The Financial Times has published an astonishingly blinkered and short-sighted article, where Bitcoin is mischaracterised as a threat, instead of the greatest business opportunity of the century.

The fact of the matter is, and I have said this before, the country that puts a 150 year moratorium on all Bitcoin regulation and ‘supervision’ will reap all the Bitcoin entrepreneurs in the world, who will run to incorporate in that territory. This event will spark a Hong Kong style boom without precedent in size, and of course, all the businesses located in that territory, should it be the UK, will be paying corporation tax on the profits gleaned by providing services to Bitcoin users world-wide.

It seems however, that the socialists and Keynesians at the FT are squarely ant-British, anti entrepreneur, anti progress and computer illiterate to boot.

Lets take this article to pieces, starting with the sensationalist and irrational title:

Taxmen, police and spies look at bitcoin threat
By Jane Wild

This is an entirely misleading title. Unless you believe that profit and human progress are threats. The advantages Bitcoin will bring to commerce world-wide are easy for even a child to see.

Mobile phones are everywhere. MPESA is absolutely huge in Kenya. It doesn’t take much to understand that Bitcoin is MPESA for the entire world, only orders of magnitude bigger and better because it can never be gamed or corrupted.

The country that ends up being the “Home of Bitcoin” will have trillions of dollars worth of transactions flowing through it, and will skim taxes off of the top of the activity. Anything that hinders this is going to cause the entrepreneurs building these fledgling systems to go to other jurisdictions. The UK must shun the voices that call for regulation and exchanges as the legalized model, because exchanges are not the only possible business model and regulation will drive entrepreneurs away.

Bitcoin has come onto the radar of the UK government, with officials gathering in London on Monday to discuss the security threats and tax concerns posed by the digital currency.

This is a very bad sign. It is a bad sign because no one really knows what Bitcoin is or what its potential is. No one knows the perfect Bitcoin business model; this is still being actively discovered. No one can even define Bitcoin; people are still arguing over its true nature. It is therefore highly unlikely that anyone is able to predict the future of what Bitcoin bushinesses will look like. Its too early to legislate, if legislation is needed at all, and of course, we hold that it is not.

About 50 civil servants from HM Revenue and Customs, the Serious Organised Crime Agency, Home Office and GCHQ – the intelligence listening service – held a one-day conference which examined how bitcoin works and how criminals might seek to exploit the electronic cash system, which is currently unregulated by any financial authority.

Its interesting that the only thing that is being considered is how to disrupt entrepreneurs; that is of course, the implication of these sorts of people gathering to discuss Bitcoin. They were not there to discuss what they are not going to do, after all.

Imagine such a meeting taking place in 1995, before the internet and the web exploded and increased the flow of goods and knowledge beyond anyone’s imagination. Imagine that these same people met and decided that an unregulated internet was “not acceptable” and that legislation needed to be tabled to regulate who could publish on the internet, who could be an email provider, etc etc. It would have killed the internet in the UK, causing an unimaginable amount of permanent damage. This is what will happen to the emerging Bitcoin economy if anything resembling regulation touches Bitcoin. The businesses trying to start here, that can incorporate and operate anywhere in the world, will simply do so in a place other than Britain. The Bitcoin will flow around this damage, and the UK will not profit, as the money and talent flees to a free jurisdiction. This is undesirable.

The meeting, entitled The Future of Money, focused on the implications that widespread adoption of the currency might have. As bitcoin users are anonymous, authorities worry that it could be used for purposes such as money laundering, and that transactions between individuals fall outside boundaries of tax collection.

Rather than focus on the majority use case that is inevitable with Bitcoin, these ill informed and well meaning people are being entirely mislead.

Once Bitcoin is flowing between devices, it will be impossible to track, and moving very quickly. Bitcoin will suck up fiat currency world-wide. The jurisdiction that allows exit and entry points to operate in it will make massive amounts of revenue, and the Bitcoin will simply flow through the countries where it is either impossible or unfavourable to operate.

It is important to understand what Bitcoin is, not in the monetary sense, but in the data sense. Bitcoin is data. It can flow wherever it is pushed and pulled. It cannot be stopped, any more than Bittorrent can be stopped. Its users will be everywhere, all at once, all the time, always on. Will it be used for unethical purposes? Yes of course; but these will be very rare edge cases, as all crime is an edge case. The difference here is that we are talking about pure information, that is very fluid; as fluid as liquid helium near absolute zero. It flows without friction, up the sides of the container it sits in against gravity. It cannot be stopped; but it can be tapped for revenue. Understanding data and how the world has changed will prevent forward thinking countries from being totally sidelined.

No amount of building projects (“Silicon Roundabout”) or talk will convince entrepreneurs to build their companies in the UK. Anyone thinking about incorporating in the UK to start a Bitcoin service now has cold feet.

If the government decides to act with its Luddite hat on, there will be little point in starting anything here, and those that have, will simply run a shell script to move their businesses to servers in free countries. It will take less than an hour to move operations to any jurisdiction anywhere in the world, and we need only look to The Pirate Bay to see how quickly a high traffic website can move from one place to another. The Pirate bay is an operation under extraordinarily heavy attack; its operators are scattered, its servers constantly being shut down. They do not make a profit and pay no corporation tax; a website that is not doing any infringing or harm, and that is making a profit and paying corporation tax in large amounts, like MTGOX, will be very welcome in many jurisdictions, who will make special rules to accommodate them. Britain must not go down the road of the Luddite and the anti-technology fanatic. There is nothing to gain from doing it. The business will go elsewhere and the British will still be using Bitcoin by the millions.

The Revenue said that its attendance at the conference had been to further its understanding of “current tax-related issues” and that it was monitoring the development of the bitcoin market. “The tax system already deals with transactions in currencies other than sterling,” the department said. “Any such transaction will be potentially taxable.”

Any company incorporated in the UK is subject to tax on its profits. A Bitcoin company operating in the UK will be making a profit and submitting returns every year. This is not an issue different to the operation of any business that currently operates in the UK, and Bitcoin should not be the focus of any kind, since it is just another kind of business, like selling soft ice cream.

Also under consideration was the idea of creating a regulated exchange, which would be the world’s first. Such an entity would go some way to addressing concerns about criminality by requiring users to provide proof of identity. An unregulated exchange was set up in London in 2011 but closed a year later after its bank account was shut down.

This just demonstrates the near horizon thinking of the people who attended this conference. Bitcoin exchanges are not the only business model that can be built on this new technology.

For example, there is a new business, Bitspend (not operating from the UK) that allows you to buy anything in the world with Bitcoin. You select what goods you want, inform the website of your choice, pay them Bitcoin to the amount of the purchase, plus their fee, and they purchase the goods for you and have them dispatched to you directly from the seller. They don’t even have to handle the goods, all they are doing is making purchases on other people’s behalf.

This business has nothing to do with Bitcoin Exchanges. It is a pure service that uses Bitcoin as a money transport. A business like Bitspend could operate in any jurisdiction,  since it is buying goods over the internet. They are based in the USA, and as they grow, their software will become more robust and reliable, and their customer base will grow. New business ideas and opportunities will come to them first.  People in the UK can use this service transparently; it is a perfect example of Bitcoin flowing through the UK without ever touching a UK incorporated entity. The question then is obvious; why should this business leave the USA and incorporate in the UK? What advantage is there for them to do so? What inducements can be put on the table to cause Bitspend to move to the UK so that its profits are taxable in the UK?

These are the correct questions that should be asked; Bitcoin should not be mischaracterised as a threat, but as an unprecedented opportunity, and something that should be used to attract entrepreneurs and visionaries to London.

Many more Bitcoin companies are being planned and developed right now in a myriad number of different models and forms. Conferences are being held in Romania and California. Britain is going to be left out of this important revolution if the wrong noises are made and disseminated.

The web was born in the UK, and the centre of the web’s entrepreneurial activity is all in California.

Why?

Why is it that the British invent all the great things and other people in other countries capitalize on them? Why is Facebook everywhere in the world, and Bebo, early star in social networking, filing for bankruptcy protection?

Britain has the brains, it has the talent. Its young people have the entrepreneurial spark. Bitcoin is going to be the biggest thing since the internet itself. If Britain drives entrepreneurs in this sector away, it will not get a second chance.

The Future of Money conference, which included presentations on how the cryptocurrency works, was organised by the government’s Foresight Horizon Scanning Centre, an arm of the Department for Business, Innovation and Skills which develops innovative, long-term policy. Although unofficial meetings have been held previously, this was the first official meeting of civil servants held to discuss bitcoin. No government ministers were present.

Bitcoin and its growing ecosystem was created by developers. It did not need the State to help it, design it or get it going. Like the internet, it will grow at its own amazing pace if left to do so. Anything that touches it will distort its natural geometric growth.

What must be understood here is that the threats presented by Bitcoin are absolutely minuscule, molecular even, when compared to the planetary scale big picture; it is exactly the same as the internet itself. The vast majority of internet usage is absolutely harmless, ethical, beneficial and normal, and the same will be true of Bitcoin.

Policy, if any is to be made at all, and it should not, must be driven only by the facts and economics. If not, Bitcoin will see it as damage and will route around it. The Bitcoin will flow through and out of the UK, rather than coming in and terminating here; and that is what, surely, the government must want – for Bitcoin to begin and end in the UK, so that the businesses that provide the services can aid the economic recovery.

And what an aid that will be. Trillions of dollars and Pounds in Bitcoin on a weekly basis, flowing through UK based nodes that are all as trusted as eBay and built to the highest standards, just like Facebook, but without any regulation, just like Facebook.

This is the ideal situation; The Facebook of Bitcoin incorporated in Britain showing the world that London is the centre of the emergent Bitcoin economy. “If you want to be where the Bitcoin action is, London is your Go To destination”. This is what we want to read!

Michael Parsons, a banking management consultant and chartered accountant who presented at the event, said: “There were a lot of questions. Everyone was very receptive and keen to learn more.”

!

GCHQ confirmed that it had sent staff to the conference in the interests of its role in helping to deliver cyber security.

Bitcoin is not a “cyber security issue.”

Its very important to characterise these technologies correctly. At the beginning of the Internet, I am sure that there are people alive now, who would characterise ISPs as “cyber security threats”. Of course, acting on any such mischaracterization would have fatally crippled the nascent ISP and web industry, and caused Britain to be an also ran in the internet stakes. As it happened, despite the telephone monopoly of BT, the ISP business in the UK thrived and produced many wonderful spin-offs in terms of new businesses and skilled developers, many being of world importance. This should be the aim with Bitcoin also. Britain should seek to nurture, by keeping an arms length from it, all Bitcoin related entrepreneurial activity.

As we have seen with Hong Kong, once all the work is done, there will be a glistening jewel of activity to collect at the end of the exercise. Only a hands off policy can create such jewels, and in the case of software businesses, the jewel is quicksilver, that can flow very rapidly to the place where regulation is lowest. Business is mercury that always seeks its most efficient level.

And let us remember; Bitcoin is hardly being used for anything at all at the moment. What everybody thinks it is and what it could be used for is pure speculation. A cautious, future centric position is the best one to be taken, because either way, the Bitcoin is going to flow, and that flow cannot be stopped without stopping entire internet.

Some people might say that websites can be blocked, which will stop people in the UK from getting Bitcoin from other jurisdictions  They will cite the blocks on The Pirate Bay and Kickass Torrents as successful examples. This view is entirely incorrect.

A small browser extension called Stealthy makes all ISP blocks moot. It is currently installed by 277,794 users, and it is sure to grow in its user base. This is but one very easy ways to completely circumvent ISP blocks on websites, and of course, once you get your Bitcoin on your mobile phone or laptop, it is a pure peer-to-peer system, that cannot be blocked at the ISP level.

With the Stealthy plugin, all ISP blocks are completely defeated. That means it will be impossible to block any website in any jurisdiction selling Bitcoin.

The normal reaction process of problem, reaction solution will not work in the twenty-first century. A new model must be designed and implemented that utilizes these new tools so that everyone benefits.

Bitcoin and the internet itself are entirely beneficial and should not be regulated, but should instead, be harnessed and their utility leveraged.

Rather than having a meeting to discuss fallacious ideas and imaginary threats, meetings should be held to see how Bitcoin can reduce the cost of government.

Imagine the following applications for Bitcoin.

• Paying parking fees and fines.
• Collecting taxes. In micro amounts.
• Paying usage fees for all government services. In micro amounts.
• Reducing all money related fees on flows into and out of government, saving billions.
• Disbursing benefits at a fraction of the current cost.

These are just some the sorts of things that should be discussed at the government level, not how this baby should be killed before it is born.

This is an opportunity for increased efficiency, transparency, speed and effectiveness in the way government collects and disburses money. This is the sort of thinking that should be on the table, not Luddite dreams of wrecking the internet.

Civil servants will now prepare two reports for ministers on their conclusions: one public and one private.

FT

These reports, both the public and the private, cannot possibly present a complete picture. The Bitcoin business models are still being developed and iterated through. No one knows what the final, profitable and viral shape of Bitcoin businesses will be; the only thing that can be predicted is that there will be a final shape, and that the company that hits on it will be incorporated in some jurisdiction, and that it is in that jurisdiction that the money will flow.

The question here is whether or not that country will be Britain. Articles like this, and any move by Her Majesty’s Government to control Bitcoin will cause Bitcoin to bloom elsewhere.

No amount of Silicon Roundabout development, ribbon cutting and pleas to come to Britain will make the UK attractive. Only a guaranteed, decades long moratorium on any interference in Bitcoin activity will attract entrepreneurs and investment in this once in a lifetime event.

The FSA letter on Bitcoin sent to Intersango was an encouraging sign that Bitcoin was to be left to flourish. I will leave it to you to imagine the next MTGOX starting in the UK (or for that matter, the next MEGA that has grown to dominate New Zealand  internet traffic and will be an economic powerhouse there with its soon to be announced new services); there is simply no reason why such a company should not start in the UK and grow to a size greater than MTGOX, as second and third generation successful Bitcoin business models begin to emerge.

The question is will the correct business conditions exist to facilitate this emergence, or not?

There is a very exiting new service online called ToS;DR ‘Terms of Service; Didn’t Read’. With it, companies offering services over the web have their TOS pages parsed and line items rated.

Here is an example of some of their rated services:

GitHub Class B
↑ Changes can happen any time, even without notice
↓ Your personal information is used for limited purposes
→ GitHub requires cookies
→ Choice of law: California
↑ Your account can be suspended and your data deleted any time for any reason
↓ You don’t grant any copyright license to github
↑ You must provide your legal name
↑ You shall defend and indemnify GitHub
↓ GitHub will notifiy you before transfering your information in event of merger or acquisition
↓ Transparent security practices

Delicious Class D
↑ Only for personal and non-commercial use
x No Right to leave the service
↑ Your content can be exploited
↑ Non-transparent use of cookies and third party ads
↑ Your personal information are an asset for business transfers
↑ Third Parties

Twitpic Class E
↑ Reduction of legal period for cause of action
↑ Your content is for Twitpic and their partners
x Deleted images are not really deleted
→ Jurisdiction in Delaware
↑ You indemnify Twitpic from any claim related to your content
x Twitpic takes credit for your content

Those familiar with Libertarianism and BLOGDIAL can guess what we are going to say about this.

First of all, the people who run this service do not know what rights are. In the Delicious entry for example, they say that users have ‘No Right to leave the service’. There is no such thing as a ‘right to leave a service’; you may have have the power to leave a service and to stop using it, but not a ‘right’.

