Archive for the 'Economics' Category

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create a better way of accessing and delivering email; the idea of using an email client like Outlook Express has been superseded by web interfaces and email ‘in the cloud’ that provides many advantages over a dedicated client with your mail in your own local storage.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

Crony Capitalists deploy glove puppet schizophrenic luddite

Tuesday, September 13th, 2011

The crony capitalist copyright monopoly has rolled out its latest delusional computer illiterate schizophrenic luddite, Jeremy Hunt, to try and cripple the internets.

First things first.

Culture does not need a secretary. The idea that the State should have a position to ‘have a say’ in matters to do with culture is absurd on its face. Art galleries, artists, authors, music makers, sculptors and anyone involved in culture in any way do not need to be overseen, managed, given ‘guidance’ or ‘represented’ by a ministry. Only States like the USSR have traditionally had such corrosive, totalitarian and frankly, disgusting posts. Actually, France has a Minister of Rock & Roll, but France doesn’t count.

Even if you accept that the State should have a ‘Culture Secretary’ the internet is a technical brief, not a cultural one. No doubt there are moves afoot to create a new ‘Secretary for Digital’. The State should not be able to produce these new positions willy nilly, since they are public servants.

OK, Lets do this.

Google should join fight on piracy, says Jeremy Hunt

Culture secretary calls on advertisers and search engines to make life more difficult for those that ignore copyright laws.

What a disgusting, irrational and ridiculous call; to ‘make life more difficult’ for people. The internet exists to make life easier. What Jeremy Hunt is calling for is to cripple the internet, to make service providers divert capital away from improving their services into something that no one but a tiny group of venal beasts want. This is not the call of a human being, this is a call from a monster that wants to destroy progress, inhibit the utility of the greatest invention since fire, and to harm millions of people all over the world. Absolutely repulsive.

Jeremy Hunt, the Secretary of State for Culture, Media and Sport, is to tell Google and other search engines that they should play a greater role in the fight against online piracy. Mr Hunt will ask them to make life more difficult for pirates.

And they are all going to tell him, politely, to go straight to hell. Jeremy Hunt is in good company; he is spouting the same garbage that Andy Burnham used to on this matter.

Copying music is not piracy. It is not theft. The BBC even said so, in a grovelling apology after they aired a scandalous, unforgivable, stupid, retarded and evil attack on Bittorrent and were taken to task for it:

First though, an apology. File sharing is not theft. It has never been theft. Anyone who says it is theft is wrong and has unthinkingly absorbed too many Recording Industry Association of America press releases. We know that script line was wrong. It was a mistake. Were very, very sorry.

If copyright infringement was theft then Id be in jail every time I accidentally used football pix on Newsnight without putting Pictures from Sky Sport in the top left corner of the screen. And Im not. So it isnt.

No where near enough of an apology, but as far as the BBC goes, this is grovelling, first class.

He is expected to tell the Royal Television Societys Cambridge Convention that reasonable steps will make a significant difference, and also make the suggestion that if the industry does not help the Government it will legislate via the new Communication Bill. We intend to take measures to make it more and more difficult to access sites that deliberately facilitate infringement, misleading consumers and depriving creators of a fair reward for their creativity, Mr Hunt will say.

The world is changing. The number of people who know about crony capitalism, the abuses of the RIAA/MPAA and the rest is growing exponentially. Even the scumbag lying State shills at the BBC say that people like Hunt, “..(are) wrong and (have) unthinkingly absorbed too many Recording Industry Association of America press releases”.

Jeremy Hunt is on the wrong side of history, and he hasn’t got the brains to know it. If he does know that what he is saying is unfounded, illogical codswallop, then he is a coward for not stating the plain truth, which is that the internet has changed the way people consume media, these changes are benefits which will bring prosperity to everyone, and the old business models are dead as the Dodo.

The Government wants search engines to penalise website whose content is ruled unlawful. Less prominent results would have a direct effect on revenues from advertisers as well as sales.

If you removed all the links to any torrent site or site that provides links to other sites, what would happen is that someone would write an application that will absorb and re-distribute all those searches. It would spur the creation of a one stop place to find everything you need, and it could be designed in such a way that it can not be shut down. It would make the distribution of links more efficient, and this would mean more file sharing.

The internet sees Jeremy Hunt and his luddite ideas as damage and routes around him and them. Anything that is done to stop people communicating will cause more robust systems to be developed and deployed to bolster communication. We have seen this again and again. Napster was shut down and that caused gnutella to be developed. Then, the Bittorent protocol was developed as a direct answer to the problem of hosting files on central repositories. The same thing can be done with links. A distributed search engine, unstoppable, with no central point of attack will up the stakes and Jeremy Hunt would be the one that caused it to come into being. That is what is called an ‘own goal’ in the UK.

Mr Hunt will argue that online businesses deserve the same legal protection as physical ones. We do not allow certain products to be sold in the shops on the high street, nor do we allow shops to be set up purely to sell counterfeited products. Neither should we tolerate it online, he is set to say.

This is a fallacious, straw man argument. Physical goods are not the same as information and it comes right out of the MPAA script. When you copy a file or an idea, nothing is lost, and more to the point, Google does not facilitate copying, it merely points to resources that may or may not ‘infringe copyright’. There is no reason whatsoever to call upon business to take proactive measures against links that potentially point to items that are not even criminal in the first place.

He will add, however, The government has no business protecting old models or helping industries that have failed to move with the times. But those new models will never be able to prosper if they have to compete with free alternatives based on the illegal distribution of copyrighted material.

This is double talk. Government is protecting the old business models by insisting that there is such a thing as copyright. It is helping industries that have failed to move with the times, explicitly, the music and film industry. Secondly, Hunt says ‘free alternatives’ are bad; what if the new business model is the free model?. By saying that free is not acceptable, Hunt is picking winners, helping the dinosaur media and failing to move with the times. It is not the place of Jeremy Hunt or any public servant to determine which business models are and are not appropriate. Jeremy Hunt is talking nonsense on stilts.

Despite campaigns from internet freedom activists, the high court ruled in July, after a lengthy process, that the internet service provider BT should block a website that flagrantly infringed copyright, called Newzbin. Although the Internet Watch Foundation is able to use a sped-up legal process, it currently can only do so for sites relating to illegal online pornography. Google, however, claims that takedown requests from reliable copyright holders are dealt with in four hours. The government moving its pressure from ISPs to search engines marks a new approach to its multi-faceted attack on digital piracy.

http://www.telegraph.co.uk/technology/google/8759414/Google-should-join-fight-on-piracy-says-Jeremy-Hunt.html

They will fail.

Since the advent of modems running at 14.4k people have been sharing files, and it has grown year on year without fail every year. The mainstream media and the copyright monopoly have lost both the war and the argument. The movie studios still pull in hundreds of millions for their blockbusters, and so the much reported death of their industry has not materialised, as it never does whenever they whine that a new technology is going to wipe them out.

It is nothing short of absurd that Jeremy Hunt and his cohorts want to turn Britain into a leader of all things internets, but in the same breath, they do everything they can to cripple the companies that work with it. You cant have it both ways; either you want your East End Fantasy to take root or you do not. If you do, get out of the way, and let business flourish. If you do not, carry on as you are, making these ridiculous paid promotions for the copyright monopolists and watch everyone write you off as a potential place to locate.

In the past, anyone thinking about writing an innovative service, like a CD Ripping service, would have run a mile from the UK. Only now, as the CD is dying as a format will it become legal for a company like this to set up… or will it? Who knows? What is for sure is that if you plan on starting an internet business in the UK, you are taking a huge risk that Jeremy Hunt & Co. are going to suddenly, at the behest of your competitors, put you out of business either by directly legislating against you, or scaring investors away by giving a speech.

One thing is for certain; the tide is turning against Jeremy Hunt and all the glove puppets who sound suspiciously similar. What do I mean by that? Hmmmm, Which one is Jeremy Hunt, and which one is Andy Burnham? can you tell?:

Hunt or Burnham?:
“We must ensure that copyright delivers maximum benefit to performers and musicians. That’s the test of any model as we go forward”

Hunt or Burnham?:
“Let me be absolutely clear so there are no misconceptions about where the Government is on this. We share a real support for artists and musicians.”

Hunt or Burnham?:
“Music has been hit hard over the last ten years, and if we dont do something there is a real danger that parts of the music industry will be washed away.”

Hunt or Burnham?:
“Developments in communications have changed the music world and I think we are now at a time that calls for partnership between Government and the music business as a whole: one with rewards for both of us; one with rewards for society as a whole.”

Hunt or Burnham?:
“My job Governments job is to preserve the value in the system.”

Hunt or Burnham?:
“What do we need to do to help our businesses grow and evolve between now and 2025? Where can regulation help and where is it a barrier? What can we do collectively to enhance the whole UK market?”

Hunt or Burnham?:
“We have an extraordinarily strong and diverse media landscape in this country, combined with a remarkable wealth of talent in our creative industries.”

They are indistinguishable are they not?

Honestly, I dont care about what these people think; the only thing that matters is that they have the guns. As long as they have the monopoly on violence, they will be able to distort, destroy, corrupt and damage. If they did not have the monopoly on violence, Jeremy Hunt might be a school teacher somewhere, harmless, quiet and of no concern to anyone.

Thankfully, the market, the internet, and the people on it are more powerful than Jeremy Hunt. No matter what he says, no matter what he asks for, and no matter who he can bully into obeying his luddite wet dreams, the internet and the market will route around him and his disease and the spice will flow!

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.

Thinking correctly about Bitcoin

Tuesday, August 30th, 2011

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And Bitcoin is a very very disruptive technology.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Internet is starving the streets

Wednesday, August 24th, 2011

Whilst roving around a major city in the UK, I was overwhelmed by the filth, the poverty, the distorted faces, the ground-in misery, the decay and the hopelessness in evidence whichever way you cared to look.

Contrast this with the shining, enthusiastic, clean, efficient, free, beautiful, soaked with hope and promise Internet, where everything is possible, if you can write software or operate a mouse.

Buying things in the streets is a disgusting experience. Not only are people ugly and rude, but the streets themselves are incredibly filthy, with layers of ground in grime from the feet and garbage of millions of people who leave every type of food and waste behind them like upright slugs trailing dirty slime behind them.

You may be lucky enough to need something from a shop that is clean and neat, and it may even have staff that can speak in a polite manner. When you enter, if you are really lucky, it could even have air conditioning. Even if that is the case, after you have done your business, for which you are robbed of an extra 20% on top of the price you pay for no good reason, you have to return to the pig-filthy streets to get anywhere, and you had to arrive by those same foul streets to get there in the first place, and when you leave, you are burdened with packages.

Contrast this with shopping on the Internet. You click through some beautifully laid out pages, compare and contrast prices from different ‘stores’, read the voluntarily donated opinions of other decent, literate people who are honest and who have your best interests at heart, and then, when you make your decision, you click a button to find that the next day your shoes arrive.

Even then, if you do not like your new shoes, you can return them and get your money back, no questions asked.

