Delingpole on Friday: My Litecoin Hell: or Why the Geeks will Inherit the Earth

This is the story of how I lost £100,000. Or £250,000. Or £1,000,000. Or God only knows the way Bitcoin and Litecoin are behaving at the moment. But whatever: I wanted to buy into Bitcoin and Litecoin much earlier than I managed and had I done so, I would have been able to buy a lot more of them for much, much less, and thus ended up a lot, lot richer….

And the reason I didn’t? Well have you ever tried buying XBT or LTC when you’re a) not a geek, b) you’ve never done it before and c) you live in a world where the entire banking regulatory system is perfectly useless at actually protecting you from bad shit but utterly ingenious at devising ever more complex ways to deny you access to the money in your bank account?

As a card-carrying member of all three categories I can tell you. It sucks.

Problem #1. My bank. Lloyds.

So there I am: good to go. Money in the account, gagging to be transferred into XBT or LTC as soon as possible. But there’s a problem: my home phone number has changed and I haven’t yet updated it on my online banking facility. So I can’t do a bank transfer because when the bank does an automatic ring back to check it’s me, I won’t be there to type in the confirmation code.

Still, should be easy enough to fix, right? Just type in my new phone number and….

Nope. Turns out if you want to change your phone number you have to wait THREE days before the bank can register it.

But this is stupid. I’m me. I’ve definitely got money in my account. I definitely, definitely want to buy some Bitcoin now. There’s bound to be a way round this – and there is, claims the online website. I just ring up telephone banking.

So I ring up telephone banking. They ask for my telephone banking code. “You mean my password, that I’ve been using for years?” No. My telephone banking code. “What telephone banking code? What’s wrong with my old password?” Sorry without my telephone banking code they can’t process any payments on the telephone. But it’s OK, if I put in my request now, they’ll have my code sent to me within three days.

Problem #2 Technology. So I go to the Litecoin website and download the software for my Litecoin Wallet but up comes the error message telling me it can’t be opened because it is from an “unidentified developer.” This, of course, means nothing to me. I am not a techie. That’s why I ring my tech guy for support.

My tech guy tries to explain: something to do with security settings. But I still don’t understand so he arranges to do a screenshare. Unfortunately there are some glitches with his laptop and I have to go out. Now it’s the weekend and I don’t want to hassle him over the weekend. It will have to wait till Monday.

Later I will work out that the money I have lost in this delay is far greater than the several thousands of pounds I have paid the tech guy in the last two years to be my tech guy. Grrr.

Problem #3 (I’m giving you the abbreviated version here. There are many more problems than just these three). How do you buy Litecoin by bank transfer? Answer: with enormous difficulty, as I find when I go on to some Litecoin forum or other, with lots of retro-looking typed communication (no fancy design) like in the old days before the internet properly took off. “What is this place? Is it like the Dark Web?” I type in. Someone else types: “Think we’ve got us a troll.” “No. I’m not a troll. I’m an English Literature graduate. I know this is hard for you techies to believe but there are actually people out in the real world who find this computery stuff very difficult.”

Anyway, I’m referred to a site called www.kraken.com – which claims to be able to sell Bitcoin and Litecoin for cash, until you read the small print and realise you have to “Get Verified.” This involves submitting bank statements, passport copies and such like, then waiting for hell to freeze over. (Which hell doesn’t by the way: that’s the whole point of the phrase. And so it is with Kraken’s verification procedure. One week on my application is still “processing.”

In the end I buy my LTC from Sef at Clickshop.com. It’s a bit scary, doing a bank transfer, to an internet address in exchange for magical fairy money. But Sef is as good as his word – and I’d recommend him. Within minutes of the bank transfer, my LTC are in my wallet. The next day I order a few more. Annoyingly – or perhaps vindicatingly if you’re a glass half full kind of person – the price has already gone up by 50 per cent.

What does all this mean?

1. Bitcoin and Litecoin and the other crypto-currencies have the potential to go a lot, lot higher once they become useable by and comprehensible to people outside the world of tech, Austrian economics and survivalist nutcasery.