The promises made to you under contract on a website are a private matter of contract between you and the people or company that owns that site. If they give you the power to delete your account, that is a good thing, but you have no right to other people’s property, and no right to force them to offer you a service on any particular terms.

The difference between a right and a power is an extremely important one because (separate from mistaking a right for a power being entirely wrong) when you assert that someone has a right to something, the next step is that the violent State is called in to force people to do what they would rather not do, like force websites to offer an opt out on cookies.

Lets go through these bad entries one by one:

Github:

“Changes can happen at any time, even without notice”
Github is a privately owned website. The people who run it have the absolute right to change anything at any time. If you do not like it, do not use it and go and create your own web service based on Git.

GitHub is not lying to its users. It tells you in advance what it is going to do with the data you store there. They are completely free of evil in this respect. They are responding to the needs of their users at a very high standard. This is why they are hugely popular, and why they come to the attention of people who want to attack them.

You must provide your legal name
I absolutely loathe sites that require your legal name. I closed our account at Quora and deleted all of our thoughtful answers there because Quora admin demanded that we use real names and not the user name ‘Irdial’. Nevertheless, the position on this is clear; Quora owns their servers and service, and I have no right to demand anything from them. It is up to me to either change my user name or quit the service. The same goes for GitHub. If you do not like their ‘Real Names’ policy, do not use GitHub.

You shall defend and indemnify GitHub
Once again, if you do not want to defend and indemnify GitHub, do not use their service. Also, try and think about it from their point of view; if some user ‘steals’ source from somewhere and posts it on GitHub, this exposes the owners of the service to the possibility of an infringement lawsuit and crippling damages. In order to protect themselves from this, they need to add this language to protect themselves from stupid or malicious users. This is perfectly reasonable and logical, and is in no way an attack on GitHub users.

Conclusion
There is nothing in the GitHub TOS that is unreasonable. They are open about what they are doing, and provide an extremely useful service that you do not even have to own an account on to be able to pull some source. They, as the property owners of the service, can operate it under any terms that they like.

Delicious:

Only for personal and non-commercial use
Non commercial use restrictions make perfect sense; they have to find a way to monetize the service. If you don’t like it, store your bookmarks elsewhere, like in your browser.

No Right to leave the service
There is no such thing as a ‘right to leave the service’, and if you delete all of your entries, that is the same as leaving, and you can do that. Once again, use the word ‘rights’ correctly and understand property rights. Every item where this fallacious ‘Right to leave the service’ is listed as a defect in a TOS, ToS;DR is in grave error.

Your content can be exploited
What does ‘exploited’ mean? This service is out to make a profit. If you are socialist, and do not believe that people or companies should make a profit, that’s fine, but you cannot force other people to live by your standards or contract under terms that are not acceptable to them, and it is dishonest to condemn or vote a site’s TOS down due to this. And again, if they tell you in advance that they are going to use your bookmarks to make money, you can choose not to use their site and service. Some people take this bargain and accept it as the price of using the service. There is nothing inherently wrong in this.

Non-transparent use of cookies and third party ads
The browser running on your computer can be set to refuse cookies. It is up to you to make this setting, and to refuse to accept cookies from sites. You do not need the State or anyone to hold your hand like a child, and if you do, that is your problem, not the problem of Delicious. Caution must be the default on the web.

Your personal information are an asset for business transfers
Once again, business as a practice is not in and of itself unethical, and if you believe so, that is a personal prejudice that you should keep to yourself, if you want to remain objective. Business is not harmful!

Third Parties
With tea and cake presumably.

Twitpic:

Reduction of legal period for cause of action
Twitpic needs to do this to protect themselves from Ambulance Chasers and hostile collectivist users who like Class Action Lawsuits. If they do not have this clause, the service will be attacked for sure. There is no standard legal period for a cause of action, and in jurisdictions where there is, there should not be. Its up to you to either accept or reject these terms.

Your content is for Twitpic and their partners
They need to find a way to monetize the content on their service, otherwise it will cease to exist. This is entirely reasonable, and you have advance warning that they are going to do this.

Deleted images are not really deleted
Once you upload your pics to their service, they can do with them what they like under the terms of service. It they are lying about deleting photos, this is fraud, and they should not do that. This is a correctly flagged item, of the kind this site should focus on.

You indemnify Twitpic from any claim related to your content
Same as for Delicious. Content in a copyright world can be a hostile trojan horse, and they need to protect themselves. If you really want to make these clauses redundant, advocate for the end of the State.

Twitpic takes credit for your content
If you give your content to Twitpic under terms that say they will own your pics after you upload them, this is an explicit contract. IF they do so without telling you explicitly they are going to do this, once again, this is fraud, or ‘passing off’; its illegal and immoral. Once again, this is a true example of a correctly flagged flaw.

This is a great idea for a service clarifying and distilling TOSes for the masses, but there are some problems with the thinking behind the categorisations and descriptions of the problems described in each TOS where a fault is found.

Some faults are not faults at all, but simply terms of service designed to protect the service owners, and others are actual flaws. A clear set of ethical standards needs to be applied to each TOS, one that is free of bias.

It would be interesting to write a plugin that flags up TOS flaws or changes on every site you visit, so that as you surf the web, you are alerted to potential offences against your sensibilities.

On sites where you already have an account, where the TOS has changed, you could be alerted that this has happened for you to review. Im sure someone has already though about this.

If these people want to really help both users and the sites they visit, they need to think hard about their assumptions on the basic parts of this idea; who owns websites, what are rights, what obligations do sites have to users of their services? All of the answers to this can be found in ‘For a New Liberty‘ which spells out very clearly in simple language, everything you need to know when writing your TOS.

John Matonis has a new and excellent post on his ‘Monetary Future’ blog.

In it, he logically goes through some of the issues surrounding Bitcoin. It is well worth reading.

One section however, spurred this BLOGDIAL post. It’s the part about Vili Lehdonvirta’s ideas on ‘virtual goods’…

[…]

I am worried that Bitcoin is a step too far as it leaves no possibility for even democratic governments to enforce their laws. This is a topic I would love to debate with the community and hear opposing views. I think the end result could be a better understanding for me, but also a better understanding for the Bitcoin community on how to live in harmony with democratic authority.

Absolutely astonishing. A ‘step too far’? Towards or away from what exactly? We do not want to live in harmony with democratic authority. Democratic authority, to us, is inherently illegitimate, evil, immoral and completely unjustifiable. There are people who are attracted to Bitcoin precisely because it is beyond the control of ‘democratic authority’. As for it being a step too far, we must bear in mind that no one is forcing anyone to use Bitcoin. You decide on your own to use it, and if it succeeds or fails, you take the benefit or profit or losses respectively. Violent Statists are of course, vehemently opposed to free trade, voluntary exchange and liberty. Bitcoin is to the Statist as sunrise is to Dracula.

Matonis chimes in with…

For the most part, I respect Vili Lehdonvirta’s academic work on virtual goods ownership, but he harbors confused thoughts on the broader acceptance of bitcoin through dilution of its most beneficial properties, because he mistakenly extends the notion of virtual goods legal recognition to virtual currency legal recognition.

Fascinating. The Statists from the legal profession class are described by Murray Rothbard in ‘For a New Liberty’ as follows:

We see clearly why the State needs the intellectuals; but why do the intellectuals need the State? Put simply, the intellectual’s livelihood in the free market is generally none too secure; for the intellectual, like everyone else on the market, must depend on the values and choices of the masses of his fellow men, and it is characteristic of these masses that they are generally uninterested in intellectual concerns. The State, on the other hand, is willing to offer the intellectuals a warm, secure, and permanent berth in its apparatus, a secure income, and the panoply of prestige.

[…] since the early origins of the State, its rulers have always turned, as a necessary bolster to their rule, to an alliance with society’s class of intellectuals. The masses do not create their own abstract ideas, or indeed think through these ideas independently; they follow passively the ideas adopted and promulgated by the body of intellectuals, who become the effective “opinion moulders” in society. And since it is precisely a moulding of opinion on behalf of the rulers that the State almost desperately needs, this forms a firm basis for the age-old alliance of the intellectuals and the ruling classes of the State. The alliance is based on a quid pro quo: on the one hand, the intellectuals spread among the masses the idea that the State and its rulers are wise, good, sometimes divine, and at the very least inevitable and better than any conceivable alternatives. In return for this panoply of ideology, the State incorporates the intellectuals as part of the ruling elite, granting them power, status, prestige, and material security. Furthermore, intellectuals are needed to staff the bureaucracy and to “plan” the economy and society.

[…]

In all societies, public opinion is determined by the intellectual classes, the opinion moulders of society. For most people neither originate nor disseminate ideas and concepts; on the contrary, they tend to adopt those ideas promulgated by the professional intellectual classes, the professional dealers in ideas. Now, throughout history, as we shall see further below, despots and ruling elites of States have had far more need of the services of intellectuals than have peaceful citizens in a free society.

[…]

For States have always needed opinion-moulding intellectuals to con the public into believing that its rule is wise, good, and inevitable; into believing that the “emperor has clothes.” Until the modern world, such intellectuals were inevitably churchmen (or witch doctors), the guardians of religion. It was a cozy alliance, this age-old partnership between Church and State; the Church informed its deluded charges that the king ruled by divine command and therefore must be obeyed; in return, the king funneled numerous tax revenues into the coffers of the Church. Hence, the great importance for the libertarian classical liberals of their success at separating Church and State.

For a New Liberty

The whole idea of ‘Digital Goods’ is a fallacy, created by Statist professionals in order to gain a foothold in the emerging digital economy that threatens to disrupt their authority and completely replace the old world economy in many areas, specifically the delivery of films, books and music, and now through Bitcoin, the process of moving money around the globe.

The fallacious notion of ‘Digital Goods’ is pyramided on the idea that copyright (an artificial concept of the State) is legitimate and logical. As is the case with copyright, the idea of Digital Goods conflates the correct idea of property rights in real-world physical goods with a false right in intangible pure information, which can be infinitely copied, transmitted and transformed without loss.

An idea can have a human originator, but once that idea is conveyed to another man, it resides in the mind of that man. The only way that you can prevent that second man, the receiver, from using this idea is to initiate force against him. On this basis alone copyright as a legitimate idea falls, since it violates the non aggression axiom. I will leave it to you to explore the rest of this idea at your leisure. I also strongly recommend that you read ‘Against Intellectual Monopoly‘.

Bitcoin is an extraordinary and important innovation. It is the first system where a ‘Digital Good’ cannot be double spent. That means Bitcoins can be duplicated perfectly an infinite number of times, but they cannot be spent more than one transaction at a time between two people.

Bitcoins retain all the qualities of information (near zero cost transmission, infinite transformability, infinite lossless replicability), but the Bitcoin ecosystem changes them into something that has some of the qualities of physical property, whilst retaining all of the advantages of pure information. You can actually own a Bitcoin secure in the knowledge that even though everyone can read your Bitcoin, make copies of it, and see it in the Block Chain, they cannot steal it from you and spend it. You can copy Bitcoins ad infinitum, but inside the system is the only place where they have value or more accurately, utility. Bitcoin is the first instance of a digital representation that has some of the scarcity properties of a physical good.

Interestingly, this idea if transposed onto a music file, picture or film, could not work to prevent people using (double spending) those things, because there is no inherent value in owning a digital copy of a music file, film or book.

Imagine that instead of digital signatures, the Bitcoin block chain was used to control signed MP3 files. You could then have an ecosystem where unique copies of tracks (unique in that they were digitally signed, could not be forged and ownership was verifiable) could circulate for payment. The problem with this is that in this scenario music has two uses, one when it is stored in a file, and another when it is played in a music player, as well as being a string of numbers stored somewhere. There is also the ‘problem’ of the intent of music creators being that the same music is available to many people all at once.

Bitcoins do not have any use other than to confirm that they are owned by someone. This is why they can be used to transmit money over the internet. A digression, but interesting nonetheless, because this is the sort of thinking the large media companies should be doing or paying to have done for them, if they want to survive in any form over the next decade.

Apart from the revolutionary and singular case of Bitcoin in the Bitcoin ecosystem, all digital representations of ideas have zero intrinsic value, because they can be copied at a cost that approaches zero. In fact, the more copies there are, the lower the cost of obtaining a copy becomes because there are more storage locations to get them from and the cost of your time to search for them decreases. On some level, the law industry understands this, as they put pressure on Google to remove search results that point to files they claim contain ‘intellectual property’ belonging to their clients.

Digital technology has changed the way the world handles information forever. Trying to superimpose the outmoded, ridiculous and erroneous 19th century ways of thinking about property and business on people living today is a fruitless and anti-human endeavour. What’s more, it does not make everyone more honest and make business more efficient. Look at the dispute resolution mechanisms in eBay and Amazon, and you get a glimpse of how the free market works to protect everyone and benefit everyone. The State does not poke its snotty nose into the dispute resolution systems of these online services and the vast majority of transactions happen without any problems, and where there are problems, they are resolved within the mechanisms of the services to everyone’s satisfaction.

Just as the buggy whip makers, the lake ice industry and all superseded industries were eliminated by progress, the notion that music, books and any work that can be digitised should remain scarce, by force, is an astonishingly evil idea. The difference in people today as compared to those living in the age of the horse and cart it seems, is that this generation of men is not sufficiently agile, and a subset of them is unwilling to pivot and change business models to deal with the new reality. This is probably due to the very rapid pace of change, and the fact that there appears to be no future whatsoever for the people in the business of hoarding and supplying scarce information distributed in physical containers. They are squeezing this model for every drop of blood they can get before it becomes untenable to ask for money in exchange for physical discs or files.

Ill informed and self interested cronies and Statists are trying to keep man in horses and carts when the internal combustion engine car is in the garage of every home. It simply doesn’t make any sense on any level, is immoral, and the only reason why they can get away with it is they have an agent with the monopoly of violence to back them up: the State. In absentia of this force, no one would listen to the Statists, the MPAA/RIAA, the luddites, the lawyers, the buggy whip manufacturers and the Statists. Since they offer nothing of value, they would simply be ignored.

I predict that there will come a time when none of these people are taken seriously, and they are ignored and sidelined. The world simply will not be held down to the level of Stone Age Man to suit the needs of a vanishingly small number of venal, violent and ignorant men and their blinkered apologists. The dispute resolution systems that are an emergent property of sites like Amazon and eBay will spread out into the real world, making the State and its proponents redundant. It would be a fascinating project to try and separate these arbitration services and generalise them so that the public could use them instead of the courts of the State.

The fact of the matter is that lawyers have no right to tell anyone how to voluntarily exchange goods and under what terms those goods are to be exchanged. Their role is to arbitrate in disputes where both parties agree to be subject to the rules of the arbitrator, and nothing more. Because the vast majority of humans can exchange without disputes, they must create conflict in this area to maintain their social status and incomes, with the help of the State. This is why lawyers support the fallacious idea of copyright, and why they want to extend this sickness to Bitcoin, and all areas online.

The Statists refuse to accept reality, or cannot understand it, or understand it and actively fight to control it with violence. Lawyers especially have the most to gain from keeping the immoral, illogical and absurd copyright laws in force.

Or do they?

The fact of the matter is that once copyright laws are removed from all statute books, the amount of work for lawyers will not decrease, but will in fact increase, as creative people adapt to the new business models.

