How the Bitcoin protocol actually works. How anonymous is Bitcoin?

  

  Bubbles are irresistible by nature, they are sucking you up with the rest of the crowd in the parabolic move. When everybody is getting rich literally overnight, how can you stay away? Now we have The One for the Meme generation.

  Not only the FED is watching the important levels in Gold and Bitcoin, Winklevoss twins are pumping hard Bitcoin today on the reddit fighting the FED. They came out with the solid target price of $40,000, so before at least $39,999 there is nothing to worry about. 

  We warned about the Central Banks Launching Worldwide Coordinated Attack On Bitcoin as we see it and now it is time to dig into Bitcoin fundamentals and technical architecture - what will be left from this brilliant idea after The Bubble Crash.

  Michael Nielsen describes it with very good technical detail level and you can find his full work on the link, we will provide here only the extract on the one of the most important value propositions of Bitcoin - its anonymity. Brian Hanley has published very interesting research paper on Bitcoin, which we would like to share today as well. And Francois R. Velde presents the Bitcoin Primer with the view from Chicago FED. 

Brian P. Hanley: The False Premises and Promises of Bitcoin.

"[bitcoin is]...a very clever practical joke by someone who is having enormous fun exposing in the most sophisticated way imaginable the naivety of clever mathematicians, economists and/or rich speculators. ... or ... The cleverest con trick ever conceived, and probably one of the most rewarding."

Chicago FED Letter - Bitcoin: A Primer

"The term “mining” may lead one to think that bitcoin is not fiduciary. It is true that real resources (computing hardware and energy) are expended in creating bitcoins. Since entry to min- ing is free, the value of these resources will be the market value of bitcoins pro- duced (whose number per day does not depend on the size of the network). But once created, the bitcoin has no value other than in exchange, contrary to a gold coin."

Central Banks Launching Worldwide Coordinated Attack On Bitcoin

  Technical analysis for Bitcoin is basically meaningless with so much noise in the print, but the chart below from TheArmoTrader tells the story better than thousand words. After all recent events described below we are issuing our Warning and the line in the sand is $800 for Bitcoin now. With coordinated attack Bitcoin can be pushed below it, everything is prepared for it now. We do not have any inside, but has been in the Gold market and observed its manipulation enough to see what is coming. If somebody is interested now to Kill the Bitcoin brilliant idea hijacked by speculators with  Crashing The Bubble - it is time. Whether there are enough interested parties to do so  you have to decide for yourself. Will it happen now? We will see very soon. The most unfortunate thing is that some influential people are leading the uninformed "freedom fighters" towards just one more slaughterhouse now.

  Central Banks are getting all together now to celebrate Federal Reserve 100 Year Anniversary. If somebody thought that Bitcoin with other "listed" 42 Crypto-Currencies can challenge the banksters for real, please think twice and take at least the profit! We need more smart people with capital to join the real values when Gold and Silver will be shining again after Special Op "Gold 2.0" to distract 99% from Gold will be over. FED is still silent, but crackdown on Bitcoin is already in place. Now Central Banks of Australia and New Zealand have issued Bitcoin warning. All these actions are coordinated, as you can see now. Pump it Up and Crash it hard - how many will be left to support the brilliant idea? We will note one more time very important coincidence: according to the reports JPMorgan is Net Long Gold now. Crashing Bitcoin will send Gold much higher, maybe JPMorgan knows something the others don't?"

Michael Nielsen:

How the Bitcoin protocol actually works

"How anonymous is Bitcoin? Many people claim that Bitcoin can be used anonymously. This claim has led to the formation of marketplaces such as Silk Road (and various successors), which specialize in illegal goods. However, the claim that Bitcoin is anonymous is a myth. The block chain is public, meaning that it’s possible for anyone to see every Bitcoin transaction ever. Although Bitcoin addresses aren’t immediately associated to real-world identities, computer scientists have done a great deal of work figuring out how to de-anonymize “anonymous” social networks. The block chain is a marvellous target for these techniques. I will be extremely surprised if the great majority of Bitcoin users are not identified with relatively high confidence and ease in the near future. The confidence won’t be high enough to achieve convictions, but will be high enough to identify likely targets. Furthermore, identification will be retrospective, meaning that someone who bought drugs on Silk Road in 2011 will still be identifiable on the basis of the block chain in, say, 2020. These de-anonymization techniques are well known to computer scientists, and, one presumes, therefore to the NSA. I would not be at all surprised if the NSA and other agencies have already de-anonymized many users. It is, in fact, ironic that Bitcoin is often touted as anonymous. It’s not. Bitcoin is, instead, perhaps the most open and transparent financial instrument the world has ever seen."

