Blog Updated: September 18, 2016
If you want to “pan” in private, it’s not Bitcoin.
What’s in your “pan?”
Digital Gold should be private.
So why would you “pan” for cryptocurrencies in full view of every person on earth? Wouldn’t it be nice if you could “pan” in private?
So which cryptocurrency is best?
But it depends upon your view of reality — your worldview.
If you feel that all financial transactions must be public, then Bitcoin, Litecoin – even Ethereum – are good choices. As is government cash.
Even physical gold is great — a sound money, unless it is confiscated by governments. Unless history repeats itself. What, you think you live in a perfect world?
How about I give you a gold coin and you give me, say $1200. Thing is, there’s risk involved. I need to carry my gold around with me. You need to carry your cash. Then we need to meet. All risky.
So we often just carry our cards. The little plastic things with microchips or magnetic strips. Still, there is risk. Theft, cloning, hacking into retail chain servers, etc.
And that harks back to your opinion of financial institutions, as well. In the modern era, even banks are extensions of government policy. Privatization has taken a back seat to the Welfare State.
Would not a cryptocurrency be better than one’s national currency? Sure it would, but which one?
Capital Flight v. Pump and Dump
As of June 9, 2016, Bitcoin is still in “surge mode” and the potential for profit is difficult to ignore. But it appears to be waning again. It’s off its highs…again.
Perhaps it is the capital flight from China. Maybe the problems in Argentina are giving Bitcoin the boost. Both assertions seem reasonable. But are they only temporary? It’s anyone’s guess — educated or not.
In the past, Bitcoin spiked in value. It was thought that the Cypriot mess caused the surge. It has also been suggested that false buying signals had been sent by large Bitcoin exchanges. Mt. Gox for example.
In any event, after Bitcoin spiked in 2014, it retreated. Still, it has not yet fallen to its previous lows.
When was the last time Bitcoin was valued under one dollar? Prior to 2014. Since that time, Bitcoins have consistently been worth hundreds of dollars each.
But it has only been a few years. Many concerns still exist.
The infamous “Pump and Dump” schemes bother many. Notorious when it comes to cryptocurrencies.
“Pumpers,” often called “whales,” purchase large amounts of a particular crypto and entice other buyers into the market. It’s an old game.
The “Pumpers” then sell hard, suddenly, if there is enough liquidity, and leave the “bag holders” slack jawed. Their bag of crypto-coins suddenly worth less than zero — since there are no buyers. Later the cryptocurrency goes belly-up and a few days later a new coin is hyped and “pumped.”
Regulation and the Taxman
Governmental regulation is another reality. Governments outlaw private currencies. Drive up the prices and thereby encourage the criminal elements – indeed, create criminals out of common citizens.
In a way, although not illegal in many countries, cryptocurrencies exist in a surreal world, where they are respected by the Fintech community, but often disdained as quasi-gamer monies, by parents yelling at their kids, who are up all hours each summer night trying to mine a few dollars worth of electronic wonder.
Taxation is yet another issue. How much will one owe (in the U.S. especially) when one sells, trades or uses Bitcoins? Can the revenue service track Bitcoins?
One new alpha stage cryptocurrency is even attempting to develop and “sell” a completely transparent altcoin. It’s called Taler for “Taxable Anonymous Libre Electronic Reserve.” It’s Richard Stallman’s project.
Don’t discount Taler just yet. It appears to solve the taxation dilemma, but it’s still in development. It would be a perfect cryptocurrency for a country without privacy laws. If governments can peer into your every purchase, account, expenditure ad infinitum, just where is Stallman going with this? Oh, “Big Brother.”
Bitcoin Tracking and Wealth Redistribution
Please tell me you knew that Bitcoins can be tracked as well, but not like Stallman’s brain child.
Aside from the ability to track many cryptocurrencies, what other human risks lurk in the digital universe? How about “fear?”
