Mad Max and Bitcoin

Having not seen the new Mad Max movie yet I couldn't say whether they use bitcoin in it or not. Judging by the previous films I would say not. Life, death, sex and gasoline are the only viable means of trade in this post apocalyptic world. Mad Max however is a fantasy, though quote pertinent with global warming, water and gasoline supplies inevitably hitting the wall at some stage. Russel Brand the popular delinquent puts it well in his Trews story. It is quite ironic that we enjoy watching a graphic depiction of a terrible future situation for which currently preventative decision are continuously put on the back burner.

Mad max certainly isn't going to accept a briefcase full of fresh Australian dollars in exchange for his Doom Tanker fully fitted with machine gun turret and rusty snow plow front guard. "That old government money is not worth anything around here boy" he'd say, kicking you in the nuts and lighting a fire with the paper bills to cook your testicles on. . . It is true that without government control, today's money is nearly useless.

There are a myriad of systems required to support and be maintained in order to retain the value of the current monetary system. Without those enforced the public will not support or accept it as payment. Not only because they wont want to, but because they can't, because the surrounding structures are vital part of the value equation. It simply doesn't work in time of scarcity and corruption like that in Mad Max. The natural real value of a dollar is zero. 

Bitcoin doesn't really claim any different, however if you want to be technical its the value equation is different. 

If V stands for real value, P stands for the belief of society or the perceived value, S stands for structure and T stands for levels of trust and organisational integrity. 

V=PxSxT

Bitcoin removes S and T from the equation. The formula is simply 

V=P

Value and perception will always be linked, but removing the extra components of the value equation can only reduce risk and make the intrinsic value stronger.

Society has come a long way, we don't live in a Mad Max world. Even though it looks cool to watch and it actually might happen, it's all just TV really. It should make some Fiat money at the box office and generate some Bitcoin trade on Streamium. The inspiring thing is that in this hypothetical Mad Max world bitcoin would still work. That's one less thing to worry about if you have them in your pocket.

The reason bitcoin works is because it is a trust-less system. No trust is required. There is no third party needed to maintain it, it maintains itself and no government required to guarantee it. Some goggle wearing leather clad sprite can even validate some printed paper bitcoin credits on an offline device in the back of there buggy. Some dusty old desktop computer left over from 2015 running on a motorcycle battery. If the spear wielding fiends had smart phones they could force a blue tooth transaction in the middle of the red dessert or else "cutcha". They would have no reason to doubt transaction on an app to app bitcoin transaction. It would be unforgeable and irreversible, just how they'd like it. Iron clad in math "3-1=2 Rockatanski, better pay! give me your f**ing digi"

Cypto-currencies are structured in a decentralised way and it is not the technicality of how the system works in adversity it is the psychological aspect of the trading mechanism that allow it to retain appeal in such cultural conditions. In a lawless world where no one can be trusted near of far, some interesting questions are posed. primitive human behaviors are a big part of it. hard resources are the first priority. Food Water and weapons are best. When moving around however those things do still get a bit heavy and a mechanism for trade is in demand. the better that you can physically hide it the better store it will be. If the system is run openly by anyone and simply out of self interest, the way bitcoin miners are, then there are no problems when everyone must fend for themselves.

What better token then one that you can send to an unknown address miles away with the flick of a thumb across a cracked screen whilst the villain still has the spear to your head. he now has nothing to still and now way to find it. 

One thing that we can always trust is math. 1+1 will always equal 2 even if the whole world is up side down andt there's a gun to your head. This makes bitcoin appealing in the Mad Max world. There are only 21 million bitcoins and people can understand this. People can judge the value on that fixed basis and on their experience with the tribe down the dusty path. This fundamental difference to our current money, where supply is continuously changing, is key to the trust issue. In a world where nobody can be trusted, you can only trust math. You can not trust an organisation or person producing valuable tokens at all. In a state of such persecution you simply coluldn't accept someone else having such an unjustified luxury.

With bitcoin every part of the code is publicly available. you need not trust anyone to its workings, you only need to look it up. Dessert bases could harbor bitcoin mines and Rockatanski, with an old Huawei phone in his pocket, might just be richer than you think!

Digital Money vs Cryptographic Money

Less than 1 percent of normal money in the usa is physically printed cash. The rest of it is digital and held only on on ledgers within the financial system. If you feel that your existing money was physical and liquid then some research may be in order. It is in fact 99 percent theoretical and very much subject to the tenants of perception.

