Famous Headlines

The bitcoin protocol works off a new technology called a blockchain.   Think of it as a time specific excel spreadsheet.

Its called a block chain because its is a stack of digital blocks of data.  Say for example you had a stack of 10 legos in various colors.    You could not change the middle blocks color without dismantling the entire thing and rebuilding from the new block up.

Bitcoin is currently on approximately block 250,000.

Now for the point of this post.

Here is a link to "the genesis block" which was the first bitcoin block ever discovered

link

If you look near the bottom in the code labelled "coinbase" you see this.

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

 That string of text will be there forever.  It was coded into that block by the anonymous bitcoin designer "Satoshi Yakamoto"

Satoshi was so fed up with the current banking system that he decided to code his own.  He did a good job.   Bitcoin is lightyears ahead of the current banking system in terms of technology.

Here are some other news headlines you may remember.  How did these change the world?

Separation of Money and State

This is possibly one of the best articles I've ever read.

http://letstalkbitcoin.com/separation-of-bank-and-state/#.UhtlJRsqiSo




just because this one is pretty awesome too..
http://www.economicpolicyjournal.com/2012/12/50-reasons-for-separation-of-money-state.html

Headlines and other funny things

Just some cool thoughts.

Lets start here with some wild statements link

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." -- Western Union internal memo, 1876

A rocket will never be able to leave the Earth's atmosphere.  -The New York Times 1920

A lot of people I run into today say "Bitcoin will never take over, it will never be huge" and other similar things.   The truth is I have so much more understanding of Bitcoin than these people.

I believe Bitcoin to be the largest disruptive technology this world will ever see.

Cost of College Used to Track Inflation Pre 1981.

I had a good laugh at this-this morning.

Obama on college costs

He blames the colleges, he blames the liberals, he blames the conservatives.  He kind of blames the students a little bit.

What he doesn't blame is inflation.  He doesn't blame money printing.  He doesn't blame bank and government bailouts.

Perhaps we should send Mr. President the link to shadowstats?

I'm am a huge proponent of shadowstats.  It explains so much.

I've touched on this before, but according to the government something that cost $100 in 2001 should only cost about $125 today.

So you think in your head, what has only gone up 25% since 2001?

housing?

gas?

concrete? (its up 300%)

food? (smaller boxes dont count)

pretty much nothing is only up 25%

Please also remember the certain areas of the economy get subsidies, to help keep costs down.  (like food) 

Now we are ready for the good laugh... ready?   Like many other charts, college costs tracked real inflation until 1981.   Remember what happened in 1981?  The government revised their definition of inflation.   So if you look at the chart above, costs and salaries trended with inflation, then in 1981, they sky-rocketed... I'm shocked... absolutely shocked....(insert sarcasm here)

Remember this one? Its the inflation adjusted stock market, sky-rocketing after 1981.  I cant believe people actually buy this government BS inflation data.....

Something Funny is Going On Here

Countries of the world do no like the dollars place as a World Reserve Currency.   This is reinforced by many economic situations around the world, and now we can add one to the list.  Bitcoin Adoption.

As is, for at least a hundred years, the USD has been the world reserve currency.   Trade for oil is only done in USD, banks around the world keep dollars instead of gold as a backup to their own currency.   Its just the way it is because the US wasn't decimated during WW2.

The United States has taken advantage of their status by borrowing 17 trillion dollars, and printing 85 billion per month.

The US Government gets to borrow at low interest rates and print money because we have reserve status.

I think we've made some countries a little upset with this "cheating"

The United States sees Bitcoin as a threat.   They are tackling exchanges, forcing them into licenses that cost millions of dollars and huge piles of paperwork.   They have been shutting down exchanges that dont comply.   Multiple states have attacked small bitcoin oriented business, and world wide, any bank that deals with dollars(all of them) dont give bitcoin businesses accounts.

The United States is waging a small and mostly silent war on Bitcoin.  The only thing this will accomplish is to push innovation and jobs outside the United States.

Dont believe me?    Let say that Congress just BAN's bitcoin entirely because of criminal uses.   Do you honestly think criminals will stop using it because its illegal?  No, because they dont care about the law anyway, they are criminals..   Banning Bitcoin only affects its users that obey the law.

The rest of the world almost seems to be celebrating?   I wonder why?

Canada has announced it will not regulate Bitcoin. link

German has announced Bitcoin is legal and will not regulate link  (this is generally applicable to the entire EU)

China promotes Bitcoin on their state run TV link

A Texas Judge declared Bitcoin a currency  link (note Texas is probably the "right" wing state)

Perhaps Bitcoin is onto something here.....Maybe countries are tired of the USD's use in world trade?

The system is broken: Part 2

I went out to dinner last night with my family and some friends.   It came time to split the bill and we started doing the normal thing.

Step 1) Waiter puts down bill
Step 2) Slowly, each group picks up bill and everybody adds their tally.  Nobody has cash.
Step 3) Each party tells the waiter what amount goes on what card, waiter has to remember.
Step 3a) If your collecting cash, the cash ends up short, and the person holding the cash gets to add more cash out of his pocket.
Step 4) The waiter then goes and runs 3 credit cards, each for different amounts, then retuns a pile of cards/paper to the table for everybody to sign.

It ends up being a logistical nightmare, especially if a waiter refuses to separate a ticket.  Its just so silly.  People don't think of it as silly because its "business as usual".  But when you step back... its pretty stupid.

