Archive for the 'Fear-mongering' Category

Bitcoin and Reality versus American Journalists

Thursday, April 3rd, 2014

You can avoid reality, but you cannot avoid the consequences of avoiding reality. – Ayn Rand

This famous Ayn Rand quote is true, but the real question is raises is “what is reality?”

For some American journalists, reality is their belief that America is the center of the universe, and that their opinions, rulings and laws apply everywhere by default. By any objective measure, this is false.

Bitcoin is a technology that proves once again, that America is not the center of the universe, or even of economic activity on the earth. It doesn’t have the biggest population or the greatest economic freedom. It is just another country, one jurisdiction amongst many, and one that the vast majority of the people of the earth ignore completely.

With Bitcoin it will be shown again, as it was with CDMA and GSM, that what American journalists and entrepreneurs want will not become the world default simply because they want it. Their peculiar ideas and sense of right and wrong applies only to them. The majority population of the world is an economic force that they cannot possibly compete with, and in the internet age, this means that they must always lose and submit to the effects of numerically superior populations.

For those of you who do not remember, there were two competing mobile phone network standards in the past; GSM and CDMA. These standards were not compatible, and the only country that settled on CDMA was the USA; everywhere else in the world settled on GSM.

Now, GSM is the global default, and no mobile phone is CDMA only. The world won, America lost. All the development, investment and engineering effort that went into creating the CDMA cellular network was lost, wasted in fact. The same will be true of Bitcoin, and any internet technology, which is more properly called, “software”. We could also use the example of software patents, which are only issued and valid in the USA, to show how parochialism is moot in today’s internet age but we can save that for another time.

There are no “rogue players” or “bad actors” in software. Software is neutral. It does not and cannot care what you do with it. It is not concerned with puritanism, or hysterical fear-mongering about the scant few people who choose to smoke marijuana. Software is information that can perform acts on information; this is the breakthrough that preceded Bitcoin that almost no one has picked up on. For the first time ever, an idea or a design can be made to do something without the direct guidance human agent. Previously, ideas that are designs needed to be written down on paper and then executed by hand to create a mechanical device. Even delivering the idea had to be done by a human. Now, information can be mediated by a machine, that can communicate to another machine. That machine can be a printer, or any other mechanical device, or another machine of the same design. These machines are called, “computers”.

Now with Bitcoin, computers and software are being used to do accounting in a way that allows the data stored in them to mimic the properties of fiat paper money. The problem that Bitcoin solves is called “The Double Spending Problem”. Previously all data, which is infinitely copyable, made it impossible to verify wether or not a piece of data had been copied. Now with the blockchain, data that is tracked inside it can be allocated to a single person, in a way that is verifiable by anyone anywhere. This is superior to holding a paper dollar, because Bitcoin ledger entries cannot be forged, unlike paper dollars, or entries in a bank ledger. This means that Bitcoin can be used as money, amongst many other things that require a single owner to be identified as the owner of something.

The nature of Bitcoin should be clear to anyone reading this piece, and you should already own some. What you may not understand is the truly profound revolution that Bitcoin is, and the ramifications of what the solution to the Double Spending Problem are.

Bitcoin will make socialism impossible. It will make all forms of coercive collectivism impossible. American journalists say things like, “Sometimes our greatest strengths are also our greatest weaknesses.” This is communist drivel. There is no collective weakness in man, or collective strength. That an American journalist is writing like this is troubling enough, but what is even more shocking is how little insight people have to what Bitcoin is about to unleash.

Bitcoin will make it impossible to run a coercive State apparatus. Thanks to the money printing antics of the central banks world-wide, and in particular, the Federal Reserve, which prints the money that underpins the entire global fiat system, the paper money systems of the world’s central banks are going to disappear. This is not hyperbole; every single fiat currency that has ever existed has gone to hyperinflation and ceased to exist. Here is a list…

Angola 1991-1995, Argentina 1975-1991, Austria 1921-1922, Belarus 1994-2002, Bolivia 1984-1986, Bosnia-Herzegovina 1992-1993, Brazil 1986-1994, Bulgaria 1996, Chile 1971-1973, China 1948-1949, Free City of Danzig 1922-1923, Georgia 1993-1995, Germany 1922-1923, Greece 1942-1944, Hungary 1945-1946, Israel 1970-1971, Japan 1948-1951, Krajina 1992-1993, Madagascar 2004-2005, Mozambique 1977-1992, Nicaragua 1987-1990, Peru 1988-1990, Philippines 1942-1944, Poland 1989-1991, Romania 1998-2005, Russia 1921-1922 and 1992-1999, Turkey 1990-1995, Ukraine 1993-1995, United States 1861-1865, Yugoslavia 1989-1994, Zaire 1989-1996, Zimbabwe 2004-2009

The currency of the United States has failed twice. The third time is just around the corner. This is guaranteed and inevitable:

At heart, this economic crisis is in fact a currency crisis. Throughout history no paper currency (or fiat currency, since it is accepted as money by virtue of Government fiat or decree) has survived, and this time will be no different. The average lifespan of fiat currencies has been 16 years*. The present system is unique in that it has survived for 38 years and for the first time ALL countries throughout the world are on a fiat money standard. This means that the resulting crash will be on the scale of something the world has never seen.

[…]

http://www.zerohedge.com/article/coming-financial-tsunami

Bitcoin is something new; a distributed public crypto ledger that has an application making it useful as a pseudo currency, which emerges from the process of a machine running software. The value people put on it is subjective, since it has no form or mass, and since it is scarce, real world goods can be divided against it in a catalactic calculation. This is something really new, that is difficult to understand at first and which is extremely powerful and useful.

The decentralized structure of Bitcoin makes the violent actions of the Statists impossible. It flattens the field so that everyone is protected from the biggest violent predator, the State. There will be no more creation of money out of thin air by the State. No more debasement of people’s savings. No more fiat currency created by central Banks. This, along with the removal of banks as transaction facilitators is the true transformation that keeps Statists up at night in a cold sweat. This is what American journalists desperately want to prevent, once they get a glimpse of what Bitcoin is and what it will do. Bitcoin will decentralize everything, and remove government force from the equation by starving it of stolen loot. You only need look at BitTorrent to get a glimpse of what trying to stop it will look like.

BitTorrent is a protocol released by a single man, Bram Cohen, to solve the problem of centralized servers acting as mediators in file sharing. It is a software breakthrough as important as Bitcoin, and looking at BitTorrent is a good way to illustrate how the Bitcoin disruption is going to emerge, evolve and propagate.

BitTorrent takes up one third of all internet traffic. It has completely replaced all previous centralized file sharing services and software. This is analogous to Bitcoin replacing the money transfer services. Bitcoin will replace the banks completely as storage of money can be done on your phone or laptop or keyfob. Bitcoin will replace both money transfer services and banks which will no longer serve any useful purpose, unless they pivot to Bitcoin exchanging sites.

BitTorrent makes it possible to get a file from anyone anywhere in the world, instantly.Bitcoin makes it possible to send money from person to person anywhere in the world without knowing them, instantly.

BitTorrent is not controlled by anyone. It was written once and spread by the work of developers world-wide. Bitcoin was written once, and is spreading exactly the same way.

BitTorrent does not belong to anyone. It is free software. Bitcoin is the same; it belongs to no one, anyone can download and develop whatever they like with it.

All of these facts combine to make viral effects inevitable. Bitcoin is going to spread everywhere. People like to download movies, but they do not need to. That pressure alone caused BitTorrent use to explode. People actually need to send and receive money on a daily basis multiple times. They have a real, crucial to life need for Bitcoin; this will cause it to be quickly propelled at a greater velocity and momentum than BitTorrent, and it will stay at that high level of momentum. It will become a beneficial juggernaut.

BitTorrent services cannot be stopped by the State. There are technical and practical reasons for this, but first among the reasons is that there are too many people using it to stop them all individually. You cannot turn off the internet to stop them, without killing world commerce. You cannot block the sites that list torrents (the files used to seed information to BitTorrent nodes) Because there are many tools that prevent net censorship that are child’s play to use, like “Stealthy” the Google Chrome pluginwhich takes only a single click to unblock any censored website. The only thing that can work as a propaganda exercise is to arrest the owners of the biggest torrent indexing sites. Technically, these indexing sites are not participants in file sharing at all; they are only listing files that need to be downloaded from somewhere else and used by a BitTorrent client somewhere else. If the law worked properly, these torrent indexing sites would be free and clear of any wrongdoing, because they do not host any copyrighted material themselves, they only index files that may or may not point to other files that exist on users computers that are seeding. And these token arrests have not and will not stop anyone sharing files. Ever.

Of course, the technical, ethical and legal facts are of no consequence to the American journalist and the American legal system. They throw out the rule of law to protect the incumbent industries that are threatened by file sharing. It has not worked of course, and filesharing is bigger than ever, more efficient and greatly strengthened by two decades of research and software development that has made BitTorrent filesharing something that can never be removed from the internet.

Now superimpose all of this onto Bitcoin.

Bitcoin services will not be stoppable by the State. There are technical reasons for this, but first of all, there will be too many people using it to stop them all individually. You cannot turn off the internet to stop them, without killing world commerce… that will be based on Bitcoin. You cannot block the people that sell Bitcoin, because they will do it person to person hundreds of millions of times per day, world-wide. All the tools used to stop internet censorship will be used to stop Bitcoin exchanging sites from being taken down, and when I talk about exchanges, I do not mean the exchanges that mimic the stock exchange model. New exchanges are going to emerge that are nothing like stock exchanges and these will be so simple to use that anyone can understand them. The software that powers them will be open and this will make them very resilient. Arresting a vanishingly small number of unlucky Bitcoin users or site operators will have zero impact on the world-wide exchange of Bitcoin.

This is the reality faced by the American journalist that wants the world to stay exactly as it is forever. Their blinkered world view is already finished, and they don’t even know it.

Their antiquated, violent, prohibitionist ideas of “bad actors” is going the way of the dodo. There are no “bad actors”; in reality there is only the market, which works to suppress people who are truly bad; i.e., people who break their promises and do not deliver on what they promise to deliver.

No “regulator” or recent immigrant prosecutor in palookavile USA is going to stop Bitcoin, or the people who use it. They might bag a trophy prosecution, get their portrait painted and hang the stuffed heads of their innocent victims on their wall, but the vast majority of people will be unaffected, not only because they do not have the staff or the means to stop everyone, but they have very limited jurisdiction. Look at internet poker and casinos to get a feel for what that looks like in real life.

The American obsession and subservience to their unconstitutional agencies is utterly baffling. These three to six letter agencies all try and carve out turf whenever something new arrives, and Bitcoin is no different. The American FinCEN and the IRS both have declared that Bitcoin is two different things, as if they were not both parts of the same government. It is the modern equivalent of a keystone kops movie; watching them bump against each other scrambling around trying to get to grips with the slow motion software tsunami that is about to sweep them away.

That anyone is calling for “a clear voice” from these people is beyond belief. Why should any of these people have jurisdiction or a voice over free speech? Yes, Bitcoin is a form of speech, it is not money, no matter what a State mouthpiece journalist tells you.

These agencies have no business, right or legal obligation to regulate, control, inspect or stop Bitcoin in any way. Just because there are a few people asking for “guidance” from them does not mean that the conclusions they come to are correct, ethical or enforceable. The people who make a career out of testifying before committees like beggar servants are irrelevant to the truth of software. No matter what they say or claim is their “stake” in Bitcoin, no one outside of their incestuous Washington bubble cares. Bitcoin, like BitTorrent, will flow into every device and nothing they do or say can stop this from happening. The market will determine what services thrive and succeed, not blabbering wannabe leeches.

There is no such thing as “the BitTorrent community”. Soon the idea of a “Bitcoin community” will seem utterly absurd. There is no software community, rice community, air community or math community. All of these things work and taste good despite there being no “community” to “represent” them. These quaint ideas come mostly from people who do not have Bitcoin or who do not write software. They are desperate, once they realize what is happening, to get on board and have a part to play in this incredible once in a lifetime event. This is perfectly understandable, and in fact, desirable. What is undesirable however, are the types that do not have direct involvement in software choosing to assert themselves by bringing the law onto the heads of the people who are actually creating the infrastructure and who own the thing that they are fans of.

It is not enough for these people, like the journalists, to witness and report what is going on, or to start collecting and using Bitcoin; they must impose their petty, small minded, limited imaginations on others to achieve satisfaction. Its nauseating, and unethical, and in the end, will be a complete wasted effort because no one cares what these people think. The people that write software and own Bitcoin are going to do what is good for them, spend their Bitcoin in ways that benefit them, build services that they need and write the software that does what they need to get done. No one cares about these low brow busybodies, and the BitTorrent example is a perfect fit once again. Journalists are non-actors in the new world order of software. They do not write anything that can be executed; all they can do is complain. And they are very good at it.

Bitcoin has the potential of raising the standard of living of living of the 2.2 billion unbanked. The State, busybodies and socialists are not required to make this happen; only entrepreneurs, software and hardware developers are needed. There is no such thing as “over regulation” in Bitcoin, the regulation comes from the software itself and its baked in rules. If you agree to abide by the software’s rules, you can use Bitcoin. If you do not, you cannot. You can use other software, or use other methods to account for your money, but that is entirely your decision. No law is required to mediate an exchange of Bitcoin, and there are enough laws that cover fraud and contract to protect anyone who interacts with a business that makes a promise. And of course, contracts are what are going to be “Blockchainized” next, with Etherium.

If only journalism could be made to be as true and reliable as Blockchain mediated transactions!

It is profoundly shameful that journalists and Statists want to cripple something that could change the world and improve the lives of billions in the same way that the telephone and the internet have changed the world for the better. Their personal ideas of right and wrong that are entirely wrong and learned by rote should not be the standard by which free men should be forced to live. Even if their ideas about ‘drugs’ are correct, this is a vanishingly small amount of trade in comparison to the 2.2 billion unbanked that can benefit from Bitcoin, along with the billions of banked who will have their money freed by it.

The question is this; is man going to live by the peasant thinking of the lowest common denominator, or is he going to reach for the stars?

Thankfully, the latter is going to be the case. No thinly veiled threat that “we” must come begging to “Washington” is going to stop the spread of Bitcoin everywhere.

Nothing is going to stop liberty from being the default. BitTorrent file sharing is the model that proves this. It is deeply entrenched in the fabric of the internet and the minds of the users. Soon, Bitcoin will be exactly the same. It will be ubiquitous, the best services will thrive, and the bad services will be quickly abandoned. All the boasting about thousands of outlets and millions of users by some startups are completely meaningless. In the internet age, these big numbers can drop to zero very quickly. Look at MTGOX, MySpace, AOL, and all the other large sites that no longer exist, or that are now mere shadows of their former selves.

No site is immune from falling out of favor with King Consumer, but one fact remains true in every instance; the internet persists, ready to facilitate the next big player. Bitcoin is the internet of money. No matter what player disappears, the Bitcoin network will still be there, ready to transact, store and record.

This is the only thing that is important.

The world has changed, Statists.

Get used to it, because no one wants you. Everyone wants Liberty.

And we are going to have it.

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http://www.8btc.com/bitcoin-and-reality-versus-american-journalists

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Bitcoin is not a threat, it is a boon

Tuesday, May 14th, 2013

The Financial Times has published an astonishingly blinkered and short-sightedarticle, where Bitcoin is mischaracterisedas 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 andKeynesiansat 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 anentirelymisleading 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. Itdoesn’ttake 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 oftransactionsflowing through it, and will skim taxes off of the top of theactivity. Anything that hinders this is going to cause the entrepreneurs building these fledgling systems to go to otherjurisdictions. 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 stillarguingover its true nature. It is therefore highly unlikely that anyone is able to predict the future of what Bitcoinbushinesseswill 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 ofcourse,the implication of these sorts of people gathering to discussBitcoin.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 beyondanyone’simagination. Imagine that these same people met and decided that an unregulated internet was “not acceptable” and thatlegislationneeded to be tabled to regulate who could publish on the internet, who could be an email provider, etc etc. It would have killed theinternetin 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.

OnceBitcoinis 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 orunfavourableto operate.

It is important to understand what Bitcoin is, not in the monetary sense, but in the data sense. Bitcoin is data. It can flowwhereverit 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 heliumnearabsolutezero. 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 startinganythinghere, 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 underextraordinarilyheavy 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 toaccommodatethem.Britainmust 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 isjustanother kind of business, like selling soft icecream.

Also under consideration was the idea of creating a regulated exchange, which would be the worlds 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 (notoperating 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. Theydon’teven 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 anyjurisdiction, since it is buying goods over theinternet. They are based in the USA, and as they grow,theirsoftware 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 incorporatedentity. The question then isobvious;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 mischaracterisedas a threat, but as anunprecedentedopportunity, 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 thisimportantrevolutionif the wrong noises are made and disseminated.

The web was born in the UK, and thecentreof 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 isFacebookeverywherein the world, and Bebo, early star in social networking, filingfor bankruptcy protection?

Britain has the brains, it has the talent. Its young people have the entrepreneurial spark.Bitcoinis going to be thebiggestthing since theinternetitself. 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 governments 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 internetusageis 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 andeconomics.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 Bitcoinon a weekly basis, flowing through UK based nodes that are all as trusted aseBayand built to thehigheststandards, just likeFacebook, but without any regulation, just likeFacebook.

This is the ideal situation; TheFacebookofBitcoin incorporated inBritainshowing the world that London is thecentreof the emergent Bitcoin economy. “If you want to be where the Bitcoin action is, London is your Go Todestination”. 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 thesetechnologiescorrectly. 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 thenascentISP 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 wonderfulspin-offsin 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 relatedentrepreneurialactivity.

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 theexercise.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,whichwill stop people in the UK from getting Bitcoin from otherjurisdictions They will cite the blocks on The Pirate Bay and Kickass Torrents assuccessfulexamples. This view is entirely incorrect.

A small browserextensioncalled 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 anyjurisdictionselling Bitcoin.

The normal reaction process of problem, reactionsolutionwill not work in thetwenty-firstcentury. A newmodelmust be designed andimplementedthat utilizes these new tools so that everyone benefits.

Bitcoin and theinternetitself are entirely beneficial and should not be regulated, but should instead, beharnessedand 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, notLuddite 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 somejurisdiction, and that it is in that jurisdiction that the money will flow.

