Both the Hack and the Response Indicate That Bitcoin CANNOT be Trusted—EVER!
Bitcoin Hack Costs Bitcoin Holders a Proportionate Amount of Their Holdings
State of the Nation
The following development with Bitcoin occurred — quite incredibly — for bitcoin holders at the hacked Hong Kong exchange earlier this month. First, the digital payment system was mysteriously hacked; then all Bitcoin holders at that exchange were assessed a loss to cover the amount of the stolen bitcoin value.
This whole event is both highly suspicious and extremely strange. Nonetheless it has imparted valuable understanding about the CON GAME that Bitcoin really is.
How does a bank asset-holder lose a portion of their asset because a thief walks into the ‘bank’ and makes off with a big haul? The depositor does not lose their money because of bank incompetence, and the bank is even reimbursed by their insurance company. The net loss to the depositors is always zero in the banking sector.
The same thing would occur if someone stole stocks or bonds from the holding company, carbon credits or commodity contracts from the broker, and physical gold or silver from the gold dealers vault.
This whole Bitcoin hack sounds like a HUGE warning to all holders that your asset IS NOT SAFE in any way, shape or form. Not only is Bitcoin so hackable that it can be stolen outright, it is also not properly insured. Nor are one’s Bitcoins holdings safe in the event of a Bitcoin heist having nothing to do with the Bitcoin-holder’s deposit.
Truly, this entire scam sounds like it was created by the same folks who created the Federal Reserve … only in this case the scheme is stacked against the investor/depositor even more—much more!
Blessing in disguise
Let’s be real here. First of all no one even knows who really created the Bitcoin platform. How utterly silly is that. It ought to be obvious now why this is so—if there was a name they would be tracked down and found out to be another CIA cutout who was contracted by The Company to fabricate a payment and digital currency platform that had as many holes in it as a CIA hit. Apparently they gave the creator a nice Japanese name to confer some Oriental legitimacy on him. We all know how digitally capable and ever-inventive the Asians are, don’t we?
How stupid do these people think we are? Well, those folks who continue to own and use Bitcoin in the wake of this highly publicized hack and loss are quite stupid indeed. That such an eventuality was even possible and yet not properly disseminated by prospectus or contract agreement is as inconceivable as it is ridiculous.
Certainly some of those folks lost a lot of Bitcoin value because of the utter ineptitude and irresponsibility of the Bitcoin operator. However, all losers ought to consider this event as massive wakeup call. It is a real blessing in disguise, it is. We’ll bet that the policies have not even been changed so that such a loss can never take place again. Of course, Bitcoin will forever be hackable because that’s the way it was engineered … just like every CIA-conceived operation has a backdoor (e.g. Microsoft, Facebook, PayPal).
Get as far away from Bitcoin as you can. It appears to be a total joke from every angle.
Reality Check: Until the Almighty Dollar — IN ITS CURRENT FORMAT — completely collapses, there will never be another legitimate or strong enough currency — hard, digital or otherwise — that will be allowed to compete with it. The BRICS economic union is already putting up enough competition against the dollar-denominated universe known as the Petrodollar. Surely the “Financial Masters of the Universe” are loathe to permit any other viable alternatives to the rapidly deteriorating US Dollar.
What follows is a post from ZeroHedge that spells out the crime against Bitcoin and then the crime by Bitcoin. This institutional reaction will go down in history as the faux pas that exposed Bitcoin like no other. What a scam! Oh, yeah, it was founded by one “Satoshi Nakamoto”, so they say. They are C.I.A., of course, who control the MSM lock, stock and barrel.
What an absolutely absurd state of affairs. And, yet, just like the Flat Earth Theory, people still go for it! What a place!
Did we forget to mention? Bitcoin’s main competitor was also hacked big time in June of this year. How convenient!
State of the Nation
August 23, 2016
The First “Bitcoin Bail-In”: All Bitfinex Users To Lose 36% In “Shared Loss” After Historic Hack
Last week’s sharp, 30% plunge in the price of bitcoin (and its latest competitor, ether), after news hit that 119,756 bitcoins, or about $70 million, had been stolen from the Hong Kong-based bitcoin exchange Bitfinex, demonstrated once again the biggest risk with digital currencies: despite claims to the contrary, outside hacks remain a key threat and risk to anyone holding (obviously, we use the term loosely) digital currencies.
Now, adding insult to injury for those who “held” their BTC at the hacked exchange, Bitfinex announced it would pull a page right out of Europe’s bank resolution mechanism, saying that all of its users will lose 36% of their deposits after it concluded its review the massive hack, in what is set to be the first ever “bitcoin bail-in.”
And, in pulling another page out of Europe, Bloomberg adds that to compensate its customers, Bitfinex users would receive (largely worthless) tokens that may later be redeemed or exchanged for shares in its parent company. Following the announcement, bitcoin climbed to $599 in early trading on Sunday. The virtual currency had dropped 12% to $577.23 in the week through Friday, its largest weekly decline since June, however has now recovered all of its sharp drop which had seen its price tumble as low as $470 on August 2.
“After much thought, analysis, and consultation, we have arrived at the conclusion that losses must be generalized across all accounts and assets,” the exchange wrote in a blog post on Saturday. “In place of the loss in each wallet, we are crediting a token labeled BFX to record each customer’s discrete losses.” Good luck monetizing said “token.”
The blog post ended as follows:
Thank you for your continued patience and for the many generous offers of support that we have received over the last several days. Notwithstanding this attack, we continue to believe in the possibilities associated with bitcoin. We will continue to update our customers and the public as and when we can.
According to Bloomberg, a representative of the exchange wrote on Reddit that the 36% loss“applies to all assets across the site, so everyone.” The exchange previously said losses would only apply to users who either had bitcoin deposited at the exchange or who were in the process of lending U.S. dollars for margin trading.
Following Tuesday’s Bitfinex hack, the exchange closed down trading, withdrawals and deposits and said it was cooperating with law enforcement and would update the public after its investigation. In the latest blog post, it said it will reopen with limited functionality in the next day or two. Bitfinex was the largest exchange for U.S. dollar-denominated transactions over the past month, according to bitcoincharts.com.
As we predicted one year ago, the main reason for the surge in bitcoin has been the explosion of Chinese users of the virtual currency, who have rushed into bitcoin as one of the few remaining options to bypass Chinese capital controls on monetary outflows. As such the Bitfinex hack, impacting numerous Chinese participants, has not come as much of a surprise: what better way to limit trader euphoria for an asset that has soared nearly 200% in the past year than by “forcing” a loss of nearly a third on everyone involved.
It remains to be seen if this latest bail-in “glitch” will temper Chinese euphoria for the digital currency; considering the sharp rebound which has practically filled the entire hack “gap”…
… hackers will have to work overtime to temper the infamous Chinese enthusiasm for buying more of things that go from the lower left to the upper right.