Shades of Things to Come 1
Money, the Economy and Digital Depravity
Financial Rigging Shoddy Construction Bitcoin Bitcoin Alternatives A True Innovation Summary Bitcoin Update
In the U.S., the “Glass-Steagall” act prevented, at least to an extent, financial gamesters from pirating the economy, by limiting some of the ways that the economy could be robbed and exploited. Then they effectively repealed the act, and the financial system was rigged and played to the point of breakdown. Then they supposedly implemented some “controls,” but nothing stops them from just turning around and “repealing” again, then robbing, cheating, stealing and crashing the financial system again.
Passed by Congress in 1933, Glass-Steagall prohibited commercial banks from engaging in the investment business. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression.
- Review of some financial shenanigans
- Explanation of Bitcoin and cryptocurrencies
- Problems of cryptocurrencies
- Alternatives and solutions
The 2008 collapse was brought on in part by the 1999 revision of two of its provisions, that restricted banks from affiliating with securities firms.
What was the excuse that supposedly made them feel confident to gut Glass-Steagall though?
Every failing of the financial system, and so-called “blunder” or “mistake” or “oopsie” like this points to a flaw in the greater political system. That should give a thinking public a place to tackle the problem. But that doesn’t seem to be happening, so progressively more of “the little people/mundanes” face financial ruin.
We’re seeing business collapses, high unemployment (called “near full employment” in the USA, by the expedient of not counting about 100 million unemployed there), crazy price increases, and crazy price decreases.
- San Francisco, Seattle, Toronto and Vancouver real estate bubbles — tied to financial system policies — make homes unaffordable except to the wealthy.
- This is only a precursor of other wild price swings. For example, almond prices recently faced a sudden drop due to a glut of almonds brought on by misallocation of resources. Great if you like almonds, of course, but if it puts producers out of business, we’ll see the prices skyrocket.
- Oil prices undergo wild fluctuations, as we’ve experienced recently. Alberta always seems to get hurt the most and complain the loudest over oil price drops. What a place for these mammoth pickups young guys there like to buy — I saw one of these big Ford half-tons in premium trim on the lot for $75K! Then the oil patch does massive layoffs and these young guys start suiciding. What’s really weird is that Alberta used to be all about ranching, beef, agriculture. Then they got suckered into betting on the cyclical oil industry and didn’t think to keep much of a fallback position.
- Shipping collapse, like Hanjin Shipping’s (world’s 7th largest line) bankruptcy, the first such in 30 years is, again, financial crisis related.
- Beginning horrors of what’s shaping up to be a world-wide currency collapse include currency controls, bank account seizures, precious metals restrictions, withdrawal of paper money, an absurd push to “digital money,” and corresponding demonization of barterers, gold and silver users. Cypress, India and Venezuela are three prominent examples of countries that have suffered badly due to this.
…And the obvious failures, disasters like in India, and in Venezuela, don’t stop this from proceeding. In fact the U.S. Fed. lauds the “Indian experiment,” of pulling 86% of its circulating currency from the people’s hands and creating nationwide chaos!
Bubbles, bailouts, wild price fluctuations, unemployment, gnawing inflation: All signs of a criminal financial and economic system. Our present system is irrational, resources are poorly distributed, unemployment is rampant, taxpayers are being exploited and we have inefficient, impoverished economies world-wide.
Inflation rages on, despite a low reported rate, and we smilingly play along like village idiots.
One interesting thing that is mostly invisible, is inflation management.
Of course, it’s no secret that you get less for the same or higher price at the grocery store, as they artfully diminish the contents of grandly-sized packaging. Not only that, but they cheapen ingredients, add more “fillers,” and do other tinkering, so a lot of the “food” we consume is now poisonous.
Something really invisible is housing. We have been shuffled into overpriced hovels yet think we’re “movin’ uptown” like The Jeffersons or something. And house “investing” and “flipping” has become obsessive-compulsive mania.
