IRS now cracking down on Bitcoin with tools that eliminate transaction anonymity

Questions continue to arise about the true anonymity of the popular online cryptocurrency Bitcoin. While many assume (or have been told by others) that Bitcoin is completely untraceable, new reports indicate that this may not actually be the case, as the blockchain ledgers are public and technically available to anyone who knows how to break into them.

Last month, Alt-Market.com founder Brandon Smith issued a warning about Bitcoin’s purported anonymity, explaining that it’s hardly the anonymous solution to the fiat Ponzi scheme that many people believe it to be. He says that based on what’s already been revealed by whistleblowers like Edward Snowden and those involved with Wikileaks, nothing in the digital world is truly anonymous, period – including cryptocurrencies like Bitcoin that have transaction records publicly available.

“The feds have been proving there is no anonymity, even in bitcoin, for some time, as multiple arrests using bitcoin tracking have indeed occurred when the FBI decided it was in their interest,” Smith wrote. “Meaning, when the feds want to track bitcoin transactions, they can, and it does not matter how well the people involved covered their actions.”

Theoretically speaking, practically any group with the proper tools at its disposal, from the FBI (Federal Bureau of Investigation) to the NSA (National Security Agency) to the IRS, (Internal Revenue Service) could develop systems with which to extract data from the Bitcoin blockchain ledger and identify every Bitcoin transaction that’s ever been made. The IRS has apparently already developed a special analysis tool that allows it to track down individuals who are profiting from Bitcoin but not declaring these profits on their tax returns.

“According to a contract recently obtained by the Daily Beast, the IRS can now track bitcoin and other cryptocurrency addresses,” explains a recent report by Bitcoin.com. “They can do this to route out potential tax evaders. They purchased software from the blockchain analysis group Chainalysis.”

IRS working overtime to extort as much profit from Bitcoin users as possible

Since the IRS exists for one purpose, and one purpose only – to enrich itself as much as possible on the backs of hard-working American taxpayers – the growing popularity of Bitcoin is a threat to its revenue stream. Every Bitcoin user who isn’t paying taxes on his or her Bitcoin profits is a potential target of this mafia-style corporation that functions as the enforcement arm of the privately-owned Federal Reserve bank.

Not only that, but Bitcoin users also face the constant threat of price fluctuations, as the value of the cryptocurrency has been exceptionally volatile as of late. Many will recall the Bitcoin “flash crash” in which the price of Bitcoin plummeted from about $3,000 per coin to roughly $2,500 per coin in a matter of just four hours. As of this writing, the price of Bitcoin is hovering around $4,600 per coin.

The government’s hate for Bitcoin is creating additional threats in the form of “cryptocurrency terrorism” as well. This is the idea that Bitcoin users are evading the use of Federal Reserve Notes and other forms of fiat currency for the purpose of committing illegal activity online. If Bitcoin isn’t truly anonymous, then this suggests that such users will possibly be identified and put on government “watch lists” in violation of their constitutional rights.

“The guidelines for who is or is not a terrorist are now so vague that any American could potentially be added to a list for something as menial as knowing someone who has committed an activity deemed to be of terrorist nature,” explains SHTFplan.com. “And as has been highlighted previously, those activities could range from making a hand gesture that looks like a gun or manufacturing your own gold and silver coins.”

Sources for this article include:

SHTFplan.com

Bitcoin.com

NaturalNews.com

Bitcoin is digital fiat currency backed by nothing, warns Health Ranger

 It’s long been presented as an alternative to fake fiat currencies like the Federal Reserve Note (often referred to as the “dollar”) because there’s a limited amount of it and it’s completely decentralized with no involvement from central banks. But the popular online “cryptocurrency” known as Bitcoin may just be another form of fiat currency that’s taken a digital form, says Mike Adams, the Health Ranger, warning that like the dollar, Bitcoin isn’t technically backed by anything, either.

Unlike the greenbacks of old, Federal Reserve Notes today are backed by nothing but the public’s trust in them. As long as people believe that currency issued by the private Federal Reserve and loaned to the United States government on interest holds inherent value, then it will hold that value (or some ever-dwindling percentage of that value as inflation creeps on up). Federal Reserve Notes hold no real value whatsoever, of course (other than the ink and paper they’re printed on), but as long as people think they do, then all continues as normal.

