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Wednesday, April 10, 2013

Hell Yea! Bitcoin undermines government authority. Imagine market information where buyers and sellers transact economic activity anonymously using untraceable digital cash.


Bitcoin vs. Big Government
How the virtual currency undermines government authority.
Jerry Brito | April 9, 2013
Interest in Bitcoin has surged along with its valuation. Last week saw its exchange rate soar past $100 for the first time ever, landing the virtual currency on the front pages of The Washington Post and the Financial Times. Yet the media frenzy, which has focused on the rapidly rising valuation and its possible causes stemming from the bank crisis in Cyprus, is overlooking Bitcoin’s true radical significance—that it can’t be controlled
In his new book, This Machine Kills Secrets, Andy Greenberg recounts the history of the 1990s cypherpunk movement that paved the way for WikiLeaks and Anonymous. The early Internet’s crypto-anarchists foresaw a future world in which widely available cryptography secured personal anonymity and privacy to such an extent that it threatened the authority of the state. Their key insight, Greenberg explains, is that anything that can be done cryptographically can be done without government oversight.
Before eBay or WikiLeaks, cypherpunks like Tim May imagined online markets for information in which buyers and sellers transacted anonymously using untraceable digital cash. Anything from state secrets to private credit reports would no doubt become available for the right price. These ideas were notoriously taken to the next level by the radical libertarian Jim Bell who proposed a system  for anonymously crowdfunding the assassination of corrupt government officials.
While almost all the technology necessary for such black markets was available when the cypherpunks were writing, there was one conspicuous exception: true digital cash.
Until Bitcoin, virtual currencies have in one way or another relied on a third party intermediary, such as a bank or a credit card company, to prevent “double spending.” In the physical world, if I give you a $20 bill, I will no longer have it. You can’t be as sure of that, however, when the cash is a digital file that can be easily copied. The solution has been to have a trusted intermediary keep a ledger of balances and deduct a transaction’s amount from the payer’s account, and add it to the payee’s.
Intermediaries, however, are the regulatory chokepoints at which government can apply pressure. For example, after WikiLeaks released its trove of State Department cables, payment processors such as Visa and MasterCard succumbed to political pressure and refused to transmit donations to the group. PayPal even froze its account so that the group couldn’t access funds it had already collected. As as a result, WikiLeaks has been driven to near bankruptcy.
Today, online gambling is illegal under federal law and the prohibition is enforced through payment processors, which are not allowed to send money to offshore casinos. The infamous Stop Online Piracy Act (SOPA) also targeted financial intermediaries and would have banned payments to suspected pirate websites.
Bitcoin is revolutionary because it solves the double-spending problem without employing an intermediary; there is only the payer and the payee. The system accomplishes this by distributing the ledger of transactions across a peer-to-peer network of users, much like BitTorrent. This allows a record to be kept of all transfers so that the same cash can’t be spent twice, but because it’s distributed, there’s no one central authority keeping the ledger. This makes bitcoins true digital cash. Like dollar bills or euro coins, if you hand them over to a payee, you will no longer have them. And because there is no third party running the ledger, there is no one for the government to pressure or regulate.
Much of the discussion around bitcoin today centers on whether it will work as money. Money has three functions: it serves as a medium of exchange, a unit of account, and a store of value. Because Bitcoin is distributed, there is no central banker that can decide to inflate the money supply. Some argue this makes it a good store of value, like gold or Picassos, while others counter that Bitcoin’s historic volatility make it a poor store of value and an unreliable unit of account to boot. Given the public’s fear of currency devaluation in Europe and the U.S., the question of whether you can stash your wealth in bitcoin to avoid capitol controls and inflation is what has been driving much of the media’s coverage of the currency.
Time will tell whether the gold bugs or the skeptics are right, but what’s being overlooked is that it doesn’t matter whether Bitcoin makes it as a store of value or a unit of account for it to work as a medium of exchange. Even if the Bitcoin market remains volatile and never pans out as a good store of value or unit of account, one can imagine users converting their dollars or euros to bitcoins for just long enough to make a transaction; perhaps just minutes. And as long as it works as a medium of exchange, it is the true digital cash that was missing from the cypherpunks’ predictions.
With a little bit of effort, today you can purchase bitcoins anonymously with physical cash. You could then do all sorts of things the government doesn’t want you to do. You could buy illegal drugs on the notorious Silk Road, an encrypted website that has been operating with impunity for the past two years facilitating annual sales estimated  at almost $15 million. You could gamble at various casinos or prediction markets, buy contraband Cuban cigars, or even give money to WikiLeaks. Dissidents in Iran or China can use Bitcoin to buy premium blogging services from WordPress, which now accepts payment in the currency. Perhaps more importantly, Bitcoin makes the cypherpunks predictions of markets for stolen secret information and even assassinations feasible.
Last month, the Treasury Department issued guidance on how it plans to regulate Bitcoin exchanges. This is good news for the currency since it implies the government is looking to regulate its use rather than prohibit it. Confronted with Bitcoin’s potential, it’s not reasonable to expect that Treasury’s money laundering cops would simply let it be. So it’s a sensible approach for them to take because Bitcoin, much like BitTorrent, can be used for both licit and illicit purposes and would in any event be difficult to shut down.
Today physical cash is anonymous, which helps keep one’s purchases private. Cash is also difficult to control: a $100 bill never gets “declined.” As we move to an all-digital world, we should ensure that we retain some type of digital cash that is not tied to a financial intermediary that can spy on or control transactions—even if, just like physical cash, it is put to nefarious uses. The real question facing Bitcoin today, then, is whether law enforcement and regulators will continue to show as much restraint as they have so far.