Construction used to be construction, not slapping up a tar-paper shack. “Houses” these days are foundationless, using scrap materials to simulate reality. We used to have real brick houses, or real stucco/plaster, a sort of concrete with wire mesh underneath for shaping and reinforcing. Houses used shiplap (notched for smooth overlap) or tongue-in-groove planking material of real, solid wood under their exterior finish. Oh, that didn’t last, and we were on to plywood, for a while, then pressboard, small pieces of wood chip smooshed together, in a glue matrix, and now what? Particle board (pressed sawdust). Then they slap on some problematic finish, like vinyl siding, or EIFS (Exterior Insulation and Finish System), and stick a million-dollar price tag on the wretched thing.
Wood siding is so popular in North America, partly, of course, because it is cheaper, and you don’t need to be too talented to slap it up. But it’s not fireproof, and it takes a lot of maintenance, what with painting and the like. Still, with care, wood can last a long time, especially if cedar siding is used. On the other hand, the cost of hiring a good bricklayer or plasterer reflects in the value of the house. Perhaps no one here ever went over to Europe, where their houses last hundreds of years, made of brick and stone.
Then they got obsessed with “energy efficiency,” and sealed up the new houses tight, in a “vapor barrier.” Unfortunately, a house needs to “breathe” somewhat, so the air inside isn’t toxic. Oops! Also, “modern” external finishing like vinyl siding and EIFS, polystyrene foam covered with polymer (plastic) coating, doesn’t breathe, so the sheathing beneath will tend to rot. Oops! Also, vinyl, aluminum (foam insulated) and EIFS all have the problem of emitting toxic fumes from the plastics, when burned. Oops! But these cheaper selections are favored by all these fly-by-night contractors running around.
(By the way, look up the Monte Carlo hotel fire in Las Vegas for a look at how ridiculous this EIFS is. Having been to Vegas a few times, I still didn’t realize there were so many other bad fires there, the MGM Grand one in 1980 being the worst disaster in Nevada history. Well, of course, Vegas keeps this type of thing on the down low.)
Inside our houses now, there is a tendency to “go upmarket” in the kitchens and bathrooms. Kitchens are tarted up with granite counter-tops and “premium” stainless appliances made on the cheap in China, the potty sports a hot tub, dual sinks and “designer” tiles. It’s funny how the exterior and bones of the structure are cheaped-out, and everyone lavishes the big bucks on the non-critical elements.
It’s not the smartest to use our houses as “savings accounts,” because when they revert to their true, depreciated values, it’ll be tough on the pocketbook.
Of course, it’s all part of “inflation management.” Houses aren’t houses anymore, but mock houses, stage scenery with little intrinsic value, built with substandard materials, and substandard skills.
As part of the ruse, they’ve also become huge. For one, two or three people, yet sized as though we were back to the days of The Waltons, with six kids and Granny and Grampy all bunked inside.
But, when a hulking new cardboard castle crops up on the street, its size, EIFS “tailored look,” and gingerbread trim make all the old houses look sadly outdated and teeny, so everyone has to tear down and build anew to keep up.
Then there are the condos and high-rises. Crappy new disposable buildings, including “top-end” ones. People are moving into such a new tower locally — these are million dollar plus condos, and already there are complaints about the finishing/craftsmanship. I see from pictures that they’re using forced-air heating, too. What the…? That’s the worst, dry and dust raising. It has one advantage, besides being cheaper to install: you feel the heat quickly. But you’d think a brand new 60-floor tower would have radiant heating at those prices.
Doesn’t matter though, they’ll be paid off and decay and the whole building can be razed prematurely. It’s just cheap concrete, glass and spandrel, after all.
And it’s the same thing as we see in war: Useless destruction, with the side-effect that money is being spent and the economy is artificially stimulated, and big bucks are made upstream.
Of course it doesn’t stop there. Cheap housing needs expensive repairs, and premature replacement parts. It’s win-win — except for the long-suffering middle class that “can never seem to get ahead.”