Well, it’s much the same for Bitcoin, which isn’t actually a real coin but rather a “blockchain” entry that holds a value relative to how many Bitcoins have been “mined,” and how much people are willing to pay to trade them. The idea is that Bitcoin will be limited in number – the original claim was 21 million Bitcoins total – that are to be traded on a peer-to-peer basis with no central bank. This would, in essence, created a limited amount of them that would eventually stabilize into some real, tangible value at some future date.

But the way that Bitcoins seem to be operating in today’s reality, says Adams, is that they’re viewed more as a speculative investment than a fixed currency. People are gambling on the notion that they might be able to get rich quickly by buying and selling Bitcoins, the price of which has been exceptionally volatile in recent months.

“From July 21st through the end of the year, a timeline of serious obstacles threatens to crater the speculative Bitcoin marketplace,” claims Adams. “One of those events has been called a ‘Bitcoin civil war’ and could threaten the very existence of the crypto currency. That’s why people are taking profits right now, selling their Bitcoin holdings and driving the price downward.”

If people don’t know what they’re doing with Bitcoin they could lose a lot of money

Adams insists that because Bitcoin isn’t backed by gold that it’s not necessarily superior to other cryptocurrencies like Ethereum or Z-cash, which are two other types of cryptocurrencies that are bought and traded online. Many people who’ve been jumping on the cryptocurrency bandwagon don’t understand the real risks involved with purchasing Bitcoins as a store of value, which could lead some of them towards financial ruin.

A Bitcoin correction could thus be on the way, which may result in a drastic decrease in the perceived value of Bitcoin. Those who thought it was just going to be on the up and up will be unpleasantly surprised, should this correction occur, to learn that they’ve lost potentially large sums of money on their speculative investment – a scenario of which they need to be keenly aware.

“Bitcoin has achieved an extraordinary rise over the last 12 months, skyrocketing from about $600 to a recent peak of $2300,” Adams warned back in May. “While the long-term prospects for Bitcoin are strong — and I believe it will achieve $10,000 per Bitcoin in the years ahead — this recent parabolic rise is a sure sign of ‘irrational exuberance’ now rearing its ugly head once again.” [RELATED: To keep up with the latest news on Bitcoin, be sure to visit and bookmark BitcoinCrash.news.]

Sources for this article include:

NaturalNews.com

NaturalNews.com

Bitcoin now being heavily manipulated by the communist China regime which can cause huge price swings at will

The price of the popular online “cryptocurrency” Bitcoin has reached all-time highs in recent weeks, with many wondering what will happen next as the Bitcoin bubble expands ever-larger. While many are focused on heightened interest in Bitcoin from Japanese and South Korean retail investors, which is massively driving up its trade value, there’s another major player in the mix that many people aren’t considering: The world’s second-largest economy, China.

Believe it or not, most of the Bitcoin “mining” operations in existence are currently located in China, which is curious because cryptocurrencies seemingly represent the exact opposite of communism. The decentralized, peer-to-peer format of Bitcoin isn’t exactly in the best interest of authoritarian governments, in other words, and yet Bitcoin operations are strong in China.

The reason for this, reports indicate, is that by allowing Bitcoin mining in China, the Chinese government can effectively monopolize control over the blockchain. Bitcoin in China is basically a tool by which more power and control can be leveraged for the political elite, which is why it hasn’t yet fully hit the chopping block. (RELATED: Want to learn more about Bitcoin and keep up with the latest developments on it? Be sure to bookmark and visit Bitcoin.Fetch.news)

“Since China can have such a huge impact on the price of Bitcoin, why wouldn’t the Chinese government use this power to its advantage?” asks China Uncensored. “Chinese government regulators can, in theory, exert a huge influence on the global price of Bitcoin. So, if you own Bitcoin, well, the value of your money can be heavily influenced by the whims of the world’s largest authoritarian regime.”

China’s manipulation of Bitcoin resulted in 2013 crash when cryptocurrency fell from $1,000 to $100 almost overnight

It is widely believed that the great Bitcoin crash of 2013 was engineered by the People’s Bank of China (PBOC) when government authorities suddenly prohibited local financial institutions from dealing in the digital currency. Bitcoin had risen in value from $100 per “coin” in September to $1,000 in November. It then crashed seemingly overnight, causing major losses for folks who weren’t paying attention.

