“Is the Stock Market Overbought?” Millennials Need to Ask This Question

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With due respect to the adage that any question asked in a headline is going to be answered ‘no,’ … Yes.

A simple google search for the terms ‘stock market’ and ‘overbought’ will return numerous results from influential financial news sites such as The Street and Market Watch detailing how precipitously high the market is trending and how tenuous the fuel powering that rise.

In point of fact, it’s an open secret that nothing was fixed after the Great Recession, and now with the anti-regulationists installed by the Trump administration being given free rein, what few safeguards were in place are currently being gleefully hobbled and stripped away all to the happy-horseshit tune of ‘the market will fix all.’

Well, the market is run by people, and those people frequently enough cut corners, cheat, and use inside information. Sometimes they just act stupidly because the deals they’re involved in are so multi-layered and complex it’s near impossible to figure out what’s really going on.

Stupid regulations are horrendous. No regulations is even worse.

And now, for some reason, the same site that gave us a warning call a couple of months ago that the market is overbought, is now running a piece that advises millennials to get in 100% in stocks. Anyone under 50, author Philip Van Doorn, should but up to their eyeballs in stocks, or risk missing out.

Historically, there is reason to take this position. Averaged out over the decades, the stock market has given better returns on practically anything you can think of other than unicorns. However, if the market is on record highs, but it’s not based on extraordinary corporate earnings and outlook or a rising middle class, then the higher the market goes, the more likely it is to crash, and crash hard.

More than that, if you invest at the height of a market, when it does crash, it might take years or decades to recoup. When I was a boy in the early 80s, I remember my father being talked into buying gold by an uncle because of the massive returns it was seeing. It crashed soon after and the market only recouped to that level within the last few years – and long after my father’s retirement and eventual passing.

Advice to millennials to buy the stock market under these conditions is wildly irresponsible. The rise of the market is based not on fantastic economic growth and prospects, but on the same insider dealing that gave us the crash of 2009 – and the next one is likely to be even more painful.

No – the stock market should only be part of the millennials’ portfolio – and the rest should be in instruments that promise far greater returns.

And that is the reason for Bitcoin’s existence. It was built to be a non-governmental money that cannot be controlled, manipulated, or civil-asset-forfeitured. It is the cash of the internet, and totally in the control of the individual once they have taken the time to learn how to handle it (a steep learning curve, but actually less than learning how to confront the myriad fine-print riddled scams of the banking system).

Bitcoin currently stands at about 1,450 dollars a coin with a market cap of about 24.5 billion. It is experimental and temperamental, with a few teething pangs still to work out (otherwise known as the scaling debate). But, when push comes to shove, you are going to see the smart money, and smart money, pour into safe-haven assets like Bitcoin. And when that happens, that lofty market cap go from the equivalent holdings of a single billionaire to a tenth or more of the world’s GDP.

Dababneh’s Vampiric Bitcoin Bill Rises From the Dead for the Third Time

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Matt Dababneh, Assemblyman for California’s 45th District, has introduced for the third time a bill that would handcuff Bitcoin businesses, no matter size nor function.

In essence, any business utilizing Bitcoin for anything other than sale or purchase would need to pay a 5,000 dollar registration fee with an additional 2,500 dollar yearly fee. For this fee, it is unclear what service or benefit the businesses would be getting other than to have a piece of paper to wave when the authorities come to visit.

In principle, Bitcoin Warrior is not opposed to government regulations when they are enacted and enforced for the good of the community, defined as the largest number of people, and which do the least damage. Unfortunately, regulations have gotten a bad rap as they are too often merely a show of activity on the part of politicians – heedless of the collateral damage they do (see the plethora of laws enacting security theater after 9/11) and protectionist rackets by entrenched industries (see the infamous hair stylist licenses).

If this law was truly in the interest of the people, it would not 1) be framed as an extortionate power grab, and 2) would have been proceeded by studies of actual use cases and problems encountered by those using Bitcoin. Each provision could then be supported by specifics indicating its need.

In recent years, the Bitcoin Foundation has fallen out of favor, and largely out of awareness, of the majority of the Bitcoin Community. It, and its director Bruce Fenton, have been stepping up to the plate on issues like this and protecting Bitcoin from overzealous politicians. Please send your thanks and your support to both the Foundation and the EFF which have done so much to kill the two previous incarnations of this bill.

1xBit Offers Complete Bitcoin Gambling Experience

Having a jam-packed library of betting options is no longer the only factor online players consider. An overall satisfactory gambling experience highlighted by hassle-free banking and improved security are what drive bettors to patronize a brand nowadays. And these are exactly what the online betting community can expect from 1xBit.

1xBit is an online sportsbook and casino that fully runs on Bitcoin. With a decade of experience in the iGaming business, 1xBit continues to venture into the heart of online gambling, but this time through the digital currency, Bitcoin.

Bitcoin, which became popular as the first peer-to-peer cryptocurrency, allows bettors to instantly place bets right after making a deposit, as well as to quickly receive payouts in as fast as a few minutes. As Bitcoin and the games work hand-in-hand, there is more to experience at 1xBit.

Betting on sports and casino with Bitcoin

Players can choose from over 30 sports options and a variety of casino games.  Those hungry for some real betting action will find here what they have been looking for. On top of the long list of covered sports, 1xBit also boasts a variety of major and minor leagues and tournaments both from the local and international scenes. This is why placing bets on football matches in different parts of Europe or wagering on college basketball games in the US are a breeze.

But this Bitcoin sportsbook takes it a bit further and provides more than what other Bitcoin sports betting sites do. 1xBit offers not just the match odds, but it also gives odds for prop bets and there are many to choose from. Moreover, flexibility is one thing sports bettors will appreciate here as they can conveniently switch odds format from decimal to any of following: US, UK, Hong Kong, Indonesian, and Malay.

It’s a similar kind of success when it comes to 1xBit casino. Slots remain popular among online bettors, and a bevy of great-themed slots are in the 1xBit library. Games from Betsoft Gaming and Endoprhina are some of the most popular in Bitcoin gambling but players can also find titles from Booming Games, Play’n GO, and Mr Slotty. All these Bitcoin slots go hand in hand with others from Playson, EGT, Concept Gaming, and Pragmatic Play.

Joining the online slot games are the all-time favorites blackjack, roulette, and baccarat. Video poker games and other specialty games are also on board.

Live casino and esports

Granted that 1xBit comes with a loaded sportsbook and casino, there are still more distinct features to find here. The growing library of live casino tables is one. Instead of simply providing live dealer games from one developer, 1xBit gives its members the freedom to choose their favorite. Finding the best casino table is easy with the availability of games from Evolution Gaming, xPro Gaming, Lucky Streak, and even Extreme Live Gaming. But players can also choose to check out the tables from Pornhub Casino.

Another worth checking out are the esports matches. 1xBit is well-prepared for the rise in popularity of esports betting and this is evident with the online games covered in the sportsbook. Counter-Strike: Global Offensive, Dota 2, League of Legends, and Overwatch are just some of the hottest esports games included. What makes these extra special is 1xBit’s esports bonus calendar. This calendar gives different bonuses every day for specific games, making betting on esports with Bitcoin more fun and exciting.

It is these products that make betting at 1xBit even better. With Bitcoin as the primary payment method, members have full access to the sportsbook and casino games, as well as other games and bonuses available. Players who want to experience all these can simply register an email address to start their journey to an amazing Bitcoin gambling experience with 1xBit.

The Truthiness of the Bitcoin Scaling Debate

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Jameson Lopp, a CoinDesk contributor and frequent tweeter whom I have long respected unfortunately has taken to using alternative facts.

Now, just to define my terms here, what I mean by alternative facts is that when someone says something, as Colbert would put it, truthy, but not really true.

Now, I’ll take his comments in reverse order:

Bitcoin doesn’t have an authority to stop people from claiming such things.

Mostly true. Though two of the main venues of public discussion on all things Bitcoin, r/Bitcoin and Bitcointalk.org are both run by a person who goes by the name Theymos. Theymos has taken the view that any fork of Bitcoin (presumably not approved by Core) is by definition an altcoin and not worthy of discussion on his turf.

Theymos is legally totally within his rights to censor anything he wants on his turf, but since these are the two most frequented venues for Bitcoin discussion and information, quashing the concerns and suggestions of a large segment of the Bitcoin user population naturally caused resentment and acrimony.

So, yes. There is not authority in Bitcoin that can tell you what to say or not to say. But at the same time, there are people who are in a position where they can influence what a large number of the Bitcoin population hears and reads.

Bitcoin doesn’t have a Foundation.

A qualified false. Here’s the link to their still functional webpage. The Bitcoin Foundation for something on the order of a year and a half was an important feature of the Bitcoin ecosystem. Members of some of the most preeminent businesses came together to create what was a supposed to be a Bitcoin information clearinghouse and outreach center.

Right from the start, the foundation started irritating bitcoiners who viewed it as a kind of power grab. Since the foundation wanted to work with governments and legislators, some felt it was a violation of the principles of Bitcoin. And then came the accounting scandals, the arrest of one of the founding board members, the monumental collapse of MT Gox, etc., etc.

The foundation’s last board meeting appears to have taken place in November of last year. So, while there is a foundation, I am sure Mr. Lopp would say that it doesn’t exist in any meaningful way. But then, I expect if it were functional, that he would say that it doesn’t exist since Bitcoin doesn’t need a foundation.

Bitcoin doesn’t have a Core.

And this is the one that really got me writing is post. Yes, yes there is. When Satoshi invented Bitcoin, he was the sole developer. He got a few other people to help him, but really, it was all Satoshi.

When Satoshi moved on, he handed the keys to the Github account to Gavin Andresen – which meant that he and he alone could make changes to the client that Satoshi built. That doesn’t mean others couldn’t fork it, even then. Gavin, not wanting total control, gave others the ability to make commits, or changes to the core code. After some time, possibly due to disagreements with and opposition from the team he had empowered, Gavin stepped down as chief developer and handed the role off to Wladimir J. van der Laan.

The team of developers is actually several hundred strong with no requirements to join or leave other than writing good code that catches the interest of others. That being said, there are only five people who have the ability to actually implement that code and package it with new releases of the Bitcoin Core client.

It is this client and the features to carries that most people understand to be ‘Bitcoin.’ And it is forks of this client that people like Theymos consider forks of Bitcoin and thus not really Bitcoin.

It is absolutely true that another team could come along at any time and produce a client so good that everyone adopts it, and all of a sudden, the Core team would suddenly no longer be in control of the client that most people are using. However, one of the arguments made against other teams is that they DON’T have the pedigree and experience of the Core team. So it’s a catch 22. You can’t be Core unless you are Core.

This this is the reality of the situation right now. There is a Core team and there are people censoring opinions they don’t like, further fracturing and polarizing the debate. Denying these things doesn’t help move us forward. Recognizing the truth of the situation before us does.