Keep in mind, working-class people used to live in smaller houses, but they had big front and back yards, and could grow a garden and do some landscaping, maybe even put in a pool. Plus, there was money for a summer cottage, maybe a boat, or an RV, and people had some stash for a bit of travel.
Today, though people pump most of their money into them, houses aren’t going to last. All of them have a lifespan, even if they’re well constructed, with every part wearing out or just becoming technically outdated. (Meantime, innovations from many decades back, like low-voltage light switches, get forgotten and discarded.)
Speaking of expensive repairs… Get this: The Millennium tower in San Francisco that has been falling over may get a taxpayer bailout! Look at this con: They’re building a public works project nearby, a glorified bus station, which may be an excuse to get a taxpayer bailout for the 10s-100s of millions it will cost to tip the huge tower back straight. In case you were wondering how the entitled and connected rich manage to weather any and all setbacks, it’s because they have set up these phony constructs called “governments,” basically huge extortion and enrichment schemes. Yes, government, and even the concept of “countries,” and what we need from them, need a rethink. And to be thought through properly this time.
What happened is they built this 197 m. (645 ft.) white elephant as an “upscale” condo building in 2009, on Mission Street, a main drag, pardon the pun. It had already sunk about 10 inches when the city signed an agreement with the building’s lawyers to fix any and all damage caused by the excavation they were doing for the new Transbay Transit Center, a rail and bus terminal (though many don’t think the high-speed rail component to L.A. will ever be financed).
Now the reason it sank, 16 inches to date, and 6 inches off-center, is because they built this “ultra-luxury” tippy-tower on mud — fill used to claim some extra land for San Fran. Now, normally, the engineering practice is to dig or drill down — down to bedrock, and build up supports/piers from there to sit the building on, but, no worries, because their way of avoiding all that would save some money! And of course, San Francisco isn’t on a fault line, or anything. Just to be sure it couldn’t sink, the building was built extra-heavy, using concrete instead of steel framing.
Do a search and take a look at the pictures of the cracks in the basement, the parking garage. I don’t think you could pay me to go down there. Wonder if they’re using Spackle or Bondo for the patchwork? Probably it’ll be just mashed-up newspapers and water, since they’re going to wait for the long-suffering taxpayer to foot the bill for the proper materials.
All that “churn” we talked about is partly to accommodate a flaw in system: We have to have ever-higher deficits, and if that doesn’t worry you, you worry me. So it is absurd when they talk about “the deficit,” as though it were forever a big surprise that it is so high! So, to prepare for when that becomes unsustainable, we have to see changes in the money system.
I think Bitcoin is meant to acclimatize the masses to “e-currency,” “cryptocurrency,” “cybercurrency” or “digital currency” that is being vetted for potential replacement of our current paper money system. This is tied in to a push for a world-wide fiat money system, rather than just national ones. If they’re trying to get rid of our money, they’re going to stage something that seems like a viable, “good” replacement. As well, infringements on the money monopoly are never tolerated, so Bitcoin would have never been allowed to become a “thing,” if there weren’t a plan.
If (more like “when”), countries (actually their central banks) introduce digital currencies, it should be game over for Bitcoin. Or, rather, that’ll be the excuse to have it fold, taking everyone’s bitcoin investment with it.
Not just Bitcoin, but everything these days we’re told is valuable is just a shady con. Like the idiotic “Facebook,” which is a platform that many, many programmers could implement. That is, it’s nothing new, not an “invention” or “innovation,” but has extraordinary perceived value (and, despite a history of these type of things falling out of fashion, is extraordinarily overvalued). It is actually a test of gullibility, to create value out of nothing, besides being a spying tool, and social manipulation tool.
Oh, powers that be want a “digitalized currency,” all right. The potentials to tax every monetary exchange, “shut down” or selectively “tax” anyone they don’t like, implement charges on every transaction, snoop on every transaction, force negative interest rates and rampantly inflate the “currency” are just too great temptations. Plus, paper money has “handling and production costs,” like transport, security, counting, printing.