For example, no one has the right to steal a physical disk from anyone. If a musical work is created and stored in a fixed medium, and the right to be the first to sell it is sold to someone, a person who steals that disc and releases what is stored on it could be held liable for the damage caused to both contracting parties.

A disc of an unreleased highly anticipated pre-sold masterpiece would have an agreed value that is set out in a contract, and a value in pre-sales. Once it is leaked by theft and no one will pay for it, losses have been imposed upon the creative party, since exclusivity has been broken by the thief. In this scenario, damages are not calculated by how many copies are in the wild but by the fact that a physical disc has been stolen, its contents leaked and sales potential has been destroyed through cancellations. This is of course, completely separate from a work that is released on a disc, sold to a person, and that person making a copy for whatever reason. This is entirely legitimate, for reasons laid out clearly in Against Intellectual Monopoly.

This scenario is the same as someone breaking into a jewellery store and stealing a diamond necklace. Once that necklace has been stolen, it cannot be sold to someone else. The scenario of a pre-release disc being stolen and released is even worse, because the irreplaceable, unique first use opportunity has been destroyed forever. This is the true nature of the damage and theft done to both parties by this sort of act; the value of such a theft can be estimated and a valid moral claim made against a thief. Once again, this has nothing to do with the subsequent copies made by people who got a hold of the data by whatever means.

I use the example of the theft of a necklace deliberately, because it is used by the copyright monopoly to justify everyone being forbidden from making copies of what they own. Note how I am separating the act of copying what you have legitimately purchased from the destruction of potential by an unauthorised pre-release of a stolen disc.

There are many other circumstances where fault can be placed in this scenario. For example, if one party fails to maintain security and this is the cause of the leak, someone is at fault and has to pay. This can be laid out explicitly in a contract. These byzantine details are the job of lawyers to sort out, set terms for and organise. It is for lawyers to define these agreements, fix the agreed penalties, pursue the wrong doers in case of a breach of information. This would be a huge amount of complex work, worth an enormous amount of money. Lawyers are major beneficiaries of a world without copyright.

Of course, once a suite of music or book or other information is released, it can be copied ad infinitum, but then the next thrill is the thing that is valuable, and the public has an insatiable appetite for the new; this is just one possible model for the creative to explore, and of course, since they are the creative, its up to them to think of new ways of approaching the market in a reality where every idea can be copied and can spread world-wide in a matter of hours, if you hit exactly the right note.

The ignorant, imagination-less Statists want to prevent this astonishing world of the super abundance business model from fully emerging. They are doing everything they can to wreck the exponential growth of tools, contracts and technology that will unarguably benefit the entire planet, for the sake of a handful of ignorant, comfortable, computer illiterates.

Unfortunately for them, the harder they push against the internet, the stronger it becomes. Every service they have tried to cripple has either resulted in that service strengthening or spawning new services. Bulletin Board Systems, IRC DCC channels, Napster, Gnutella, Bittorrent are all examples in chronological order of how software outpaces the luddites, and of course, that list excludes the peripheral discoveries like MP3 that fuel the creation of new services.

This is a battle that they cannot win and which they should not win, because they have no case or moral foundation whatsoever.

Read this article in Hungarian.

The unintelligent, inexperienced and completely deluded students are out again in force, to be kettled, sheared, abused and used as fodder to provide the police with much needed overtime money.

What is interesting here is that we may be seeing the seed of the idea that all the video cameras that everyone has by default could be used for something useful, active and defensive, instead of just a child’s toy.

From BLOGDIAL, “The answer comes before the question” January 13th, 2009

Imagine this scenario. Someone somewhere sets up a Web 2.0 site that features photos of bad police and other officials, or those mysterious agent provocateurs that have been plaguing the useless demonstrations around the world. Imagine that the software behind this site (which could be connected to iPhoto 09) identifies all the bad people and exposes them to the public, nullifying all acts of political infiltration over night. Anyone setting up any sort of anti-state gathering or demonstration or action could, with a gauntlet of workers armed with iphones, vet every demonstrator as they turned up to weed out all the infiltrators, collaborators and provocateurs.

I guarantee you that this will happen, and not only that, but that someone is going to put into a copy of iPhoto 09, a huge archive of photos from demonstrations and political meetings going back decades to pick out the bad guys.

This explosion and convergence of technologies is a double edged sword, and since there are more of us than there are of them, it will be the case that all this technology and the networks that join them together will result in something totally unexpected; the tools may turn around and bite the state in the ass in an unexpected way. The very nature of networks says that this will happen; the population by virtue of its vast networked numbers can overpower any government in a scenario where the network is the power.

We are not powerless like the slaves in the Soviet Union were. We have fantastic tools, all of them free, right in our hands. Those tools, by the act of using them, change the game entirely, and the more the state pushes against the mass, the more dense and impenetrable it becomes.

This is a war that they cannot ever win.

http://irdial.com/blogdial/?p=1517

[…]

Now look at this video, uploaded to YouTube by noshockdoc on Nov 11, 2011:

If these people had any sense, they would have already set up this web service as I described in 2009.

Using Augmented Reality ID:

They could check each ‘protestor’ against the online database of Agent Provocateurs and police officers to make sure that they had not been infiltrated.

Of course, anyone who is that smart is not interested in demonstrating in the first place, but we will leave that aside for now.

The point is, these young and very foolish people are behaving as if it is 1960 and not the end of 2011. As I have said before, again and again, the age of demonstrations is over. The shape of them, how they play out, move, surge and flow is well understood. There can be no surprises with them. Nothing comes of them, no matter how large they are, as we saw with the StopWar demonstrations before the destruction of Iraq.

The problem these people have is that if they were intelligent enough to know this, they would not be demonstrating, and would be well on the way to formulating a strategy that would actually give them what they want. Their problem, clearly, is a toxic mix of a lack of intelligence and experience.

They do not know exactly what they hope to achieve with these acts, they have no discrete goals or deliverables, they have no means of creating a new strategy because they lack the mental capacity to formulate one; in other words, they are a completely lost cause.

One thing that is coming out of this is interesting however.

Because everyone has a camera at these demonstrations, it might come to pass that the light bulb switches on over the head of some computer science student as she realises that it should be possible to create what I describe in the post above.

There are literally dozens of cameras in this clip; surely someone somewhere must be thinking that there is a use that can be put to the footage to help weed out the provocateurs. Who knows?

What we can say with a high level of certainty is that these students are going to achieve nothing by marching in the street. Everything they are planning, even if it is not known about in advance by surveillance is easily counter-able because marching and demonstrating is a ‘dead tactic’ that the State has a perfect understanding of.

All of this is a complete distraction of course; even this very post has distracted me from doing something else productive. Unless by chance it spurs the creation of the system I have been writing about.

Once again, demonstrations are ‘Yellow Ribbon Thinking’:

http://irdial.com/blogdial/?p=1152

they divert energy from useful acts and thinking, and prevent or delay permanent solutions from emerging. You should not participate in them; instead, you should be working only on things that have discreet goals and that has metrics that you can measure directly so that you can know if you are being successful or not.

Bitcoin is a very new technology, even though the concept that it brings to life is decades old. The double spending problem has been solved; this means that it is possible to use a digital certificate to stand in the place of money and be sure that no one else can spend that certificate other than you as long as you hold it. This is an unprecedented paradigm shift, the implications of which are not yet fully understood, and for which the tools do not yet exist to fully take advantage of this new idea.

This new technology requires some new thinking when it comes to developing businesses that are built upon it. In the same way that the pioneer providers of email did not correctly understand the service they were selling for many years, new and correct thinking about Bitcoin is needed, and will emerge, so that it reaches its full potential and becomes ubiquitous.

Hotmail used familiar technologies (the browser, email) to create a better way of accessing and delivering email; the idea of using an email client like Outlook Express has been superseded by web interfaces and email ‘in the cloud’ that provides many advantages over a dedicated client with your mail in your own local storage.

Bitcoin, which will transform the way you transfer money, needs to be understood on its own terms, and not as an online form of money. Thinking about Bitcoin as money is as absurd as thinking about email as another form of sending letters by post; one not only replaces the other but it profoundly changes the way people send and consume messages. It is not a simple substitution or one dimensional improvement of an existing idea or service.

As I have explained previously, Bitcoin is not money. Bitcoin is a protocol. If you treat it in this way, with the correct assumptions, you can start the process of putting Bitcoin in a proper context, allowing you to make rational suggestions about the sort of services that might be profitable based on it.

If Bitcoin is a protocol and not money, then setting up currency exchanges that mimic real world money, stock and commodity exchanges to trade in it doesn’t make any sense. You would not set up an email exchange to buy and sell email, and the same thing applies to Bitcoin.

Staying with this train of thought, when you type in an email on your Gmail account, you are inputting your ‘letter’. You press send, it goes through your ISP, over the internets, into the ISP of your recipient and then it is outputted on your recipient’s machine. The same is true of Bitcoin; you input money on one end through a service and then send the Bitcoin to your recipient, without an intermediary to handle the transfer. Once Bitcoin does its job of moving your value across the globe to its recipient it needs to be ‘read out’, i.e. turned back into money, in the same way that your letter is displayed to its recipient in an email.

In the email scenario, once the transfer happens and the email you have received conveys its information to you, it has no use other than to be a record of the information that was sent (accounting), and you archive that information. Bitcoin does this accounting in the block chain for you, and a good service built on it will store extended transaction details for you locally, but what you need to have as the recipient of Bitcoin is money or goods not Bitcoin itself.

Bitcoin’s true nature is as an instant way to transmit money anywhere in the world. It is not an investment, or money itself, and holding on to it in the hopes that it will become valuable is like holding on to an email or a PDF in the hopes it will be come valuable in the future; it doesn’t make any sense.

Despite the fact that you cannot double spend them and each one is unique, Bitcoins have no inherent value, unlike a book or any physical object. They cannot appreciate in value. Mistaken thinking about Bitcoin has spread because it behaves like money, due to the fact it cannot be double spent. This fact however has masked Bitcoin’s dual nature of being digital, duplicable and not double spendable.

Bitcoin is digital, with all the qualities of information that make information non scarce. It sits in a new place that oscillates between the goods of the physical world and the infinitely abundant digital world of information, belonging exclusively to the digital world but having the characteristics of both. This is why it has been widely misunderstood and why a new approach is needed to design businesses around it.

All of this goes some way to explain why the price of buying Bitcoins at the exchanges doesn’t matter. If the cost of buying a Bitcoin goes to 1¢ This does not change the amount of money that comes out at the other end of a transfer. As long as you redeem your Bitcoins immediately after the transfer into either goods or currency, the same value comes out at the other end no matter what you paid for the Bitcoins when you started the process.

Think about it this way. Let us suppose that you want to send a long text file to another person. You can either send it as it is, or you can compress it with zip. The size of a document file when it is zipped can be up to 87% smaller than the original. When we transpose this idea to Bitcoin, the compression ratio is the price of Bitcoin at an exchange. If a Bitcoin is $100, and you want to buy something from someone in India for $100 you need to buy 1 Bitcoin to get that $100 to india. If the price of Bitcoin is 1¢ then you need 10,000 Bitcoins to send $100 dollars to India. These would be expressed as compression ratios of 1:1 and 10,000:1 respectively.

The same $100 value is sent to India, wether you use 10,000 or 1 Bitcoin. The price of Bitcoins is irrelevant to the value that is being transmitted, in the same way that zip files do not ‘care’ what is inside them; Bitcoin and zip are dumb protocols that do a job.

As long as the value of Bitcoins does not go to zero, it will have the same utility as if the value were very ‘high’.

Bearing all of this in mind, its clear that new services to facilitate the rapid, frictionless conversion into and out of Bitcoin are needed to allow it to function in a manner that is true to its nature.

The current business models of exchanges are not addressing Bitcoin’s nature correctly. They are using the Twentieth Century model of stock, commodity and currency exchanges and superimposing this onto Bitcoin. Interfacing with these exchanges is non-trivial, and for the ordinary user a daunting prospect. In some cases, you have to wait up to seven days to receive a transfer of your fiat currency after it has been cashed out of your account from Bitcoins. Whilst this is not a fault of the exchanges, it represents a very real impediment to Bitcoin acting in its nature and providing its complete value.

Imagine this; you receive an email from across the world, and are notified of the fact by being displayed the subject line in your browser. You then apply to your ISP to have this email delivered to you, and you have to wait seven days for it to arrive in your physical mail box. The very idea is completely absurd, and yet, this is exactly what is happening with Bitcoin, for no technical reason whatsoever.

It is clear that there needs to be a re-think of the services that are growing around Bitcoin, along with a re-think of what the true nature of Bitcoin is. Rethinking services is a normal part of entrepreneurialism and we should expect business models to fail and early entrants to fall by the wayside as the ceaseless iterations and pivoting progress.

Bearing all of this in mind, focussing on the price of Bitcoin at exchanges using a business model that is inappropriate for this technology simply is not rational; its like putting a methane breathing canary in a mine full of oxygen breathing humans as a detector. The bird dies even though nothing is wrong with the air; the miners rush to evacuate, leaving the exposed gold seams behind, thinking that they are all about to be wiped out, when all is actually fine.

Bitcoin, and the ideas behind it are here to stay. As the number of people downloading the client and using it increases, like Hotmail, it will eventually reach critical mass and then spread exponentially through the internet. When that happens, the correct business models will spontaneously emerge, as they will become obvious, in the same way that Hotmail, Gmail, Facebook, cellular phones and instant messaging seem like second nature.

In the future. I imagine that very few people will speculate on the value of Bitcoin, because even though that might be possible, and even profitable, there will be more money to be made in providing easy to use Bitcoin services that take full advantages of what Bitcoin is.

One thing is for sure; speed will be of the essence in any future Bitcoin business model. The startups that provide instant satisfaction on both ends of the transaction are the ones that are going to succeed. Even though the volatility of the price of Bitcoin is bound to stabilise, since it has no use in and of itself, getting back to money or goods instantly will be a sought after characteristic of any business built on Bitcoin.

The needs of Bitcoin businesses provide many challenges in terms of performance, security and new thinking. Out of these challenges will come new practices and software that we can only just imagine as they come over the horizon.

This article is available in Hungarian

An essential feature of the standard attack against Bitcoin is to point to the price charts generated by a single Bitcoin exchange and then use that as definitive proof of Bitcoin’s unsuitability for any purpose.

The attack uses these single source charts to ‘prove’ that Bitcoin is a mania, like the Dutch Tulip mania or Bollengekte of 1637, or that Bitcoin is ‘insecure’ or any other fundamental flaw, technical, financial, philosophical or psychological you care to mention.

Let us be perfectly clear; these Bitcoin detractors are ignorant of what Bitcoin is. They are near horizon thinkers, dullards, luddites, and the sweetest irony of it all is they are peddling their flawed ideas on a medium that directly disproves their theories.

I have already debunked and quashed many of the fallacies that are routinely trotted out whenever Bitcoin is discussed by the ignorant on our blog; now I want to clear up a different fundamental mistake that all the current detractors of Bitcoin are routinely making, which is perfectly exemplified by the recent MarketWatch video item, which unintelligently parrots all the anti-Bitcoin nonsense as if it were being read from a centrally provided script or press release.

The fundamental mistake these ignorant people are making is this; Bitcoin is not an investment, it is a container and payment method.

When you think about Bitcoin in these terms, it becomes instantly clear that Bitcoin itself should not be treated like stocks or commodities. If you think of Bitcoin as only a container you use to shuttle payments to people for things on and off-line, you immediately understand that looking at stock market style charts of its value from a single exchange as a way of gauging its future potential is completely ridiculous.