Not long after, the Japanese Bitcoin exchange Mt. Gox came to a grinding halt, which brought about a bear market for Bitcoin that lasted until the end of 2015. Bitcoin reached a crescendo in recent weeks when it hit nearly $3,000 per coin (it’s just over $2,500 now as of this writing after having dropped some), suggesting that another major crash is on the way.

The situation is ripe for another massive plunge as Chinese authorities are once again chomping at the bit to crack down on Bitcoin. One of the driving factors for this is the way that some Chinese citizens are using Bitcoin as a means by which to take their money out of China and hide it elsewhere. The government wants to limit the amount of the foreign currency that people can buy in order to prevent this, which would have a dramatic impact on the price of Bitcoin for the rest of the world.

At the same time, restricting Bitcoin in just the right way will still allow the country’s wealthy elite to continue to profit from it. After all, Bitcoin transaction are not anonymous for Chinese citizens, as they are required by law to link their bank accounts to their Bitcoin accounts in order for authorities to keep tabs on people’s buying and selling habits.

“Chinese authorities again resorted to jawboning to influence the Bitcoin price when they announced in January that they were investigating the country’s digital currency exchanges,” explains Zero Hedge.

Sources:

ZeroHedge.com

YouTube.com

NaturalNews.com

BitRAPED.com news website launched as Bitcoin plunges nearly 30% in 3-day sustained crash

As promised, we’ve just launched a new website to document the Bitcoin mania (i.e. “Tulip bulb mania”) that has now taken hold across our world of incredibly gullible people.

Visit BitRAPED.com for news coverage of the Bitcoin bubble, the Bitcoin crash and Bitcoin hustlers who are running a Ponzi-style “pump and dump” scheme that depends entirely on new suckers to buy into the Bitcoin bubble in order to prop up prices of the virtual currency.

Far from its original promise of being a pro-liberty currency that would bypass the regulation and corruption of central banks, Bitcoin has now become a speculative bubble pushed by “crypto swindlers” who are trying to offload their over-valued Bitcoins to gullible newbies who have no clue what Bitcoin really is. The entire Bitcoin bubble is now propped up by not merely faith but mania, echoing the psychology of every bubble in history, including the dot com bubble that crashed in 2000 / 2001.

Disclaimer: I mined Bitcoins for years and was an initial Bitcoin advocate. I recently sold all my Bitcoins for gold, converting virtual currency into real precious metals. I currently own less than one Bitcoin and have no financial interest in Bitcoin prices moving downward.

The BitRAPED.com website plans to document the delusional insanity of all the Bitcoin bubble pushers who absurdly think they are smarter, more brilliant and more wise than all their ancestors who propped up their own market bubbles (and got clobbered by the crashes). What nobody seems to remember is that all exponential rises in speculative markets eventually collapse, and they almost always crash at a much faster rate than the rate at which they climbed.

A simple analysis of Bitcoin price advancement before the 2017 speculative bubble blowoff indicates that Bitcoin will correct to around $1000 USD or lower. From there, it is likely to continue a slow, steady climb, having fleeced out the speculative noobs who will suffer catastrophic losses:

Bitcoin has already crashed from almost $3000 to around $2100 in just the last few days, and while it may cyclically recover from such price insults, the mere fact that Bitcoin has become nothing but a speculative vehicle for greed and delusion is irrefutable proof that it’s going to blow off the bubble, weed out the fairy tale seekers, and return to sanity (i.e. “utility”).

If you own Bitcoins right now, get out while you still can because the correction is going to be absolutely brutal. Follow all this at BitRAPED.com.

Raoul Pal warns Bitcoin is a speculative bubble, “scarcity” may be a myth and it isn’t a “store of value”

A bitcoin investor who purchased the popular cryptocurrency several years back when it was only about $200 – it’s now valued at almost $3,000 U.S. – recently sold everything he had and moved his money elsewhere. And his advice is that you should do the same if you don’t want to suffer the consequences of what he says is shaping up to be an impending bubble pop.

Since March, the price of Bitcoin in terms of the U.S. dollar has risen by a whopping 210 percent. This rapid increase has drawn many a first-time investor to view Bitcoin as a tool for getting rich quickly. But Raoul Pal, author and publisher of The Global Macro Investor, says that all this speculation is making Bitcoin even more risky.

