Xapo CEO and founder Wences Casares explains why, after a 5,000 year reign, gold has been surpassed by bitcoin as the ideal ledger.

Bitcoin is a new digital currency that is perhaps the best form of money that we have ever seen. It’s important because most of us don’t understand money very well and perhaps the concept that is hardest for us to understand about money is that money is and has always been a ledger. And people often ask: “What is money backed with?” And the truth is money’s not backed with anything. It has never been backed with anything. The euro is not backed with anything in particular and neither is any other currency in the world. And gold, for example for that matter is not backed with anything either.


Some people think that gold has value because we use it for jewelry but it’s actually the other way around. Gold is valuable because it’s very scarce and because it’s very scarce it has been the best ledger we’ve found in 5,000 years. In bitcoin we have something that is as good a ledger as gold, meaning it’s incredibly scarce. There will never be more than 21 million bitcoin. It’s even more scarce than gold.But in history we have had this tradeoff between things that have been very, very good store of value like gold for example and things that have been good for payment like the Portuguese escudo, the U.S. dollar, American Airline miles, or Facebook credits. Those things are better for payment but they’re not so good as a store of value historically. And the things that are good for a store of value like gold are not good for payments.

In bitcoin we have something for the first time that is incredibly superior than anything we have seen before as a store value and also as a form of payment.It’s hard to have a rigorous discussion about bitcoin without understanding money. And the best way to understand money is to understand the history of money. Anthropologists agree that there’s no tribe, much less a civilization, that ever based its commerce on barter. There’s no evidence. Barter never happened. And that’s counterintuitive to most of us because we are taught in school that we first barter and then we made money because barter was too complicated.

Well, barter never happened and that’s one of the key myths about money. So then you would ask the anthropologists, “So how did we do commerce before money if there was no barter? There was no commerce.” No, there was plenty of commerce and the way that commerce would happen is that let’s say that someone in our tribe killed a big buffalo and I would go up to a person and say hey, “Can I have a little bit of meat?” And that person would say “No” or “Yes, Wences, here’s your meat.” And then you would go up to a person and say “Hey, can I have a little bit of meat?” and that person said “Yes, here’s your meat.”And basically we all have to keep track in our heads of what we owed other people or what our people owed us. And then someone would come to me and say “Hey Wences, can I have a little bit of firewood?” and I would say “Sure, here’s your firewood.” And I have to remember that I owe that person a little bit, that this person owes me a little.

And we all went about our business with these ledgers in our minds of who owes us what and what do we owe to whom. Very subjective system often these debts didn’t clear or clear in ways that were not satisfactory to both parties. Until about 25,000 years ago someone very, very intelligent came up with a new technology that really took off. So a person came to me and said “Hey, can I have a little bit of firewood?” and I said “Sure, here’s your firewood.” And this person said “This time we’re going to try something different. Here are some beads for you.” And I said “I don’t want beads. I don’t care for beads. I don’t need beads.” He said “It’s not about that. We are going to use beads as the objective ledger of our tribe. Instead of each of us having to remember what we are owed the beads are going to keep track for us. An objective ledger to keep track of debt.”

priceofliberty:

"Hmm you spent one dollar more than your account could afford? Better charge you a $36.00 overdraft fee"

FUCK YOU, PNC

Banks have done some really nasty, shitty, stupid things over the last, oh, 1,000 years. But I actually think that overdraft fees are a nice offering.

If you don’t want to pay the $36, you can ask for no overdraft protection (or you could balance your account and make sure you aren’t overspending). Plus some banks allow you until the end of that business day to make a deposit to balance the account and they won’t charge you the overdraft fee. Might be all banks now with the new laws, I’m not sure, but I know that US Bank does it. 

But I understand that many people live paycheck to paycheck so being able to draw a line of credit without any approvals or having to have a credit card can be very helpful. It can also really save people the shame of not having $7 more dollars in their account at that very moment, which is a big plus but nearly impossible to measure the impact of. 

I think that the fee is too high, but that leaves the market wide open for someone to come in and say “I’ll offer overdraft protection for just 10% of the total overdraft and I’ll cap it off at $25”. So if you go over just $1, you owe $0.10. 

Then again, there’s probably a reason no one’s undercut the market yet (probably because the costs of applying overdraft protection are higher than most realize?).

Looks like the stock market got in the ring with 1980’s Mike Tyson.

