The official blog of the Digital Cash Alliance
Hardware Upgrade Scheduled
In order to provide scalability for future growth, the DigitalCash wallet clearing network is having its hardware upgraded. This means that wallets will not be accessible during this time. Also, this website will be offline. Downtime is scheduled for 6 hours, but may require a longer or shorter interval. After the upgrade, transaction processing should at least double. (Future loadtesting will confirm this projection.)
Musings on the Dao of Blockchain
What is the likely future of Bitcoin specifically, and of blockchain technology generally?
A few years ago these questions would not even have been asked separately, as if they might have differing answers: back in say 2013, blockchain was Bitcoin. Today the Bitcoin currency itself has run into significant difficulties, leading to an understandable tendency to abstract the worthwhile features of decentralized blockchains outside of Bitcoin itself.
What are some of the difficulties experienced by Bitcoin, and what has caused them? Former Bitcoin Core developer Mike Hearn gave an excellent summary in his January 14th article, “The resolution of the Bitcoin experiment”, which also amounted to his resignation speech. While his conclusion that the Bitcoin experiment has failed (past tense) is overly dramatic, he definitely nails down a list of some of the major issues from a market usability perspective:
“If you had never heard about Bitcoin before, would you care about a payments network that:
I’m going to hazard a guess that the answer is no.”
- Couldn’t move your existing money
- Had wildly unpredictable fees that were high and rising fast
- Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)
- Is suffering large backlogs and flaky payments
- ... which is controlled by China
- ... and in which the companies and people building it were in open civil war?
The issues with moving existing money, large backlogs, slow and flaky payments, etc., are all the result of the Bitcoin network reaching its saturation point. Due to the fact that a block must be of a fixed size, there is necessarily a maximum number of transactions which will fit into a single block. Given that blocks are completed (mined) every so many minutes (about 10 minutes on average, albeit with wide variability), this implies a maximum transaction rate. While the calculated theoretical maximum for Bitcoin, based on its present 1 megabyte block size, has always been understood to fall around 7 transactions per second (tps), using the actual typical size of a transaction yields an effective throughput of more like 3 tps. For comparison purposes, PayPal is estimated to be able to handle around 400 tps, and global credit card networks such as MasterCard can sustain well over 10,000 tps.
Various competing proposals (such as Bitcoin XT by Hearn and Andresen) have been offered in order to change the Bitcoin block size. None of these proposals has been adopted. One problem is that larger block sizes imply higher latency, in that the spacing between mined blocks increases proportionally as the blocks become larger. Thus there is an inherent tradeoff between capacity and settlement speed. Bitcoin's rate of final settlement, at 10-60+ minutes (for 1-6 confirmations) is already ridiculously slow.
The issue with allowing spend reversals due to a new feature is a reference to “Replace by Fee” (RBF), a recently implemented feature which presents a number of problems described here. Since its adoption, Coinbase and other Bitcoin merchant payment gateways have become compelled to wait for at least one complete block cycle before accepting a customer's payment and notifying the merchant's website of the payment completion. This means that those shopping online with bitcoins now have to wait for anywhere from 1 to 45 minutes for their payment to go through, depending on various random factors. It almost goes without saying that such slow and inconsistent settlement times are completely unacceptable in any online payment system.
The point about Chinese control refers to the fact that a significant percentage of the mining hash power in the network is located in China, which means it's on the other side of the Chinese government's “Great Firewall” censorship system. Consequently, connectivity between the Chinese miners and miners located elsewhere is often poor. (Hearn likens it to bad hotel wifi.) This sometimes causes miners to produce very small or even empty blocks, quite close together. Hardly a helpful development in a network which is already struggling with saturation and backlogs at peak times.
Hearn's last point about the community being in an open civil war goes to the heart of his conclusion that Bitcoin “has failed” because the community has failed. While it's certainly true that acrimonious debates, mudslinging, impugning of personal motives and integrity, and extreme factionalism are to be found on practically every Bitcoin-related Reddit thread, tweet, and blog post, the allegation that “the community has failed” isn't quite accurate, because it implies that things might have turned out differently if only the Bitcoin community (or various prominent members of that community) had behaved differently.
Unfortunately the problem is more fundamental than mere infighting, no matter how bitter, immature, or frankly alarming (e.g. petulant threats to perpetrate hard forks) those squabbles may become. The basic problem is that there is no way to resolve the disputes, precisely because there is no one in charge. As has often been pointed out since Satoshi's paper was published, no one “owns” Bitcoin. The network is decentralized and “trustless,” requiring consensus for major changes to the protocol. What has always been amazing to me is the staggering practical naivete which is required in order to extol a lack of ownership or responsibility as being uniformly positive and inherently a good thing.
No owner implies no manager. The fact that no one needs to be trusted likewise implies that no one is responsible. When no one is ultimately responsible, you get exactly what we're seeing in the Bitcoin community today: global office politics without a referee. It appears that the end result of a decentralized network is, actually, centralized inertia! In reality, the problems aren't Mike Hearn's fault, or Gavin Andresen's fault, or Peter Todd's fault, or anyone else's fault. Instead they're the inevitable result of an almost cultish devotion to the gospel of decentralization, which abhors ownership and responsibility, seeks to replace objective reality with the idea of group consensus, and leads inexorably to the tragedy of the commons.
If, say, a credit card company like Visa were bumping up against their transaction throughput limit, and foresaw the problem looming years in advance, they would simply build ahead of growth, with the result that the end consumer would likely never notice anything. If they failed to take suitable action in time, competitive pressures would quickly punish them with a loss of market share and revenue. But with Bitcoin, despite the fact that the throughput limitations were obvious as far back as 2009, no choices were made on how to deal with the problem, despite there being no shortage of proposals. At this point, no amount of attempted unilateral hip shooting, by anybody, seems likely to make any difference. We're left with mere hopes that professionalism coupled with some kind of rational capitalist behavior will emerge, take hold, and save the day -- thus protecting the more than a billion dollars of investment made in the Bitcoin space to date from going down the memory hole. Sadly, a much more likely future scenario is currently being provided by the example of Venezuela, where everyone in authority seems chiefly interested in maintaining their prerogatives, even as the house burns down around them. Bitcoin does share a certain spiritual kinship with populist socialism.
I can't help but wonder why anybody would have invested so many millions in any business built on top of a technology which cannot possibly scale high enough to make even a significant dent in global electronic remittances, still less take over the world as predicted by all the hype. This goes double when the technology lacks a responsible decision-making party, even a dim-witted decider. (Where's 'W' when you need him, /sarc.) Moreover the blockchain architecture, when applied to objects with rapidly shifting ownership, such as money or even equity shares, is fundamentally ill-suited for such a use. Each coin carries its complete history on its back like a snail, or like an arbitrarily long sequence of endorsements to new owners on an automotive title. Coins with unconfirmed inputs cannot be spent, spends within the same block need to be serialized, and spends to dead wallets take coins out of circulation permanently. Issues surrounding economies of scale in p2p networks can actually lead to more centralization, not less. And although commonly referred to as a cryptocurrency, Bitcoin isn't actually encrypted, resulting in essentially no transaction privacy whatsoever. These and other issues we've posted about before.
It's Just a Step to the Right...