“The explosion [in the price of Bitcoin] is mania,” he’s quoted as saying by Zero Hedge. “It’s people looking for a rate of return. It’s in the bubble phase. [Bitcoin] goes through this periodically … it rises several hundred percent, and then collapses.”

Pal hopes that people will be smart and remember that a similar situation occurred back in December 2013 when Bitcoin leaped in price to over $900. Amateurs who knew nothing about Bitcoin flocked to the cryptocurrency, only to watch it suddenly and quickly plummet over 360 percent to below $250. It took three years for the price of Bitcoin to return to its pre-collapse value, and a similar situation appears to be brewing right now as Bitcoin has reached what appears to be another plateau.

Bitcoin viability on the rocks as other platforms show better functionality, speed

Besides all the wild speculation taking place, there’s also the changing nature of Bitcoin, including rumblings about it no longer having a fixed amount of coins. This built-in scarcity feature is what drew so many people to Bitcoin in the first place, but with talk of it going away many are wondering if Bitcoin is still even a viable store of value.

Pal doesn’t think so, and that’s why he’s already dumped his small share of the 21 million Bitcoins that were originally said to be in existence. Bitcoin’s senior developers and miners have been contemplating the creation of what they’re referring to as a “hard fork,” which would split Bitcoin into two and allow for the creation of more Bitcoins beyond what was originally promised.

“Bitcoin was supposed to be a store of value, you couldn’t mess with the formula,” Pal says. “And now they’re talking about a ‘hard fork’ changing it? Even if they don’t change the formula, the fact that they could? That’s enough to say it’s not a long-term store of value.”

It’s also important to consider that other technologies are already outpacing Bitcoin in terms of their long-term viability and functionality. In India, for instance, there’s a new “frictionless” payment system known as “India Stack” that reportedly allows users to open bank and mobile phone accounts, as well as share medical records at any hospital or clinic using just fingerprints or a retinal scan.

Bitcoin developers have been trying for quite a while to implement a similar system of seamless integration, but so far they’ve been unsuccessful. Not only that, but India Stack functions about 50 times faster than Bitcoin, and it’s currently serving some 1.1 billion people – which is far more than have ever even attempted to use Bitcoin.

“This revolutionary digital infrastructure will soon be able to process billions more transactions than Bitcoin ever has,” says Pal. “It may well be a Bitcoin killer or at best, provide the framework for how blockchain technology could be applied in the real world.”

Sources:

ZeroHedge.com

MauldinEconomics.com

Bitcoin flash crash makes mockery of ridiculous claims that Bitcoin is a “store of value”

It’s only been a few years since cryptocurrencies like bitcoin first began taking the world by storm, offering what many people see as a more secure financial alternative to fiat currencies like the dollar. But the almost 20 percent bitcoin “flash” crash that recently took place just days ago on June 12 suggests that this may not actually be the case, and that relying on bitcoin as some kind of miracle store of value is more than a bit misguided.

Plummeting from nearly $3,000 per “coin” to about $2,550 in just four short hours, bitcoin revealed to the world its true volatility. It isn’t just going to be up, up, and up for bitcoin as many people falsely believe, including the tens of thousands of amateur investors throughout Asia who are right now stocking up on bitcoin in an attempt to secure what they believe will afford them a solid financial future.

Take a look for yourself at these revealing charts and you’ll see how quickly and dramatically bitcoin’s volatility could bring an uninformed investor to ruin. Unless you know exactly what you’re doing when it comes to bitcoin, you probably shouldn’t be investing in it – especially if you’re risking your life savings to do so.

New bitcoin investors don’t remember 2013 flash crash when bitcoin dropped over 70%

Prior to the recent flash crash, bitcoin’s value had risen in relation to the dollar by an impressive 210 percent since March, which is why many new investors have been jumping on-board the bitcoin train. But what many of these people don’t realize is that bitcoin has done this type of thing before, and the end result, at least in the shorter term, wasn’t pretty.

It was December 2013 when bitcoin had reached a high of over $900 per coin. It had been on the up and up for many months, with many a savvy investor starting to eye it as a potential new asset in their portfolios. Everything was looking just fine and dandy until suddenly it wasn’t – bitcoin went from $900-plus per coin to below $250 per coin, a more than 70% drop.