Bitcoin probably won’t survive. It is just a first draft, to iron out the bugs and see how easy it is to bait the suckers in. We get the occasional story, like recently, where they’re going after users in a “crackdown” (but possibly a contrived one, to validate the scam to people who see it and think Bitcoin must be “independent”), by the U.S. government against customers of a Bitcoin redeeming business. Or this headline from Zero Hedge, Feb. 4, 2017.
Bitcoin Plunges After Chinese Exchanges Suspend Bitcoin Withdrawals
Then on the other side of the bitcoin, its valuation is dizzyingly high, up around $1250 at one point. Nuts. But it will prove irresistible to some people who “want in on the action,” as long as it can make crazy gains from time to time. This latest price hike is despite the Chinese crackdown, as apparently people were using small peer-to-peer traders for their transactions, bypassing Chinese controls.
To see Bitcoin is on shaky ground, you only have to look at the justification for it. It should make the world roar with laughter. Now, supposedly, what happens is that computers “mine for bitcoins” by “solving complex mathematical problems that become more complex as more bitcoins are mined.”
That was the first explanation that I heard. Trying to uncover a sensible explanation took some work: What they call bitcoins are a digital entry in a Bitcoin account (note the capitalization: small “b” for bitcoin; upper-case, for the Bitcoin business). Like a fiat currency, it has faith-based value. It has users, because it has users, you might say.
Now the innovation is that each “miner” keeps a record of all the bitcoins. This is the important part of the concept. If you just had one single repository of information, it might be tampered with. But if many people have a record of all bitcoin transactions, it is very difficult to get away with gaming the system.
Conference Call Monopoly
Let’s backtrack now to make the concept more accessible. Picking something most people are familiar with, suppose you wanted to play a game of Monopoly, but do it by telephone, with an arbitrarily large number of people. Call it Conference Call Monopoly. So you give all your players their $1500 starting money, as an entry in a log or database. (You can’t exchange regular Monopoly money, since the players aren’t all sitting together. So instead, you just keep a paper record of account — call it a “database” — for every player).
The “database” could be done simply: Elect one player the banker, and he’d have an additional duty of keeping everyone’s balance. If you spent something, he’d mark it down under a column with your name on a piece of paper. Since you’re playing by conference call, you’d just ask the banker what your balance was if you forgot.
Well, as you could imagine, people would get pretty upset at this arrangement if they started to lose. How do we know if Banker Joe isn’t giving himself a few bucks extra on the sly? Or shortchanging you somewhere along the line? Well, of course, you’d have your smarties who would keep their own tally, and compare it with what Banker Joe said, to see if he’s honest. The Bitcoin protocol works along those lines: Each miner has a record of all transactions from the start of Bitcoin. The “mining” of bitcoins (a term selected, obviously, to give bitcoins some of the gravitas of precious metals), involves people using their computers to find bitcoin transactions and update all Bitcoin records.
Now, multiple transactions are going on at any given time, so transactions are bundled together as blocks. These collections are found by the “miners,” online, and they perform the transactions, representing the updates of peoples’ Bitcoin accounts. “Miners” are rewarded with newly created bitcoins (or fractions thereof). If you’ve heard the term, “block chain,” that just means the chain or sequence of all the blocks, over time. You can go back to the first, “Genesis” block and follow all transactions of all the bitcoins or any particular bitcoin, if you have a mind to.
This explanation makes more sense, but you aren’t going to see it publicized, because it reveals the shortcomings of Bitcoin. First off, there is a scalability problem. That is, the number of transactions could grow much larger than tech could keep up with. In fact, the system is already pretty sluggish: It can only tolerate 7 transactions per second, so about 220 million/year. That might sound like a lot, but if each user does only 10 transactions a year, that’s a limit of 22 million users. It is not a viable world-wide system at that rate of speed. It’s a bit of a joke, a toy app.
Plus, the database of all transactions is potentially vast, and growing constantly. Some proponents say, “Oh, storage capacity keeps getting cheaper every year!” That’s a dumb retort. Capacity growth would not keep up if Bitcoin really caught on. Plus, what a waste of space.