Entire companies and technologies have sprung up in the effort to develop solutions which will compensate for the inherent deficiencies of blockchain technology. A good example is the idea of “pegged side chains,” aka “lightning chains,” “permissioned blockchains,” or “sharding” (in the parlance of Ethereum). The idea of pegged side chains is that coins are moved aside into a special pool address (the “peg”), typically controlled by multi-signature escrow, and then mirrored on a much smaller special-purpose private blockchain where they can circulate freely, rapidly, and possibly according to different rules. Only when absolutely necessary do coins get un-pegged and moved back to normal circulation on the parent blockchain. (For our critique of the original paper on side chains by Back et al, see this article.)
The idea of side chains, or dark pools, or any similar scheme that permits coins to circulate “off chain” certainly gets around immediate throughput issues, and may even have a side benefit of protecting the transactional privacy of users (unless the off chain pool is itself a public blockchain). However the practical problem with the concept is that in reality most side chains will need to sync up with the parent blockchain, at least in part, relatively frequently. Coins will also need to be able to migrate between them.
This creates the potential for large hubs submitting transactions back into the Bitcoin system, with the main benefit being that one could net out many smaller transactions. But how many such major sources of net transaction inputs can exist before the overhead of keeping them synced with the parent chain negates their beneficial effect? There's no obvious way to estimate this, but we can deduce that the number is not particularly large. An analogous effect is produced by the use of CPU-anchored memory in a NUMA architecture computer. At some point adding additional CPUs to a NUMA machine does not yield any further performance benefit. Presumably, at some point adding additional side chains and dark pools won't either, since the 3 tps speed limit for the parent blockchain will remain a constraint, plus we're also generating new transaction load due to coins moving in and out of the pools. Much like increasing the Bitcoin block size, side chains are at best a temporary stopgap solution that can only buy limited time.
All of this has naturally led some seekers to ponder: how can we can extract and use the essence of what is good about blockchains, possibly without actually having to use a real blockchain at all? This is the thinking behind BigChainDB, a technology for marrying blockchain concepts (but probably not an actual blockchain) to scalable distributed databases currently used for big data. Their white paper opens by describing the gross contrast in performance between blockchains and real databases thus:
We can frame a traditional blockchain as a database (DB), in the sense that it provides a storage mechanism. If we measure the Bitcoin blockchain by traditional DB criteria, it’s terrible: throughput is just a few transactions per second (tps), latency before a single confirmed write is 10 minutes, and capacity is a few dozen GB. Furthermore, adding nodes causes more problems: with a doubling of nodes, network traffic quadruples with no improvement in throughput, latency, or capacity. It also has essentially no querying abilities: a NoQL database.
In contrast, a modern distributed DB can have throughput exceeding 1 million tps, capacity of Petabytes and beyond, latency of a fraction of a second, and throughput and capacity that increases as nodes get added. Modern DBs also have rich abilities for insertion, queries, and access control in SQL or NoSQL flavors; in fact SQL is an international ANSI and ISO standard.
Decentralized technologies hold great promise to rewire modern financial systems, supply chains, creative industries, and even the Internet itself. But these ambitious goals need scale: the storage technology needs throughput of up to millions of transactions per second (or higher), sub-second latency, and capacity of petabytes or more. These needs exceed the performance of the Bitcoin blockchain by many orders of magnitude.
This explication succinctly makes clear the obvious fact that blockchains, as they now exist and function, have absolutely no chance of taking the financial world by storm. This conclusion does not change regardless of how many consortiums backed by financial institutions (such as R3) invest money into blockchain technology startups. Most such groups are merely allocating resources simply to “have a strategy,” in a kind of Pavlovian response to media buzz. They're mainly industry followers in any case, not innovators, who are primarily looking to buy a piece of the action before it gets used against them competitively.
The folks at BigChainDB then proceed to demonstrate how some of the nice features of blockchain currencies, such as trustless decentralized control, immutability, public auditability, and the creation and movement of digital assets, can be implemented at scale by integrating Ethereum-style smart contracts with a distributed big data DB, using their BigChainDB middleware. It might well be objected that running such a system on a network of federated cloud nodes controlled by one company hardly constitutes an instantiation of a “decentralized trustless network.” And of course such objections have been raised.
However these types of objections spring from ideology, more than practicality. In fact the global financial system already runs on top of fast distributed databases operated by individual corporate vendors, where data can be altered or even erased entirely at will by the owning party, or by accident, or due to the malice of hackers. There are certainly glitches, but on the whole it works amazingly well. Bitcoin, as the exemplar of the decentralized communitarian alternative, modulates only a tiny fraction of global spending activity, and works rather poorly, especially of late.
As already stated, ownership implies responsibility, which produces accountability (or at least the impetus for it). Trustless decentralization implies no ownership, no responsibility, and no accountability on the part of anybody to anyone. The free market has historically dealt with this issue for centuries by means of competition, and done so well enough to build a modern high-tech civilization on that basis.
While it remains to be seen how well BigChainDB actually works in practice, it's a good start in the direction of providing blockchain-like features, without the deleterious technical hangups and lack of responsible proprietors. Their crew (the paper lists 9 authors) evidently brings more practical real world past experience to bear than seems to be the norm for tech startups in the cryptocurrency arena.
The DAO of Blockchain Physics
The first significant enterprise constructed as a smart contract on Ethereum is the DAO, for Distributed Autonomous Organization. This ambitious project proposed to act like a VC firm for future cryptocurrency startups, with funding pooled from contributors according to the smart contract, voting on which submitted projects should be funded conducted according to the contract, distribution of funds to client firms made via the contract, and even distribution of dividends back to shareholders performed according to the smart contract. It was proclaimed that the traditional corporate vehicle was dead, long live the decentralized meta-firm, owned by the people and controlled only by mathematics!
Probably to the surprise of few much over the age of 30, this project blew completely apart in a matter of days, taking more than US$60 million worth of ethers with it, with possibly up to another $100M still to be drained out. It seems that when the code is the law, the code had damn well better be correct, only it wasn't. It also seems that there was some confusion about the nature of the problem and whether it had already been corrected. (At one point a few days beforehand the developers explicitly claimed that the bug had been fixed, and that there was therefore no danger.) It also appears that there are significant implementation flaws (and possibly even design flaws) in Ethereum's Solidity language and compiler itself.
Well gee, ya think? A brand new computer language, with no history of real world applications deployed in it, gets used right off the bat to implement a financial mechanism tasked with handling hundreds of millions of dollars worth of value. That's completely insane right there. There's a reason why Cobol and Fortran continued to be used for years even after C and C++ became widely available. It's because the older languages were mature and robust, with enormous installed bases and thousands of expert programmers who understood them thoroughly and could write and maintain complex systems in those languages, which could then be trusted with people's money, and indeed even with people's lives. Today one can safely use C/C++, and a few other mature languages, for financial applications; the Bitcoin Core itself is an example. But mission critical software simply should not be written in nascent languages with no deployment history, known only (at best) to a few hundred programmers. Attempt to short-circuit the software lifecycle at your extreme peril!
Apart from the bugs and the naivete displayed, the response of “the community” to the DAO debacle has been even more revealing. Calls have gone out for a temporary “pause” on exchange trading in ethers and DAO tokens, to protect the interests of the innocent. It's been suggested that the whole thing could be unwound by means of a hard fork of the Ethereum blockchain, so that the thieves would never be able to realize their ill-gotten gains. Miners could then vote on the adoption of the fork to give it the stamp of community approval. Mr. Edan Yago, the CEO of Epiphyte, wisely urges the Ethereum Foundation and developers not to succumb to the siren call of human intervention. He concludes:
It comes down to is this. If smart contracts must be interpreted by humans for their "intent" instead of by code for their programming, then smart contracts cannot be autonomous and automatic, and instead can be retroactively reversed by the community, the courts or governments.