Some had anticipated this type of market correction, but few thought it would be this dramatic. It took about three years for the price of bitcoin to once again reach its previous levels. This wasn’t necessarily a problem for those who recognized bitcoin as a potentially risky currency alternative, investing as such. But for those who saw only dollar signs and who jumped headlong into the deep end with speculative intent, it was a financial disaster.

“The explosion [in the price of bitcoin] is mania,” says Raoul Pal, author and publisher of The Global Macro Investor, an elite macroeconomic and investment research service. Pal sees what’s happening today with bitcoin as a potential prelude to the same type of serious correction that took place in 2013.

“It’s people looking for a rate of return. It’s in the bubble phase. [Bitcoin] goes through this periodically … it rises several hundred percent, and then collapses.”

Pal himself admits to having made a lot of money on bitcoin when he purchased some several years back for about $200. But he’s decided that now is the time to cash out, and he’s warning others that they should do the same. He also has concerns about some of the changes that are potentially being made to bitcoin that increase the risks of investing in it pretty dramatically.

“This is the most exponential move we have seen,” he warns. “Bitcoin was supposed to be a store of value, you couldn’t mess with the formula … and now they are talking about a ‘hard fork’ changing it?”

Follow more news on the Bitcoin bubble at BitRAPED.com.

Sources for this article include:

BitcoinCharts.com

BusinessInsider.com

Bitcoin wallet COINBASE now seizing accounts of Americans… users rage against “total ripoff” as their Coinbase accounts VANISH

The popular online Bitcoin wallet Coinbase has been routinely seizing accounts of users in Hawaii and Wyoming, effectively “stealing” their Bitcoins by locking them out of their accounts. A Natural News investigation confirms that Coinbase is citing obscure state laws in its decision to seize accounts of users in both states, yet the online wallet refuses to allow users to log in and change their state of residence if they move to another state.

In effect, Coinbase is “stealing” Bitcoins from users by locking them out of their own accounts, preventing them from accessing their Bitcoin balances even if they move to another state. Users are raging against the “ripoff” and the “theft” in user comments (see some examples below).

How Coinbase “steals” Bitcoins from its own users and locks them out

When Wyoming-based users attempt to log in and see their Bitcoin balances, they are greeted with a Coinbase blocking message that says, “Unable to create account.”

Although we strive to provide continuous access to Coinbase services, Coinbase has indefinitely suspended its business in Wyoming and we regret that we cannot currently support services in Wyoming. You can find a further explanation of our account suspension policy here. We hope to restore service in Wyoming soon, so please check back again.

On its Wyoming account suspension page, Coinbase explains, “we apologize that we cannot currently project if or when our services may be restored.”

Attempts to get Coinbase to change the state of residency have been “completely useless,” Natural News was told by users. Coinbase refuses to respond to users in any meaningful way, regardless of how much money has been seized by Coinbase.

By locking Wyoming users out of their own accounts and restricting them from changing their state of residency, Coinbase is effectively “stealing” Bitcoins from users in America. This is starting to look a lot like Mt. Gox, the formerly most popular Bitcoin wallet which stole all its user’s Bitcoins in a surprise mass theft maneuver and closed up shop, never to be heard from again. Related: Read the top ten things you don’t know about Bitcoin that could cause you to lose everything.

Coinbase “theft” of Bitcoins demonstrates the extreme risk that comes from holding Bitcoins

What Coinbase demonstrates yet again is the extreme risk that comes from holding Bitcoins in an online wallet. At any moment — and without notice — Coinbase can seize all your Bitcoins, too, denying you access to your own account.

Because Bitcoin is entirely unregulated, it can essentially do anything it wants, including “stealing” user accounts and denying users access to their own wallets. If such activities were taking place in the banking industry, Coinbase executives would be arrested and charged with criminal fraud.

If you are using Coinbase, you are just begging to have your Bitcoins stolen or seized. The total dollar value of Bitcoins that have so far been “stolen” by Coinbase from users in Wyoming and Hawaii is unknown, but given current Bitcoin valuations, it’s almost certainly in the tens of millions of dollars.

