why I decline to discuss financial matters along any particular parallel related to their personal interests. As in most cases folks do not accept that I do not find any utility of the “market” having survived the pure despotism deliberately and strategically established since 2007.

      Neither do I find the eradication of the Bill Of Rights and consequential destruction of the USA as a Republic under the rule of law, as a suitable environment for participation as a retail investor. Therefore in my opinion, any and every recommendation received from anyone will fail to satisfy what I was taught as benchmark for suitable recommendations.

      When approached by folks who know I am no longer licensed to make suitable recommendations, they still prod me for some feedback or insight. I wholeheartedly decline and they are often offended, suspecting I may have some personal difference specific to them. I do not. I simply find the current environment to be caustic to the point of being devoid of rational pursuit.

      Regarding your commentary describing “conventional wisdom” and “a wrong move”, any rational move of the market to the downside will have severe consequences. Therefore folks simply wait for others to lead, and when the market moves against them the consequences will be immense. My point is there is no escape. I have withdrawn entirely because I see zero role for me as a fundamental investor. I see a global coordination of lies consistent with global despotism.

      Money and investing will be the least of worries for what is to come. As long as fiat money exists, there will be maintained a monopoly on force around the globe. The only sleep I get is due to over exertion in pursuit of homesteading. Even that is on average of 5 hours per night. Focused misanthropy is the only rational response. Faith is the vehicle which will return just suffering upon the entitlement infected sheeple complicit in collectivism. They are so counting on making it through another decade of spending someone else’s money. Every morning I arise and hope the entitlement checks stop entirely. However the incremental long term cancer (inflation) will secure greater genocide, and so that is the course preferred by central banks.

      The worst thing that could happen to me would be for my wife to come home with a winning lottery ticket. What a miserable life it would be, sentenced back to positioning and defending fiat money denominated securities, under endless despotism. I’d die for my wife, but I won’t do that.

      Bottom line, there is nobody in the financial world that isn’t a slave to the process in the current environment, and this has manifest deliberately as planned by central banks. WW3 continues on schedule to eradicate human rights around the globe. Global genocide to follow. Bill Gates can’t stop smiling. Obama is drooling. According to their paradigm, not only don’t you matter, you can’t matter.

      Anarcho-Capitalism or else.

      Woodchuck Pirate
      aka Raymond J Raupers Jr USA
      http://www.woodchuckpirate.com



    • SteveRN on March 7, 2014 at 07:02

      Sounds good, I appreciate the reply and respect your choice. Thanks.



    • Sally Oh on March 7, 2014 at 07:49

      ^^^ What the Pirate said.



  5. Karen on March 6, 2014 at 16:58

    Richard: Some day, when you want to do another podcast interview, you may want to consider The Survival Podcast. You and Jack will either hate or love each other. I haven’t a clue which. He’s been eating “paleo” for awhile (interviewed Robb Wolf & some others) but hasn’t been exposed to RS yet, has written about & done podcasts on money, is a libertarian moving more towards anarchism, and he’s an entrepreneur. He’s recently done some podcasts that include comments on bitcoin. Today’s podcast is entitled “How Most Americans Are Little More Than Proud Slaves”.

    http://www.thesurvivalpodcast.com/

  6. Dan Linehan on March 6, 2014 at 20:06

    Gah.. your new theme scared me for a second — http://i.imgur.com/YsL0tZa.jpg

    Peercoin > Bitcoin. 😉

    • Richard Nikoley on March 6, 2014 at 23:07

      Dan, I’m actually using “Bitcoin” generically. Well aware there are other digital or crypto currencies. This is interesting:

      “All over Silicon Valley and around the world, many thousands of programmers are using Bitcoin as a building block for a kaleidoscope of new product and service ideas that were not possible before. And at our venture capital firm, Andreessen Horowitz, we are seeing a rapidly increasing number of outstanding entrepreneurs – not a few with highly respected track records in the financial industry – building companies on top of Bitcoin.

      “For this reason alone, new challengers to Bitcoin face a hard uphill battle. If something is to displace Bitcoin now, it will have to have sizable improvements and it will have to happen quickly. Otherwise, this network effect will carry Bitcoin to dominance.”

      Spoken like a VC, but potentially right. On the other hand, the very nature of the thing with super low transaction fees ought to make it easy for anyone to deal in many currencies, having them in a wallet right on their handheld device. One could decide in which currency to pay for some good or service based on what markets are up to both in exchange between crypto currencies and fiat currencies. Actually, an algorithm could be created to instantly give a “best currency to pay with.”



  7. Woodchuck Pirate on March 7, 2014 at 05:03

    To make money, in any legal manner, is no longer a suitable recommendation.

    I now regret every dollar I make.

    Anarcho-Capitalism or else.

