Archive for May, 2012

Dystopian Pingit from Barclays cannot win

Wednesday, May 23rd, 2012

The Financial Services Club Blog has an interesting piece on Barclays Pingit:

http://thefinanser.co.uk/fsclub/2012/05/case-study-barclays-pingit-for-consumers-and-corporates.html

Pingit is the new service from Barclays that runs on iPhones and Android. In order to use it, you need to be a Barclays customer.

Barclays Pingit is growing fast. They have over seven hundred thousand users. They are using the PayPal “recipient becomes a user” as a way to spread the service. This is a fascinating trend, and they probably have so many initial users because they were able to target existing account holders directly in the branch or through the post or other points of contact to offer them their new free app.

Pingit is very interesting for anyone interested in Bitcoin, banking and liberty, for several reasons, and it is a bad product for anyone interested in the future of money transfers over devices that is beneficial to the users. Look at the onerous and invasive sign up procedure you have to go through to use Pingit, and you get a taste of what that service is all about; arbitrary controls and restriction:

As a non-Barclays customer you have to go through a very complex account verification process that involves not only a PayPal like penny drop into your current account with a reference number that you need to enter; but this is followed by a letter to your house via snail mail with another verification number.

More on this in detail below. None of this ‘account verification’ has anything to do with the utility of the product, how it works, its security or anything else. If Barclays did not have to do this, Pingit would be on the phones of seventy million people, not seven hundred thousand. And this is a very good thing, because once a service becomes entrenched it will be hard to displace it.

Or maybe not.

Everything has changed in the internet mediated world. Pingint might have seven hundred thousand users today, but there is nothing to stop another app developer creating a product that sits four millimetres adjacent to it on your iPhone’s home screen that does a better job without any nasty restrictions or requirements.

Pingit users could then move their money into that app and then never open Pingit again. Think of it as similar to MySpace users migrating to Facebook, and of course, all the people who are un-banked and who do not live in the UK are also on the same internet with the same mobile phones that Pingit users are on. The market for these users is bigger than the population of the entire UK. On this basis alone it is clear that Pingit will eventually reach an upper limit that is a subset of the UK population. The field is wide open to disrupt and capture the money on mobiles market, and the winner will not be Barclays Bank.

Imagine the following scenarios. Barclays doesn’t like what you are doing on your mobile phone. They can unilaterally or by order of the State, freeze your account and disable your Pingit access. They have total surveillance of every transaction you make, on both ends, to whom, when and from whom. Their 4,123 word long terms and conditions include the following arbitrary restrictions:

  • You need to be 16 or older to use Pingit.
  • You can send 1 or more but not less than 1.
  • You must have a UK current account.
  • You must give them your UK mobile number.
  • Pingit can reverse payments at any time.
  • There is a maximum daily limit of 300 for payments.
  • The payment can be made only once the Payee has registered for the service.
  • There is a maximum daily limit of 5,000 for all payments received through Pingit. Barclays will refuse to process a payment if it exceeds the arbitrary limit.
  • Barclays places arbitrary restrictions and limits on how you use your Pingit account.
  • Users may not be able to install or use the app on a jail-broken or rooted device.
  • You may not attempt to derive income from the use or provision of the service, whether for direct commercial or monetary gain or otherwise.
  • Pingit can refuse to process a payment if they believe that you have not met any of the conditions.
  • You must authorise Pingit to display the full name of the account and your mobile number to the payer when they input your mobile number into the app.
  • Depending on the information you provide when registering, Barclays may require you to complete registration at a Barclays branch or to provide us with further information before you can use Pingit.

Arbitrary, absurd, completely ridiculous and even astonishing.

These terms and conditions, and this is only a cherry picked selection of them, are unacceptable to all decent people with an intact moral centre, and none of them are needed for Pingit to work if it had been designed properly; they are made to surveil the user and to be compliant. People in other countries or of no country at all will not be bound by these arbitrary, anti human, anti market restrictions, and when an entrepreneur launches a rival e-money app, they will eviscerate Pingit and all other competitors that are spawned by banks.

This might be the reason why Blockchain.info’s Bitcoin app was removed from the iTunes store after having been approved. It is exactly the sort of app that is an existential threat to Pingit and products like it. Both Pingit and Blockchain.info’s apps are free, so there is no friction there. One surveils you and you cannot use it ‘out of the box’ upon download. The other works as soon as you run it and does not surveil you. Bitcoin allows you to send and receive very small fractions of Bitcoin. The arbitrary one pound limit, apart from being denominated in fiat Sterling, means that the world of micro-payments is forever shut off from Pingit. It is a major flaw. Blockchain.info’s app wins over Pingit.

Blockchain.info’s app and service has no KYC restrictions, no fees and no ability to arbitrarily shutdown your account. It is a friction free service. It has no default surveillance, and you do not need to identify yourself in order to use it. There are no limits to the amount of money you store on it. It is international, ‘instant on’ and interoperable with a plethora of different services. By any measure Bitcoin running in Blockchain.info’s app is infinitely superior to Pingit.