Users complain of Coinbase stealing their money

From the Coinbase reviews page of Highya.com:

• WARNING: Stay away from Coinbase: Coinbase is a site of criminal thieves that will steal your money. Stay away! Coinbase is not to be trusted. As with many other complaints I have seen, they have lost/stolen from me as well, they have no phone number posted anywhere to contact them, they will not answer to any complaints you have from the website, or if they do eventually answer to a problem from the website after several weeks, they will just tell you there is nothing they can do. I am contacting any and every review site I can find to warn as many people as I possibly can. I am opening a case with the Better Business Bureau, and any other authority I can contact. Do not use Coinbase; stay away!
• Coinbase said they no longer can operate in Hawaii. Ok, I can deal with that. They said to liquidate and get your money. Well, I’ve been going in circles to do just that, and it is NOT HAPPENING. POOR, poor service. Beware, I wouldn’t trust them with any other funds, I can’t even get back my $140+ USD. Sad.
• I only got 5.54 BTC out when I had to “close out” to an external wallet on May 17th, 2017. The send back from BLOCKCHAIN on the 15th was stollen, netting the scamming Coinbase 1BTC or $1,700 off of me for some rule breaking they never named as I was ONLY sending Coinbase to MYSELF. You sure can believe they NEVER answered a single email to their BS “support” email as to what the “violation” was. DO NOT store BTC in Coinbase or you will be sorry!
• TOTAL RIP OFF: They stole money from me and then closed by account when I called them on it.

Bottom line? Beware of Coinbase in particular and any Bitcoin wallet in general. The Bitcoin industry is rife with con artists, fraudsters and thieves. We will be documenting all this in detail with the launch of a new site called BitRAPED.com

BITCOIN BUBBLE: Seven simple, self-evident questions that will cause you to steer clear of the Bitcoin bubble mania

I’m really enjoying the vigorous debate about Bitcoin taking place across the liberty movement. It’s really interesting that many of us who are anti-central bank actually have sharp disagreements now on the Bitcoin situation. Yet we’re all pro-crypto-currency, and we all hope Bitcoin succeeds in the long run. (I’ve been mining Bitcoin for quite some time, and I fully understand the crypto-currency structure.)

As you may know, I’ve recently taken the position (in just the last couple of weeks or so) that Bitcoin is headed for a catastrophic collapse because it currently exists in an irrational, speculative bubble driven by clueless noobs who think Bitcoin generates wealth by magic. Others completely disagree, saying that Bitcoin has only just begun to grow and could reach $1 million per coin. This is an exciting disagreement for the simple reason that somebody is going to eventually be proven really, really WRONG. (Without this division, no market can function at all, by the way. All markets require two opposing sides who disagree on the value of a particular asset.)

I was correct about the dot-com crash in 2001, by the way, and was also correct about the sub prime mortgage collapse. In both cases, before those crashes took place, I was routinely ridiculed by people who insisted “the rules are different this time” and said I was being pessimistic, since “everybody is going to get rich” as long as they all buy in. Sound familiar? This is all the same stuff you’re hearing now about Bitcoin. What Bitcoin promoters don’t seem to realize is that they sound just like the dot com promoters in 1998… who eventually lost nearly everything when the crash happened in 2001.

In any case, I should state for the record that I don’t intend to imply any personal attacks against individuals who disagree with me in this space. We’re all pro-liberty and we actually share a lot of the same goals about making corrupt governments and central banks OBSOLETE, but I do disagree with their justifications for saying Bitcoin will keep going higher. So in the spirit of continuing this “vigorous debate,” I hereby present several questions that, once you answer them, should cause you to seriously rethink the future of Bitcoin.

Seven self-evident questions that will cause you to steer clear of Bitcoin bubble mania

Question #1) Apple produces iPhones. Amazon produces fulfillment services for millions of products. What does Bitcoin produce?

Answer: Nothing. That is, nothing other than increasingly irrational speculative expectations for the price of Bitcoin. Bitcoin isn’t a company and Bitcoin produces no products. As a non-entity, it has no revenues, no assets, no patents and no employees. 100% of its value is based on faith, and faith is a fickle thing.

Question #2) Bitcoin’s “value” has increased by 350% in the last 12 months. What has Bitcoin introduced in that time period that would justify a 350% increase in its value?

