Bitcoin Archives - Page 3 of 3 - Free-Man's Perspective

What’s New at the Bitcoin Colony

As I’ve mentioned in the past, Bitcoin is an invasion into the status quo. It is not a modification of the dominant financial system or even an extension of it… it’s a Klingon colony that dropped to Earth in 2009.

As I’ve also mentioned in the past, what matters about Bitcoin is not the technology itself (which is fascinating but not perfect), and it’s certainly not the dollar exchange rate. What matters about Bitcoin are the thousands of young people who have grasped its meaning, and who get up every morning excited to do something with it.

So today I want to show you some of the new developments that are coming from the Bitcoin colony. These aren’t the only new developments, but they are among the most important of them, and they help to paint a picture of what’s emerging.

First, however, I should extend my thanks to Velas Commerce, the Bitcoin and e-commerce consultants who kindly shared material with me.

Ethereum

If all goes as planned, Ethereum will become an expanded cryptocurrency. Like Bitcoin, Ethereum is a network with its own blockchain (public ledger) and its own currency, the Ether.

Unlike Bitcoin, Ethereum is designed to interact with other computers. That makes all sorts of automated contracts possible. Internal company data, contract specifications, outside data inputs, time and date, and so on, can all be coordinated and money (Ethers) distributed automatically. Some of the programs being built for the Ethereum network sound like they’ve come out of a sci-fi movie, including decentralized autonomous corporations, or DACs.

Ethereum creates self-enforcing contracts. These can get very interesting once you consider the number of devices that can be controlled through an Internet connection. TVs, car keys, hotel room keys, etc. Imagine a rental car where your key simply stops working if you stop paying the hourly fee.

DACs (or sometimes DAOs, decentralized autonomous organizations) are businesses or organizations that run themselves. This is essentially a group of people working together for a specific goal, but instead of their interactions being governed by a corporate framework, they’re governed by code running on the Ethereum network. Such a framework may be too rigid for many uses, but a massive time saver for others.

Ethereum is written to be as simple, open, and flexible as possible to allow for unaccounted future uses, which makes it one of the more interesting new technologies.

E thereum can be used now but is still in development and likely won’t be used commercially until sometime later this year.

OpenBazaar

OpenBazaar is eBay the service, without eBay the company. Anyone can join and buy or sell goods and services. Like Bitcoin, OpenBazaar isn’t owned or controlled by anyone; it’s a network of peers that operates with no middleman.

What makes this technology especially interesting is its use of conflict-resolution technologies. With escrow and legal agreement built in, these resolution technologies will encourage trade that likely would otherwise never occur, due to concerns over fraud or the difficulties involved with multiple legal jurisdictions.

In addition to escrow and arbitration, OpenBazaar uses multisignature (“multisig”) Bitcoin transactions to prevent fraud. This ability has always been built in to Bitcoin, but it has seldom been used.

In a multisig transaction, bitcoins are sent to a special address that will hold the funds and only release them when a majority of the parties involved sign off on the transaction. Generally these transactions are two or three, meaning that two of the three parties involved must agree on where the funds should be sent.

Using OpenBazaar, the three parties involved would be the buyer, seller, and escrow. The funds are sent by the buyer to a unique multisig address and stored there until the buyer and seller have completed the transaction successfully and sign off on the transfer of funds to the seller. If there’s a dispute and the buyer and seller cannot agree on where the funds should be sent, the escrow (perhaps influenced by the decision of an arbitrator) has the deciding vote.

This conflict-resolution system along with a reputation system have the potential to give people enough confidence to trade without reliance on existing legal systems.

OpenBazaar is up and running now, and a variety of goods and services can be bought there today. However, the software is still being tested; a completed version is scheduled for release in early 2015.

SilentVault

One of the biggest concerns with Bitcoin is that it has serious privacy issues. Bitcoin is the most transparent currency ever created. If you don’t take steps to protect your privacy when using Bitcoin, anyone anywhere can view your entire transaction history. SilentVault offers a solution to the Bitcoin privacy issue. It also facilitates trade in other currencies, including gold and silver.

SilentVault is a wallet application that allows users to bring in cryptocurrencies (currently Bitcoin and Litecoin), then to spend them “silently,” or “off chain” (not recorded on the transparent ledger/blockchain).