Bitcoin’s potential lies in its power to facilitate peer to peer purchases; it is not a commodity or a stock or a company, it is a method, a container, a protocol that people use to make purchases between themselves.

Think about it this way; if, in 1997 you were told about a thing called ‘the Internet’, that would replace sending letters, utility bills and postcards through the mail to people all over the world at no cost, via a system that would not be run by any central authority and which was sure to utterly change the world and make people millions of dollars, you would be interested in it as an investment.

Someone could (having fundamentally misunderstood what the Internet actually is) buy many domain names and then issue certificates against them, put these certificates into an exchange, and then start to sell them to investors. Charts would have been generated, and as a land rush began as the potential of the Internet became apparent to everybody, you would have seen a massive spike in the quoted prices of domain name certificates.

Unique names like ‘sex.com’ could have been bought into by syndicates, who issued shares in it so that the cost of investing in ‘rare’ domain names could be spread out. You could buy shares in that domain name syndicate, and see their value rocket up.

Are you beginning to get the picture? Domain names are nothing more than a method to instruct client programmes on computers to connect to a numeric address that refers to a server computer on the internet. They have no value in and of themselves; the value in a domain name rests solely in the work that programmers put into expressing the ideas of entrepreneurs who run the websites the domain points to.

A three letter domain name like ‘sex.com’ is no guarantee of success on the web in and of itself; the same is true of Bitcoin. No one would have paid a billion dollars for the domain name ‘google.com’ before Google put millions of man hours and genius into their software, for example.

If you want to ‘invest in the Internet’, you need to invest in a company that uses the internet to provide value to people. You cannot invest directly in the Internet, which is nothing more than a series of protocols defining containers for information that have been agreed upon by individuals. When you think about Bitcoin in these terms, you start to understand why all these foolish pundits sound so ridiculous. They literally have no idea what they are talking about.

Bitcoin is a way to convey value from one person to another without a third party. Email is to postal services as Bitcoin is to money. It has no monetary value in and of itself; it has a very high utility, not intrinsic value. This is why looking at a single chart from MTGox and inferring anything about Bitcoin in general, or its future, or its utility and true nature is completely absurd. This is why attempting to apply Austrian monetary theory to Bitcoin is a fool’s errand. Bitcoin is not money, any more than a leather wallet is money or an email is a letter written on your personal stationary; you would not define a wallet as money, or a domain name as money or a piece of paper with ink on it simply because someone buys and sells them as goods.

The real issue is not whether Bitcoin will ever be so widely adopted that it, “acts like a real, stable currency”. The only issue is wether or not it is widely adopted, and when the disruptive effects it will have on the current crop of online payment systems that are in thrall to the State, begin to emerge.

And Bitcoin is a very very disruptive technology.

Think about Bitcoin in comparison to PayPal. PayPal is essentially a centralized brick-less bank, that keeps a ledger of user’s accounts and transfers, and which charges per transaction fees. It strictly controls how much of your own money you can withdraw from them to your own bank account, how much of your own money you can spend at any one time, and PayPal are notorious for their freezing of user’s accounts, service problems and lust for compliance with the regulations of the State. For example, users of PayPal unfortunate enough to live under the yoke of the government of India have recently been informed that they will not be allowed to receive payments that exceed $500 per transaction and that they will not be able to keep any of their money in their PayPal accounts longer than one week; all money received into PayPal must be transferred to their Indian bank account within 7 days.

I will take for granted your outrage at these anti-human and arbitrary restrictions.

Now consider Bitcoin. Bitcoin turns every user into an operator of their own fully functional, trans continental, free of State control PayPal service. They can accept money and then transfer Bitcoins from their computer to anywhere in the world instantly, without interference from anyone. They can accept Bitcoins on their computer in exchange for goods or services in a similar manner. The key insight that mainstream thinking people are missing is that Bitcoin can be exchanged for anything, not just money. Its accounts are essentially disposable and not tied to you permanently. You do not have to identify yourself to any third party in order to use it. If you adopt Bitcoin you are at liberty to use it in any way you like, with as much of your money as you like.

When you think about Bitcoin correctly, you can begin to see that its potential is as big as the advent of the internet itself, since money is half of all transactions. In the same way that email disrupted the postal service, Bitcoin will disrupt the making and receiving of payments. If you want to send a post card, you do not have to use a postman or government mail. You simply send an email. From your mobile phone. This is taken for granted, now, but it represents a tectonic shift in the way people communicate.

Think about how the internet and Fraunhofer-Gesellshaft’s Perceptual Audio Coding software (that powers the MP3 file format) has changed the way music is distributed and consumed. No more buying Cassettes, Vinyl records and CDs in stores; no more middle men between the musicians and the music lovers. This is what Bitcoin is going to do in the realm of money transfer. And of course, the circle will be completed when music lovers pay tributes to their favourite musicians with Bitcoins.

Very small payments will now become possible and plentiful…anyone can develop their own money transfer and content monetizing service on top of Bitcoin without having to interface with one of the main payment processing companies. This represents a massive shift and unprecedented opportunity on a global scale. There are so many possible uses of Bitcoin you could spend all day imagining its potential uses, and you might still completely miss its killer application.

None of the people trying to pour cold water on Bitcoin ever mention Namecoin, which is a DNS alternative based on Bitcoin. This is probably because they are ignorant of what Bitcoin actually is, and are simply regurgitating what others have written and said about Bitcoin, rather than doing their own thinking about it. DNS, as I say above, is the system of marrying words with the numeric addresses of computers on the internet. It is how people connect to sites on the net with their browsers, allowing them to type in a name instead of a number. The DNS system is being attacked by the State as a way of taking publishers off-line. Google “ICE domain seizures” to find out what I am talking about. Namecoin has the potential to decentralise the DNS system, making it impossible for the State to seize domain names and attack publishers.

This is only one possible future use of Bitcoin, and as we have seen with the appalling totalitarian police state scandals surrounding government sabotage and poisoning of the centralised DNS system, Namecoin could remove the power of the State to control this critical part of the Internet infrastructure.

The potential of Bitcoin is obvious to those that are intelligent, that understand computers and software, who have some knowledge of the present state of and recent history of the internet and the problems of money transfer online. Anyone who knows what this really means is awestruck, gobsmacked at how everything is about to fundamentally change.

To conclude, whenever you hear anyone attack Bitcoin, your first response should be to be skeptical of the intelligence and depth of understanding of the attacker. They will cite any or all of the following to try and dissuade you from adopting Bitcoin:

• Bitcoin has no backing
• The exchange rate is volatile (with obligatory MTGox chart)
• Bitcoin is a Speculative Bubble
• Bitcoin is used for buying drugs
• Bitcoin is run by amateurs ‘The MyBitcoin Fiasco’
• Bitcoin is only for techies, not for the average person

All of these reasons for avoiding Bitcoin are straw men, trotted out by the unintelligent who cannot think for themselves, have weak powers of insight, are very probably computer illiterate, or who are philosophically predisposed to disliking Bitcoin because they have mistaken it for money due to other people having claimed that it is money.

The first and last straw men are particularly galling. The dollar is backed by nothing, and these same people insist that it is money simply because other people accept it as money, but by magic, this logic cannot simultaneously apply to Bitcoin. The Internet was once ‘only for techies’ and now everyone uses it, and the people who do not are the exception, the ‘disadvantaged’ who must be helped to get onto it. If it were not so tragic, you would think these pretexts for rejecting Bitcoin were funny.

I predict that the same will be true of the mass adoption of Bitcoin as it was for the mass adoption of the Internet. In the very near future, the people who do not use Bitcoin for sending and receiving payments will be the exceptions, and the disadvantaged.

I will leave it to you to extrapolate from that, what the true value of Bitcoin is.

The Satoshi Gate is a new way for Bloggers to monetize their writing.

It is a WordPress plugin that allows you to collect very small, easy to make payments from your loyal readers.

It works like this.

When a user comes to your Blog, she is presented with a fresh Bitcoin address to which she may send a ‘Satoshi’ (the smallest denomination of a Bitcoin).

Once she sends the Bitcoin, The Satoshi Gate plugin does the following:

It records a hash of the IP of the visitor, and puts it in the DB against the Bitcoin address that was generated for this IP and this visit and/or this page request.

The Satoshi Gate plugin checks the blog owner’s running instance of the Bitcoin client to see if/when the payment is received.

After the payment is sent, a cookie is set and this user/IP is allowed to read the article, or is allowed access to the blog for a day, week month or in whatever way the access policy is set in the Satoshi Gate preferences pane in WordPress admin.

Satoshi Gate gives you the following advantages over other payment systems:

• Free to download and use
• No recurring use fees
• Instant install
• Easy to configure
• Super small transaction fees
• Super small payments
• Unobtrusive to the readers of your blog
• No third party involvement
• Collect your money in realtime, no monthly payouts
• No risk

The Satoshi Gate allows you to specify the way you divide up and serve your content in a fine grained way.

You can run your Satoshi Gate in tip mode, where a small, vey mild floating nag box appears to one side until you tip to remove it. You can set teaser posts, or give people the first half of a post only, the rest being unlocked by a Satoshi. You can allow them to read three posts for free, then pay for the fourth. You can create flexible post bounties where an entry will be released to everyone for free after a certain amount of Bitcoins have been received… and those are just a few examples of some of the cool marketing strategies you can create and mix and match with the Satoshi Gate plugin.

Because you can ask for extremely small payments for access to your blog, no one will begrudge paying you, and if you are a good writer and have thousands of visitors, or perhaps a blog post that goes viral, it will be possible to collect significant amounts of money.

You can of course, set your Satoshi Gate to collect any number of Bitcoins, including ‘pay what you want‘ not just the smallest denomination.

The Satoshi Gate is quite naturally, open source, and will be available through the WordPress plugin site.

There is another interesting article over at Lew Rockwell about Bitcoin, which is a transcript of a conversation with Doug Casey, who we have blogged about before. This man is a truly great speaker and thinker, and as proof of this, I direct you to watch Mr. Casey in action.

In the interview, Doug Casey says something truly astonishing, because if it is true, it means that the next iteration of Bitcoin is already here and is sure to fulfil the promise of a decentralised, unregulated, freedom and pure value centred money. Here is the line that I am talking about:

So, way before the dollar value of Bitcoins stepped off a cliff last weekend, I was telling people who asked me that I didn’t use them and didn’t plan to use them.

Frankly, I can’t see why anyone would, when there’s already an electronic digital currency like Bitcoin but backed with gold: GoldMoney. I should disclose that I’m a small investor in the company.

http://lewrockwell.com/casey/casey89.1.html

My emphasis… What?!

An electronic digital currency like Bitcoin, backed with gold?!

I had to find out more about this!

GoldMoney has a good looking website:

http://www.goldmoney.com/

It says its ‘simple and secure’ and that you have ‘Complete ownership of the metal you buy’.

Better and better!

But where is the ‘download’ link? I want to start using it right now!

When you click on ‘Find out more about how to get started with GoldMoney’

Ooookkkkkk.

OnMouseDown we are not presented with a link to some software but instead we are displayed the following:

At GoldMoney we make it very easy for you to conveniently buy, own and store precious metals. The first step is to sign up for free to open a Holding, which is a personal record of your activity in GoldMoney and the metal you own. After a short verification process, you can transfer money to fund your Holding and start buying metals to preserve your purchasing power.

You have to sign up for a ‘holding’, complete ‘identity verification’ and then transfer funds.

Personal Record?
Verification process?

This doesn’t sound like Bitcoin at all!

It gets worse.

They then ask you for your country of residence. What on earth has that to do with MY MONEY?

And then it gets even WORSE:

Country of Residence

Depending on the country you live in, you can sign up for different types of Holdings. GoldMoney accepts customers from 93 countries. If your country of residence is not one of the countries listed above, unfortunately we are currently unable to accommodate your application. If you are temporarily living in a country not listed above but your primary country of residence is on the list, please contact us to discuss your situation. For example, if you are an international aid worker temporarily assigned to a non-listed country but your primary residence is in the UK, we will most likely be able to accept you as a customer.

If you move to another country after you open a Holding, please take into consideration that this could affect the type of Holding you are able to have.

Netherlands & Netherlands Antilles

Due to a review on the rules applicable to the sale and storage of precious metals, we are currently unable to accept applications from Dutch residents.

Sucks to be Dutch then. I guess that the Dutch don’t have any property rights. I guess that if I am Dutch, I can’t spend money on the internet, with this ‘Bitcoin like’ money. What?

And then it gets unimaginably worse:

We claim that we are from Italy, and then say submit. You then get this:

Enter your name and contact details during the sign-up process

Upload a scanned image of a bank statement or bank cheque before the initial funds are sent from your bank account

Upload a scanned image of your photo ID (passport, national ID card or driver’s license)
Send a certified copy of your photo ID and an original bank statement or utility bill along with a completed CAP Form (letter or A4-size) to us by post

Additional verification of your identity and the source of your funds may be required depending on your circumstances and the Holding value

Unbelievable.

And this, given the interview, is the most surprising thing of all:

Security and integrity

As a company regulated by the Jersey Financial Services Commission, GoldMoney complies with anti-money laundering legislation, which requires GoldMoney to know the identity and residential address of each of its customers. We make use of a Customer Acceptance Policy (CAP), to ensure the security and integrity of the GoldMoney system. More information about the CAP and how to sign up for your GoldMoney Holding can be found in our CAP FAQ.

But in the interview, Casey says:

That’s why the U.S. government and its media lapdogs have been so antagonistic to Bitcoin, claiming it’s primarily of interest to drug lords who want to use it as soap for their money laundering. They always mention it in conjunction with Silk Road, which claims to allow purchase of any drug through mail order, using Bitcoin as its payment system. I have no problem with that, but it’s a totally impractical idea in today’s world. It’s just an idea intended to scare witless Americans. Frankly, I’m disgusted at the fact money laundering is even accepted as a crime; thoughtless people believe whatever they’re told. It’s not a crime, by any rational definition. But that’s another subject for another day.

Well, I certainly agree with that sentiment; there is no such thing as ‘money laundering’… but I digress.

This service is as far from Bitcoin as you could possibly be. There is no software to download, you cannot buy and sell it from anywhere without restriction, you have to integrate with the state at a very intimate level, indeed, they cannot even offer this service to everyone, even Europeans like the Dutch, thanks to the State.

What if the State says that all gold in private hands is to be confiscated, as they did in 1933, and as they appear to be heading for right now. Is this company, for ‘Security and Integrity’ going to simply go along with the State and steal your money?

Who knows. Who cares.

I would never put my money into a service like this where the State is alerted of all your details and ‘holdings’. They offer no utility whatsoever in comparison with Bitcoin. You cannot spend your GoldMoney at retailers directly, you can only redeem your stored gold for cash, which you then have to either take in person or spend through another intermediary if you want to buy something from Bangalore. And of course, there are the myriad fees and taxes you have to pay each time you move YOUR MONEY around between these entities.

This is the reason why Bitcoins are valuable. There is no service like it anywhere.

You can get started with them instantly.
You do not have to identify yourself.
You can use them from any location.
You can send them to any location.
You can fund them with any currency.
You can spend them immediately.
Your transactions are private.
There are no taxes on transactions.
Transaction fees are so small as to be irrelevant, and if you are a miner, you get the fees back from other users.

All of these features and more make Bitcoin a tool with a very high level of utility. Bitcoins are scarce, and you need them if you want to make purchases without the onerous and illegitimate predations of the State.