The question here iswhetheror 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 toBritainwill 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 trafficand will be an economic powerhousethere 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 generationsuccessfulBitcoin business models begin to emerge.

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

The European Central Bank report on Bitcoin: you can smell their fear

Tuesday, November 6th, 2012

The European Central Bank is one of the most destructive entities ever unleashed upon the peoples of Europe. Its Keynesian fiat currency is backed by nothing, is defrauding millions, is by design stealing value from the people who are forced to use it under threat of violence, and is doomed to fail and collapse like all other fiat currencies before it. In the history of the world, there has not been a single fiat currency that has not collapsed, and the Euro will be no different. The average lifespan of fiat currencies has been 16 years, and the only exceptions to this are the currencies that have extra momentum for political reasons.

The so called ‘bailouts’ in the Eurozone crisis are nothing more than the theft of value from millions of people to prop up mathematically unsustainable socialist economies. Greece defaulting and the other bankrupt states that are sure to follow, are just the beginning of this process. Even now, central banks world-wide are repatriating their gold in the knowledge that gold is money, and an unprecedented collapse is about to unfold with all paper currencies going to hyperinflation. For an insight into this, I direct you to read, “The Case for a 100% Gold Dollar” by Murray Rothbard and “What Has Government Done to Our Money?”, also by Murray Rothbard. There you will find the history of the world wide emergence of worthless fiat paper currency pyramided on the unconstitutional, gold-free, privately printed US Dollar.

You should also look at the last speech by Margaret Thatcher given in the House of Commons as Prime Minister, where she explains to the collectivist dullards why Britain should not join the ‘ECU’. Of course, decades later, as the Euro implodes, this position is absolutely vindicated.

Now, with that background in hand, it is with a delicious feeling of schadenfreude that we read a PDF report released by the ECB on Bitcoin and the notional game money “Linden Dollars”. The fact that this report lumps together these two things demonstrates a fundamental misunderstanding of what Bitcoin is. If you replace the phrase ‘Linden Dollars’ with ‘Monopoly Money’, the logic remains intact. Bitcoin is something new, revolutionary, decentralised, uncontrollable, money like and almost uncategorizable if you take into account the differing opinions on its true nature. Linden Dollars are none of those things. More on that below.

We will now cherry pick the parts of this report that jump off of the screen. For sure, this report is one of the most serious ever written coming from a high level government entity. For certain, the penny has dropped in the circles of power about what Bitcoin means to the future of money and its potential threat. Without a doubt, they are thinking carefully about how to stop it. They must know that if they attack it, this will attract attention to it, and it could go viral and outflank them. They must have made the connection between Bittorrent powered pirated movies and Bitcoin, and the absolutely futile and useless struggle the Copyright lobbyists have been mounting against it. They know that the best they can do is put off mass adoption and try to inveigle their way into a position of intermediating transactions or vampirizing the in and out points as a way of remaining relevant. In the light of this, it should be absolutely clear that implementing anything that retards the flow of Bitcoin or the exchanging of fiat currency into it is insane, because it gives Leviathan more time to wake out of its ignorant stupor and mount a withering attack.

And now, on to the report.

A virtual currency can be defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.

This is not correct. Virtual currencies are tightly regulated, by the market, and the software that orders those markets. This is the only regulation that matters. A more accurate description would be extralegal, since there is no law governing Bitcoin or systems like it. Bitcoin is usable not by a ‘specific virtual community’ but by everyone everywhere.

This might seem like nitpicking on the surface, but it is not. The definitions used to give meaning to things in the real world shape the perception of them and the ability of men to control other men. By calling Bitcoin a ‘virtual currency’ or ‘money’ you immediately set up the pretext that they should be regulated by the State. Even in absentia of actual laws controlling this new phenomena, the default position of some is that regulations, that do not exist, must be obeyed. This idea is completely false, and is a result only of the language used to describe Bitcoin, not the nature of Bitcoin itself, which is elusive. Bitcoin is outside of the law. There are no laws anywhere governing its use, and so there are no laws or even regulations to obey when you deal with it or trade in it.

Depending on their interaction with traditional, real money and the real economy, virtual currency schemes can be classified into three types: Type 1, which is used to refer to closed virtual currency schemes, basically used in an online game; Type 2 virtual currency schemes have a unidirectional flow (usually an inflow), i.e. there is a conversion rate for purchasing the virtual currency, which can subsequently be used to buy virtual goods and services, but exceptionally also to buy real goods and services; and Type 3 virtual currency schemes have bidirectional flows, i.e. the virtual currency in this respect acts like any other convertible currency, with two exchange rates (buy and sell), which can subsequently be used to buy virtual goods and services, but also to purchase real goods and services.

This is an error. The true classifications and important distinction between virtual currencies has to do with who controls them, how they are distributed and the software used to interact with them. This is why you cannot lump Linden Dollars in with Bitcoin. The two are incompatible and very different in architecture.

Bitcoin is unique, both in terms of how it works through distributed peer clients and its Austrian School inspired money supply limit. These are the only things that really matter, not what you can or cannot do with them. Linden Dollars are a threat to no one. Once Linden Labs is shut down and its owners get the Bernard von NotHaus treatment the problem of Linden Dollars goes away. Locking up the developers of Bitcoin will, on the other hand, not stop Bitcoin any more than locking away movie pirates has made a single dent in the level of Bittorrent traffic on the internet.

Virtual currency schemes differ from electronic money schemes insofar as the currency being used as the unit of account has no physical counterpart with legal tender status.

Not quite. The differences between virtual currencies and electronic money are as follows. Virtual currencies (like Linden Dollars) are made up of entries in a centrally controlled database saying who has a certain amount stacked against their user name. Electronic money is cash like in that it is made up of digitally signed certificates that can be transferred between individuals without reference to or permission from a central authority.

Its also worth bearing in mind when thinking about electronic money schemes versus virtual currency in the terms set down in this paper, that the State has sanctioned one and not the other. Electronic money schemes allow you to move fiat currency between points, that is itself, backed by nothing. The means of doing this is by shifting accounting entries in ledgers. The fact that electronic fiat currency is backed by nothing is absolutely identical to the true nature of both Bitcoin and Linden Dollars. The Euro is not backed by gold or anything else; the main difference between the money of Linden Labs and the Euro is that Linden Labs does not use force to make people trade with its ‘money’, whereas the ECB does.

The issuer of the currency and scheme owner is usually a non-financial private company. This implies that typical financial sector regulation and supervision arrangements are not applicable.

This is hilarious. It is the financial sector regulation and supervision arrangements that have brought Europe to its knees, that has the Greeks out in the street throwing molotov cocktails and the Italians with a bank appointed apparatchick at the helm. If anything, private supervision of currencies or even better as in the case of Bitcoin, computer supervision, is infinitely superior to ECB regulation and supervision. At least then either the profit motive or an unalterable mathematical rule will be the sole arbiter; force is not a part of the equation, and everyone can choose what currency they want to accept on a level playing field. The ECB is against this, obviously, and will eventually advocate the use violence to stop free people transacting in private with Bitcoin. They have admitted as much in this report. They are going to have a very hard time shutting down Bitcoin however, if it scales to the size of Bittorrent. Once again, anything, any business practice or business model that prevents this scaling or which slows rapid adoption or increases friction should be shunned.

the link between virtual currency and traditional currency (i.e. currency with a legal tender status) is not regulated by law, which might be problematic or costly when redeeming funds, if this is even permitted.

These people, surely, must be aware of eBay’s dispute regulation system. This system allows participants in eBay’s service to resolve disputes without having to resort to the law. This has worked spectacularly well, and there is no doubt that a self regulating reputation based system will emerge to reduce Bitcoin fraud to a tiny fraction. No one needs the ECB or the State to protect them or regulate the market. This is a demonstrated fact. What the writers of this report are doing here is making an appeal to fear. “If Bitcoin is not regulated, people will die”.

Lastly, the fact that the currency is denominated differently (i.e. not euro, US dollar, etc.) means that complete control of the virtual currency is given to its issuer, who governs the scheme and manages the supply of money at will.

Not true of Bitcoin, obviously, and in any case, the ECB and the Federal Reserve have complete control over the currencies they force people to use, and look at the disasters and mass theft these entities have engineered. The supply of money should not be in the hands of a violent monopoly. Bitcoin and Linden Dollars do not suffer from this flaw.

The above quotes were from the introduction. Now we get to the first part of the report proper, that deals specifically with Bitcoin. They trot out the usual FUD about Bitcoin, probably because they do not have the expertise or insight to understand it fully, though this seems unlikely, since the report is well researched, and smacks of extremely capable and knowledgeable authors.

Bitcoin is astonishing and controversial without ever having to mention the edge case uses it is put to today. People who mention these fringe uses in serious contemplation of Bitcoin do not understand what it is and how revolutionary its design is, and they discredit themselves by doing so. FUD is a crutch for the weak minded and computer illiterate, and completely out of place in this document.

The problem with the US Dollar is not that it is used by criminals. The true problem with the US Dollar is that there are too many of them, and there is no natural control over their supply. When the US Dollar was a bearer certificate promise to a quantity of gold, there was a natural check on the money supply; now that that is gone, it is literally worthless, and is only accepted because the State uses force to mandate its use for payment of taxes and as a unit of account. It is identical to the tally stick in its essential nature, and differs only in that it will not last as long as the King’s wood did.

The assessment covers the stability of prices, of the financial system and of the payment system, looking also at the regulatory perspective. It also addresses reputational risk concerns. It can be concluded that, in the current situation, virtual currency schemes:

? do not pose a risk to price stability, provided that money creation continues to stay at a low level;

They might not now, but they have a huge potential to, especially currencies based on Bitcoin. If Bitcoin is used only as a way to move money, and not as money itself, it poses no threat to any money system. If however, people start to use it as money, it will eat away the importance of State issued fiat currencies and the actors who regulate them.

? tend to be inherently unstable, but cannot jeopardise financial stability, owing to their limited connection with the real economy, their low volume traded and a lack of wide user acceptance;

This doesn’t make any sense. You cannot say that Bitcoin tends to be inherently unstable, because it is not old enough for a sufficient record to be examined and its nature is not even well understood. In any case, a man looking at a chart of the value of the dollar could assert that it is not good money, and that it is unstable. And these are the people who cast doubt on Bitcoin?

? are currently not regulated and not closely supervised or overseen by any public authority, even though participation in these schemes exposes users to credit, liquidity, operational and legal risks;

The fact that they are not regulated is a benefit, not a risk. How the ECB regulates (or more correctly, mismanages) the Euro is the best demonstration of why they should not be in charge of money. The risk people choose to expose themselves to is not a matter for the ECB or the State. Legal risks are a side effect of the State, and can be avoided by private dispute resolution, as we have seen with eBay.

? could represent a challenge for public authorities, given the legal uncertainty surrounding these schemes, as they can be used by criminals, fraudsters and money launderers to perform their illegal activities;

It is a challenge on several levels. First, it is a challenge to the supremacy of Keynesian State issued fiat currency. Once people are made to think about what money is and where it comes from, and how it should work in a perfect world, the Emperor’s New Clothes Effect is sure to kick in and then a societal rejection of government issued fiat currency is sure to follow, accompanied by howls of derisive laughter.

There is no such thing as money laundering: “Money laundering is a euphemism for transactions out of view of State surveillance. Any transaction that takes place outside of State control is essentially Money Laundering according to the State.” Blogdial.

Libertarians consider fiat currency to be criminal fraud, on a massive scale, and we are absolutely correct in this assessment.

Bitcoin is like any other thing that can be used for more than one purpose. Anyone citing criminal activity as a pretext for regulation, activity which is always a minority case, is not thinking clearly, or is deliberately trying to hype up a pretext for regulation.

? could have a negative impact on the reputation of central banks, assuming the use of such systems grows considerably and in the event that an incident attracts press coverage, since the public may perceive the incident as being caused, in part, by a central bank not doing its job properly;

A negative impact on the reputations of central banks would be very beneficial to the population at large, and this is an extraordinarily frank admission. If this paper were private and sent only to ECB insiders we could expect language like this, but to have it published in the open is either a mistake or an act of hubris. They don’t think anyone is paying attention…. absolutely shocking.

The central banks have an unearned reputation, which they have bought with violence and surreptitious theft through inflation. The ignorant public trusts them and holds them in high regard only because they have been tricked and brainwashed and have never had an alternative placed before them. The adoption of local currencies like the Totnes Pound demonstrates that people are adaptable and are willing to put at least some of their money into local currencies when the case is made to them. This means that if Bitcoin atarts to be used by a large number of people and businesses, it is inevitable that it will eat a large proportion of the transactions made in the central bank mediated system’s fiat currency. This will be done because it is private, easy, regulation free and you can send the money literally anywhere in the world to any device for nothing.

? do indeed fall within central banks responsibility as a result of characteristics shared with payment systems, which give rise to the need for at least an examination of developments and the provision of an initial assessment.

This is a pipe dream. Bitcoin will not be regulated any more than Bittorrent is. The State might eventually regulate the few sycophant run entry points, but after that, it will be impossible for them to regulate the peer to peer transactions that happen between individuals and the pure entrepreneurs that serve them.

If Bitcoin becomes big enough to warrant regulation, it will already be too late. The best they will be able to do is tax the conversion of their fraudulent fiat currency as it enters the gravity well of the black hole of Bitcoin, where money goes in but never comes out. Once all the money has disappeared into Bitcoin, a new economy will emerge that is beyond the reach of the State, which will have to resort to fleecing the computer illiterate, the compliant and the dealers in real goods via a vicious financial policing system that monitors the movement of all goods and money. Think about it.

This report is a first attempt to provide the basis for a discussion on virtual currency schemes. Although these schemes can have positive aspects in terms of financial innovation and the provision of additional payment alternatives to consumers, it is clear that they also entail risks. Owing to the small size of virtual currency schemes, these risks do not affect anyone other than users of the schemes.

This report is an alert, transmitted to all Globalists, Statists and central bankers, world-wide. Bitcoin is serious business. It is not a fad, it has not been ‘hacked’ and has not crashed, as the ignorant Statist mouthpieces have tried to claim whenever a vendor has had a problem.

Bitcoin represents a real systemic threat to the world fiat currency system, not only because it cannot be easily regulated or shut down, but because it calls into question the very nature of money and jurisdiction. It questions the need for the ECB and its fraudulent ‘Euro’, the Federal Reserve and its “Dollar”.

The risks of Bitcoin are only to the ECB and the Fed. The risk to the individual users is comparatively small. If a few users get hacked or lose a few tens of Bitcoins, who does this affect? Bitcoin goes on, as will the trillions of transactions made in it. Every hack event makes the Bitcoin client software ecosystem stronger and less vulnerable. As Bitcoin get stronger, confidence in it will increase, as will reliance upon it to move money from A to B.

Its interesting that they say the risks do not affect anyone other than the users of the schemes. If this is true now, why will it not be true if Bitcoin takes up a third of all transactions world-wide? Why is it not important at a small scale, but important at a large scale? Is this report really asserting that if a few people get hurt, “it doesn’t really matter”? This gives you a peek into the ethics of these people, “as long as it cannot displace us, we do not care about who gets wiped out by Bitcoin”. This makes any comment the ECB has to offer on Bitcoin with regards to “harming society” absolutely hollow.

As a consequence, this report largely relies on information and data gathered from material published on the internet (see the Annex for references and further reading), whose reliability, however, cannot be fully guaranteed. This places serious limitations on the present study.

This is an absolutely ridiculous disclaimer. In preparation for writing this report, these people should have used Bitcoin themselves, and then applied their economic theories to it, after examining it and the services that are on offer. That is all you need to understand it fully, and its implications. The reliability of sources on the internet is irrelevant; Bitcoin is not theoretical, it is live and running right now. It is run on software that can be examined in fine detail.

I am going to forgo picking out all of the mistakes in this paper, such as this one:

Virtual currencies resemble money and necessarily come with their own dedicated retail payment systems; these two aspects are covered by the term virtual currency scheme.

I assume that as a reader of BLOGDIAL, you know what money is, and therefore know that a virtual currency is not and does not resemble money. I will not be going over this again; what I will do, is go straight to the most interesting parts of this report, leaving out the glaring errors and the sections that the report gets right, because these are not of interest to us. It is interesting however, to note this section:

Modern economies are typically based on fiat money, which is similar to commodity-backed money in its appearance, but radically different in concept, as it can no longer be redeemed for a commodity. Fiat money is any legal tender designated and issued by a central authority. People are willing to accept it in exchange for goods and services simply because they trust this central authority. Trust is therefore a crucial element of any fiat money system.

What they are saying here is that money is money today, simply because people say it is. Anyone paying attention closely will be flabbergasted by this admission. The ECB is admitting that the money it issues is worthless, and it is used only because people have faith in the issuers of it. I will leave it to you to ponder wether this makes the ECB a sort of church, with the Euro its holy sacrament. Needless to say, this makes Bitcoin deeply sacrilegious.

Also, they say that money is money because, “People are willing to accept it”, yet we know that it is money by force because it is fiat currency, “fiat” meaning arbitrary decree. People who try and conduct all of their business in gold, for example, get into hot water, even if it is gold issued by the country in which they live.

By this admission, the following line is a lie, where the report says that the Euro is a:

Store of value: money can be saved and retrieved in the future.

when clearly it is not. Not only is the Euro not money, but it is not a good store of value because the supply of it is not fixed. It is inflated by design, meaning that it is a very poor store of value.

Money is not a “social institution”, as the report claims. The ECB is a social institution. Money is the property of individuals; it does not depend on any institution for it to come into being or have its value (Bitcoin being the latest example of this, if indeed it is money; the FSA in the UK says it is not) and the best form of money is gold. Gold in your hands is separate from any issuer, has a value in and of itself, “inherent value” and is not a part of ‘Society’ or a ‘social institution’ or any other fictional socialist nonsense.

Money has not been affected by technological innovations; it remains exactly the same in nature, just as man’s nature has not changed because he can make a phone call. This is a fundamental, though not surprising, error of the authors of this work.

a virtual currency is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. This definition may need to be adapted in future if fundamental characteristics change.