59 comments:

  1. It sounds interesting. I will wait and see.

    ReplyDelete
  2. The Government can listen to all our phone calls, emails, and text messages.

    They can monitor all our internet history.

    They can detain us indefinitely without trial or evidence, if they deem us a threat, in ANY sense of the word.

    They can order us to be killed by a drone strike for ANY reason.

    They are interested in promoting the corporate interests of those who lobby with the most money (Israel, Oil, War), human rights and international law be hanged.

    Do you seriously believe that this will stand?

    ReplyDelete
    Replies
    1. http://www.americanthinker.com/2013/04/why_the_united_states_is_a_dying_country.html

      Delete
  3. .

    I only heard of bitcoins a couple weeks ago.

    Definition of:Bitcoin

    An untraceable, peer-to-peer digital wallet system introduced by Satoshi Nakamoto in January 2009 (Nakamoto's identity is unknown, unverified, and he has not been publicly heard from in print or otherwise since the end of 2010).

    Bitcoins are a true "virtual currency," because they are created out of thin air and not issued under the auspices of any government. Considered a Ponzi scheme by many, the value of a Bitcoin (BTC) has gyrated wildly, from a few cents to as much as 35 U.S. dollars. In December 2011, a single BTC was worth about $3.

    People Make Their Own
    The strangest thing about Bitcoins is that they are created by users in their own computers with a Bitcoin "miner" application. Although the generation can take a very long time, rafts of servers have been employed to make them faster, and a botnet was discovered that harnessed unsuspecting users' computers to do the job. Bitcoins can also be bought and sold for real money at a Bitcoin exchange. As of 2011, there were approximately six million Bitcoins in existence; however, the total is theoretically capped at 21 million by the year 2140.

    There is no central clearing house or repository for Bitcoins. The Bitcoins and the transactions are stored in each user's digital wallet in the computer, making it a nearly untraceable currency. Although the transactions themselves are available to the public, the source and destination addresses of the Bitcoin transfer are encrypted.

    There Is a Market
    A market exists, because there are companies selling products and people willing to do work in exchange for Bitcoins.

    Traction - Then Hacking
    By late 2010, Bitcoins were beginning to gain some traction in the world, but mostly in the open source and underground communities. By mid-2011, there was an attack on the Mt. Gox Bitcoin exchange, and that June, someone claimed a hacker extracted 25,000 Bitcoins from his personal computer worth nearly $500,000. Also, in June 2011, members of the U.S. Congress began a legislative attempt to make the currency illegal. For more information, visit www.bitcoin.org. See Web payment service.



    .

    ReplyDelete
  4. .

    Liberals push the dystopia of the classroom. It's a Brave New World

    Melissa Harris-Perry's "Lean Forward" spot has some observers up in arms — and rightly so.

    For one thing, the ad is premised on a canard. Harris-Perry begins by saying, "We have never invested as much in public education as we should have." But as Garrett Quinn notes at Mediaite, "We spend more on education per student than every country in the world according to the latest OECD Education at a Glance report."

    Of course, the real controversy comes next, when Harris-Perry explains why we don't invest in public education. In her world, it's because

    "...we've always had a private notion of children, your kid is yours and totally your responsibility. We haven't had a very collective notion of these are our children. So part of it is we have to break through our kind of private idea that kids belong to their parents or kids belong to their families and recognize that kids belong to whole communities. (Emphasis mine.)"

    Sure, it's true that we need strong communities and institutions to help grow strong Americans. But the primary responsibility rightly belongs to the parents. Family is the fundamental building block of society.