For example the financial crisis of 2008 is a glaring example of this. Unfortunately since then the system has not shifted since then. Money is still held databases and accounted lists agreed to in longwinded financial reports and audits capped off with a night out at decent restaurant. An annual report published at the end of the year with 50 pages and a few charts and some footnotes reffering to anouther 50 charts. Derivatives in the usa are now valued at 220 trillion where the cash supply is only 1.38 trillion. Bank deposits are at 10 trillion. To prevent bank runs the Fed has recently passed new rules allowing institutions to refuse to release you your cash for up to 10 business days. Something that would not be necessary if our finacial system had trully healed.

There is a misconception that furious money printing is carried out in the literal form, although it does happen, it is mainly comprised of digital creation. The strike of the key creating a billion dollar government bond, a copy and paste, lets make that two.

Our current money is infact digital and this new bitcoin phenomenon is infact something else. The difference between Digital money and Cryptographic currency is a key to understanding what it is and why so many people are taking to it.

All cryptographic money (crypto-currency) has a physical form. You can take the bitcoin, write down its individual fingerprint on a peice of paper, and there it is. This means it can not be copied and pasted. You would simply have two coppies of the same dolar. Spend one and the other would no longer work. While cyptographic might seem more digital, it is actually in a special way more concrete than even a printed note.

It is not only the physical form of a bitcoin which is more tangible than todays normal money, it is also the method of which transactions are recorded. When a bitcoin transaction occurs online or otherwise, the physical money, the tangible code, actually changes hands.

When a normal money transaction occurs, separate ledgers are compared and modified to suit. Two independent ledgers must agree and some third party can verify that these two independent parties are counting correctly. This means that in the existing system there are thousands (probably millions) of ledgers accoss the world which are all supposed to balance against each other. Some of these ledgers are digital some are on paper, some of these are digital but not compatible with other digital ledgers. This makes it all very difficult to know what is going on in the bigger picture.

With bitcoin there is one ledger. This makes it very easy to know whats happening. The bitcoin ledger could even be printed out and stored in one library. I imagine it would take up quite a few shelves but it is possible. You could go to a shelf and find all the transactions for that day. This could not happen in any meaningfull way with the current system. How would you index them?

One counter argument is that the amount of transactions on the current system is so imense this idea of having one ledger printed and stored in one place is obsurd. Even if they where easily available it would simply take to much space. There are huge football field size server farms already in the mid west of the usa trying to store all of this data at pressent and strugling. Data duplication and extraction are key issues there. With various forms of indiscript information stored in these places intellgent computer algorithms are contrived to try to make meaning from financial noise. The term 'meta data' has arrived which is the ultimate embodyment of such digital vagaries.

The thing with crypto-curency is that when they scale up, say if multiple ledgers are required to record all transactions in the world, then at least these ledgers are compatible with eachother. Not only bitcoin but other crypto currencies like litecoin etc. can handle different transaction needs and these can all be anlysed using the same, relativley basic tools. No duplicates occure and all the data is pure. This means that data on what is happening in the financial system can be much more accurate. Figures can be asessed in real time, can be physically verified and are in thier nature mathematicaly real. A vast improvement on pressent day statistics.

This issue with figures is important for all people. The fed is continually anouncing figures on unemployment and consumer spending and thats fine. The problem is that at a later date, normally as part of the next quarters anouncement they are also reviewing previous figures up or down. So in effect the actual numbers are in the fine print published after the fact and contually revised. This means we have very little actual clarit and It is difficult to determine what the real data is. Janete yellen even encourages businesses to do there own figures and not to rely on the data provided by the federal reserve. The real numbers have also fallen into cloud of politicle pressures and language. Remember 'patience' doesn't necessarily mean two quarters. These conditions make it difficult to do business and predict trends. It also means that government policy can not target things well and policy success is ill judged as the data is not solid. With crypto-currency data business, government and consumers a like are empowered with accurate, publically availabe information.

So we can see a destinct difference between what can be called digital money and what is crypto-currency. A mistake i have made in the past. Our current system is infact more digital in many ways than cryto currency. Althought crypto-curencies like Bitcoin have great digital utility, in their nature they are infact less digital and more  an embodyment of math. Infact cryptographic coding is a physical mathematical thing, it is something that can be held and will not change. Digital currency which is for all intensive purposes our current system, implies something that can be broken, coppied cracked and hacked. You can hold cash but its value is actually fluid, determined by multiple factors, including the rate at which the fed induces quantitative easing. Crypto currency is infact a solution to these issues.