Bit Premier Preparing for the Next Generation of Bitcoin Millionaires

One of the side effects of how Bitcoin came on the scene is that there is quite a lot of centralization of wealth. A recent report stated that if you own 25 bitcoins, you are in the top 2 percent of Bitcoin holders. This article from Cryptocoins News presents a chart that makes things look even more lopsided.Bit Premier Listing

This fits into my theory of how Bitcoin is going to take over the world. In the early days, people running clients on their desktop computers could gain 50 bitcoin rewards every ten minutes. Competition was low, so many of these early users racked up huge stockpiles.

With each big run up of Bitcoin, we’ve seen people who have suddenly ‘discovered’ a stash of this virtual gold on an old hard drive (and in one case, who remembered that it was there after he had thrown the drive away!)  and were suddenly in a position to seriously upgrade their lifestyles.

Bit Premier is a Bitcoin marketplace specifically designed to cater to these nouveau riche. There are yachts, villas, sports cars, artwork, and even submarines for sale.  Starting in 2014, they came on the scene at just the moment when the price was on its downslide from the 2013 bubble, but even with prices dropping from 1200 to 200, there were still bitcoiners who got in early enough so that they saw buying a villa with Bitcoin as a win.

Bitcoin has been knocking on its all-time-highs again, and granted a way is found to end the internecine battle over how to scale to world-wide-currency levels, there is a good chance that we will see another strong run up in price.
For right now, many bitcoiners can only look at the listings on Bit Premier wistfully, but there’s also the chance that anyone holding 25, 10, or even 5 bitcoins will be in the next wave of Bitcoin millionaires, cruising Bit Premier’s pages looking for a villa on a Thai island.

Banks Still Making the Case for Bitcoin

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Three headlines caught my eye this morning that reaffirmed my belief in not only the viability of Bitcoin, but also the need for it.

The founding statement explaining Bitcoin’s existence, if there is one, was embedded in the first block of its immutable ledger, the blockchain. Encoded into the block are the words: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

The first block was mined a few months after the start of the devastating great recession, which had been brought about by large banks conducting business in risky and unethical ways, because it was profitable for the moment and their bonuses were large. And when the tranches of subprime mortgages upon which their house of cards was built began to shift and sink, they fell like behemoths.

Not really, though. In a purely capitalist society, the worst offenders would have been pulled under. In ours, though, most of the banks were deemed ‘too big to fail,’ meaning the pain of having them fail was thought too great for the nation to allow. So, taxpayer money was poured into the banks to bail them out.

The injustice was lost on few, not the least Satoshi Nakamoto, the founder of Bitcoin, who saw fit to embed it into the founding element of Bitcoin.

Fast forward 8 years, and what do we find?

Wells Fargo, following a 185 million fine last year for defrauding customers by secretly opening new accounts and charging fees for services not requested, is this year contesting a 5.4 million judgement to lost wages and court fees to be paid to a former manager who had blown the whistle on unethical practices at two Wells Fargo branches in the Los Angeles area. They are also supposed to rehire the manager who has not been able to find work since his firing due to a system of blacklisting ‘troublesome’ employees the banks have concocted.

Citibank has been found to be one of the top three banks accused of credit card abuse by its customers according to the Consumer Financial Protection Agency. WallStreetOnParade, and excellent site dedicated to watchdogging our financial industry, has listed the number of abuses and fines the company has been subjected to in recent years, which doesn’t begin to scratch the surface of what they’re likely guilty of.

Citibank was, of course, one of the banks at the center of the 2009 crash, and received nearly half-a-billion dollars in taxpayer bailout money. That was the public payment. It was later revealed that from 2007-2010, Citibank received 2 TRILLION in favorable loans from the Federal Reserve. Why? They are too big to fail.

Finally, we are now hearing that Jamie Dimon, protege of Sanford Weill who established the culture of ethicless behavior at Citibank and now head of JP Morgan and Chase, is saying that ‘too big to fail’ as a problem has been fixed by the weak oversight and fixes put into place after 2009. Capital controls have fixed everything, and the government oversight people should lay off as it will decrease the banking industry’s ability to pivot in the face of a new crisis.

The banking industry has only grown bigger since 2009. Politicians and regulators have only gone more into the pocket of those self-same banks. And now, we have a coterie of billionaires heading most of our government agencies with one goal in mind above all others – get rid of inhibiting regulations.

The role of government, when it is doing its job, is to protect the powerless from the powerful. The regulations and oversight bodies are there to protect little me from massive, faceless corporate entities (who are also, strangely, legally people). The government is largely failing at this job.

And that is why we need Bitcoin to take back control of their finances. It is money made for an internet world. It allows me to be my own banker. And it allows me not to support these mammoth corporations that are at the heart of our corrupt system.

Trump Advisers Shorting the US – Time to Buy Bitcoin

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To those who haven’t gained a real understanding of the potential of Bitcoin a question that comes up a lot is, what exactly is it good for?

Without answering “buying things on the dark web,” it’s not really an easy question to answer in the present tense. There are some great deals to be had using it, it’s slowly getting better for sending value across borders, but it certainly has not yet found its one absolutely must have function yet.

It’s my oft-made argument that the reason for that is the true role for Bitcoin has not materialized yet. It will one day be a solid store of value and means of
everyday as well as cross border transactions, but before it can be that, first it has to rise several magnitudes in value.

And the fact of the matter is that slow adoption of people using Bitcoin is not going to let it achieve that goal. No, Bitcoin needs a catalyst that it will propel it suddenly and precipitously to many multiples of its present value. And that event will be a political and/or financial crisis that will make the Lehman crash of 2009 pale in comparison.

A few days ago, Think Progress published an expose revealing that Peter Navarro, head of President Trump’s National Council on Trade, has invested some 15,000 dollars shorting the US economy.

Now the piece itself is mostly written to expose the hypocrisy of the Trump administration, which has taken a strong America First line. The revelation is noteworthy. Given the brash promise the administration has made about pumping up the economy and returning jobs to America, there should be no hesitancy from anyone in his administration.

Nevertheless, the revelation is also hardly earth shattering.. To a man of Navarro’s stature, 15,000 dollars must be a small portion of his portfolio, and it’s probably there as a hedge against adverse eventualities more than anything else. He’s not betting against America; he’s taken insurance that in the event anything did happen, at least some part of his portfolio would do well.

So what?

In 2009, the Lehman crash was precipitated by a lack of regulatory oversight leading to investment banks selling instruments they knew were bad, and then using the money to buy shorts against the instruments they were selling. Trump and his advisors are stripping as many regulations as they can, creating an even bigger wild-west attitude. This alone makes for a dangerous situation, but add to that the Russian-connection allegations that are increasingly swirling around this White House, and we may be seeing the start of a perfect storm.

An embattled president creates uncertainty in a market made unstable slick practices, causing the market to tumble, causing reactions both against and from the administration, causing responses from alienated trading partners… Things may get very bad, very quickly.

Given that Bitcoin can overcome its own political battle over how best to accommodate a global economy, which it increasingly looks like it will be able to do, one way or the other, then when that storm hits, Bitcoin is going to be the perfect safety net of value. Millions, … billions will flow into Bitcoin until it becomes the one, undeniable, global currency operating with and between all the national currencies.

I don’t begrudge Mr. Navarro his hedge against the unknown. It’s the smart play no matter how sure he is that things will work out the way he thinks they will. But, I would also say he should supplement that bet with 15 bitcoins.
Just a little Bitcoin in everyone’s portfolio might, just might, make all the difference.

Congress Seeks to Kill Internet Privacy, Proving the Need for Bitcoin

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The thing that drove me into investing in Bitcoin is pretty much the same thing that caused many American’s last year to cast a vote for Donald Trump: Disgust with the a political system that for 40 years at a minimum has not been serving the needs of the American population. Well, not all of it at least. Really only .01% of it.Image result for internet privacy

The problem with casting a vote for Trump is that people have a tendency to blame the wrong thing for the problems that plague our nation and our economy. The problem is not the government, which is merely a tool we the people use to set the rules for how we deal with each other, determine how to spend the money collected in taxes for the benefit of  all the people and to ensure a bright future, and to maintain a readiness to defend the country from foreign aggressors should the need arise.

Reagan famous scariest nine words in the English language, I’m from the government and I’m here to help, are not scary because government will natural do a bad job. They’re scary because the government has been bought–lock, stock, and barrel–by corporate interests and billionaires.

A vote for Donald Trump, unfortunately, was not a vote for freedom. It was a vote for a native of the uber-elite class that created the worst problems we are dealing with now.

This is being illustrated right now by a bill that is on the way from a corporate-owned congress to a plutocratic native in the presidency: a bill that would quash a FCC rule requiring broadband providers to get permission from individual customers before selling their personal information–including browsing history, financial and medical information, and even contents of emails–to other companies.

In point of fact, the FCC rule doesn’t go far enough. The companies shouldn’t even be able to use this information for their own benefit without the expressed permission of the customer.

And no. The argument that Google or Facebook does it does not counter this argument. If I don’t want my browser history known by Google, I can go incognito in many browsers or use search engines designed NOT to track this information, like Duck Duck Go. And really, I’ve never liked Facebook anyway, so slipping through their net is pretty easy for me. But to avoid having my ISP track this information, well, I would have to stay off the net – and in this day and age, that is not a reasonable response.

I am a bitcoiner not because I dislike the government, but because I think it must be made to work in the interest of all the people, and not just a few – like the corporations that benefit from this bill. The way to do that is to make sure that people have ways to take back and take control of their own rights, and responsibilities.

In this day and age, most of our daily finances are conducted through banks and with credit and debit cards. This means that the banks, and the government, can track every cent I spend, where, and when. It also means that they can freeze and close my accounts whenever they want.

I am a family man, and I have little to hide that wouldn’t be seen as mundane by most people. Nonetheless, I close the doors when I change my clothes, I don’t talk about how much I make with my neighbors, and I use reasonably strong passwords on my online accounts. This is because no matter how mundane my life might be, it is still mine, and I mean to retain the right to decide for myself how those details get shared.

During the election, Donald Trump declined to share his tax returns with the American public, a reasonable expectation given the importance of the job.Yet, he will sign a bill making it making it trivial for employees of any number of companies to have access to similar information on you for a small fee.
Bitcoin is one step to taking control back and make banks unnecessary. Hopefully we will see innovation and development like the Mesh Network which will make Comcast likewise obsolete.

Price of Bitcoin Set to Rise After Boss Battle

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As we speak, Bitcoin is facing what may be its most serious threat to its existence since it first began to be mined. The battle is over exactly how Bitcoin should grow to be able to fulfill its destiny as a global currency and store of value.