And, as well, computers have to keep up, in terms of processing power, to process growing numbers of transactions, meaning high costs in computers and electricity.
Bitcon’s (heh-heh) shills equate these transactions with “intrinsic value.” No, an orange has intrinsic value. A table has intrinsic value. The shills say the electricity and computer time that went into the transaction computations are somehow representative of value. These shills don’t understand entropy. All they have to show is wasted time, and wasted electricity. Speaking of which, an organization that monitors Bitcoin (called Blockchain, after the Bitcoin block chain), says miners spend $17 million per day to mine bitcoin worth $4.4 million! That estimate may be a bit pessimistic, but nonetheless, it appears that more money is going into the mining costs than the payoff. How’s that for a joke? And the cost can only go up over time, since the transactions become more difficult, by design. (That is to say, the design is flawed.)
Got to love how they try to make a liability an asset by saying, “The more bitcoins there are, the harder it is to make more,” but that “harder” means it’s harder to run the necessary calculations (propagate the transactions) that make the stupid system viable in the first place! Madness!
And, painfully, the electricity is real (wasted) value that could have gone into cooking your burrito. The bitcoin they mine is basically nothing at all, in the world of common sense.
You or I can sit around all day and watch TV or piddle around on the computer reading Tweets and watching YouTube videos of cats. That time is wasted, not transmuted into something worth paying for. It’s the same for inefficient Bitcoin transactions. But because the mass man does not truly understand computers, we’re going to keep seeing confusing scams like “Bitcoin” introduced. And as long as mass man doesn’t understand mathematics and greedy swindles, we’ll see casinos and lotteries persist.
Imagine in the Bizarro “Bitcoin” logic, Walmart bragging in advertising that it was “Making it harder for you to shop… Every day!” and hiding sparse stock on high, unreachable shelves, narrowing the aisles, not cleaning the bathrooms, then adding, “We make sure our processes are always more inefficient and costly… Always. And we pass the losses on to you!“
It doesn’t end there, as there’s no anonymity in this system. Every transaction is kept “forever.” That means potential lack of privacy, so Bitcoin sucks as a private payment system.
And what’s the point of no privacy? They say it’s good to track “cheaters” in the system, without pointing out any cheaters they’ve actually caught.
People have already been screwed by Bitcoin. Users at Mt. Dox got robbed of some or all of their investment. Mt. Dox was the biggest Bitcoin market. It turned out to be an embezzlement scam that stole $450 million of patrons’ bitcoin investments (based on the price of bitcoin at that time).
There are plenty more problems. Here’s a headline from a quick Google search:
Bitcoin Exchange Bitfinex Says It Was Hacked, Roughly $60M Stolen…
And… Bitcoin transactions producing capital gains are taxable, somehow.
And… You have to be careful of your password. Lose that, or the drive you “store” your bitcoins on (bitcoins are, actually, just an alphanumeric code), and they’re gone. This brings up something interesting to consider. Some guy, unwittingly, threw a computer disk drive storing “millions of dollars” of bitcoins in the trash. Presumably, those bitcoins are lost forever. Well, over time, as more people lose their bitcoins by misplacing their passwords or crashing their hard drives, the pool of bitcoins will shrink to zero, since bitcoin is limited to a count of 21 million.
And… Of course, the Bitcoin network, and your stash, are vulnerable to hackers.
And… At least 36 Bitcoin dealers have folded so far.
And… Don’t forget you pay for the privilege of using Bitcoin with a transaction fee.
Of course, the Bitcoin endeavor may be to discredit all independent digital currency efforts.
All this gloom, but the concept of Bitcoin is a good start.
Room for Improvement
Yes, Bitcoin has some good ideas, but the ideas aren’t fully cooked, yet. For example, why do transactions have to be propagated to every miner? There could be some streamlining via setting up zones or nodes to limit this. That they don’t already do so, is another factor that indicates that this whole Bitcoin thing is likely a government-sponsored scam to test how practical it is to track everyone’s expenditures, cradle to grave, forever, which would explain how Bitcoin got as far as it has, and all the free publicity.
