Wednesday, August 3, 2016

Bitcoin Price Crashes After Exchange Admits Security Breach, Over $60 Million Stolen

I was initially enthused by Bitcoin as an anti-dollar crypto-currency, but after researching its cyber-security issues, I became suspicious of Bitcoin's creation.  My suspicion was Satoshi Nakamoto, the alleged mythical creator of Bitcoin (whether one person or a group of hackers), could be a sub-unit of the US Treasury.

The holes in the security of Bitcoin, and the non-anonymity of the block chain header--which tracks all transactions, hinted towards a backdoor created by financial authorities to track nefarious Bitcoin holders.

Is this conspiratorial?  Yes, but who benefits by providing an alternative to the USDollar, yet still maintaining confidence in the dollar?  If gold is an undesirable alternative to the dollar, Bitcoin could be a welcome supplement to dollar hegemony for the financial status quo.

Due to the obvious risks of holding Bitcoin (it's electronic, it can be lost, it can be stolen, and competitive crypto-currencies exist--undermining its stated goal of scarcity), I subsequently couldn't endorse Bitcoin or any other crypto-currencies.

The fall of Mt. Gox raised my suspicion.  This latest theft of Bitcoin confirms my skepticism.  The fallout of this latest electronic theft is yet to be determined.  Who is legally liable?  Will insurers guarantee the losses?

At the end of the day, Bitcoin is an electronic entry, much like a bank account.  The difference is banks don't have the reserves to back up their deposits due to fractional reserve banking, which is hugely problematic despite reassurances by the financial authorities.

Ownership is 100% possession, so the ultimate safe haven currencies are still physical gold and silver.  This has been true for over 6000 years, and will continue to hold true.

http://www.zerohedge.com/news/2016-08-02/bitcoin-crashes-after-exchange-admits-security-breach

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