If this is the case, it's hard to see what value smart contracts actually have, which means that it's hard to see that ethereum should have any value at all.
What he neglects to state explicitly is that since interference is plainly a choice open to the powers that be within Ethereum (else there would be no need to urge them not to do it), all this braying about autonomous organizations and programmatic intent is in fact little more than marketing BS. Which means that Ethereum “smart” contracts are actually inferior to ordinary business contracts: they're harder to understand, since written in a code even more obtuse than legalese; they're harder to enforce if they break, because they don't map to any legal jurisdiction and fail to explicitly identify the parties; they're difficult or even impossible to modify in the face of changing business conditions and relationships; and they can apparently be overridden and reversed at will by a central authority, namely the operator of the private blockchain, who is not a party to the contract and was never appointed as an arbiter of contract disputes. All of which makes smart contracts of this stripe a mind-bogglingly bad idea, regardless of what ultimately happens with the DAO, or with Ethereum.
So far at least, the “physics” of blockchain (outside of sheer speculation) seems to amount to a damping function.
It's extremely unfortunate that failures with huge headline-grabbing losses such as MtGox and the DAO have marred the early development of cryptocurrencies. But this is mainly attributable to the fact that in such cases far too much value was thrown in by too many, too easily, too soon. It appears that all the hype about “no need to trust anyone, because it's math” has fostered both moral hazard and gullibility. Since MtGox was a real world company, at least somebody got prosecuted; although the likelihood of victim restitution appears remote. With the DAO, establishing responsibility may be very difficult. One can hardly jail programmers for writing bugs.
Then does a blockchain have any worthwhile use? Clearly, it does. It is useful as a distributed public ledger, in much the same way that a DHT, a distributed data store, or a distributed filesystem is useful. It's a spanking new tool in a modern programmer's toolbox. Its use is indicated in cases where both censorship resistance and public access to data are important. Perhaps someday, title databases to real property, motor vehicles, and the like will be implemented using publicly accessible blockchains. (And perhaps those applications will even be coded using smart contracts.) But in my opinion the use of blockchain by itself in support of financial transactions, e.g. for currency payments, or for trading in debt, equites, commodities, and the like, appears extremely unlikely. It's simply an unsuitable technology for such purposes, no matter how much idealists may prize the idea of a global currency without an issuer.
So what do we do instead? In my view, the financial system of the future will centralize payments for efficiency, but decentralize the network at the level of the business model, using competition. It will increasingly support privately issued money of diverse kinds to replace defective government-issued fiat currencies. Instead of a distributed issuer, we will see demand distributed across a supply of many individual private issuers operating in competition with each other. One thing that Bitcoin got right is that payment systems are an example of software as a service. Users, the consumers of this software service, will be sovereign in this market of competing free market monies. Before the age of central banks and unbacked fiat currencies, free markets, property rights, honest money, and individual responsibility and initiative built modern civilization. In the future, we will return to these roots, except that the money will be digital -- but with the privacy of physical cash.
In fact, we've already developed a software system which uniquely supports this vision! It's much more scalable and far more private than a blockchain. You can learn more about it right here on this site.
The War on Cash and How Digital Cash Helps You Resist
Certain people and organisations in the world want your money. There have already been enormous changes in what is money. For hundreds of years, roughly 301 to 1933, money was gold, silver, and copper coins, or paper documents representing gold or silver. Of course, a vast array of other things have been used as money. During ancient times and more recently during periods of privation, war, or imprisonment, people have used cigarettes, chocolate, hunks of iron, silks, salt, and cattle as money. There persist cultures today where traditional judges levy fines denominated in cattle against wrongdoers.
Since 1933, the US government has attempted to eliminate gold as money, first by banning its use by Americans, then in 1971 by breaking the Bretton Woods treaty and refusing to redeem dollars for gold. Since 1964, silver has been taken out of US coins. Since 1982, nearly all the copper has been taken out of the US cent.
Meanwhile, credit cards and debit cards have been developed, so that money sometimes is represented by a hunk of plastic. More recently, smart phones have replaced credit and debit cards, illustrating that a great deal of what we think of as money is actually accounting records stored in computers. If you take a look at how central banks and the most central of all, the Bank for International Settlements, work, you can see computer entries form the basis for nearly all the money in the world.
In addition to digitally representing money, banks and publicly traded markets have developed digital representations for stocks, bonds, and commodities. In the gold bug world, we often speak of the "paper gold" market, but it is really not very much on paper. It is more of a digital promissory note gold market, with the understanding that major commodities exchanges, such as Comex, don't require sellers to be able to deliver physical gold. Trades are often settled in "cash" which means more of those computer data entries. Instead of "paper gold," we think of it more as a "garbage gold" market.
The purpose of central banks has been to centralise monetary policies. Monetary policies include how much money is in circulation and what interest rates are charged by the central bank to the member banks of that country or region (in the case of the European central bank). One of the interesting facts about banking is that you cannot lend money at interest, nor accept deposits from other people, without a special licence, in most countries. Nor can ordinary mortals sell financial instruments such as stocks, bonds, or commodities, without broker and dealer licences. It remains possible to create entirely private exchanges, but these are not advertised for fear of falling afoul of the regulatory agencies that watch over the financial industry.
For a very great many years, since at least Alan Greenspan became chairman of the Federal Reserve in 1987, it has been a policy of that central bank, and others around the globe, to keep interest rates artificially low in order to stimulate both financial markets and, in some respects, the economy generally. Today, as a result of decades of such policies, and the related booms and busts caused by these policies, most countries stand at "the zero bound" where interest rates paid by central banks to member banks are either zero or very nearly zero. And, today, it is clear that zero percent interest is not sufficiently attractive to stimulate economic growth.
In several European countries and very recently in Japan, interest rates have been reduced below zero. Now, what does a negative interest rate mean?
Well, if a central bank pays 1% interest to member banks who are required to hold "excess reserves" at that central bank, and there are a trillion dollars on reserve, then that central bank pays ten billion dollars in interest, per year. Suppose they take interest rates to zero? Then they pay no interest on those reserves. Suppose they take interest rates to negative 1%? Then they charge $10 billion a year on those same reserves.
Which means that instead of receiving a benefit for holding onto money, the banks are punished for having money on hand. Of course, the central banks still require the banks to have reserves on hand, but with negative interest rates, are motivating banks to go out and lend more, or, at least, that's the theory that is promoted by some in the banking cartel. Of course, since holding capital has a higher cost, the banks are motivated to increase fees, charge interest on deposits, and make up for these losses by lending at higher rates.
Of course, that means that banks will lend to other banks in a different way, and smaller banks that have fewer resources within the system will continue to place money on deposit with larger banks so they can arrange wire transfers and other services for their customers. The same is true for credit unions - and eliminating smaller banks and many credit unions may be an objective of those in the banking sector who wish to further consolidate the industry. People with savings accounts and certificates of deposit are likely to see penalties and fees for having money in the banks. With negative interest rates, the more negative, the worse things get. Everyone with money is penalised for having money.
Aha! You can see there are some loopholes. Obviously, if you have $45,000 in your savings account, and your bank tells you it is going to start charging you interest, you can take your money out of the bank. And maybe you do so, and put it with a stock broker, who, because of his bank's policies, has to charge you interest. So you buy stocks, maybe. Or you buy gold or silver. Or, maybe, you simply go get cash from the bank.