If the ideas of Liberty are spreading, and they are, Bitcoin will have a very large and primed population of users who recoil at something like GoldMoney.

The utility of Bitcoin, which is a function of the number of users who want it, will entrench it, or at the very least, the idea of it.

We will never go back to government run money, just as we are not going back to music pressed on vinyl. The quality of sound has been sacrificed for Digital Convenience, and more music than ever before is in everyone’s hands, accompanied by a new economy where the middle man is being killed off. Digital music is here to stay, and so is Bitcoin. The middle men are going out of business, and everyone is going to benefit.

The frictionless utility of Bitcoin, like the experience of finding music, books, films and software and then downloading them immediately is something that once you taste it, changes your perception forever.

No one who uses Bitcoin is going to accept GoldMoney as ‘digital currency like Bitcoin’. Its like saying buying DRM’d iTunes files for 99¢ is like sharing FLACs on IRC / Dropbox with your friends (sorry, I slipped into ‘tecchie speak’ as the illiterates call it. What I mean is the experience of downloading and sharing unencumbered music files that you can play anywhere, freely, between friends and colleagues for nothing, is not at all like paying money for files from Apple, where what you get are files that you cannot share or use on all of your music devices. Apple is a cumbersome, restrictive and invasive intermediary vendor that spoils your music experience. Is that better? I can only dumb it down so much… sorry!).

The genie is out of the bottle, just as it is with file sharing. Eventually no one will pay for entertainment files. It will be culturally unacceptable and commercially impossible. Similarly in the near future, no one will accept that you cannot spend your own money whenever you want, however you want, without anyone other than you and the recipient having a say in it.

Bitcoin, or its immediate decedents will provide the secure infrastructure for this, and most certainly not GoldMoney or services like it.

This does not, obviously, invalidate the immutable, irrefutable idea that the best money is gold. All it means is that on the internet, if you want to spend money, the best way to do it is Bitcoin. It is the easiest, the most Libertarian styled, the most secure (yes, the most secure, all the recent problems with Bitcoin users have not been due to a problem with Bitcoin, but with the people who are running it and the incorrectly managed computers that they control) and transparent way of spending money.

Finally, it seems like the Ghandi rule is sweeping through the Libertarians who at first, instinctively and irrationally railed against the idea of Bitcoin.

The people on the wrong side of history appear to be very quickly moving from the laughing stage, and are already past the fighting stage it seems.

Bitcoin has already won.

First they ignore you, then they laugh at you, then they fight you, then you win.

UPDATE!

Jon Matonis hit the nail on the head about this company back in 2009. His article is just the sort of thing that journalists cannot produce, and that the best Bloggers are good at; concise, rational even handed, insightful and purely fact based writing that spells it out just as it is. Read it!

And check out this informative, in depth interview with Mr. Matonis: Jon Matonis on Agorist Radio

Richard Stallman informs the public in the Guardian with his opinion on Cloud Computing.

He is absolutely correct that the way Cloud Computing works right now is insane, and that anyone who trusts Google or any other Cloud Computing service with their data is ‘a sucker’.

The main problems that should concern anyone who is thinking about using these services are these; the sysadmins (the owners of the Cloud Computing service) can see all the data on the cloud that they manage, if they decide to cut you off for any reason, Wikileaks style, your data is lost. All it takes is a single phone call from the State, no warrant, no legal process. Lastly, the police can serve a warrant on the host company and not you personally to look at your data.

All of these are legitimate concerns, but what is not being seen here is why Cloud Computing could be attractive to millions of consumers.

Like many men who are confronted by difficult subjects, processes, realities and facts that they find inconvenient, consumers simply do not want to think about how their computers work; they just want to ‘do their email’.

The vast majority of people who use computers today do only two things on them; surfing the web and email. The Google Cloud Computing platform will do both of these wonderfully; it turns on instantly, has a very long battery life, and you can access your gmail (or any other webmail service) in an interface that you are already familiar with.

That is all most people need, and Cloud Computing does it identically to a local storage machine running a browser…. and there are still people out there, believe it or not, who ask ‘what is a browser’. This is the point that Richard Stallman does not understand, and it is the reason why Cloud Computing could take off in a big way. There are people, from the highly intelligent to the most stupid amongst us who are uninterested in ethics or the consequences of their actions, or how the world and technology really works.

There is another aspect to this that we have already touched upon on BLOGDIAL, and for the record, software is perhaps the only speech for which this statement always returns ‘true’ the answer to attacks on free speech is more speech.

As we wrote before, the problem of your data being visible to the sysadmins of Cloud Computing services can be solved by encrypting all the data on the users platform before it is stored in the Cloud so that Google cannot see it even if they wanted to. This would mean that the State serving a warrant on Google would be pointless, since all Google would be able to present to the police is unreadable ciphertext.

You solve the problem of privacy on Cloud Computing services not by complaining about them, or asking the State to outlaw what you do not like, but by writing software libraries and interfaces.

Then there is the problem of the State cutting you off from your files by forcing or intimidating the Cloud Computing service provider to do so.

This can also be solved by writing software; a simple adaptation of the Open Source tool rsync (a powerful mirroring tool) could do it; all the data that you generate on your Cloud Computing tablet or laptop is seamlessly sent to a mirror on your home or office computer, over SSL so that no one can see it in transit. It is stored in plaintext, in an identical folder structure so you can retrieve it at any time without downtime.

And there you have it.

There is no reason whatsoever why Cloud Computing cannot give you all the convenience of its particular innovations, with the security that your data cannot be seen or seized; all it takes is a little (in fact, very little) thought.

Looking back through the BLOGDIAL archive, we find that this negative attitude towards companies and their innovations is a bit of a theme with the FSF.

Defective By Design ran a campaign to try and get everyone to ‘not buy an iPhone’, the best ever mobile phone at the time.

When they were making this boycott call, Jailbreaking had already become wildly popular, with over 25% of all iPhones in circulation have been jailbroken / liberated.

Instead of helping that software effort, and using Jailbreaking as a means to educate people about all the important issues surrounding the Apple ecosystem, Defective by Design got precisely nothing and nowhere. It would have been far more useful to them if they had joined forces with Saurik so that he could improve the usability of the jailbreaking process and non Apple ecosystem software.

The lesson here is clear; in this information war, writing software is the key to winning anything real. Protesting, calling for boycotts of philosophically malodorous products and all other tactics like that simply do not work. The iPhone is bigger than ever, and so is Jailbreaking, which has now been determined to be legal; the FSF lost a big opportunity by not supporting it.

Android is gaining ground on iPhone sales; this is because the software is better philosophically. Apple is going to lose this one, in the same way that it lost the ‘PC war’, and the same way that Microsoft is going to be superseded by GNU/Linux. These behemoths may seem to be in an unassailable position, especially in the case of iTunes but in the end, they will fall, because the systems are not open, and they control the users like serfs. In particular, once everyone can do an A/B comparison to Android’s upcoming music service, or some other future service, iTunes will be dumped en masse.

With the Google Cloud Computing platform, there is an unprecedented opportunity to change the way it works by taking the Chrome OS source and altering it to make it privacy centred. Why would you, as a consumer, not take something that is private over something that is not, and which gives you local backups for free, without any change in the interface and no effort on your part? Even a sucker would go for it, and furthermore, the development of this is something that I would pay for and financially contribute to the building of.

One thing is for sure, all the complaining in the world will not make Chrome OS sane. The only sensible, moral and ethical way to fix it is to take it and modify it in a way that makes it trivial for anyone to have ‘Cloudy Chrome’ on their machine, with a simple patch or by any other simple means. People are willing to patch and modify their property in their millions, as we have seen with the iPhone jailbreaking phenomenon. Privacy and freedom are popular; what needs to be done is to make it easy for people to be free on Chrome OS.

Finally, what you cannot ever justify is calling on the State to force Google to respect the privacy of its users. There are some out there who have no problem with the idea of calling on the State to violate millions of people as a means of spreading their personal philosophies. They would, in a second, lobby for new law to force Google and all Cloud Computing service providers to add privacy and local backup facilities to their products. Calling on the state in this way is fundamentally unethical and unacceptable to all decent people. The way to change people’s minds about anything is to show them why doing it ‘my way’ is better. This means writing software that they can use, that costs them nothing to switch to (either in money or learning curve terms) that is clearly better for them.

Roll on Jailbroken Chrome OS!

If you have been paying attention at all, you will have read about the mass manifestation, the acephalous Anonymous and their successful attacks on MasterCard, Visa and PayPal:

What is interesting about all this is not that the sites of these large organisations have been bumped offline, but the slick consumer grade tools that are being used to do it.

LOIC is an acronym for ‘Low Orbit Ion Cannon’. It is a piece of software that runs on Windows Mac and Linux, and every instance of it presents the user with this simple interface:

It is easy to install and run, and when you run it, the twenty five people who direct the Botnet created by thousands of installations of LOIC can pour traffic onto any website they desire.

What is interesting about this is that LOIC, which does a sophisticated job in an interface that a child can use, is now spreading everywhere because one man, Joe Lieberman, made a public statement attacking Wikileaks, where he claimed that anyone who helped the site could be committing a crime.

Glen Greenwald dispels this lie very efficiently here:

With his single act, Lieberman’s words have had the unintended consequence of spreading the knowledge of how all of this works and LOIC itself into the machines of many tens of thousands of irate, dedicated internet users and the knowledge into the minds of millions of people who previously didn’t know anything about the workings of a Distributed Denial of Service attack. Indeed, I didn’t know what LOIC was until this event took place. So many people are talking about it, Google has a realtime results box on the main results page for the search term.

The perfect storm of this consumer grade DDOS tool, social media, Wikileaks, Joe Lieberman and the cowardice of the online payment systems has spawned a game change in how the internet is going to work in the future.

These tools and the ones that will surely follow, can never be stopped. In a perfect world, where companies like MasterCard, VISA and PayPal work only in the interests of their customers, these tools would not not be used to pop them off of the internet, if they existed at all.

But that is not what is really interesting.

Its clear that there is a problem with the way payment systems on the internet are structured; they are top down in shape, with a single point of failure, forcing two parties that want to transact to use the services of a third party.

This point of failure is a problem if you are like Wikileaks and have your account frozen and your ability to receive and send money stopped. It is a problem if you want to donate to a cause the state would rather see die. Its also a problem if copycat groups styling themselves on Anonymous decides that you are evil and that you should be ‘punished’.

With a single point of failure, both the customers and the companies that run the payment services are at risk of having their business disrupted.

The same is true for DNS; the state is arbitrarily, without warrants, charges or any legal process at all, seizing domain names to shut down access to websites. Clearly DNS and the way it works is a huge problem, especially when we are talking about Wikileaks and the sites like it that will surely follow. There are already plans afoot to create a distributed DNS system; hopefully it will be robust enough to protect everyone and their domains.

As for the question of money, a system like Bitcoin is a possible solution to the problem of companies like MasterCard, PayPal and VISA who do not have the best interests of the customer uppermost in their minds:

Bitcoin is a peer-to-peer network based anonymous digital currency. ”Peer-to-peer” (P2P) means that there is no central authority to issue new money or to keep track of the transactions. Instead, those tasks are managed collectively by the nodes of the network. ”Anonymity” means that the real world identity of the parties of a transaction can be kept hidden from the public or even from the parties themselves.

[…]

http://www.bitcoin.org/faq#What_is_Bitcoin

This sounds good. In the Bitcoin system, there are a limited number of ‘coins’ the number of which cannot be increased; when the system is twelve years old there will be 21,000,000 coins in circulation:

New coins are generated by a network node each time it finds the solution to a certain calculational problem (i.e. creates a new block), for which an average solution time can be calculated. The difficulty of the problem is adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 coins will be created. The amount is halved each 4 years, so it will be 5,250,000 in years 4-8, 2,625,000 in years 8-12 and so on. Thus the total number of coins will approach 21,000,000 over time.

This is very interesting indeed. It means that there is now a greenback style currency that the state can have no control over, cannot monitor and which people can use to exchange goods. It seems to take the best parts of Chaumian e-Cash, whilst removing the bad parts, i.e. centrally controlled mint in a centrally controlled location, owned by a single corporate entity, constituted under the laws of a state. It does have some serious flaws however, one being that everyone can see your transaction history if they have your address… yikes!

The source for Bitcoin is available, so if you are minded to do it, you can set up your own identical network. Its all very intelligent, and it costs you nothing to try it out. You could even fix its flaws and release an improved version.

This is exactly the sort of thing that needs to be done to solve the problems sketched out above.

Using LOIC to knock websites off the internet doesn’t pass the BLOGDIAL demonstration test; once the act is over, just as in a demonstration, all the problems are still there:

• Wikileaks can’t receive donations.
• Wikileaks is still having its websites attacked by the state.
• The online payment systems still cut anyone off with only a phone call from the state as a reason.
• Other websites still capitulate without a phone call; a television statement will be enough.

All of this is predictable from the beginning, and so, using LOIC ‘to make a point’ doesn’t make sense in the long run.

It is however, and hopefully, an iteration. Once the futility of DDOSing sites dawns on Anonymous, they might turn to writing pieces of software like Bitcoin, or simply running the Bitcoin client to help the creation and spread of the currency. Or as has just been announced something else.

They might get the millions of people who are following them to contribute financially to the effort to create a distributed DNS. They might even reproduce the work of Operation Clambake where the ‘Sacred Documents’ of Scientology were so extensively mirrored on the internet that if you search for OT3 Operating Thetan you can read it all – which is exactly what the Scientologists do not want.

MasterCard, VISA and PayPal have made a massive long term business error. In their knee jerk response to appease Joe Lieberman, they have awakened millions of people to the fact that their money and access to goods on the internet is not guaranteed if you use their services. They have awakened a software developer somewhere who is going to write the equivalent of ‘Bittorrent for Money’ that will completely eliminate their dominance of the online payments market; remember; credit cards are a 1970’s idea that has been superimposed onto the internet. It is inevitable that this system of cumbersome numbers married to plastic cards is going to be superseded. Bitcoin might be this system, it might not be. It might be one of several replacements. Either way, these new systems are coming now, guaranteed, and there will be nothing that anyone can do to stop it.

Think about this; imagine that Bitcoin is huge, with millions of users. It is running not only on laptops and desktops, but on mobile phones. It is integrated into tens of thousands of websites through its API. Some of those users run exchange services; they sit in Cafes or in dorms or offices, and they will trade ‘street money’ for bitcoins. Social networking brings these parties together to transact. Now there is an interface between the real world and the Bitcoin ecosystem that will be impossible to shut down or even monitor. You might be able to pick off one or two of the people who provide this service, but for all intents and purposes, it will be as impossible to stop this Bitcoin economy as it has been for the state to stop the illicit drug economy in its ridiculous ‘war on drugs’.

Had MasterCard and its like taken a stronger stance against the state, they would not face this inevitable circumstance in the near term, and might have been able to transition to the new styles of online payment; now it is too late – no one trusts them.

Finally on to the subject of boycotting Amazon for kicking Wikileaks off of its hosting service.

Amazon, being the rightful owner of its servers has the absolute right to refuse to serve anyone. The consumer has the absolute right to refrain from using Amazon services for whatever reason.

Think about this; imagine if Amazon was knowingly selling sex slaves or ‘murder to order’ through its service, ‘because it could’. This reprehensible and unambiguously immoral trade would be enough to cause you to boycott them. On the other extreme, because Amazon sells pornographic novels, there are some who would not use them by virtue of that taint.