What you hold and trade with your SilentVault wallet are vouchers representing assets, not the assets themselves. While this is obvious for gold or silver, which are not digital assets, the distinction is important for Bitcoin. The wallet contains vouchers, which are cryptographically signed, digital bearer certificates that are analogous to coins.

These vouchers can be traded and exchanged with other SilentVault wallet users privately, securely, and in a peer-to-peer fashion. The system can also be used as an exchange, as you can trade vouchers backed by different assets (bitcoin, gold, silver, etc.) with fellow users.

SilentVault systems are built using privacy and security-focused software. All communications are made within private servers with no public-facing IP addresses. End-to-end encryption is used so that even SilentVault can’t monitor chats or view the contents of users’ wallets.

SilentVault is available for use today.

Open-Transactions

Open-Transactions and its commercial version Monetas provide tools for what you would think of as normal financial transactions, checks, invoices, etc., in a cryptographically secure and distributed fashion. However, it also includes many nontraditional financial transactions such as online cash-like transactions, issuing currencies, commodity trades, and smart contracts.

Unlike Bitcoin or Ethereum, Open-Transactions is server-based software. This has some advantages—it’s faster and cheaper—but it’s not as resilient as Bitcoin. The Open-Transactions developers imagine a trustless system of federated servers where there are a wide variety of servers available and they are nearly incapable of fraudulent behavior.

Bitcoin’s and Open-Transactions’ very different system designs make them very complementary to each other. Bitcoin works well but doesn’t currently have the scalability, wide variety of features, or speed that Open-Transactions can provide. Open-Transactions and Monetas are integrating a number of Bitcoin features, such as security features for Bitcoin exchanges. You can think of Open-Transactions as providing financial services around Bitcoin—for example, facilitating trades from gold to bitcoin and back or supporting off-chain transactions.

Like all of our examples, Open-Transactions exists outside the traditional banking system; however, it provides an impressive selection of financial tools. This has the potential to allow someone who is “unbanked” to use banking tools or even become an international commodities trader. As Open-Transactions’ commercial incarnation, Monetas, says, they are “launching the financial inclusion revolution.”

Open-Transactions is an ongoing open-source development project. The commercial version of the software, Monetas, is currently developing mobile phone apps as well as commercial products that should be available soon.

Paul Rosenberg
www.freemansperspective.com

This article was originally published by Casey Research.

Whether You Love It or Hate It, You’re Missing What Really Matters About Bitcoin

Bitcoin made big news over the past year or so, when the price spiked and made some people rich. The possibility of fast money always generates a lot of commotion, and it certainly did this time.

Personally, I didn’t want the price of Bitcoin to spike; it grabbed people’s attention for all the wrong reasons. Cryptocurrencies—of which Bitcoin is the first, the best known, and currently the most important—are a revolution in commerce. But they are also much more than that.

Bitcoin is an intrusion into a stasis-oriented world: the child of radical concepts and cryptography, birthed by confirmed outsiders. This is a new and different thing, not a slightly different financial tool.

But even this is not what matters most about Bitcoin.

Enter the Bitcoin Kids

The Bitcoin blockchain—a decentralized public ledger for the transfer of assets—is truly a ground-breaking development, but that’s not the key factor here.

The ability to utterly bypass the Fed, SWIFT, and the rest of the money monopoly is the answer to a hard-money advocate’s fondest dreams, yet even this isn’t the thing that really matters.

What matters are the people whom I call, affectionately, “the Bitcoin kids.” This is a very loose grouping of thousands of people, mostly fairly young and widely dispersed, who are thoroughly committed to the cryptocurrency revolution and all that it entails.

What the uninitiated don’t understand is that these people are not just trading bitcoins; they are busy developing a whole new generation of products and services—things like Silent Vault, Monetas, Etherium, and many others. Lots of them are involved in 3D printing, and some, in the maker movement. Others are involved in humanitarian efforts like BitcoinNotBombs.

These young people are not terrified at the prospect of failing at a new venture. Rather, they are picking spots, jumping in, and getting to work. And if a venture of theirs does fail, they pick themselves up and start over.

Please bear in mind that if I wanted to, I could list a number of problems in the world of Bitcoin. I could further explain a number of attacks and potential attacks on Bitcoin. This is not an entirely invulnerable technology, and I am not holding it up as perfection. But those problems don’t belong in the center of this picture either. The Bitcoin kids are adaptable and stand a good chance of side-stepping or overcoming the attacks that will come upon them.