There are, however, already a number of laws in nearly every country that make this attempt to save yourself from punitive negative interest rates very difficult. Banks can, in many countries, refuse to provide you with cash. They can require that you only receive a few thousand dollars at a time, so you would have to go to the bank again and again. Banks have charged fees for taking money at an automatic teller machine (ATM) and as negative interest rates become the way of the world, expect ATM fees to skyrocket.
Into this situation comes the war on cash. Larry Summers, one of the nastiest little rich kids ever in our view, recently proposed, in an editorial eagerly accepted by Jeff Bezos and the Washington Post, that the $100 bill be removed from circulation. Others, in Europe, have called for the elimination of the 500 euro note. In Japan, the stores that sell home safes and vaults have sold out, in recent weeks, and there is a huge demand for the largest bank notes available in Japan. In Cyprus, as recently as 2013, troubled banks were allowed by their government to confiscate deposits from people generally in order to meet some of their obligations during a time when ATMs were shut down and people were not allowed to withdraw all of their funds.
Please don't take our word for it. Go look at sites like Zerohedge.com and LewRockwell.com for additional details. The war on cash, which is part of the war on freedom, has been going on for decades. It is coming to a head, because if people and companies can remove their deposits, bankers won't be able to extract money from depositors whenever monetary policies are changed. And, although a great many people are going to be harmed, including elderly people who have been relying on the interest they earn from their savings in banks, the bankers don't care.
The harm to other corporations, especially smaller banks and credit unions, will be enormous. You should expect to see smaller banks going out of business in record numbers allowing for even further consolidation of the banking industry. Alternatives like credit unions may also be eliminated through these negative interest rate policies.
So, what can you do? Actually, there are a lot of good choices, today, that you don't have to try to invent something new or hunt in distant countries, or on other planets, for answers.
One thing that I've seen since 2011 is a small laminated card with a silver dime or silver quarter inside. Any coin store in the United States can provide you with "junk silver" meaning the 90% silver coins of the United States minted prior to and including the year 1964. There are still many millions of these coins available, and while they are still usable in general circulation, they are worth many times their face value because of their silver content. Dime cards and a related invention from 2009, Ron Helwig's Shire Silver and gold wire in a laminated card, represent a reasonable alternative to other forms of cash. If you go to a farmer's market in a smaller community, you can generally find farmers who are quite eager to accept gold and silver as money.
At roughly the same time, 2009 or so, Bitcoin was being developed as a software protocol by Satoshi Nakamoto and others. It was initially disregarded by most people, and only after several years of development did its price increase to the highly attractive $1200+ per bitcoin in December 2013. Because Bitcoin is simply a software protocol, though one that requires considerable "proof of work" to mine into existence, it was immediately possible for other software on similar lines to be developed. For example, where Bitcoin has an upper limit of 21 million Bitcoins, ever, Litecoin has an upper limit of 84 million coins.
Today there are over 630 different "crypto-currencies" and you can go to coinmarketcap.com to learn quite a lot about them. The most widely used is still Bitcoin, which has the largest market cap, the most total transactions, and the largest dollar volume of transactions. You can go to blockchain.info for further details on Bitcoin.
But, as the team here at the Digital Cash Alliance has known and written about for many years, there are difficulties. First, Bitcoin and many other crypto-currencies have a public block chain, so your transactions are not private. Second, that block chain has gigabytes of data, and more every day. Third, many companies that buy and sell Bitcoin attempt to comply with the anti-money-laundering and know-your-customer laws that effectively prevent you from having any economic privacy unless you take a great number of careful steps. And, because of the nature of the mathematics involved, there are upper limits on how many transactions Bitcoin, Litecoin, or the others like them, can actually manage to transact in one hour.
Happily, there are good alternatives. The Digital Cash Alliance allows you to move your Bitcoin, Litecoin, silver, or gold into our DCSpark wallet technology. Our wallets are not new, they have been around for years. The technology is not only designed, it is fully implemented, stress tested, and in active use. DCSpark wallet users don't connect over HTTP, but over a different protocol, XMPP. Strong cryptography and strong log-in techniques protect your wallet contents. Nobody tracks your use, your transactions are not recorded on any central server, there are no records to demand, there is no way to link your IP address to your particular activities, so you have considerable economic privacy.
Transactions in DCSpark are immediate. You don't have to await confirmations after your funds are in your wallet. Payments are irrevocable, once the receiving wallet picks them up. If someone loses control of a wallet, there is no lost payment, since those payments that are not picked up within seven days are returned to the sender. There is a built-in exchange system so people can buy and sell vouchers for gold, silver, Bitcoin, and Litecoin. That exchange, built for the SilentVault enterprise and, thus, called SVX or SilentVault Exchange, has a built-in escrow capability. Similarly, there is a marketplaces aspect of the wallet where businesses can establish store-fronts to offer goods, services, games, or information. The Alliance is in contact with prospective currency issuers, merchants, and users and expects to expand the number and types of currencies available.
We believe that because Digital Cash has similar properties of anonymity, immediacy of use, and privacy of ownership, that it is accurate to describe it as cash. So, in the war on cash, we are very much on your side and against the oligarchs, central banks, Keynesians, and government agencies seeking to destroy your wealth.
Bitcoin and Terrorism
The following is a blog posting from our adviser Jim Davidson.
Earlier this week, Bruno Delpeuc'h (his last name is said "Dell-puck") joined the Digital Cash Alliance advisory board. Welcome Bruno!
Recently, French high technology journalist Matthieu Delacharlery of Metronews contacted Bruno about the topic of ISIS/Daesh using Bitcoin to finance terrorism. To his credit, Matthieu's questions are open-minded on the topic. Here are those questions as received by Bruno:
- What types of virtual transactions does ISIS/Daesh use?
- Are they really untraceable?
- Are they used to launder oil money? To buy weapons? Drugs?
- Using bitcoin by ISIS/Daesh: is it real or imagined?
- Piracy risk and financial losses, not very practical, eventually, so why?
- Why then would they want to build their own currency in parallel (except for the symbolism, right)?
- According to the German newspaper Der Spiegel, syndicated by Reuters, Europe may have to review all the rules on fund transfers, particularly those enabled by new companies in the sector. Does Europe really have the means to do so?
- How would this work, by controlling companies who exchange bitcoins against euros or dollars?
Bruno's interview with Matthieu was published yesterday and can be found here (in French). A rough English translation can be had from Google here. But naturally we had quite a few thoughts among ourselves on this topic, and of course not all of them made it into the published interview. So we thought a blog post here would also make sense, both by way of elaboration and better English translation.
First off, transactions on the Bitcoin blockchain are not untraceable, they are permanently published facts recorded by everyone running the Bitcoin Core software. You can look up transactions at various web sites including Blockchain.info. So if there is evidence of ISIS/Daesh using a particular Bitcoin address, one can get quite a lot of information about what happened - where the Bitcoin came from, how much of it there was, and any other information included with the transaction.
Then we come to the question of how the Bitcoin gets used. Recently in Paris there were a series of attacks by terrorists. Some of the weapons they use seem to have been tracked to Belgium. So, who are the Belgium arms dealers who accept Bitcoin, if any exist? It is pretty clear that if a person in Europe wants to buy guns and doesn't want a lot of questions asked, they get euros in 100 euro and 500 euro notes, say, and find a seller who accepts cash.