In other words, they have no good definition of Bitcoin. This is true not only of the ECB, but of everyone who is talking and writing about it. Is Bitcoin money or is it not? Is it a distributed ledger, or is it ‘digital gold’? One thing about Bitcoin is true and everyone can agree on this, it is hard to get Bitcoins, no matter what you think they are. This is being addressed.

We have written extensively, consistently and coherently on the subject of what Bitcoin is on BLOGDIAL. I suspect that the same forces that cause some people to believe that Bitcoin is money are going to come into play when the ECB decides to try and design policy concerning it. Bitcoin to them, is a threat. It is a money, and it should be either killed or regulated so that it has no teeth.

This of course, does not change the nature of Bitcoin; Bitcoin is like a mirror that reflects the ideology of the looker. An Aparatchick will see something that needs to be regulated. A Statist will see something that requires compliance. Entrepreneurs see an exiting business opportunity. A Libertarian will see another neutral tool for her toolbox, to go along with her hammer and coping saw.

Until the big idea of Bitcoin is unleashed, what people think Bitcoin is will remain in flux. All we can say about it that is true is related to the clients, the network software and the statistics to do with processing power and other plain facts. Trying to pin down Bitcoin to one definition is like trying to say what the internet is. It is a series of tubes. A way to send mail. A way to make phone calls, and so many other things, but it is really whatever you want to do with it, and there is always another protocol that can be developed and used on it.

The theoretical roots of Bitcoin can be found in the Austrian school of economics and its criticism of the current fiat money system and interventions undertaken by governments and other agencies, which, in their view, result in exacerbated business cycles and massive inflation.

For certain, this is the most delicious part of this document. It will have the Bitcoin hating Austrians blowing smoke from their ears, as the dastardly ECB puts the blame for Bitcoin’s creation and design upon its creator’s correct conclusions about the true nature of money gleaned from a careful study of the Austrian School. The bigger Bitcoin grows, the more it confirms that the Austrians were right. Or will it confirm that they are wrong? I suppose it depends on who you ask!

Note how the authors detach themselves from Austrianism by using the phrase, “in their view”. They are saying here that the Austrian School is not correct, and that it is just a ‘view’. This doesn’t make any sense. Economics cannot be two things at once, and as we have seen, the wrong ideas of the Statist “paper moneyists” and Keynesians has destroyed every paper currency that has ever been created. The Austrians are correct, because history demonstrates it. It is not opinion or theory, but fact.

It is a great pity that the major voices in the Austrian School have not picked up on and championed Bitcoin. Its almost as if they have worked diligently and brilliantly for decades determining exactly what money is, but now that the 21st century has crept up on us all, they cannot look outside of this definitive study at the world as it profoundly changes around them, and apply their insights to this truly new and wonderful innovation.

Perhaps now that the ECB has made this connection, they will be forced to either ramp up the irrational attacks on Bitcoin, siding with the ECB, or they will concede that Bitcoin is extremely interesting and serious, and perhaps even a form of money. Either way, none of this has any effect on the adoption of Bitcoin, and is more of a form of entertainment, as this insightful commenter describes. Bitcoin, like the moon landings, will succeed no matter what the pronouncements of the people who say it is impossible are.

However, the system has been accused of leading to a deflationary spiral. The total supply of Bitcoins is expected to grow geometrically until it reaches a finite limit of 21 million. If, however, the number of Bitcoin users starts growing exponentially for any reason, and assuming that the velocity of money does not increase proportionally, a long-term appreciation of the currency can be expected or, in other words, a depreciation of the prices of the goods and services quoted in Bitcoins.

The only people who level the accusation that Bitcoin is deflationary are the Keynesians that believe the supply of money must increase over time, and that this doesn’t matter, even though it penalises savers because, “In the end we are all dead anyway”.

A fixed money supply is in fact, a good thing. It means that you can save money and rest assured that when you use your savings, the money will have the same purchasing power as when it was stored. Naturally occurring money like gold has, for all intents and purposes, a fixed supply. That is why the price of goods denominated in gold when displayed on a graph against time is a flat line, over decades, and the only fluctuations are to do with natural disasters like locusts destroying crops, and other natural supply altering events that change the amount of goods on the market.

People would have a great incentive to hold Bitcoins and delay their consumption, thereby exacerbating the deflationary spiral.

This is another Keynesian fallacy, see Rothbard for a refutation of the imaginary “Hoarding Problem”.

Secondly, Bitcoin is not the currency of a country or currency area and is therefore not directly linked to the goods and services produced in a specific economy, but linked to the goods and services provided by merchants who accept Bitcoins. These merchants may also accept another currency (e.g. US dollars) and therefore, the fact that deflation is anticipated could give rise to a situation where merchants adapt the prices of their goods and services in Bitcoins.

This is interesting. Because Bitcoin is not linked to the currency of any country or currency area it is not directly linked to the goods and services produced in a specific economy? Why is gold linked but Bitcoin not linked? Gold is acceptable everywhere on earth, and so is Bitcoin… this is a very odd argument; is there a currency that is linked to anything, anywhere? Surely this is only a matter of what people will accept in payment, and there are no actual links to anything between currencies and goods. The only exception to this is compulsory taxation, where the State will only accept its own currency in payment of taxes.

Furthermore, if Bitcoin is thought of only as a way to transfer money and not as money in and of itself, this problem goes away. Merchants would set the price of their goods in Bitcoins dynamically by realtime API calls to the exchanges, and when the payments via Bitcoin are made, exchange their received Bitcoins into gold or fiat currency directly upon receipt. There is no reason why a merchant should want to hold on to Bitcoins, they are of no use to the merchant, and she exposes herself to risk of theft, Bitcoin price fluctuation and attacks from the ECB. It also means that in her business processes, she can account only for the fiat money of the State in her annual returns and tax forms and not for the ill understood Bitcoin she has received.

If Bitcoin is not treated as money, all the imaginary problems associated with it, “compliance”, “Know Your Customer”, “Anti Money Laundering” regulations and all of that other utter nonsense goes away. It becomes nothing more than another protocol layer on top of the internet, that does not need regulation or interference to do its job; moving money from A to B. When you think about it for a second, its clear that the idea of regulating Bitcoin is as stupid as the idea of regulating email.

However, it is also true that the system demonstrates a clear case of information asymmetry. It is complex and therefore not easy for all potential users to understand.

I laughed out loud at this. Its clear that the ECB does not understand what money is, and yet they claim that Bitcoin is complex? Is it really more complex though? How many people in the street understand how GSM works, and does this affect their ability to use mobile phones and make calls to anywhere on the globe? People don’t even need to remember telephone numbers anymore thanks to the design of the phone’s address book (which is not actually a real book. Do you understand what I am getting at?); why should it not be as easy to send money between mobile phones as it is to send a text message to an address book entry?

The same can be said of every technology in use today; you do not need to understand catalytic cracking to be able to drive a car, and you do not need to know about public key cryptography to understand what the green lock in your browser means. No one in the middle ages would have been able to use a mobile phone, yet today there is no one alive that cannot be made to understand it in a few minutes. The same is true of Bitcoin. When the breakthrough service arrives that simplifies Bitcoin to the level of a mobile phone’s ease of use (Think Apple), this argument against it will be moot. It is only a matter of time and development and funding.

The paper then goes on to roll out some pathetic fallacies, of the kind we have read before, “because we do not know who wrote Bitcoin, it cannot be trusted”. This is utter nonsense. Bitcoin is software that can be examined by any competent person. Just because the authors of this paper are incompetent software illiterates, does not give them license to assert that Bitcoin, “works like a pyramid or Ponzi scheme”. They should have hired a software developer to assess the source code for them so that they could speak from a position of authority on this matter, instead of relying on hearsay from the internet. Very shabby, and quite stupid.

As for the ‘problem’ of getting out of the Bitcoin system should it collapse, this is not a problem if Bitcoin is treated as a money transmission protocol and not money. It is up to entrepreneurs to develop business models and services that treat Bitcoin according to its true nature to make this problem go away. If no one is holding Bitcoins and the system collapses no one gets hurt, except for the small number of people with Bitcoin in transit at the precise moment it collapses. Everyone else, the billions of people who used it to move trillions from A to B will have lost nothing whatsoever.

Further action from other authorities can reasonably be expected in the near future.

Oh really? Do your worst.

You will not be able to stop Bitcoin, any more than you can stop Bittorrent and pirated warez which have been around for decades, since the days of the BBS. Trillions of files have been copied, billions of song files, billions of movie files, hundreds of millions of PDF files of books. There is NOTHING you can do to stop it, and it will NEVER cease.

Bitcoin is going to spread like wildfire, once people start to use it and intuitively place it somewhere between cash and text messages. It will spread to every web browser and every mobile phone and tablet.

And there is NOTHING you can do about it.

  • Attacking the exchanges will not work
  • Arresting individual Bitcoin users will not work
  • Threatening people with propaganda will not work

Just ask the MPAA / RIAA how well their anti ‘piracy’ campaigns have been going over the decades they have been trying to stop people from copying files. Every few years there are software improvements that strengthen the ecosystem; from Napster to Gnutella to Bittorrent to Bittorrent Magnet Links to Tracker-less Bittorrent to Bittorrent in the Cloud, every year there are new innovations making the Bittorrent ecosystem more resilient and widespread. The same will be true of Bitcoin.

All the show trials, disgustingly harsh gaol sentences and million dollar fines of 70 year old grandmothers have not stopped Bittorrent, and these techniques will fail with Bitcoin also.

The world is changing. Thanks to the internet, people are not only learning and sharing information as never before, but they are also using the same network to build tools that have never and could never exist before the internet. Adapt or die is the catchphrase that applies to both the ECB and the MPAA / RIAA. You must accept the new reality. It is not going away, and there is nothing you can do about this without destroying everything that is now dependent on the internet.

GAME OVER!

There is always sunshine

Monday, December 12th, 2011

 

…above the grey sky.

“We’ve asked for it back. We’ll see how theIraniansrespond.”

 

Home Truth Is Out There

Monday, November 28th, 2011

Data from a new study, published in the British Medical Journal, has been chewed up by the Fourth Estate and spat out to deliberately fear-monger against Home Birth.

See the Press Assoc., BBQ, Terriblybadfor examples of the most widely reported ‘angle’ on the study.

Babies born to first-time mothers who choose a home birth are almost three times more likely to die or suffer a medical complication, according to a report.

I have read the study, linked above. The overall risk for a ‘serious adverse outcome’ did not reach statistical significance in home birth vs other birthplace cohorts. Only when a specific subset of data were analysed was a significant result reached.

And just to clarify the inflammatory quote above, see table 8.4 in the Appendix to the study for the data which show that your child does not have ANY more likelihood of dying at home compared to a ‘medical’ setting. In fact, the highest proportion of neonatal deaths were found in freestanding midwifery units. For what it’s worth.

However, having read the study and having tried to understand the data, I would like to present an alternate interpretation.

CHOOSING TO GIVE BIRTH IN AN OBSTETRIC UNIT HARMSYOU, AND HARMS YOUR BABY, BEFORE YOU EVEN ARRIVE

It’s true, and this brilliant study proves it.

THEN THEY HARM YOU SOME MORE

It’s true, and this brilliant study proves it.

Let me elucidate on the data which supports my hypothesis.

So, you are ‘low risk’ (defined by this study), gestation has gone very well (defined by this study), labour starts… at home you get on with things. Eventually a midwife usually arrives and checks you over. At this stage only 5.4% of women at home had any kind of medical complication (meconium leaking, abnormal foetal heart rate and so on).

If, however, your labour starts and you have to leave home, get to hospital and do whatever they tell you to do before a midwife sees you… 19.5% of women showed 1 or more complications! 8x as many women in hospital had 2 or more complications than those women who stayed at home. That’s a bad start.

So, baby is coming and those Obstetricians just can’t keep their hands away. If you’ve chosen hospital you have 4x more chance of little Chelsy being sucked out with a plunger (ventouse), 3.5x more use of metal salad servers (forceps), 5x more chance of being slit open (caesarean), almost 2x more chance of serious perineal trauma, 2x more blood transfusions, 5x less chance of a normal placenta delivery, 3x less chance to use natural pain relief such as water birth – but 4x more chemical pain relief (epidurals etc.), and, finally, 4x more chance of having your fanny slashed by a scalpel-happy medic.

Also, home birth rates better than midwife-led units in all these aspects.

Obstetric Unit births were classified as ‘spontaneous vertex’ (normal head-first) births in only 74% of cases.

At home your chance of a completely normal birth was 93%. Again higher than midwife-led units.

All this data is freely available in the study manuscript online and it’s online appendices.


				

Police Undercover Snatch Squads and Agents Provocateurs

Wednesday, November 16th, 2011

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.

Why the quoted price of Bitcoin doesn’t matter

Monday, October 17th, 2011

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

US CENTCOM Strategy of Troll FAIL

Tuesday, October 4th, 2011

As the empire starts to crumble, and the talking heads in the MSM dwindle in influence, replaced by the likes of Alex Jones and Infowars, desperation methods are being rolled out to try and sabotage alternative and social networking media.

It will not work.

The problem they have is one of reputation, and six degrees of separation.

Because everyone is connected to everyone else by only six steps, it is now impossible to inject a lie into the hive mind of The Mass and have that lie survive scrutiny.

We have spoken about The Mass before on BLOGDIAL; it is the accurate prediction of the Twitter mediated hive mind that is impervious to the State and its lies.

Even if this vile attack on the truth through manipulation and lies was successful in any way, countermeasures can be built in software that would completely eradicate the influence of these glove puppet agents provocateurs.

Using the model of the PGP web of trust and the fact of six degrees of separation, it is possible to build a self organising, self healing global network of trusted introducers who can re-tweet only what is known to have not come from a glove puppet.

These trusted introducers and their messages would carry more weight than any glove puppet, and in fact, Twitter almost does this spontaneously through its simple method of people following each other and getting to know the sort of tweets that come out of the people they follow.

Anyone who uses these social networking tools understands that un-following is instant, adaptive network healing; if someone you follow says something that is a lie you either refute them by replying in public or un-following them and never again re tweeting their messages.

These simple actions are like the behaviour of antibodies fighting off infection, in this case, the infection of lies told by lying glove puppets.

These military people simply do not understand the world the are now living in. They cannot use their ridiculous twentieth century PSYOP strategies by ‘upgrading‘ them and superimposing them on Twitter; it simply will not transpose to these media.

What they must now realise is that lying as a strategy is finished. This would be the breakthrough that would put them on a strong footing for total domination of the social networking space. Sadly (or happily) they simply have not got a clue, nor the ethical foundation to make the correct strategic decision.

Lets do this!

The US military is developing software that will let it secretly manipulate social media sites by using fake online personas to influence internet conversations and spread pro-American propaganda.

They will fail.

A Californian corporation has been awarded a contract with United States Central Command (Centcom), which oversees US armed operations in the Middle East and Central Asia, to develop what is described as an “online persona management service” that will allow one US serviceman or woman to control up to 10 separate identities based all over the world.

Wait a minute, is it the US Military, or is it some snake-oil salesman in California who made a successful pitch?

The project has been likened by web experts to China’s attempts to control and restrict free speech on the internet.

This is utter nonsense, Grauniad style. Censorship has nothing to do with organised glove puppetry; everyone can continue saying whatever it is they like, unimpeded. Can these morons even define the words they are using? Shocking stupidity, and par for the course at the Grauniad!

Critics are likely to complain that it will allow the US military to create a false consensus in online conversations, crowd out unwelcome opinions and smother commentaries or reports that do not correspond with its own objectives.

Critics are nothing more than cry babies whining instead of writing software. As I say above, a web of trust can be built either spontaneously or with software designed to tamp down glove puppetry and MILCOMTROLLS. You can always spot trolls very easily, especially when they use templates or multiple identities to spam comments. The Telegraph comments sections are full of garbage; all you have to do to tune it out however, is to set Disqus to ‘best rated’.

The single act of people rating comments up (and not down, there is no downvote button) crowd-sources the bullshit out of sight. If an organised team of MILCOMTROLLS tries to hijack the comments, it is always the case that the best refuting comment outshines the glove puppetry, and the takeover backfires completely.

The people who put this contract out to tender have absolutely no idea how any of this works, and it is going to backfire on them spectacularly. Just ask Johan Hari about how Google can expose misdeeds in English. Any MILCOMTROLLS that try and poison threads or spin the hash tags will be spotted, outed and crowded out, reinforcing the exact opposite messages that they are trying to push.

The discovery that the US military is developing false online personalities known to users of social media as “sock puppets” could also encourage other governments, private companies and non-government organisations to do the same.

So what? Its just like other governments wanting nuclear weapons because the USA has them, or countries like India wanting ID Cards because most European countries have them.

The Centcom contract stipulates that each fake online persona must have a convincing background, history and supporting details, and that up to 50 US-based controllers should be able to operate false identities from their workstations “without fear of being discovered by sophisticated adversaries”.

This is unfeasible, and if it is feasible, the web of trust can isolate and expunge these glove puppets. Also, consider that when individuals write blog comments or send tweets, they think about what they are writing, instead of working from a script. The only way this MILCOMTROLL plan could possibly work is if they hired individuals to write from the MILCOM point of view, genuinely on a case by case basis, with the target articles distributed to them for attack.

You cannot create a fool proof system where one person can control ten identities and not be crowded out or discovered. Because each of these identities, credible or not, will all be propagating the same point of view, this fact alone would be enough to characterise, isolate, and quarantine them.

Centcom spokesman Commander Bill Speaks said: “The technology supports classified blogging activities on foreign-language websites to enable Centcom to counter violent extremist and enemy propaganda outside the US.”

Ron Paul 2021!

He said none of the interventions would be in English, as it would be unlawful to “address US audiences” with such technology, and any English-language use of social media by Centcom was always clearly attributed. The languages in which the interventions are conducted include Arabic, Farsi, Urdu and Pashto.

Its unlawful to glove puppet in English for American audiences, but its A-OK to ASSASSINATE Americans.

You cant make this stuff up.

Centcom said it was not targeting any US-based web sites, in English or any other language, and specifically said it was not targeting Facebook or Twitter.

Lies lies and more lies.