The Anti-Geezer Photo

Older folks are sometimes too touchy about the things that young people do. For example, take a look at this photo:

Seeing a kid in a mask and with a scarf around his head, it’s easy to call him silly. (Before throwing any stones, though, we really should remember all the stupid things we did at twenty.) But again, that is beside the point—look at this kid’s sign:

The corrupt fear us.

The honest support us.

The heroic join us.

Think about the thoughts and commitments behind those words. These young people are claiming righteousness and honesty and heroism. What better ideals could we possibly want our children and grandchildren to champion?

And here’s another thought for older folks:

If you think the Bitcoin kids are being impulsive and erratic, get involved and help them. If you think they’re discounting the attacks they’ll face, fill the gap and prepare them for those attacks. Sitting on the sidelines and finding fault is primarily a way of defending your own inaction. If you think these young people lack experience and depth of understanding, roll up your pants, wade into the surf, and start delivering it to them. Show them by doing.

The New Way

Let me give you an example of the attitude these young people are displaying. One of them, Julia Tourianski, wrote this:

Just like the Internet gave information back to the people, Bitcoin will give financial freedom back to the people. But that’s only the first step… Bitcoin will allow us to shape the world without having to ask for permission. We declare Bitcoin’s independence. Bitcoin is sovereignty. Bitcoin is renaissance. Bitcoin is ours. Bitcoin is.

These young people believe precisely what Thomas Paine told the disobedient and rebellious American colonials of 1776:

We have it in our power to begin the world over again.

The Bitcoin kids believe that they have the power to begin the world over again, and that’s a very powerful thing all by itself. Furthermore—and this is of supreme importance—they are acting on that belief every day… thousands of them. They are not waiting around for public opinion to support them, they are not waiting for “the masses to rise up,” and they are certainly not waiting for permission. They are getting up each day, inserting their will into the world, and building a cryptocurrency economy… and building a new world thereby.

Most of us have long known that the current world system was corrupt and devolutionary. We’ve been trying to thrive in spite of it, biding our time, and wondering when things would ever start to change.

I’m here to tell you that things have started to change. Bitcoin is at the center of it, and the Bitcoin kids are the key. We can fight it, join it, dance, mourn, or simply defend our ignorance, but the time we’ve been waiting for stands before us, right now.

Paul Rosenberg
www.freemansperspective.com

This article was originally published by Casey Research.

Coming for Your Accounts: Solutions

After running last week’s article (They’re Coming for Your Accounts), we received a number of questions about how to actually protect oneself. So, this week I’d like to address that subject.

First Words

I need to make an important point before I proceed, however: I am not involved in the financial industry, and I do not know the many rules that apply to IRAs, 401(k)s, and so on.

So, please understand that I’m speaking in rough terms and that you’ll need to apply all my suggestions to your own situation intelligently. I simply do not have precise advice to give you.

But with that said, here are some suggestions:

Partial, Multiple, and Incremental Solutions

Solutions to financial problems do not have to be all or nothing. If you think that IRAs are ripe for picking (as I do), then you can begin by ceasing to fund them. Take your money as regular income, pay taxes on it if you must, and put it to use as you see fit. That money will no longer be in the “first grab” pile.

If you do something like this, you will be slowly moving your assets out of easy government control. And if you hold your earnings in the form of cash, rather than in a bank account, it becomes very difficult for a government to seize.

Everyone will have their own opinions and risk estimates, but in my opinion, money left in registered accounts is becoming riskier than cash that is thoughtfully stored.

There is also the common issue of spouses disagreeing on what to do: One thinks registered accounts are a risk; the other doesn’t. While these situations are difficult, they don’t have to be as dramatic as we make them. We can simply do several things at once: Leave the 401(k) as it is, but start putting new money into silver and gold. Or create an offshore structure and fund it bit by bit, instead of continually funding the government retirement account.

There’s no reason we have to go 100% in any single direction; We can go several ways at once. Better to do this than to fight and make our lives miserable; money should make our lives better, not worse. It is useful and important, but not that important.

Warning Bells

Whatever your plans may be, it’s a good idea to have a backup plan: “If they do X, we’ll do Z.” What you’d like to do ideally is to not get hurt too badly when the alarm bell is rung.

So, I’d suggest that you keep the least money in the place that’s likely to be hit first. And in my opinion, that will be the place that’s easiest for a desperate government to loot.