This mathematical code can not be duplicated as it is unique and interdependent. It is what it is and cannot be duplicated or forged and the quantity is fixed. This is as apposed to the current system, where two ledgers agree to a number and these ledgers are subject to periodic thirdparty scrutiny. The quantity of money in the current system is simply put determined by the interpretation of risk in the market. And it is what people believe it is or what people tell us it should be. How whimsically digital is that?

I argue that the mathematics based system is more tangible than our current monetary system. Fears of over intangible nature of bitcoin are infact quite the opposite. Our current system is emensily intangible and this has lead to problems in the past. Those who want to counter this should be thinking about holding phisical crypto-currency.

Bitcoin - Like a Cure for Systemic Cancer

Doctor Doctor says the Nurse

I have a patient who's had a severe overdose of the current financial system.

I gave him a heavy dose of bankers, corporate  lawyers and accountants and his quantities are still easing! I'm concerned he might cardiac arrest.

Don't worry I have a vaccine. Says the Doctor.

Just don't tell anyone at the hospital board.

It will relieve it straight away.

 

Why Are all you Captains Always Talking About the Size of Your Blocks

Deflation is a Beautiful Thing

When prices go down, you can buy more! its great you go to the store and you go to the store and surprisingly they cost less. Its a beautiful thing.

Why are all our authoritative figures telling us otherwise? People say "the economy is doing well inflation is 2%" but inflation is not growth1 it just means we are 2% poorer. They say deflation is bad, it will stop people from buying. But hand on now, how does that work? Well apparently people delay spending because they know that it will be cheaper later. I say the whole idea is wrong.


So would you not go and buy a burger because it would probably be cheaper next week. I don't think so, you're hungry right now. We buy things because we want them and we want them when we want them, not next week. you're coach has a hole in it, so you decide not to replace it now and live with the hole for a couple of years so that you can get it cheaper. Well i don't mind holes in my couch but I don't wait two years to possibly get a 10% discount due to my prediction of inflation. oh hell no!

We need to be very carefully when politicians try and frame this idea linking inflation and economic growth. They are not part and parcel one does not lead to the other, the interaction is more complex then that.

Even the term "inflation" is deceptive. what does that have to do with the price of bread! It means your money is worth less couldn't they find a more accurate noun!  Some how "Deflation" actually means your money is increasing in value. Shouldn't we call it "value growth" or "strengthening value"? 

Inflation is confusing for the general population. The reality is that is is a construct that serves people who control assets, wealthy people and government printing money. This is because of a few basic things. I call them the 5 pillars of inflation doom.

1. Inflation effects money so effects people with money most. Its impacts people who have long term financial assets because impact on those people who hold it.

2. When we wealthy people hold lots of dept the increase in inflation reduces the dept faster. 

3. Wealthy people who hold deposits are not effected as interest rates can respond immediately to inflation. 

4. People with money are in more control of their dept and cash levels. When inflation increases or decreases they can respond immediately to change in the inflation rate.

5. The prices of goods increase before wages increases, because employers don't put wages up until they see the impact of increased prices hitting their balance sheets. This normally takes about a year, so the wealthier business owners don't have to respond to the costs of inflation until a year or so later.

6. inflation is a measure of the increase in the cost of living. It immediately reduces the quality of life of less wealthy people. Poorer people must spend all of their money immediately. 

Its pretty simple really, what would you prefer, pay less or more? 

We need to educate ourselves, inflation sucks! Cheap food and shoes are a good thing. We need the sneakers to hide from the people who try to tell us otherwise.

Disaster Relief

We don't need to rely on big aid organisations anymore to run effective aid systems. Just a couple of people, some posters, a video camera and an ink jet printer. It means more can get to the people who need it most. 

See also this article and the BitGive Foundation

You can donate directly to a Nepalese charity instantly with Bitcoin here.