Good grief, “digital currencies.” It’s bad enough the way we are overly dependent on computers even now. You may have seen the crisis in stores when power goes out and they can’t handle manual cash transactions, using a pad of paper and pen, say. No, they’ll just sit there on their southern exit port like the morons they are. And yet there are those who want to have the whole monetary system depend on computers and volatile bits and bytes?
Potential disadvantages will be overlooked, though, by the government when ramming its cryptocurrency down our throats. Then it’ll be “convenience” that will win the day and people will rave about how great it is to “not have to worry about money anymore.” One source was talking about how they are going to bribe people to foolishly accept this push for “digital cash,” by giving benefits to early adopters of the cryptocurrencies that banks are thinking of introducing (and China’s central bank has already announced and trialed). Even without formal digital currencies, they’re already almost there, since people are widely using debit cards to pay right now.
You’ll have someone in line in front of you with a frickin’ candy bar. “How are you paying?” “Debit.” Soon the cashiers will be hesitating and looking at you funny if you say you’re paying cash. It’s ridiculous.
As should be expected, someone’s already got the jump on improved implementations for cryptocurrencies, though. I just found this new site, Iota, a “transactional settlement and data transfer layer…” that seems address some of my complaints. It is probably something to keep tabs on.
IOTA is a revolutionary new transactional settlement and data transfer layer for the Internet of Things. It’s based on a new distributed ledger, the Tangle, which overcomes the inefficiencies of current Blockchain designs and introduces a new way of reaching consensus in a decentralized peer-to-peer system. For the first time ever, through IOTA people can transfer money without any fees. This means that even infinitesimally small “nanopayments” can be made through IOTA.
Instead of a monolithic “block chain” of all transactions, it uses a “Tangle,” or a different protocol that looks to me like a sort of “transaction tree.” They call it a type of “graph.”
Really interesting. It, or something similar, should be “the future,” if it can evade the scheming government’s interference and destructiveness.
Of course there are others (really, there’s bound to be an avalanche of competitors), like Monero digital currency. It looks good. There’s also Dash, “digital cash.” And then there’s Ethereum. It tackles some of the issues, but it’s from a consortium of banks and financiers, likely making it pointless and dangerous for use by a normal private person.
There is something else going on with all this. We’re being lied to about the blockchain being the “big concept” behind cryptocurrencies. In saying that, they’re deliberately obscuring what could be a world-changing innovation.
Which is that computerized commerce might revolutionize something we know well already — barter. But now spread out over countries. A computer program could match up wants, skills and abilities, with those of others. This would work because, everyone needs something. And almost everyone can provide something. We have the potential of evolving away from the need for money as an exploitative middleman. However, you can expect any development of this nature to be violently opposed, because there are just too many interests that profit from the use of money, and demand its continued use. That’s why any system along these lines would have to be well-planned and designed to stop meddlers from wrecking it.
Yes, all the obsession with the current implementation of cryptocurrencies is another scam to part people from their money. A true breakthrough would be a reliable (but efficient) way of tracking and keeping a valid chain of transactions, so no one could rip off the system, but used in a sensible way.
The “barter/transaction-based” system is inherently more secure, too, since there will not likely be the same buildups of huge notional value, as with the cryptocurrencies, where they’re going on about how Bitcoin has a cap of $18 billion or something, and Ethereum is at $4B…
However, there does remain a sticking point that has always existed with barter. If you get rid of the money aspect, there is no agreed-on relative valuation of things. For example, the value of bananas and the value of the skill or labor a person provides can vary greatly. And sometimes, people just want to get some money to just save it, not trade, for use later. Fortunately, local currencies have shown the value of the notion of “hours” (of work) as a representation of value. That is, one hour’s worth of labor. As in Ithica, New York, where “Ithica HOURS” are produced. That is a local, printed, currency that is traded like U.S. dollars, within the town. It is pegged at 10 USD/Ithica HOUR.