I gave several examples last week of what has been happening, so that would be a good place to begin your analysis. And remember that predators always hit the softest target first.

Specific Options

Here are several options for keeping your money under your own, personal control:

Cash: Still easy enough to get, and easy to store. Theft is always a concern, but when governments start stealing directly from bank accounts – as they did last year in Cyrpus – which is the lesser risk?

Gold and silver: Very similar to cash, but with two differences: During normal times, it may need to be exchanged for local currency, which is an added expense. In bad times, however, local currency becomes worthless, and the metals retain their full value. There are many local coin dealers that make purchasing silver and gold easy.

Bitcoin: While new, sometimes volatile (though not recently), and not universally accepted, Bitcoin is easy to get, easy to use, and easy to secure. And it remains solely under your control. In addition, cryptocurrencies can be used internationally without expense or permission.

Invest in local businesses: We covered the specifics of this in FMP #19, but investing locally diversifies your risk, while still giving you the ability to oversee your investment. And it helps your neighbors directly, rather than giving Washington and Wall Street a skim on all your investments.

Offshore structures: Holding your money in another country is a very large speed bump to your local government. Yes, if you’re a real criminal, the other country will give up your money promptly, but such places are dependent upon foreign bank accounts, and they will not want to scare their customers away by giving up their money without a fight.

Furthermore, offshore structures are not terribly expensive to obtain. You’ll want to use a professional to do the work for you (it’s too hard to do yourself), but the expense is not as bad as you may think.

Offshore real estate: Offshore real estate, I am told (please verify for yourself), does not have to be declared to the US government.

Breaking Inertia

The most fundamental need in situations like this is to break the inertia that entangles us. That inertia moves always in the direction of compliance with authority and a mute servility.

What matters most to us is that we leave the camp of the perpetually obedient and start acting in the world according to our own judgment. In the end, that’s the only way to live our own lives (financial and otherwise), rather than “being lived” by outside forces.

Paul Rosenberg
FreemansPerspective.com

Switching Scripts

Almost all of us were raised to follow a more or less uniform script through our lives. Sometimes it was specifically taught to us, and other times we just absorbed it by watching others. But regardless of how we were trained, there are two primary problems with following this script:

Following a script is unbecoming to a thinking being and leads in bad directions.
Such scripts reflect what worked a generation ago, and yesterday is gone.

We all know the details of the script, of course. It goes more or less like this:

Do well in school.
Rebel with music from the entertainment corps.
Get shoes, clothes, and gadgets with the best corporate logos.
Get a university degree. (If your family isn’t rich, take student loans.)
Take a job at a big firm with good benefits.
Get a loan and buy a house.
Build a 401(k).
Believe in democracy.
Send your children to daycare, then school.
Buy brand-name goods.
Watch the best in entertainment.
Rely on Social Security and Medicare.

Do these things, and people in authority will approve of you. In fact, nearly everyone from the previous generation will approve of you. After all, you’re following the script that they wrote, back in 1984, a generation ago.

It No Longer Works

In 2014, however, this script no longer works. Manufacturing jobs are way down, selfemployment is down, and even the number of military jobs seems to be declining. We all know college grads who can’t find a job, and others who are working at Starbucks… and lucky to get that.

Poll after poll shows that the Millennial Generation (people born between the early 1980s and the early 2000s) have very little expectation of doing better than their parents. The reason for that is obvious: The old script isn’t working. And while the older generation is emotionally committed to the 1984 script, the young generation isn’t. They know they’re being screwed.

Still, the old script is being promoted in media and by politicians. Almost the entire older generation – or at least those who are televised – do homage to this script, and repetitively.

What is promoted isn’t working for most of us, and government/corporate promoters will change last of all.

So, what is to be done?

Switching Scripts

The obvious answer to the question above is to switch scripts: to stop doing what no longer works, and start finding things that do work.

The problem with doing sensible things such as this, however, is that they’re scary.

Those of us who have gone to traditional schools and grew up surrounded by the televised culture (that is, almost all of us) were taught to stay within the lines and to take part only in things that have been authorized. Venturing outside the borders of the approved seems dangerous to us. That’s for weird people.

But what we find authorized is the script from the last generation, and that no longer works. So, we can either stay within the lines that were drawn for us, or we can act on our own judgment, go rogue, and work at improving our situations.