  

Jim Rogers on George Soros, Goldman Sachs and When Harvard and Stanford Will Go Bust.

  

   

  As you know, we are not in a position to give any investment advice, we never tell you what to buy and what to sell. We are in the education business and only share with you our travel diary. Today we would like to share another idea about one of your best investment in yourself you can allow: buy and read this book from Jim Rogers.

  If you would like to know about The Break Up with George Soros on his "manipulations of the markets", why Jim O'Neill and Steven Roach "do not have a clue" about Emerging Markets (as the rest of the Wall Street) and how Allan Greenspan - "mediocre economist" has ruined the United States - this book is for you. What to expect next with the "Yes Man" - Mr Bernanke running the FED for his friends will be coming there as well. Inflation will be presented in a very interesting way by Jim - "How many Congressmen you could buy before for the price of one today."

  Please do not miss among the headline revelations, the real wisdom about this world and investing. You must know what you are doing and be the best in it, just one thing at a time. It will be enough. We will add: "Trust your Swing" - particularly when it is tough. 

  We guess that now, after Tim Geithner has joined CFR with his Turbo Tax skills you do not need to immigrate to Singapore to speak up your mind. The Masters and their Puppets are in a plain view, running the show for the Muppets without any constrains by secrecy any more.

Jim Rogers Street Smart.

Golden Age. Planet Ponzi. All You Need Is Love. Happy New Year 2013!

  "As Mitch Feierstein explains in his book "Planet Ponzi", you will not get much anything else if you are not in the Circle of Old Boyz. Oh ye, oops: we are wrong here - we will All get our Taxes Increased, Starting with Inflation. We will All get the Bill left from Those who continue to Party even now.

  Suck it up my friends, just suck it up. If you are not on the Payroll in Washington, DC or with other Members of the Oldest Pioneer Organisation - we are All pretty much ... (Add the Spice here to your liking)."

Sci-Fi Movie Script: "Federal Reserve - Keeping The Strong US Dollar Policy From 1913 - Established To Serve and Protect" GS, JPM, BAK, C, HBC

Strictly Confidential.

Presentation. First Pass.

Sci-Fi Movie Script.

In-House Working Title: "Keeping the Faith In the US Dollar"

Suggested Change: "Finding the Faith In the US Dollar"

General Story-Line: "Federal Reserve: We as Federal As Federal Express. But Better For Our Shareholders"  

Submitted Nov 19, 2012.

Status: Casting is open, AlphaCat is invited for President Obama's role.

Commonly Used Acronyms:

BS: Banking System, Banking Slaves, Male Cow Manure.

MF Global: A tragic case of a Very Sad Company of Well-Connected People "losing" a Lot of Other People's money.

MF (Sans Global): Naughty Word.

HFT: High-Frequency Trading or Hot "Naughty Word" Traders.

USTs: US Treasuries, or Your Children IOUs Issued mostly to "Asian Investors".

Hedge Funds: Wealthy People playing with Other People's Moneys.

Algos: When HFTs are Partying They are using Comps to Front-Run fellow Market Participants.

PROPs: Hedge Funds Organised Inside Banks by "Banksters" to Squeeze the Cream out of the Muppets.

Muppets: Bank Clients that are being Sold Stuff, which Banks Are Not Buying.

PPT: Plunge Protection Team, a team which Never Existed and where the "Banksters" are writing off losses to the Feds through their PROPs Trades, by Supporting "Efficient Market."

Feds: Unelected Officials, employed by the "Banksters". On Temporary Leave in order To Create and Support aforementioned "Efficient Market" and Keep Muppets from Running on the Streets.