The fear of a crash. The fact that Bitcoin values can go to zero at any given time. This is perhaps the “Nightmare on Crypto Street” — unless you live in Argentina. There, the monetary nightmare has become a socioeconomic reality. Any crypto is a savior in a Welfare ‘Statist’ Regime.
As soon as the Argentinians and Chinese figure out that they are vulnerable to ‘tracking’ you may see a big switch in the CryptoNote systems. Monero for one.
But fear gives us that queasy feeling when we put cash in and receive crypto in return.
For those in Argentina, Bitcoin is a Godsend, however. The currency there is nearly worthless. One cannot do worse.
In China, where massive amounts of “paper wealth” has been accumulated and the Chinese government is devaluing the currency, thereby appropriating huge sums of money — that money is finding an escape valve: Bitcoin.
Certainly, Bitcoin is acting as a pressure relief valve for those who are being economically suppressed.
And in the U.S….
Recently, the government, seeing trillions of dollars just sitting in retirement accounts realized they could easy and legally ‘use’ that money.
Welcome, citizens. Your government, which is not bankrupt, has taken it upon themselves to ensure that all money market funds everywhere are safe and secure — in government bonds.
How did Uncle Sam do this? Simple: over-regulation. It is now fiscally sensible to use government treasury instruments. So most investment houses are towing the line — the ‘party line.’
Uncle Sam will soon have trillions of extra dollars and not need a “QE” for several more months; unless investors pull their money out or move away from money market instruments.
In other words, the money grab is going international. This fact will only serve to push crypto’s into the stratosphere.
Bigger questions lurk in the stratosphere as well.
Bitcoin’s Internal Organs
Can Bitcoin take the lack of pressure? Are other coins better suited to absorb the transaction volume, should savers come in droves?
In fact, it is well-known that Bitcoin may not be able to handle the ever-increasing volume of transactions. This is a hot debate, however.
The current developers of Bitcoin squabble over improvements and changes. Bitcoin’s internal organs, so to speak. The original developers have moved on, citing numerous concerns. They organized it and let it go.
Perhaps it’s high time to diversify into crypto. And keep some of your hard-won crypto’s, private.
When the first pizza was purchased with Bitcoin, many thought it was a fluke. Now you can buy almost anything with them – with no intervening bank.
Naturally, many of us want to get in on the ground floor of something great. Some even want to make sure that nobody knows where their crypto’s are, how many they have or where they send them.
Yes, one can send their Bitcoins through “mixers” where they are tumbled and jumbled – for a small fee. This is a bit of a pain and the fact that you do this can be tracked.
It’s time for something better. Something private, but from the “get go.” With no mixing service required. No possiblity that someone will abscond with your crypto at the “mixing service.”
It’s time for a Real Update
What is needed is an up to date, “with the times,” cryptocurrency. Luckily, it already exists.
Monero and AEON, are waiting. In my mind, they are the gold, silver and bronze of the “Crypto-Olympics.” This might change if the speedy AEON operates as planned.
But these are only a few of the successful and promising “CryptoNote” based cryptocurrencies, with built-in privacy. Mixing services not required.
Only you know how much ‘money’ you have. Only you know where your ‘money’ is sent. Only you know where you keep your stash.
Compared to all the rest, the “CyptoNote” based ‘coins’ are much more stable than their “less private” counterparts. They are the next step in the revolution of digital currency.
It is not about the “Darknet.” It’s about you and your cash.
Remember, they are watching your Bitcoins, Litecoins, Ethers, Ripples, Dogecoins, Peercoins…and the list goes on.
It’s time to come to the “Private Side.”
Why give them all of your financial information voluntarily? Why provide every criminal on earth your account number and coin count?
Wouldn’t it be nice to be the only one with the knowledge? Where not even your bank can know your ‘financial picture.’
The time is now. Act while you still can.
(Note: the contents of this blog are the opinions of the writer. Do not base any investment decisions upon said information. Do your own research.)
Panning for Gold Picture compliments of: Tony Oliver from Denver, CO, USA (Prospector) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)%5D, via Wikimedia Commons