The online world is much better than the ‘real world’. It is travelling without moving. It is connecting without effort. It presents a face to you that goes out of its way not to offend you. It is intelligent, cultured, educated, funny, humble, gentle, easy to get on with, inoffensive, useful and entirely beneficial.

What happens when you try and connect these two worlds, to try and bring the benefits of the online world to the ‘real world’? Read the rest of this entry »

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/

Bitcoins are Baseball Cards

Wednesday, August 3rd, 2011

The responses to Bitcoin from different camps that encounter it have been fascinating to read. Bitcoin, like the Internet, is a mirror reflecting the philosophy of the person who is talking about it.

Libertarians see it as a way out.
Statists see it as a way of receiving the blessings of the state.

and so on…

One of the many interesting sets of thoughts swirling around Bitcoin is the idea that somehow, the State must be involved in Bitcoin, and there are people out there who are keen to try and shoehorn any legislation or rule that is out there to fit the Bitcoin case.

Take a look at this:

FinCEN Brings KYC Requirements To Bitcoin?

The U.S. Department of the Treasury (FinCEN) issued a Final Rule making non-bank providers of pre-paid financial instruments subject to comprehensive Bank Secrecy Act (BSA) regulations similar to depository institutions.

Why this particular rule, and not the first amendment of the constitution? Cryptography, it has been argued, correctly, is a form of speech that falls under the first amendment protections guaranteeing your right to write whatever you want.

Bitcoin is made up of cryptographic signatures that can be printed out as text. This means that they are clearly protected speech and not financial instruments.

Why should FinCEN have anything to do with Bitcoin at all? If FinCEN applies to Bitcoin, should it also not apply to Baseball cards?

Baseball cards or comics or YuGiOh cards could be used as money because someone somewhere values them.

They could be stored in a vault and then certificates issues against them that could be traded automatically at online exchanges.

Does that mean that these certificates are money? Does that mean that FinCEN rules should apply to them?

Of course it doesn’t. Applying FinCEN rules to Bitcoin, quite apart from the immorality of these regulations, is improper and ridiculous.

The regulations affecting stored value now use the term prepaid access which is more broad and technology-neutral. Though FinCEN has not formally asserted that Bitcoin would fall under prepaid access regulations, earlier contact with the agency referred to bitcoins as a form of stored-value. If correct, then Bitcoin sales to U.S. customers would likely be a regulated activity per this Final Rule.

The new regulations become effective on September 27, 2011, 60 days after its July 29, 2011 date of publication in the Federal Register.

This is absurd. Who made contact with FinCEN, and where is the written record of this contact? Who did the contactor represent, and whoever she was, she did not represent ‘Bitcoin’ or any of its users, but was acting on her own. The details of that contact are something that would be interesting to read.

To comply with the Final Rule, providers of prepaid access must register with FinCEN. Because bitcoins are decentralized, it is uncertain who a provider would be. Might every exchanger be considered a provider, for instance?

This is all springing from a false assumption, that Bitcoin is a store of value that FinCEN has jurisdiction over. It is not.

Also under the Final Rule, sellers of prepaid access must collect personal information from customers, maintain transaction records, file suspicious activity reports and comply with other requirements of money service businesses (MSB). Last month FinCEN issued a ruling that was intended to clarify the definition of an MSB and includes the possibility that even businesses outside the U.S. conducting money transfer over the Internet could still be classified as U.S. MSBs. Additionally, the definition no longer requires that an MSB be a business any individual who receives funds in exchange for a stored value might be considered an MSB.

This is of course, absolutely absurd. Even if you concede that FinCEN has jurisdiction over U.S. companies and persons that deal in Bitcoin, to assert that people and companies outside the USA would need to register with FinCEN betrays a complete lack of understanding of the concept of jurisdiction.

Its like those very sad webmasters in the UK who put up DMCA takedown notification pages on their sites. The DMCA does not apply anywhere in the world other than in the United States of America, and no webmaster, publisher, company or person is required to obey its strictures who is not based in or who does not have servers in the USA.

If FinCEN actually tries to attack Bitcoin, and then tried to demand that entities outside the USA register with it, they should be met with this type of response.

Though the ruling has exemptions to not impact the typical prepaid debit card found at grocery stores, for example, the exemptions would likely not apply to Bitcoin. These exemptions give a pass to providers and sellers when the following conditions are met:

  • The funds cannot be transmitted internationally.
  • Funds cannot be transferred from one user to another.
  • No additional funds can be loaded except from a depository source (e.g., from a bank).

There is no way to limit where bitcoins can be spent and the value is easily transferred from one person to another so Bitcoin will not likely be considered exempt from the AML regulations.

Bitcoin, being a form of speech, should not be regulated by anyone. In the same way that you have protections against fraud (someone misrepresenting some reproduction Baseball cards to you as genuine, or someone stealing your YuGiOh cards) you have those same protections with Bitcoin. If someone defrauds you or breaches a contract they have with you, take them to court or arbitration.

The state is not needed to control Bitcoin, police it, regulate it or have anything whatsoever to do with it. It has, like the internet, grown in popularity all by itself, will grow in utility just like the internet has by virtue of people adopting it and using it, and any interference in it is illegitimate on its face.

Following these regulations will be a serious burden to sellers. For instance, compliance requirements as specified in an article by Perkins Coie LLP include:

Identifying information includes the customers name, date of birth, address and identification number. Sellers must retain this information for five years from the date of sale.

The records must be easily accessible and retrievable upon request from FinCEN, law enforcement or judicial order.

The bigger impact of following AML may not necessarily be the cost of compliance but instead will be the likely result to effectively de-anonymize Bitcoin.

Following these regulations is unthinkable. Even if you accepted that these regulations were in some mysterious way beneficial, it would not and could not stop people from trading Bitcoins client to client, without identifying themselves to a parasitic third party.

When Bitcoin usage reaches critical mass, there will be trillions of transactions happening on a daily basis. The people who serve as enter and exit points for it would be recording meaningless details that would serve no use whatsoever after the first purchase of Bitcoins.

Bitcoin is not anonymous, despite what people think. There are services out there however, that can make it completely anonymous, and these will be improved and will multiply in number as the precise nature and level of anonymity in bitcoin becomes well understood by everyone. In the same way that The Anonymizer, Hide My Ass and the many proxy services that have come into being to cater for those who want anonymity, its a safe bet that the same entrepreneurs will apply their knowledge to the problem of making Bitcoin completely untraceable.

As for the cost of compliance, only US companies will be forced to pass the expense of these ridiculous regulations on to their customers. It will mean that customers, who see high prices due to regulation as damage and route around it, will choose exchanges outside the USA, simply because it is cheaper. This will create another tier of middle man in America; businesses that will take your money and then interface with foreign exchanges for you, rather like the Dorian Grey services we have written about.

Ironically, these new regulations may drive even faster Bitcoin adoption. These restrictions may cause many retailers to discontinue offering the prepaid cards that can be used at ATMs internationally. Since global redemption of stored value is a service that is legal to offer, is in huge demand and is something that Bitcoin does well using digital currency might become the more popular alternative.

Unintended consequences!

And of course, as Bitcoin passes critical mass, it will become absolutely impossible to clamp down on the international flow of ‘money’, since Bitcoin is a peer to peer system.

When the global economy becomes dependent on Bitcoin, as it does now on SSL, no politician will dare raise a finger to control (damage) it, just as it is now completely unthinkable to regulate the cryptography behind SSL, as the French tried to do and which Dominic Strauss-Khan put pay to.

A more immediate consequence will likely be the employment of lawyers to specifically consider how this Final Rule affects Bitcoin.

http://www.bitcoinmoney.com/post/8412471372/fincen-prepaid-access-final-rule

Maybe so. Certainly there are people out there who are desperate to interface with the State when it comes to Bitcoin.

One way or another, the State is not going to control Bitcoin. Either because it is not in their financial interest to do so because it is a world-wide phenomenon, or because they cannot possibly stop the hundreds of millions of people who are going to be using it.

There are 2,095,006,005 people on the internet. That is 30.2% of all the people on earth and an increase of 480.4% in ten years.

If only ten percent of all people use Bitcoin. No. Lets say five percent. That is 104,750,300 future users of Bitcoin. There is no reason why this number cannot not be achieved, and of course we are working only with today’s assumptions; there is no knowing what new innovations related to the block chain that are around the corner. Or innovations in the shape of client that people will be using. Imagine new versions of Google Chrome or Firefox that are not only browsers, but Bitcoin clients.

Every browser, doubles as a Bitcoin client.

Think about that for a moment. An HTML5 Bitcoin client, with an interface designed by Google or Mozilla. Easy to use and absolutely everywhere; on every computer in the world, by default.

One thing is for sure, there is no going back.

People have complained that ‘the next Google’ could not come out of Britain, because Britain is toxic to business.

If Bitcoin is going to be the biggest revolution since the internet itself, and the British establishment are desperate to entice companies to set up here and take root, then any regulation on Bitcoin (or for that matter, Internet Business which is serious business) is, to put it lightly, not a good idea. In fact, the smart thing to do would be to draw an arbitrary area on the map in London, and declare that area an Internet Free Trade Zone, where there are no restrictions, taxes or regulations, for a period of 150 years.

This would instantly attract every Internet business on the planet to the UK. There would be an unprecedented inflow of brains and money into London, making it the ‘Internet Capital of the World’.

Or, you could regulate Bitcoin, and be an also-ran gaggle of losers, while Hong Kong, Dubai and other jurisdictions suck up all the brains, money, skills and entrepreneurs.

To sum up, Bitcoin is to money as PDFs are to hardback books. Bitcoins are speech, not financial instruments. The State has no business interfering in Bitcoin in any way, and US regulations and laws do not apply to people and companies outside of the continental USA.

19,785,621 seconds

Wednesday, July 27th, 2011

THe title of this blog post is the number of seconds it took for the hive mind of Anonymous to reach the next iteration that we wrote about in December 2010. Here is the tweet posted around the time of the light bulb moment:

If @LulzSec called for a #Paypal boycott it would make way more damage than any LOIC attack could ever do. Is that a felony? #AntiSecless than a minute ago via TweetDeck Favorite Retweet Reply

What is so exiting about this is that 229 days (or 329,760 minutes or 5496 hours) is not very long for an iteration, and if the time between iterations is getting shorter and shorter, it will not be long (since Anons are highly intelligent) before they come to the Final Boss of of this game: The idea of the State itself.

When they come to the conclusion that the State is not needed, is the source of all the evils they are railing against, that it is a new cancer and not at all inevitable, Murray Rothbard will spell everything out for them in a tome that is not TL;DR, and which will simply blow their minds.

PayPal’s ridiculous regulations are a product of the State. If if were not for the State, they would not be doing what they are doing, i.e. blocking access to accounts, closing accounts at the behest of the state, restricting the flow of your money etc etc.

If you look behind the curtain at everything that is going wrong, from the insane wars, to the restrictions on free speech, DRM, the ban on vitamins, the RIAA/MPAA, Domain seizures, your money becoming worthless, widespread poverty, the ‘War on Drugs’, the patent trolling, the endemic corruption, the bank bailouts… EVERYTHING – the State is the direct cause of it.