However dangerous leaving the authorized script may feel, it’s the only reasonable path to take. 1984 is gone.

So, What Is the New Script?

Obviously, there isn’t one. We have to start creating it ourselves. But if we don’t do this, the only alternative is 1984’s script – the one that worked for the generation that is in power now, and who sees the world through 30 year old lenses.

Furthermore, the most effective new ways of living won’t be handed to us from some genius authority. They will form in bits and pieces, based on the things that are working now. And it will come through many minds and by many examples, not from unified and authorized sources.

Come to Dallas in October

This October 17-19, we’ll be inaugurating a new festival, called the Going Rogue Festival. The purpose of the festival is to find, promote, and explain the things that are working now, outside of the authorized script. We’ll be covering everything from Bitcoin to home schooling to 3D printing to home farming.

We have a great group of speakers, with more to be added, but this is not just a seminar: It’s a festival. We’ll also have vendors displaying their products and services, catered meals, and a great group of people to meet, work with, and grow with.

Please come if you can. There is a discount for early registration. GoingRogue.co (When asked for a coupon code, please enter FMP)

Paul Rosenberg
FreemansPerspective.com

A Report from Middle America

I was recently involved in a day of meetings with small business owners in the American Midwest. It was both encouraging and sad at the same time.

What I Found First

Overall, I found a large room full of productive human beings. It was uplifting. Most of these people were between thirty and seventy years old, more men than women, and they were all productive people, the kind who get up early every day, make sure that complex systems are producing properly, fix anything that is broken or near breaking, plan for the future, cooperate with large numbers of other people, and then go home at the end of the day and love their families.

If all the world lived like these people, we’d be halfway to a paradise by now. And that was a thought that made me sad.

Why? Because these people – by any standard of decency – should be left alone to create their better world. But instead, they are forcibly tied to wasteful, parasitic, and destructive systems. Half or more of their earnings are taken from them every year. Their actions are restricted by their moral inferiors. They live less than half the rewarding lives they should be enjoying, and for no defensible reason.

The Other Things

Beyond my overall happy/sad impressions, I found quite a few particular things:

These people would have preferred to discuss the practical particulars of their businesses – tools, materials, technical obstacles and solutions, and so on. But instead, they were forced to discuss government compliance. Almost every subject discussed from the front of the room dealt with government regulations. Most of the subjects discussed on the sides involved tools, equipment, business strategies and so on.
Dealing with employees is a major issue, especially involving the immigration police. These people are justifiably concerned with fines and indictments, just from hiring employees who are clearly long-time Americans. (That is, not Hispanics or other recent immigrants.) A few of the comments I heard:

“Good luck trying to explain that to an ICE agent.”

“Do NOT waive the 72 hour waiting period.”

“Do NOT allow them to enter your facility or inspect anything without authorization from counsel.”

Nearly all of these people agreed that government in America is out of control, abusive, and oppositional to their happiness. I think that’s a positive opinion, since it reflects reality, meaning that they have stopped looking at the world through myth-colored glasses. The sad part of that is…
These (good) people don’t know what to do about it. The system they grew up believing was their friend has turned against them. They’ve gathered the considerable courage required to face that, but they don’t know what to do next. They are working within the system as they can, trying to avoid its hazards, but don’t see any clear alternative – and no path of escape. They’d like to do other things, but they also need to feed their kids, and don’t know what to do about it all.
Bitcoin is spreading everywhere. One of these business owners, in a very rural area, has built a Bitcoin mining operation. And not only Bitcoin, he is also mining for the other cryptocurrencies. And, he’s telling everyone else about it. I was surprised (and pleased) by this, since this meeting had absolutely nothing to do with computers, economics, or anything else that usually connects to cryptocurrencies. This man simply saw a great opportunity and jumped on it.

All In All

All in all, I came away from the day more confident in the future than I had been the day before.

We are exposed to so many horror stories every day. The images thrust upon us show a world filled with danger and discouragement. The reality, however – once you remove yourself from the newsfeed – is that there are a lot of very decent people who are generally doing the right things.

Our job now is to define newer and better ways to live and to spread that information to as many good people as we can. And to remind them they DO have the right to live good, happy, prosperous lives.

Please do everything you can along these lines. Thanks.

Paul Rosenberg
FreemansPerspective.com

Is Bitcoin More Dangerous than “Cartel Money”?

