The Crypto Cleansing

CryptoCleansing

A few months ago, as I was having a conversation with another crypto advocate, these words escaped my lips: “I hate to say it, but maybe we need a price crash.” As I said them, I had a slightly sick feeling of “Be careful what you wish for.”

Now, the price has crashed. But in spite of all the pain that has caused, it was probably necessary. Why? Because it chased away the scammers and the people who were only in cryptos for a fast buck. “Bitcoin will get you a Lambo” was a pretty damned juvenile idea, after all. It was certainly nothing worth building upon.

So, whether we’ve enjoyed it or not, the fire has raged, the forest has been pretty well cleansed, and those who remain can build without ridiculous distractions.

A few days ago I reran the numbers on the market cap of world currency (about $200 trillion) and all cryptocurrencies (about $400 billion). So, crypto = 0.2% of government currencies… meaning that fiat currencies are worth 500 times what cryptos are worth. And that makes the choice in front of us nice and clear:

If you think cryptocurrencies aren’t worth one five-hundredth of fiat, sell now and go back to your Life Before Bitcoin.

If you think cryptos are worth more than one five-hundredth of fiat, get back to work.

We have a full crypto economy to build, and the worst obstacles have just been removed. Let’s get busy.

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Paul Rosenberg
www.freemansperspective.com

Bitcoin Is a Revolution, Not an Investment

bitcoin revolutionIt has been interesting to see large numbers of people pay attention to Bitcoin in the past year or so. The reason for that attention was the exchange price of Bitcoin, which made a lot of early adopters wealthy. (One of the few times when the right guys got rich.)

The idea of getting rich quick always sells, and it did this time too. Along with it came a lot of investment talk, complaints about volatility, well-publicized government raids, central bank reports, and threats from tax men.

What most of these people missed was that Bitcoin is not a traditional financial instrument and doesn’t fit into the categories of traditional finance. Bitcoin – cryptocurrency – is a new thing. It’s a radical, revolutionary thing. As long as you try to categorize Bitcoin with traditional financial tools, you’ll never really understand it.

Bitcoin Comes From Outside

Lots of people talk about “outside the box,” but many of them would run from anything that was truly outside of the box. Such people may be interested in Bitcoin because of price gains, but only because they don’t understand how radical it really is.

Bitcoin, you see, is not an adaptation based on existing currencies, nor can it be understood that way. Bitcoin is from outside – from the realm of anti-establishment radicals.

In particular, Bitcoin comes from the cypherpunks, a group of crypto-anarchists and anarco-capitalists. They began to flourish in the early 1990s, as cryptography merged with the new Internet and they realized they could “wall-off” areas of cyberspace from the coercive intrusions of governments. Here are a few quotes from these folks:

We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us.

Encryption, digital money, anonymous networks, digital pseudonyms, zero knowledge, reputations, information markets, black markets, collapse of governments.

A specter is haunting the modern world, the specter of crypto anarchy.

Arise, you have nothing to lose but your barbed wire fences!

These are not financial people trying to invent a new kind of currency that’s going to make them rich – these are radicals who want to build a new world. And that’s exactly what Bitcoin is: a radical tool for building a new world.

Bitcoin was birthed on the cypherpunk mailing list, by the way. One of the list members, someone named Wei Dai, outlined the structure of cryptocurrencies in 1998, ten years before Satoshi Nakamoto wrote his program.

What’s so interesting about the current moment is that the concept of cryptocurrency is challenging people to think about what they truly believe. Do they really love the status quo? Or is it just something they accepted because they saw no alternative?

Because once people really understand Bitcoin, they also understand that it is built on the opposite principle of the status quo. Bitcoin has no place for a central controller, no tool allowing an enforcer to override anyone’s transactions, no mechanism of coercion at all. That makes cryptocurrency anathema to the current monetary regime and to every ruling regime.

People who come to understand Bitcoin also learn this, and it can be a real challenge for them.

And What Now?

Well, several things are going on now, all at the same time. Here’s my list:

  • The old regime – banking, law enforcement, tax-gatherers – are trying to harness Bitcoin and build tools of control into or around it.
  • Military and intel agencies are figuring out how to shut down Bitcoin traffic without killing the Internet altogether. The big tech companies have become their sycophants and are following their masters’ will.
  • Certain financial operators (“reasonable” types) are trying to subvert Bitcoin and make it acceptable to the powers-that-be.
  • People outside the G20 financial monolith are beginning to see the utility of Bitcoin. It is much cheaper, easier, and faster than Western Union, bank wires, or credit cards. It’s also far easier to transmit over distance than cash. A cab driver in Zaire doesn’t give a hoot whether the Western banking cartel hates Bitcoin; if it works for his customers, he’ll use it.
  • New projects like Ethereum, Dark Wallet, BitWasp and many others are popping up regularly. The innovations are not stopping.