Once developed, the software could allow US service personnel, working around the clock in one location, to respond to emerging online conversations with any number of co-ordinated messages, blogposts, chatroom posts and other interventions. Details of the contract suggest this location would be MacDill air force base near Tampa, Florida, home of US Special Operations Command.

Once again, coordinated messages will be identified and neutralised. Think about this as a possible way of destroying the effectiveness of this dastardly plan.

Akismet is a distributed tool for eliminating spam. It is 99.99% effective. A system like that could be used to completely eliminate the occurrence of glove puppets and mass up/downvoters.

Since these people will be working in a coordinated way, their acts will be synchronised. It will be possible to identify them as a group and then systematically exclude them from showing up in comments or as up-votes. Digg has some experience in this, where massive groups of paid Diggers were organised to push stories onto the front page. Since these people all work together, it only takes a few instances of them working to simultaneously to generate a unique fingerprint of their behaviour, which can then be tested against when future MILCOMTROLL style attacks are initiated.

Of course, all this happens silently in the software, so like SEOs trying to game Google, they will meet with a very serious problem the instant they roll this programme out. Anyone working with Gmail knows that it is spam free. This proves that distributed, collaborative filtering and secret sauce software can work to keep out the bad guys.

Centcom’s contract requires for each controller the provision of one “virtual private server” located in the United States and others appearing to be outside the US to give the impression the fake personas are real people located in different parts of the world.

These people are not going to be posting in English. This is a big hurdle for the glove puppets who are going to be operating their MILCOMTROLL identities. Online credibility is not just a matter of getting an accurate word for word translation of an idea; there are cultural references, nuances and cues that the American military are notoriously and hopelessly bad at. Can you imagine some shorn headed operative in jungle camo, sitting in an air conditioned room in Tampa Florida, trying to pass herself off as a muslim man in Riyadh? Or ten different people in Riyadh?!

The whole idea is simply ridiculous, and in fact the targets of this rubbish will not need any special software to detect these MILCOMTROLLS, they will give themselves away when they post during prayers or some other stupid (and fatal) basic cultural error.

It also calls for “traffic mixing”, blending the persona controllers’ internet usage with the usage of people outside Centcom in a manner that must offer “excellent cover and powerful deniability”.

This is snake oil straight from the brochure. NO $ALE!

The multiple persona contract is thought to have been awarded as part of a programme called Operation Earnest Voice (OEV), which was first developed in Iraq as a psychological warfare weapon against the online presence of al-Qaida supporters and others ranged against coalition forces.

Ridiculous. There were no al-Qaida in Iraq before the Americans got there. This is pure and utter bullshit, and those with memories longer than goldfish know this. The war of blowing people to bits, and pictures of it, are worth many thousands of MILCOMTROLLS. You cannot win hearts and minds with a gun, or a drone. Period. This is a waste of time and a waste of money, and I strongly suspect that anyone who has been on a tour in Iraq will confirm this. The military are giving more money to Ron Paul; more than all the other candidates combined. This is not an accident; these people know what is really going on, and no amount of snake oil, lies, glove puppets or trolls can stop the truth from coming out.

Since then, OEV is reported to have expanded into a $200m programme and is thought to have been used against jihadists across Pakistan, Afghanistan and the Middle East.

And its not working, on a purely objective PR level, removing all aspects of right or wrong, who started what or anything other than the measure of mindshare. All you have to do is watch the propaganda that these people produce on LiveLeak. No troll, no commenter no one can counter the stark shock value of what these people are disseminating. They are winning the PR war because their PR is quantitatively better. Once again, this has nothing to do with what you personally think about them and their motives, its a pure matter of mathematical fact.

OEV is seen by senior US commanders as a vital counter-terrorism and counter-radicalisation programme. In evidence to the US Senate’s armed services committee last year, General David Petraeus, then commander of Centcom, described the operation as an effort to “counter extremist ideology and propaganda and to ensure that credible voices in the region are heard”. He said the US military’s objective was to be “first with the truth”.

The best counter-terrorism and counter-radicalisation programme would be to elect Ron Paul. It is a scientific fact that all terrorism against the USA would cease thirty days after Ron Paul was elected.

Do you think that that is a big claim to make? Very well, dont believe, me take it from someone, the only person in fact, who has done a 100% accurate study of the true nature of terrorism: Professor Robert Pape, in his lecture “Dying to Win”

In this lecture, he will prove to you with unassailable facts that if Ron Paul wins, terrorism goes away.

This month Petraeus’s successor, General James Mattis, told the same committee that OEV “supports all activities associated with degrading the enemy narrative, including web engagement and web-based product distribution capabilities”.

This is utter nonsense on stilts. The ‘enemies narrative’ as outlined by Dr. Pape is that America is occupying other people’s countries. That is the ONLY narrative, and no amount of glove puppetry can alter this fact. Only a complete removal of American forces from foreign lands can change the narrative and end the nightmare.

[…]

Finally, we get to the ‘me too’ part of the article:

It is unclear whether a persona management programme would contravene UK law. Legal experts say it could fall foul of the Forgery and Counterfeiting Act 1981, which states that “a person is guilty of forgery if he makes a false instrument, with the intention that he or another shall use it to induce somebody to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person’s prejudice”. However, this would apply only if a website or social network could be shown to have suffered “prejudice” as a result.

Is an online identity, a nom de plume a ‘false instrument’? Any website that takes comments from anyone using any name has entered into a contract where such an act is acceptable, and so de-facto, the Forgery and Counterfeiting Act 1981 could not apply. The fact is that UK law is not anywhere near being relevant to glove puppetry and where they apply existing law, they nearly always get it horribly wrong, like the recent case of the autistic Troll imprisoned for… trolling.

Trolling is a simple matter of freedom of speech (property rights). The people who own the servers are publishing on their own property. They enter into contracts with people who leave comments. It is as simple as that. There is no space in that contract and interaction for the State to interject itself.

This article was amended on 18 March 2011 to remove references to Facebook and Twitter, introduced during the editing process, and to add a comment from Centcom, received after publication, that it is not targeting those sites.

[…]

http://www.guardian.co.uk/technology/2011/mar/17/us-spy-operation-social-networks

Yeah, bullshit.

This is so full of fail there is fail spilled all over the floor.

The people who are least susceptible to MILCOMTROLL propaganda are the targets of this insane scheme. They are not going to buy any of this, and any attempt to spin the Twittersphere or blogosphere in English, in the USUK, as they are no doubt trying to do right now, is doomed to failure.

The mass rejects their malignant attempts at influence at every step, and as the economy continues to degrade, all calls to ignore the Federal Reserve, wage more wars, re-elect mobsters and murderers is going to ring so hollow that the sounds will resemble the biggest bell ever cast.

Precursors to Bitcoin legislation emerge

Friday, September 2nd, 2011

It is clear that the State is not going to quietly disappear into the night, and leave everyone to live as free men. Given that they still feel the need to preserve the illusion that they have the consent of the governed, we can expect any technology that threatens the State to come under legislative attack, after a carefully orchestrated series of media smears, hysterical news articles, straw man attacks and ‘real world’ examples of harm where Bitcoin is presented as an enabling factor.

Bitcoin has the potential to severely disrupt the ability of the State to steal money from people. Bitcoin is being built by developers who want to preserve the privacy and security of its users. If Bitcoin and systems like it become wildly popular, as popular as the internet itself, then this will mean that financial transactions will ‘go dark’ and the state will not be able to intercept, detect or steal money from citizens.

Email communications are routinely monitored by the state, both covertly and overtly. This eavesdropping could be stopped completely if the users of email encrypted their communications. The tools to do this are free and simple to use, and yet, mass adoption of encryption for email has not take off after over a decade of availability. Had encryption been built into email from its inception, privacy would have been the default for email.

The development of Bitcoin is being done with privacy in mind from the beginning. In order to make a Bitcoin transaction, a user must accept that her transactions have privacy features built in by default.

The mistakes and built in disadvantages and myriad security problems of email are not going to be repeated with Bitcoin, and if Bitcoin becomes as ubiquitous as email it will represent a significant step towards liberty for all people world-wide.

When the State is perturbed by new technological developments and sees them as a direct threat, they build a case for legislation either through a crisis, real or fabricated, or through an academic attack from its intellectual class.

The recently published paper, ‘Shadowy Figures: Tracking Illicit Financial Transactions in the Murky World of Digital Currencies, PeertoPeer Networks, and Mobile Device Payments’ by John Villasenor Cody Monk and Christopher Bronk is an example of an academic attack of this type:

http://www.bakerinstitute.org/publications/ITP-pub-FinancialTransactions-082911.pdf

The paper works from the premiss that the State has rights, that it has a right to control and steal from individuals, it has the sole right to define what money is and is not through its legal tender laws and that it also has the right to forbid people from transacting in anything other than the currency it issues.

In short, it works from a position that takes the State and its power as a given. It is an excrescence of members of the class of “opinion moulders” in society as described by Murray Rothbard; men who’s alliance with the State is based on a quid pro quo, where in return for spreading and reinforcing the idea among the masses that the State and its rulers are wise, good, sometimes divine, and at the very least inevitable, with no conceivable alternatives, the State incorporates the intellectuals as part of the ruling elite, granting them power, status, prestige, and material security.

Lets begin with the executive summary:

Almost no one would argue that governments do not have a right to track and trace digital financial transactions associated with activities such as terrorism and human trafficking. It is less clear, however, how governments can surmount the formidable technical and organizational challenges associated with detecting and monitoring these transactions. The solution will require a combination of self-regulation, government-industry collaboration, and change in both technology and culture within government agencies.

Actually, there are many people who argue that not only does the state have no right to track and trace digital financial transactions, but that the state does not have any rights at all. Only man has rights. The State (under the American system of government) has powers that are delegated to it by the people through a carefully crafted Constitution, enumerating and limiting those powers.

Using the standard fear-mongering terms of terrorism and human trafficking in relation to this gives you a foretaste of what is to come in this shabby publication. The State uses terrorism as a pretext to surveil everyone’s transactions, en masse, not just those of terrorists, who are now defined as essentially anyone who breathes air. This is the only explanation for the millions of Americans who are listed on the State’s despicable ‘No Fly List’, whose explicit purpose is to prevent acts of terrorism.

This is also the pretext they are using as they are pulling off the pants of wheelchair bound 97 year olds at airports, looking for bombs in the diapers of infants and requiring banks to report on all transactions over arbitrary limits. No one who is in full possession of the facts of State surveillance under the guise of prevention of terrorism believes this line any more. These measures are solely and demonstrably designed for the control of the ordinary citizen.

Human trafficking is another straw man argument; anyone who is trafficking in human beings will quite sensibly be using cash to receive or make payments. This is the same bogus argument put forward when attempts were made to regulate cryptography in the 1990s; it was claimed that terrorists were using Steganograpy to hide messages in images. It was a completely false Hollywood movie plot of course, and the idea that human traffickers would take an electronic payment rather than large Euro notes or One Hundred Dollar bills is patently absurd. Once again, anyone who thinks even casually about this comes to the conclusion that these arguments for the legislation and control of digital money are weak at best.

This paper is littered with fallacious arguments:

While there is a wide spectrum of views regarding the right to digital privacy, almost no one disputes the notion that the right to digital financial privacy does not extend to providing an impenetrable legal shield for the online financial activities of terrorist groups, human traffickers, or drug cartels.

Once again, there are many people who argue that prohibition is immoral, and that the entire ‘War on Drugs’ is a fiasco and a disaster on every level.

To say, “almost no one disputes the notion that the right to digital financial privacy”, is a pure example of the appeal to belief fallacy. Just because many people believe something, you cannot infer that their beliefs are correct or that an act based upon them is justified.

The State is most certainly not justified in surveilling everyone’s transactions to intercept money and goods that do not involve crimes where there is a victim. The matter of prohibition is a perfect example of this.

Hawala and other informal value transfer systems long predate the advent of computers and the Internet, and, in more recent years, have been of concern to authorities because of their potential to be used for money laundering and terror financing

I will not address every instance of the straw man of terrorism or human trafficking in this publication.

Money laundering is a euphemism for transactions out of view of State surveillance. Any transaction that takes place outside of State control is essentially ‘Money Laundering’ according to the State. This means that, for example, people living in Greece, who are forbidden from making any transaction over 1500 in cash, even though the money is legitimately theirs and they are not engaging in any act that is defined as criminal activity by the State, is guilty of ‘Money Laundering’ by the mere fact that they are making a transaction above an arbitrary size.

What the authors of this paper are suggesting is that digital money systems, by virtue of their built in privacy mechanisms are de-facto money laundering systems because they deny the State the ability to surveil them. This is classic State reasoning, Kafkaesque and irrational, of the kind that is used to justify every predation and immoral piece of legislation that the State cares to write, from the laws prohibiting you from growing certain species of plant, to eminent domain, the innumerable different licenses, regulations and compulsions of all kinds and beyond.

tracing a specific suspect transaction that is intentionally buried in the noise can be like trying to find a pickpocket who just stole a wallet in a crowded market. The knowledge that the pickpocket is certainly among the hundreds of people within view is of little comfort if there is no practical ability to search every person in the market.

Its interesting that the authors use the analogy of a pickpocket when describing the act of a citizen making a transaction of their own money to another person over an anonymous network. It is the State of course, that is the pickpocket and thief, not the citizen minding her own business and transacting voluntarily and in private.

In l996, physician Douglas Johnson started spending his evenings writing software to create e-gold, a new digital currency that, though not issued by any government, would be fully backed by gold stored at various locations around the world. By 2001, there were nearly 300,000 e-gold customer accounts with an aggregate value of about $16 million.4

Anyone who does not believe that the State is building a case to come after Bitcoin is deceiving themselves. They are already using the one size fits all pretext of terrorism to shut down minters of physical coins like the Liberty Dollar and this case along with the case of e-gold should be of interest to people who use Bitcoin. E-gold had assets worth 16 million dollars, and:

“Liberty Dollar coins and precious metals, currently valued at nearly $7 million.”

Bitcoin is worth 10 times the amount NotHaus’s gold was worth, so I’m sure it is receiving 10 times the destructive attention from our glorious overlords.

[…]

Libertarian News

Bitcoin is bigger in dollar value than both e-gold and Liberty Dollar combined, and it is decentralised with no single company controlling it, unlike the e-gold and Liberty Dollar services. This academic paper is, I am quite sure, a direct result of this fact, and the fear that Bitcoin is sure to continue to grow in strength in every respect. This paper will be distributed widely among the State actors who will seek to understand Bitcoin within a framework of their own thinking and ideology.

You can expect that every trick in the book is going to be used to retard the growth of Bitcoin. You will see smears thrown at it that will include terrorism, human trafficking, and drug dealing (as we have already seen in this paper) but also expect child porn and paedophillia to be used to taint these systems. For those who are not persuaded by hysteria, the financial news networks are busy telling their viewers that Bitcoin is to be avoided at all costs. None of these attacks are logical or rational of course.

While e-gold was backed by actual gold, Bitcoin is fully virtual, backed only by the confidence of the people who use it for transactions. A governmental entity attempting to shut down Bitcoin servers in its territory would almost certainly find that even more servers would spring up, Hydra-like, in other parts of the world. As of July 23, 2011, there were approximately 6.9 million Bitcoins trading at a value of more than $13 per Bitcoin, corresponding to a total supply of over $90 million.11

And here we have another problem which this paper does not address; Bitcoin is not money. This will be the first counter argument tilted against any attack by the State against a high profile company that trades in Bitcoins. E-Gold and Liberty Dollars had one thing in common; they both traded in objects that are demonstrably money, and which are in fact, better money than the Federal Reserve Notes that are legal tender in the United States.

Bitcoin is different in that it is not money, but is a protocol, like TCP/IP. I predict that this will be a successful argument, because if it falls, then the financial regulators will be given the power to regulate the resale of any good or service for which a token or recipt is issued simply because money is exchanged for goods and services.

If the State was staffed by actors who were rational, they would not be attacking these services; they would immediately accept them all as payment for taxes. In this way, they would ensure that whatever happens and whatever systems come to pass, they will have a stake in them and a stream of revenue. By trying to stamp out digital currencies, refusing to accept them and trying to force people to use their worthless and inflating fiat currencies, they will end up being starved of cash as people switch from bad currencies issued by central banks to digital money transfer systems.

The potential Achilles heel of Bitcointhat each server in the network contains a complete record of all transactionswill almost certainly be addressed in future systems that distribute transaction information so that no single server or small collection of servers contains a complete transaction record. It is also possible to envision systems in which the transaction records are not only distributed, but evanescent, so that even the collective information stored on all the servers in the system at any given time would not enable a complete reconstruction of transaction history.

This is essentially what we have been saying; Bitcoin as a brand may or may not not succeed, but for certain if it does not, an improved successor in a following iteration is bound to be created. Solid Coin is one of the first challengers in this respect. They claim that their client software and network, which are a fork of the open source Bitcoin source code, is superior to Bitcoin and are not afraid to trumpet this claim.

For individuals using any digital system properly, the loss of a small working balance is not a deal breaker. When a digital money transfer network collapses and a new replacement network emerges, whatever fiat or non fiat currency you have to hand and wish to transmit can be sent through the new system. The companies that facilitate exchanges could be wiped out, but they will quickly be replaced by successors since some of the software suites used to run exchanges are open source software. This means that the digital money economy can survive multiple crashes no matter what the causes of those crashes are. The need for people to transact at a distance with very low fees is so great that it will never be possible to get rid of this idea, no matter what the inconvenience of a crash means in terms of short term losses.

It is statistically inevitable that some fraction of the more than 300 million transactions performed using M-PESA in 2010, and of the much larger number of transactions that will be performed in 2011 and future years, will not be legitimate. And some fraction of those, in turn, may involve payments that bear on American national security or law enforcement concerns.

The paper goes on to describe M-PESA and its spectacular growth, and then claim that a small fraction of the 300 million transactions performed in that system will be ‘of concern’ to American national security or law enforcement.

This is not the problem of anyone in the world other than the U.S. Government, and if Ron Paul becomes president, it will no longer be the concern of the U.S. Government.

We must remember when we read these words that the phrase ‘law enforcement concerns’ means prohibition and the bogus ‘war on terror’ both of which are entirely illegitimate. In absentia of these two rationale, there is no concern of any kind when we talk about what the un-banked are doing in the middle of what most Americans would consider to be “nowhere”. These are artificially created problems looking for solutions, and they should be rejected by all right thinking people on principle.