I’m going to use a couple of passages from the Bible (the original set of moral standards for our Western civilization), followed by an examination of both Bitcoin and cartel money, to see how they hold up in comparison.

As for my use of the term “cartel money,” it’s the best short description I know for the dollars, euros, yen (and so on) that we use in our daily commerce. They are produced by secretive and monopolistic groups of private banks. That rather precisely matches the definition of cartel.

Principle #1: For wherein you judge another, you condemn yourself; for you who judge practice the same things.

I think by now we have all heard the big accusation against Bitcoin – that it is used for “money laundering” – made especially by the money cartels (the European Central Bank first).

First off, that doesn’t make sense to me. A currency is supposed to be neutral – that is its purpose. So, accusing a currency of money laundering is like jailing a knife for murder. But, that’s not precisely the point we’re addressing here.

Rather, the question is: do the cartels do the same thing that they condemn?

You bet they do!

Read this story on HSBC. Then read this one on Wachovia. These banks laundered hundreds of billions of dollars – knowingly – for violent drug lords. And it gets worse: No one from either bank went to jail. Neither bank was shut down. Neither bank suffered more than a minor fine.

So, how much of a concern can money laundering really be to the cartels and their politician partners? Clearly none, or very close to none.

And, since the cartels accuse Bitcoin of being used for bad things, let’s be clear about the situation: Every mafioso on the planet uses cartel money. So do all the drug smugglers, terrorists, and pornographers.

Does Bitcoin accuse the money cartels? Nope. Bitcoin has no official operators to speak for it at all.

It is true that many Bitcoin users accuse the cartels of being manipulators, but, at least for now, there is no Bitcoin cartel that is even capable of manipulating the currency.

So, round one goes to Bitcoin: The cartels very clearly condemn themselves, and Bitcoin clearly does not.

Principle #2: Everyone who does evil hates the light, and does not come to the light, lest his deeds should be exposed. But he who does what is true comes to the light.

When Bitcoin creator Satoshi Nakamoto posted his Bitcoin paper in 2008, he laid everything open for all to see. Then he wrote the Bitcoin program and left it “open source,” so anyone could see the programming.

The process of creating cartel money, on the other hand, is mostly hidden, purposely confused, and isn’t even taught to most Econ majors. And if you think that’s just my opinion, here’s one from the esteemed economist John Kenneth Galbraith:

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.

The argument is made, of course, that the process of creating dollars, etc. is very complicated, and that people don’t understand it because of that.

I don’t think that’s true, but even so, let’s compare it to Bitcoin: Making bitcoins is also complex, but Bitcoin enthusiasts have been working night and day to explain their new currency and how it works. I’ve seen them cornering people at birthday parties, trying to make them understand.

Round two goes to Bitcoin also. Bitcoin wants to be seen and known, and the cartels surely do not.

It all comes down to the reason “why.”

Satoshi Nakamoto began the original Bitcoin document by saying that he wanted to, “allow online payments to be sent directly from one party to another without going through a financial institution.” He goes on to say that he was creating,

an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

In other words, Satoshi wanted to remove the necessity of one man ruling another in the area of money. Furthermore, he did it, then went away.

As for the motives of the cartel, we can’t really tell. The visible heads of the Federal Reserve are certainly not the owners of the Federal Reserve, and the US government refuses to reveal the names of the owners.

Perhaps the closest real examination of their motives comes from a renowned professor who worked for them for a few years. Professor Carroll Quigley of Georgetown – and a major influence on none other than Bill Clinton, wrote this in his book Tragedy & Hope:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank… sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent rewards in the business world.

So, was Quigley right? I have no solid proof that he is, but he would be an awfully hard witness to impeach. One substantiation that comes to mind is a recent comment by Illinois Senator Dick Durbin. In the midst of a political fight, he complained, “The banks own the Senate.”

That’s not really proof either, but it is interesting.

You can make up your own mind on the banks, but Satoshi’s motives are fairly well beyond question.

I think it is clear that from a moral standpoint, Bitcoin is far, far better than cartel money. (As are silver and gold.)

So, the next time you hear someone calling Bitcoin dangerous and evil, don’t let them get away with it!

Paul Rosenberg
FreemansPerspective.com

Silk Road Died, Bitcoin Crashed. So why am I so happy?

You may have heard that Silk Road – the truly free online market – was taken down today, by the FBI. In response, the price of Bitcoin crashed 24%.