I would refine the definition a little, to say, “one hour of unskilled, competent labor.” Looking at the website, that is implied, anyway. This would make the “hour” unit palatable, world-wide, and so it could be used in a world-wide “hours-based” system. The system I’m thinking of would have to operate between people who had access to local currencies, or brokers who preferably engaged in gold and silver transactions. There are legal implications with using national (“reserve”) currencies, so this should be avoided.
An hour of labor is fixed, unchanging, and has a steady supply and demand, but it can’t be monopolized or hoarded or stolen very easily, so it is an ideal representation of transactional value. In fact, there are already people who have done lengthy analyses of this type of system and found it to be favorable.
Why, then, would you need a computer involved? Why wouldn’t people just come and mow your lawn, and you’d pay them in your local paper currency? Well, of course, one reason is to link the various local currencies, world-wide, to make a more universal system for trade and exchange. That’s not just it, of course. We don’t exclusively use coin and paper money now — we use debit, credit, cryptocurrencies, checks, IOUs… Sometimes it’s just much more convenient to use an electronic transaction, or very difficult to use paper.
On the other hand, a physical representation of the money is also desirable — and the “local paper currency” system is already implemented and being used in various cities, because, in turn, paper sometimes is more convenient and easier spending, and, importantly, is independent from computer network outages, and “hackers.”
Using something like Bitcoin as a store of value encourages speculation, hoarding and theft. A system used to exchange value for value with a common denominator is more desirable. The designers seem to have forgotten that digital bits used to represent things, can represent anything. One use of Bitcoin is for money exchange. But look at the needless complication. As an example, imagine an American going to Japan, needing Japanese yen, who buys bitcoins with dollars, then buys yen with the bitcoins. Why all this nonsense? With a “hour-based system,” if you’re going to Tokyo, you’d buy local, physical “Tokyo Hours,” from your hour account — with an exchange rate at par.
Of course, the main appeal of Bitcoin, right now, is to transfer assets. That’s especially obvious, when looking at a more blatantly tyrannical state, like China. There, a lot of people want to get value — their personal assets — out and offshore. (And of course China suddenly imposed all sorts of controls and restrictions on Bitcoin, making it useless for that purpose in China, overnight.) It’s a real no-brainer: reliable asset transfer at a reduced fee, and one free from government’s watchful eye. The hours-based system is a solid one for that purpose.
Note also, that this type of model is not inflationary. Which is great in a practical sense — no government taxation of your “capital gains,” for example, because there are none. Of course, it isn’t as good in drawing interest to the model, because it doesn’t play to people’s greed, like where they think they can make hay and get something for nothing. That’s a problem that makes a “hours-based” proposal less attractive among people who are using Bitcoin in hope of profiting by speculation on increases in bitcoin relative value.
I’m soaring recklessly into this flight of fancy to make a point: It seems to be uncommon knowledge that a cryptocurrency can be whatever you want it to be, but it has to be grounded in sensibility. Bitcoin itself is nothing at all, except whimsy. Even worse than fiat paper. As bad as fiat currencies like dollars are, they have a physical representation and widespread acceptance based on many years of usage. U.S. dollars, for instance, can be used, that is, exchanged, at any time, almost anywhere in the world, and are unlikely to sink to zero value overnight. Fiat currencies go to zero value over a period of decades. Even if people see for themselves the value of their cash going to hell, it still retains a power over men’s minds, like The Shadow.
Point being, the cryptocurrency experiment will be successful if it gets people to thinking about what a currency is, and what it can be. E-gold was very successful, (note that it actually had a physical gold backing, of gold stored in a repository), and though it did collect its share of fraudsters it wasn’t tainted like Bitcoin by a bunch of thieving criminals like at Mt. Gox. So the government stepped in and shut e-gold down with, basically, trumped-up charges, using ex post facto laws (that are supposed to be illegal). That is a clue that e-gold was on to something.