People who are clear thinking are not wedded to any particular idea out of habit. They hold their ideas because they are arrived at by reason, and if by reason they must abandon wrong ideas, they do so immediately.

The idea of the State is a habit, a bad one, like heroin, and anyone who refuses to accept the State as the Final Boss is a brainwashed, drug addled addict.

It looks like the tipping point has been reached. Anonymous and its legion are moving inexorably towards the locus of Libertarianism. They are quickly shedding all operations that are ineffective or that involve disrupting other people’s property (like LOIC). Closing your PayPal account and switching to another service is an incredibly powerful act. By moving to another service, you can ensure that the flow of information (money) is not interrupted. The question then becomes, which service to switch to?

If you switch to any service that is regulated by our enemy, the State, you will be moving from one frying pan into another. What is needed is a way to move information (money) that does not involve a third party. A middlemanless system that is controlled by the masses for the masses.

That means Bitcoin.

The next obvious iteration is to get millions of people to move to Bitcoin as the main way they transact with money on the internet. That means dumping credit cards, PayPal and any other payment system that is regulated by the State.

Even if the number of places where you can buy things with Bitcoin is small now, if millions of new challengers appear holding it and eager to spend it, I guarantee you that Bitcoin will be integrated into every e-commerce package out there in less than a month. This will dramatically bootstrap the Bitcoin economy, decimate PayPal and the credit cards and bring forward the date of the inevitable demise of the State.

Remember; the taint of the State is the root problem. Apply this simple test to anything that you can think of that chafes at your sense of decency and liberty.

“Is there a law or regulation that makes this bad thing happen?”

If the answer is yes, then the State is behind it.

Try it. You will be amazed at how everything bad you can think of can be traced back to and is a direct result of the existence of the State.

The inevitable next question is “what are we to do without a State to tell us what to do?”. Murray Rothbard and the Libertarians have the answer, and this answer is not based on theory alone; it is based only on provable facts.

A critical mass of non violent change is coming where the State will simply cease to exist, just like it did in East Germany. This time it will be different however. There will be no West Germany to fill the void. There will be nothing; nothing but the good will and power of collective non violent voluntarism and the unprecedented prosperity that will follow as day follows night.

One last thing.

Some people say, “this is how you do it, keep it legal and legit”. This is wrong, ‘in the matrix’ thinking.

If you restrict yourself only to what is legal, then you will most certainly fail.

If they outlaw Bitcoin, or any of the other 17 alternatives to PayPal, and remove your ability to change services and stay ‘legal and legit’ how will your boycott end? It will end in total failure.

Your strategy should not be based on doing what is or is not legal, because the State, the enemy, decides unilaterally what is or is not legal. Constraining yourself in this way is thinking inside the box created for you by the State. It will not work.

Your strategy must be based only on what is moral and what is effective. That means refraining from doing anything that is immoral and only doing things that are effective.

If they make payment systems other than PayPal illegal, that is an attack on your liberty that you can respond to without committing an immoral act; in the same way that smoking marijuana, despite it being illegal, is responding to an outrageous infringement of your liberty without committing an immoral act. You simply refuse to obey, en masse.

What has changed is that everyone is connected to everyone else, and withering, debilitating, concentrated, tsunami death blow boycotts can strike with incredible ferocity if the conditions are correct.

Just wait for the critical mass condition to arrive, when the penny drops and the State dies… I imagine that it will be like the change of weather on a day where it has been raining and all of a sudden, the rain stops and beautiful sunshine burst into the day.

The green rain of the State will be stopped!

Bitcoins backed by gold launched

Thursday, June 23rd, 2011

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

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

So, way before the dollar value of Bitcoins stepped off a cliff last weekend, I was telling people who asked me that I didnt use them and didnt plan to use them.

Frankly, I cant see why anyone would, when theres already an electronic digital currency like Bitcoin but backed with gold: GoldMoney. I should disclose that Im a small investor in the company.

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

My emphasis… What?!

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

I had to find out more about this!

GoldMoney has a good looking website:

http://www.goldmoney.com/

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

Better and better!

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

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

Ooookkkkkk.

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

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

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

Personal Record?
Verification process?

This doesn’t sound like Bitcoin at all!

It gets worse.

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

And then it gets even WORSE:

Country of Residence

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

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

Netherlands & Netherlands Antilles

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

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

And then it gets unimaginably worse:

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

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

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

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

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

Unbelievable.

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

Security and integrity

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

But in the interview, Casey says:

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

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

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

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

Who knows. Who cares.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bitcoin has already won.

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

UPDATE!

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

And check out this informative, in depth interview with Mr. Matonis:

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

The clear divisions on Bitcoin

Wednesday, June 22nd, 2011

It is now clear where the lines dividing freedom minded people on the issue of Bitcoin are drawn.

On the one side, you have mostly older computer illiterates who are out of their comfort zone, and on the other, you have younger computer literate people who are comfortable with both free market ideas, sound economics and computers.

The former camp, the computer illiterates, all use the same form of argumentation and fallacious reasoning to attack Bitcoin, including straw men. Here is a good example:

Approximately 2,000 years ago, Aristotle said good money must be:

  • Durable
  • Portable
  • Divisible and consistent
  • Have intrinsic value

The astute reader will immediately realize that Bitcoin does not possess any of those characteristics and was subject to trouble from the getgo not to mention the security issues that immediately arise with anything computer and Internet related. A computer generated currency is not durable, as the recent hack demonstrates. And its certainly not portable. Can you imagine bringing your computer to the door to pay for your next Chinese food delivery? You get the idea for the remaining characteristics.

[…]

http://howestreet.com/2011/06/grim-decade-employment/

The straw man here is the line about Chinese food delivery. There is no reason of course, why you could not pay for your Chinese food in advance by Bitcoin. Its like saying, “imagine ordering books by computer from a company, lets call it ‘Amazon’. Imagine the delivery man having to keep change for all the sales! Its a security nightmare. IT WILL NEVER CATCH ON!”

The astute reader recognises faulty reasoning when he sees it, and is not persuaded by straw men.

As for the Aristotelian qualities that money must have, lets go through them for Bitcoin.

Bitcoin is durable. In fact, because it is not a physical good but is instead, an idea fixed in media, it can last for an indefinite time as long as it is copied to another medium. You can keep backups of it, which of course, you cannot do with physical money. Once again, the fact that you can have two copies of your money and cannot spend it twice is the breakthrough of Bitcoin.

Anyone who says Bitcoin is not portable, is not thinking clearly. Bitcoin is the most portable ‘money’ ever created. It can be sent anywhere in the world in an instant. There is no other money like it in the world in this respect.

Bitcoin is divisible. Each coin can be divided into one million equal parts. Bitcoin is consistent in value, if we accept that the value of a commodity is related to its supply.

The only test Bitcoin fails, some would argue, is that it has no intrinsic value. Lets go to the dictionaries to be absolutely sure:

What Does Intrinsic Value Mean?
1. The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.

[…]

http://www.investopedia.com/terms/i/intrinsicvalue.asp#ixzz1PzdrOzEy

In finance, intrinsic value refers to the value of a security which is intrinsic to or contained in the security itself. It is also frequently called fundamental value. It is ordinarily calculated by summing the future income generated by the asset, and discounting it to the present value. Simply put, it is the actual value of a security as opposed to the market or book value.

[…]

http://en.wikipedia.org/wiki/Intrinsic_value_(finance)

An intrinsic property is an essential or inherent property of a system or of a material itself or within. It is independent of how much of the material is present and is independent of the form the material, e.g., one large piece or a collection of smaller pieces.

[…]

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

I think the last one puts the nail in the coffin of the argument that Bitcoin has no intrinsic value.

Bitcoin has intrinsic value, by definition, because the system has value to the people who use it. It also has intrinsic value, by definition, because the amount of material in a thing is not relevant to wether or not a thing has intrinsic value; Bitcoins are immaterial, and they are part of a system that has value.

The fact that a single exchange, MTGox was hacked does not demonstrate that ‘A computer generated currency is not durable’; this is another instance of fallacious thinking. For fun, can you pick the correct one?

Once again all of these fallacious arguments are being made on the internet, and the irony of this appears to be lost on the people making them.

Even if Bitcoin is only used by one one hundredth of the entire internet population regularly, the number of people using it will be enough. More than enough. “For what?” I hear you ask… anything we need.

The people who build the systems that change the world do not need luddites, computer illiterates and sticklers to urge them to do what they do. The internet was built by a small number of people, and it has spread everywhere. Bitcoin was devised by one person, and it has already changed everything.

While we are at it, there is another prediction that has gone out of the window, the lone wolf inventor was declared extinct a few years ago, the claim being that the research and development costs involved in creating new things meant that unshaven men in their garages would not be able to produce world changing technologies.

How wrong they were. Bitcoin and Bittorrent are only two examples.

This is true for Bitcoin and the systems that are going to come after it. You need only look at at a widely adopted system like Skype, which is a decedent of ideas behind Gnutella, which itself was a decedent of Napster.

This is another problem that afflicts the discussion of Bitcoin; not only do very few people have a knowledge of how software works in general, but even fewer know about the recent history of some of the amazing tools we now take for granted.

Take a look at Nautilus, the file browser. Did you know that a company raised 11 million dollars to develop it? The company was called Eazel, and now we all benefit from that massive investment whenever we use the file browser in our Linux desktops, since Nautilus is now free and open source. Before this company, file browsers on Linux were not so user friendly. The people who invested in Eazel might not have made a profit, but that is not the point. The point here is that a world class piece of software was released that made something that was hard much more easy. The same dynamic can happen with the Bitcoin client, and when it does, we are going to experience massive, permanent disruptive change.

When thinkers like Mark Shuttleworth or Justin Frankel or a consortium of developers with many millions of dollars in the bank decides to fork and polish Bitcoin, you are going to see the emergence of a new version of the Bitcoin client, which will be as usable as the Skype client, that will sit on top of the existing Bitcoin network. Adoption will then go exponential, and all the short sighted people who claimed that it will never catch on will be forced to eat their words.

This new Bitcoin client will not only address all of the problems of the present client, but it will introduce new features that will make the adoption of Bitcoin accelerate; like being able to print out your Bitcoins so you can spend them like paper money.

Thinking is hard. Reading and understanding technical specifications is not easy; you have to spend many hours cross referencing different documents, each of which is liable to cause you to have to read other difficult to digest documents.

If you are not willing to do this, its not a problem; the world will go on without you. Thats why all these people are able to send out email newsletters, publish websites and make Skype calls without knowing how it all works or the history of the tools they are using.

What you cannot do however, is claim that something, in this case Bitcoin, cannot work when you are not capable of understanding it or even worse, are unwilling to make the effort to research it properly, and then expect people to take you seriously.

Something as important, significant and world-changing deserves proper attention and analysis, not flippant twaddle masquerading as insight.

A classic post on the origins and future of copyright

Friday, June 17th, 2011

I just came across this very wonderful post on copyright, excerpted here. Read the rest of it, its a classic, and do spread it.