The contenders are Bitcoin Core on one side, a Bitcoin client maintained by thCreative Commonsose who received the ‘commit’ keys to make changes to the protocol in a direct line from Satoshi Nakamoto. Currently the Core team have developed a protocol known as SegWit which will allow some data not to be stored directly on the blockchain, effectively increasing transaction capacity. SegWit also makes other improvements that will make second-tier protocols possible that can massively increase transaction volume off-chain.

The other side is Bitcoin Unlimited, a contender client developed based on the Bitcoin Core code, but with a few simple changes to it – the most of important of which is that it will allow for bigger blocks, or a much higher throughput of transaction volume than allowed by core. Core’s blocks were limited to 1 megabyte to prevent spamming of the network by Satoshi early on.

Core and BU are locked in a death grip, with SegWit supporters controlling a vast majority of the nodes, and Unlimited supporters controlling a significant amount of mining power.

The sad fact is that these two proposals are not in opposition. Not all scaling can happen on chain if Bitcoin is to achieve true global proportions, and second tier protocols will need more on-chain capacity to really be effective.

Bitcoin Warrior has from the beginning been a supporter of both bigger blocks and SegWit. We also feel that it is a false choice to have to choose between one or the other, and we wish that the core team were clearer with concrete plans to scaling so businesses could continue adopting without worrying about rising miner fees. We also regret that BU did not make any effort to incorporate SegWit into their client. We aren’t familiar with the technical difficulties of doing this, but doing so might have been a show of good faith and allowed for the cooling of tensions.

At this time, Bitcoin Warrior is running a Core 0.14 node to signal support for SegWit since it is the more technically capable team and the transaction speed improvements to 2mb are sufficient to allow the developers to keep working on further speed increases.

It is our belief that the current battle is a battle for the life of Bitcoin – and this battle has been brought on by a number of factors, including censorship on r/Bitcoin creating hard feelings polarizing the community, bad faith debating by many bitcoiners who resort to name calling and conspiracy spinning, and the intransigence of the people with most influence (Maxwell, Ver, Back, etc) to understand that even if their specific vision of what’s best for Bitcoin may differ, that they have both a sincere desire to see Bitcoin succeed and a great deal invested in getting it to where we are today.

Further, though I am not one to go in for conspiracy theories, I do feel that it’s likely that one or more persons, companies, or governments are adding fuel to the partisan fire raging in the Bitcoin community. All they have to do is step in with hyperbole, name calling, etc. and everyone retreats deeper into their respective corners. This makes coming together, not to agree, but to disagree civilly and with an eye to find a way forward, even more important. The troll on the other side of that tweet is probably not being paid by Roger Ver. but by Goldman Sachs.

As the situation now stands, Bitcoin Unlimited has an advantage with the miners, and Core as a strong advantage with nodes – many of which are run by regular bitcoiners contributing to the network. It will be difficult for BU to reach the 51% of hashing power necessary to fork the chain (likely bringing a lot of confusion as Bitcoin would essentially become two instead of one). And SegWit has been designed to need 95% consensus to activate, a nigh-impossible goal even in the best of circumstances.

It is our prediction, however, that after a stalemate period, one, probably Core, will gain the upper-hand in adoption rate, and then we will see a quick adoption.

And once this boss battle has been won, we will then see that a lot of money waiting on the sidelines will start pouring back into a robust and viable Bitcoin. The price of Bitcoin will start to rise.
So, the only thing holding us back right now is … us.

What’s Holding Bitcoin Back?

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Now that the Winklevoss ETF has gotten its official rejection from the SEC, things have quieted down enough in the Bitcoin space for the controversy over how to scale to retake the center stage, and on Twitter and Reddit, the slings and arrows have been flying.

What really started things going was when one of the major mining pools, AntPool, switched to using the alternative Bitcoin Unlimited client over the Bitcoin Core client, the defacto standard.https://www.flickr.com/photos/basl/

To anyone not aware, which I expect to be few readers of this article, the Bitcoin Unlimited client allows the maximum blocksize, or throughput of transactions, to be set by the miners rather than being capped at 1 megabyte as it is in the Bitcoin Core client. For its part, the Bitcoin Core client is trying to gain enough consensus to activate a protocol known as ‘SegWit,’ which stands for segregated witness, and would reduce the size of data needed to get transactions into blocks. This is a defacto increase in throughput, but is a one-off, and further changes to what people want to code into their transactions may limit the effectiveness of this change.

This battle is crucial because transaction volumes are rising high enough so that not all transactions can make it into blocks, and the fee for ensuring that a transaction is recorded in block is rising to the point where Bitcoin is not looking as attractive as it once did to potential users.

Note that these proposals are not in opposition in and of themselves, and both could be incorporated easily if proponents of both proposals decided they wanted to work together and not against each other.

There is a lot of hysteria, name calling, and use of logical fallacies being used on both sides – but in my observations of Twitter and both main Reddit groups, r/Bitcoin and r/BTC, it’s the Core supporters who are far more sinning then sinned against. This might also be because their numbers seem to be far greater and their supporters include more of Bitcoin’s luminaries.

The more hysterical claims against Bitcoin Unlimited are that a rise of the blocksize to 2 or more megabytes would put the whole system at risk. It would make running nodes more expensive, create latency in how fast blocks propagate creating orphaned blocks, and open the system up governmental attack by limiting bandwidth.

The more hysterical claims against SegWit are that it was created by a number of developers who happen to work for a single Bitcoin company, Blockstream, which is developing off-chain scaling solutions including the Lightning Network and sidechains. Basically, the claim is that Blockstream is seeking to keep blocks small so the they can force everyone to use their proprietary transaction systems, charge a fee, and turn a profit. They would, in fact, position themselves to be the central processing center for a system that was designed not to have a central processing center.

Rational views suggest that raising the blocksize to 2-8 megabytes would likely not greatly impact the security of Bitcoin’s system. Proponents say that continuing advances to computer and communication technology will make even larger block sizes safe as well, but that’s an argument for a different time. Small increases seem like they would be safe. Conversely, hysterical cries that any raise is just a ‘slippery slope’ to unlimited blocksize, jeopardizing the whole system are unfounded. The difficulty of making current changes to the protocol suggest that we are nearing a stage when any further changes to the base level will be impossible to gain consensus.

Rational views of SegWit suggest that it is smart, effective, well-tested, and lays the groundwork for further developments, like the Lightning Network (which is being developed by a number of teams, not just Blockstream), and really should be activated at the earliest possible date.

On the whole, the problem of scaling Bitcoin has nothing to do with the protocol, and everything to do with pride, prejudice, and visceral emotion. A raising of the Bitcoin blocksize to 2mg along with SegWit activation may very well have gone through with little controversy as all parties would have felt listened too. But once lines had been drawn, hardliners began claiming that any non-backward compatible change, known as a hard fork, could not be tolerated – and that argument essentially shuts down discussion of a blocksize increase since it can only be achieved through a hard fork.

Whatever happens, it seems that Bitcoin will eventually find its way to scale –  creative solutions are being proposed all the time. And though other coins like Ethere
um and Dash are gaining ground against Bitcoin due to the fear, uncertainty, and doubt being spread, it’s likely that Bitcoin will not lose its place as primary cryptocurrency. But the needless arguments are slowing us down, giving others reason to doubt us unnecessarily, and keeping us from focusing on the real fight – disintermediating the banks and governments who have rigged the system for so long.

Let’s create a money that we can trust and use. Let’s do it with the knowledge that bitcoiners who hold different views than our own are NOT out to destroy it. and let’s keep it civil.

Generals Hayden and Flynn – and What’s Wrong with America

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Four star general Michael Flynn, former head of the CIA and NSA,  has gone on the record accusing millennials of being an untrustworthy generation:

… But this group of millennials … simply have different understanding of the words loyalty, secrecy, and transparency than my generation did.

Hayden was specifically talking about Edward Snowden and Chelsea (formerly Bradley) Manning, accusing them of being traitors who have harmed American interests and the ability of the American security apparatus to protect the homeland.

Now this accusation strikes me in two ways: First is the reason for these two American heroes sacrificing their futures to reveal great wrong-doings by the government entities they work for. The second is that Hayden does not seem to be speaking out about much greater acts of treachery perpetrated by men of his generation, and even who have, like him, served in uniform. It causes me to wonder about his actual motivations.

Let’s first take a look at what Snowden and Manning revealed:

A short list of the revelations revealed in the Manning trove o documents include the killing of a Reuters’ reporter, the killing of a 70-year-old woman and a five-month-old baby that was subsequently covered up with an airstrike, rampant abuse and torture of prisoners, illegal spying on the leadership of the UN, …

Though horrible, the scope and impact of what Snowden revealed is much more telling, so I’ll present the highlights in a bullet list:

  • Mass collection of Americans’ phone records by the NSA
  • The Prism program which secretly required companies like Google and Microsoft to provide any information requested – the companies were forbidden to even acknowledge that a request had been made
  • Britain’s version of the NSA taps directly into fiber-optic cables around the world, compromising all our communications
  • The NSA spies on American allies and their leaders
  • A program called XKeyscore collects nearly everything people do online
  • In the event that large tech companies don’t comply with the NSA, they can infiltrate Google’s and Yahoo’s clouds – again exposing all our activities and data
  • The NSA collects text messages
  • The NSA cracks security and builds back doors into popular devices – exposing our activities and data not only to the government, but also giving criminals the opportunity to find and use those back doors

Keep in mind that whistleblowers in the American government are typically not treated kindly. Manning was sent to prison where she received punitive treatment, and Snowden fled to South America, getting trapped in Russia when his passport was revoked. And they knew the likely response because of what’s happened to whistle blowers in our recent past.

There are legitimate criticisms that could be made about HOW both of these individuals blew their whistles, but there is no question that they have uncovered a huge amount of illegal, unethical, and unconstitutional behavior on the part of the government. Hayden, faced with the malfeasance of his department coming to light, of course, does not admit, apologize, and correct – he doubles down and blames those who revealed the crimes of his department.

Now let’s take a look at another general, once who likewise was heavily involved in national security: Michael Flynn.

Michael Flynn was briefly National Security adviser to President Trump and was a key person in the campaign and transition. He …

  • Flynn called the Russian ambassador several times during the transition, which in-and-of-itself might not be worth noting, but he also did so precisely on the day when Obama was rolling out sanctions against Russia. The timing was extremely suspicious.
  • He denied that the talked about sanctions, but it was eventually revealed that he did.
  • He was a paid lobbyist for the Turkish government throughout the campaign, transition, and into his time as National Security Adviser.
  • He revealed that he was a paid lobbyist to the Turkish government only after the fact.

So, let’s summarize. We have two people, who at great personal cost, expose the wrongdoing of their government. And we have decorated general placed into one of the most sensitive jobs in government who is being paid by one foreign government and apparently in collusion with another.

Hayden, of course, has much to say about the leaks and nothing to say about the general.