    And here's the (mostly) unspoken problem: The notion that children do not really belong to their families, but rather, to the state (or "community") is straight out of the "Authoritarianism 101" playbook.

    The best way to control tomorrow is to control today's children. This has been tried by various regimes throughout history.

    Because it's sometimes dangerous for observers to use historical parallels to explain such things, I'll use some allegorical ones...



    http://theweek.com/bullpen/column/242427/why-is-msnbc-aping-george-orwells-villains


    Pan to visions of 1984 and Animal Farm. Pan to A Brave new World


    Remember, "Think of the children." Or, as MSNBC host, Ms. Harris-Perry previously stated her support of abortion, 'things in our uterus to be disposed of."

    These people are beauts.

    .

    ReplyDelete
  5. Drudge has the Obama “Let them eat cake” concert at The Palace on the Po.

    ReplyDelete
  6. Rufus?

    By Ambrose Evans-Pritchard11:00PM BST 09 Apr 2013

    “Europe doesn’t have an energy policy. It has a climate policy,” said Markus Beyrer, head of BusinessEurope.

    Mr Beyrer said the US is running away with the shale energy revolution, leaving Europe’s companies in the dust. Spot gas prices are now four to five times higher in Europe, with grim implications for the chemical industry.

    “Shale gas is a game-changer and we need to have a discussion based on the evidence, not based on risks,” Mr Beyrer told The Daily Telegraph. France has imposed a moratorium on shale exploration and few countries have yet to take decisive action.

    Mr Beyrer said Europe’s carbon trading scheme is a muddle with “mutually distorting objectives” that drive up energy costs without much benefit for the climate. The latest twist is a switch to coal by EU power companies, playing havoc with CO2 goals.

    “Nobody is happy. The US and even China are making more progress with renewable targets than we are,” he said.

    Equally worrying, he said, is that Europe is slipping further behind in industrial efficiency, chiefly due to rigid labour markets. “Labour productivity in US manufacturing has increased by 1.8pc since the early 2000s, compared with 0.66pc in the Euro Area,” he added.
    The transatlantic gap in economic growth reached 2.6pc last year after the eurozone crashed back into recession, the highest since 1993. Citigroup expects the gap to widen further to 3.4pc by 2014 as EMU remains stuck in slump, with extreme levels continuing into the latter part of the decade.

    This will have profound compound effects. Euroland’s overall GDP will slip from 78pc of US levels to 66pc by 2025. “We expect very different recovery paths, reflecting differing policy choices,” said the bank.

    America’s per capita income will be 9-10pc higher than the 2007 level by 2017; the eurozone’s will be 3-4pc lower, worse than Japan’s Lost Decade.

    The problems facing the eurozone were underlined on Tuesday with figures showing that German exports fell in February. Exports fell by 1.5pc compared with January of this year and by 2.8 pc from February 2012, official figures said.

    In France, the second biggest eurozone economy, the trade deficit widened as a drop in exports was not made up for by a bigger drop in imports.

    ReplyDelete
  7. I've been saying for awhile, now, that Europe would probably be the first major economy to run into serious trouble.

    The trick is "what happens Next year," and I honestly don't know.

    ReplyDelete
    Replies
    1. I suppose, at some point, we will "deal around" Europe, and go "heads up" with China.

      Actually, I think WE will be the ultimate winner; but, mine is Not the majority view.

      Delete
    2. WE have the thousands of Universities, and research labs, and the flexibility (hundreds of thousands of small farmers with money/credit) to transition to biofuels, and electricity.

      China, I believe, waited too long to make her move.

      Delete
    3. They got about a Billion too many folks, too.

      ...and only room for 40 million or so in caves.

      Delete
  8. Police officers are monitoring social media, internet forums and BlackBerry messaging networks in the expectation that Margaret Thatcher's funeral procession next Wednesday will be targeted by protesters.

    ...

    Calls for a statue of Lady Thatcher to be erected on the empty fourth plinth of Trafalgar Square were criticised by Falklands veteran Simon Weston, who warned it could become a target for protests.

    ...

    Ukip leader Nigel Farage and Lord Tebbit also said they were in favour. Mr Weston said a statue would be "fitting" but he warned of the "reaction of the foolhardy".

    ReplyDelete
  9. Here resteth Quirk
    A world class Jerk
    Always a Fraud
    Especially Abroad
    But at home Too
    Ready to screw You

    http://www.spiegel.de/international/germany/sociologists-document-rise-of-personalized-gravestones-in-germany-a-892809.html

    ReplyDelete
    Replies
    1. Uniquely Dead: The Rise of Quirky Gravestones

      Delete
    2. This comment has been removed by the author.

      Delete
    3. .