Answer: Nothing other than increasing expectations (i.e. “hype” and mania). Again, there is nothing any person can point to in the last 12 months that would cause Bitcoin to be suddenly worth 350% more, other than a 350% increase in the speculative “faith” in Bitcoin itself. There aren’t 350% more merchants accepting Bitcoin, for example, and there aren’t 350% more awesome uses for Bitcoin. If anything, Bitcoin is now slower and more expensive to use than it was 12 months ago, meaning the advantages of Bitcoin over other forms of money transactions are eroding. The only mathematical reason why Bitcoin is 350% higher now than it was 12 months ago is because 350% more money has been thrown at it, almost entirely by speculative investors whose only goal is to ride the wave of speculation higher and higher, then sell at whatever they think is the top. They see Bitcoin as a “get rich quick” vehicle and nothing more.

Question #3) Bitcoin is being promoted as a “store of value,” yet it frequently will correct by 30% – 50% in under 48 hours. What is YOUR definition of a “store of value” and how does Bitcoin fulfill your definition?

Possible answer: A store of value should have minimal volatility. It should neither gain value overnight, nor lose value overnight. It should be something with a long, multi-generational track record of preserving wealth. Very few things in our world meet these qualifications. Some of the things that do are gold, land and fine art (museum quality). Shares of stock in certain corporations have also stood the test of time (Lloyds of London), but crypto-currencies have existed for barely a single decade. There isn’t a single crypto-currency that has stood the test of time.

Question #4) If you are holding Bitcoin in the hopes of selling it at a higher price, how will you know when to sell it? (In other words, when has Bitcoin reached its peak, in your mind?)

Possible answer: No matter how high Bitcoin goes, lots of Bitcoin holders will continue to insist it will go much, much higher. With people now throwing around estimates of Bitcoin reaching $1 million per coin — without any real justification to back it up, by the way — you would obviously be a fool (according to this logic) to sell it at $10,000 or $100,000 or even $500,000 per coin. Ask yourself: What’s your selling point? How will you know when you reach it? What is your argument for why that selling point isn’t NOW?

In reality, you will sell Bitcoin when everybody else panics and starts selling Bitcoin, too. Like nearly everyone else, you will follow the herd and do what they do. That’s why all speculative bubbles rapidly lose value in a runaway panic once people come to their senses. It’s also why all the masses who think they are buying low and selling high actually end up buying high and selling low.

Question #5) What does Bitcoin offer to secure its dominant market position that no other crypto-currency offers?

Possible answer: Nothing other than name recognition, and that’s fading fast. With Litecoin, Ethereum, Zcash and other crypto-currencies rapidly gaining market share, Bitcoin has now dropped below 50% of the aggregate crypto-currency market capitalization for the first time. Visit CoinMarketCap.com to see a list of 100 more crypto-currencies, including Ripple, Dash, Stratis and Monero. Many of these crypto currencies are technically more advanced, more secure and more anonymous than Bitcoin. There is really nothing Bitcoin has that’s unique enough to prevent people from selling Bitcoin and moving into some other crypto-currency en masse. Thus, the argument that Bitcoin will be worth millions of dollars per coin because it will become the world’s dominant crypto-currency and eventually replace the U.S. dollar really has no rational basis.

Question #6) What is the profile of the typical “new buyer” to Bitcoin today vs. five years ago?

Possible answer: Five years ago, Bitcoin was being purchased by pro-liberty, high-IQ technical people who understood encryption, peer-to-peer structures and the distributed blockchain ledger. Today, Bitcoin is being purchased by Japanese housewives who think it’s a “get rich quick” discovery that generates wealth by magic. The radical change in the mindset of the people now ENTERING the Bitcoin marketplace should tell you something very important about where this is headed. People who have no specific loyalty to decentralization, peer-to-peer cryptology and borderless, bank-less currency also have no specific loyalty to Bitcoin or any crypto-currency at all. Once the “new thing” mania wears off on the noobs, they will flee Bitcoin and hop to the next popular investment craze that comes along.

Question #7) How will you sell Bitcoin if the power grid goes down?

Answer: You won’t. Without electricity, Bitcoin ceases to exist for the simple reason that it only exists as a computational hologram, requiring both a steady stream of computational power and a functioning internet to stay alive. Now, you might argue that the risk of the power grid going down is very slim. But NASA puts that risk at about 12% every decade due to the appearance of massive solar storms that would fry the current power grid structure and thrust much of our world back into the 1800s. A single EMP nuke attack from North Korea would also accomplish much the same thing.