Since the principles are undeniable, (it’s just the current implementations are bad), what may happen is that legitimate private (non-governmental) digital currency implementations will crop up, and will improve with every iteration, until finally evolving into something valuable. Developers specializing in this area could start by integrating the proposed improvements described above. (And hopefully, people will wise up, and stop government’s heavy hand from meddling and destroying truly useful and independent ventures.)
The craziness never ends. Now they’re talking about forking Bitcoin — that is, making a separate implementation of Bitcoin, presumably with somewhat different rules/protocols and such. So there’d be two “types” of Bitcoin. It’s not worth struggling with this nonsense, trying to figure out or explain what is going on, just avoid Bitcon, and save yourself the hassles.
All right, a quick ‘splain — looks like there is dissension in the ranks at Bitcoin (related to the issues I raised above, regarding Bitcoin’s lousy implementation), and some of the coders want to go with new software for Bitcoin, in hopes of improving transaction speed (lowering “latency”), by increasing block size. You, my readers, are already up to speed and already know that the transactions are bundled in “blocks,” so, theoretically, if you have more transactions per block, and you can process the same number of blocks, you have more transactions per unit of time, quickening the system.
I expect if they go this route, they’ll see oblivion for one of the forks. That is, people on the “bad” fork will convert their bitcoins to those on the “good” fork, en masse, leading to a crash in value on one of the forks. (So some are going to take heavy losses.) That’s a no-brainer, if one fork is perceived as “better,” unless they anticipate it and figure out a fix ahead of time.
Which calls to mind something else to take note of: “Leaks.” The economic system is artificial. Price discovery is difficult as interest rates and other factors are manipulated. Thus, we see insanity like Bitcoin that went over 1200USD (now calmed down a bit). It’s because engineering the economy means unexpected, unplanned consequences, and fear. That fear is driving the price of Bitcoin. Weird “leaks” in the system show up in unrealistic pricing in areas where prices aren’t artificially suppressed or inflated. It’s like when you squeeze a flexible container containing a liquid, and it bulges out in the areas where you aren’t squeezing.
In Bitcoin’s case, it’s somewhat foolish for people to buy in to a high-priced offering. Because the system is primitive. In fact, any cryptocurrency is going to be forever somewhat primitive since it will always be superseded by a more advanced implementation. Thus, before we take this stuff seriously, we should wait for a system that accounts for that fact, and has a plan for constant technology updates, just like your computer operating system.
Note that buying in on some of the other emerging cryptocurrencies may be an interesting speculative investment with chances for some gains, just be prudent and don’t bet the bankroll.
Ironically, the cryptocurrencies could be a savior for us, or spell our disaster. It all depends on how we manage them.
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Believe it, Jayne!
BTW, the Millennium Tower problem still looms. It’s still sinking, inch by inch, and the latest proposal is for a $500 million fix! For a $350 million tower…
I couldn’t refrain from commenting. Very well written!
Came across this comment of public interest on a YouTube video about the tower by “phillip kalaveras” on July 17/22:
THIS IS HOW THE MILLENNIUM TOWER HAPPENED
In mid-2004, the Department of Building Inspection took the extraordinary step of ordering construction halted on a 52-story project at 80 Natoma St. The then head of the building inspection department, Frank Y. Chiu, said in a legal declaration in October 2004 that he ordered a work stoppage in light of their experts’ warnings that the 80 Natoma St. project would sink far more than the geotechnical designers estimated.
At this point in time, The Millennium Tower is still on the drawing board and has the exact same foundation designed by the exact same geotechnical firm – Treadwell and Rollo – that designed the much lighter 80 Natoma St. project that was just shut down by the Department of Building Inspection for having an inadequate foundation. Treadwell and Rollo are now undeniably aware that their foundation as planned for the Millennium Tower is inadequate and that it will be rejected by the Department of Building Inspection so they simply did not submit it for review and let construction begin. It is of record and is undeniable.
This is what happened and it can be easily fact-checked by anybody, everything else that is being thrown around is I suspect an intentional distraction from what is a simple truth so the next question will never be asked… How was the Department of Building Inspection sidestepped?