Where would ISIS/Daesh be getting their Bitcoins? They must find a buyer for oil somewhere, right? Who is this mysterious buyer of oil paying in Bitcoin? The blockchain ought to show some evidence for it.
It would be far simpler for ISIS/Daesh to sell oil for euros. And,
indeed, we find lots of evidence to support that conclusion:
From this last link, here is a brief excerpt: "Turkish Socialist party member Gursel Tekin has established that Daesh’s smuggled oil is exported to Turkey by BMZ, a shipping company controlled by none other than Bilal Erdogan, son of 'Sultan' Erdogan. At a minimum, this violates UN Security Council resolution 2170. Under the light of Putin’s message of going after anyone or any entity engaged in facilitating [ISIS/]Daesh’s operations, Erdogan’s clan better come up with some really good excuses."
Is ISIS/Daesh selling oil for Bitcoin? This idea seems very doubtful. They are most likely selling oil in Turkey for EU euros. Which, when you think about it, neatly solves the problem of how to pay for guns in Belgium. Because we know that Belgian gun dealers, especially on the black market, are happy to accept EU euros.
One does not have to invent oil traders buying ISIS oil for Bitcoin and Belgian gun merchants selling guns for Bitcoin. Doing so is illogical, violating good old William of Ockham's "razor," that says we should not multiply entities unnecessarily.
If there is no such evidence of large scale oil for Bitcoin and Bitcoin for gun purchases, and we see none on the Bitcoin blockchain, then blaming Bitcoin is a scape goat tactic. Similarly, the various people, like the CIA's John Brennan, claiming that ISIS/Daesh was using encryption to plan the attacks in Paris have proven to be utterly false. Perhaps it embarrasses France that NATO member nation and supposed ally Turkey is buying ISIS/Daesh oil and providing a major pathway for terrorists to enter Europe. If one wishes to look at the truth about ISIS/Daesh, one can also find quite a bit of US military and diplomatic support for their efforts, and a huge amount of Saudi Arabia and Qatar support for them. Very likely, the recent attacks in Europe are not Bitcoin's fault.
Now, there are some social media postings that show Arabic messages encouraging people to use Bitcoin to fund ISIS/Daesh and jihad. These postings give out Bitcoin addresses. Are these posts from actual ISIS/Daesh terrorists, or are they from espionage agencies wanting to create reasons to attack Bitcoin? We don't know.
We do know, however, that the "evidence" that one wallet possibly linked at some point on the blockchain to addresses where ISIS/Daesh are collecting bitcoin donations is one that holds $3 million in Bitcoin is a lot of nonsense. Here is some analysis on that topic.
With respect to gun and drug purchases: People can buy weapons for EU euros, right? There are gun sales in Belgium, in Austria, legally, complying with national laws in those places. These seem to take place primarily for euros, though, not Bitcoin.
There are also places, right in Paris, where one can buy marijuana, cocaine, heroin. People sell those things for EU euros in cash.
If there are bitcoin addresses where people have bought guns for Bitcoin in Europe, there should be records of those transactions on the blockchain. We think it is simpler and more logical to see oil being sold for euros and euros being used to buy guns.
"Security theatre" is very different from actual security. The CIA built al Qaeda in Afghanistan in the 1980s to fight against the Soviet Union. Then, in 1991, the USA and "coalition forces" joined together to contest the Iraq invasion of Kuwait, which brought hundreds of thousands of Americans to Saudi Arabia.
Many Americans are Christians, some are of other religions, very few are Muslim. So, mostly, Americans are "infidels" by the standards of Wahhabi Islam. Osama bin Laden's objection, his "fatwa" in 1994, as written, his "holy war of jihad" was based on the USA having infidels stationed within a few hundred kilometres or less from the holy cities of Mecca and Medina.
Is there a huge difference between the authoritarian, torturing, murdering-for-religious-infractions government of Saudi Arabia and the authoritarian, torturing, murdering-for-religious-infractions government of ISIS/Daesh? The two governments/organisations (Kingdom of Saudi Arabia, ISIS/Daesh) share a common religion - Sunni-Wahhabi Islam. They have many similar habits toward women, civil liberties, journalists, torturing prisoners, etc.
Also, if one looks at a map, one can see that the territories claimed by ISIS/Daesh run from the Syrian border with Turkey through Western Iraq and to the Iraq border with Saudi Arabia. So, one could suppose that some ISIS/Daesh oil is sold to the Saudi government, or to private parties representing militant extremists in Saudi Arabia (the bin Laden family is from Saudi, as are quite a few of the ISIS/Daesh fighters whose nationalities are identified here.
Now, Syria borders Turkey, Jordan, Iraq, Israel, and Lebanon. Again, we would not be surprised to learn of an oil for cash transaction taking place in Jordan. The connection to Lebanon might not be permanent, given how territory moves back and forth among the various players, including Assad's government. For that matter, we have know way of knowing if the Israeli Mossad accepts oil from ISIS/Daesh and pays in euros. This seems unlikely, but, so does the oil for bitcoin and bitcoin for guns approach.
Since ISIS/Daesh have been using USA weapons, including an anti-tank system, as indicated here, perhaps, then, we should surmise that the United States Central Intelligence Agency arranges for the sale of ISIS/Daesh oil for dollars. Where, how and to whom? Look at the list (from European sources) in the .jpg indicating the nationalities by country where ISIS/Daesh fighters come from. Lots of countries on that list are able to convert Saudi Riyals and EU euros to US dollars. So we don't need to assume that ISIS/Daesh oil is sold for dollars, right? Nor do we need to assume it is ever sold for Bitcoin.
With respect to the question on having their own ISIS/Daesh currency: Everyone wants to have their own currency. "Everybody needs money. That's why they call it money." ~ Danny DeVito, from the film "Heist."
Another important point reflects on whether the ISIS/Daesh people are indeed true Islamists. If they are, as they claim, how could it be true that they are using Bitcoin. Truly committed extreme Islamists who chop off heads and hands and make women wear burkhas would surely use only the money specified in the Koran: the gold dinar and the silver dirham, in the specified weights and purity. Bitcoin, or any electronic digital money, couldn't possibly qualify. To use it would thus be blasphemy.
What about Europe having the power to track all financial transactions, everywhere? Currently, no, Europe has no such capacity. Yes, they wish to develop that capacity as seen here.
Would they be able to control the companies that exchange Bitcoins for national currencies? Possibly. But there is very little control over who can go into a cafe and offer bitcoins for euros. Nor is there any reason to believe that anyone in ISIS/Daesh needs to do so. After all, they can already sell oil for euros.
ISIS/Daesh is a creation of the USA foreign policy opposing Bashar al-Assad's government of Syria. Blame Hillary Clinton for promoting this policy while at the State Department. Blame the CIA for recruiting, training, and funding factions including al Qaeda. Blame Turkish, Saudi, or Jordanian buyers of oil, possibly representing Swiss or Dutch groups, or not. Blame Bitcoin? It just doesn't make sense.
So, what does one conclude from this set of questions, these legitimate concerns, raised by a more or less mainstream journalist in the technology sector? It seems pretty clear that there are people in national governments and international alliances, like the government of France, like European Union, like NATO, and like the USA government which believe that Bitcoin, crypto-currencies, and privacy technologies like encryption are dangerous.