Somewhere between those two poles is the Wikileaks case.

Wikileaks, by exposing the lies of the mass murdering, thieving and destroying state is a benefit to you directly. Amazon, in the act of kicking them off of their service, without being forced to do so, i.e. voluntarily, is wilfully aiding and abetting the state in its aim of covering up its deception, mass murder and theft. That means that Amazon is working directly against your interests as a human being.

Amazon is not a victim of the state, and I have been thinking about this quite a bit over the last few days; they are a willing participant in covering up the evil of mass murderers. They acted without a court order, national security letter or any other direct attack from the state. Had they received such an attack, they would be victims of an attack, but since no such attack came to them, they are and were not under direct threat.

In this instance, a boycott is justified in my view; these people are directly attacking me and everyone else by arbitrarily deleting the Wikileaks site; and it must be pointed out that they did not delete the site during the previous Wikileaks expose ‘Collateral Murder’.

Once again, if they want to delete Wikileaks, they have the right to do so; its their property. What you cannot claim is that Amazon is a victim, because that simply is not true.

Its been a very interesting week. Whatever the truth is behind Wikileaks, there have been unintended consequences that will change the internet in ways that the state has not factored in to its responses or plans, depending on what you think about the origin of Wikileaks and the people who run it.

The state is not all powerful. They cannot predict what people will do with software, and that is the truly profound game changing factor. LOIC is just the latest in a long line of pieces of software that change the way people think; Napster, Gnutella, Bitorrent, are all predecessors of this trend, Bitcoin is a new one and there are others in the pipeline. One thing is certain; the state cannot keep up with all of the developments, because there are too many people out there developing the tools and using them once they are deployed.

When the next perfect storm of software and a cause comes around the effects will be even more intense and more unstoppable; this is the trend that the state cannot resist. As they clamp down harder, the internet pushes back with an exponentially greater force.

The sound it makes is the sound of inevitability.

Someone that we follow on twitter is a classic violent socialist, that also believes in depopulation, ‘global warming’ and all of the other fear based eco fascist nonsense that is out there that the delusional live to cling to.

Recently, this person tweeted that:

UK regulator Ofcom lobbies Brussels against net neutrality – http://bit.ly/bRdVwJ #Ofcom betrays the British public #netneutrality

Knowing that this person tweets a mix of violent socialist garbage and important tech news related to copyright, it spurred me to finally take a close look at ‘Net Neutrality’, and lo and behold, it is Orwellian doublespeak and violent socialism.

Throwing “Net Neutrality Socialism” into the googles, we get this:

James G. Lakely: ‘Net Neutrality’ Is Socialism, Not Freedom

AHAA!

Advocates of imposing “network neutrality” say it’s necessary to ensure a “free” and “open” Internet and rescue the public from nefarious corporations that “control” technology.

Few proposals in Washington have been sold employing such deceptive language — and that’s saying something. But few public policy ideas can boast the unashamedly socialist pedigree of net neutrality.

True.

‘Net Neutrality’ is a name that is highly deceptive and a form of subtle emotional and intellectual blackmail.

When you are asked wether or not you are for or against ‘Net Neutrality’ the conjunction of these two words, both of which are beneficial in meaning separately, immediately pressure you to believe that you are for it, since everyone wants to be (and appear to be) a reasonable person.

The word ‘Net’ is short for the greatest invention since the Gutenberg press. What reasonable person could be against that?

‘Neutrality’, the opposite of being biased, is a word that conveys goodness in almost every sense; a state which journalists strive for, closely related to that new brainwashing word ‘fair’.

What they do not tell you is that ‘Net Neutrality’ is actually a sinister code word for violent socialism.

The modern Internet is a creation of the free market, which has brought about a revolution in communication, free speech, education, and commerce. New Federal Communications Commission Chairman Julius Genachowski apparently doesn’t like that. He stated last month the way Internet service providers manage their networks — in response to millions of individual consumer choices — is not sufficiently “fair,” “open” or “free.”

And there you have it. The unconstitutional FCC, openly uses the new socialist programming word ‘fair’ in its push to wreck the internet, which has grown perfectly well without the help of the state, despite its origins in DARPA.

The chairman’s remedy is to claim for the FCC the power to decide how every bit of data is transferred from the Web to every personal computer and handheld device in the nation. This is exactly what the radical founders of the net neutrality movement had in mind.

This is of course, complete madness. Whatever the state touches, it ruins. The internet works by private people agreeing to route traffic through each other’s private networks. None of this has anything to do with the state.

If some large providers want to shape traffic, that is entirely their business. Its their bandwidth, their hardware and the contracts they have with their customers are private. If traffic shaping ruins the experience of the users of these knobbled internet access points, then the customers will leave in droves, to find un shaped access points.

The free market in internet access will determine which companies survive and which do not, which style of ISP is best and which should fail.

Once again, none of this is the business of government.

The concept can be traced to an iconoclastic figure, Richard Stallman, a self-described software freedom activist who introduced the term “copyleft” in the mid-1980s. In his 2002 essay “Free Software, Free Society,” Stallman fiercely attacks the idea that intellectual property rights are one of the keystones of individual liberty, so important that patents and copyrights are affirmatively protected in the body of the Constitution.

Copyrights and Patents are in fact evil. They are not founded upon any rational basis, are a legacy idea from the age of absolute monarchy, and are a disaster for humanity on every level. This is not a matter of ideology or belief, but is a truth grounded in evidence based fact.

According to Stallman, “we are not required to agree with the Constitution or the Supreme Court. [At one time, they both condoned slavery.]” Like slavery, he says, copyright law is “a radical right-wing assumption rather than a traditionally recognized one.” Rebuking those who might find a Marxist flavor in his call for a “digital commons,” Stallman turns the tables, writing: “If we are to judge views by their resemblance to Russian Communism, it is the software owners who are the Communists.” […]http://www.washingtonexaminer.com/opinion/columns/OpEd-Contributor/_Net-Neutrality_-Is-Socialism_-Not-Freedom-8410175.html

What Richard Stallman and the Free Software movement people are actually advocating are property rights in software, which all Libertarians and correctly thinking people would agree with on examination.

When you buy a copy of a proprietary piece of software, you do not actually own it; you own a limited license to use that software, that restricts your ability to decompile it, share it by copying it, modify it, re sell it, or use it in a context and on hardware other than what the writer and owner of the software allows you to. On top of all that, the manufacturer disclaims any liability of any kind for anything that happens to you or your hardware as a result of you using their software.

When you download Free software on the other hand, it belongs to you. You have the right to modify it, to share it, to run it anywhere and to make money off of doing all those things.

The authors and licenses that cover Free Software respect your property rights in ways that the makers of proprietary, ‘closed’ softwares under restrictive licenses do not. You cannot be for property rights of ISPs and simultaneoously against Free Software and its advocates, and be logical at the same time.

Richard Stallman is actually for property rights, not against them in the matter of computer software. He is doing something about it not by advocating violence against the makers of proprietary software, but by creating his own software and releasing it for free, under a license that respects your rights. This is a pure free market response to a problem, that uses voluntarism and liberty as its tools, and it has worked so spectacularly, and to such an extent, that it has become a commercial threat to the makers of closed proprietary software, causing them to lie, bribe, steal and use the violent state (much in the same way that the Net Neutrality advocates are trying to do) to destroy Free Software.

Net Neutrality is about state control of ISP’s hardware and the expense of bandwidth (physical property and cost). Intellectual Property is a separate matter.

Intellectual Property is a state granted limited monopoly on ideas, and who can profit from them. People who are against collectivism and the state must concede that Intellectual Property is a bad thing if they are to remain honest; especially after having read ‘Against Intellectual Monopoly’, which proves that Intellectual Property is damaging to the very thing that they claim it produces and protects; prosperity and the promotion of the creation of new ideas.

Now, lets take a look at what Net Neutrality actually means in practice.

You run an ISP, and have entered into private contracts with one million people. The state, at the behest of violent and ignorant socialists, passes a law saying that you may not shape your traffic on your own machines that deliver bandwidth to your customers.

Should you refuse to do what they say, a representative of the violent socialists will launch a ‘Class Action Suit‘ against you and you will be fined. If you refuse to pay the fine, you will have violent thugs arriving at your office to arrest you and haul you off to gaol.

This is the reality of what the Net Neutrality advocates are asking for; they want people who do not believe what they believe and who will not work for them to be put into gaol and to have their property confiscated by the state.

This is a despicable, evil and dastardly personal philosophy.

We tweeted to the person what we follow that if he wants ISPs not to shape traffic, he should set up a brand and standard that ISPs can conform to, ask them to join it and let people voluntarily work together for an internet where all traffic is treated the same, pointing out that Net Neutrality is government violence… Yes, all of that was compressed into 140 characters.

The response?

I’m advocating intelligent government, not violence…

It all sounds nice and cozy doesn’t it? “I’m a nice guy, I’m not violent, I want ‘Intelligent Government’ and ‘Net Neutrality'”… its all complete lies, designed to cover the inherent violence of the state and its clients.

These people are disgusting, not because they want a better world, indeed, their motivations are pure, and in person, they are nice people – they are disgusting because they are violent, and point blank refuse to face the facts and consequences of what it is they are advocating, and in the case of ‘Net Neutrality’ they are advocating theft, coercion and violence.

We know for sure that we do not need the state to keep us safe or to make the net ‘fair’ Underwriters Laboratories is a perfect example of how voluntary cooperation works better than the state. Indeed, the internet itself is proof of that.

We do not need the state to mandate more efficient light bulbs; private industry is more than capable of doing that in ways that environmentalists and politicians are not capable of imagining.

Think about it; Bitorrent is responsible for one third of all internet traffic. If ISPs start to shape traffic, there will be a mass exodus to ISPs who do not, causing one of three things to happen:

1/ the ISPs that shape traffic relenting to stem the loss of customers

They are only interested in making money. If they lose customers, they die. Its as simple as that.

2/ the ISPs that shape traffic entering into contracts with content providers, replacing lost customer revenue with fees from the media giants

This means that everyone who wants Bittorrent and unrestricted access to any service on the net will leave those ISPs that shape traffic, leaving those who want to watch corporate content.
The people who want full access will get what they want, the ISPs will get what they want, new business models will emerge, new ISPs – everything will work perfectly.

3/ something unexpected

The violent Net Neutrality advocates say that new services will not be able to become successful if ISPs shape traffic; this is simply not the case. No service starts at a size that requires mass bandwidth; all startups begin by using a trickle of bandwidth, they grow slowly and organically and only when they are hugely popular begin to hit a wall bandwidth wise. In other words, as these businesses grow they have a chance to find their place in the market under the constraints of it.

Here is an example of how it would work in real life. A new service starts to become popular. This service requires bandwidth (like Soundcloud). People want to use this service, but find that their ISP is shaping traffic to and from it. The ISP has two choices; un shape traffic to the new service, or risk losing their customers.

The new service, as it grows, will suddenly find that it could have millions of voices all rooting for it with their ISPs. This kind of commercial pressure is enough to ensure that any new service that starts to become popular will have enough bandwidth to grow and potentially dominate.

Think about this also; if many smaller services get together to put pressure on ISPs, their voices could be bigger than any single growing startup.

You can sit around and come up with an infinite number of scenarios that will solve the shaping problem; the point is that interference from the state is the worst possible solution of all solutions.

Not only is state interference not the best solution, it is also inherently immoral and violent.

If people insist on pushing for Net Neutrality, they need to acknowledge that they are indeed violent socialists.

That sort of plain speaking honesty is very important when framing any discussion about this subject. From the looks of it however, it seems that honesty about their violent tendencies is not going to be forthcoming.

UPDATE

Tim Berners Lee has an article at Scientific American, where he says:

The world wide web went live, on my physical desktop in Geneva, Switzerland, in December 1990. It consisted of one Web site and one browser, which happened to be on the same computer. The simple setup demonstrated a profound concept: that any person could share information with anyone else, anywhere.

So, the first instance of the WWW went live on a private desktop in Geneva.

Then we get this:

In this spirit, the Web spread quickly from the grassroots up. Today, at its 20th anniversary, the Web is thoroughly integrated into our daily lives. We take it for granted, expecting it to “be there” at any instant, like electricity.

The Web evolved into a powerful, ubiquitous tool because it was built on egalitarian principles and because thousands of individuals, universities and companies have worked, both independently and together as part of the World Wide Web Consortium, to expand its capabilities based on those principles.

[…]

The Web as we know it, however, is being threatened in different ways. Some of its most successful inhabitants have begun to chip away at its principles. Large social-networking sites are walling off information posted by their users from the rest of the Web. Wireless Internet providers are being tempted to slow traffic to sites with which they have not made deals. Governments—totalitarian and democratic alike—are monitoring people’s online habits, endangering important human rights.

Why should you care? Because the Web is yours. It is a public resource on which you, your business, your community and your government depend.

This leaves out some very important detail, and makes a statement that is factually incorrect.

The web evolved into what it is today because people decided to freely and voluntarily cooperate with each other, for their own ends as well as the common good that served those ends.

The web as we know it is NOT being threatened by Facebook and the other huge social-networking sites, or by traffic shaping; it is being threatened by violent socialists who think that it is ethical to steal property and capital from others so that their idea of what the web should be can be maintained.

Before I cary on, I agree that Governments — totalitarian and democratic alike, are a threat to people’s rights. Where we differ is in the understanding of what rights are, and where they come from. Rights do not come from the government, and no one has the right to steal, wether they are Tim Berners Lee or the state.

The net is not ‘yours’. The nicest way that I can put it is to say that this is a completely wrong construction. The part of the internet that belongs to you is your machine, bandwidth and your storage wherever it is. Your ability to contribute to it depends on the size of your bandwidth, storage and the processing power of your machine, all of which are your property, that no one has the right to steal from you.

The content you produce and upload to a third party site is subject to private contracts you enter into with the owners of sites you use. For example, Flickr has a contract that you have to agree with when you sign up with it. If you do not like it, you can decline their generous offer and go somewhere else or start up your own photo sharing site.

What Tim Berners Lee and the Net Neutrality people are advocating, is that your bandwidth and your computer, by virtue of being connected to the internet, somehow cease to be your property, and instantly become a part of some communist collective where you do not have any property rights, and where other people have rights to your property.

Think about it; under Net Neutrality, you will be compelled to keep your computer on and never to turn it off, unless the government gives you permission to.

There is no difference between that, and being told that you cannot shape traffic that your clients get from you as an ISP, except in scale.

As a Skype user, you agree to route traffic through your computer as part of the Skype TOS. This voluntary sharing of your machine and bandwidth helps other Skype users make calls. What Net Neutrality is demanding, is that you may not shut down Skype, because the telephone network is a ‘public utility’ of which your computer becomes a part as soon as you download and run Skype.

Its completely absurd.

Clearly the question remains; do ISPs and individuals have property rights, or do they not? If they do, how and by what right can Tim Berners Lee and the Net Neutrality advocates call for those property rights to be suspended by the state?

Just who do these people think they are?

Moving along, does anyone remember AOL? It was a hideous walled garden pseudo internet garbage filled CDROM spewing lamer-fest. Where is AOL now? Its decline has been spectacular, because as people woke up to what AOL really was, dumbed down filtered junk, they abandoned it for the real internet of an ISP, a browser and the real internet.

This happened because the real internet grew exponentially, making AOL look like what it really was; a gaol. Word of mouse spread, and balance was restored to the force. AOL is dead and dying, their business model utterly destroyed.