On top of all this, Pingit only allows you to send Sterling back and forth. This means that the money you use in Pingit is deflating, losing purchasing power on a monthly basis, by design. Quite apart from the fact that you cannot use this ‘money’ anywhere else but in the UK, the inflation tax is another reason why people will opt for Bitcoin rather than Pingit when the two apps are installed side by side on their phones.

This has implications for Apple also. If they continue to refuse to allow Blockchain.info’s app to be given away for free on iTunes, people will turn to Android phones where they will be able to run the apps that they need without any fear of arbitrary shut down. Imagine that you have 50BTC on your iPhone and you run iTunes to update your apps. Apple, because they have disallowed Blockchain.info’s app, prevents you from getting updated versions, and if you need to download it again, you cant. This is an unacceptable risk, quite apart from being insulting and anti consumer. Its clear that Android phones are the future when it comes to e-money provided by third parties, because Apple cannot be trusted to allow you to use your device for what you need it for. Add to the mix the rumours that Apple is working on iWallet, and you get a sense of what Apple’s motivations might be in removing Blockchain.info’s app. They don’t want any competition… CAPISH?

Barclay’s Pingit service is interesting because it means that money on mobiles is going to happen in a big way. Now it is a matter of who has the best product that will fit into the space, avoiding the bear traps like iTunes, the attacks from the banks (shutting down the accounts of Bitcoin businesses), the technical difficulties and the State.

On top of this, and perhaps the biggest barrier of all for Bitcoin, is the PR problem; getting the public to understand what Bitcoin is, how it works and why it is superior to services like Pingit. In order to make this happen, the merchants are the first line of attack. Bitcoin, if it is accepted in many places will trigger installation of the clients on phones, and a spread of the ecosystem. Blockchain.info’s app is potentially, a key piece of this puzzle.

It should now be clear to anyone with an interest in this that regulation and registration of Bitcoin services will not help adoption. If this is a race between services, clearly Bitcoin has the advantage and the better potential to go viral far more than Pingit or MintChip or any of these broken by design bank offerings.

In order for the chain reaction to happen, nothing must stop the flow of money in the system. Registration and regulation are carbon rods in the pile. What is needed is a runaway chain reaction so that the Bitcoin is spread everywhere, into every device in every pocket. Tying down Bitcoin into jurisdictional boxes, hampering it with onerous regulations, KYC and other arbitrary nonsense will allow Pingit and other services to mature, spread and solidify. Once again, this does not mean that their dominance will be permanent, it will simply mean that for a time, the market is broken and people are hurt. It would be far better for humanity if Bitcoin wins without going through a stage of broken e-money, and there is no reason why this should not happen.

Pingit cannot win. By popularising e-money on mobile phones, they are educating the users about money on mobiles. Once this information is spread everywhere, a new challenger can arrive and wipe them out in a matter of months, and there will be nothing they can do to stop it.

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Bitcoin and the State: Asking permission to be free

Thursday, May 17th, 2012

Should people who want to see the widespread and rapid adoption of Bitcoin seek tight regulation and integration with the State, or should they rely only on their skills as developers, marketers and entrepreneurs to create the rock solid, reliable and trustworthy products that people will use in their millions, like the other well known internet companies that have changed the way we do things?

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A Bitcoin innovator has just applied for and received a registry entry from the US Federal Government’s Financial Crimes Enforcement Network:

http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

on that linked page you can read the following statement clarifying FinCEN’s position on each entry they list:

“The inclusion of a business on the MSB Registration Web site is not a recommendation, certification of legitimacy, or endorsement of the business by any government agency.”

This disclaimer appears on the certificate as the first paragraph, in large letters. The certificate also says that, FinCEN does not verify information submitted by the MSB. Information provided on this site reflects only what was provided directly to FinCEN. Read the rest of this entry »

TransferWise: limited, lacklustre and locked in to the State

Thursday, May 17th, 2012

TransferWise may or not be the next big thing, but as far as I can see their appeal is limited both in terms of who needs it, can use it, and the time it will take for them to be completely outflanked by superior services.

The VentureBeat press release:

http://venturebeat.com/2012/04/18/transferwise-undercuts-the-banks-with-crowdsourced-currency-exchange/

says “Banking is broken”; this is true, but what is needed to replace it is not ‘the AOL of banking transfers’; what is required is the open Internet of banking transfers, and that means Bitcoin.

Back before the internet permeated every home, AOL was the main way millions got online and used email. It was the consumer method of getting online. Anyone who knew anything about how the net really worked understood that AOL was garbage, and not the true internet. Similarly, anyone who had a friend that needed to get their contacts list out of AOL Messenger knew what a jail and walled garden it was. TransferWise is the AOL of money transfers. and I predict that it will end up just like AOL, even if it becomes massively popular for a short time.