What’s more, Flynn is a consumer and purveyor of fake news. He and his son, who also worked at the White House until his fall from grace, spread a provably false story about Hillary Clinton participating in a child trafficking and sex operation that was being run out of the basement of a DC pizzeria. Even though it wasn’t. Even though, if it were, there would it would have been criminal for the police to have not swarmed the pizzeria, and
even though a
one reader of the story took it upon himself to go to the pizzeria, terrorize the staff and clientele, and shot rounds into the ground before realizing that there were, in fact, no kids being abused in the basement.

No, the problem is not the millennial whistle blowers. We need more of them.

The problem is a government that has begun to believe it’s own lies.
And the solution is for each of us to check our facts, check our officials, and set up systems where we don’t need to check them because they can’t go bad – and that’s why I use Bitcoin – a currency that works without the need for government or banks.

SEC Rejects Bitcoin ETF, Creating Bitcoin Buying Opportunity

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Doom and gloom has descended on the Bitcoin community in the wake of the SEC’s decision to REJECT the Winklevoss Bitcoin Trust ETF.

As I and so many others have written, this rejection is no surprise, and it’s approval was in no way crucial to the success of the Bitcoin experiment. The odds were stacked against approval as Bitcoin is a new, revolutionary asset, and conservative bureaucracies like the SEC do not want to expose themselves to the risk of things that they don’t well understand.

Further, as has been shown by much reporting, the SEC, like many bureaucracies is more than a little captured by the industry it is supposed to police, and Bitcoin is a threat to that industry. If Bitcoin achieves its full potential, it will dis-intermediate banks and governments, returning the power to control personal finance to the people. It is the cash of the digital age that does not need to be entrusted to a bank, incurring fees and opening it up to the possibility of being seized or frozen on a whim.

Right now, it’s important to remember that any money that you don’t have in cash in your possession, is not yours. The bank or government can at any time decide that it is not yours, change the value of a column in an Excel sheet, and your net worth will go to zero.

And this is a frightening prospect as the world’s governments become more authoritarian and plutocratic.

View the notion of bail-ins. In the event of a major bank crisis, the trend has been to make bank depositors responsible for the losses of the bank.

View the notion of civil forfeiture. The government, currently by way of the police, but there would be no reason that this power couldn’t be expanded in ‘the name of the public good,’ can seize any of a person’s property on suspicion alone, and are under no obligation to make getting that property back easy. In fact, most institutions doing civil forfeiture set up reclamation labyrinthine and difficult reclamation processes that most victims give up in despair.

And consider the notion of a ‘normal’ 2% inflation rate pushed by the Federal Reserve. The reason for this inflation rate is not to match the money supply to the size of the economy – that would keep the value of money at a 1 to 1 ratio. No, it is to devalue the money held by savers and decrease the burden of what large debtors owe. Who benefits, huge corporations and governments piling up huge debt burdens. Bitcoin is deflationary, a money that favors savers and punishes debtors.

The case for Bitcoin has never been stronger.

Whats even more important to remember as the price takes a hit on the news of the ETF rejection is that in the end, ETF like Bitcoin Trust, payment processors like Bitpay, and Bitcoin sellers like Coinbase are all transitional businesses whose very business models will be invalidated by the success of Bitcoin.

I was hoping for the jump start that the ETF approval would have given Bitcoin, but it is no surprise that it wasn’t given a go. The price has dropped as we all expected it to, and more drops may be coming as these things tend to have a cascading effect. This is NOT the death of Bitcoin, and we are seeing that Bitcoin is growing stronger across the globe, particularly in places like Nigeria and Venezuela… precisely the type of economy that most needs an internet based, trust free currency that gives the power of money back to the people.
So, my final takeaway… this is a buying opportunity.

Bitcoin Media Watch: Fortune Warns Against Greater Fools

Fortune Magazine had an interesting article talking about the likelihood of the Winklevoss Bitcoin Trust getting SEC approval or not.

In general, the article was fair and informative, and, also in general, it’s nice to see the increased amount of informed and balanced coverage Bitcoin has been getting in the press lately. Of course there are negative hit pieces written by experts who presume their resumes preclude the need for supporting facts, but in general the coverage has been picking up. There was only one line that I took issue with in the Fortune article:

According to Estes, the SEC may worry the agency’s approval of an ETF could lead to a bubble inflated by bitcoin novices—a bubble that could then pop. “Some fear it could be a good opportunity for legacy players to find the next sucker to take it off their hands,” said Estes.

This might be something reasonable to say with some of the pump-and
-dump scamcoins we’ve seen over the years. It does not seem a reasonable thing to say about Bitcoin.

Why?

In its short 8 years, Bitcoin has seen a tremendous amount of drama. The initial bitcoiners were a hardcore, technophile, frequently libertarian bunch. They were in it for the tech and the politics, and their number can still be found at Bitcoin meetups.

Those who joined in 2013 and 2014 have seen Bitcoin spike, crash, and not do much of anything. All the time it was doing that, there were hacks, thefts, frauds – never with the core blockchain or software of Bitcoin, but enough to make many wary of it as a dangerous instrument.

Then there have been the near constant questions about Bitcoin’s legality and how governments and law enforcement would treat it. The fact that Bitcoin has been called the currency of the dark web, completely obscuring the fact that cold, hard cash is still the currency of choice for most criminal enterprises. There have always been fears that somehow the government would step in and quash this financial experiment.

People who hold Bitcoin do so not for short-term gain. They may do so to get rich, but that bet is based on a belief in the fundamental nature of Bitcoin and what it can do to disintermediate banks, credit card companies, and governments from our private financial affairs. And when you pick up the newspaper any given day, you can see the need to disintermediate the banks, the credit card companies, and the government.

Bitcoin is the cash of the internet, pure and simple. It returns financial control to people. And the people who have held it and helped to develop it through all the drama of the last eight years are not waiting for someone else to buy at a slightly higher price so they can dump it.

I have a small investment in Bitcoin. It is large enough to give me hope for the future, but not everything I own, because it is, after all, still and experiment. Even if Bitcoin were to go to 50,000 on the news of an SEC approval of the Winklevoss trust tomorrow, I would not be selling. I might judiciously upgrade my lifestyle, but after taking the wife to dinner and getting the kids a few toys, I would continue holding my bitcoins, and continue to try to get more.

My hope is not that there will be a greater fool to start buying Bitcoin, but that it is the greater fools who don’t.

Bitcoin’s Price is Falling Ahead of the ETF Decision: Why That’s a Good Thing

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For the last week it appeared as though Bitcoin might crest the 1,300 dollar mark, but was continuously pushed back just shy of achieving that goal. Then a couple of days ago, it experienced a sharp drop and has been losing ground ever since. As of this writing, it is hovering around the 1,140 mark and seems likely to go lower.

Two observations I have about this drop is that, like with many drops in the past, it does not seem to be a slow attrition of the price, but periods of consolidation punctuated by strong sell orders – suggesting that the drop is being led by specific investors or institutions and not by the broader market. The second is that the US market seems to be leading the drop as GDX and Kraken have been trading fairly consistently lower than the Chinese exchanges, something that hasn’t typically been seen in the past.

Some have been claiming that the drop is the result of Antpool signaling its support for Bitcoin Unlimited, the major competing client to Bitcoin Core, there doesn’t seem to be any reason to think that this is true. There are still far fewer BU nodes signaling than Core. For now, neither of the two big scaling alternatives, raised blocksize with BU and Segwit paving the way for Lightning networks with Core seem like they will be seeing activation anytime soon.

That’s not good news, but it’s also not new news. Sooner or later, despite the acrimony in debate (and for the record, I have seen far more belligerence and name calling from the Core side than the BU side), eventually we will see a win by one side or the other, a compromise, or a work around.

No, the big news story that must be driving the price is the fact that the SEC must approve, reject, or no comment (default approve) the Winklevoss Bitcoin ETF by March 11. If approved, there is the possibility of a great deal of institutional money being poured into the Bitcoin space, raising the price considerably. If rejected, then, … well … things will progress kind of like they are now, which is a general trend of adoption and development.

The prognosis for whether the exchange will be approved or not is anybody’s guess. On the ‘it will be approved side is the fact that if it were going to be rejected, it would likely have already been done, one of the two officials who will make the decision seems inclined to permit, and the Trump administrations general hands-off attitude toward regulation. On the ‘it won’t pass side’ is the fact that it is a new, risky instrument and the SEC is a conservative agency. Much easier and safer to stop the fund and let a future administrator approve one if they want. Plus, all of the ransomware attacks, use of Bitcoin on the darkweb, the fact that much of the mining is happening in China, etc.

So why the price drop? It seems likely that large investors are protecting themselves from a loss after a rejection, and preparing to buy back on the dip that will the rejection will precipitate. On the flip side, if the exchange is approved and the price jumps, they can still buy back in on the continued upswing, and will have only lost some differential in price, but still come out positive.

In the long term, an ETF approval would be a good jump start for the Bticoin ecosystem, and I hope that it gets approved. I’m not counting on it, though, and will continue to HODL as I’ve done through all of the ups and downs.

Far more than the ETF, the news I am hoping to hear is that the CORE development team start listening to the real concerns of many in the Bitcoin community, make reasonable proposals and write reasonable code to meet those concerns, and get Bitcoin moving again.
But I guess that’s just wishful thinking.

 

Bitcoin is Rising but has a Gordian Knot to Cut

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There is a lot of excitement in the Bitcoin community as it decisively breaks through its 2013 all time high.Further, the Bitcoin rally seems to be being driven by ground level interest as seen by rising trading on LocalBitcoins in countries as diverse a Nigeria, Kenya, Thailand, Norway, Sweden, New  Zealand, Russia, and of course a consistent up trend in the US.

The Winklevoss ETF

Many pundits are saying that the rise in Bitcoin is largely because of the impending decision by the SEC to approve or reject the Winklevoss Bitcoin Trust, and mhttps://www.flickr.com/photos/bfishadow/any others are speculating that if (when?) the trust is rejected that the price will take a major hit.

There are a lot of reasons to think this is not true. The prevailing sentiment is that even under the looser, more Wall Street friendly regulatory regime under Trump, that the SEC is likely to see Bitcoin as too risky and speculative to get their stamp of approval. For the officials working at the SEC, if they approve and something goes wrong, they will certainly come in for tremendous amount of criticism, If they reject, then there will be nary a peep by anyone that matters, to them at least.

Therefore, it is likely that a rejection of the ETF has largely already been priced in – and when the news comes down, there will be a mild correction, possibly followed by a breakout upwards based on actual adoption numbers.

On the other hand, rejection is not certain, and if it is true that a rejection has been priced into the market, and if the ETF is approved, then we could see a rapid, exuberant rise in the price – probably leading to a bubble which will need to burst and consolidate before actual adoption kicks back in and continues the rise.

Bitcoin VS. Gold

Another feature of the current Bitcoin rally is a plethora of articles comparing it to gold, saying that Bitcoin has surpassed gold’s price.