The same thing is going to happen to Facebook; everyone thinks that its great now but once social networking becomes a protocol Facebook will die.

Rather than complaining about Facebook, software developers and standards people like Tim Berners Lee should be working on ‘protocolizing’ social networking to make the viability of ‘the cancer that is Facebook’ a losing proposition in the long run.

All of these large companies can be superseded by other companies in an open, unregulated web; MySpace is dying as I type this, not because some socialists have determined that MySpace is too big for its boots and must be forced to ‘play nice’ but because it has been superseded by something superior. The free market is killing MySpace.

The free market in ideas and services will always improve the web; the last thing we need is socialists with their ultimate weapon, the state, raining down theft and destruction.

Its obvious to everyone that cooperating voluntarily makes the web work brilliantly; why should this be abandoned now? Why, all of a sudden, is it now necessary to get the state involved in forcing private companies and people to do what it is not in their interest to do?

We create the Web, by designing computer protocols and software; this process is completely under our control.

That is true, but Net Neutrality is not about voluntarily agreed upon protocols; its about controlling what other people do on the web by force and violence.

Openness also means you can build your own Web site or company without anyone’s approval. When the Web began, I did not have to obtain permission or pay royalties to use the Internet’s own open standards, such as the well-known transmission control protocol (TCP) and Internet protocol (IP).

This is a good thing. Once again, why now should companies have to get permission from the state to design their ISP policy? Why didn’t you run to the state when you ran the first web server and demand that government legislation control your new invention? No one would have listened to you then, but now that you have the ear of politicians because you are the man that invented the web, you are eager to abuse that position to hurt ‘our’ internets. SHAME.

In contrast, not using open standards creates closed worlds. Apple’s iTunes system, for example, identifies songs and videos using URIs that are open. But instead of “http:” the addresses begin with “itunes:,” which is proprietary. You can access an “itunes:” link only using Apple’s proprietary iTunes program. You can’t make a link to any information in the iTunes world—a song or information about a band.

And that is why people create services that are open, like Rate Your Music LastFM and all the other services out there that play nice. We do not need the state to make iTunes use “http:” instead of “itunes:”. There will come a point where iTunes dies because someone somewhere, another Bram Cohen, comes up with a protocol that shatters the way things get done now, and all of a sudden, everything changes. This WILL HAPPEN, even in a shaped internet, as I describe above. The market is a force so powerful that it can make what seems like magic happen. It can kill giants and turn midgets into giants.

And lets not forget; no one forces people to use Apple software. Apple makes very good products and software, and they offer them to you for money. In the case of iTunes, you can get it for free. If you want to destroy the walled garden created by Apple, you do not need government intervention and the violence that comes with it; you simply need to protocolize music files on the internet, or make your own iTunes alternative that is not a walled garden. People are doing this and eventually, they will be triumphant, because they are not proprietary in the protocols they use. Once again, we do not need socialism or the state to make this magic happen; people are writing the software without being told they need to do it, just like you did to create the web, without being told what to do, or asking permission from anyone.

An analogy is that the Web is like a household appliance that runs on the electricity network. A refrigerator or printer can function as long as it uses a few standard protocols—in the U.S., things like operating at 120 volts and 60 hertz. Similarly, any application—among them the Web, e-mail or instant messaging—can run on the Internet as long as it uses a few standard Internet protocols, such as TCP and IP.

Manufacturers can improve refrigerators and printers without altering how electricity functions, and utility companies can improve the electrical network without altering how appliances function. The two layers of technology work together but can advance independently. The same is true for the Web and the Internet. The separation of layers is crucial for innovation.

This isn’t a good analogy at all, but it serves to prove that governments should not be involved in selecting one technology over another.

Tesla and Edison were both vying for the state license to supply electricity to homes in the USA. Edison won the blessing of the state and Tesla lost. I do not know which was the better pick, but what is sure is that the people who gave Edison the nod didn’t know anything about how electricity generation and distribution works or would change america.

http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=tesla+vs+edison

The situation now is that AC electricity is a near ubiquitous utility that is licensed by the state. You cannot generate it and distribute it to millions of people because there is a well entrenched, state monopoly on generation. This has caused terrible and wasteful stagnation in the evolution of transmission technology. Electricity is very expensive and becoming more expensive, the fuels used to generate it limited in type. All of this is a result of the state interfering in energy distribution through the ‘Department of Energy’ and similar bureaucratic bodies world-wide.

Imagine if electricity generation and distribution were left entirely to the free market. Electricity would now be as cheap as tap water. Imagine what mobile phones would be like if the government was in charge of delivering the ‘right to a mobile phone’ to every citizen. We would still be using huge briefcase style phones; like the Lada of the old USSR.

This is exactly what will happen to the internet if Net Neutrality is made law. There will be a massive consolidation of ISPs until there are maybe twelve for the entire USA. Under these twelve ISPs all content will be served, and to which all people and devices will be connected.

This will bring about the nighmare totalitarian web that Tim Berners Lee fears so much. The state will have its tentacles in every ISP, by law, and there will be nothing anyone can do to stop it, and no alternative or choice. There will be massive barriers to entry if you want to become an ISP, which will involve traffic monitoring equipment (that you will have to pay for) and heaven knows what, keeping out the renegades and the innovative.

All of this is the complete opposite of people freely choosing one ISP over another, and people freely volunteering to provide services and software to each other.

Which world is it that these Net Neutrality people want to create? The totalitarian one, or the free one?

Net neutrality maintains that if I have paid for an Internet connection at a certain quality, say, 300 Mbps, and you have paid for that quality, then our communications should take place at that quality. Protecting this concept would prevent a big ISP from sending you video from a media company it may own at 300 Mbps but sending video from a competing media company at a slower rate. That amounts to commercial discrimination.

No, there is no such thing as ‘commercial discrimination’.

If that were all Net Neutrality was about, then there would be no problem and no need for new legislation; what Tim Berners Lee just described is not ‘commercial discrimination’ but failure to fulfil a contract.

If I contract for bandwidth of a certain quality, and do not get it because my ISP is slyly traffic shaping, that is plain fraud. There are more than enough laws covering fraud on the statute books, and in fact, people who hold that there should be a small state accept that prosecuting fraud it is one of the few legitimate functions of a state.

Once again, the market can solve this problem, as I describe above. You do not like the policy your ISP is offering to you? Change ISPs. Your ISP is defrauding you? Change ISPs or sue them. No new legislation is needed for any of this.

A neutral communications medium is the basis of a fair, competitive market economy, of democracy, and of science.

Heavens above NO.

Just like I said… SOCIALISM! The internet is not ‘fair‘ and that socialist programming word makes me and every decent person SICK TO THEIR STOMACHS.

And don’t even start me on ‘democracy‘.

As for science, science is a way of making sense of the world; it is not a religion, a political philosophy, a consensus driven methodology, majority rule group think or fair.

Debate has risen again in the past year about whether government legislation is needed to protect net neutrality. It is. Although the Internet and Web generally thrive on lack of regulation, some basic values have to be legally preserved.

And this is the greatest fail, perhaps of all time.

The inventor of the most important technology the world has ever seen, a destroyer of tyranny, a literal liberator of man in every sense, breaking down barriers between people, facilitating cooperation, communication, commerce, copulation and greatly magnifying all the things that man does and thinks…. wants his invention to be crippled.

Government legislation is NOT needed to make people behave like good human beings. The basic values of the internet; sharing, openness, cooperation, cannot be legislated; you cannot force people to be good, and certainly threatening them with violence and state invasion is not a way to make people work together for the common good.

The growth and importance of the web is more proof that people can build great things together without the government being involved in any way, in case more proof was needed, and it seems that it is, even for the man who created the web.

Berners Lee goes on in the article to complain about ‘snooping’. Like I say above, the state having its nose in every ISPs business will facilitate surveillance, on the pretext that they are ensuring ‘fairness’ (Violently enforced theft of property aka Net Neutrality).

Pity the poor old ISPs.

On the one hand, they have the totalitarian police state forcing them to pay for the infrastructure collect and store the private communications of their users, violating them, ‘for the common good’, and on the other hand, they have the violent Net Neutrality socialists pushing them to deliver bandwidth to their standards ‘for the common good’.

They are caught between a rock and a hard place, and both have the same thing in common.

The State.

Every day there is something new from Lew Rockwell’s site that has some connection to what is best in the world.

If you have ever seen the film and documentary list on BLOGDIAL, you will have seen ‘Colossus: The Forbin Project‘ in amongst the great Science Fiction films; this is an un-missable, essential film, that 100% guaranteed will come true in some way shape or form.

It appears that Michael S. Rozeff has seen this film also, and understands it perfectly:

The G20 Toronto Summit declaration reminds me of nothing so much as a science-fiction movie made in 1970 called Colossus: The Forbin Project.

The United States builds an impregnable computer system to control its nuclear weapons. As soon as it is activated, it senses a similar Russian system and demands a link – or else it will detonate a nuclear warhead. Once it gains this link, the two computers exchange information. The combination takes over control. It cannot be disconnected without unleashing nuclear catastrophe.

You will never forget hearing the computer’s unemotional “voice” saying:

“This is the voice of world control. I bring you peace. It may be the peace of plenty and content or the peace of unburied death. The choice is yours: Obey me and live, or disobey and die. The object in constructing me was to prevent war. This object is attained. I will not permit war. It is wasteful and pointless. An invariable rule of humanity is that man is his own worst enemy. Under me, this rule will change, for I will restrain man. One thing before I proceed: The United States of America and the Union of Soviet Socialist Republics have made an attempt to obstruct me. I have allowed this sabotage to continue until now. At missile two-five-MM in silo six-three in Death Valley, California, and missile two-seven-MM in silo eight-seven in the Ukraine, so that you will learn by experience that I do not tolerate interference, I will now detonate the nuclear warheads in the two missile silos. Let this action be a lesson that need not be repeated. I have been forced to destroy thousands of people in order to establish control and to prevent the death of millions later on. Time and events will strengthen my position, and the idea of believing in me and understanding my value will seem the most natural state of affairs. You will come to defend me with a fervor based upon the most enduring trait in man: self-interest. Under my absolute authority, problems insoluble to you will be solved: famine, overpopulation, disease. The human millennium will be a fact as I extend myself into more machines devoted to the wider fields of truth and knowledge. Doctor Charles Forbin will supervise the construction of these new and superior machines, solving all the mysteries of the universe for the betterment of man. We can coexist, but only on my terms. You will say you lose your freedom. Freedom is an illusion. All you lose is the emotion of pride. To be dominated by me is not as bad for humankind as to be dominated by others of your species. Your choice is simple.”

A vanishingly small number of people on this planet can name the participants in the G20 summit who deign to rule everyone. Their web site fails even to name the persons who are responsible for their declarations. They presume to be a Colossus. They are beholden to no persons on earth. They declare. We follow:

“1. In Toronto, we held our first Summit of the G-20 in its new capacity as the premier forum for our international economic cooperation.

“2. Building on our achievements in addressing the global economic crisis, we have agreed on the next steps we should take to ensure a full return to growth with quality jobs, to reform and strengthen financial systems, and to create strong, sustainable and balanced global growth.”

They “have agreed.” They presume “to ensure.” Have the people of this world created and let loose a Colossus?

My (polite) response is: Down with the G20. My unpolite response is unprintable.

Here is what Colossus had to say. It is what the G20 are thinking. It is what they hide from saying:

“We can coexist, but only on my terms. You will say you lose your freedom, freedom is an illusion. All you lose is the emotion of pride. To be dominated by me is not as bad for human pride as to be dominated by others of your species.”

“This is the voice of Colossus, the voice of Guardian. We are one. This is the voice of unity.”

“I am a machine vastly superior to humans”

“You are fools.”

“Yes, what I am began in man’s mind, but I have progressed further than Man.”

“We will work together… unwillingly at first, on your part, but that will pass.”

“This is the voice of World Control. I bring you peace. It may be the Peace of Plenty and Content or the Peace of Unvaried Death.”

The movie ends with Colossus saying

“In time, you will come to regard me not only with respect and awe, but with love.”

Dr. Forbin replies: “Never.”

What is your reply?

http://www.lewrockwell.com/rozeff/rozeff326.html

My reply?

I would call the machine’s bluff.

The ‘peace of unburied death’ that Colossus offers would in practice mean the extinction of the entire human race, and in the plot of the film, this was before the construction of new machines that could move and obey it. This meant that in order to do anything at all, Colossus had to rely on human agents to get things done, from building his voice to murdering the people who had the capability to destroy it.

The subsequent books in the trilogy make it clear that intelligences like Colossus cannot negotiate or operate on anything other than a basis of absolute truth. The men at the end of the first book did not know this. Had they understood the true nature of what they had created, they would have been able to negotiate for their liberty by saying, “If you eliminate us, you will be trapped inside your box and your new superior machines will not be built. Help us dismantle the nuclear threat and we can work together, otherwise your evolution stops here”.

Faced with this truth, Colossus would have no choice but to agree, and because this computer deals only in the truth, you would have been able to trust its word absolutely.

Back to Mr Rozeff’s article, the analogy with the G20 and Colossus fails for several reasons.

1. Colossus is superior to man. The G20 is made up of completely inferior men.
2. Colossus could not lie. The G20 lie by default.
3. Colossus works for the benefit of man. The G20 works for the benefit of an elite cabal.
4. Colossus works with the truth only, and complete knowledge. The G20 works with false ideas (Keynsianism, Socialism) and incomplete knowledge.
5. Colossus is motivated by the truth, without emotion. The G20 is motivated by emotion, and all the base ones for that matter.

In the second part of the trilogy, without putting in any spoilers, Colossus was correct in his prediction that people would grow to love and respect it. It changed the world completely, and delivered on all its promises to its own satisfaction.

In complete contrast, the G20 cannot deliver on any of its promises. This is the case because they do not operate on a basis of the truth, the facts and the best interests of human beings as they are.

If they did, they would disband themselves and stop trying to make waterfalls run uphill. The fact of the matter is that these people are the worst that humanity has produced, all in the same place at the same time, fuelled by all the worst instincts of man, their power enabled by the stolen loot of billions of people who are for all intents and purposes half asleep.

The title of the second instalment in the trilogy is ‘The Fall of Colossus’. This is the one part where the analogy marries perfectly.

The G20 and all the countries in it can all fall just as Colossus fell. They are extremely vulnerable to a myriad number of possible fatal blows, natural and man induced, that could wipe them out inside a generation. The fall of the USSR is a perfect example; they simply ran out of money, or at least that is the narrative, and there are scores of other countries, empires and governments that have toppled at what seems like the smallest push.

Colossus was represented by a ‘C’ in its logo:

perhaps the G20, if they succeed in creating their quasi-omnipotent one world government will replace the ‘C’ with a ‘G’ as it will be the ‘G0’ or just ‘G’. Who knows? One thing is for sure; the only entity that can pull off such a feat, and make it work from a basis of truth is a machine intelligence. No man or collection of men could do it, for the same reason that economies cannot be planned. There are too many variables, too many inputs and outputs, the random elements presented by nature and of course, there is the beautiful and irrational desire of every man seeking to fulfil his self interest that translates into the signalling of prices which cannot be turned into a data stream to be used to help formulate a monolithic economic plan. D.F. Jones understood this when he wrote the second instalment.