      Merely a bit of word play on the poem. Nothing important.

      On the other hand, I have to compliment our resident poet. The poem is absolutely the very best thing he has ever written here. Nothing else comes close.

      In this case, the value gained by his years of study as an English major is evident to all.

      .

      Delete
  10. I wouldn't be able to sleep tho, w/o my piles of thousand dollar bills and gold bullion under my bed.

    A store of value and source of satisfaction.

    ...maybe a bowl of hot beef bullion before turning in?

    Bitcoin and Beef Bullion, that's the ticket.

    ReplyDelete
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  14. The Europeons are screwed, blued and will soon be tattooed.

    Our ObamaNation has shown the way. Far surpassing our economic rivals, in the Eurozone and in Asia, for that matter. There is no where else in the whirled where 330 million folk live so well, for so long.

    ReplyDelete
    Replies
    1. .

      In the valley of the blind, the one-eyed is king.

      .

      Delete
  15. Snow in April, will wonders never cease.

    ReplyDelete
    Replies
    1. and 2 days running where 4 year olds kill folk with guns...

      what a wondrous place! What a wondrous culture@

      http://www.theglobeandmail.com/news/world/us-boy-6-dies-after-being-shot-in-head-by-4-year-old-playmate/article10967608/

      http://www.theglobeandmail.com/news/world/boy-4-fatally-shoots-wife-of-tennessee-sheriffs-deputy-with-mans-own-gun/article10932581/

      Delete
    2. The Sheriff's deputy would be armed, regardless of any "gun control". Indeed he'd be one of the folks charged with controlling the firearms of others, when he cannot even control his own.

      A micro view of the macro problem. Those who are tasked to control others cannot even control themselves.

      Delete
    3. 9000 gun laws on the books. About 15% are enforced. Loony Tunes at Newtown broke 41 of them. Do you really think 9001 will change anything? Nothing the anti gun crowd is proposing would have stopped him. Or the idiot at the movie theatre.

      Being able to say, "at least we did something on my watch" isn't solving the problem.

      Delete
    4. From a cultural standpoint 2 days 2 4 year old killing a person each.

      Delete
    5. .

      Culture?

      :)

      The culture in this country has been devolving for decades. I blame it mostly on liberal elitists and outsiders who want to bring European 'enlightenment' to our shores.

      .

      Delete
    6. 14 people were stabbed with a knife yesterday in Houston by a CRAZY guy. Are you seeing the trend?

      LOONY TUNES
      IDIOT
      CRAZY

      See the trend? It ain't the weapon.

      Delete
    7. Yeah, leaving guns and knives lying about so toddlers and crazies can play.

      Delete
    8. So now you are suggesting we should arrest people for being stupid? We finally agree on something.

      Delete
  16. .

    One more example of incompetance in military procurement and cupidity in military supply.

    General Dynamics Stryker

    Within 31 months after General Dynamics won the contract, Strykers were deployed to Iraq. It was late 2003. “That required production of a common chassis for 10 original Stryker variants before completion of production verification testing,” according to a November 2012 IG report.

    There was also a lack of information on what the logistics needs would be — spare parts, other supplies, maintenance. That ultimately required 45 General Dynamics maintenance personnel to be deployed with each Stryker brigade...



    http://www.washingtonpost.com/world/national-security/whats-the-price-of-a-life/2013/04/08/637439c4-9eca-11e2-9a79-eb5280c81c63_story.html

    .

    ReplyDelete
    Replies
    1. General Dynamics, Mr Obama's "Favorite" defense contractor.
      His primary patron, Lester Crown, a major stockholder and past CEO of General Dynamics.

      Delete
  17. .

    Obama's 2014 Budget and how it compares.


    http://www.nytimes.com/interactive/2013/04/10/us/politics/obama-budget-comparison.html?hp&_r=0

    .

    ReplyDelete
  18. The thing is, our guys were getting slaughtered in those POS Bradleys. The Stryker was a huge improvement. When you've got guys getting killed you have to move.

    ReplyDelete
    Replies
    1. .

      Have to move?

      There is no excuse for incompetance, cupidity, and graft.

      I was against the Iraq war from day 1, even before, I was even writing letters to Rummie and to senators denouncing what I saw coming. After we invaded, I got pragmatic. It was a done deal. I assumed we would win in 6 months and be out in a year like the last Gulf War.