This is nonsense, of course. One Bitcoin is not in any way equivalent to one ounce of gold. Gold has a market cap of more than seven trillion dollars, and Bitcoin is testing 21 billion. It’s nice to see that Bitcoin is rising, and it was a nice psychological boost when Bitcoin crossed over gold’s list price, but in fact, there is nothing to read into that fact.

Of far more interest to me was the recent debate held between gold bug Peter Schiff and Bitcoin bug Brian Kelly. The lively debate essentially came down to Schiff saying that gold has a long history and is based on something real, and Kelly saying that Bitcoin is built for the new economy and IS based on something real, a trustless protocol and ledger system that is ripe to be built on top of. Kelly implies that the new economy is being born today and that Schiff can’t see it through his gold-colored glasses.

In my own opinion, like so many things that people like to put into binary opposition, gold and Bitcoin are not in competition. They have similar, but different, properties and are complimentary. It would be wise to have both in a portfolio. But in the final analysis, if you’re looking to just retain value, gold is best, but if you’re looking to raise value, then Bitcoin has tremendous upside potential – far beyond gold’s. Schiff rightly indicates (by saying that Bitcoin is the new Beanie Babies) might go to zero instead of the moon. But that is a chance we take any time we invest in something new. The fundamentals of Bitcoin look strong, and it is more likely to go higher in the long run than to disappear.

Kelly, despite a lot of criticism for talking over Schiff, soundly won the debate according to online polls.

The Fly in the Ointment – Bitcoin’s Gordian Knot

Although I am generally bullish about Bitcoin’s long-term prospects (and decidedly agnostic about what it’s going to do on a day-to-day or week-to-week basis), thereis no getting around the fact that the people involved in Bitcoin’s development, both as a currency and a protocol, have been locked in acrimonious debate for more than a year. One side wants the blocksize to be raised which would allow for more transactions per second and lower per-transaction costs. The other side, and the one with the clear upper-hand at the moment, wants to keep the blocksize at the current 1mb.

As with everything, there are tradeoffs, Raising the blocksize would make using Bitcoin much easier and cheaper for everyday commerce, but critics claim that it would lead to centralization as only very powerful nodes could handle the huge database necessary to record all the transactions. This is a simplification, of course, but being decentralized is a key component of Bitcoin, and if it were to become centralized then it would be vulnerable to all sorts of attacks.

Keeping or lowering the blocksize means that decentralization would be prioritized, but transaction rates would be low and the price to get any single transaction into a block would go up – something we are currently seeing happen. Proponents say that his isn’t a problem as Bitcoin can be a backend store of value rather than a currency, something on the order of how banks settle their accounts at the end of the day rather than how people buy a cup of coffee. For the consumer level, there is the possibility of second or third level infrastructure like Lightning or sidechains. These have the possibility of providing enormous throughput, but critics claim that Lightning and other second level protocols are being developed by for-profit companies and that people pushing them have a personal stake having people use their proprietary services. This also would be a violation of the promise of Bitcoin as Bitcoin is supposed to completely disintermediate banks and other like services.

We are thus at an impasse. Bitcoin cannot scale on chain as so-called small blockers are directly in control of the main client used to run Bitcoin, called Bitcoin Core. There are alternate clients, but they would need to be used by at least a super-majority of users before large blocks would take effect. The most prominent alternate client right now is Bitcoin Unlimited.

Scaling Bitcoin off chain is also currently unlikely for a few reasons. First, changes to Bitcoin’s protocol would need to be made – the most important pending change is called Segwit, and just like Bitcoin Unlimited, it is awaiting a really super majority of users to start using it (95%) before it will activate. Even under the best of circumstances this would be a difficult hurdle to leap, and under the current contentious environment, it seems unlikely that it will take effect.

Unfortunately, it is my opinion that Bitcoin cannot and will not truly take it’s next leap of development before a solution to this impasse is found.

Cutting Bitcoin’s Gordian Knot

The worst part of the impasse is the acrimonious nature of the debate, where prominent people of the community engage in ad hominem attacks, question motives, and generally troll each other. This behavior makes discussion and compromise that much harder.

There is hope. When you strip away all the personal attacks and motive questioning (we’re all in it for ourselves – that’s built into the protocol) we all want what’s best for Bitcoin and to see it succeed. Most big blockers would agree to some limits as long as we were seeing the ceiling raised, and most small blockers know that even the second tier scaling solutions would sooner-or-later require the ceiling to be raised. Remove the pride and the ruffled feathers, and there’s a lot of common ground.
Further, development continues, investment continues, adoption continues. It is not clear to me what, who, when, or how the Gordian Knot of Bitcoin will be cut – but it seems clear to me that at some point something will break and we will find ourselves on the other side of this problem. It also seems likely to me that when we, the pioneers of Bitcoin, look back on this fiasco, we will all agree that it really could have been made a whole lot simpler.

Bitcoin Media Watch: Ann Pettifor Attacks Bitcoin – A Response

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It’s a funny thing. You would think that Bitcoin would offer something of interest for those on both the right and left side of the political spectrum. It is a money that returns financial control to the hands of the people, removing the need of banks or governments to create or secure it. Since it is finite, it rewards workers and savers, while penalizing debt financing. It would end the cycle of financing waste and wars on the notion that the debt incurred today can be paid back for less in the future because money will be worth less.

And yet, Bitcoin has been attacked savagely from the right and the left.

Up today is Lynda Pettifor, A UK economist who rails against the roll big banks play in the pauperization of the world populace to the benefit of a rarefied 1%.

A few days ago video was posted on Business Insider that details why she thinks that Bitcoin is bad. Interestingly, the video itself is not cut like a news piece, it is cut like a commercial, complete with floating words and scary imagery to prick the lizard brain into a primal fear of this new digital asset.

This video may indeed show what Pettifor thinks of Bitcoin, but is not a scholarly work, it is a hit piece, pure and simple – and not worthy of a person who proclaims herself to be a scholar.

The piece is not long, so we can parse what she had to say:

Bitcoin was invented by some big, bad guys on the dark web as a kind of secret currency for which they could use to exchange goods and services.

Good: It is a currency created to exchange goods and services.

Bad: It was created by some big bad guys. … What? Exactly how are they big or bad? Satoshi Nakamoto, whether one person or a group, created Bitcoin, worked on it for a number of years, and walked away. There are thousands of coins that are thought to belong to Satoshi, but have not moved since they were mined, though they would be worth many millions. Profit does not seem to have been Satoshi’s primary motive.

And ‘secret currency’? It’s not exactly secret. I have a website dedicated to its promotion. And although Bitcoin is pseudonymous, meaning that there is no name printed on side of each Bitcoin wallet, it is also not anonymous. Actually, since financial privacy has not been my own primary aim, if the IRS or someone else wanted to know what I do with my bitcoins, it wouldn’t be hard to track them down. Start with the QR code on my donate page, find Bitcoin addresses closely linked to that address, and voila! You have me! It was for this reason that when Coindesk printed this article stating that the Danish police had found a way to track Bitcoins, I was surprised that anyone was surprised. It is certainly possible to make Bitcoin transactions more private, and not posting your address on your website would be a good start to that, but Bitcoin is certainly not ‘secret’ by any stretch of the imagination.

Pettifor goes on to talk about how Bitcoin can’t work because there will be a finite number of coins minted:

The problem with a finite asset is that the economy is not finite.  And if you have this finite amount of money to match this almost unlimited capacity of people in the economy to do things, money doesn’t work.

Now there are different ways to look at this one. She is speculating that the value of the dollar (for example) should remain the same, and the number of dollars printed should be increased to match the current rate of economic activity.

But how do you actually determine how many dollars need to be printed. And how to account for inflation? And if Pettifor is really a progressive she should realize that inflation is an invisible tax on the poor – sapping their wages and savings.

In fact, Pettifor has it exactly backwards. You don’t have to have a money that can be infinitely increased, you should have a money that is infinitely divisible. As the economy enlarges, smaller units of the money can be used to purchase things – also known as deflation. Deflation is typically seen as an evil by governments and corporations which rely on debt financing and inflation to keep themselves stable. For you and me, though, a deflationary currency would be far better. And in the long run, it would make for a far better, more beneficial economy.

Money works fine in a deflationary economy – it just doesn’t work for the wealthy as well (but it does even work for them!)

Bitcoin doesn’t allow economic activity to take place on the scale that we want it to be.  It is too volatile to be useful.

Now this pair of statements is particularly telling because they contradict each other. Bitcoin currently does not allow economic activity to take place at scale, because it needs to scale up tremendously before it can do so. When it hits a multi-trillion dollar market cap (at which point dollars will be valued in Bitcoin and not the other way round), it will certainly allow that activity, but the monetary model will need to be deflationary and not dependent on fractional reserve banking.

The other statement, that Bitcoin is too volatile. just feels like a potshot at this point as it’s been made by everybody and his brother at this point. Of course it’s volatile. And it will continue to be volatile. Until it rises in value to the point where it’s value is buoyed by substantial economic activity. Volatility is not Bitcoin’s death knell, it is its birth pangs.

And now for Pettifor’s coup de grâce.

It’s a bit like a ponzi scheme. If you got in at the beginning, more suckers got dragged in, the price goes up, they sell at the top, when the thing crashes down, there are a lot of losers.

Let’s be absolutely clear that Bitcoin is still an experimental financial instrument, and until it achieves a ‘we can’t be without this’ status, it will continue to be so. There is absolutely the chance that Bitcoin could fail, be overtaken by a rival, or be crushed by overbearing regulation. I don’t think it will, but it’s the risk you take when you start investing in it.
What Bitcoin isn’t, is a Ponzi scheme. If it is, then any investment with the chance of failing is as well. Bitcoin has the chance, maybe just a chance, but a chance to change the world. And the world is desperately in need of changing. So, Ms. Pettifor, that’s a chance I’m willing to take

Sprite, Lightning, and Block Size – Towards a Bitcoin Scaling Solution

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In one of Andreas Antonopoulos’ regular speeches, he likes to talk about the problem of Bitcoin scaling. In short, he says that the problem of scaling is a good one to have, as it means that there are people to want to use the use the network. And he says that Bitcoin will fail to scale – until something happens and it does. And then it will fail to scale again, until it does. And it will continue to fail to scale, all the way up until the point where it becomes a worldwide, if not world, currency.

The ‘something that happens’ may be something people are already working on, or an idea or innovation that seemingly comes out of nowhere–but all of a sudden, Bitcoin will find a way to grow and meet demand until the next time it fails to scale. Right now, the main ideas for scaling begin with Segwit, which is not so much scaling as fitting more information into the Bitcoin blocks, and which also provides a number of other fixes and innovations to the Bitcoin protocol, moves to Lighting, a system of off-chain payments channels currently under developments by a number of different teams, and finally includes enlarging the blocksize, currently capped at 1MB.