A Crescendo of Copyright

Natural Finale and Reprise

Rejected by The Rethink Music Conference, April 2011, Berkman Center for Internet & Society, Harvard University

Abstract

  • A prologue mankinds culture and copyright in perspective

Copyrights 18th Century Overture

  • 1709 Queen Annes privilege of copyright
  • 1787 the philosophy of Paine and the (natural) rights of man
  • 1790 the prestidigitation in which a privilege is inveigled as a natural right

Copyrights Confrontation with Cultural Liberty reaches a crescendo

  • C19-20 the printing industrys exploitation of its privilege
  • 1990s the propertisation of published intellectual works as an entrenchment
  • 2000s the piracy of published intellectual works as a natural liberty
  • 2010s the persecution of the people for their piracy (cultural liberty)

Copyrights finale, and the reprise of natural rights

  • 20?? the prospectus for mankinds future

Prologue

The extent of mankinds primordial cultural activity stretches back at least half a million years, but thanks to repeated erasure by glaciation we start the notable cultural events calendar at 50,000BC.

51,709 years later a nascent empire and its pampered press have the impudence to decide that mankinds cultural commonwealth would be so much better if a law was created to prohibit people from copying each other.

There are a few words for the precursory, unbridled cultural intercourse that still remain in the English language, though they are almost obsolete: folksong, folkmusic, folktales, and folklore. These primeval springs are still known to a few among us and can be found seeping through the pre-renaissance foundations upon which our modern culture stands.

Today we have the luxury of looking back over the last three centuries of protection to see how much richer our culture has become, being effectively manacled and enclosed by corporations such as Disney. Permitted the liberty only to create purely original works, albeit with some tolerance for cultural cross contamination (if not too flagrant), we enjoy a far more creative and diverse culture. Or rather, this is what Queen Annes Stationers Guild and its descendant publishing corporations would persuade us is the consequence of her wise enactment of law to protect published works from the grubby hands and mouths of the great unwashed.

Nothing to do with the printers monopolies then

Let us see the historical accident of copyright in perspective:

65,000,000BC Primates
2,000,000BC Homo Erectus
500,000BC Division into Neanderthal & Homo Sapiens
200,000BC Homo Sapiens ancestral basis
140,000BC Glacial retreat after 40,000 year long glacial period
50,000BC Dawn of mankinds culture: language, music, drawing, etc.
32,000BC Cave paintings
30,000BC Neanderthals extinct
20,000BC Glacial retreat after 50,000 year long glacial period
17,000BC Lascaux Cave Paintings
10,000BC Holocene modern epoch
9,000BC Jericho
8,000BC Stonehenge sites significance
3,100BC Stonehenge construction begins
2,611BC First Egyptian Pyramid
753BC Foundation of Rome
300BC Library of Alexandria
48BC Library of Alexandria accidentally destroyed by Julius Caesar
300 Book format outnumbers scroll format
1282 Water powered paper mill
1403 Corporation of London forms Stationers Guild
1440 Development and use of printing press begins
1492 Europeans discover New World
1536 Erasmus dies 750,000 copies of his works sold
1557 Stationers Guild granted control over all printing
1572 Fall of Inca Empire
1695 Stationers Guild loses control upon expiry of the Licensing of the Press Act 1662
1703 Daniel Defoe endorses commercial piracy of his work – if true copies
1709 Queen Anne Establishes the Privilege of Copyright
1787 US Constitution
1790 Madison re-enacts Statute of Anne (tweaked for the US)
1791 Thomas Paine deprecates privileges
1814 Steam powered printing press
1837 Babbage designs Analytical Engine
1937 Relay computers
1943 Valve/Tube computers
1953 Transistor computers
1969 Internet begins with two nodes
1971 Microprocessor computers
1991 World Wide Web begins
2000 The people obtain the means of mass reproduction and communication
2010 The successors to the Stationers Guild seek possession of the Internet via ACTA
2011 Copyright recognised to be ineffective vs the peoples cultural liberty/piracy
2015?? Copyright is reformed to exempt individuals in the digital domain
2020?? Copyright is reformed to exempt individuals
2025?? Copyright is reformed to exempt the digital domain
2030?? Copyright is repealed
2031?? The authors exclusive right to their writings is properly secured at last ethically

Seen in a proper perspective, copyright is a legislative misadventure borne of political expediency and commercial self-interest. It is a hiccup in mankinds history and, in the face of the diffusive nature of information, is coming to an abrupt and natural end.

[…]

read the rest of this epic, classic, brilliant, informative and insightful post here:

http://culturalliberty.org/blog/index.php?id=276

No wonder it was rejected, it is so true it jumps off the screen and knocks you off your chair!

Refuting the attacks on Bitcoin’s design

Friday, June 10th, 2011

Some people believe that the design of Bitcoin is flawed, and that it cannot work. David Kramer is one of them and has made an interesting post over at Lew Rockwell, about Bitcoin. Lets take a look.

I’m sure by now many of you have heard about Bitcoin. The fact that it’s called “virtual currency” gives you an idea about its actual value as a real medium of exchange.

This isn’t true; the only thing that gives you an idea about its value as a medium of exchange is what you can exchange it for. Right now you can trade a bitcoin for 26.141 Federal Reserve Notes. This is the truth about what the value of a Bitcoin is right now.

While many people who are touting it on Facebook are enamored with the fact that it was voluntarily created by the marketplace (i.e., is not forced down our throats by a private central bank), I’m afraid that those people are losing sight of how a real medium of exchange arises in a free market.

Bitcoin was developed as a way to exchange between people in a cash like fashion at a distance, without a central clearing authority. It was created because there is a need for this service, which has been recognised since the days of Dr. David Chaum’s E-Cash.

The people who work on this project were not directed to by anyone, and no one told the man who made the breakthrough that this is what he should be doing. This is yet another example of free people solving problems for themselves, and that is a good thing.

We should point out that Satoshi Nakamoto could have patented this idea but choose not to; instead, he released his idea and the software he wrote to implement it as Open Source, so that everyone everywhere can benefit from his concept. This is a noble act, and it is proper that we recognise this.

A medium of exchange arises from something that had a material use/value in the market prior to becoming a medium of exchange, i.e., it was also a good being bartered for other goods and services. Over the centuries, gold and silver won out as the two most preferred mediums of exchangewith gold holding the number one position due to it being more scarce than silver.

You could argue that the electricity and the CPU cycles that are used to generate bitcoins had a use in the market prior to their use to create a Bitcoin, but we will leave that for today.

Over the centuries, gold and silver have been settled upon as the best medium of exchange by the market, and this is still true today.

Now fast forward to the twentieth century, which is happening right now. How can I transmit gold (or any thing that I and another person want to trade) without double spending, anonymously, to a person that is half way around the world, without a central clearing authority? Before Bitcoin, this was not possible, and now it is.

Bitcoin, whilst not conforming strictly to the definition of what money is, is a very useful tool to exchange value. It takes some understanding and knowledge of mathematics to grasp exactly how it works and why it is so brilliant, but even without that knowledge, it can still be used by everyone eventually.

Mr. Kramer can use email to send and receive messages without understanding SMTP or POP syntax. He can write blog posts without understanding HTTP requests or MYSQL, and most certainly he will be able to use credit cards and buy books from Amazon whilst his transaction is protected by SSL. None of these things, these very complicated things, need to be understood fully before you can grasp their importance. SSL, upon which the entire commerce infrastructure is built, is nothing like putting a paper document in an envelope to be mailed by the government monopoly postal system and yet, it is used every day to secure documents in transit. PGP and Public Key Cryptography is used every day to sign documents in a way that means they cannot be forged; signing a document with Public Key Cryptography is not the same as putting your ‘John Hancock’ on a piece of paper, but it is a quantum leap in a different direction that has uses way beyond what signing a piece of paper can do for you.

This is what Bitcoin is all about; it is a breakthrough in sending and receiving acknowledgement of ownership.

Anyone who scoffs at this is simply not seeing the big picture.

What was Bitcoin’s prior material use/value? Zero. It is just bits in a computer.

This is a straw man argument. David Kramer’s post, and the two links in his update to Murray Rothbard’s books (one of which I have read; ‘What has Government done to our money?‘) are just ‘bits in a computer’ and yet, these bits can be used to transform the thinking of men. Bitcoins when they are stored on a device, are represented by bits, but it is what those bits represent and their relationship to other bits on other people’s computers that is important. This line of Kramer’s shows that he really does not understand what computers are, how they work and why Bitcoin is a breakthrough.

And what’s with the “fixed” amount of Bitcoins? Who determined the “proper” amount? A computer programmer?

And why not a computer programmer? This is exactly the same asLacy Clay saying Thomas DiLorenzo cannot talk about economics ‘because he is an historian’. For what reason are computer programmers excluded from inventing something that has a potential use in economics? Or should this be left only to the high priests? This is not a serious argument against the design of Bitcoin. Clearly there needed to be an upper limit to the number of Bitcoins in circulation, otherwise it would not be useful as a way of transmitting ‘money’. The person who designed Bitcoin, a computer programmer, set the upper limit. If the market will not accept this limit, then the system will not be used. But I digress.

Data is infinitely copyable. There is no limit to the number of times data can be copied. This means that any token in a system of exchange can be copied at will by anyone with access to the system at any level. This is where the problem of double spending comes from, and part of the breakthrough in Bitcoin is the solution to this problem, which computer programmers have been searching for for decades.

When you have even a slight grasp of how data and computers work, and you understand that the double spending problem has been solved, your first reaction would be to gasp, as the enormity of what Bitcoin is dawns on you.

Only the free market can voluntarily determine how much of a real medium of exchange is needed in the marketplace over time.

This is true, but once again, this has nothing to do with Bitcoin. By releasing Bitcoins slowly over time, by the efforts of the people who use it, there can never be a flood of Bitcoins. Satoshi Nakamoto must have grasped on some level, if not entirely, that money is a commodity, which is why he designed Bitcoin to be mined in this way, instead of starting off with 21,000,000 coins in circulation all at once. All we know about his thinking is what we see in his software and in his original proposal. We have between now and 2142 to see what the market voluntarily determines how much of a real medium of exchange Bitcoin is, and if the number of bitcoins is too small or too big. Whatever the outcome, there is nothing stopping someone else with another system from supplanting or improving on Bitcoin, by whatever means they can come up with.

While the idea of attempting to get rid of the Bankster monopoly on creating money out of thin air is commendable, Bitcoin is also money created out of thin air. Bitcoin is just substituting one bogus medium of exchange for another.

http://www.lewrockwell.com/blog/lewrw/archives/89471.html

Declaring Bitcoin to be ‘Just Another Bogus Medium of Exchange’ is not an argument and is clearly false. It is also not true that Bitcoins are created ‘out of thin air’. Bitcoin is new and unique, and that is a fact; even if you believe it to be bogus, you have to demonstrate why it is bogus.

If you want to refute Bitcoin (or anything for that matter) you have to address the facts about it. Here is an example of someone who has done precisely that.

Tav addresses how Bitcoin works, acknowledges its breakthrough, demonstrates an understanding of economics, identifies what he believes the specific flaws in Bitcoin are, and explains why he concludes it cannot work, clearly and with precision. Here is another critique and another by the same author.