And, the 2008 financial crisis illustrated that the economic picture constructed by the organs of the U.S. government tasked with financial and commercial measurement, oversight, and regulation can have significant blind spots. These examples illustrate that the barriers to observing financial activity can be organizational as well as technological. Accordingly, successfully addressing the complexities of illicit financial transactions in cyberspace will require structural and technological steps taken by regulatory, intelligence, and law enforcement agencies, as well as the private sector.

This is of course, completely ridiculous. The causes of the 2008 financial crisis were and are well understood by students of the Austrian School of Economics, and were predicted, repeatedly on television. There were no ‘blind spots’ save in the eyes of the Keynesians and the slavish apologists for the Federal Reserve. Note also, how apologists for the State use the prefix ‘cyber’ when they are talking about things on the Internet they do not like and ‘digital’ when they are describing things they perceive as beneficial.

The economic pictures constructed by organs of the U.S. Government are nothing more than fairy tales. Take for instance the way that unemployment is measured. It is a fact that the way the counting is done has been deliberately manipulated to massage the numbers downwards. The website Shadow Stats specialises in presenting honest data rather than the skewed numbers generated by political needs of the State.

To claim that digital currencies make calculation difficult for government is absurd. If calculation is so critical for the State, they should force the Federal Reserve to publish ‘M3’, the number that describes the money supply, and they would not use statistics to lie about the true state of the economy. All of this is, of course, separate from the fact that the State has no legitimate purpose in generating these numbers and using them to engineer society in the first place.

The private sector has no interest in crippling their products so that the state can gain back door access to them and their customer’s data. Burdening them with these proposals is anti-business, anti-progress and anti-liberty and is illegitimate.

In addition to fostering self-regulation within the various industry sectors involved in the movement of money, the U.S. government should establish an interagency government/industry working group or expand the charter of an existing group to focus specifically on emerging financial threats.

These measures will not work to ameliorate the artificial problem of ‘financial threats’. Since all of the software, both in terms of clients, servers and exchanges are open source, any attempt to poison a digital currency will immediately cause a fork. Solid Coin is a perfect example of this; they have forked Bitcoin in advance of any threat from the State, based solely on the casually spoken words of Gavin Andressen at the first Bitcoin conference.

Should any involvement by law enforcement actually be confirmed, or the Bitcoin source go closed, Solid Coin will gain tremendous momentum. Digital currency sees the State as damage and routes around it, to re-purpose a venerable phrase. Like a physicist trying to know the location and energy of a quantum particle at the same time, any attempt to touch these systems will be self defeating.

Another set of relatively low-tech but still useful solutions pertains to systems that can monitor the premises where MMT agents conduct business. Digital image and video recording is now routinely used in venues as diverse as banks, stores, and taxis. A properly designed system could aim to ensure that cash could only be accepted or disbursed when both the agent and the person providing or accepting the cash were on video.

And here we have an example of the mindset of the State, and in this case, the rancid anti-Americanism that is at the heart of many thinkers in the U.S.A. All people are presumed guilty. You have no right to privacy. Surveillance should be universal and pervasive. All financial transactions should be treated as suspicious by default.

Look at the list in this section; they even approve of surveillance in taxis as a method of eliminating financial privacy. This is as far away from the American dram as it is possible to get, and people do not want the sort of world that the authors of this paper envision as necessary. This is why Bitcoin, E-gold, the Liberty Dollar and systems like it are popping up all over the place. If the State was legitimate and a force for good, there would be no need for people to spend their time developing currencies whose central feature is to get your money out of the clutches of the State. In fact, this might go some way to explaining why email was developed without encryption built in (apart from the fact that it pre-dates modern fast processor and the Public Key Cryptography systems that were developed after the advent of email). In the 1960s people’s faith in government had not been shaken to its core. Nowadays of course, there is little faith in the State; it is widely and correctly understood to be a malevolent and destructive force for evil.

For the United States to ensure its national and financial security, the ability to understand the massive flow of digital information that is the global financial system today, from micro to macro, and from baht to Bitcoins, is of fundamental importance. Where once the numbered Swiss bank account, the wire transfer to a shell corporation, or, as in All the Presidents Men, a paper bag containing $25,000 in cash were primary means for covert financial activity, the Internet and mobile phone networks are the potential setting for a vastly expanded set of new, digital avenues for conducting hidden transactions.

Given the rate of change of the digital landscape, any set of solutions constructed based on a single snapshot in time will quickly become obsolete. However, by creating the collaborations, regulatory frameworks, and technologies that reflect todays more fluid and diverse financial transaction environment, government and industry will be better positioned to address illicit transactions today and to adapt to address those of the future.

The conclusion of this paper amounts to wishful thinking. The jig is up for the State in its present form. They are going to have to adapt radically and philosophically if they are going to remain as the arbiters of anything at all.

Part of this radical change will be to address what exactly is meant by, “the United States to ensure its national and financial security”. What exactly is the United States financial security? The U.S. is a nation of people; if their money is secure, i.e. not being inflated away by the Federal Reserve, and they can transact locally and at a distance for next to nothing, what is the problem?

The problem is that the authors are not talking about the people of United States and their financial security; they are talking about the State, the Federal Government, and its financial security. In plain English, they are referring only to the Federal Government’s ability to levy taxes and collect them.

Digital currencies and peer to peer transactions are a direct threat to the Federal Government and its ability to tax. This is the only threat that they are truly concerned with; all of the other threats they list here are statistically insignificant compared to the trillions of dollars that could potentially be lost to them in a peer to peer digital currency world.

The statistical probability of being affected by terrorism is less than many daily fatal occurrences, like death from bee stings or anaphylactic shock from adverse food reactions. I do not even need to quote car accident statistics or even lightning strikes, or alcohol, or pharmaceutical related deaths, all of which happen at greater frequencies than terrorism by orders of magnitude.

Terrorism is not a pretext for trying to stop the future from being summoned. As for human trafficking and crimes against children, as ghastly and reprehensible as these crimes are, they are, mercifully, exceedingly rare and should not be used to destroy the tools, systems and free society that entrepreneurs and the creative are building.

It is completely inhuman, illegitimate, immoral and unethical to attempt to suppress and destroy people’s rights. In the 21st century, we have the tools, the understanding and the will to build the systems that will forever repudiate the claims of the State that it was ever needed to make everything run smoothly. Digital currencies like Bitcoin are only one tool in this movement, the writings of Murray Rothbard, Lew Rockwell, Ron Paul and the distribution systems that spread these ideas are the main ways that this revolution is taking place. No doubt, in private, the authors of this piece would call for the internet itself to be permanently and entirely shut down for the sake of ensuring the ‘security of the United States’. It is this irrational, un-American thinking that is behind the recent discovery that Justin Raimondo has been under F.B.I surveillance, simply because he writes articles.

It is a great tragedy that so many Americans have lost touch with the idea of what America was meant to be. Apart from that tragic loss, its interesting to note that this paper is concerned not with the plight of the poor in the ‘third world’ and the unbanked millions who have no access to capital. They are not concerned with the human suffering that could be lessened by the new technologies that are being developed. They are only concerned with themselves, and their own narrow parochial interests, that are borne out of a fundamental misunderstanding of the proper role of government and what people’s rights are.

Its up to every person who can think and write and run software to refute these fallacious arguments, to use the new systems at whatever level they can and to spread the ideas of liberty. We simply must not let these wrong headed statist arguments go unchallenged.

I have refrained from explicitly detailing the thinking behind the assertions I have made in this piece that claim or infer that we do not need the State, that the State is illegitimate on its face, and that it has no rights in and of itself. I will leave it to the reader to visit the Ludwig Von Mises Institute website for the background, evidence and proof that these are all facts. There are posts on this Blog that go into this in detail also. You cannot go far wrong by reading Lew Rockwell’s blog for a complete rundown of these ideas and links to many scholars and philosophers. If you want to understand the basics of all of this, you should buy and read Murray Rothbard’s For a New Liberty which is also available for free. To understand money and how the State has interfered in it to its near total destruction, you need to read What has government done to our money, also by Murray Rothbard.

With these tools in your hands you will be able to understand and prove to yourself that everything I have said in this piece is true, and why the paper that I have debunked is as wrong as something can be wrong.

It is incumbent upon you to demonstrate that you are not a part of the coercion and violence that the paper critiqued here espouses, and that you are willing to live with other human beings without them. If you are willing to co exist peacefully with your fellow man, then you should reject the basic premiss of this scandalous paper and its fallacious reasoning. If you do not, then you must concede that you are a violent person, that you approve of the coercion and violence of the State, and that the ends justifies the means.

Libertarians are willing and able to co exist with you. They are non violent; the very heart of their philosophy is that they can never initiate force against anyone. The measure and test of the ethical basis and morality of your philosophy should be wether or not you can co exist with others as the Libertarians can.

Many of you reading this will believe in democracy. You will use that word interchangeably with ‘fair’, ‘just’, ‘ethical’ and ‘good’. It is none of those things. I put it to you that your society cannot survive as it is without coercion and violence, and that it is doomed to failure because it is based on coercion and violence.

Hungarian translation of this article.

Guardian warmongering over Pakistan encryption ban

Wednesday, August 31st, 2011

The Guardian helps to whip their idiotic readers into line in advance of regime change for Pakistan. All articles of the type that you read below are designed to discredit the governments, like them or not, of the target countries with lies, hypocritical attacks and pure propaganda.

France ‘banned encryption’ in the 1990s; Dominique Strauss-Khan ended the restrictions Where were all the howling articles about interception then?

Where are the howls today about the deliberately weakened A5 GSM encryption? Where are the howls from the Guardian about ECHELON? Where are the howls about RIPA, which forces you to reveal your passphrase? Where are all the howls about the German government’s attempts to break into Skype calls? Where are the howls about all the abuses going on from inside their precious ‘democracy’?

Before you attack Pakistan, get your own house in order. If you do not, then every foreign country in the world will point to you as an example of how to govern correctly. US/UK has full access to all land line phone calls, mobile calls, internet traffic that is not encrypted and a myriad of other ‘intelligence sources’ which actually means immoral privacy violations on a mass scale. They also have access to all of the communications taking place in Pakistan.

It is only natural that Pakistan, who is not invited to share in the data collected by the west from ‘their own citizens’ that they should take steps to get access themselves.

Lets do this!

Pakistan to ban encryption software
Internet service providers will be required to inform authorities if customers use virtual private networks in government crackdown

This is no different to the moves in the west to force ISPs to retain data and cut off users who are sharing files. Once the French (for example) figure out that VPNs can be used to share files and beat their ban, they will move to outlaw them also. You dont think that France could possibly ban VPNs? they already did something just as stupid, as you can see here.

Internet users in Pakistan will no longer be able to access the web through virtual private networks following the government ban.

Millions of internet users in Pakistan will be unable to send emails and messages without fear of government snooping after authorities banned the use of encryption software.

The same is already true of users in the US/UK. Millions of internet users cannot send email without fear of government snooping, so what is the problem with Pakistan doing the same thing? I wonder if these Guardian shills can explain why they think that its OK for US/UK to ‘snoop’ on communications but its NOT OK for Pakistan to do so. Of course, they would not call it ‘snooping’ in the US/UK, they call it ‘security’. It is base hypocrisy turned up to eleven.

A legal notice sent to all internet providers (ISPs) by the Pakistan Telecommunications Authority, seen by the Guardian, orders the ISPs to inform authorities if any of their customers are using virtual private networks (VPNs) to browse the web.

Seen by the Guardian, but not by you. Pics or it didn’t happen. There is absolutely no reason why the Guardian should not publish this document so that we can see if for ourselves. But of course, the Guardian is a paternalist newspaper that rather than let you make up your own mind, presents a sugar coated, fact free fait accompli for you to swallow whole. Wether its articles on economics, computer security or anything else, they do not present you with all the facts. But lets move on…

Virtual private networks allow internet users to connect to the web undetected, meaning that they can access banned websites and send emails without fear of government interception.

Pakistan’s 20 million internet users have previously been banned from popular social networks, such as Facebook, because of blasphemous material about the prophet Muhammad. All internet traffic in the country travels through the Pakistan Internet Exchange, which can be intercepted by the military and civil intelligence agencies. The move echoes a crackdown against encrypted communications across the border in India and in China.

And what is left out of this part is the fact that BBM is encrypted, and that back door access to it has been given to the State right here, the recent mass looting being the pretext. Lets also not forget that right here, it was seriously proposed that Twitter and Facebook be ‘shut down’ in an ’emergency’ by the state.

Why are these journalists whining about China, Pakistan and India, when the same nasty things are being done right here? Those countries are acting rationally and following the example of the UK.

The Pakistan Telecommunications Authority legal notice urged ISPs to report customers using “all such mechanisms including EVPNs [encrypted virtual private networks] which conceal communication to the extent that prohibits monitoring”. Anyone needing to use this technology needs to apply for special permission, the notice said.

OUTRAGEOUS! Not.

Authorities in Islamabad insisted that the ban on VPN access was intended to stem communications by terrorists.

Terrorists do not use VPNs or GPG/PGP. Those of you who are up on this remember the bogus Steganography Threat that did the rounds years ago. Bad journalists at papers like the Guardian claimed that terrorists were hiding secret messages inside photos posted on the internet. There has never been a single instance of this found; it was just pure hype, just like this article is pure hype, and like the pretext Pakistan is using to ban VPNs because of ‘Terrorism’ is pure nonsense.

However, banks, call centres and many other businesses use encrypted connections to communicate with their branches and customers, to protect sensitive data such as account numbers and passwords.

Which is why the French ban in the 1990s didn’t make sense, and this doesn’t make sense either.

“This is like banning cars because suicide bombers use them,” said Shakir Husain, chief executive of Creative Chaos, a Karachi-based software company. “You have to find out who these guys [extremists] are. This is a blanket, knee-jerk, response.”

Mr Husain, you cannot possibly expect common sense out of these people. They exist in a parallel universe where logic, rational thought, morality, ethics and decency are poisons.

There is strict regulation of internet traffic in Pakistan.

LETS BOMB THEM! REGIME CHANGE! SPREAD DEMOCRACY!

Last year, the authorities banned the entire Facebook website for months after a user launched a contest to draw a cartoon of the prophet Muhammad.

LETS BOMB THEM! REGIME CHANGE! SPREAD DEMOCRACY!

Accessing the internet on BlackBerry smartphones is problematic, because of the device’s high-security encryption software.

But its not a problem for the US/UK, because they have back door access, and journalists at the Guardian do not care about that; instead, they care about a country thousands of miles away, where no one reads their rag, where only the elites use the internet, and where they cannot have any influence whatsoever. No, this article is designed to make you feel good about living in the ‘free’ west, to pour scorn on Pakistan, and to loosen your resistance in advance of the day when the bombs start dropping on them.

Recently the regulator made it impossible for Pakistanis to access the website of Rolling Stone magazine, after it published an article on the high proportion of the national budget in Pakistan that goes on its military.

[…]

http://www.guardian.co.uk/world/2011/aug/30/pakistan-bans-encryption-software

In Britain, you can be arrested for possessing books. Pakistan banning Rolling Stone is no different in any way.

Britain has the highest level of google takedowns in the whole world. Blogs are amongst the most targeted. Of course, the Guardian has nothing to say about this whatsoever; all eyes on PAKISTAN!

This is warmongering, hypocrisy and nauseating, stinking garbage wrapped into one pice of filthy propaganda.

Anyone with an intact moral centre understands that the people in Pakistan have the right to live in whatever way they choose. It is not the place of anyone to point a finger at them and say that they are not living correctly; point your bony finger at your own State and its dirty dealings, immoral restrictions, privacy invasions, lies and mass murders and fix your own problems.

Lest we forget, people in Pakistan are not plagued by millions of CCTV cameras; you can walk all over the place there without being watched. Which country has the most CCTV cameras in the entire world, violating millions of people on a daily basis?

It seems today, that it is impossible to read any article in a newspaper that tells the truth.

It doesn’t matter any more.

No one is getting their news from the war machine and its paid shill monsters. Take a look at this:

Look at the seething, roiling anger in the face of the murder machine apologist, face contorting like a cornered rat. These people know that the jig is up, no one trusts them anymore, no one is listening to them; all they have are straw men, ad hominems and syrupy appeals to emotion.

This is why we have the absurd stories of viagra fuelled rape squads and all the other completely bat-shit insane lies paraded by the lie machines. These stories, the manufactured propaganda smears are as sick as the people who repeat them. They need to go this far, because they have been caught lying so many times with the more reasonable sounding stories that only completely crazy scenarios will work to grasp anyone’s attention.

Sadly for them, thanks to the internet, these lies do not last more than a few days before they are completely debunked. They are running out of tools (plausible and implausible lies) that they can sell. This is why they are so angry; there is no higher volume to turn their lies to past eleven on the dial, and it is why, as you can see in the video above, they are so angry at Russia Today, who are playing better chess than them.

Russia Today is outflanking all other news media by telling the truth using the mouths of people who have the truth in them.

They get on a wide variety of completely credible people to tell you the whole truth, and who, when you research what you have been told, can be verified every time as telling the whole truth.

Contrast this with what The Times, the BBC and The Guardian peddle, and you begin to understand why Russia Today has all the respect, attention and the traffic, and why the US/UK mainstream media is losing money, credibility and attention.

Market volatility and Bitcoin

Monday, August 8th, 2011

One third of all the Bitcoins that will ever be created have now been mined. This is as a good a time as any to re-state the facts about Bitcoin.

It needs to be pointed out to the easily frightened out there on teh ineternetz, that Bitcoin has not ‘failed’ simply because the first company to provide a service that uses it (MTGOX) has attracted users who exhibit a class of behaviour and needs.

MTGOX is nothing more than a single company that is providing a service. It does not set the true value of Bitcoins, it publishes what its users are willing to pay for it. This has nothing to do with the actual value of Bitcoin now or in the future.

We can infer this by using a thought experiment.

Imagine a world where Bitcoin is in use by one hundred million people. Every day, people use it for every conceivable type of purchase. It is easy to obtain Bitcoins and people have no problem understanding them or spending them.