On the face of it, all three of these ideas seem like good ones, within reason. Streamlining the the information that goes in blocks and fixing the malleability flaw? Check! Com
ing up with a faster, off-chain system of payment channels? Check! Raising the blocksize in reasonable, measured steps to make sure demand is kept up with and prepare for the demands Lightning will inevitably put on the system? Check!

There are inevitably lots of debates about what’s best, security risks, and even about the direction and role Bitcoin should play in the world. The only thing that is certain is that we are not done making changes to the base Bitcoin protocol – not if we want it to succeed.

Now, as reported by Coindesk, there is another proposal to solve the Bitcoin scaling problem – Sprite. This new idea is in some ways a simplification of the Lightning idea. The authors of the white paper note, though, that their idea is ready to be run on Ethereum as is, but that it would likely not be compatible with Bitcoin because changes to the script would be necessary.

This is true of other potential improvements or innovations to Bitcoin, such as Mimblewimble – another idea about how to increase scalability and also add true anonymity to Bitcoin, but at the cost of some of the current programmable features of currency. For Mimblewimble to be implemented, there would have to be changes to the base protocol.

And that’s where we stand right now. The fight over what, how, and even if we should make changes to the protocol, otherwise known as a fork, has so muddied the waters that the people who would have to make the change, the miners, are finding it safest to do nothing.

A few days ago, I saw a tweet from someone praising the Bitcoin core developers for persevering despite all the vitriolic rhetoric and personal attacks they have had to put up with. I re-tweeted with a comment that I agreed that they deserved praise, but that it was important to note that the vitriol has been flowing in excess in both directions.

My point was merely to say everyone needed to cool down, come to the table, and come up with reasonable steps to move us forward. Part of that means compromise and recognizing that the people on the other side of the table are there because they believe in and support Bitcoin too.

For my efforts, I got called the PC brigade.

And that is exactly what I’m talking about. Using that label was an effort to discredit me and shut me up. It is exactly what we don’t need.

In the white paper for Sprite, the authors note that Sprite will probably not be compatible with Bitcoin because of the changes needed to the script. They note that it might work, however, on a side chain, which essentially means elevating a competing currency to work in tandem with Bitcoin.

They further state that developers working on ideas to improve cryptocurrencies are better off not starting from Bitcoin, as they will be hampered by its quirks – and the implication is that there efforts are likely to come to naught.

I am a long-time Bitcoin supporter, and I believe that it has the potential to do much good in the world. I am enjoying its current problem of failing to scale – in that I am glad enough people are becoming interested in it to want to use it to make the system creak. But if we are going to survive to the next moment when we ‘fail to scale,’ we are going to need to find a break in the current logjam. And that will require people, all of us, giving each other the benefit of the doubt and working toward a better Bitcoin.

Some Writings on What Bitcoin can do for the World

Bitcoin and Women

Bitcoin can Change the World

Bitcoin can End World Poverty

How Blockchains can Change the World

 

RingtoneFeeder – Get Your Ringtone Discounted with Bitcoin

As a service to the Bitcoin community, Bitcoin Warrior is featuring merchants and services that offer discounts when purchased in Bitcoin. Today we are featuring:

RingtoneFeeder

Description
We have been creating original ringtones EVERY week since April 2008. The tones are all produced to put a smile on your face and to make your phone stand out from the crowd when your phone rings or alerts you.
The tones are produced by Geoff Smith. Most of you probably know Geoff from his jingles heard on Adam Curry’s Daily Source Code Podcast, GeekBrief.tv, Radio Lingua Network, Tips from The Top Floor, ScreenCasts Online, the successful iYule project and lately the theme song for TWiT Live with Leo Laporte.
Geoff began composing jingles and theme songs for podcasters back in 2005 and has written hundreds and hundreds and the list keeps growing.
Geoff is currently the keyboard player for the Nashville based power pop band, Codaphonic as well as the bassist and lead singer in the Chicago based Police Tribute Band, One World. Geoff was also the guy who wrote Digg the Code, which got massive acclaim when Cali Lewis made a cult music video of the song during the Digg the
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Bitcoin Media Tracker: Bitcoin’s Denouement?

Pyments.com had a grab-bag article describing the current state of Bitcoin on their site for the last few days. I was particularly interested in this article as the title is Bitcoin Tracker: Denouement? Now the word denouement essentially just means ‘ending’ and is used in literature for when all loose ends are tied up.

In the context of Bitcoin, I was a little confused since, in-and-of-itself a denouement is neither good or bad (it depends on if you’re the hero or not), but it certainly means ending. Is Pyments claiming once more that Bitcoin is dead?

The article starts by talking about the recent regulatory crackdown of the Chinese government on Bitcoin exchanges along with the chilling effect this had trading volume. Despite this seemingly troubling news, the price of Bitcoin has largely held stable, initially dropping from nearly 1,200 dollars to about 900 before recovering and holding steady above the 1,000 dollar mark.

What the article doesn’t get into is the fact that it was the fickleness of Chinese regulation that led to the multiple drops in price in 2013 and 2014 after Bitcoin hit an all time high of 1,200, bottoming out at about 200 in 2015. This was so true that the statement ‘China bans Bitcoin’ attended by a sudden drop in price became a joke within the hardcore Bitcoin community. One of the reasons that China could have such a big effect on the price was that the Chinese exchanges had unnaturally high trading volumes as the exchanges didn’t have any trading fees to cool overheated speculation.

So, the involvement of the Chinese government this time, to inspect the exchanges, to make sure they were not breaking any laws, and to impose trading fees had a muted effect on the price, will in the long run stabilize the market and are generally taken to be a good thing.

It’s also important to note that Bitcoin is still in its infancy and the direction it takes as it grows up is not immediately clear. If it becomes a reserve currency with base and second tier level protocols allowing it to be fully controlled by individuals, the business models of exchanges and payment processors is merely a transitional phase to smooth t
he interaction between government issued money and cryptocurrency until the later grows enough that people will no longer need to use the former.

The article further notes that Bitcoin in Japan seems to be taking a turning. Mizuho Financial Group has recently invested 1.75 million on bitFlyer, a Japanese Bitcoin exchange and payment processor. In general, the Japanese government has been taking a cautious, but positive approach to Bitcoin, and in April Bitcoin will be officially recognized as a means of payment. Bitcoin trading in Japan is on the rise, and many are expecting that the relatively conservative Japanese public may be set to take an interest in Bitcoin because of this official recognition.

No general article on Bitcoin would be complete without a mention of the spectacular implosion of MT Gox, one of the first and certainly the largest Bitcoin exchange, headquartered in Shibuya in Tokyo until it suddenly stopped trading in 2014, of course contributing to the already downward slope the Bitcoin price was on at the time. The article notes that nearly half-billion-dollars worth of Bitcoin went missing, whereabouts still unknown. The assets that were left are in the hands of the courts and are likely to be apportioned out to investors at some point. The article points out that IOUs for these payments are being traded, and it appears hedge funds are buying these up in anticipation of a skyrocketing price when payments begin.

The MT Gox story is complicated, but one of the things the article kind of misses is that it appears that the exchanged has been hacked and funds stolen years before it went down, and much of the trouble it had later was a result of the owner, a man of questioned ability and temperament, trying to cover up and make good on the loss. It’s also not at all clear how much of the supposed losses were actual and how much were ‘on the books’ losses fake volumes. MT Gox was certainly hacked several time, and funds were stolen, but it’s not clear that it was as much as has been reported.

Then the article ends on a case involving the hacking of JP Morgan by a pastor from New Jersey and the owner of the Coin.Mx Bitcoin exchange. The exchange owner bribed the pastor to let him use the church’s charity to front money-laundering activities. These appear to be real criminals committing real crimes, who happened also to be using Bitcoin.

Which brings me back to Pyments and their denouement title. As far as I can tell, the article is fairly even-handed, noting some good and some ill aspects of the current Bitcoin scene. They left out two big questions that Bitcoin has, the March 11 deadline for the SEC to approve, reject, or no comment the Winklevoss twins’ Gemini Bitcoin ETF. If that gets approved or no commented (which would amount to approval), we could see a massive influx of institutional interest. If it is rejected, it’s unclear what would happen, but I predict we would see only a slight dip in price as the expectation is that it will be rejected by the conservative SEC, so the effect is probably already priced into the market.

The other, more negative, element the article missed is that the nearly two-year long battle amongst developers over how Bitcoin will best scale continues to be vitriolic, divisive, and with no sign of immediate resolution. In my opinion, we will not see a true ‘denouement’ of the current Bitcoin story until that issue is resolved, one way or the other.

So what exactly is the denouement the title is talking about? I can only presu
me that the title writer, with a predisposed negative attitude towards Bitcoin (it is a payments website, after all), was to ambigiously suggest that Bitcoin, once more, is done.

I appauld Pyments for the even-handed article on the state of Bitcoin. I have to wonder about the FUDish nature of the title, though.

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Trump Supports Civil Forfeiture; Support Bitcoin

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In 2012, my wife and I decided to take a road trip through this great land of ours to visit my wife’s sister. Her sister was wanted to buy a house, so my wife wanted to help out. Rather than spend the money on a wire, she took 8,000 dollars out of the bank witcreative commons imageh the intention of giving it directly to her sister when we arrived.

Soon after pulling onto the highway, a truck in front of us kicked up a rock, putting a tiny crack in the wind shield. I grit my teeth, but there was nothing to do about it for the time being, so we continued on the trip.

Somewhere along the Arizona- New Mexico border, a police officer somehow noticed that crack in the windshield and pulled us over. I was polite and cooperative, and the officer was pleasant. He said that we should fix the windshield as soon as possible, but that he wouldn’t write us up this time. He also said  there was a lot of drug traffic coming through the area, and though we looked like nice enough people, he asked if he could search our car. I agreed since it’s always been my policy to cooperate with the police.

He leaned into the car and within two minutes came back out with the envelope of money my wife had placed for safe-keeping below the front passenger seat. He asked what it was for, and my wife told him about about her sister buying the house and how she meant to present it as a gift.

The officer took his hat off and scratched his head. Then he said “I think this is too much money for people to just be carrying around, unless it’s for some other reason. This money, it probably comes from drugs sales, and I’m going to need confiscate it.”

This is when things got really weird. The officer brought out a piece of paper that he wanted us to sign saying that we were relinquishing rights to the money. If we did sign, we would not be arrested. If we didn’t sign, we would still lose the money, our car too, and we would be arrested.

Reluctantly, and with my wife glowering at me, I signed.

The above is not a true story in that this event never happened to me. It could have, though, and has happened to thousands of people all over the country.

This week, President Trump met at a round table with sheriffs from across the country to discuss law enforcement. One of the topics for discussion was civil forfeiture – the practiced being described above. Trump, true to form, supported this practice without ever really demonstrating that he understood it.