If you want to contribute something meaningful and useful that is the way to do it. There are arguments swirling around the ‘hoarding problem’; it would be nice to read a good analysis of hoarding and how it applies to real money like gold and silver, and how those dynamics apply to Bitcoin. In any case, I don’t care much for people who refuse to think hard about subjects like Bitcoin; something that is voluntary, harmless, an exiting breakthrough and which has massive potential even if in this iteration, it fails.

We have seen the failure of other systems, like Chaumian E-Cash before. Each of these iterations causes analysis, innovation and new products to emerge. This is something to celebrate, to think hard about, to address with logic and facts and indeed, to even try out on your own computer so that you actually have a grasp of what is involved in it.

Finally, whatever happens with Bitcoin, the individual wins.

If Bitcoin becomes the de-facto way of spending money on the internet, displacing all other systems like Credit Cards and PayPal, the public wins, and the State loses. That is win.

If Bitcoin fails because the State outlaws it, hatred for the State increases. That is win.

If Bitcoin fails for economic reasons, it will not be tried again in this form and the lessons learned will be folded into the next iteration. That is win.

If Bitcoin fails for technical reasons, same again, the lessons learned will be used in the next iteration, which is win.

Whatever way you choose to look at it, Bitcoin is a good thing.

+++++++ UPDATE! +++++++

In a well considered article, which I linked to above, “BitCoins: All Buzz, No Substance” by Grant Babcock, the problems with Bitcoin as perceived by the author are addressed. In listing his objections to Bitcoin, he actually argues for it. Lets take a look.

A given goods exchange value has a tendency to snowball.

This is happening with Bitcoin right now.

If I believe that a larger number of people are willing to trade for a good, I am more willing to trade for that good myself.

This is happening right now with Bitcoin.

Eventually, we expect a single good or a handful of goods to emerge as the predominant media of exchange; they are then called monies.

This may happen with Bitcoin on the internet. If enough people download the client and accept it, and websites use the simple tools needed to accept it, we can expect it to emerge as a form of money. Bitcoins, by Grant’s own reasoning, are no different to coconuts, feathers, tally sticks or cowrie shells.

Historically, goods such as cigarettes, precious metals, shells, and many others have emerged as monies.

And so why not digital certificates that cannot be forged or ‘printed’ (mined or generated) beyond a certain number (21,000,000)?

Peoples willingness to treat an item as money is based on experience. They forecast that a good will be accepted in trade tomorrow because it was accepted in trade the day before and the day before that.

And so, if enough people accept Bitcoins, they will treat it as money de-facto by this definition.

If we follow this chain back in time, eventually we arrive at a point where the commodity is has not yet been used as a medium of exchange and is only wanted for its use value.

This is true of Bitcoins; digital certificates and signatures have been around for many years; they were never before thought of as money in and of themselves (though you can buy certificates for money; ask Mark Shuttleworth about how he became a billionaire by selling ‘just bits on a computer’).

The principle that the value of a currency can be traced back to a time when it was not yet a currency but just a commodity like any other is called the regression theorem, and interested parties can read more about it in Human Action Ch 17 4.

If you do not like tracing Bitcoins back to digital certificates, you could trace them back to the electricity used to make them. Or is electricity not a commodity because it is not physical? It is intangible, but is transmissible… hmmmm!

Typically once a commodity becomes a money, a variety of certification agencies will emerge.

Bitcoin has this, of course, in the form of its decentralized P2P clients. That is the breakthrough; no centralised certification agency.

Suppose for example that our money is gold examples of certification might be an imprint on a gold coin stating its weight and where it was minted, or a piece of paper entitling the bearer to a certain amount of gold at a trusted repository.

A stamp on a bar of gold is meaningless, as we have seen with the tungsten centered fake gold bars. Bitcoin, in this respect, is superior to gold because each Bitcoin is absolutely certified.

This certification makes the commodity an even better money than it would have been without the certification. The certification is bundled with the commodity and traded, but is in principle distinct; the coin and the stamp in the coin are different things.

Indeed. As you can see, all the arguments presented here for gold as money, apply to Bitcoins as money.

Just as the computers and the internet changed the way letters and books are made and distributed and read, money is being changed in the same way.

This means that if you want to read a physical book, you still have to go out an buy one, or have it posted to you. If you want money in the real world, you should use gold and silver coins only.

If you want to read a book on your iPad, you get a PDF copy from somewhere on the internet, and then read it on your device. This does not mean that ‘PDFs are not books’ and no one with any sense says this. PDFs are for e-readers. That is their nature, its what they are for and the medium where they make sense is the computer.

If you want to send money to your cousin in Jodhpur, you take your gold coins to a shop in Manchester, turn them into Bitcoins and then send them. Your cousin can then turn them back into gold, or he can buy goods and services with them on the internet. Bitcoins are to money as PDFs are to books. Its not hard to understand, and the wow factor comes in when you understand that whilst PDFs can be copied ‘double spent’ ad infinitum, Bitcoins cannot, even though they are both digital.

That is simply incredible and its why everyone is so exited about them. Add to the mix the anonymity, the lack of central authority, the transparency in both the client software and the network, and you begin to see just what a revolution this is any why the word ‘revolution’ is appropriate.

Finally read this excellent analysis of gold vs Bitcoin by Anthony Freeman.

Chinese translation of this article.

At long last, it has dawned on them

Thursday, June 2nd, 2011

Thanks to Old Holborn, we just read this breathtakingly wonderful piece. It says many of the things we have been going on about for years:

  • Demonstrations do not work
  • The State has no right to control you
  • The State has no power to control you unless you consent
  • StopWar and the like just don’t get it
  • Doing nothing is better than marching
  • If everyone simply stops cooperating, the State dies
  • Only a small percentage of the population needs to quit the system for massive beneficial change to take place

You read BLOGDIAL, so you know what I am talking about.

This piece comes from TPUC. We really are heading for a significant tipping point, where a confluence of factors is going to unleash everyone. This will be a good thing, because Britain is full of locked up potential that if released, would transform the entire world.

Here it is, in full:

A direct challenge to the authority of the State

by bogbeagle Mon May 30, 2011 8:54 am

Hi chaps. Haven’t posted here for some time, but I’d like to introduce to you a new “strategy” which has potential … well, I think so.

It’s a pretty long post, but I’d ask you to persevere and tell me whether you think the logic of my argument is sound. And, is my proposal sound?

Let me precis … I propose that we can demand, of government, the answer to an “impossible” question. That, if asked publicly, this question is sufficient to undermine the “assumed authority” of government.

A refutal of Government’ authority

I’ve always been told that I am “governed and taxed by consent”.

And, when you think about it, this must be true.

It stems, of course, from the Christian’ idea that we are each born free and of equal worth. Now, if two people are equals, it follows that one may not direct the other, nor impose his will upon that other, except with the consent of both parties. When no such consent is present, it must be the case that one ‘man’ is imposing his will by force, or the threat of force. In effect, that would mean that one ‘man’ has enslaved the other to his bidding.

So, to avoid that accusation, Western governments have invented the idea of “consensual governance” … wherein each of the governed agrees to abide by the rules, sanctions and taxes which are laid down by “Government”.

There is little doubt that this relationship serves many people adequately. It’s also true that few people ever question its validity; that’s why we are known as “sheeple”, I guess.

Logically, if I am “governed and taxed by my consent”, there absolutely must be a mechanism by which that consent may be withdrawn. If no such mechanism exists, then the concept of “consensual governance” is clearly untrue; I would be governed without my consent and thus be a slave to the will of other men. There are parallels with the slave-owning society of the C18th, if you’ll just ponder awhile.

A strategy

My strategy has two prongs:

1 … A concerted and public demand that the “Government” inform me of the mechanism by which I may withdraw my consent to its governance. If no such mechanism exists, then said “Government” should state that I am, in fact, its slave. I would, in effect, be challeinging the Government’s “lawful authority” to govern.

2 … An attempt to unify the disparate campaigning and lobbying groups, each of which is hindered by the same, fundamental, deficit. That is, each group is suffering a deficit in Liberty. If the members of the “stop-the-war” group can be shown that their cause is the SAME as that of the “I-want-to-smoke-weed” group, then the number of those who would live as Free people, will swell; and at some point, their mass will become critical.

OK, the first prong involves a direct challenge to government itself. Traditionally, those who would be Freemen, have sent off their affidavits and been thoroughly ignored … am I right? Well, that’s the treatment that I received, anyway.

This time, we must act in concert and very publicly. But, this will not involve travel or mass demonstrations, or confrontation. No, I suggest that we use the Royal Mail and the Internet (our best friend).

I propose that, en masse, we flood the PM and our MPs with demands (recorded delivery) that they tell us how we withdraw our consent to governance. Of course, they cannot truthfully reply, since their reply must either tell us that we are enslaved OR furnish us with the freedom to opt out of the State. I’ve thought about this for quite some time now, and I’m confident that any and all answers, which they might construct, ultimately lead to the same truths … we are enslaved. The thing is, we have to force them to admit it or else retire embarrassed and blustering. The facts of this strategy should motivate thousands more people to question their status within the community. Now, I do expect that 90% of the public could not give a toss, but if just one percent sit up and take notice … well, that’s 650,000 people.

Running in tandem with this mass “interrogation”, would be our internet campaign to promote the concept. This will be largely via the alternative media (we all know the value of the MSM, by now). I’m thinking of numerous campaigning websites, Zerohedge, Max Keiser, Adam vs the Man, Freedomain Radio, Alex Jones … you get the idea. We have to put the PM and our MPs in a position such that a refusal to comply with our demands is simply untenable … they will then be forced to bullshit. They’ve no other option, because they DARE NOT speak the truth of the matter. We, of course, anticipating the bullshit answers, will have raised and dismissed them, publicly, before the politicians have even uttered them.

As to the unification of campaigning groups. Let me give you an exemplar. I’m sure that it’s obvious to you that a Free man of good conscience would not support an unjust war. But, that’s exactly what we are forced to do, via taxation. And, “forced” is the right word to use.

It serves the ends of the peace campaigner to withdraw his consent to taxation, when the money is being used for evil ends.

So, too, with the campaigner who wants to smoke his weed (or whatever). As a Free man, it is clear that the State has no business in defining what substances he may ingest. And yet, the State assumes de facto ownership over his body by compelling him to ingest only that which the State deems acceptable.

Each of these two campaigners is suffering from a common deficit .. a Liberty deficit.

I don’t know whether it’s possible to make that case to them. I don’t know whether their other concerns will over-ride my arguments. It could be that the peace campaigner also wants to have the State extort money from other people and give it to him in the form of benefits. If that’s the case, then it’s a clear example of “having your cake and eating it”, since it is impossible to have your own Liberty whilst denying it to others … except by the use of force. Well, that’s a moral dilemma for them to ponder. I’d suggest that you’ve no business in labelling yourself “peace campaigner” whilst encouraging the State to extort money from others, on your behalf. But that’s just me!

In passing, I feel that it’s important to avoid confrontation with the executive arm of the State. Our campaign should be one of ideas. The State is well prepared to fight a campaign of riots and bottles, but woefully unable to challenge logic. How can it challenge the Truth?