You’re on a mountainside, you’re watching the snow build-up and it builds up and its wind-swept in its own overhang and it’s unstable and anyone with an experience knows that this is an avalanche in the making. […] A snowflake comes along the petures a few other snowflakes and that starts a little momentum in that creates a slide and then a larger shoot and the whole thing comes lose the avalanche comes down to kill some skiers and buries the village below and that’s your disaster. Now the couple things, number one, who do you blame, do you blame the snowflake or do you blame the unstable snowpack. I would submit that the unstable snowpack is your problem because if it wasn’t one snowflake it would be another maybe one the day before or one the day after. It doesn’t really matter the snowflake doesn’t matter it’s going to come what matters is the fact that you have a very unstable system and as applied to finance […] we have exactly the same situation. James Rickards - “The Death of Money”

As I’ve always maintained, it wasn’t the banks that started the 2008-2009 collapse. It was the governments that artificially changed the market and took the risk out of the high-risk endeavor of lending to people who can’t afford it. 

Before government thought that they could win votes by putting people into houses that they can’t afford, banks would never touch most of these clients and for good reason. 

Once the government forced them to lend and also implied that bailouts would be had, it was a free for all and then it was chaos. 

asker

Anonymous asked: What are your thoughts on all those bankers that have commuted suicide this year? Conspiracy?

I don’t really have thoughts. 

Perhaps they each had some sort of big loss on the year? Maybe they each saw a big collapse coming (rational or not) and didn’t want to be around? Maybe they were all sick of life and lost the will to live? Who knows.

Over 1 million people take their own lives (suicide) each year and that number increases every year (due to longer lives and other factors). 

The chance that a dozen of those 1 million deaths would be bankers isn’t that abnormal to me. 

anarcho-americana:

talesof4chan:

First National Bank of Gamestoptalesof4chan.tumblr.com

this generation is too damn smart for fractional reserve banking

Brilliance. He has it. 

anarcho-americana:

talesof4chan:

First National Bank of Gamestop
talesof4chan.tumblr.com

this generation is too damn smart for fractional reserve banking

Brilliance. He has it. 

What is a Yield Curve

APM Marketplace hadn’t posted a video in a long, long, long time. Yesterday they posted, what seems like, 1,000 videos. All great. 

anarcho-americana:

JPM To Lay Off 17,000 Mortgage Bankers In 2013 And 2014, Because The “Housing Recovery” 

The last time JPMorga had an investor day, Jamie Dimon explained to Mike Mayo why he is richer than him (and pretty much anyone else). This year, Jamie will be more focused on explaining to 8,000 JPM workers why after firing 16,500 people in consumer and mortgage banking, the bank will now let go another 2K and 6K in those same two groups (which will bring total mortgage and consumer banking headcount reductions between 2013 and 2014 to at least 17K and 7.5K, respectively). This may be tricky especially in the context of, you know, the housing and economic recovery, and stuff.

Source:  JPMorgan

It’s also because home sales are down due to lack of inventory and if they don’t foresee home sales, there’s no reason to keep mortgage sales people. Just have a limited staff to man phone calls from current mortgage holders and a limited staff to handle sales and back-end.
As for the consumer banking, why have people when ATM technology is so advanced that they literally give money, take deposits and let you manage accounts all from the Automated Teller Machine. With the increase of online and mobile banking and the increasing cost of human capital and physical rent, it’s a changing business and the cuts come via labor. That’s just the bottom line. 

anarcho-americana:

JPM To Lay Off 17,000 Mortgage Bankers In 2013 And 2014, Because The “Housing Recovery” 

The last time JPMorga had an investor day, Jamie Dimon explained to Mike Mayo why he is richer than him (and pretty much anyone else). This year, Jamie will be more focused on explaining to 8,000 JPM workers why after firing 16,500 people in consumer and mortgage banking, the bank will now let go another 2K and 6K in those same two groups (which will bring total mortgage and consumer banking headcount reductions between 2013 and 2014 to at least 17K and 7.5K, respectively). This may be tricky especially in the context of, you know, the housing and economic recovery, and stuff.

Source:  JPMorgan

It’s also because home sales are down due to lack of inventory and if they don’t foresee home sales, there’s no reason to keep mortgage sales people. Just have a limited staff to man phone calls from current mortgage holders and a limited staff to handle sales and back-end.

As for the consumer banking, why have people when ATM technology is so advanced that they literally give money, take deposits and let you manage accounts all from the Automated Teller Machine. With the increase of online and mobile banking and the increasing cost of human capital and physical rent, it’s a changing business and the cuts come via labor. That’s just the bottom line. 

The Federal Reserve decides to tapper off of money printing and the stock market takes a dive unlike any we’ve seen in the last year and a half. Still believe that all of these “gains” are real?

United States Representative 36th District Texas, Steve Stockman talks about Bitcoins, currency, Wall Street and the future of money.

"Crash". 

"Crash".