2. The geeks shall inherit the earth. (Not that we hadn’t guessed this already)

3. Cryptocurrencies are the inevitable, honest response to a world so crippled by red tape and rigged markets that it has all but ceased to function. If your bank won’t let you use your own money to pay the people you want when you want; if you can’t use gold or silver as a hedge against the inflation you know is being caused by money-printing; if you’re feeling increasingly over-surveilled by a grasping State which you know, one day, is going to punish you for its decades of overspending by finding one way or another to confiscate your assets; then what other option do you have but make the financial equivalent of moving off the grid?

This is why, of course, Big Brother will eventually find a way of destroying this nice little thing we techies, Austrian economics buffs and survivalist nutcases have got going. But, hey, it will be fun while it lasts…

9 comments on “Delingpole on Friday: My Litecoin Hell: or Why the Geeks will Inherit the Earth

  1. Orc Knee
    November 29, 2013 at 2:35 pm #

    I bought my first BTC when they were 13Euros a pop….ah those were the days, shame I ‘smoked’ ’em instead of keeping them for a rainy day. lolz
    If you’re bying NOW, it’s a little late my friend…..you gonna get burned big time…..

    Wait a bit…..they will return from ‘tulip territory’ when the muppets have finished their bying spree.

  2. R Slicker
    November 29, 2013 at 3:11 pm #

    South Sea Bubble?

  3. Kevin Lohse
    November 29, 2013 at 3:15 pm #

    Why not cut out all the middle-men and plump for black tulips?

  4. grumpyoldmanuk
    November 29, 2013 at 3:16 pm #

    Why not cut out all the middlemen and plump for black tulips?

  5. Mots
    November 29, 2013 at 3:40 pm #

    Why not cut out all the middlemen and plump for black tulips?

  6. Mots
    November 29, 2013 at 3:44 pm #

    or.. why not cut out all the tulips and wait for plump middlemen.

    Invest in real assets:
    – experiences
    – food & shelter
    – artwork you really enjoy
    – the welfare and education of others and those you love

  7. therealguyfaux
    November 29, 2013 at 7:14 pm #

    Something to remember, about attempting to “invest” in any “sure thing,” besides “Hold out cab-fare home” (as the wisdom of the race course has it):

    Once you find out people are borrowing to buy anything of value– and the cost of the borrowing is too low, relative to what they believe the appreciation in price is, for them not to do so, i.e., they believe they will pay off the interest with “house money,” somebody’s going to come in and short these people right outta their socks. They’ll have to liquidate to pay off their loans, the price will continue way down, and the shorts complete their trades with a much cheaper item.

    How else do you think Joe Kennedy and Bernard Baruch could have made money off the 1929 Crash?

    Am I missing something here?

  8. 3x2
    December 1, 2013 at 7:38 pm #

    Apart from the ‘difficulties’ you outline, the other element that puts me off is volatility.

    If Bitcoin were to steadily rise with the occasional ‘new plateau’ reached every now and again as, say, Paypal and e-bay (Amazon … M&S .. BoA) started accepting the stuff then I could see its new value. What we have instead are wacky moves up and down that seem to have no ‘new news’ behind them.

    Currently $1000/BTX, Why? There has been no new news that would push BTX from 200 to 1000. I’m thinking ‘market manipulation’. BTX hasn’t suddenly become rarer, USD hasn’t suddenly lost its value, BoA hasn’t suddenly jumped into the BTX market. And Lloyds Bank are certainly not going to exchange JD’s Bitcoins for actual GBP.

    So why would any commodity go 5x ‘overnight’? What I am saying here is that Bitcoin may well be a good idea in principle but it looks an awful lot like a game of ‘pass the parcel’ that will end in tears for many and ‘big smiles’ for the few.

    I may well ‘miss out’ on the boom but then again I won’t be one of the many poor ‘saps’ who loose a lot of ‘USD’ playing a market that they don’t really understand. Any market that can do 5x ‘overnight’ is a market to avoid – unless you are a ‘market maker’.

  9. duncanpt
    December 2, 2013 at 3:11 pm #

    While obviously about as portable as gold bullion, sealed bottles of high quality whiskies and liqueurs strike me as an interesting store of WTSHTF value, which can easily be negotiated and exchanged for goods and services in small, neat amounts. Something that Bitcoins and gold may not be able to compete with if there’s no power, no transport and no internet.

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