What comes of this is anyone’s guess, but one thing is clear: The genie is out of the bottle;  everyone knows that cryptocurrencies work, and work well. Even if Bitcoin is brought down, new adaptations will follow it in a steady stream.

The revolution is here, now. Fight it, join it, dance, mourn, or just play dumb; it’s your choice.

Paul Rosenberg
FreemansPerspective.com

Why the Founding Fathers Made Their Own Money

rebellion moneyIt is an interesting historical fact that people who take part in rebellions tend to coin their own money – not when the rebellion concludes, but as it starts.

There is good evidence that silver half shekels, like the one pictured above, were actually minted on the Temple Mount during the Jewish Rebellion against Rome in 66-70 AD. (The wonderful Biblical Archaeology Review ran an article on the subject.)

And this case is hardly unique; there have been many rebellions that promptly issued their own currency. Here is Massachusetts currency from 1776, issued early in the American Revolutionary War:

rebellion money

The primary reason that rebels create their own currency is that monetary control is far more of a force than people realize. Baron Rothschild was not being overly flamboyant when he said, “Give me control over a nation’s money supply, and I care not who makes its laws.” Being able to manipulate a money supply is a fantastic power, affecting every part of an economy. If you know in advance that the money supply will go up (diluting its value) or contract (concentrating its value), you immediately gain a massive advantage over everyone else – and you can target this advantage to help or hurt almost any group you choose.

Because of this, a rebel group that is tied to their opponent’s money has nearly lost before the battles begin. Serious rebels learn this quickly.

The Modern Rebellion

The rebellion that we’re all part of is not an armed rebellion, but a moral rebellion. And, interestingly enough, our rebellion understood very early on that money was a primary factor in our enslavement.

The roots of our rebellion go back as far as the first oppressed man or woman who thought clearly about morality, whenever that was. In modern times, however, we can trace our rebellion back to the 1940s – a time in which Mises had already been examining the foundations of money, Hayek was interested in competing currencies, and Rand was examining the morality of money.

(I’m passing over very many good people in the above paragraph. May they forgive my brevity.)

In our lifetimes, we’ve had David Chaum’s work on digital cash, Orlin Grabbe’s work (both theoretical and practical), e-gold, Pecunix, networks of exchangers, subsidiary services, and, most recently, crypto-currencies, beginning with Bitcoin. Our moral rebellion is not slowing down.

What matters about all of these currencies (and many more I haven’t mentioned) is that they are all rebel currencies. Sure, a few criminals and Ponzi operators have made use of our technologies, but that’s simply unavoidable. How many crooks use government money? (Answer: all of them.)

Rebel Morality

I think it’s important to make a few points about this moral rebellion of ours:

  1. This is not about attacking anyone or even attacking the current systems of oppression. Yes, every individual has the right to self-defense, but what we’re after here is not to lord it over anyone else, but being left alone to live as we wish.
  2. We must treat our fellow men and women with respect, even if they are wrong. If they want to be ruled by a state, that’s their choice, and we have no right to rip it away from them. (If it crashes without our coerced “support,” that’s not our problem.) If we think that people are being stupid to choose state serfdom, we should convince them that other ways are better, but we cannot force them to live our way and still call ourselves moral.

Our rebellion money has actually done a fine job of supporting these two moral points. The supposed failures of these currencies were primarily that they couldn’t withstand coercive and violent attacks. In other words, they worked very well; their “problems” were attacks from the status quo: a system of coercion and violence, masquerading as justice.

What we are now seeing is a moral awakening. Young people are questioning the systems that supposedly sustain them but actually use them as slaves.

When people begin to see the world in moral terms, they quickly perceive the deep immorality of the status quo – a system that is utterly dependent upon coercion and deception. If there is a root to the continuance and success of honest, rebel money, this is it.

In the end, our battle is this: morality versus coercion and deception.

Paul Rosenberg
FreemansPerspective.com

Is Bitcoin More Dangerous than “Cartel Money”?

bitcoin cartel moneyI’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