Now, I don’t know where this might lead. It could be another dead-end. But, I think that the logic is unassailable. What is your opinion?

——-

My opinion is that you rock, you are 10000% correct, and if this takes off, you will have pushed the button.

Ethics-Ra vs Moralzilla in the Sausage Factory

Wednesday, June 1st, 2011

We return to the subject of health and rights.

There exist many groups with well-intentioned wishes to provide assistanceon a global basisto people they classify as ‘less fortunate’ or ‘undeveloped’. These groups actively lobby for certain global health policies which fit with their own, morally-defined and often colonialist world-view.. The list of these groups is endless (start with WHO, UNICEF, UN-Women, DFID, WHA, UNDP, World Bank…. and go from there).

These groups are lobbying, with much success, for policies such as the global fortification of flour and iodination of salt. They promote lifestyle interventions in developed and developing nations (often without any strategic input from representatives of these nations; hence the new colonialism), are demanding global regulation of the food industry (reducing salt, sugar, restricting advertising, banning trans fats and so on), banning alcohol adverts and demanding punitive taxes, and are pushing very hard to achieve a reduction to <5% of global population as smokers in the next 5-10 years through similarly aggressive measures against the tobacco industry.

These policies are listed here, albeit briefly, so that you may think of how one may go about trying to implement one of these policies globally. First the policy process is developed in various agencies (over several years minimum), lobbied for through more agencies, pushed at sub-UN (e.g. WHO, WHA) and then at UN level meetings and finally adopted as a global UN Treaty and implemented on the ground by those countries who choose to ratify the UN declaration. Implementation occurs even if this means changing local law, as has been done with tobacco use in public places (see the FCTC). This entire process costs unimaginable sums of money… and the point here is to remember from where exactly that money comes.

There is now an enormous political push for global public health governance (you can see here that this idea reached UN level many years ago, with sponsored publications from 2002. Nota bene the direct links with trade/economics). The prospect has spawned a whole research field, with institutes and conferences to boot!

This push will of course necessitate the setup of yet another organisation to coordinate research, implementation and monitoring of policy. However, these global bodies are always skint, and member nations are failing to keep up their UN subscriptions. But this little fact does not put off those interested (and self-interested) parties, oh no! And why not? Because they all know that there is a vast source of money out there which can be accessed if only they can persuade the other politicians (since at this level the interested parties are all represented by politicians, no matter their previous or current professional background) to squeeze it just a little harder. That source is the taxpayer. And in global policy, that means every taxpayer, everywhere.

It can be concluded, from directly witnessing these types of discussions, that the main reason why the implementation of global policy (and of global public healthcare policy in particular) is taken so incredibly seriously, is that the population is considered to exist for, and is amenable to, behavioural modification and exploitation as these global bodies see fit: ALWAYS in regard to ECONOMIC GROWTH. The only way a policy, medical or otherwise, will be approved at UN level is if it is sold to politicians as a driver of economic growth or in terms of improving human productivity and life-years at productive age.

The terms used at this level to describe people are dehumanising, indicative of the single value of a plebian life only in terms of contribution to economic growth. Its contribution to the economy is far more important in driving policy than any consideration of humanitarian or ethical concerns. There are, of course, interest groups which deal in ethics, such as the Nuffield Council on BioEthics in the United Kingdom. They advise political groups and others, with the aim of acting as an honest broker of information. As such they have, for example, developed a ladder of intervention. One may describe the ladder as running from Libertarian at the bottom to Dictatorial (or UN Treaty) at the top. These people, some of whom I know, deal in ethics, yet it is hard to be clear whether they act pragmatically rather than ethically, exhibiting an apparent requirement to demonstrate their own relevance to politics and policy-shaping.

Whatever, a mere digression. Returning to a coordinated global health policy, implemented from on high, the major problem is that these things cost money.

Most existing and future local (national) tax has been promised to The Bankers to compensate them for all the losses they incurred in their private businesses while exploiting the public purse. The children and grandchildren of two continents are already beholden to as-yet unborn Bankers, indentured slaves who will grow up knowing no other life, unless they find a red pill.

So the only way a new global public health policy will be implemented and it will be implemented, and it will not be the only policy implemented in this way – is through new, global taxes. Global Government developing and implementing Global Policy funded by Global Taxes extorted by the same Global Government. Are you paying attention yet?

There will soon be a global Tobin Tax on financial transactions, although this is likely to be inconsequential and serves as window-dressing to convince the workforce that The Rich Suffer Too.

Other revenue streams under serious consideration are a global tax on aeroplane tickets, and one on internet service providers (suggested by Sarkozy, who now also wants more internet regulation). Of couse, a new global body will be needed to manage and monitor these taxes… you can see where this leads. At least, youd better see!

Finally, if we manage to hold down our rising bile, suspend our disbelief and assume that there is indeed a humanitarian drive behind many global policies, we may return briefly to Ethics and Morals. Is it ethical to extort money, however morally correct the purpose to which that money is put? Is it ethical to eliminate choice or otherwise intervene and thereby punish by restricting the liberty of even one person in order to benefit your own moral judgement of what is good for the majority? Is it ethical to impose, by force, your own moral judgement on others? In the reality of global politics, the answer to all these questions is a resounding YES.

The reason is because these questions are all filtered through the screen of greed-based economics. Thus we see the question as Is it ethical to impose, by force, your own moral judgements on others, if that judgement leads to economic growth (and, by default, increased upward flow of wealth)? In the sausage factory there are no ethics, there are no morals, there is only money.

Right to rights!

Wednesday, June 1st, 2011

Rights, like sausages, cease to inspire respect in proportion as we know how they are made.

Apologies toJohn Godfrey Saxe

New rights are being shaped and squeezed, like sausages, from so much mechanically recovered political mincemeat. The difference between a right and a good is not a difficult concept. However, the sound ethical concepts underpinning the definition of true rights are sidelined in favour of political expediency and the generation of political power with new rights generated and promoted, with horrendous irony, under the guise of more power for individuals. In literal and ethical fact, the only real rights are those which apply to property in all its forms, and from which stem all personal liberties. Yet, and particularly among the politically educated, this fact does not prevent the rapid expansion in what are, in reality, goods at best and often little more than nonsensical, illogical restrictions on liberty.

Recently I have heard many promotions of the Right to Health (rather than to healthcare, which while also an idiotic statement, is at least a clearly demonstrable good… and to which you obviously have no right). Of course, we know what morally smug do-gooders mean when they invoke the Right to Health, but it is plainly as ridiculous a concept as the Right to A Pretty Face, or for that matter the Right to Food. Even if, for arguments sake, we consider Health as a good, then it is personal property; your Health (good or bad) belongs to you. Moreover, since you cannot sell your health, then it is an inalienable part of your Self, and encompassed under the first principle of the Right to Self-ownership (a true, valid, property right). Even though you may sell or donate access to your body for scientific or other purposes your health, being an inalienable part of your self, cannot be extracted and sold as a seperate entity.

In the same set of discussions, at WHO / UN level meetings, other rights mentioned included the Right to the Best Start in Life seriously! Which is what exactly? $10 million in a trust fund, crib at the Ritz and Gucci nappies? Who exactly judges what is best? As is plain to see, any discussion of new rights is nothing more than a hotbed of meddling, idealistic idiocy.

More timely at present due to men in wigs upholding an assinine law made on the fly to appease men on the take, and also due to Twitter caving, are the Right to Privacy and Right to Know. Both of these rights pertain to knowledge, which is essentially and ultimately a good, not a right. In the context of news stories about corporate whores, media whores and whoring whores and the abuse of law (superinjuctions) the two rights are tightly linked.

Consider a married-with-children man, lets call him Ryan Giggs, who decides to accept the oportunity (howsoever it arises) to fuck a media whore. The Mhore then directly gains, through application of her talents (use of her labour), certain knowledge about Mr Giggs preferences about which he would not wish his family to become aware. That knowledge has a value in our society, to newspapers and other media – these agencies believe the public has a ‘right to know’ how Mr Giggs likes his ladies to perform. The knowledge also has value to Mr Giggs, who presumably believes the public has no right to know, but unfortunately for him blackmail is illegal here. Were it not, our Mhore could approach Mr Giggs and offer to keep silent in exchange for money. They would enter a contract agreeable to both, and both parties would be happy. Mr Giggs is protected against further extortion as he has a contractual agreement on the value of the knowledge into which his Mhore has freely entered. Should she break this and sell the knowledge to the media anyway, she could be rightly and justly punished for breach of contract (property law). However, blackmail is illegal primarily to protect the rich, and prevents people from rightfully exploiting their property (knowledge) as they see fit. In this clearly ridiculous situation, our Mhore is obliged to realise the value of her knowledge (it is property, she owns it) on the market with the consequence that lawyers get rich, laws are abused and everyone finds out about it anyway.

For a comprehensive explanation of the ethical basis for selling knowledge, and why blackmail is an infringement on your liberty, see Rothbard. See Rothbard anyway. See it all. And when you next come across a new right, you will see it being squeezed, turd-like, from the ludicrous, self-serving, logic-mincing arsehole/machine that is global politics.

The Hargreaves report on intellectual property: full text

Tuesday, May 17th, 2011

The Hargreaves report on intellectual property recommends setting up a ‘digital exchange’ for the clearance of copyright. Here is the full text of the report, broken into chapters served as PDFs. You are free to copy them and distribute them at will.

Chapter 1: Introduction
Chapter 2: Creation Under Competition
Chapter 3: How Competition Works
Chapter 4: Innovation Without Patents
Chapter 5: The Intellectual Monopoly Apologists
Chapter 6: The Evil of Intellectual Monopoly
Chapter 7: The Devil in Disney
Chapter 8: Does Intellectual Monopoly Increase Innovation?
Chapter 9: The Pharmaceutical Industry
Chapter 10: The Bad, the Good, and the Ugly

Its about time that the state has the power to violently prevent you from exercising your property rights removed from it.

In the UK, it is illegal to make a copy of a CD you own for your own use. That is completely immoral; if you own a CD it is your right to copy it, destroy it, lend it or do anything else you like with it.

If you concede that the state is legitimate in telling you that you cannot make a copy (rip a CD to MP3s) then you must also concede that you should be forbidden from destroying a CD, if the maker of that CD demands that you do not do that.

This is how absurd the copyright laws are.

There are companies in the USA that specialise in ripping your CD collection for you.

You send them your CDS, and in a matter of days, you get your CDs back along with a DVDR of MP3s containing rips of all your tracks. These companies, the service they provide and the benefits they produce cannot happen in the UK, thanks to its absurd statutes.

The Hargreaves Report will sweep all of this away in one motion. Its recommendations on patents will result in cheaper drugs and medical care for everyone, making the beloved NHS more cost effective; if you love the NHS, you should hate patents.

There is only one problem with all of this, naturally, and as soon as you read the Hargreaves Report linked above, you will instantly know what it is.

Finally, if you want to attract business to this ridiculous ‘Silicon Roundabout’ push, persuading businesses to locate to Britain, you must remove all the barriers to entry that people recoil from, like punitive non-dom regulations and other absurd anti business nonsense, of the kind that Google say would have prevented them from starting their business in the UK.

