Max Keiser talks about Bitcoin and Litecoin on BBC Newsnight! All about digital currency

we're gonna call all competing currencies enough to make the Bitcoin almost look pass a virtual currency has exploded onto the public imagination this year particularly fans are hope it's their passport to a quick fortune these currencies bypass governments and central banks regulation and oversight is the thing that makes them so attractive but ultimately uncontrollable they've been seen since their inception as a shadowy form of trade but this week they got the seal of approval or at least recognition by none other than the Fed Chairman so how's that time come there's Simon Jack what is money really well for most people it means cash here on Wrigley Road Market in London's East End the only way is cash it's something you can fold up put in a pocket stuff in your mattress if you want it's something you can believe in but in some quarters that belief in paper money is beginning to crumble some things have value because they are either desirable or rare like gold diamonds or famous works of art the problem with money is that it is anything but rare central banks around the world are printing the stuff like it's going out of fashion but for some people it already has using horribly complicated computer code programmers have replicated some of the qualities we value in something like gold powerful computers compete like prospectors to unearth ore mine the coins in cyberspace but there is a finite supply of them here you have a token which is impossible to dilute impossible to counterfeit and just like people would consider buying gold during inflationary times they are considering buying Bitcoin and buying pecan I think many people are buying Bitcoin because they're afraid of inflation so all very clever but what's the use of something that only exists in the ether you can't take that down the pub well actually you can write a drink I think to buy a drink I'm gonna need one of these or one of these he goes great thank you very much thank you very much and cake that was 0.007 one bitcoins to pay so far virtual currencies have been in the shadows of the financial system an experiment in creating a new form of exchange but when the world's most powerful banker name checks them people sit up and listen while these types of innovations may pose risks related to law enforcement and supervisory matters there are also areas in which they may hold long term promise a word or phrase from the Fed Chairman can move markets and this was no exception Bitcoin soared in value after these recent comments bitcoins are now worth seven hundred and thirty dollars each just two years ago it was three virtual currencies can also be used anonymously making it the perfect black market currency the Silk Road was an online Emporium selling illicit goods for cyber cash last month it was shut down by US agencies and the value of bitcoins plummeted Bitcoin depends on an entire infrastructure millions of computers linked together and it depends on businesses like Bitcoin exchanges which allow you to switch from Bitcoin to other currencies it depends on the internet effectively and so this idea it's a sort of post government currency a currency able of getting around government is it's kind of silly because government can pull the rug on Bitcoin very easily in Canada there are even Bitcoin ATMs so should we all rush out and buy them well it's extreme volatility is one reason that even its biggest advocates say buyers should beware I'd encourage people to do research and only risk as much as they're willing to comfortably lose in Bitcoin or any other virtual currency you don't take Bitcoin thieves Bitcoin so you better keep a few readies on you you may need them that was Simon jacket joining us now the former broker Max Keiser now broadcaster and Jeremy cook chief economist at world first foreign exchange just one welcome to you both I wonder if max you think this is the tipping point that you get the Fed Chairman name checking it does it feel mainstream to you now well first of all I can tell you that Jeremy is sweating bullets because the Bitcoin does everything his firm does but faster and cheaper you know it's already rivaling Western Union the number one money transfer in the world eclipsing them in volume per day so firms like Jeremy's now in the crosshairs let's pretty calm to me he's in denial he's in denial Emily he's in denial in shock if it hasn't one of you if we we've we've heard we've heard from Ben Bernanke talking about how he's acknowledged the Bitcoin but the caveat that he put it on the top of that was about law enforcement it was about the safety of bitcoins the ability to be able to obviously they can't counterfeit them that's one of the one of the reasons why people buy into these things but the reason why people are so scared about them is the ability they can't be traced the anonymity of it all and certainly payment institute is like world first actually hold the world record for them making a payment between two countries by the way master there's a 150 million dollars was transferred today using bitcoin for a fraction of a cost that no firm including Jeremy's would ever ever approach so this is a real genuine threat to that industry number one number two you talked about the counterfeiting you can't counterfeit Bitcoin that's a real problem with the British Pound or the American dollar is that they're being printed willy-nilly to solve lots of problems that politicians can't seem to solve so they simply print money i people are panicked panicked by what's happening in the banking in the central banks and they're moving into something that they perceive as having to store a value risk well they're always talk about the bitcoin is always talked up by people who own it but just their speculation good people use it every single day to transfer money all over the world it has a primary purpose as a means of transferring money number one number two it's also a currency that's why it has huge value in this economy my sister I mean what is interesting is the fact that people have chosen something that they think governments and bypasses regulation that says something about the socio-economic movement which we're going through at the moment and every time you have a socio-economic movement you have to have a money behind it a currency behind that be that golden at the moment this seems to be Bitcoin I'm happy with that socioeconomic medicine it's a libertarian movement it's a by the people for the people get away from big government get away from big industry get away from the people pollutes Forex scandals the the scandal is an HSBC laundering money they talk about Silk Road and the drugs Association what money HSBC billions of dollars of money laundering right there the current scandal with copal are scared by the banking in this country around the world you heard that you heard the point the commentator made there that people think it's a post government currency it's not because the government can step on it or stamp it out if they want to that's false why because it's completely outside it's like p2p file swapping in hit the music industry this is the p2p file swapping of money and so the banking system in the current regulatory environment it will be as effective at stopping that as the music government's law uses bitcoins if they see it as a threat they will they will take it off the people wheel we all know that I don't see how do they do that then I mean how do they how do they take it off people if they if they confiscate it's just like I've got cash in my wallet now there's no way of insuring your bitcoins against loss it's one of the big fears about it they can simply take it off you they can get it off your computer and if they feel it as a threat this is what's happening in this industry the regulatory environment in the US and the UK versus the rest of the world in China India around the world Bitcoin is now the unbanked of the world six billion people they don't really have access to banking infrastructure as such are now using these currencies are using it with our mobile technologies and they are going to lead this market the number one market for Bitcoin right now is in China and if the US and UK don't want to compete the water if they don't want to compete in this market then they can go home we don't want them to where do you say Bitcoin to people a lot of people will think automatically of the darknet they'll think of the drugs I think of the child porn they'll think of the rather seedy side of the transactions that people don't want to up front isn't that where a but that's no of course not that's a very minor part when Silk Road was busted silk coin the Bitcoin started to move up in value because you got rid of what was perceived as a bad agent in the market there's a commerce element to Bitcoin fine but the majority the reason why we're looking at Bitcoin now is the huge increase in price and that's what really takes it away as a currency if I if I owe you 200 pounds and say bitcoins rating at 200 pounds I can give you a Bitcoin and say there's are two hundred pound debt is paid tomorrow the value of Bitcoin I've got away 116 percent risk so we're seeing the day maybe instant transaction using a serbs like bitpay for example no concert okay which not many people will take at the moment right what about all the other currencies I mentioned at the beginning there the peercoin and the hobo nickel and all the rest of it you think there's any future I mean obviously if you can do an algorithm you want to code a new coin right effect ation I think yeah that aren't going anywhere aren't going it aren't going anywhere a nice a nice thing for online they will always have a following will you ever invest in in look at it a couple of years ago how to place see what the infrastructure behind Brad saw this I said today's excepting prototypes or is is interspatial flight new programs and he's already put a quarter million dollar seat with it so people are accepting bit there's 20,000 merchants on accept Bitcoin and it's one thing to do a bit could thanks very much indeed thank you babe thank you probably the most influential man you've never heard of Sir Johnny I've is the Chingford born designed

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