Now imagine this world with or without MTGOX.

The value of Bitcoins does not change in this world very much, one way or another with or without MTGOX. The aggregate demand of one hundred million people, all trading Bitcoins between themselves, measuring its true value on a minute to minute basis will tell each user what the real value of Bitcoins are.

And that value is orders of magnitude greater than twenty Federal Reserve Notes.

For example, lets suppose that you buy a Chinese take away meal for eight people for one Bitcoin. And that includes four bottles of Champagne. You get an instant feel for what a single Bitcoin is worth in the real world.

This is how real people determine the value of their money. This is how they know that ten dollars is too much for a can of coke.

What is happening now with Bitcoin right now is that it is circulating in a closed feedback loop populated by highly skilled programmers with financial software backgrounds, Libertarian monetary policy enthusiasts and over-clocking geeks. Once the Bitcoin economy breaks out of this closed feedback loop and is in wide use, it will not be possible for a single exchange to alter its value.

This is the inevitable scenario that the Bitcoin detractors cannot see. Bitcoin now is exactly analogous to the birth of email, and all the arguments against email taking off and replacing the post, all the arguments against shopping on the internet all apply equally to Bitcoin.

As I said before, the rate of adoption that Bitcoin will experience will be very much faster than the rates of adoption of email and web browsing. What needs to happen to push adoption along is this:

  • The building of simple to deploy tools so that anyone can accept Bitcoin.

And that means plugins for Word Press, Magento, OS Commerce and every other platform that is out there. Imagine a ‘+01’ button for every page you publish on the internet. Imagine Stack Exchange implementing this ‘+01’ button. Do I even need to go on?

It doesn’t take a genius to imagine what would happen if someone developed a Bitcoin app for Facebook. If it spread virally, you would exceed one hundred million users of Bitcoin in a very short amount of time.

Already, people have been donating to posts on BLOGDIAL through the address that is published on every post made by ‘irdial’. Other bloggers are explicitly asking for Bitcoin tips in their sidebars. Once the word gets out that you can make money simply by posting a string on every post, adoption of Bitcoin will explode in the Blogosphere. I imagine the quality of posts will also improve dramatically, as people craft their words to solicit tips, rather than to simply get something off of their chests.

Bitcoin is not MTGOX. MTGOX is a service that is built around Bitcoin. At any time, some piece of software or some service could emerge that will cause adoption of Bitcoin to go viral. Even something as simple as a simple Tweet from a highly influential blogger could cause literally millions of people to download the client and start using Bitcoins.

Anyone who says Bitcoin is finished because a small group of people are agreeing on artificial prices on its first ever large scale service doesn’t understand what Bitcoin is, or what its potential is.

And a final note. The Federal Reserve stopped publishing ‘M3’ the metric that told you the number of dollars in circulation. Bitcoin is different. We know how many Bitcoins are in circulation at every instant because it is public knowledge and will always be public knowledge. In this respect, Bitcoin is more transparent than the dollar, and of course, there is an upper limit to how many Bitcoins there will be, unlike with the dollar that can be printed willy nilly.

The low exchange rates that Bitcoin services are quoting are a great opportunity, maybe (or maybe not) your last opportunity to get Bitcoins at a low price through the current exchanges. As it is with Gold, you will kick yourself if Bitcoins go to $5000 per Bitcoin, just as gold is predicted to go at least ten times higher than it now stands, at record prices of $1671. Both gold and Bitcoins are cheap at today’s prices.

You have been warned.

The Dollar Crash

Sunday, August 7th, 2011

The US Dollar, the first pure fiat world reserve currency, has lost almost all of its value against gold, falling from $1 to around $1680 per ounce.

Its now looking increasingly likely that the record-high price of $1680 on June 8 represented the peak of a financial fraud that is now slowly unravelling. The interesting question is: where will the price decline stop?

Most assets have a fundamental value: the value that reflects the practical use to which that asset can be put. You can always live in a house regardless of what happens to the real estate market, so we can be confident that house prices wont fall to zero. Similarly, if the price of gold fell too much, people could always use it to make jewelry, so gold is a relatively safe investment.

The puzzling thing about the US Dollar, is that the currency doesnt seem to have any fundamental value at all. True, you can currently purchase many goods and services with Dollars. But despite the volume of Dollar-denominated commerce being high, Dollar-denominated prices seem to be driven up by the current rounds of quantitative easing (money printing).

The US Dollar is different from traditional currencies. The fact that there are 300 million Americans who use dollars for their day-to-day transactions creates a floor for the value of dollars. Most of us dont pay much attention to the exchange rate between dollars and other currencies, because were used to thinking of dollars as our fundamental unit of value. And even if we wanted to stop using dollars, it would be hard to do since most of the people around us wont take anything else. So, despite a major screw-up by the Federal Reserve, we can still count on the value of dollars not falling very much. This logic of course, will also apply to the new pure digital currency ‘Bitcoin’.

In contrast, theres no significant community of people who conduct commerce exclusively (or even primarily) in Gold. And you cant eat, live in, or make a fire out of Gold. And this means theres no logical stopping point to Golds price increase. So far Gold enthusiasts have been buying Gold as the price increases, convinced that the price will go up eventually. But as the hoped-for Dollar rally has failed to materialize, more have gotten discouraged or bored and cash out the Dollar, pushing the price of Gold up further. This process has been going on for a couple of months, and now it appears to be accelerating. I suspect the Dollar is terminal.

http://blogs.forbes.com/timothylee/2011/08/07/the-bitcoin-crash/

You can smell their fear now

Monday, August 1st, 2011

The Grauniad has an astonishing report of a newsletter published by Belgravia police station, where people are advised to report anarchists to the police.

I’m not making this up:

Anarchists should be reported, advises Westminster anti-terror police
Islamist terrorists also mentioned in briefing, as anarchists complain of being criminalised for their beliefs

What should you do if you discover an anarchist living next door?

[…]

the answer, according to an official counter-terrorism notice circulated in London last week, is that you must report them to police immediately.

This was the surprising injunction from the Metropolitan Police issued to businesses and members of the public in Westminster last week. There was no warning about other political groups, but next to an image of the anarchist emblem, the City of Westminster police’s “counter terrorist focus desk” called for anti-anarchist whistleblowers stating: “Anarchism is a political philosophy which considers the state undesirable, unnecessary, and harmful, and instead promotes a stateless society, or anarchy. Any information relating to anarchists should be reported to your local police.”

What the HELL?!

The note was issued from Belgravia Police Station as part of Project Griffin which aims to “advise and familiarise managers, security officers and employees of large public and private sector organisations across the capital on security, counter-terrorism and crime prevention issues”.

Grauniad

Here is a page that has the actual report linked from it. The Grauniad didn’t think you should actually read the report for yourself:

http://liberalconspiracy.org/2011/07/31/met-counter-terrorism-office-report-anarchists-to-the-police/

The first thing that is interesting about that document is (apart from its appalling graphic design) that there is no named author.

What public servant was responsible for this gaffe, who told her to write this and why is she not accountable? You KNOW why.

Now lets think about this carefully.

Why has some uneducated person put this nonsense into that document?

From their point of view, the only exposure to ‘Anarchism’ they have had is the agent provocateurs who routinely smash up McDonalds and bank windows. They equate this criminal behaviour with Anarchism because the people who do that violence say that they are Anarchists.

In fact, the truth is those people are not Anarchists, but are in many instances members of the police, sent out to cause trouble. This is a well established fact.

Now, not all the police are aware that their own force is being used as a tool in this way, and I imagine that they would be shocked, SHOCKED to find out that this was so; nevertheless, these compartmentalised, unnamed people are playing right along in their roles, obeying orders without any care or concern for their duties or the truth.

And they wonder why the ideas of Libertarianism are spreading like wildfire. All anyone has to do is read this Grauniad article to be completely outraged, as all of the comments on that article demonstrate.

Grauniad readers are staunch anti-Libertarians to a man, but they are not not stupid, and can tell right from wrong where their own rights overlap with the rights of others when it comes to free speech. They know that this statement is only one step away from applying directly to them and their ideas.

Thinking once again, from the point of view of an uneducated, low IQ man, how can you spot an anarchist? More importantly, how can you spot who is not an anarchist?

There is one easy way to tell who is or who is not an anarchist; anarchists are:

1/ Non violent: Anarchists do not use violence to achieve their goal of a stateless society.

Thats pretty much it. Anyone who smashes a McDonalds window, or who engages in any violence of any kind is not an anarchist by definition. The people who do that are CRIMINALS, not anarchists.

And for the record, the goal of a stateless society is a completely logical, moral, realistic and just goal, and that police report is correct in this single aspect;

Anarchism is a political philosophy which considers the state undesirable, unnecessary, and harmful, and instead promotes a stateless society, or anarchy. Any information relating to anarchists should be reported to your local Police.

Lets do this.

Anarchism is a political philosophy.

CORRECT.

which considers the state undesirable, unnecessary, and harmful,

WRONG.

Anarchists can PROVE, through logic, ethics and history that the state is harmful, unnecessary and undesirable. This is not something that anarchists consider or is something that is mere opinion, any more than people ‘consider’ that the sky is blue; the state IS evil, is not needed and is toxic to humanity and that is a fact, not conjecture, a belief, an article of faith or any of those things.

Now, taking all of this into consideration, that the ‘anarchists’ who attend demonstrations and smash things to pieces are not anarchists at all either because they are not philosophically anarchists or because they are agent provocateurs and given the fact that anarchists are non violent, and have the right to publish and espouse anything they like in writing or by any other means, if someone was to report an anarchist to the police at Belgravia station…

What are they going to do?

Arrest someone for reading a book? Or publishing a pamphlet? Or writing a blog?

Whoever they did that to, would be in line for MILLIONS OF POUNDS in compensation, after a sensational, high profile trial, which would be taken on a contingency basis by a line of Britain’s top law firms, who would queue around the block for a chance of easy money. Academics from all over the world would submit amicus briefs on behalf of the defense.

They would have a snowballs chance in hell of getting away with it.

I simply cannot believe that the police in Belgravia have so much time on their hands that they can even be doing this sort of infantile nonsense. No one wants these ridiculous, meaningless scaremongering reports. They do not prevent crime, cannot prevent crime, waste time and money and bring the profession of policing further into disrepute.

Of course, Libertarians have an answer to this.

Libertarians understand that the State should not have a monopoly on security. Security is a service that should be produced by the market:

The market and private enterprise do exist, and so most people can readily envision a free market in most goods and services. Probably the most difficult single area to grasp, however, is the abolition of government operations in the service of protection: police, the courts, etc. the area encompassing defense of person and property against attack or invasion. How could private enterprise and the free market possibly provide such service? How could police, legal systems, judicial services, law enforcement, prisons how could these be provided in a free market? We have already seen how a great deal of police protection, at the least, could be supplied by the various owners of streets and land areas. But we now need to examine this entire area systematically.

In the first place, there is a common fallacy, held even by most advocates of laissez-faire, that the government must supply “police protection,” as if police protection were a single, absolute entity, a fixed quantity of something which the government supplies to all. But in actual fact there is no absolute commodity called “police protection” any more than there is an absolute single commodity called “food” or “shelter.” It is true that everyone pays taxes for a seemingly fixed quantity of protection, but this is a myth. In actual fact, there are almost infinite degrees of all sorts of protection. For any given person or business, the police can provide everything from a policeman on the beat who patrols once a night, to two policemen patrolling constantly on each block, to cruising patrol cars, to one or even several round-the-clock personal bodyguards. Furthermore, there are many other decisions the police must make, the complexity of which becomes evident as soon as we look beneath the veil of the myth of absolute “protection.” How shall the police allocate their funds which are, of course, always limited as are the funds of all other individuals, organizations, and agencies? How much shall the police invest in electronic equipment? fingerprinting equipment? detectives as against uniformed police? patrol cars as against foot police, etc.?

The point is that the government has no rational way to make these allocations. The government only knows that it has a limited budget. Its allocations of funds are then subject to the full play of politics, boondoggling, and bureaucratic inefficiency, with no indication at all as to whether the police department is serving the consumers in a way responsive to their desires or whether it is doing so efficiently. The situation would be different if police services were supplied on a free, competitive market. In that case, consumers would pay for whatever degree of protection they wish to purchase. The consumers who just want to see a policeman once in a while would pay less than those who want continuous patrolling, and far less than those who demand twenty-four-hour bodyguard service. On the free market, protection would be supplied in proportion and in whatever way that the consumers wish to pay for it. A drive for efficiency would be insured, as it always is on the market, by the compulsion to make profits and avoid losses, and thereby to keep costs low and to serve the highest demands of the consumers. Any police firm that suffers from gross inefficiency would soon go bankrupt and disappear.

One big problem a government police force must always face is: what laws really to enforce? Police departments are theoretically faced with the absolute injunction, “enforce all laws,” but in practice a limited budget forces them to allocate their personnel and equipment to the most urgent crimes. But the absolute dictum pursues them and works against a rational allocation of resources. On the free market, what would be enforced is whatever the customers are willing to pay for. Suppose, for example, that Mr. Jones has a precious gem he believes might soon be stolen. He can ask, and pay for, round-the-clock police protection at whatever strength he may wish to work out with the police company. He might, on the other hand, also have a private road on his estate he doesn’t want many people to travel on but he might not care very much about trespassers on that road. In that case, he won’t devote any police resources to protecting the road. As on the market in general, it is up to the consumer and since all of us are consumers this means each person individually decides how much and what kind of protection he wants and is willing to buy.

[…]

http://mises.org/rothbard/newlibertywhole.asp#p215

I don’t know anyone who does not think that there are not enough police on the streets. If the police had any sense, they would understand that in a Libertarian system, there would be more of them, doing real police work for better money and conditions, and they would not be wasting their time writing silly pamphlets and enforcing laws that outlaw victimless crimes like the statues covering the current round of insane prohibition. Even the police are starting to wake up about that particular corner of the insane asylum.

While we are at it look at this:

Police to carry out on-the-spot fingerprinting in the street even for minor traffic offences

Police are now armed with a device that can scan fingerprints so they can correctly identify suspects who lie about their details.

In what sounds like something out of George Orwell’s dystopia 1984, suspects can now be finger printed in the street thanks to the new hand-held police gadget.

The mobile identification service scans a print, then checks it by trawling through a national database for the details.

[…]

Daily Mail

Sound familiar? It should; we told you about this many years ago.

There appear to be some people who are awake. Look at this top comment on the Daily Mail article:

If you have never been finger printed by the police, and the vast majority of the population have not, then how can this device tell a roadside copper if you are lying or not?

Which is exactly the point that we make in this article, and what we repeated over and over in different variations for a decade.

These devices exist not to protect you from criminals, but are there to make money for the vendors that manufacture them. Each one is connected to a Blackberry, and then there is the cost of the bespoke scanner attachment and the management of the database. This is nothing more than fleecing the population.

But I digress.

What these people are saying is that if you read a book and then agree with what is in it, you are a criminal, a ‘terrorist’. Its completely absurd of course, but it is an indication of a fundamental shift that is taking place.

These people are scared. They are scared of ideas. If these people are so terrified by ideas the whole edifice must be crumbling invisibly before our very eyes, and in fact, this is a very clear sign of that happening.

A society that is secure in its beliefs and values, in this case, the right of free speech and the right to believe whatever you want to believe, has no cause to turn against its own fundamental principles in order to ‘protect itself’. The fact that they are now (and have been for over ten years) turning against the core values of their ‘society’ is a clear sign that the system is slowly moving into panic mode. The problem for them is that they will not be able to stem the tide.

No power on earth can stop an idea whose time has come. The reality is that all the violence is coming from them and the majority will do nothing while the edifice collapses. Then, one day, as it happened in East Germany, the State will simply cease to exist, only this time, there will be no ‘West Germany’ to take the place of the dead State. The world will not end, violence will not break out, there will not be chaos or a breakdown of order. There will only be a end to coercion by the State.

Depending on who you are and what you have come to know is the truth, this is either a very good thing or a very bad thing. You cannot un-know a truth; Libertarianism cannot now be un-seen or un-read or un-published. The ideas are out there, anyone who encounters them, because they are crystal clear in their truths, observations, analysis and logic, is converted to them. The economic collapse, predicted by the Austrians and the anarcho-capitalists is coming true like clockwork. They have the only correct explanation for it, and when you expose people to the fundamental principles of it, that are undeniably true, lo and behold, they understand and change their broken thinking.

This is inevitable, and will no doubt accelerate as a pound of butter goes to 5 in the supermarket.

Real anarchists do nothing except tell the truth day in and day out. As the State destroys itself with its Keynesian heroin, the State itself is going to abolish the State without any help. Real anarchists only document what is happening, and shake their heads in disbelief at the logical fallacies, the economic illiteracy and penchant for self immolation that Statists exhibit. Look at this for an example of how, even now, they want more insanity and not less.

The story of this newsletter is spreading virally across the internets as we speak. If the people who wrote this have any sense or decency left they will firstly identify who the author was and then apologise and revise their statements.

Or not.

It will not change the final outcome one iota.

The correct response to murder

Saturday, July 23rd, 2011

Its a terrible thing when people are murdered. It does not matter who is doing it or why, it is a crime, a savage and terrible crime. It is however important to put this shooting in Utya into the correct context straight away and then to think about it clearly and carefully.

Some people are saying that the ’emotionlessness’ with which this gunman murdered his victims is “midnboggling”.

Why?

Why is it that when an individual commits murder everyone becomes breathless, shocked and ‘cant sleep at night’, but when its done with drones or soldiers there is a greatly reduced amount of outrage?

What is the difference between this man committing murder and people sitting in an office somewhere commanding a drone to kill men women and children in a wedding party, just as dispassionately, calculatingly and emotionlessly? We have all seen the leaked footage of operations in Iraq where the controllers of the drones calmly murder people and speak in measured, relaxed, dispassionate voices as they do so. The fact that people can do this should not be surprising to anybody, especially when they believe they have a just cause.

The just cause the desk bound drone murderers are using is that they are ‘taking out’ the leaders of a group that could in the future, pose a threat to ‘their nation’. As you will see below, this is exactly what people are speculating this Utya murder was about; the prevention of dangerous future political action.