Yet here I am – just a few hours later, feeling very optimistic. Why? Because the philosophy of freedom just showed itself to be massively stronger than statism and its “don’t think, just obey” philosophy.

Here’s What Happened

As I was finishing my lunch, I saw a story posted on the takedown/crash. I did a bit of checking and conversed with a friend, and then hustled over to a place I know where crypto-anarchists hang out online.

These guys were already talking about replacing Silk Road, and doing a better job of it.

Forget about the drugs aspect of this – I don’t care for drugs and neither do the people I listened in on – they just want to build free markets.

Contrast that to a financial site, where I found a couple of Bitcoin haters, a Fed trying to supercharge as much fear as he/she could, and several people trying to buy Bitcoin at its lows, or lamenting that they were out of extra cash to buy right away.

But here’s the interesting part: In the face of an orchestrated attack (and you can be sure that the Feds arranged the day’s events for maximum fear – that’s what they do), even these people, within minutes, were walking forward, not backward.

A Better Philosophy Wins Out

Arguably, the greatest triumph of a new philosophy has to be that of the early Christians (of the 1st, 2nd and 3rd centuries AD), they simply would not be stopped, no matter what was thrown at them.

And why wouldn’t they turn back? Because the Roman way was ridiculous and barbaric. Their gods were vile, vain, sometimes stupid and often cruel. Who wants to worship that? These Christians – whatever their faults or virtues – had found a God who loved them, who wished to help and enlighten them, who said they were meant to be free and prosperous.

Which way would you choose?

The Romans persecuted them and sometimes killed them, but they would not be turned around. These people chose the better philosophy, and in the end, they won.

Today, I saw the same thing, wrapped in modern circumstances.

Freedom-minded people are not stopping, are not abandoning their views. And why should they? Shall we go back to the idiocy and self-contradictory life of worshiping the state? Of pretending that robbery is somehow – magically – not robbery when the government does it?

Our minds have been removed from the state’s intimidation and conditioning. Shall we go back to believing lies and repeating vapid slogans for the rest of our lives?

There are real reasons why individuals move from bondage to liberty, but very seldom the reverse.

The Bottom Line Facts

At the end of all the discussions, all the fears, all the questions, all of the explaining to newbs and concerned friends, stand these facts:

Our philosophy is better than theirs. We offer men and women truth, understanding, compassion (the real kind), and strong, direct relationships. The state offers punishment, fear, an occasional promise of plunder, and intrusion into every relationship in your life.

Our people are better than theirs. Not because we were born better, but because finding and living according to truth produces better people than blind obedience and fear of the lash.

We are not quitting. We can’t. We won’t.

Yes, there may be bruises and even blood along the way, but like the first Christians, our people do not turn back – they continue regardless.

We’ve come out of the state’s cultivated darkness, and we are moving into more and more light. Why would we want to go back to where we were? Even if we tried to do it, could we really stick with it? Could our minds really fit back into their old restraints?

This is why freedom will win, my friends: The genie is out of the bottle, and the Internet has spread the message to the four corners of the Earth. It’s a better message. It produces better people.

And in the end, we will win.

Paul Rosenberg
FreemansPerspective.com

Bitcoin Should Get Ready For an Attack

Bitcoin – poorly understood and frequently talked about ignorantly – is a wonderful new financial tool… and a very timely one. But because of its virtues, it is about to be attacked.

But before I explain how, why, and my recommended responses, let me get everyone up to speed on what this stuff really is:

Bitcoin is digital cash. You do not get an account, you get a wallet. Holding Bitcoin on a computer is the same as holding government money in your wallet.
Bitcoin is distributed. There is no central office and no central computer… anywhere.
Bitcoin can’t be printed up, like national currencies. It has to be ‘mined’, and this requires special computers, lots of calculations, electricity and a bit of luck. It’s neither free nor easy.
Bitcoin is limited. Only 21 million of these things can ever exist, and they can only be mined on a very specific schedule. (About 11 million exist now.)
Bitcoin can’t be changed. Bitcoin is a specific computer program and cannot be changed by any single party. It is a specific set of rules cast into a computer program, and since that program is open source, it can be checked by anyone to assure that there are no secret back doors.
Bitcoin is pseudonymous. Every transaction is recorded, but real names are not. While it is not properly anonymous, it can be used anonymously if you do simple things like never using the same address twice. (There are even ‘laundries’.)
Bitcoins are oblivious to borders, laws or rules. This is simply computer code – nothing else matters.