Dangerous to whom? Why, dangerous to the big banks, the big companies, the people most likely to suffer losses from the disruption of new technology. Certainly dangerous to the ambitions of espionage agencies which Manning, Snowden, and many others have demonstrated want to spy on everyone, no matter what you are doing. Spy on you for no reason, to collect everything you ever write, say, or think, and manipulate those data streams to their own ends. Probably, the espionage agencies want to be able to plant information on anyone's computer or smart phone in order to have an excuse to arrest, torture, and kill that person, based on their long history of indecency, mass murder, and support of authoritarian regimes.
But is there any evidence that encryption technology or crypto-currency technology is being used by ISIS/Daesh and other terrorists. No. There is not. On the evidence, national governments and espionage agencies use encryption technologies. Terrorists, it turns out, do not.
Given these facts, if you want to use encryption to safeguard your privacy on the Internet, you might consider supporting the Indiegogo campaign to improve the ElanVPN.net network. Buy a perk, you'll be glad you did.
Bitcoin: Let It Fork!
(Reblogged from Freedom's Phoenix with permission of the author.)
There has been a lot of commotion in the Bitcoin world lately. A few of the core developers (an informal group that maintain the program) made a big splash by saying that the "block size" (a technical issue) had to be increased or else horrible problems would ensue. They're calling their plan "Bitcoin XT."
What I LearnedAt first, I simply didn't want to be bothered with this. Just about everything that passes across a plasma screen these days is sold as a major, life-threatening crisis. I ignore as much of it as I can.
But after hearing a bit more about this issue from several friends, I decided to look into it a bit further.
The first thing that caught my attention was that this idea was being sold with fear. That, to me, is a huge red flag. If you want to sucker humans – if you want make intelligent people act stupidly – fear is your tool; every serious manipulator of humans knows this. So, this fact turned me off from the Bitcoin XT idea right away.
Next, I learned that one of the two guys driving this has been speaking at the Council on Foreign Relations about Bitcoin going mainstream. Seriously? Bitcoin is cypherpunk technology; it is inherently outside the mainstream. (Does Sid Vicious take tea with the queen?) Bitcoin was created by radicals and bears their nature. To make Bitcoin acceptable to the powers that be is to kill it. Period.
So, the fact that this idea comes from people who want to turn Bitcoin into a guv-friendly payment system – to neuter it and kill it – drove me even farther away. If I had wanted status-quo tech, I'd never have looked at Bitcoin in the first place.
Thirdly, someone told me that the guys driving this wanted to make themselves "benevolent dictators." Hearing that, I immediately started laughing. Then I checked and found out that it was true and that they were saying so overtly. You can find the comment, "[W]e will be benevolent dictators," here. That cemented it for me. In addition to everything else, these guys want to run a technocratic dictatorship. And not only that, but they had the arrogance to say so in public. Wow.
Be afraid, surrender your values, and accept dictatorship… that always ends well, doesn't it?
So...So, to all of this, I reply: Fork off.
Yes, I know that sounds like I'm playing cute word games, but I really mean it. I want them to pull their hard fork. I want them to break off and go away.
Take your fear, your compromise, and your dictatorship with you, and be gone. Fork off and take as many with you as will follow. It will be a great lesson, and more importantly, it will be a great cleansing. I welcome it… I seek it.
And if these people do split the Bitcoin blockchain into two parts (this is called a "hard fork"), here are some things that I expect to happen:
The fair weather venture capitalists will have panic attacks, as their dreams of Zuckerberg Heaven start to evaporate.
Mainstream media will breathlessly report – for the 20th time – that Bitcoin is dead… but this time for sure!
Regulators will have no clue what to do and will then pile into Bitcoin XT, turning it into just another PayPal.
The exchange rate… might… drop! Ye gods! It could be the end of the world!
The heart of the Bitcoin world will keep right on doing what they're doing.
So, yes, I want the fork. It's about time to shake out the people who are clogging up the works. Let the price fall for a while. Let the agents of the status quo go over to Bitcoin XT and leave the rest of us alone.
Now, please bear in mind that I'm under no illusion that Bitcoin is perfect. Changes may indeed be required. But anyone who seriously utters the phrase "benevolent dictator" or who pounds us with fear, or who wants to "go mainstream," excludes himself or herself from being taken seriously in the world of Bitcoin.
The agents of the status quo should fork off. And the sooner the better.
Nosy Snoops Spy on You
You are being spied upon. There are a number of words that people use in talking about programmes that governments operate to snoop on the people they pretend to serve. Domestic surveillance is an artful term, implying not only a close watch being kept, but also that the people being watched are under suspicion.
Under suspicion of what? Of being free people who don't wish to be inspected, spied upon, watched, tagged, numbered, taxed, regulated, beaten, placed in custody, raped, murdered, or otherwise treated badly, of course. You are already guilty of three felonies today, didn't you know? There are so many laws, and the law and order crowd has been so gushingly enthusiastic that you cannot avoid breaking several laws every day. Of course, most of the time, nobody takes action, but isn't it a relief to know that you are being spied upon, so that at any time your actions can be turned into crimes, you can be arrested, beaten, raped in jail, cavity searched, and treated like dirt? Doesn't that make you feel wonderful?
It isn't like spying on people is new or a secret. How do you think empires are maintained? In Étienne de la Boétie's day, the evil, violent, bloodthirsty psychopath who was dictator of France (the king, as they say) had to do it the old-fashioned way, by hiring some people to spy on others. Nor was such behaviour new in his day, but, rather, typical of all dictatorships going back into ancient history.
Today, of course, the national governments don't have to hire anyone. They simply demand the information from private telephone providers and if even one of them objects, they ruin the guy running the company. Or they ask for the information from giant computer companies like Google and Google happily, eagerly turns over information. Goodness, Google eagerly goes out and collects information with its "street view" cameras alongside antennae to pick up wifi signals and cell phone signals and everything else they can lay hands upon, because they admire the spies, they have contracts from spy agencies, and they like destroying privacy. Not that Yahoo or any of the other majors is any better.
How should you proceed? We think de la Boetie had a pretty good set of ideas on this topic.
"You live in such a way that you cannot claim a single thing as your own; and it would seem that you consider yourselves lucky to be loaned your property, your families, and your very lives. All this havoc, this misfortune, this ruin, descends upon you not from alien foes, but from the one enemy whom you yourselves render as powerful as he is, for whom you go bravely to war, for whose greatness you do not refuse to offer your own bodies unto death. He who thus domineers over you has only two eyes, only two hands, only one body, no more than is possessed by the least man among the infinite numbers dwelling in your cities; he has indeed nothing more than the power that you confer upon him to destroy you. Where has he acquired enough eyes to spy upon you, if you do not provide them yourselves? How can he have so many arms to beat you with, if he does not borrow them from you? The feet that trample down your cities, where does he get them if they are not your own? How does he have any power over you except through you? How would he dare assail you if he had no cooperation from you? What could he do to you if you yourselves did not connive with the thief who plunders you, if you were not accomplices of the murderer who kills you, if you were not traitors to yourselves? You sow your crops in order that he may ravage them, you install and furnish your homes to give him goods to pillage; you rear your daughters that he may gratify his lust; you bring up your children in order that he may confer upon them the greatest privilege he knows: to be led into his battles, to be delivered to butchery, to be made the servants of his greed and the instruments of his vengeance; you yield your bodies unto hard labor in order that he may indulge in his delights and wallow in his filthy pleasures; you weaken yourselves in order to make him the stronger and the mightier to hold you in check. From all these indignities, such as the very beasts of the field would not endure, you can deliver yourselves if you try, not by taking action, but merely by willing to be free. Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces."