TransferWise suffers from several problems. First, it is under complete control of the State. Look at its boast of full integration with the UK regulatory bodies. This means that all transactions are subject to complete surveillance and control. Read the rest of this entry »

The heat is slowly building up against the Canadian Royal Mint’s Mint Chip

Thursday, May 17th, 2012

Mint Chip, the Canadian Royal Mint’s attempt to enter the digital money market, is doomed to fail. It is being thoroughly attacked from all sides, the technical, the philosophical and economic.

Via a post on Slashdot, we are reminded of Bruce Schneier’s warning signs of Snake Oil, which the Mint Chip suffers from.

What is ‘Snake Oil’ I hear you ask? In cryptography, snake oil is a term used to describe commercial cryptographic methods and products which are considered bogus or fraudulent. The name derives from snake oil, one type of patent medicine widely available in 19th century United States.

There are several parts of Mint Chip that cause even those with a casual interest in cryptography to smell snake oil. Read the rest of this entry »

Unethical collectivist fail on steroids in the Grauniad

Thursday, May 17th, 2012

Peter Beresford keeps referring to the ever elusive, imaginary ‘we’ in his piece, which is a typical Grauniad screed against liberty and the spirit of man.

There is no ‘we’. Man is an individual, he is not the same as a cell in algae, or a telepathic race of aliens who share consciousness. Beresford and his ilk have no right to co-opt people into his sick collective by force. His position is nothing less than advocating slavery.

The so called overclass is able to be an overclass because people Beresford cannot think. They cannot use reason to find the true nature of anything outside themselves, and even of themselves. They cannot understand economics, which includes the true nature of money. If they could, the superclass would not cease to exist, but instead, would be proportionally and symbiotically buffered by the billions of consumers all asserting their natural rights equally.

Ideas like this, to the economic illiterates and the people who do not know what rights are, are simply incomprehensible. They do not have the knowledge or language to understand these ideas, and make no mistake, this lack of comprehension has been deliberately nurtured by government schools. This brainwashing is used to keep people in their place; what is so appalling is that the truth of how everything really works is there and has always been there for the taking in libraries and now on the internet at near zero cost. Read the rest of this entry »

Bitcoin is voluntarist, not socialist

Thursday, May 17th, 2012

The idea of socialism is diametrically opposed to the core philosophy of a voluntary peer to peer system like Bitcoin. Peer to peer systems dis-intermediate the transfer of information and eliminate the need for an arbitrary governing authority or service provider. Bitcoin, like maths, has no philosophy and is neutral.

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Socialism’s basic premiss is that ‘property is theft’, and that all property, goods and services should be collectively owned for the benefit of all people in a coercive State with no opt out. Under a socialist system of forced organization, individuals do not have free use of their inherent rights, which are violently suppressed.

This is an inherently immoral proposition, where one group of people inevitably coalesce into an illegitimate ruling class to control and administer other people ‘for their own good’; the good of the collective. Even if this aggregation of power were not the case, no man or group of men has the right to force another man to relinquish his property.

Libertarians understand that there is no such thing as ‘the rights of the collective’ and that only a living individual human has rights. Chief amongst these rights, the ‘root right’, is the right of property. Read the rest of this entry »

The confusion over the nature of corporations

Thursday, May 17th, 2012

There is a great deal of deeply seated confusion about corporations, their origins and true purpose. People who are intelligent and well read in the field of the philosophy of liberty sometimes fall short when it comes to understanding what a corporation is, why people use them and what the true nature of them are. On the one hand, they are for voluntary association, and yet on the other, they rail against corporations. This is illogical.

As it is with anything complex, clear thinking is needed when you try to think about corporations. Lets begin by taking apart the myth that they exist as creatures of the State.

There is no reason that in a free society without a State that a group of people cannot band together to work on a project under rules that they select for themselves. They pool their risk, and (for example) decide that they do not want to put all their capital on the line should something go wrong and face a court, however founded, deciding that they are liable. Read the rest of this entry »

Using the proliferation of cameras to identify provocateurs

Thursday, May 17th, 2012

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

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

[…]

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

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

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

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

This is a war that they cannot ever win.

[…]

Now look at the attached video, uploaded to YouTube by noshockdoc on Nov 11, 2011. Read the rest of this entry »

Why advocates for peace should support Ron Paul

Thursday, May 17th, 2012

Take a look at this:

Stephan is a great thinker, but it seems that what he cannot do is empathise with other people.

While he is sipping coffee in his house in Canada, Hillary Clinton and Obama are at this moment concocting another lie / pretext to unleash mass murder on people, namely Iran:

http://politics.salon.com/2011/10/12/the_very_scary_iranian_terror_plot/singleton/

Canada, which he funds with his taxes by his own admission, will no doubt be a part of this criminal act.

Should Ron Paul become president before they are able to launch this mass murder, he will be able to prevent it.

For this reason alone, Ron Paul should be supported. Its all very well sitting in the safety of your own home in the empire, and paying taxes to support it, complaining that Ron Paul doesn’t want to dismantle the state, while your money is being used to kill Iranian children. Read the rest of this entry »