I guarantee you that there are companies, right now, that are starting up that shun Britain because it is anti business, and that there are companies in development here that once they start to fly, will fly away from Britain in order to avoid being bogged down by the entrenched anti business climate. Skype was based in Estonia for a reason.

Think about it.

Analysing the Anonymous ‘Open Letter to the Citizens of the United States of America’

Thursday, March 24th, 2011

That acephalous, elusive, networked, autonomous, intelligent and revolutionary construct Anonymous, has published a statement called “An Open Letter to the Citizens of the United States of America”, wherein they demonstrate that Anonymous is rapidly iterating towards Libertarianism.

They have a few more cycles to go however.

We have written about Anonymous before; it is interesting because it is a fulfilment of the prescient observations of Jean Baudrillard, with his assertion that there is a “mass”, with characteristics closely matching what Anonymous is and how it reacts to stimuli.

This statement is significant not only because it demonstrates that Anonymous is moving towards the locus of Libertarianism, it is also interesting in the type of thinking displayed at this iteration; Anonymous clearly understands far more than previous generations, but it is still hampered by some fundamental illusions, misconceptions and illogic, and this has prevented it from coming up with a coherent statement.

Anonymous has lofty goals. It clearly, explicitly, is seeking Natural Rights. This is a very specific goal, and one that is not compatible with some of the goals listed at the end of the statement.

Thankfully, Anonymous is full of highly intelligent, computer literate people who, once exposed to the truth, accept it as the truth, just as computer programmers must accept the syntax of a language if they are to use it, and mathematicians must accept that 1+1=2.

Let us parse through this announcement, correcting it and analysing as we go along…

Dear us citizens,

The people who live on the ‘North American Continent’ are human beings; they are not citizens or slaves of the United States Government, living in farms like cattle. It is crucial, when attacking these problems, that the persons thinking about them understand what human beings are, and what their true relationship to government and other human beings is.

Human beings are not the property of other human beings. They are individuals with inherent rights that do not come from government. Being ‘born a US citizen‘ is tantamount to being born into slavery. Anyone who wants Natural Rights for themselves rejects the idea of being born a citizen, of any state, no matter what it is called, or how that state came to be.

We, Anonymous would like to offer you, America, the opportunity to join and support our movement.

This offer cannot be made to ‘America’. It can only be made to the individuals who happen to live in what has come to be called ‘America’.

We are a group that formed on the internet – one that knows no constructs or absolutes, and one that has recently grown exponentially.

There most certainly are absolutes. There is right and wrong; stealing is wrong, for example. There are constructs also; Natural Rights is one of them. You cannot on the one hand, say that there are no absolutes or constructs, and then on the other, call for Natural Rights.

We would like to introduce an Operation. An Operation that involves Americans getting our Natural Rights and dreams back.

Your Natural Rights cannot be taken away from you. They can only be denied expression. For example, the property rights you have in paper can be denied to you if you choose to write an essay or print instructions that the state determines that you may not distribute. You have the absolute right, at all times, to own and publish; the state merely uses violence to stop you from exercising that right.

Right now, you can help by passing on the Information. Information is power. Share the power of the Information with other like minded individuals. The more people we represent, the more Power we have, both as individuals and as Anonymous. Thank you for your time and power.

I would suggest that information, that is true, needs to be shared between the like minded and the yet to be like minded.

CITIZENS OF THE UNITED STATES OF AMERICA

Many events have taken shape over the course of only a few years, and slowly our system has been working towards the gains of itself rather than the gains of the people.

It is completely wrong to characterise the State as ‘our system‘. It never was, is not, and never will be ‘our system’. Even if it were to become some sort of collectively owned, internet mediated Communist Utopia, this is completely contrary to Natural Rights.

The State does not work towards the gains of itself; it is not a living entity with its own goals, separate from those at the levers of the controls. The State is the violent apparatus through which a small number of people (who are indistinguishable from Mafia gangsters save in scale), rob, steal murder and destroy for their own personal gain.

Before you try and understand any of the problems facing free people, it is essential that you understand the true nature of the source of the trouble; the State. It is also crucial, when trying to describe this problem, to not use collective pronouns when talking about it. It is not ‘our taxes’ or ‘our schools’ or ‘our government’. These things are the property of the State. You do not own them, do not control them, and should not refer to them with a collective pronoun. Ever.

While we have all watched and rallied against the system working against us, there have been other gains of the system that have gone without a peep as back-room deals and and bargaining allow for the passing of legislation and research funding that has resulted in the loss of more liberties such as censorship, phone and internet surveillance and eminent domain laws.

There is nothing wrong, in principle, with back-room deals. This message from Anonymous was, no doubt, written in such a back-room fashion; in private as it were. The assumption here is that the State is legitimate in principle, and that if its dealings were done in the light of day, this would ameliorate the problems faced by the human beings living under them. This is completely incorrect; the State is not legitimate, and wether or not its laws, deals and strictures are negotiated in public or private is immaterial to this fact.

Research ‘funding’ is of course, stolen loot redirected to corrupt scientists and crony capitalists. Censorship is the violent curtailing of property rights in paper, CD ROMS servers and bandwidth. Surveillance is a similar violation to censorship, since it involves interfering with private property to carry it out. Eminent domain is simple theft.

All of these violations have one thing in common; they all come from the State. When you peel away the layers of illogic, groupthink and brainwashing, the State emerges as the common enemy and problem behind all the usurpations, violence and evil that Anonymous opposes.

Not to mention the higher taxes, lower wages, and loss of work due to exports deals.

Taxation is violent theft by the State. Wages are a private contract between two people or a person and a company. You cannot on the one hand, call for Natural Rights, and then in the same breath, call for the violent State to guarantee you high wages by threatening violence to those who provide jobs. This is pure illogic.

Loss of work, in every form save natural disasters and entrepreneurial miscalculation, is caused by the State and its distortion of economic activity through its minimum wage laws right up to the Federal Reserve, fiat currencies, legal tender laws and monopoly on setting interest rates. Anonymous seems to understand this partially, as ‘End the Fed‘ is high up on its list of priorities, but you cannot call for the end of the Federal Reserve system, and then say that the State should guarantee wages or interfere in economics. There is some confusion here, that will hopefully be cleared away in the next iteration.

We repeat the history of our mistakes instead of evolving our society.

There is no ‘we’ in any of this, only individuals with Natural Rights. There are no collective mistakes, and there is no ‘our society’, collectively owned by everyone. These are collectivist brainwashing terms, used to prevent people from understanding the true nature of the problem by stopping them from identifying the State as the cause of all problems.

Generations in the past spoke of what we face as current issues, the only difference being that of our technological achievements. We have forgotten such words our society has found guidance and value in:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

This is very problematic for anyone who wants to exercise their Natural Rights. The pursuit of happiness is not a right, and rights are not secured by or granted by government. The State cannot derive power from the governed; this is a fallacy. The State cannot do things that individuals cannot do, and cannot be ceded powers that individuals do not have. You cannot, by dint of a vote, cede the power to steal, murder and destroy to the State, because you do not have that power yourself.

The declaration of independence is a beautiful document, no doubt about it, but it is fundamentally flawed in its outlining of what rights are and where they come from, and what makes government legitimate.

No one has a right to institute a government that controls people who do not consent to be governed by it, no matter how it is formed. This document can only lead to tyranny, and that is exactly what has come to pass; a monolithic Federal Government that murders at will, like an out of control monster.

This document, and its ideas should be rejected by all people who desire the expression of their Natural Rights, for as soon as you accept its principles, you are on the way down a slippery slope to despotism, theft and every vile thing that decent people loathe today.

“In the past few months, Anonymous has made headlines through the actions of a few. The media tries to instill fear of which Anonymous is as a “group”, and in the process failed to recognize it as an “ideal” that is gaining momentum.

Ideals are good, as long as their foundation is sound.

Anonymous is an ideal that the people can use to further help other people.

People helping other people is good. Voluntarism and Natural Rights is the key to prosperity. Statism, collectivism and coercion are pure evil and should be rejected by all decent people.

In this case, you’re not being heard and transparency in government operations is non-existent in many matters.

Once again, if someone is stealing from you right in front of your face, transparently, it is still immoral theft. The fact that theft is hidden or not is not material. The meme of ‘Transparency‘ is Statist brainwashing designed to keep you from coming to the conclusion that the State itself is illegitimate. There are many such brainwashing terms, ‘have your say‘, ‘transparency’, ‘accountability’ – all of these are patent nonsense. If you are having your money stolen from you, and you have your say in where it goes to any extent, this does not mean that you have not been violated by theft. If the money that was stolen from you was accounted to you, i.e. “we stole 58% of your pay-check this year”, this does not erase the immorality contained in the fact that money has been stolen from you through violence.

All of this brainwashing must be eradicated and the actions of the State put into their proper context, if you are to attack this problem correctly.

Mobilize yourself to find your information, and we’ll be giving you resources to further help you. Take the information you find and tell your government your demands.

It is not ‘your government’. You have no right to demand that the State take its stolen money and do your bidding.

We want AMERICANS to wake up! We want AMERICANS to read! We want AMERICANS to think,and above all question all things! We want AMERICANS to analyze, criticize, critique and learn to read between the lines, to expose and to deconstruct! We want you to believe in the infinite power of the people! We want you to learn that we’re all truly brothers and sisters in humanity regardless of all the artificial barriers that have been set up to separate us!

Waking up is a good thing, but make sure that you wake all the way up and not just half way, like in Inception.

If you are going to read, read Murray Rothbard’s Libertarian Manifesto as a starting point to your complete awakening. Its easy to read and understand, and after you have read it, you will never think about government and rights in the same way again.

It is crucial to question all things, but you must make sure that you really are questioning from the correct frame of reference, and not inside a box provided for you by the State and its brainwashing schools.

“Think For Yourself, Question Authority” -Timothy Leary

Reject authority, end the State.

Inform. Educate. Guide. Evolve. Wake up the People. The time for the next step in our species’ social evolution has come!

Social evolution is nonsense. Man has one nature and one nature only. The people who call for social evolution are of the same ilk as the Fabian Socialists, who want to destroy the family and recast populations into inhuman morasses of degradation and total control.

To effectively reform the system that has enslaved us, we must consider following the advice and

The system cannot be reformed, because it is fundamentally flawed and immoral. Government cannot draw legitimacy from the people; this is a lie, and anyone that understands Natural Rights already knows this.

example of those who have preceded us. Thomas Jefferson, Andrew Jackson, Abraham Lincoln, Teddy Roosevelt, and JFK are good places to start.

Abraham Lincoln was a monster, and should only be held up as such.
Teddy Roosevelt was pure evil.
JFK gave us the NASA moon landing.

All of this thinking is the result of brainwashing in government schools, especially the nauseating worship of Abraham Lincoln.

All took fierce positions against central banking, government corruption and corporate power.