The stock rationale given for lack of equivalent response to the murder of different people inevitably circles around the idea that brown people are not thought of as full human beings, whilst Norwegians, being ‘white’ are, or that war is ‘justifiable killing’ whilst individuals killing is not. None of this off the shelf thinking really matters; the only thing that matters is your reaction to murder, and your ability or inability to empathise with other human beings, especially if you want to see an end to politically generated murder.

When people are cut down, as in the case of “Collateral Murder” your feelings for those that are murdered should be identical to the feelings you have when you see people in Oslo blown to bits, or students attending a political camp on an island slaughtered.

There is absolutely no difference between these events; they are all unjustifiable, immoral and repugnant murder and if you have stronger feelings because you personally have been to the places where the attacks happened or have some other ‘real connection’ to the event, then there is an urgent adjustment that needs to be made to your ability to empathise with the plight of other human beings. The only exception to this, where stronger feelings are a correct, natural and explicable response, is when you witness a murder in person, or a member of your own family is killed. No one can be expected to be rational when something like that takes place, but for all other murders, wherever they happen, when you are watching film of it or reading a report of it, your reaction should be exactly the same. Your ‘real connection’ to other people is no less real because you have not met them or been to their houses or cities. That is how real human beings feel about other human beings.

Once again, there is nothing surprising or staggering about the methodical and emotionless killing of human beings. It is done every day, sometimes on an industrial scale, by people just like you and me. When man gets it into his head that the only way to have order is the use of violence, there is nothing that he will not do, no lie he will refrain from telling himself and no level he will not sink to.

People are speculating that this killer wanted to wipe out the next generation of socialist leaders. Violent people have no problem in doing this; the end justifies the means, and the State does exactly the same thing. This is the motivating thought behind the drone attacks and it is also (for example) the true origin of inheritance tax.

Inheritance taxes are explicitly designed to prevent wealth from accumulating in the hands of families. In order to achieve this end, the State uses violence to make sure that this wealth accumulation does not happen. The State does not kill to achieve this end, but they use violence as a means to it. If you are for inheritance taxes, then you are of the same mindset as the people who think that it is a fit and proper solution to a political problem to murder individuals or a whole generation of nascent leaders who will inevitably turn out to be socialists. You are for violence.

This is the hard truth that people do not want to swallow; immoral violence at different levels is behind the edifice of the State, and all Statist thinking, its fallacious justifications and immoral actions. If you are for any of it, no matter what the justification, you are violent.

People are asking, “What kind of psychopath has that kind of forward-thinking planning?” The answer is, the same sort of psychopath that orders regime change, and like Madeline Albright, is prepared to order the deaths of children to achieve U.S. policy objectives because, “we think the price is worth it”. The same sort of psychopath that kills millions of people for dollar and oil supremacy. The same sort of people who devise plans to kill ‘their own citizens’ so that they may have a pretext to go to war. In other words, the people who run the State.

Once again, why do people rail against individual psychopathy but not the small army of psychopaths that man the controls of the State, who have a proven track record of mass murder, extrajudicial killing, rendition, torture and rape and every other unspeakable crime that can be committed? Why the sleepless nights, the speechlessness, the loss for words, the histrionics over people in one country, but not for people in another country, being killed on a much greater scale and at a greater frequency?

All of these people are human beings with the same rights, they eat the same way, think the same thoughts, have families… they are indistinguishable from each other on a human level, so why does everyone who goes berserk over a small number of students, not literally go insane over the daily murders carried out by the State?

Madeline Albright said straight out that she is willing to kill children, just as was done in this case, to achieve an end, and yet, when this is said right to your face, as murderers from the State have openly said again and again, the reaction is nowhere near as shrill and tear filled as when something terrible that is personal (that isn’t really personal at all, just more local, ‘close to home’) happens. This is wrong, especially when in the belief system of the people who are having this disproportionate response, it is held that the State is a creature acting under the direction the voting public; where murder is done on their behalf, in the name of ‘the people’.

It doesn’t make any sense whatsoever.

What also doesn’t make any sense is the prominence these stories get. The number of people who die from these events is statistically insignificant when compared to all the other forms of unnatural death. Why is everyone putting these deaths up on a pedestal? Surely the murders of the State should be put on the same level, and that level should be off of the front page? More people die from bee stings, peanut allergy, alcoholism, road accidents and many other unnatural causes, so why not put these deaths on the same level? Why report them at all? The threat to you is not grater than the threat of other unnatural causes, so to place these deaths higher than other deaths is simply base emotionalism, sensationalism and irrationality.

These murders are terrible, revolting and unjustifiable. They are just as terrible, revolting and unjustifiable as the murders of the State. These murders however, should not be used a a pretext for anything other than a thorough investigation into the murderer and his motivations. There should be no new legislation, no increased surveillance, no Police State strictures. NOTHING in response to this other than a criminal investigation.

Your chances of being killed in this way are infinitesimally small. The magnification of this event into something bigger than what it actually is, is trillions of times more harmful to you, your descendants and your life than the event itself.

Do not magnify this event; it is not any more or less important than any other murder. It is not more significant, statistically or morally. It is just as repugnant as other murders and just as statistically probable.

Any emphasis upon it that is greater than the emphasis that is given to the murders of the State is itself immoral and repugnant.

Finally, people are beginning to realise that all is not quite right with these events. The photos of the perpetrator are “picture perfect”, his background and messages “intended to be found”. The whole thing stinks to high heaven. But then again, so does the State, and its mass murder. You must take three steps back and also cast the same skeptical, critical, logical eye on the existence of the State itself, its murders, excuses, pretexts, fictitious enemies and bogus justifications for what is plainly immoral.

If you do not do this, then you are not thinking logically, but are being emotionally manipulated into believing that somehow, a man murdering 80 plus people is different to the State murdering 80 plus people, and that because of this, you must accept changes imposed upon your life.

It just isn’t true.

The true nature of the anti-Bitcoin animus

Monday, June 20th, 2011

MTGox, we discover, was the victim of an internal leak of their database. They were not hacked, and they are the victims of a criminal act of theft.

The facts in this matter do not concern the people who are gloating over this event. There are a group of people who are violent in nature, and who despise Bitcoin because they understand exactly what it represents; a direct threat to their sick and violent society which is based on coercion, the absence of freedom and the application of force.

Imagine a world where everyone had access to personal force fields via an artificially created gland that was made to grow into their abdomen by a nano machine / virus. These force fields could be activated either by the fear response or by the direction of your will, in the same way that you use your will to direct your arm to throw a ball.

Everyone would be able to protect themselves from any sort of physical attack, and all would be able to use similar technology to protect their houses.

It would then immediately become impossible for the State to send their agents to your house to rob you with bailiffs. They would no longer be able to force you to pay anything that you did not want to pay, and you would be able to protect yourself and your property from the other criminals and predators that are not sent out by the State.

In such a world, all flows of money would be voluntary by default. There could be no coercion of any kind, since violence against the person and her property would have been abolished by the advent of force fields.

The entire world would switch from one based on violence to one based on voluntary exchange.

This is exactly what Bitcoin is doing.

It is going to make it impossible for the state to stop people transacting at a distance, in any amount that they choose. It is going to remove the State from the equation as the unwanted third party in all transactions.

This is the true source of the animus against Bitcoin, and it explains why people like Tim Worstall and the other writers are dismissing Bitcoin so flippantly. Here is what I am talking about. These are quotes from an article by Tim Worstall that has just appeared:

The Bitcoin community faced another crisis on Sunday afternoon as the price of the currency on the most popular exchange, Mt.Gox, fell from $17 to pennies in a matter of minutes. Trading was quickly suspended and visitors to the home page were redirected to a statement blaming the crash on a compromised user account. Mt.Goxs Mark Karpeles said that the exchange would be taken offline to give administrators time to roll back the suspect transactions.

Tim Worstall asserts that Bitcoin is finished because a single exchange has technical problems if this is the level of expertise operating at Forbes, you might be forgiven for taking everything that they publish with a big pinch of salt. There is no relation between the fictitious ‘Bitcoin community’ and MTGox, in fact, its a stretch to assert that there is a Bitcoin community at all. Is there an ‘internet community’ simply because people who peer on the network can send email to each other?

Not a good start!

For the record, Tim Worstall works as a consultant and dealer in scandium and other exotic metals. We can assume that he knows a little about how exchanges work, that there is normally more than one exchange for every commodity, and that you can get a feel for the price of a commodity not by looking only at one exchange, but by looking at them all at the same time.

He must also know that Bitcoin is in its infancy, and as other exchanges open, the problem of a single exchange running into difficulty will greatly suppress the triggers that initiate widespread panic. He should also know that a single technical fault in an exchange cannot be translated into a true loss of value in whatever it is the exchange deals in.

These fundamental facts and logic must be known to him, so why has he written this piece? What is the purpose of it?

The initial problem leading to the price collapse was that one user tried to sell more than the market could absorb. For of course the value of anything is determined by the balance of supply and demand for it. Thus the price crashed (and you can see a chart of how quickly it did here). However, it appears that this isnt the only problem:

This demonstrates Mr. Worstall has at least a basic grasp of economics and how markets work. What he does not tell you, is that the sales were made not by one user, but by over 400 users simultaneously, who were all being controlled by a single attacker. Facts are stubborn things. Had this breach not taken place, the quoted price for Bitcoins on MTGox would not have dropped as it did. Worstall cannot distinguish between a wrongly quoted price and the true price of a commodity in a market.

Since I began writing this, it has emerged that details of more than 60,000 users have been stolen from the Mt Gox exchange. The compromised information includes hashed passwords.

No, the doesnt necessarily mean the end of the Bitcoin experiment, but its a pretty good indication of it.

This is a baseless assertion, which other violent Statists will use in a faulty appeal to authority attack (“it came from Forbes, a trusted source”) against Bitcoin.

This event is not an indication of anything, other than that some of the user accounts at MTGox were exposed. If we apply this faulty logic to the other recent mass disclosures of usernames and passwords, we should expect Worstall to come up with similar nonsense lines:

The recent hack of SONY, where the credit card numbers, dates of birth and real names of TWENTY FIVE MILLION users were copied…
The recent hack of SEGA…
The loss from HM Revenue and Customs…

  • So, Thats the End of Credit Cards Then
  • So, Thats the End of SONY Then
  • So, That’s the end of SEGA Then
  • So, That’s the end of Her Majesty’s Government Then

Do you see what I did there?

Take a look at this if you want to gain some perspective on the matter of large scale data breaches, something that the Tim Worstall’s of this world seem to lack:

http://www.bitcoinmoney.com/post/6712283280/major-data-breaches.

The MTGox event doesn’t even appear on the radar.

While we are at it, in the case of Parliament, the breach of the government data really should have instantly spelled the end of ContactPoint and the ill conceived, ill fated ID Card, but of course, it did not. Also, the breach of 25 million credit cards should put pay to the Coalition’s absurd plan to use credit cards as ID Cards to access government gateways. We have written about this recently:

Credit card fraud is rampant, and using credit cards to interface with the state will allow everyone with a fraudulent or duplicated credit card to masquerade as someone else when identifying themselves to a government portal.

Look no further than the recent SONY breach where the credit card details, dates of birth, names and addresses of SEVENTY MILLION people were copied.

The population of Britain is 61,838,154 2009 That means that a number of people, larger than the population of Britain had their credit card details copied.

It means that if such a thing happened in the UK, every single person who identifies themselves to the state with their VISA could be impersonated with ease. This means more benefit fraud, GUARANTEED.

[…]

http://irdial.com/blogdial/?p=3031

but that is another story.

The fact of the matter is that writing irrational pieces like this cannot be an accident. This is not an opinion piece, though the hatred of Liberty oozes out of every vowel. I want to know who is directing these drones to write hit pieces against Bitcoin. I am not the only one (not that that means anything in and of itself) to suspect that the organised chorus of anti Bitcoin propaganda, and it is propaganda, is just too perfectly in tune to be the random warbling of computer illiterates. Or maybe they are all perfectly brainwashed to the same tune piped out by the Government schools and State mandated curricula? Who knows?

Here is another piece in the key of Fail; Fortune ran this piece recently which everyone can see is a, “…thrown together and completely fact-optional piece. Seriously, this reads like somebody who spent 2 hours reading other news coverage headlines and decided to fill in the rest with make-believe.”

Oh dear.

The mainstream media and its gatekeepers have a terrible problem on their hands. They cannot tell a story without directing people to the facts that will disprove their propaganda. They are only a click away from every hit piece they write.

Anyone with curiosity can Google Bitcoin for themselves, download it and then run it. They can start accepting Bitcoins. They can integrate it into their websites and start getting paid for anything that they do.

Once they get a first hand feel for it, the lies that are being propagated about Bitcoin are instantly washed away. As more people use it, and the client improves, it will become harder and harder to lie about Bitcoin, and then the MSM drones will have to capitulate and start accepting it themselves. Once this happens, it will be forbidden by the editors of these rags to write an anti-bitcoin piece, because they would be being paid in Bitcoins themselvs.

That will be the tipping point; just as the newspapers all decided they needed to have online editions of their lie machines on the internet, and when they adopt anything, like social networking and Twitter feeds, eventually they will all have to accept Bitcoin or its successor. This is absolutely inevitable. For those that are interested, all of the websites of the newspapers are running some sort of Open Source Software. They might not like the economics or the philosophy of ‘free’ but they are all using it to spread their lies.

Forbes.com is running Apache on Linux and so is fortune.cnn.com. Both of these organizations would have railed against Open Source software from every possible angle, with FUD, “its not as secure as proprietary software”, “the business model cannot work”, “its not ready for the desktop” etc etc, and yet, they have all capitulated, and no one even discusses it any more, save to note how far and wide the software is spreading.

This is how these people operate.

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

We are at the ‘ha ha’ stage now. It is only a matter of time before Tim Worstall or some other hack calls for Bitcoin to be banned or regulated. And for the record, you can replace Tim Worstall’s name with the name of any journalist that has written a piece like this. Even people who claim to be scientific in their thinking manage to write garbage about Bitcoin. They all share the same attributes (lies) and one is replaceable with any other, and the newspaper name or slant doesn’t matter either. I could cite dozens of shabby articles, but why bother, they are all pretty much identical in theme, deception, sneer and ignorance.

For there are certain things that we want from a currency. A medium of exchange, a store of value, wed also like to it be liquid and security is important as well.

Once again, we have the ever present WE of the collectivists. What Worstall means by ‘security’ of course is the unfettered ability of the State to be able to interpose itself in all transactions so it can tax. Without it, his beloved collective dies, and Bitcoin is the first actual financial tool that could pull it off. This is why everyone who loves and lives by the State, its predations, its illegitimate regulations, its stolen loot, its bureaucracy and all the other vile stuff in its ecosystem where violence is the lubricant, hates Bitcoin with a passion.

With Bitcoin, people have the choice to opt out of their sick society. Bitcoin is the force field that protects the individual’s money from the State. Its mass adoption would collapse the income of the State, forcing it to completely re-assess its relationship with people everywhere. On a side note, we can expect the State to ramp up the violence to eleven on the dial, before they throw in the towel.

No currency can have all of these features (and humans have used some pretty odd things as currency over the centuries, from copper sheets to cowrie shells via butter, salt, gold, silver and even pieces of paper with Dead Presidents on them, surely the final lunacy?) to perfection but a currency which doesnt have any of them in appreciable quantities isnt going to last very long.

This is simply not true. There can be a currency that has all of these features; just because you cannot imagine it that does not make it so. Three years ago, anyone you asked would have told you that the double spending problem could not be solved, because digital files are infinitely copyable. Lo and behold, a single man with a vision has solved the problem and his solution has applications beyond currency. Computer illiterate collectivists cannot even begin to see the sort of world that would emerge out of the idea behind Bitcoin. No matter. The world will change wether they like it or not.

As for odd currencies lasting a long time, did you know that the longest running currency was the tally stick? A strip of wood with notches cut in it that was then split in half; one half being spent out and the other reserved by the issuer.

The tally stick system lasted seven hundred years as a form of money.

Bitcoin can be used to send stored value across the world, in the same way that tally sticks were used. It can last a long time, and bring many benefits to the people who use it. Bitcoin, and the ideas that drive it are in no way ‘over’.

Bitcoins arent secure, as both the recent theft and this password problem show.

This is simply false, and betrays a complete ignorance of what Bitcoin is and how it works. All of the problems that have been falsely attributed to Bitcoin have not been a problem with Bitcoin itself, but have instead, been directly related to the platforms in which it is being used.

MTGox had a problem with their physical security; nothing to do with Bitcoin itself. The man who lost 50,000 Bitcoins had them stolen from a laptop running Microsoft Windows, either by physical access or remotely by a Trojan; nothing to do with Bitcoin itself.

Even if someone finds a flaw in the Bitcoin client, the idea of it is sound and has changed everything forever.

More people today are thinking about what money is, and understand what Fiat Currency is and how it is evil and institutionalised theft. That is thanks to Bitcoin. More people today have a real grasp of how simple money transfer over the Internet could and should be, if only the State would get out of the way. That is thanks to Bitcoin.

PayPal and the Credit Card companies and their processors are shaking in their boots; you will never have your Bitcoin account frozen. You do not have to make any declaration of any kind, swear an oath, divulge personal information or suffer any State mandated humiliation to start receiving and spending Bitcoins worth millions of dollars. There are no artificial limits on how much Bitcoin you can receive and spend, and where you can spend it and what on. The only loser in all of this is the State and its army of cronies, clients, parasites and thugs.

The next Rebecca Black on YouTube will put her Bitcoin address in the description, and she will reap millions from her fans… even the ones who hate her.

Actually, thats an argument against Bitcoin, sorry.

Theyre not liquid, nor a store of value, as the price collapse shows and if theyre none of those things then theyll not be a great medium of exchange either as who would want to accept them?

This is, of course, nonsense. Lets take it one by one:

“They are not liquid”

What Does Liquid Asset Mean?
An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.
http://www.investopedia.com/terms/l/liquidasset.asp

Bitcoins, are becoming more and more liquid every day. You can trade them in the street, and there are services popping up that help you find people who want to sell or buy Bitcoins close to you, using geolocation.