    Woodchuck Pirate
    aka Raymond J Raupers Jr USA
    http://www.woodchuckpirate.com

  8. John on March 7, 2014 at 06:46

    Nice, I’ve been looking forward to this!

  9. Sally Oh on March 7, 2014 at 08:19

    Scarcity and utility make things valuable. As long as a virtual currency is limited, private, easy to transport across borders and can be exchanged for goods, it should remain valuable.

    Looking forward to the money posts as well.

    Right now, I’m busy moving to my homestead 🙂

  10. McSack on March 7, 2014 at 10:40

    Looking forward to the posts on your views on currency. Right off the bat, it looks like you’re very much in favor of fractional-reserve. I assume that by that you also mean a fractional-reserve system that’s voluntary and not monopolized.

    Just curious though, have you ever read any of Murray Rothbard books about money and did that have any influence at all on you? It’s probably a stupid question, as I also assume that you’ve been around enough anarchists to come across his views at some point. If not though, I would definitely recommend it. I think he has some very persuasive arguments about the problems with the fundamentals of fractional-reserve that I had never considered before.

    But to me, fractional-reserve banking should be treated like any other enterprise. As long as it’s explicit, honest, and voluntary, people should be free to invest their money in it. The problem usually is that the way it is currently administered (apart from the involuntary nature of it) is that it is deceptive in how it operates. Many people still see their money as being warehoused, and that isn’t exactly the case, instead it’s being used to make investments with, which is what (at least theoretically) leads to its instability. But as long as people are understands its mechanisms and are aware of the risks it’s harder to make the case against it.

    I’m definitely on board with Bitcoin regardless of the criticisms about whether or not it’s “real” currency. Most of these critics have only theoretical objections, and don’t weigh them against the actual benefits. Working with some international co-workers, I immediately see the advantages of working around the current monetary system. Just in the ability to get around exchange fees alone makes Bitcoin incredibly advantageous.

    • Richard Nikoley on March 7, 2014 at 20:36

      Hey McSac

      Have never read a word of Rothbard though as you might imagine, very familiar.

      I’m the kinda guy who looks just enough to say, “ok, I get it,” and then I go off. That happened around 1995.

      You’re free to judge my own thinking and ideas on the matter. I did read a lot of stuff in the beginning, but it was mostly very classical, like Aristotle, Socrates. A few others. I read Rand, mostly because she’s a a she and that’s viscously intriguing to me because I thirst for true curious honest female thinkers. Not many. Most are intellectual whores looking for dollars, making sure the oldest profession doesn’t go extinct.



    • McSack on March 11, 2014 at 07:15

      If you’re ever up for it, I would highly recommend “The Case Against the Fed”. It’s an easy read (a lot more so than many of these diet studies 😉 ) and the book is available for free. They even have an epub version which you can pop right into iBooks or other reader: http://mises.org/document/3430/The-Case-Against-the-Fed

      It’s worth starting at the beginning, but if you want to jump right in, skip to the chapter on “Loan Banking”. I imagine you may like Rothbard’s writing style. He’s pretty much no BS, straight-to-the-point, but very good at breaking down very complex subjects into clear examples. Also, I’d even say it’s pretty entertaining.

      Anyway, a lot of things clicked for me after reading it. I think it might be worth your while. 🙂



  11. Jim Klein on March 8, 2014 at 10:09

    You wrote…

    1. medium of exchange (get a hotrod for your flock of sheep)
    2. unit of account (dollars and cents; francs et centimes, et cetera)
    3. store of value

    In the interest of efficiency and perhaps to save you some waste, you should note that all three of those translate to, “Money is a medium of exchange.” That is, unless you want to pretend that value exists in something other than an abstracting, choosing mind. That’s okay if you do and it’ll leave you in the company of brilliant philosophers like Rand, but you’ll be wrong nonetheless.

    Money is a medium of exchange. C’est tout.

    • Richard Nikoley on March 8, 2014 at 16:10

      Jim:

      Where have you been, man? I haven’t heard from you in so forever I can’t even remember when. Anyway, when Tim Starr rattled off those 3 points on a Facebook posting of mine the other day, here was my response:

      “Tim, that’s all technically and classically true (and of course, fiat currency isn’t money either). However, BC is unique in that unlike other currencies (bank or GovCo notes) it can’t be counterfeited (YET, of course) and to create more requires “mining” data which has proven for most folks to cost more than worth (what does THAT remind you of?). It’s even better than classic coin, as it can’t be clipped or shaved. Not sure that unit of account is meaningful in the context since we’re dealing digital now and a BC can be fractionalized to any extent. Some would call it an advantage. It sure beats inflation. It’s analogous, say, to using your trading account in Spiders (which can go up and down relative to exchange power) to buy stuff. Sometimes the idea of what constitutes money needs to itself change, since the world wasn’t digital.”

      Translation: I tend to agree with you.



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