Digital Renaissance

There's a new term Renaissance Millennial and I think that there is some weight to it. If the renaissance was sparked through books and the invention of the mechanical typeset printing press then what might the internet do? Our cultural does seem to be moving to a new era, The renaissance however developed over a period of 200 years and the internet has only been here for around 25. The world is now covered in information transferring cables not to mention Google balloons. People have access to information from all parts of the world. Its clear that there must be a lot more change to come. With digital currency this Digital Renaissance that we are already seeing is amplified.

In developing countries closer connections will other parts of the world make a big difference. Recently starving protesters in the Ukraine where able to get aid, in the form of Bitcoin sent directly to them, simply by holding up printed pages with their bitcoin QR codes in front of international news cameras. Digital-currency also puts developing countries on an equal playing field with the rest of the world. This counts for economic stability and for financial infrastructure. With smart phones now more common than indoor plumbing, people in undeveloped places can use their phones as international eftpos machines. People who once couldn't get to a bank in a days walk are now able to set up for free and sell things all over the world, independently. This non-corporate international trade will reduce poverty and create a more financially balanced world.

This goes hand in hand with spreading education. People can educate themselves using the internet and now new occupations are appearing all over the world. Anything that can be done over the internet can now be paid for quickly and easily. Translating and editing blogs, computer programing, web design, recording and even commissioning of art. Just check out freelancer.com to see some of the possibilities.

The freelance, crowd fund and donation based economy has been on the rise for a while. This is in part due to necessity. Artistic copyrights have and been almost destroyed by the internet and in the wake of this companies like Spotify are further cutting the royalties that recording musicians are receiving. Artist that once were making a good living on record contracts are now finding that most of there air plays go through international corporations and that the fee's generated are much less than before. Google adsence payments for online content providers are also quite small. With Bitcoin, artists can easily get payed directly. Rock stars can even transparently show how rich and or poor they are so we can decide weather to support them or not. We just need to be proactive about who we support. In this way digital-currency is a catalyst for up and coming international artist and fair wealth distribution.

In our local real world amongst the birds and the tree, its also a great way to tip buskers and show appreciation. This all simply from the fact that there's no need to keep your account number secret. You no longer need to put a hat out and watch over it carefully. Easy micro payments make anything monetisable anywhere. you don't need to man a till. You just need to display a QR code. Bitcoin even works when away from the net and out of cell reception service by using bluetooth. These existing features allow large transactions to be made on the top of a mountain or simply whilst on the run. Because you don't need to carry a special hardware with you, it makes working much more mobile.

Few would deny the impact of the internet over the last few decades. With money specifically designed for the internet do we get a Digital Renaissance?  Digital money/Crypto-currency or whatever you like to call it very p[programmable and I feel we may find big developments in unexpected places. The Dogerain app for example , can 'make it rain' Dogecoin (digitally) on anyone who's in the room with you. Pretty fun and, it is intended to be satirical hip hop video application for nerdy crypto parties. But if you consider this in a different light it could perform completely different function.  An employer could simply run this app in their office to pay staff. Certainly reduces paper work and argument over hours. It would make a great model for an art collective or not for profit, with all earning simply going into the Dogerain reservoir. These are all seem like far out ideas now but there are people who are into that.

One click payments are big advantage offered by Bitcoin. I am so bored of entering my credit card details into machines and I don't think I'm alone. With Bitcoin it is even possible for purchasing payments to be made automatic. This could save a little time and mundane math and more importantly it could also enhance the buyer experience. Imagine being able to shop and entertain yourself without actually having to physically cue up and make transactions. All you would do was enable the app, set a limit and let blue tooth do the rest.

Simple tools fundamentally change the way we do things. But it's not only the new freedom of value that's provided by the tools, it's the vibe of it. Some people feel that money is evil. This view is prevalent with artist, musicians and authors. There is a sense of greed, corruption and a lack of transparency associated with the current value system. Bitcoin has had its ups and downs in the past, but Bitcoin allows total transparency. This in tern can help us repress greed and corruption much more effectively than before.

The current financial system also doesn't work well for artists because their appeal is less tangible than normal products and there audience can be more international or more dispersed. Efforts are often gouged by corporate intermediaries or are simply offered for free. I think our cultural icons deserve more.  In the future, with the right guidance our value system can be a more in touch with society. The internet helps people connect with information and can now even out wealth more effectively with digital currency. This allows us to create something new with the world. and change the way we do things.  This Digital Renaissance wont be just limited to Europe. It will be in India, South East Asia, China, Africa and South America. That's a whole lot of Lianardoes and Donatellos.