      That lasted a few months. We started getting word of our guys dying for lack of body armor and up-armored vehicles. The word was the military needed appropriations to cover the armor, the upgrades, and new vehicles. Then I watched as months went by with Congress demanding for Bush to put a cost to the war so that the budget (and the appropriations process) could be completed. He kept stalling, indicating that they were having a hard time pulling together the cost estimate for the war. Finally, Congress passed the budget without any war costs in it just to keep the government going. Within a week or so, Bush presented them with a bill for the war and asked for off-budget funding. Months lost. All politics, all the time. That's why it made me want to puke everytime they would flash a picture of bush wiping a tear from his eye in some speech.

      Politics, graft, crony capitalism, the military/industrial complex at its worst. There is no excuse for it except greed. All of them could give a shit about what happens to the grunt they send into combat. It's all business.

      .

      Delete
    2. "cupidity" - love the word.

      Delete
  19. Nat Gas up about 114% since last Spring.

    ReplyDelete
    Replies
    1. Here's the thing, we Consumed about 800 Billion CuFt More than we Produced in the last 12 months.

      If we do that again this year (and, considering that production is now starting to drop, that is likely) we will be down to around 800 B cuft, total, in storage. It's not even clear that that amount would provide enough pressure to move the gas through the lines.

      Nat Gas could be a 'rocket ride' this year.

      Nat Gas Storage

      Delete
  20. The March Budget Numbers come out in a few minutes. They should be interesting in that March had 5 Fridays.

    ReplyDelete
    Replies
    1. Wow, that's unusual. The Treasury put off release of the March Budget Numbers until 4:00 Eastern (right after the Market closes.) Yikes. How bad can they be?

      Delete
  21. Remember how the Conservatives were bitching and moaning about a few loan guarantees to First Solar?

    What an investment!

    First Solar is Rocking and Rolling

    An amazing story out of Arizona

    ReplyDelete
  22. Due to the various fiscal crisii, the tax refunds were slow going out this year. I think that led to a much smaller deficit in February than was anticipated, and is going to cause a much Larger Deficit in March than is in the forecasts. Also, as I mentioned above, last month had five fridays. We'll see in a few minutes. :)

    ReplyDelete
    Replies
    1. Nope, it came in well Below the estimated range. $107 Billion.

      Receipts Up $132 Billion YTD from last year, and Outlays Down $46 Billion.

      Treasury Statement

      Delete
    2. This puppy could surprise; $850 Billion might be high.

      Delete
  23. On the afternoon of April 2, Admiral José Americo Bubo Na Tchuto of the Guinea-Bissau navy sailed from his West African homeland, expecting to make $1 million for helping two South American traffickers move a ton of cocaine into, then out, of Africa, according to a U.S. court indictment.

    Instead, the 63-year-old—who had weathered one of Africa's bloodiest independence battles, a civil war and more than a dozen coups—sailed into a sting. The South American barons were informants paid by the U.S. Drug Enforcement Administration.

    ReplyDelete
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  26. Opening the Commons debate, David Cameron said: "She made the political weather, she made history and let this be her epitaph – that she made this country great again." He added: "Those of us who grew up before Margaret Thatcher was even in Downing Street can sometimes fail to appreciate the thickness of the glass ceiling she broke through – from a grocer's shop in Grantham to the highest office in the land."

    Nick Clegg, the Deputy Prime Minister, said: "Her memory will no doubt continue to divide opinion and stir deep emotion. But as we as a nation say farewell to a figure who looms so large, one thing's for sure, the memory of her will continue undimmed, strong and clear for years to come, in keeping with the unusual and unique character of Margaret Thatcher herself."

    * Andrew Rosindell, a Thatcherite Tory MP, told BBC News that Mr Cameron should show the more of the "bulldog spirit" displayed by Lady Thatcher. "You must show passion, you must show belief in things," he said.

    ReplyDelete
  27. On this day in 1947, the Brooklyn Dodgers purchased Jackie Robinson’s contract. The deal set the stage for Robinson to become the first black baseball player to play in the Major Leagues.

    ReplyDelete
  28. Buy bullets.

    Beats Bitcoin.

    http://www.forbes.com/sites/danielfisher/2013/04/09/the-bullet-bubble-is-ammo-the-next-bitcoin-or-gold-in-the-1970s/

    ReplyDelete
    Replies
    1. Will today’s ammo hoarders be rewarded like gold buyers in 1972, or will they wind up like the folks who bought Bitcoins at $30 and watched them fall to two bucks a couple years ago? (The current price, readers note, is above $200 in what some are calling a speculation-induced bubble.)

      You can't shoot rabbits with Bitcoins.

      Delete
  29. Police Wednesaday evening killed a gunman holding four firefighters hostage since mid-afternoon.

    ...

    Gwinnett County Police Cpl. Edwin Ritter said the gunman was facing eviction and wanted the power turned back on.

    ReplyDelete