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Saturday, November 16, 2013

WHAT DO YOU KNOW ABOUT BITCOINS?


There is a digital currency, a dream of libertarians, only found on the world wide web, and is called bitcoin.  It was invented by Satoshi Nakamoto in 2008, who placed 1,624,250 bitcoins on the virtual block, and, apparently, kept around a million, now worth $450 million.  Nakamoto then disappeared, passing on the reins to Gavin Andresen.  Who is Nakamoto?  No one knows.  Well, we can eliminate Zorro, but perhaps keep Uncle Sam as a prospect.  At the top left is Andresen, who says he is not Nakamoto.

Satoshi Nakamoto in Japanese means "thinking clearly inside the foundation."  He claims to be a 37-year old male living Japan, but could be a group or some government agency.

To simplify the whole thing, a bitcoin allows anything to be sold anonymously on the internet.  Nothing can be traced.  Thus, drugs, weapons, sensitive porn...anything, can be bought and sold, and you receive your product through the U.S. Post Office or some form of express mail.  You avoid bank and credit card fees.

Stories are legend.  Christopher Koch (left) invested $27 for 5,000 bitcoins in 2007 and the value is approaching $1 million.  The value of each bitcoin is metastable, dropping to $30 when the Silk Road (which means that stupidity and carelessness can catch you) episode came to light, but since then has jumped to $$450.

What is Silk Road?  The largest seizure of bitcoins by Federal officials, $34 million, an online narcotics marketplace.  Just Silk Road involved 9.5 million bitcoins.

During this past year, the volume of bitcoin transactions has skyrocketed:


The speculation is that each bitcoin could be worth $1820 by 2020.  Historic value?


Combining volume and value:


You say you want some bitcoins?  Be careful, but here is a site safe to explore.  How much did I purchase?  Zero.  Stay tuned to my simple-minded postings of Twitter and Facebook.

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Super Typhoon Haiyan death toll now sits at 3,633, and affected 9 million in the Philippines.  Four hundred thousand remain in evacuation centers.  The fear now is the spread of diseases.

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