FB: our favourite social networking site "Facebook"; "The Best Special OP Ever" according to the one Senator and the back-end of the FBI & CIA according to others.

IPO shares: Idiots Priced Our shares.

Wall Street and Investment Banks: Places where IPO shares are Sold to Muppets and Further Shuffling of That Stuff Is Undertaking Amongst Said Muppets Soon After That.

The Only Place Where Gentleman steps out from a Rolls-Royce and inquires the guy-who-took-the-tube-to-work on Sound Financial Advice. 

EMT: "Efficient Market Theory" - The Old Lady which is Murdered In The Last Scene. 

What Is The LIBOR Scandal?

  Now let's wait for the stories of Gold and Silver market manipulations to surface with the new JP Morgan "trade loss" announcements.

US Dollar Collapse: Video: JP Morgan Silver Manipulation Explained 

Be careful with any investment decisions here, based purely on this cartoon, or a price tag for Silver or medical terms used - the most important message is that story is getting out into the public space and we are indeed at the tipping point now. After latest Jobs number QE 2.0 is already a history, time is to be ready for the QE n+1.

The History Of Money And Why US Dollars Are Issued By Private Bank - Federal Reserve System

We are at the very important point in the history of the modern financial system. The recent events in Europe  are no less than ground-changing historical  development and the magnitude of it will be understood only many years later. European countries are giving up their Sovereignty in order to save the Euro zone. Now the history of money will be your guide to the new order, when the New Normal will be transformed into the New World Order. 

  Private FED manipulates all markets now and has the right at its own discretion to increase the FED rate at any moment, which will increase all interest rates in a chain: mortgage payments, car loans, student loans, credit card loans, business loans etc. Should FED decide to stop monetary expansion at some point: QEn+1 and Twists - yields on the Treasuries will explode. U.S. is at the total mercy of the unelected managers running the private bank. You would think: who can do such a thing, which will bring a total collapse to the world economy - watch the movies to get your own answer. The idea to buy the assets for pennies on the dollar can be irresistible again.

Europe Is One Step Closer To The End Game - New World Order

"We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order" 

David Rockefeller

Watch the movies End Game and Fall Of The Republic. 

Gold Catalyst: Eurozone finance ministers agree to 100 billion euro Spain bailout GLD, SLV

Reuters: Euro Zone Debt Crisis In Graphics

  China Rate Cut and now Spain Bailout - Massive BackStop Operation is in place, watch out the US Treasuries Sell Off and Risk On trade now - Commodities should follow Gold. 

Gold Market Action Signals Massive Liquidity Back Stop Operation GLD, SLV

As with our recent Call on Apple, nothing here will be scientifically proven - all our markets are rigged and are pure Esoteric Fiction now. Our feeling tells us that recent carnage in Gold and Gold miners, particularly, is the preparation to the Massive Liquidity Back Stop Operation. 

Charles Nenner Calls For Silver and Gold Bottom - We Call For Apple To Cool Down AAPL, GLD, SLV

  Any such operation means the QE up to the infinity whatever it will be called. The action will be coordinated and must be unleashed on a truly huge scale in order to attempt to save the insolvent financial system from "the run on the banks". Battle Field will be in Europe - now Europe threatens to push all world economy into another recession. UK - the land of the brave, where all experiments with QE were started first - is already in recession technically. Austerity will be dying hard, but the Paul Krugman is now the bedside book.

The Gold Bug Manifesto By Paul Krugman: End This Depression Now

  What form this operation will take is not so important: there are rumors about Silver Bullet with banking super guarantee in Europe or it could be another LTRO spiced with World Wide Coordinated FED and Central Banks swap operations - the end result is that the liquidity will be flooding the system with record low Treasury Yields. The magnitude of the action will be very important - European banking system is under capitalised by 2.9 Trillion Euros now, according to UBS.

   Gold smells any currency debasement - here we are talking about worldwide phenomena - so it will be killed first. Panic in the sector has already shaken all weak hands and once the public has realised what is coming gold will resume its uptrend.

Eurozone finance ministers agree to 100 billion euro Spain bailout