In summary, civil forfeiture is the practice of police confiscating property due to ‘probable cause,’ a term which can mean anything the police want it to. The property’s owner does not have to be convicted, charged, or even arrested. Once seized, the procedures for getting the property back are drawn out and expense – made that way to dissuade people from trying.

And what happens to the money? At least some of it goes to the very police department the officer works for. This creates what some legal analysts term a moral hazard or perverse incentive. It turns the police from being the upright protectors of the people, to being the wolves preying on the people.

And if, as I might hear you say, that most police are true blue, this is a systemic, not an individual evil. The departments will rate officers on how well they bring in the bucks – just look at the prevalence of ticket quotas, also supposedly not in use.

The police need to be impartial administers of the law. And this is increasingly important now with trust in the government eroding. When police act like citizens are prey, the citizens will respond by not trusting the police, not calling the police, and resisting when the police are trying to deal with situations. The police need the trust and admiration of the people they protecting to do their job effectively.

Civil forfeiture is a corrosive abuse of official power.

We the people have a responsibility to maintain our liberty even in the face of official authority. This doesn’t mean directly opposing, but it does mean doing things to keep ourselves, our privacy, and our property safe. A free internet, our right to use encryption, our right to a non-government-non-bank money are key to this ability.
Bitcoin

The Death Knell for Net Neutrality

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I do not agree with what you have to say, but I’ll defend to the death your right to say it.

-Evelyn Beatrice HallPublic domain photo

As the news continues to be full of Trump’s so-called Muslim ban, the wheels are starting to turn to make much more fundamental, and difficult to rollback, changes to how life in America works.

Over the years there have been a number of attempts to give internet providers free rein over how they manage, or inhibit, the content that their downstream users get. The goal of the providers is to have complete control over what can get transmitted over the internet, or at the very least, how fast.

If a website wants to have fast speeds, then it will have to pay for the privilege. If a website has a business model or a message that the providers don’t like – they can simply slow down the speed at which that site can load, or block it altogether. It you are on one provider’s network and want to view content sponsored by another provider, you may have to pay a premium to view or may just be SOL.

The key change is that Ajit Pai has been promoted to lead the FCC which regulates internet providers. Currently, the internet is viewed as being a common carrier, which essentially makes it like a public road. The providers may put people on that road, but they cannot capriciously obstruct how people use those roads when they’re there.

Pai is a vocal opponent of that idea, saying that he wants to get rid of all regulations that ‘hold back investment.’ This term, hold back investment, is a dog whistle. It seems to mean a good thing – bring in money to help develop the infrastructure and benefit us all. What it really means, and what his future employers in the industry hear, is that they will be given free rein to create different tiers of usage – like a cable company charging for premium channels. And they will have the right to not allow any content that they don’t like, for any reason.

The problem with this is that free access to information is key to a free society. Whether I’m a billionaire or a pauper, I should be able to get to any information out there without having to pay the middleman providers anything more than an access fee. (And there’s a really great argument to making access free too). Of course, many sites have paywalls for their content – which is natural as they are the creators of that content – the providers will be skimming money from the pockets of the creators, inhibiting their ability to create great content. And finally, it is the ability of people to learn what others are saying and think, even if those views are unpopular or wrong – because once we start limiting that speech, then there is way to keep them from limiting all speech.

We have already moved far in the direction of becoming a corporate kleptocracy, and the destruction of net neutrality would be one more solid nail in the coffin. I suspect if there weren’t so many other disturbing things going on in the news that there would be large protests over this development –  but with so much else going on, it’s easy to miss these less sensational, but life altering, developments.

The internet is to the modern era as roads have been throughout history. Control the roads, and you control the people. Let’s not be controlled. Keep the internet free for all.

On Giving Trump a Chance

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Patriotism means to stand by the country. It does not mean to stand by the president.

– Theodore Roosevelt

The last installment of the American Intelligence Squared,an organization that hosts debates on topics of the day, posited the statement “Give Trump a Chance.”

The statement seemed odd to me at first, and after listening to the installment, I can’t help but feel that the question is completely misplaced. What exactly does it mean to ‘give Trump a chance?’

Trump has his chance whether I give it to him or not. He is in the White House, he has a Republican Senate and a Republican House, and soon he will succeed in placing Neil Gorsuch on the Supreme Court restoring the hard-right lean of that court. All three branches are either in Trump’s direct control or solidly in support of him and his policies.

Just as I won’t join the “Not My President” people, another meaningless statement that shows nothing more than aggressive denial on the part of the people who use it.

No. Trump is president. For better or worse, he is my president. He has his chance and he is taking it right now.

What these statements do NOT mean. Acknowledging that Trump is in power does not mean that I must give him my personal loyalty or abrogate my responsibility as a citizen to keep him accountable for his actions.  Even had he won with a mandate, or even a majority, this would not be so.

It is the responsibility of every citizen to make sure that people they put into power fulfill their responsibilities competently and ethically. Calling the president out when he fails on any of these counts is not ‘whining,’ it is not being ‘a crybaby,’ it is the height of patriotism.

More than that, though it is so seldom done as to be non-existent, those who hold great power and those who hold great privilege must be must be given even harsher penalties if they do break the law and the trust of the people. Penalties for people in power, from police, to CEOs, to presidents, must be proportionate to the damage that they inflict when they act badly.

And note that our current regime intends to act very, very badly. Nearly the first thing our Republican congress decided to do when it took power at the beginning of the year was to try to abolish the ethics office. Much easier to cheat and steal if you don’t have even that weak of an agency looking over your shoulder.

And this is not simply on the national level. Republican lawmakers in South Dakota convened an emergency session to repeal a referendum requiring them to be ethical. Why the haste? Because ethics is not what they are about, nationally or locally.

Watch your politicians. Follow the money. Keep an eye on how what they are doing affects your life, the lives of your neighbors. Remember that they, likely, are in the employ of a masterclass of millionaires and billionaires who would like nothing better than to establish medieval feudal system where their power and privilege are assured and we – you, me, my son, your daughter – exist to serve them. And if your officials ARE acting to weaken the republic through fear and lies, hold them accountable.

In 1975, Gerald Ford issued a blanket pardon for any wrongdoing Richard Nixon may have done. In 2008, Barack Obama refused to investigate alleged crimes and overreaches of the Bush administration. And though I think there is far less to be investigated there, in 2016 Donald Trump is not investigating the supposed crimes of Barack Obama or Hillary Clinton.

If Donald Trump, as I think he will, violates his oath of office, breaches the constitution, or out-and-out breaks the law, this is a trend that must end. We must re-establish the accountability of the people we entrust with our government, and if they break that trust – put them in jail.

Donald Trump is my president. Donald Trump has his chance. Start now. Stay vigilant.

A Tale Of Two Women: Just Following Orders Edition

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In 1981, Anne Gorsuch was appointed to be head of the EPA by Ronald Reagan. Gorsuch, an arch conservative, took to her job of curtailing the activities of the EPA with gusto, eventually leading to a scandal and her removal from the post.

The scandal involved the following accusations:

  • Political manimpulation
  • Fund mismanagement
  • Destruction of subpoenaed documents

Her defense? “I was just following orders.”

Now that’s a defense that we’ve heard before, in Nuremberg, and one that as a society we’ve taken as a non-defense. Even in the military with its rigid hierarchy and a clear necessity for soldiers to follow orders, saying “I was following orders” is not considered a defense for carrying out clearly illegal acts or committing atrocities.

As a person placed in a position of trust at the very top of the government, Anne Gorsuch’s responsibility to follow the law was that much more important.

Further, though it never plays out this way, it is my sincere belief that the higher a position of trust you have, and the wider a field of impact you have, the harsher should be the punishment should you commit crimes.

And, it is the moral obligation of every individual to speak up if they are given illegal orders. Anne Gorsuch did not do that. She followed the orders, probably willingly. And her penalty was light given the trust that she had been given.

Now let’s switch to Sally Yates, the former acting head of the Justice Department.

Yates, a holdover from the Obama administration was in a caretaker position while the President’s nominee for the position, Jeff Sessions, goes through the confirmation process in congress.

In that capacity, she serves at the pleasure of the president, but she has a higher duty to the law of the land. Thus, when Donald Trump signed an order restricting travel from seven countries on religious discriminatory lines, Yates considered the constitutionality of the order and decided that in good conscience, she could not defend it and issued an order to the department not to defend it.

And she got fired.

Now, I do not have a problem with the firing. The AG serves at the pleasure of the president, she displeased him, and he had the absolute right to fire her. But many have criticized her for forcing the firing rather than just stepping down.

Wrong: I applaud her principled stand, as I would for a republican appointee who would do the same thing. (Note – there is a lot of hypocrisy out there when one side blames the other for things they are vastly guilty of themselves.) I don’t have to agree with the stand a person takes as long as I recognize it is principled – and I applaud Sally Yates for NOT following orders, and for calling out the president for what is clearly a very questionable, at best.

We need more people, not less speaking truth to power and lets reward it when we see it.

Unfortunately for us, Trump’s nominee for the supreme court is Neil Gorsuch, son to Anne. His perceptions will no doubt be informed by the scandal that surrounded his mother’s departure from the EPA, and if confirmed for the bench, as I fully expect he will be, we will have one more person on the highest court who will privilege loyalty and power over justice and law.
Things are getting worse, not better. Send a shock to the system. Start using Bitcoin.

Trump: Proof in the Pudding and Bitcoin

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A few days ago, I responded to a tweet from MarketWatch in which they advised readers to sell everything if Trump starts a trade war. I wrote back with a pithy: Sell everything, buy Bitcoin.

One person who read the post took exception. He wrote to ask, and I’m paraphrasing, if I was really going to trust an imaginary currency when tshtf. My answer: Yes, I will trust, not an imaginary currency, but a cross-border, decentralized, programmatic
, non-bank, non-government money that’s safe from Wall Street and Treasury hands when tshtf.

And it’s not just trade wars that will spark the a rush to safe assets out of the hands of the very people who have been pauperizing us for 40 or more years. The political, financial, and social rifts in the US are growing wider. There is likely to be more domestic strife over the next few years, a good chance of new wars internationally, and a not insignificant chance that the financial system will collapse again.

Trump voters like him; the really like him

The Guardian has a nice piece this morning that examines the attitudes of a few Trump voters after his first few weeks in office. They love him. The reporter interviewed a number of working-class people in a country that went for Trump, and their opinion is that it’s about time there is someone who is cutting through the bullshit, telling the truth, and sticking up for them.