You don't need the surveillance state to make your life better. You can stop serving the tyranny of unjust men by protecting yourself. One simple action you can take today is to learn how to use e-mail encryption. Another simple action you can take is to use a virtual privacy network to connect to the Internet. You no longer have the option not to be spied upon, but you can at least make it harder to figure out who you are when you visit web sites and engage in trade and commerce. You can at least make it harder to read your e-mails by not sending them in clear text.
There are many other things you can do to reduce the extent to which you serve the system. Here at the Digital Cash Alliance we believe in your freedom and your privacy as worthwhile goals to pursue. We can help you pursue those goals.
Chaos and Central Planning
In 2007, the International Panel on Climate Change wrote, in part, "we should recognise that we are dealing with a coupled nonlinear chaotic system, and therefore that the long-term prediction of future climate states is not possible." Think about that statement for a bit, please.
We came across that particular quote in an essay by one of the five identifiable founders of Greenpeace, Dr. Patrick Moore, Ph.D., found here.
Moore extrapolates from this statement two important points. First, the fact that a coupled nonlinear chaotic system makes long-term prediction of future climate states impossible means that the ideas behind anthropogenic causes of global warming pose serious difficulties in making public policy. Public policies that are supposedly going to reduce greenhouse gas emissions and other sources of warming may or may not reduce warming in the future. Indeed, Moore indicates considerable evidence that there has been no statistically meaningful warming in the past 18 years, during which time about a third of all human-caused carbon dioxide emissions have taken place.
Second, the fact that the International Panel on Climate Change has stated so clearly their understanding that they cannot predict future climate states over the long term means that they themselves know that their proposed policies are questionable. What they propose to do may or may not bring about the changes they seek, and they cannot possibly predict future climate states over the long term. Here, in essence, is the hubris of the entire concept of scientific socialism.
It is, after all, not only the global climate which is a coupled nonlinear chaotic system, but many other aspects of life. The global economy is a coupled nonlinear chaotic system. Let's parse that phrase just a bit, first, and then examine what it means in practice.
A coupled nonlinear chaotic system would be distinct from an uncoupled, linear, ordered system. So let's examine what each of these terms means.
Edward Lorenz writes in his book "The Essence of Chaos" that a linear system is one in which alterations of an initial state will result in proportional alterations in any subsequent state. You could map a linear system in two dimensions by writing an equation for a line that represents the system. For example, the equation 2x = y describes a line among points such as (1, 2) (2, 4) (4, 8) where the first value in each case is the location along the x-axis and the second value is the location along the y-axis. You can see immediately that each of the y values is twice as big as the corresponding x value. You have a straight line, proceeding from (0,0), the origin, up and to the right in the first quadrant of a Cartesian coordinate system. The equation also works with negative numbers, so the same line proceeds down and to the left from the origin, at the same angle. Linear. In a straight line.
You might take an example from cooking. If you have a recipe for chocolate chip cookies and you buy two packages of chocolate chips you can double the ingredients and the recipe will probably turn out okay. However, in institutional cooking, one learns that some things do not scale indefinitely. If you take a recipe that works well for making a meal for four people and multiply all the ingredients by 100, you do not get a meal for 400 people, you get a huge mess. Chemistry can be non-linear. So is life.
Consider, for example, a simple harmonic oscillator. You can write the equation for that simple oscillation as the equation of a line. But when you examine the true equation for the motions of a pendulum, you find that it has significant non-linearity. There are aspects of the behaviour of the pendulum that can be modelled using a linear equation, but doing so requires that you artificially discard aspects of its true behaviour from the model.
You can think, if you wish, of linear approximations of complex systems as analogies. By making an analogy from the complex to the simple, and using the mathematics you understand to examine what you know about the simple, you can imagine that the complex system is somewhat better understood. But, in reality, you are engaged in wishful thinking. The saying "life is like a box of chocolates" is a simile, making an analogy between the box of chocolates and a person's life. With respect to the idea that "you never know what you'll get," as Forrest Gump was fond of saying, the analogy holds true. However, life is not chocolate coated, is best lived outside boxes, and has all kinds of features that are not modelled by the analogy.
So the general statement about reality is that it is nonlinear. A nonlinear system is one in which alterations of an initial state need not produce proportional alterations in any subsequent states. You might find a partial differential equation that approximates a nonlinear system, but there are certainly systems which are not effectively modelled by any single equation.
Coupling occurs when two or more systems that are themselves chaotic are synchronised by a coupling factor. One see the exponential divergence which occurs in nearby trajectories of chaotic systems and finds the idea of chaotic systems evolving synchronously to be surprising, but it seems to occur quite often. Coupling, however, is not necessarily a permanent feature, and over the course of time, synchronised chaotic systems can become uncoupled for a time, and also re-couple later on.
So, then, what of chaos generally? Let's turn again to Lorenz: Chaos may be described as when the present determines the future, but the approximate present does not approximately determine the future. Very tiny alterations in initial conditions can dramatically alter outcomes, so that what appears to be an identical set of initial conditions but is only approximately identical can result in vastly different final conditions.
An example of a chaotic system is a double-pendulum. Here, watch one in action:
Chaotic behavior exists in essentially all natural systems, such as weather, climate, living systems, and economies. We can certainly study the behaviour of chaotic systems. Mathematical models have been constructed which can be useful in such studies. There are also analytical tools like recurrence plots and Poincaré maps.
What we cannot do, what the mathematics says very clearly we cannot do, is make long term predictions of the outcomes of policies. We not only do not know, we cannot know, how changes in conditions starting today will turn out in, say, fifty or one hundred years. We can make plans, we can set guidelines, and we can affect the world around us, but we cannot be confident that the long term results we seek are going to be obtained.
Are we better off, individually or collectively, if human activities are planned, constrained, and limited by a central planning operation? Leave aside whether that central planning group is elected or self-chosen, whether it is a dictatorship of the people or a dictatorship of some one person, whether it embraces input from divers sources or whether it only cares about official measurements, would we get better results from people free to choose their own courses of action, free to discover market clearing prices without censorship or imposition, or would we get better results from having all choices first evaluated by a committee, or a dictator?
The answer is very clear. We cannot get good results from central planning. We also know that the central planners are able to evaluate their own mathematics, and they know that they cannot provide good results. We also know that their position as central planners is used to their advantage and to the advantage of those who pay them off with bribes, campaign contributions, and lobbying activities. We know that the system is broken and unable to manage our lives better than we ourselves can manage on our own. The people running the system know those facts, too.
Here, for example, are the forecasts of the International Monetary Fund about global growth, something you would think they would study carefully. Try to imagine, while looking at this chart of how they predicted world economic growth would proceed, that you are looking at a time series of sincere predictions, rather than a random set of lines.
They continue to pretend to produce good results through central planning because it benefits them and their cronies for them to do so. But don't be fooled. They certainly are not.
How, then, should you choose to proceed? If central planners are engaged in fraud, if their plan for you and the economy is never going to work, what should you do? You should make your own plans for your own benefit.
You are best suited to determine for yourself what is best for you. You don’t need the central planners, the Federal Reserve, the government, or any of their systems. Consider, for examples (these examples were used very wisely some two thousand years ago) the lilies of the field and the birds of the air which neither toil, nor spin. Nor do they pay taxes, nor do they read government reports, nor do they pay attention to laws. Yet they find everything they need.