“nor a store of value”
This is demonstrably false. If you can spend Bitcoins, they are a store of value by definition, just as the tally stick was, just as gold is and paper money is. This is nonsense on stilts, and we have addressed this before when we took apart Grant Babcock’ assertions.

“as the price collapse shows”
There was no price collapse, this is a falsehood. MTGox, a single exchange, suffered a technical problem not related to Bitcoin itself, and the price recovered immediately. The trades are going to be reversed where possible, and as you can see in this video:

the price at that broken exchange recovered. This is not reporting, or real journalism. It is utter rubbish.

“theyll not be a great medium of exchange either as who would want to accept them?”
You can file this under the same nonsense like, “guitar bands are finished” (Beatles) or “no one wants internet access, because no one is on it yet”, or “the internet will amount to nothingClifford Stoll.

Note, attentive readers, that Clifford Stoll’s famous, “it will never catch on” piece appeared in Newsweek, a world class mainstream media lie machine, with a vested interest in killing anything that stops people from being free, reading the truth or from them selling dead trees. They have been dragged kicking and screaming into the future…. but you know this!

True, Bitcoin does still offer anonymity:

Not really, but why should we expect you to get this right?

but then so do copper sheets to cowrie shells via butter, salt, gold, silver and even pieces of paper with Dead Presidents on them.

There are moves afoot and plenty of evidence to prove you wrong Mr. Worstall. Just ask this gentleman who was stopped at an airport simply because he was carrying his own money. So much for the anonymity of cowrie shells and fraudulent pieces of paper with Dead Presidents on them.

Its difficult to see what the currency has going for it.

http://blogs.forbes.com/timworstall/2011/06/20/so-thats-the-end-of-bitcoin-then/

Its only difficult to see what Bitcoin has going for it if you are an ignoramus in the literal sense of that word.

If you understand how cash works, then you should understand what Bitcoin offers its users and what it has ‘going for it’. But I think this article’s author knows full well what the potential of Bitcoin is, which is exactly why he has written this piece as he has.

No one born in 1963, who writes for ‘newspapers” and trades metals as a profession doesn’t know what the internet has done for man. People like that have experienced the internet revolution first hand, as it has transformed the way everyone works, plays, communicates, learns, spends money and thinks.

Bitcoin, its future iterations and its inevitable successors, are going to change the world again, in ways that are very difficult to predict, though we can have a crack at it for fun. It is a fact that Bitcoin already has changed the world.

One thing you simply cannot do in the face of something like this is intone, “it will never work” or “I can’t see the point in it”. These sorts of predictions, especially when they are related to technology are almost always wrong or short sighted, and in today’s day and age, with all of the experience of the last two decades under our belts, such an attitude is inexcusable stupidity.

The statist disease, not yet sterilised

Monday, October 18th, 2010

There are a few nice people who seem to be confused about rights and in particular, the rights of exchange, association and property.

This confusion manifested itself today over the matter of an American charity that is paying ‘drug addicts’ to be sterilised.

The Libertarian position on this is straightforward.

  1. You own your own body.
  2. You have the absolute right to voluntarily associate with whomever you like without interference.
  3. You have the absolute right to voluntarily exchange with whomever you like without interference.

This means, for example, that prostitution (accepting money for sexual favours) should never be illegal, since it is the consenting act of trade between two people. It means that if you want to sell your hair, a kidney, or both of your kidneys, you have the right to do so since you have a property right in your own body.

It also means in relation to this story, that you have the right to give or accept money in exchange for a medical procedure (in this case vasectomy or some other sterilisation procedure).

And none of this is the business of the state or anyone other than the consenting parties

If you accept that the state has the power to tell you that you may not sell one of your kidneys to someone, then you accept that they own you, like cattle.

If you accept that the state has the power to prevent people offering money to individuals (in this case sterilisation) then you are conceding that the state has the power to interfere in your right of exchange and free association.

You cannot on the one hand, be FOR Home Education, where you freely associate with other people or no people, rejecting the power of the state to tell you how and where you educate your children, and at the same time be FOR the state telling a charity that they cannot offer sterilisation to individuals with their own money. If you concede the latter, you cannot ask for the former and remain logical and coherent.

One patient person claimed that this charity was ‘exploiting’ people, and that using money in this way was ‘exploitation’. The person also claimed that “money and power were connected” Neither of these is the case.

Lets go to the dictionary.

Exploitation

exploitation? ?
[ek-sploi-tey-shuhn] Show IPA
noun
1.use or utilization, esp. for profit: the exploitation of newly discovered oil fields.
2.selfish utilization: He got ahead through the exploitation of his friends.
3.the combined, often varied, use of public-relations and advertising techniques to promote a person, movie, product, etc.

[…]

http://dictionary.reference.com/browse/exploitation

This is a charity, so number one does not fit.
This is an unselfish act on the part of the people who are running this programme, so two does not fit.
Three does not fit.

Lets try another dictionary.

Definition of EXPLOIT

1: to make productive use of : utilize <exploiting your talents> <exploit your opponent's weakness>
2: to make use of meanly or unfairly for one's own advantage <exploiting migrant farm workers>

Number one doesn’t fit.
Number two doesn’t fit either; these people are not being mean or ‘unfair’.

By the dictionary definition alone, this charity is exploiting no one.

Now for money and power.

Money is a tool, just like a hammer. You can use it to build a house or murder someone. It is not a living entity. What people do with money is an excrescence of their personality and motives; money is just the means to do it.

Power is force. When the state tells you you must send your children to school, they have the power to do so because they have a monopoly on violence. They send the police to your house, break down the door and take your children to school if you refuse to obey them. This charity has money, but it has no power whatsoever. They cannot force anyone to be sterilised against their will, any more than they can force a person to do anything. They simply make an offer which you can either take up or refuse.

The fact of the matter is, as long as you are not being taxed to pay for something like this (NHS abortion on demand, NHS sterilisation of drug addicts and all other social engineering) what private people plan and get up to voluntarily is none of your business.

Private people getting together to solve the tasks that they perceive as problems is absolutely normal and natural. They have the right to do so, because they are human beings, just like you are. If you do not like the idea of people offering sterilisation to drug addicts, then you are free to organise your own counter charity that gives money to drug addicts to $insert_your_plan_here. You could even organise yourself to pay for radio ads against this charity, and a poster campaign to warn drug addicts that they are being hunted. If you were minded to.

This charity is not stealing from you via the tax man. They are not forcing you to believe what they believe, or to be sterilised yourself. They do not want to control you, or exploit your family like the extremely dangerous fake charities. They do not want anything from anyone, except from the people who think that ‘drug addicts’ should not be left to produce children since they are ‘irresponsible’, from whom they ask for voluntary donations.

This is completely different from the state mandating sterilisation, and some people have a problem separating the evil operations of the state and the non evil work of charities that are funded purely. It is also completely different from the operation of the ‘=fake charities that use ‘your money’ to come after you in your own home. These confused people are the same people who do not understand the difference between choosing to carry a credit card or a supermarket loyalty card and being force to carry a government issued ID Card. We have been over this before; voluntary acceptance of a service through contract is completely different to compulsion by the state.

What is completely unacceptable to all moral people is the idea that because you do not like the behaviour of other people, you should call on the state to stop them from doing whatever it is they are doing voluntarily, that has nothing to do with you.

This is the schizophrenic mindset of some people, who want freedom for themselves and their own peculiar ways of life, but who will instantly call upon the state to smash the lives of other people with whom they disagree; and lets be frank; in the end, this is what it always comes down to; calls for organised surveillance and threats of violence from the state made by those people who cannot stand free association unless its their flavour of free association.

Note that in all of this, I do not take any position on wether or not sterilisation of human beings is a good thing or not, wether prostitution is moral or immoral, or wether it is a good or bad thing to be a ‘drug addict’ bearing children, or anything else to do with an opinion on the details; they are all irrelevant.

This is a question purely of rights; do people have the right to organise, associate, exchange money for goods and services? Libertarians say ‘Yes’ people do have these rights, and they should not be interfered with by anyone.

We may or may not agree with the work of this charity, but if you want to preserve your own way of life, then you have no choice but to support their right to say what they like, give money to whom they like, and associate with whomever they like.

If you do not accept their right, you are irrational, illogical and will not have a leg to stand on when someone who does not share your ideas turns the eye of Mordor upon you and your ilk, claiming that the way they see the world is the only correct way, and you must obey them or face violence, for the sole reason that they hold beliefs that are different to yours, and can muster a violent gang to force you to obey them.

Update! Clarification!

An attentive person has pointed out that that this charity is not paying for sterilisation, but that instead, the sterilisation procedures are taking place at taxpayers expense on the NHS, and that somehow this invalidates the sense of part of this post.

That is of course, not the case.

First of all, these are the precise facts about exactly what happens when a drug addict encounters this charity and takes up their offer. In order to collect his 200 he has to:

“provide a medical certificate of drug dependency and another certifying that they have had tubal ligation, vasectomy or a contraceptive implant.”

[…]

http://www.practicalethicsnews.com/practicalethics/2010/04/embrace-the-controversy-lets-offer-project-prevention-on-the-nhs.html

This means that what is happening is that a drug addict, upon presenting documentary evidence that he or she is in fact a drug addict and has been sterilised, receives money from this charity. Where he gets this procedure is not mandated in the terms, though its clear that a drug addict is highly likely to get it done for ‘free’ on the NHS (A vasectomy operation in a private hospital or clinic in the UK will cost in the region of 300 to 900 inclusive of hospital charges and consultant’s fees)

Most importantly,

  • No coercion is involved.
  • Its a private, voluntary exchange of money for documentary evidence.

The fact that the taxpayer is paying for these procedures is an entirely separate issue, of the legitimacy of socialised medicine; the sterilisation on offer at the NHS is already a fact. If you have a problem with that, its a completely separate discussion to wether or not this charity should ask for money from private people to offer drug addicts in exchange for proof that they are drug addicts and have been sterilised.

This charity is not forcing you to pay for the sterilisation of drug addicts; the state is. If you do not like this, then you have to do something about how the NHS is funded. The charity’s contract with the drug addicts to produce documents is still a completely voluntary and private arrangement between consenting adults, and should be vigorously protected by everyone who wants to continue unmolested with their own peculiar ways.

It is completely wrong to say that these people should not be able to come to their own arrangements, understandings and contractual agreements for money or not.

Once again:

They are not exploiting anyone, since what they are doing is entirely voluntary. This charity is not stealing from you, since by asking people to take advantage of something that is already their (according to those who think that the NHS is entirely legitimate, and who do not understand rights) ‘right’ to sterilisation on the NHS they are getting something that they are already entitled to.

If you disagree with the premiss of the NHS, then the drug addicts and everyone else who uses it for plastic surgery, dentistry or sterilisation is stealing from you wether or not this charity operates in the UK or not.

The logic of this post stands. People have the right to voluntarily contract with each other for anything and on whatever terms they like. You cannot on the one hand, ask for this to be controlled or say that, “it isn’t a transaction which has no effect outside of the charity and the addicts”; this is exactly the same logic that the people who want to ban Home Education use. They say that the children of Home Educators, as members of society, have an impact on that society if they are not educated in the school system and so therefore, Home Education is not a private matter, but is within the remit of the state to control on behalf of society, and parents have no right to Home Educate. If you accept that this charity should not be able to operate, or should be in any way constrained, attacked, scorned, chided or anything else, you are opening yourself up to the same attacks from the people who want to control you and your life, what you and how you solve your problems in ways that are ‘strange’, or ‘out of the norm’.

UPDATE AGAIN

The very wise Ali P, who taught us that Home Educated children are not pupils, pulls our her foil:

The Libertarian position on this is straightforward.

1. You own your own body.
2. You have the absolute right to voluntarily associate with whomever you like without interference.
3. You have the absolute right to voluntarily exchange with whomever you like without interference.

This means, for example, that prostitution (accepting money for sexual favours) should never be illegal, since it is the consenting act of trade between two people. It means that if you want to sell your hair, a kidney, or both of your kidneys, you have the right to do so since you have a property right in your own body.

As it happens, I agree with much of this in principle, but in practice, I believe coercion is frequently used to secure ‘consent’, whether it is statist coercion or other private or ‘charitable’ coercion. The ‘willing’ acceptance of home visits by some home educators, and the ‘advice’ of some charities to agree to these visits, is one example of what I mean by this.

I also agree that there is a parallel with prostitution, which is AFAIK not illegal in this country, although soliciting is. However, for practitioners of the oldest profession, it is not always a straightforward choice to enter voluntarily into a contract for the provision of services, since coercion, threats and even violence are routinely employed in the sector as effective techniques of persuasion.

When a ‘power over’ situation exists, whether it is overt as in forced marriage, human trafficking, domestic servitude (do they all sound familiar?) or more subtle as in cash for organs, sterilisation or whatever, it matters not IMO whether it is the state or A.N. Other who bribes, coerces, forces or otherwise extracts the individual’s apparent consent. And like it or not, some individuals are more vulnerable to such coercion, often through through age, illness or incapacity – drug addicts, for example.

I’d be interested in what others think about this.

Why not?!

We must be clear when we talk about these matters, using words only in their strict meaning, whilst also being careful to separate different classes of entity. The things we need to define in this mater are the two entities (a private group and the state) and exactly what coercion is and how free a free choice is.

By definition, a private charity cannot coerce someone to be sterilised:

coercion? ?
[koh-ur-shuhn] Show IPA
noun
1. the act of coercing; use of force or intimidation to obtain compliance.
2. force or the power to use force in gaining compliance, as by a government or police force.

[…]

http://dictionary.reference.com/browse/coercion

As we can see from the dictionary definition of coercion, force or intimidation (threats of force) are necessary to make an action fall into the category of coercion. The second part of the definition explicitly mentions the state.

What this charity is doing is not coercion, but it could be classed as persuasion. This is a very different matter to coercion by the state, with its monopoly on violence.

Persuasion is at the centre of a civilised interaction between human beings. It means swaying someone purely by argument alone, the final freely made choice being made by the persuaded person.

To use the UK ID Card example once again, the state claimed that ID Cards were not compulsory, but you would not be able to get a passport without one, and would therefore not be able to travel to other countries. That is clear coercion, this time, with the threat of violently barricading you inside ‘your’ country.

The willing acceptance of home visits by some home educators, falls into this category; if you do not accept a visit from us, we will violently take your children from you. That is coercion pure and simple, and of the same kind, from the same source; the evil state.

As for charities giving ‘advice’ to agree to these visits, this is an example of lying, which is not coercion, but perhaps collusion. If Home Educators had their own legal defence fund and lawyers on tap, this would not be an issue of course.

The parallel with prostitution is very deep in this matter; this charity, according to the byzantine ‘thinking’ of some people and laws of the UK, could be accused of soliciting drug addicts to self mutilate… but I digress; the circumstances by which prostitutes become prostitutes is not relevant to this subject, when we are talking about people who choose that life, as we have seen recently. When people are forced to act as prostitutes through violence, this is unambiguously evil violence, and is not part of this discussion.

Once again, we must cleanly separate coercion, violence and free choice when we have discussions on these matters.

Some confused people say that if someone is poor, they do not have a free choice to refuse money for sterilisation or anything else, by virtue of their desperate need. This is simply not the case. For certain the pressure on them is much greater, but they still have a free choice to not participate in anything that they do not want to. These very weak minded arguments undermine Liberty and act as a foot in the door of everyone’s lives for the nanny state.

With reference to ‘power over’ situations, once again, its important not to conflate a group of different phenomena that are wildly disparate in their cause and natures.

‘Forced marriage’ is an unpleasant idea for the British and people from the culture of the west, where marriage is done out of love and not familial duty.. In other countries however, marriage is quite a different thing, and to them, ‘John meets Jane’ marriages are anathema.

How other people choose to marry in other countries has nothing to do with coercion as defined here. Human trafficking (which is much better termed slavery) is pure unambiguous violence; in the minds of the people whose culture accepts arranged marriages (which is the correct term, not ‘Forced marriage’) slavery is, for the most part, seen strictly as a sin.

Domestic servitude which appears to be yet another unnecessary way of saying slavery, once again is unambiguously evil, and the tests for it are straightforward and beyond this discussion.

Cash for organs and sterilisation for money are nothing to do with any of this; these are entirely legitimate, voluntary exchanges of property, over which a third party should have absolutely no say. To say otherwise, is to engage in slavery; the slavery where your body, and the bodies of your children belong to the collective, to do with what they please, as they please, when they please.

As for individuals being vulnerable, indeed drug addicts with their addled brains and diminished powers of reason are vulnerable to persuasion; this does not mean that all of us who are not drug addicts should not have the freedoms that are our right. Down this line of reasoning, comes the logic that since this class of person cannot reason for themselves or protect themselves, someone has to protect them from the predations of these charities. Of course, the other class of people who cannot reason for themselves or protect themselves are children; hey ho, whaddyaknow, y’ just made Lord Soley’s argument for him; children belong in schools because, “we have to know they are safe”.

This is the big danger of accepting as ‘common sense’ the immoral reasoning of collectivism (and this is explicitly not aimed at A.P.) embrace it at your peril, and do not complain when they come to take your children, using your own parroted arguments about ‘vulnerable people’ as the pretext.

In Libertarianism, you have a complete way of approaching every possible human interaction that has unassailable logic that protects you, your rights and your relationships with other people. It provides a platform for the maximum prosperity without any violence or coercion. Those who are against it are normally either confused or explicitly violent types – you know the sort, the ones that think restaurants should be licensed by the state ‘because someone might get sick’.

Unfortunately for many, Libertarianism means throwing out years of accumulated presumptions and frameworks, most learned by rote and repeated without any thought. Libertarianism gives you the tools to parse the world and penetrate the reams of nonsense that are spewed out on every subject, like this one. If you take the time to get to grips with it, and have the intelligence and the strength to throw away your bad thinking, you will be rewarded with a set of tools and a philosophy that are is formidable as it is unassailable.

Fruits of the forest

Saturday, October 9th, 2010

Wild mushroom risotto, apple cobbler. Autumn!

Luckily, on the basis of one middle-class “horror” story in the Daily Hate-Mail, and a 2-year old recycled story from their own paper at that, there seem to be fewer people willing to pick… and so more wild mushrooms for those of us with a little common sense.

If I were a vikingBeserker!!!

I am not a viking. I am hungri for fungi.