It’s hard to read. What’s hard to understand is that just from looking at him, you get the sense that Trump is that boss that absolutely hated. Full of himself. Dismissive of others. Not nearly as talented or successful as he thinks he is. Even worse is the notion that there is someone finally fulfilling his promises and sticking up from them:

  • He’ll drain the swamp: He has filled his cabinet with billionaires and ideologues who are sure to strengthen corporations, weaken workers, and ill the pockets of people … like them.
  • He tells the truth: He cries ‘fake news’ while showing a disturbing disregard for the truth. Anything that doesn’t fit with what he wants to believe is a lie or a fraud. We now live in an era of alternative facts, which is just another way of saying ‘believe the lie.’ Facts are check-able. We should all do check them, Republican, Democrat, Libertarian, or Independent.
  • Keeping the Muslims out! The constitution is only important if it’s convenient. Restricting immigration is a president’s prerogative – and rational restrictions are necessary. The constitutional limits are there to protect you and me more than the immigrants. For me, the most disturbing part of the ban is not the ‘severe vetting,’ it is the fact that no country, including Egypt and Saudi Arabia, that has proven links to terrorists is on the list. Why these countries? My thought is … he can say he fulfilled his promise, but not hurt the country’s (or his own) business interests in countries like Egypt or Saudi Arabia.
  • Jobs, Jobs, Jobs: He is already bringing jobs back or keeping them from leaving the country. Great. He cut a deal with a company to pay them to keep their employees here. Expect to see a lot more news stories like this – specific examples of a few jobs. Also, keep a tight eye on the real unemployment, underemployment, and no-longer looking so no longer on the rolls numbers. Also keep an eye on if the the average earnings of workers is rising in real, adjusted for inflation, terms.
  • Who will pay for the wall? First, we will – as is already happening.Second, what they will call a wall will in reality end up being a bit of barbed wire and a few cameras along large stretches of the border. But expect the photo-ops to be taken against a 100-foot wall like the one in Game of Thrones. Then there’s the question about what stopping all illegal immigration from the south will do the economy.
  • He’ll stick it to Wall Street: He’s hired half of Goldman Sachs for his government! (OK, it’s a big company, so not half – but LOTS). The best is Steve Mnuchin, a predatory lender who preyed upon distressed people after the 2008 crash and lied to congress in his confirmation hearing to be Secretary of the Treasury. Trump has already begun trying to roll back Dodd-Frank, the woefully-insufficient protections instituted after the 2008 crash and there is not likely to be anything put into place. Wall Street is salivating and getting his cutlery ready – and your pension and children’s college fund is their prey.

The proof is in the pudding. I cannot say that Trump may not really be a genius who will truly make America great again. He might have a genius that I, humble as I am, simply cannot see or appreciate. I’m just not betting on it – and I will keep watching for the consequences that follow.

And, in the meantime, I’ll do what I can to keep accumulating Bitcoin.

Trump, Bitcoin, and the Case for the Nuclear Option

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Right now there is so much going on in Washington that it’s difficult to keep tabs on what’s really important.

For me, the most important event being played out is the fight over the nomination of Neil Gorsuch for the US Supreme Court. Right now, much is being written abCreative Commons Image.out his qualifications, but although a quick perusal of his record shows there are things to appreciate and to be deeply, deeply disturbed about, I’m not really interested in that for this article.

Rather, my interest in how he ended up being nominated and what can or should be done about it.

The backstory, as I’m sure you all know, is that in February of last year, Justice Antonin Scalia passed away leaving a vacancy on the court. President Obama nominated Merrick Garland, a generally competent and uncontroversial pick. Senator McConnell, a Republican, refused to schedule even a hearing on the appointment, unprecedentedly claiming that we shouldn’t appoint a justice in the last year of a presidency. The seat has now been open for an entire year.

This was an illegitimate move, no matter its legality. What makes it illegitimate is the howl of rage that would have swept the country, the cries for ‘second amendment remedies’ that would have been yelled for if the Democrats had tried to do this to a republican president. It would surely have precipitated a constitutional crisis. Democrats, true to form, complained, whimpered, and bore it.

There may not have been anything that they could really have done at the time to really affect things, but there is now: filibuster.

Filibuster and let Senator McConnell follow through on his threat to remove the filibuster as a tool Filibuster and hand full control of the White House, the senate, and the congress – plus the supreme court, to the republicans. Filibuster and let them 100% have their way by being shut out of the debate.

Then, and only then, will we the people be able to fully see and appreciate who and what the republicans stand for. Let them write tax code to favor wealthy individuals and
corporate interests. Let them repeal ethics laws (
1,2). Let fan the flames of Wall Street excess until we have another crash and bailout on the backs of the middle class.

I am no particular fan of the democrats, but there does need to be a healthy tension in the system to keep everyone honest. That tension is gone, and balance needs to be restored. Unfortunately, I now feel that that balance cannot be achieved until we have hit rock bottom and see just how corrupt the republicans in government have become.

I call on the democrats to filibuster, make themselves irrelevant for at least the next two years, and get ready for the backlash that will inevitably follow. And then I warn them not to fall into the same trap as their esteemed colleagues.

On a final note, I would like to remind the readers that despite all the claims of Obama’s illegitimacy, he was born in the US.

Donald Trump was born in the US, but is far from clearly being a legitimate president. Contrary to conspiracy theories that have not been supported by more than 4 cases of voter fraud, won with a deficit of 3 million votes due to the peculiarities of how our presidential system works. He won, but their is no mandate. Further, there is substantial proof that the Russians interfered in the election through hacking and propaganda. Added to that, it also appears that certain elements of the FBI, including Director Comey put their thumb on the scale for Trump.

Well, as is often the case when I go off on political topics, What The Hell Does That Have To Do With Bitcoin?

Easy, and unfortunate. I do not wish for bad luck, but I do prepare for it. We are at a crisis point in history, and I fully believe things will get worse before they get better – Trump is just accelerating a process that was already underway. We are going to see a major crisis in our financial and political systems, and a currency or store of value that is independent of banks and governments is going to become suddenly and supremely relevant when it does. When that happens, people and institutions all over the world will be seeking a safe place for their funds.

You can never tell, and there is no guarantee that Bitcoin won’t fail, but it’s also survived for 8 years so far, enduring some existence-threatening crises, and looks to be stronger than ever. A small purchase now might be the best purchase you’ve ever made.

Bitcoin Fundamentals, and Price, Continue to Improve

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As the price of Bitcoin seems to be pushing once more to top 1,000, some of the old excitement that used to ripple through the Bitcoin community seems to be coming back–more reserved and cautious, perhaps, but coming back.

There are a number of notable differences between the current run-up and the spike we saw in 2014. First and foremost, of course, is the lack of a Mt. Gox with bots manipulating the price. Also then, and for most large price movements that followed, Chinese exchanges let the action, trading either significantly higher or lower than exchanges in the US or Europe.

And then there was a change: just after Bitcoin reached to top its all-time-high a few weeks ago, word came from China that the officials had arrived at the various exchanges to investigate fraud, money laundering, or any other nefarious goings on. This was very unwelcome news as it hearkened back to the frequent “China is banning Bitcoin” news of 2014 that precipitated drops in the price so often that it became a running joke.

This time, though, there is no threat of banning Bitcoin, but indications seem to be that the authorities were actually running checks of the exchange operations to make sure they were being run in accordance with the law. Shortly after the checks began, the exchanges announced that they were instituting small fees on all trades, which had the immediate effect of plunging the exchange volume–something observes had long noted was too high. The high trading volumes were likely an effect of HFT trading combined with some of the exchanges moving money around internally to make themselves look bigger to attract business.

Now we’re in the midst of the first move up since the pullback after those checks started, and looking at the prices one thing jumps out–the Chinese exchanges are not leading the action. OKCoin seems to lead a bit, but on the whole, the Chinese markets have seemed pretty restrained.

Conversely, GDAX, which has been more reactive than some of the other markets, seems to have been leading many of the other exchanges in price. Perhaps we are seeing a shift away from an artificial price-discovery model led by Chinese exchanges to a fundamentals driven model led by GDAX.

Another thing of note is that Bitcoin seems to be gaining traction in South America and Africa. Trading in Nigeria has topped one million dollars, and even before those reports started coming out, Bitcoin Warrior noted an increased amount of traffic from that African nation. It seems some have started to notice that Bitcoin really does have a use case in cross-border exchange.
Internally, Bitcoin is still hampered by a largely technical fight over how best to scale the network, and it’s our opinion that something will need to break in that debate before we really see a Bitcoin moon shot, but by nearly all other metrics, Bitcoin fundamentals seem to be solid.

Artificial Intelligence Can Help Manage the Energy Grid

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A recent Conversation piece pointed out that the British electricity mix in 2016 was the cleanest in 60 years, with record capacity from renewable energy, mainly from wind and solar power. But one problem with this great expansion in renewables is they are intermittent,

Trump is Standing on the Wrong Side of History

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Donald Trump is a spasm. Now that our new president is in office and weve seen his Cabinet of old white billionaires and his American carnage inaugural address, its obvious he is the leader of one last, desperate push to stop the 21st century from unfolding. But in spite of himself, Trump might end up being

FCC Exempts Small Internet Providers From Truth-In-Billing Rules

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The Federal Communications Commission is under new leadership, and the changes are already coming. One of the first moves of the new administration has exempted small internet services providers from rules requiring disclosure of charges on customer bills. The order grants companies with 250,000 or fewer subscribers an out from the transparency requirements passed in February

Wall Street Indices Post Largest Single-day Drop Since Trump Election

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Wall Street’s most popular stock indices posted their largest single-day drop of the year Monday, as investors fretted about the potential impact of President Donald Trump’s executive order temporarily banning immigration from seven majority-Muslim countries identified by the administration as “sources of terror.” The Dow Jones Industrial Average (DJI) fell 122.65 points, or more than half

Trump signs order on rulemaking: For every regulation added, agencies have to cut 2 others

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WASHINGTON President Donald Trump signed an executive order Monday designed to fulfill his campaign pledge to reduce red tape for businesses. The two-page order requires that when a federal agency proposes new regulations, “it shall identify at least two existing regulations to be repealed.” “We want to make the life easier for small businesses” and

Google Sets Up $4 Million Immigration Crisis Fund After Trump Ban

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Google has set up a $4 million emergency immigration fund after President Donald Trump signed an executive order Friday suspending immigration from seven countries, according to USA Today . Trumps order halted the U.S. refugee program and blocked immigration from Iran, Iraq, Syria, Sudan, Libya, Yemen and Somalia, nations that are predominantly Muslim. Massive protests ensued

Trump’s draft cybersecurity policy has no role for FBI

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WASHINGTON A proposed White House cybersecurity policy would empower the federal government to take a greater role in protecting the nation’s digital infrastructure, much of which is in private hands. But a draft copy of an executive order on the issue is also notable, observers say, because beyond its calls to “decisively shape cyberspace” it

Uber responds to #DeleteUber with $3M legal defense fund for immigrant drivers

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Uber said it will stand up for drivers affected by President Donald Trump’s executive order on immigration by creating a legal defense fund following backlash on social media that called for users to delete the app. In a post shared on Facebook, Travis Kalanick, the head of the ride sharing company, called the ban “unjust” and