Bitcoin has two solutions here.

A) a QR code of a private key is printed on the receipt.   Each party pays the amount owed to the receipt.  The waiter then confirms everything is good everybody goes home.

B) A QR code is printed next to each menu item, and to order an item you simply pay the QR code on the menu.    Who needs the waiter?   You food just comes to you via robots (or something)
  Each menu would need its own set of addresses, so that the chef knew where the food was to be delivered, but seriously, isn't this the best idea ever?

I've said it before and I'll say it again.   Value = Rarity x Utility.   Bitcoin is rare(only 21 million ever).  Bitcoin's utility is only limited by the imagination of its users.   Bitcoins value is potentially unlimited.

Unlike the US dollar.   Its utility has maximized as a fiat currency, and its rarity is declining because 85 billion a month is printed.   The utility of a paper currency hasn't changed since the day it was invented, but its rarity is declining.

The only way to make a dollar more useful is to lace it with cocain so people could get high off of it.

Our Payments System is Broken.

There are two companies in this world I absolutely love to hate.

Verizon wireless
Frontier communications

I love their services, I love their prices.   I love them and want to hug them.

I HATE them because they are near impossible to pay money to.  

I can't reset my password, because I dont even know my account number for either.   Whats the account number you ask?   Its the phone number used on each service.

I use verizon for my ipad data service
I use frontier for my fios internet service

So neither one has a phone number.

I have to do a password reset, which asks for the phone number.  And then I swear loudly.   Their ebills do not have the account number on them.

I cannot get access to my online accounts.

So what happens?

The bills go past due until then beginning calling me, that is the system I've relied on for the last year or so.   Until recently.

Frontier stopped calling me, they just shut off my internet at my office.  Luckily we're moving offices so thats fine.

Verizon calls me once per day and says "please pay us now"  I say "ok"  then they say "sorry we have no operators available"

They are spamming my phone for payment, but dont have any operators available to pay?  I'm so fucking done with this.

In the future, I will not need an online account to pay money to.   They will email me a QR code and say, "pay this much money here"  I will then take out my smartphone, scan the QR code and send the correct amount of money to the email.

What will this due to call centers that deal in collections?   Think about the cost savings and infrastructure this could create for all our accounts.   It is so much easier.  No log in to remember, no passwords to remember.

It simply boggles my mind.

And just for fun... Frontier communications *used* to be Verizon Communications.... Its not just me, they used to be the same company.

Bitcoin User - Not affected

There are a number of things I laugh about every day related to Bitcoin.  When I see certain news headlines, I say to myself "Bitcoin user not affected.

Some examples

-Central Banks money printing

-Government debt

-Cyprus bank tax

-Inflation

-Government manipulation of money / taxes

Here is a website with some pretty funny memes.

http://www.quickmeme.com/Bitcoin-user-not-affected/?upcoming

My most favourite phrase of all time is 

"Government bans bitcoin  -  Bitcoin user not affected"

There is nothing the government can do to stop the coming onslaught of bitcoin.   It might take years or even a decade, but the government can't simply stop Bitcoin

I like to think of it this way.   Say you had a house on a lake.   For some reason, the level of the water keeps rising over the months, and doesn't ever stop. 

The first thing you do would look at the water and say "hey look, its rising".   This is where the bitcoin/government relationship is right now.

Next, you would get slightly concerned about the rising water... You'd think of what you could do to protect your house if the water raises further.   You think "maybe i need to build a sandbag wall".  Congress said last week, "maybe we should pass some laws"

When the water keeps raising, you then build your wall and say "there, that will stop it"   But the water just keeps raising, so you make your wall taller and taller.  This will be the "regulations" that the US government will impose on bitcoin.

Eventually you get more concerned with the raising threat, and you build a glass dome over your house.

The water then raises over your sandbag wall, and starts raising against your dome.

Given enough time, your dome is 100' under water and you cannot escape.

Bitcoin is unstoppable.   If they regulate it, users will find ways around the regulations.   If they outlaw it, it will go into the black market.   If just one country of the 236 that exists in the world that is bitcoin friendly, they will have a huge economic growth period, and bitcoin users and companies will move there.

The best thing regulators can do is impose some minor regulations on it, to justify its existence, and move on.   If I was Big Ben Bernake, I would even buy a couple hundred thousand, so that when the US dollar crashes, the government has a backup system.

The only way to save your house on a lake is to build a raft underneath it, so you can ride the rising waters of bitcoin.

If you want a current example of what I'm saying, just look at other illegal things, the most common of which is drugs.

Drugs are illegal, and the war on drugs has done a few things
1) Cost us taxpayers 1 trillion dollars link (just US tax payers)
2) empowered Mexican drug lords with massive profits.  Killed thousands of people.
3) driven drugs into the black market
4) overpopulated prisons (at more expense to taxpayers)

The war on drugs has in NO way stopped the consumption of drugs

What if drugs were legal, and the government taxes the crap out of them.    Not only do you eliminate the costs above, but you generate massive tax revenue.    Before prohibition, federal tax receipts were 70% from the sale of alcohol.

The biggest opponents of the legalization of marijuana, are marijuana dealers and growers.

Another example is Prohibition.   Alcohol consumption actually increased during prohibition.link  Modern organized crime was funded by prohibition.

You cannot regulate morals and beliefs.