This simply is not the whole story, and as you move towards the Libertarian position, the great historians who are Libertarians will dispel many myths for you. JFK through executive order 11110 tried to attack the criminal and fraudulent Federal Reserve System directly, and some say, this is why he was executed. Andrew Jackson put pay to The United States Bank that took root in the USA.

Finally, for the record, the moon project of John F Kennedy was a boondoggle where billions of stolen dollars were diverted to corporations to build the systems for NASA, for example. That is government corruption and corporate power writ large.

Americans and many other people are steeped in the myths dogmas and untruths found in the religion of the State. They accept as fact its assertions and its telling of history as related in its government schools, and it was very difficult before the internet to break through and get at the truth of it all. Now there is no excuse. You have the internet, you have the ability to read and can reason. You have no choice but to accept the world as it actually is.

The time has come for us to unite, the time has come for us to stand up and fight! You are Anonymous!

We are in the information era.
We are Anonymous,
We are Legion,
We do not forget,
We do not forgive,
Expect us.

For great justice.

Below: Grievances and demands
A starting point for reform could be established by citing a list of worthy objectives provided by ampedstatus.com;

These objectives are contradictory, based on violence, and stem from a fundamental misunderstanding of what rights are and where they come from.

Enforce RICO Laws

RICO Laws are illegitimate:

Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes27 federal crimes and 8 state crimeswithin a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all moniesand interest in any business gained through a pattern of “racketeering activity.” RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect triple damages.

It has been speculated that the name and acronym were selected in a sly reference to the movie Little Caesar, which featured a notorious gangster named Rico. The original drafter of the bill, G. Robert Blakey, refused to confirm or deny this.[1] G. Robert Blakey remains an expert on RICO;[2] his former student Michael Goldsmith also gained a reputation as one of the nation’s leading RICO experts.[3]

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

And they are a perfect example of the illegitimacy of the state, for a number of reasons. Without listing all of them, you should be suspicious that the author of this odious piece of legislation is now one of the foremost experts in RICO law.

Break Up the Big Banks

The phrase ‘break up’ gives you a clue to wether this is moral or immoral. This is nothing more than a call for violence to be carried out by the state on behalf of the mob. The state should not be interfering with economics. If you want to run your own bank, that is your affair; the state should not have the power to license, regulate or control banks or deposits in any way whatsoever. They should not insure deposits, bail out banks or do any of those things. If you do not accept this, then you are not for Natural Rights.

End the Fed

The Federal Reserve System is a creature of the State, and it should be abolished. The State should not have a monopoly on the creation of money.

Break Up the Mainstream Media / encourage citizen journalists

Once again, this is a despicable call for violence to be carried out by the State on behalf of the mob. Decent people who are for Natural Rights do not call for violence to be done to others, under any circumstances. The State should not be interfering in people’s affairs by encouraging one type of trade over another; in the UK, they call this ‘picking winners’. If you want to be a journalist, that is an entirely private choice, where you exercise your right to own and distribute paper, or own space on a server connected to the internet. It has nothing to do with government whatsoever.

End Closed Door Lobbying

The state itself should be ended; lobbying is nothing more than a pimple on the hideous face of the real, and very ugly problem.

Increase Government Transparency

See above.

End Corporate Personhood

People who understand Natural Rights know that you have the right to contract with others on terms that are suitable to you and your partners. This is an absolute right, derived from your property right in yourself and what you have lawfully acquired.

The idea behind corporations is that groups of people create a vehicle through which they can invest in a project without fear that should the enterprise fail, the investors would not be liable for the debts of the project. Before this idea, if your business suffered losses, you could lose all of your stored capital which may have taken your entire life to accumulate. Limited Liability protects you from this sort of catastrophe, and anyone can take advantage of incorporation; its not just ‘for the rich’.

There is nothing wrong with this in principle, as long as everyone who deals with every entity involved knows what they are becoming involved with and enters into agreements voluntarily.

If you have a particular dislike of corporations, then it is your choice not to deal with them. What you cannot do is impose your personal opinion on others with violence.

The railing against corporations is one of the pillars of the socialists, who have insinuated their diseased thinking into the minds of otherwise right thinking people. As soon as you scratch the surface of this thinking with a Libertarian fingernail, the lie of the ‘end corporate personhood’ argument becomes abundantly clear; this is Statism, coercion and violence under the cloak of ‘power to the people’. Its nonsense from beginning to end.

Amend Campaign Finance

Democracy is illegitimate. Majority rule is illegitimate. This is a call from inside the framework that holds that government as it is currently structured is legitimised and made moral by voting. It is not, never has been and never will be legitimate or moral, and so how campaigns are financed are totally irrelevant, when we consider that the true aim should be the ending of the State itself.

Verify All Votes

Votes, wether they are verified or not, do not confer legitimacy to governments. Once again, this is a call from inside the matrix, within a framework designed by the State to stop you from understanding that voting itself is illegitimate.

Investigate War Profiteers

The State is the source of all war. End the State and you end war. Investigating war profiteers is pointless while the State persists.

Investigate War Crimes

Rubbish. End the State.

End the Wars

End the cause of war; the State.

Restore Civil Liberties

The State is what restricts your liberties. End it, and the restoration of your liberties will follow as day follows night.

Uphold the Constitution

The constitution is a document that binds people who have not given their consent to be governed by it. That is illegitimate on its face. Worship of the Constitution and the principle that a State is legitimate when it has one is deeply ingrained in the minds of the brainwashed.

Clean Air, Water & Food

See Lew Rockwell’s Environmental Manifesto. The State cannot provide these things for you.

Reduce Healthcare Costs, Profiteering

This is straight out of the immoral Socialist thought process. There is nothing wrong with Profit. If you want to help people, it is up to you to help them. You cannot call for the state to steal to help people.

Make Healthcare a Human Right

Healthcare is a good, not a right. Rights cannot be created out of thin air by the State.

Improve Education For All, Reduce Costs

Once again, like healthcare, education is not a right, it is a good. Literacy and academic achievement have been destroyed by the State and those who call for ‘Education for all’. Costs have skyrocketed precisely because the violent statists have brayed for the State to step in and make Education a ‘right’. The State should be completely removed from the business of education. If there even is a State.

Reform Prison System

Many of the acts the State defines as crimes are not crimes at all. America has the world’s largest prison population because prison is a business outsourced by the State. Without the State, this problem would, like many others, disappear.

Reform drug laws (Stop spending so much money on drugs! NYC spent $75million alone on marijuana arrests.

The source of this is, again, the State. All laws in this area are illegitimate. They should not be ‘reformed’ they should be abolished, along with the State that created and enforced them.

Immigration Reform

In a place where there is no State, immigration is not a problem. You need to understand that immigration is only a problem because there is a State. There are arguments to the contrary. Either way, the State is not the answer to any problem, no matter what it is.

Rebuild Infrastructure

Translation: “steal more money to give to contractors to fix roads and bridges and lay down fibre optic cable”. Be careful what you ask for, because by doing so, you create more of the problem that you are trying to get rid of. You cannot be against Eminent Domain, but at the same time, be for stealing property so that roads can be built on them by the State for ‘infrastructure’.

Protect Internet Freedom

There would be no problems of censorship, interception and internet freedom were there no State to cause these bad things like net neutrality.

Empower States Rights

No. States do not have rights, only men have rights. There are no gay rights, black rights, women’s rights or animal rights. Only man has rights, and all men have the same rights. Remember this quote, “We hold these truths to be self-evident, that all men are created equal”. That much of it is true. All men ARE created equal, without distinctions in terms of their rights. This is different to being entitled to any sort of service by your fellow man of course.

End Corporate Welfare

End the State that steals money to give it.

Fair taxes for everyone!

No. Stealing is never ‘fair’, and the word ‘fair’ is another brainwashing term.

Enforce corporate responsibility

There is no such thing as ‘corporate responsibility’, and in any case, you cannot be against the idea of corporations and FOR corporate responsibility at the same time!

Force corporations to apply local labor laws in their global operations

Which is it, for or against corporations? As for ‘labor laws’, they are all illegitimate strictures of the State, and unwarranted immoral interference in economics.

Strengthen environmental laws and force corporations to clean up their act

More calls for violence.

Work for a real separation of church and state – and a real split between corp and state?

There should be no State to separate from the church. And if there are no corporations, as is being asked for, there would be no corporations to separate from the State.

Reinstate Habeus Corpus

End the state that arrests people for non crimes like Prostitution and smoking marijuana.

Allow felons who have paid their debt to restore voting rights

Voting is not a right. End the State that creates felons in the first place. Realise also, that the idea of a ‘debt to society’ is completely fallacious.

Stop prison labor from competing with local businesses

End the State, and its prison industrial complex.

Additional objectives
End lifetime appointments to the SCOTUS

The Supreme Court of the United States is illegitimate, as are the laws it rules on.

Abolish the “Patriot Act”

Abolish the State that enacted it.

Abolish the lobbying system (no paid lobbyists)

Abolish the State that lobbyists attend to, and for whom they go to get their vicious laws passed, like the Mickey Mouse Copyright extension law and ACTA to name but two.

Close Guantnamo

End the state that owns it, and relinquish the illegitimately acquired property upon which it stands in Cuba.

Establish and define “financial terrorism” as a treasonous act and prosecute offenders vigorously

This is pure in the matrix thinking.

This is a call for the State to create a crime, based inside the financial system controlled by the State and its cronies at the Federal Reserve.

Without the Fed and the State, in a land where sound money flowed freely, this idea would be a nonsense. If you want to solve this problem, end the State that steals money through the printing press at the Fed, and switch to sound money in the form of gold and silver coins.

Treason is a crime against the State. Only the brainwashed and the Statists believe that such a thing is a ‘crime’. Calling for prosecution is calling for violence obviously, the end result being the perpetrators sent to the hell holes of the prison industrial complex, at the expense of the ‘taxpayer’.

This is a perfect example of thinking three levels inside the box; illogical, irrational and incapable of framing the problem correctly because all the givens are provided by the State.

If you REALLY want to do something to End the Fed and stop the criminal crony capitalist fractional reserve bankers, do what Max Kieser suggests as your next Anonymous Operation… GOLD FINGER!

Enshrine gender equality in the constitution

Freedom is not free, free men are not equal and equal men are not free. You cannot on the one hand call for Natural Rights, and then call for the constitution to enshrine ‘gender equality’ (the violent enforcement of laws upon free people) as an amendment. This error flows from the incorrect idea that women have rights that are separate from men; they do not. All human beings have the same rights; and these are all derived from the right of property.

End corporate money in the election process

See above, and pull the cable from the back of your head.

“Reduce non-emergency military funding”

The war machine is a creature of the State. There is no such thing as ‘funding’ it is theft, pure and simple.

And there you have it. There was only one item in that list that was legitimate; End the Fed.

For those who have not read any of the books, seen the lectures or read the articles cited above, you have alot of work to do, but you will be amply rewarded with an air tight way of thinking about the world at no cost to you other than your time.

As the iterations fold over and calculate in the hive mind GPU, Anonymous will come to these conclusions, as they are all inescapable now that the internet is everywhere. Thankfully Anonymous is iterating in internet time, and it will not be long before it will be calling for measures and thinking in terms that are consistent, logical and Libertarian.