Why The Fiat Masters Must Attack Bitcoin

I say that Bitcoin will be attacked for the simple reason that it is the anti-fiat currency… and a lot of very powerful people have their entire kingdoms built upon fiat currency and its central banking game.

It is actually very similar to gold and silver in its overall effect: If Bitcoin, or gold, or silver – or any combination thereof – ever became dominant, no one could play games with the world’s money and skim from millions of people at once… or run welfare states in defiance of economic reality.

The bankers do not want to lose their positions, and if they let this alternative currency take over, they will. So, they will have to attack. In fact, I am sure as I can be that they are doing it already.

I should add that there are socialist types who love this development because it could destroy the greedy bankers, but I don’t expect them to deter the attacks to any significant extent.

The Attacks

It is important to understand that the system is not invulnerable. It’s certainly not easy to attack (like a Cyprus bank account), but attacks both small and large are possible.

I’m not going to describe large attacks, as I don’t want to give anyone ideas. You can either believe me that they are possible, or not. These big attacks, however, would not be easy, and would have side-effects. So, I don’t expect to see them first. First, Bitcoin’s enemies have to win the PR war.

There was a great line in the movie Gladiator that applies right now:

You have a great name. Before they destroy you, they will have to destroy your name.

I’m not sure it’s fair to say that Bitcoin has a great name among the general populace, but it certainly does among the best and brightest of the younger generations. And this great name is spreading rapidly in places like Cyprus, and among people who fear a Cyprus-style mass theft coming to their area.

Gold and silver are the traditional ways of avoiding predation, but trying to cross a national border with precious metals these days is to invite theft and punishment. (This was not much of a problem before the 20^th century.) Bitcoin, on the other hand, can be moved world-wide, instantly, from the comfort of your chair.

So, the first attacks will be combined with a PR war. The point will be to scare people away. “You’ll get ripped-off!” will be their emphatic meme.

Do not underestimate fear, by the way: Humans are hard-wired to over-respond to it. Fear works, which is why power-mongers always use it. And these people also own, influence or control the broadcasting systems that consume nearly all of the Western world’s attention.

So, the first attacks will be those that we are already seeing: Malicious hackers breaking into whatever clustered systems they can and stealing. (Or running Distributed Denial of Service [DDoS] attacks.) They are attacking exchangers, wallet hosting services, and so on – anything largish that can be hit. They are already publicizing these attacks, but I expect more and better.

The coming attacks will be publicized rapidly – with stories and releases prepared ahead of time – and will paint the worst possible picture. Afterwards it will be seen that the first loss estimates were wildly high, but that won’t matter to the people who see the headlines on the evening news. Joe and Jane Obedient will believe the worst.

This is all manipulation, obviously, since people are being ripped-off in government money, on gigantic scales: millions of thefts at once. Heck, every productive person in the West has about half their earnings taken from them every year in the form of taxes, not to mention the 5-10% they lose every year in the form of inflation. To compare these things to a few stolen wallets is a sick joke. But, such is the state of the West at this sad moment: The large abusers are sanctified and the innovators are demonized.

What to Do About It

Here’s my list:

Be prepared. Don’t let it shake you. Don’t compromise your beliefs.
Tell others to prepare. Tell people to expect attacks and a PR war. Tell them to upgrade their security and to be personally ready. Bitcoin will be called all sorts of things: A Ponzi, a fraud, a tool for terrorists, a threat to civilization, and so on. It’s not fun to have those accusations hurled in your face, so expect it and get ready for it.
Prepare for the worst. At some point we may need an alternative to the government-owned Internet. Setting up our own systems will not be hard or expensive, but it will require action on our parts. Learn about mesh networks and packet radio. Those who can code should think about writing new high-latency protocols, or reviving old ones like FidoNet.
Do not rely on Internet exchangers. We should all be grateful to Bitcoin Exchanges, but they are vulnerable and will soon enough be compromised or shut. The future lies with over the counter (OTC) exchangers.
Keep having fun! Bitcoin has been a gas – don’t let go of that. Adapt, improvise, overcome! Yes, there will be more bad days from here on, but don’t let them steal your joy for any length of time. Hold to the good, reject the fear. Do what resonates within you; do what makes you feel good and creative and productive.

Paul Rosenberg
FreemansPerspective.com