For these reasons, Bitcoin is highly vulnerable to EMP, solar flares and nuclear war. Physical gold, however, outlasts all such disasters for the simple reason that gold is an element of matter and cannot be destroyed by any normal means, even if you try. (You can’t burn gold. All you can do is melt it into another shape of gold.)

I haven’t heard a single rational argument that explains why Bitcoin isn’t in a speculative bubble

Since I began warning about Bitcoin valuations a couple of weeks ago, I’ve been criticized by several Bitcoin advocates who nonetheless share my philosophy of liberty, self-reliance and decentralization of the money supply. I’ve read their arguments and attempts and logic, but none of them that I’ve seen have been rooted in anything resembling rational thinking.

What I really see right now is Bitcoin holders engaged in Bitcoin self-delusion, which is understandable because it’s a psychological phenomenon that’s well known in the world of speculative investments. Once people make a speculative investment decision in anything, they then begin to subconsciously find ways to rationalize that investment, convincing themselves more and more that their decision must have been a good one. These people, in other words, aren’t lying to you when they say they believe Bitcoin could go up to $1 million per coin: They truly believe it!

That’s why it’s dangerous to listen to Bitcoin analysis from people who own Bitcoin. It carries the same pitfalls as listening to stock buying advice from someone who’s trying to get you to buy the same stocks they already own: There’s an inherent conflict of interest at work. Only someone completely outside the system — who owns no substantial amount of the asset — can look at it with a clear head.

That’s where I’m coming from. I own almost no Bitcoin (about 0.35 Bitcoins at the moment), having recently traded Bitcoins for physical gold. If Bitcoin goes up, I profit virtually nothing, and if Bitcoin goes down, I lose virtually nothing. I’m approaching the Bitcoin issue with a clear head and an objective, rational mindset which just happens to be unpopular among Bitcoin holders for all the obvious reasons. They see my articles and commentary as a risk to their Bitcoin assets, which is proof that Bitcoin’s valuations are so fragile that the mere criticism of the Bitcoin bubble might cause a wipeout of Bitcoin value. (If Bitcoin were really a store of value, its holders would have nothing to fear from someone talking about Bitcoin being in a bubble, would they?)

Bitcoin holders to the world: Shut up, stop asking questions and just BUY MORE BITCOIN, dammit!

Yet, they have a serious double standard in criticizing me for talking about this. Essentially, I’m being told that I should “stick to health topics” and stop talking about Bitcoin because only Bitcoin people know what they’re talking about. At the same time, they insist that everybody should own Bitcoin because the crypto-currency should be so widely adopted everybody has some. Do you see the obvious conflict? On one hand, they claim Bitcoin is so specialized and technical that only certain “Bitcoin elite” have the right to talk about Bitcoin. But at the same time, they claim everybody should buy Bitcoin, presumably even if they don’t understand how it works and have no right to talk about Bitcoin. This entire argument strikes me as borderline hucksterism. If everybody is supposed to own Bitcoin, why can’t everybody talk about Bitcoin? Are we all supposed to just buy Bitcoin, ask no questions and shut the hell up? Seriously? This is the argument of the “liberty-oriented” Bitcoin movement now?

BOTTOM LINE: Even though I have a long track record of promoting crypto-currencies like Bitcoin, the Bitcoin hype has now clearly turned into a “mania” craze. And what takes real courage and integrity is to state the obvious when everybody else is attacking you for doing so. Right now, I’m calling bulls##t on the current Bitcoin mania… at least until the speculative noobs are fleeced out of the system and Bitcoin values return to rational levels. Once that happens, I may very well advocate Bitcoin again. It’s not Bitcoin itself that’s the problem here, you see: It’s the bubble mania that’s going to hurt a lot of people who are buying into Bitcoin right now.

By the way, the only way new investors can “buy Bitcoin” is if someone is selling Bitcoin to them, which means by definition that plenty of Bitcoin holders agree with me because they are obviously selling Bitcoin to new buyers, trading digital ledger entries for cash and thereby transferring Bitcoin price risk to the noobs, most of whom will likely lose the vast majority of their investments once the Bitcoin bubble bursts.

Bitcoin will likely go down in history as the greatest financial fleecing of Asian investors in the history of the world.