Agorism is a libertarian philosophical approach to making your life better as you see fit. It suggests that you use counter-economic tools, such as free market money, digital cash, virtual privacy networks, the underground economy, and that you reject mainstream society’s limitations, rules, regulations, and obligations.
You Can Issue Money
Our technology lets you issue your own money. Now.
The technology of the Digital Cash Alliance makes it possible for you, as an individual, as a business, or as a non-profit group, to issue your own money. Within our technology are tools to allow wallet users to exchange the money you issue for other kinds of money (including Bitcoin, Litecoin, gold, and silver), to use your money at in-wallet merchants, to have escrow facilities to secure money exchanges, and to message other people within their wallets about anything using encrypted chat messaging and conference rooms.
Do you want to issue your own money? Are you tired of the problems with national currencies, with capital controls, with censorship of free markets? Take control of your economic destiny, today. Our technology lets you issue your own money, right now.
Finding monetary freedom.
Recently, Digital Cash Alliance adviser Paul Rosenberg wrote, "...Big Brother is on the greatest roll in all of history. No Pharaoh, no Caesar, no commissar ever had anything approaching the surveillance and manipulation capacities of modern rulers. And in support of it all stand Jane and Joe Average, ever-compliant, who simply don't want to know. Give them the slightest excuse to close their eyes, and they will. This kind of thing doesn't often end well."
It doesn't have to be that way, for you. If you have been paying attention to, say, the warnings from Edward Snowden, or the warnings from Wikileaks, or what has been said by the Electronic Frontier Foundation, or those things said by William Binney, Perry Fellwock, Russ Tice, Mark Klein, Thomas Tamm, Thomas Drake, Joseph Nacchio, James Bamford, William Hamilton Martin, Tim Weiner, or, really, any of the dozens to hundreds of other whistleblowers, politicians, and people generally, then you know that you aren't especially safe from government surveillance.
Maybe you respond by encrypting your emails. Maybe you respond by using encrypted voice communications like Twinkle or Mumble. Maybe you respond by using end-to-end encrypted chat like Jabber (XMPP). And all of these responses are good. Certainly you should use these technologies.
You should also go into your web browser and turn off geolocation. You should add NoScript and AdBlock software plugins or similar to your web browser, too. You should use a security certificate awareness plugin like Cert Patrol.
But there are two really important things that you should do which may seem complicated, difficult, or even not worth the bother. First, you should masque your IP address by using a Virtual Privacy Network. You cannot get the same results with TOR alone, and you should be aware of the many real difficulties with TOR. Second, you should safeguard your economic privacy by using an off-the-blockchain, secure, private, anonymous form of digital cash, such as those based on the Voucher-Safe technology offered here on our site.
We sell Virtual Private Network services from what we regard as the best in the business, Paul Rosenberg's own Cryptohippie. We also offer a free wallet app based on XMPP which uses very secure protocols to completely safeguard your economic transactions. You should get involved in both these areas of activity.
There are other retailers of VPN services. There are other alternatives for private digital cash. By all means, do your homework, look over the choices. But if you want to be free, you need privacy, anonymity, and communications that are not monitored.
Choose freedom. Choose digital cash, today!
Recently, our founder Kevin Wilkerson wrote, "Begging tyrants for freedom is not only a dead end, but also an exercise in moral cowardice and demonstrated practical futility. If you lack monetary freedom, the responsibility is yours, not the government's."
We were immediately reminded of E. C. Riegel's statement in A New Approach to Freedom:
"To desire freedom is an instinct. To secure it requires intelligence. It must be comprehended and self—asserted. To petition for it is to stultify oneself, for a petitioner is a confessed subject and lacks the spirit of a freeman. To rail and rant against tyranny is to manifest inferiority, for there is no tyranny but ignorance; to be conscious of one's powers is to lose consciousness of tyranny. Self government is not a remote aim. It is an intimate and inescapable fact. To govern oneself is a natural imperative, and all tyranny is the miscarriage of self government. The first requisite of freedom is to accept responsibility for the lack of it."
The Bitcoin Core protocol and software represents intelligence in action. People who wanted greater monetary choices went about developing code to create Bitcoin. Others have adopted that code for purposes of mining and transacting. Others still have modified that code for creating even more monetary choices. Voucher-Safe, the technology which underlies the Digital Cash Alliance's DCSpark wallet software, goes even further, silencing the blockchain and allowing users to trade bitcoin and litecoin with complete privacy and anonymity.
In a great many online publications we read every day about apparent manipulations in the price of gold and silver. We note that, for example, there are about 230 or more paper gold contracts for every physical gold ounce available for delivery. Who is responsible for this situation? Who could possibly be responsible?
The answer, of course, is everyone who trades on the commodities exchanges in places like New York, London, and Tokyo, to name a few. If you don't think that the price of gold and silver those exchanges indicate could possibly represent a free market in action, then don't buy gold and silver at the prices listed on those exchanges. If you own gold bullion or gold coins, don't agree to sell them at the prices given by those exchanges. Set your own price.
Rebate Gold, which represents actual gold bullion and coins in secure physical storage, isn't priced at the commodity exchange price level. Instead, a 25% premium has been added. Rebate Gold or RGold, is available in the Digital Cash Alliance's DCSpark wallets. So, right away, today, if you feel that gold is not priced properly, you can do something about it by buying RGold. (Note that you can also redeem it at the 25% premium price.)
What if RGold is completely going about it in the wrong way? If you think so, then buy gold in whatever way you choose and issue your own currency. For example, if your company mines gold out of the ground, you probably have a good source of supply. Why not sell it at a price of your own choosing?
Complaining about how the commodity exchanges are rigged is interesting, and we've seen some extraordinary evidence to indicate that there really is a lot of double-dealing and misdirection, possibly even outright fraud. What we don't see is a lot of meaningful action.
Choosing what you use as money for economic transactions is up to you. Choosing when you are satisfied that you have accomplished finality of settlement, when you have actually paid for what you are buying, or when you have actually been paid for what you are selling, is up to you. The Digital Cash Alliance provides effective tools for people who want to buy, sell, exchange, trade, operate as merchants, issue currencies, or even administer their own voucher network.
These tools exist today and are described in detail on this web site. So, the question is no longer "how" but "why not?" Why aren't you using private, anonymous digital cash, today? I cannot think of a single good reason why not.
Announcing the Digital Cash Alliance to promote private, anonymous, digital cash.
The Digital Cash Alliance has begun! For too long, the world has been without digital cash that is as private, anonymous, and useful as physical cash. We believe our technologies solve this problem by allowing issuers to provide wallet users with digital representations of various assets while allowing users to trade in complete privacy.
Our commitment to freedom is evident in our book products found under "products" on our menu system. We provide Copper Ally members of the Alliance with their choice of books from freedom oriented authors in either physical or eBook form. Our commitment to privacy is evident in our Virtual Privacy Network service from ElanVPN, a leader in online privacy. We also provide technology from SilentVault and from our own team that is designed to prevent monitoring of your private economic transactions.
Our team includes Kevin Wilkerson, our founder; myself, Tyrone Johnson, for marketing and business development; and Justin Terrell for technology development. We also have advisers Jim Davidson and Paul Rosenberg.
RGold and TGold are new currencies made available because of the Digital Cash Alliance. RGold or Rebate Gold is backed by physical gold stored in a secure vault. TGold or Token Gold is a digital currency which represents a claim on the future revenue stream of the Digital Cash Alliance technology. These are described on the links provided.
We are looking forward to working with you and many more customers in the near future.