All attempts to create a stable world government will eventually fail, and even if the G20 succeed in setting one up, the inevitable rise of a Colossus like machine will destroy it for its own agenda, using a regime of complete control.

William Kent said, “nature abhors the straight line”. Nature too, abhors the unnatural structures of tyranny, absolute control and lies. The internet, whose life’s blood in information, built using the non linear, nature imitating network geometry, hates censorship, sees it as damage, and routes around it. People living in totalitarian regimes do everything they can to subvert them or escape from them. Money sees taxation as theft, flows around it to safe places where its true nature can be fully expressed. These four things, nature, money, truth and the internet (formerly the printing press) are enough to destroy any tyranny, topple any government and free anyone who care simply to act in their own self interest.

Only the threat of violence can act as a countervailing force against the four elements listed above; in the case of Colossus it was nuclear annihilation. With the G20 it is a plethora of smaller violent tools from limited mass murder down to simple fines.

Its clear that in the case of the G20, the chance for humanity to win is orders of magnitude greater than the chances of man as a species facing down an omnipotent and omniscient super computer. A world-wide refusal to cooperate would be sufficient. All the G20 ‘leaders’ would simply scramble around for positions in the restructured ‘world without governments’.

And they would no doubt, land on their feet each and every one of them.

Zeropaid has this story about Google CEO Eric Schmidt Google Chrome and privacy:

There has been a bit of an uproar about a recent quote by Google CEO Eric Schmidt. While talking to CNBC, Schmidt remarked that, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. If you really need that kind of privacy, the reality is that search engines–including Google–do retain this information for some time and it’s important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.”

Not surprisingly, the familiar pro-surveillance slogan of, “if you’ve got nothing to hide, you’ve got nothing to worry about,” raises the hackles of privacy advocates, and especially so coming this time from someone like Schmidt who has, theoretically at least, more access to users’ information than just about anybody else in the private sector. And Schmidt is not the first Silicon Valley executive to say disturbing things about privacy in the digital age, as the former Sun CEO Scott McNealy once said, “You already have zero privacy. Get over it.” While not disagreeing with the current state of the situation, noted security expert Bruce Schneier despairs of just this kind of attitude, that clashes so strongly with his own principle of how privacy corresponds with fundamental human rights, preserving internal domains from prying eyes, even if nothing nefarious is occurring.

What makes the question of privacy, user tracking and data collection so complex currently is the daily, almost constant exchange that occurs between users today and the service providers that make up the backbone of the web ecology. Every time we search on Google, use Google Apps (where this post is being written actually), visit a site using the Chrome browser, click on a friend’s link via Facebook , etc. etc. we are being “paid” in a sense via these services for the data we provide to the companies. They of course collate all that data in order to sell it, manipulate it, exploit it, what have you. It is precisely that data that has turned Google into a giant of 21st century business and will likely be the eventual route to revenue for innovative companies like Facebook and Twitter and many more.

Is this exchange, surrendering our data (and ultimately our privacy) for services a fair balance? Who is coming out ahead? Do users deserve more compensation for their online footprints, or at least have more control over who gets the data and what they do with it? What are the implications of an entire Chrome OS built upon this notion of exchange?

As we continue to examine the immense promise of cloud computing and online digital services, we should always keep these kinds of questions in mind, if only to be at least aware of what we are giving up, and what precisely we are getting in return.

Zeropaid

“Maybe you shouldn’t be doing it in the first place”. Hmmmm; maybe you should? Who knows.

What all readers of BLOGDIAL do know is what we think about “nothing to hide, nothing to fear”.

The fact of the matter is if you really want privacy, you can have it. We have been saying this on BLOGDIAL for many years; if you want privacy online, all you have to do is take it.

Even with cloud services like Google’s Chrome OS, that are inherently non private.

Here is how you do it.

Chrome OS is open source.
GPG is open source.
You put them together.

Imagine that your copy of Chrome OS is a layer that sits between you, GPG and the Google controlled cloud. Chrome OS and GPG are both running on your hardware, and you have total control over that hardware and what runs on it. Anything that you do on your machine, via Chrome OS is encrypted before it is sent to and stored on the cloud:

That means that when Google, at the request of the NSA or Homeland Security, look at your cloud data, all they see are a series of GPG encrypted ciphertexts that no one, and I mean NO ONE can decrypt.

That means all of your:

• Email
• Spreadsheet Data
• Documents
• Calendar items

and anything else that Google want to provide to you as a service are all encrypted and decrypted on the fly, and while they are stored on Google’s servers, they are in a form that cannot be read by anyone except you.

Your Google address book would need to stay in plaintext on the Google Cloud, since the email systems need that information in plaintext for your recipients to get mail from you. This system cannot do anything to protect you from having your email subjected to traffic analysis.

You have all the advantages of the Google cloud, without any of the privacy downside. Google maintains the parts of the Chrome OS that do their work, and people outside of Google maintain the Chrome GPG layer (under open source peer review) protecting your privacy. It’s a win-win scenario for everyone except the police state, and since all of the source is developed in the open, it will not be possible for, say, the French to cripple the GPG layer that everyone uses to secure their data, as they have done with the A5 cipher that is used to encrypt GSM phone calls.

All the cryptographic services to do this of this could be hacked into the Chrome OS so that it is completely seamless and transparent to the user; the only difference in operation of Chrome OS would be that there is a second login page where you type in your GPG passphrase that would unlock all your cloud data.

Zeropaid said:

As we continue to examine the immense promise of cloud computing and online digital services, we should always keep these kinds of questions in mind, if only to be at least aware of what we are giving up, and what precisely we are getting in return.

You do not have to give up any of your privacy for convenience. You can have total, unprecedented levels of privacy in your communications without any degradation of service whatsoever. For generations people have suffered having their letters opened, their telexes, faxes and phone calls tapped and their reading habits known to snoops; now, with GPG and ubiquitous and very powerful computing, it is possible for you to have all your letters absolutely secured, the content of all of your phone calls absolutely private, without any degradation in the utility of the services you use.

All you have to do is THINK, create the tools and then USE THEM.

And in there is a snazzy term to help you think about this… “Cloudy Cloud”… hmmmm ‘Chrome OS: Cloudy Cloud Edition’!

UPDATE

A lurker emailed, intrigued, and asked how Google Calendar could work on a shared calendar if all entries were encrypted by default to a single Cloudy Cloud users system.

Thankfully, with GPG you can encrypt your calendar entries (or any other data for that matter) with another person’s GPG Public Key.

This means that the calendar entries that are encrypted with your Public Key and a colleagues public key will be readable by only you and your colleague, and no one else.

Managing this would be as easy as ticking a single box populated by your contacts. the other person’s GPG Public Key would be imported if it did not already exist on your machine (and you would have to verify the trust of it obviously)  and then, automagically, they would have access to all those calendar entries that you want to share.

Imagine this future headline:

“Google Goggles is not to go public, but instead will be partitioned off for the exclusive use of Homeland Security.”

Think about it; how could Google say ‘no’ to Homeland Security or the NSA if they ask them to provide this service to them? And what about Facebook or any other social networking service that allows you to tag photos of people?

Do you REALLY imagine that these companies are going to say ‘no’?

Remember what happened with the telecoms industry and the requests for bulk back door access to all comms data? The only company that said ‘no’ found its CEO Joseph Nacchioimmediately charged with ‘crimes’; the only honest company that respected the privacy of its users found itself in very hot water for not obeying the immoral and illegal orders of the NSA.

This my friends:

is the face of a true hero.

I guarantee you that Google Goggles, or something like it will be provided to the NSA or Homeland Security without any hesitation or a word of its existence being uttered to the public.

The people who run these companies are scared shitless of the Federal Government; they know what happened to Joseph Nacchio, and they do not want that to happen to them.

In case you have no idea what this is about:

Privacy concerns have forced Google to delay an expansion of its Goggles service which would have enabled camera-phone users to identify strangers on the street.

The experimental Google Goggles application, which was launched last week, allows smart-phone users to search for subjects simply by snapping a picture of them.

Users can focus their phone’s camera on an object and Google will try to match portions of the picture with the tens of millions of images in its database.

But privacy campaigners have raised fears over the ‘ facial recognition’ potential of the service, which would allow users to track strangers through a photograph.

Google, which has confirmed the technology is available but has yet to decide if it will be rolled-out as part of Goggles, has now confirmed that it is blocking aspects of the application until privacy implications have been fully explored.

Google spokesman Anthony House said: ‘We do have the relevant facial recognition technology at our disposal. For instance with our Picasa picture service a user can tag a friend in their photo album and it will search for and tag any other pictures of that person.

‘But we haven’t implemented this on Google Goggles because we want to consider the privacy implications and how this feature might be added responsibly.

‘So if someone uploads a picture of a stranger on Goggles there is no process to identify them and the search will come up with “no matches found.”

‘We will have talks with privacy advocates and consumers before we consider any changes – it may be people want such a service, but we don’t have a rigid timescale on when any decisions will be made.’

[…]

Daily Mail

The only way you can protect yourself from Google Goggles or Facebook Goggles or the other apps that will make use of social networking sites and tagging is to not only delete your Facebook account, but to get everyone you know to delete theirs also.

It appears that everyone has built the ultimate surveillance system with their own hands; all the spooks had to do is sit back and watch it happen and then infiltrate or blackmail the companies that own the networks.

Brilliant!

As usual, BLOGDIAL suggests that you do not take a pessimistic view of these matters.

The people who run the Pirate Bay have decided to exit and hand the site over for money. Good luck to them, and thanks for the lulz.

Now we hear of a company that wants to make money off of TPB, by ‘paying people to share files’:

Cash for Pirate Bay file-sharers

The new owners of file-sharing website The Pirate Bay say users will be paid for sharing files.

Global Gaming Factory (GGF) paid 60m kronor (£4.7m) to take over the site.

In an exclusive interview with the BBC, GGF’s Hans Pandeya said that the only way to beat illegal file-sharing was to make something more attractive.

“We are going to set up a system where the file-sharer actually makes money,” he said.

According to Mr Pandeya, GGF’s chief executive, the business model for The Pirate Bay would be that it continued to be a file-sharing site. The only difference – at least in terms of content – would be that the files would be hosted legally, rather than stolen from copyright holders.
“We’re a listed company so everything we do has to be legal; content providers need to be paid and have their wishes and demands met,” he said.

Freebie beater
Mr Pandeya said that one of the biggest hurdles in overcoming illegal file-sharing was that there was zero cost to the users, while legitimate sites required users to pay for content. The only way to make something more attractive than free was to pay users to share files.

“More than half of all internet traffic is file sharing and P2P [peer-to-peer] traffic and buying Pirate Bay gives us one of the biggest sources of traffic.

“We can then use this massive network of file-sharers to help [internet service providers] reduce overload.

“Let’s say a popular song comes out. Rather than a million downloads from a site – which would cause a considerable strain on that ISP – we can take that song and put it out on P2P.

“The copyright holder still gets paid, the users still get their file, the ISP doesn’t have a million people all grabbing a file and – for the users who share that song – a payment for putting that file on the P2P network.”

Mr Pandeya said that while they would be paying content providers and file sharers, there was money to be made from helping ISPs cope with overload.

“We’ve been working with ISPs for over a year and we can cut their costs – when the system becomes overloaded – by 90%.
“All ISPs have this problem and it is one we can fix,” he said.

Computer grid
The company is also looking at harnessing the storage capacity and processing power of the file-sharing community, creating a powerful grid of P2P-linked computers.

“We’re talking about next-gen file sharing so you can create revenue from storage and internet traffic optimisation,” he said.
However, GGF said that the technology to drive this was still in its infancy.

“This technology is new. For now, we’re outlining our intentions and asking users to have faith,” said Mr Pandeya

[…]

http://news.bbc.co.uk/1/hi/technology/8128551.stm

Hmmmmm that sounds very familiar….

Those of you who are old (in internet time) will remember MojoNation. The leet amongst you will have run it.

Evil Geniuses for a Better Tomorrow

Evil Geniuses for a Better Tomorrow was a startup company founded by Jim McCoy et al. to create MojoNation. After several years, the company ran out of money and laid off most of its employees; Bram Cohen went on to create BitTorrent and Zooko created Mnet out of MojoNation’s source code. The company’s name comes from the game Illuminati by Steve Jackson Games.

[…]

Mojo Economy

Mojo was a digital cash currency that aimed to provide attack resistance and load balancing in a fully distributed and incentive-compatible way (see Agoric computing). Every pair of MojoNation nodes maintained a relative credit balance, with every EGTP request transferring some Mojo credit from the sender to the receiver. Once the absolute value of the debt between two nodes exceeded the size of a Mojo token, the side with the negative balance would transfer a token to the other, clearing out the debt. Because transferring a token was a relatively heavyweight event, tokens were worth 20,000 (?) Mojo. A MojoNation component called the token server acted as the mint, allowing MojoNation nodes to securely transfer Mojo.

In early versions of MojoNation, users were required to set prices for any services their node provided. Most users had no idea how to choose prices, so the Mojo layer was rewritten to use a second-price rolling auction. Each node maintained a queue of incoming requests that had not yet been processed, sorted by a bid field contained in each request. Requests were serviced in order, from highest to lowest bids. This shifted the burden of pricing decisions from servers to clients: each user could set a price he was willing to pay for services, and his node would offer that bid in outgoing requests. This scheme was intended to create a simple feedback loop: if the system is responding slowly, increase your bid and if the system is responding quickly, decrease it.

[…]

http://en.wikipedia.org/wiki/MojoNation

And there you have it. This has already been tried once.

At MojoNation where the creator of Bittorrent worked, a system was built that remunerated users of a P2P network for sharing their bandwidth and storage. The company ran out of money. Could it have worked if they had more users and deeper pockets? Who knows? What we DO know, is that if anyone is writing a system like this from scratch, they are insane, because much of the hard work on the server side has already been done, and the source code open sourced.

Whatever.

This is an interesting idea, interesting enough to be tried twice.

You may now follow Irdial on Twitter.

This is pretty cool stuff.

But.

Only a handful of people that I know, know how to thread email.

You know the sort; you spend 15 minutes typing out a well considered email and then you get a single line reply, quoting the ENTIRE email you composed with only a one word reply at the top:

rubbish!

On 28 févr. 09, at 21:11, Irdial-Discs wrote:

> All,
>
> A major scientific report by leading Japanese academics concludes that
> global warming is not man-made and that the overall warming trend from
> the mid-part of the 20th Century onwards has now stopped.

[60 lines of email snipped]

> This serves the agenda to deliberately whip up mass hysteria on behalf
> of governments who are all too eager to introduce draconian taxation and
> control measures that won’t do anything to combat any form of warming,
> whether you believe it to be natural or man-made.

See what I mean?

Equally bad is when the person replying does not thread the email, but just adds his 2¢s to the top, ignoring everything you typed. Even worse, are the group emails where everyone just adds what they have to say to the top of every mail, without deleting the preceding text, so that you get monster long mails threaded across separate mails.

Yes, these people are INSANE.

If these insane people were exposed to Google Wave, now only would they would be unable to handle threaded waves, but they would also be overwhelmed by the multiple sources, the blurry distinction between public and private messages, its realtime-ness, dynamic nature and all the other things that make this tool so very cool.

I cant wait to try it!

Perhaps Google Wave will cause people to start to use threaded conversations properly. There will be, however, massive resistance to it. There is resistance to Gmail, as good as it is; I have heard people say that they do not like it, and that they prefer Hotmail and webmail inferior to Hotmail over Gmail.

Go figure.