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Blockchain can be used to fix a sustainable economy in developing countries

By on December 7, 2015 in Blockchain

Many developing countries have problems with weak (or non-existing) institutions. It can be a problem to verify ownership of land, companies and tangible assets — as there are no reliable records and registers.

With Blockchain-based technology (the same technology that is the backbone behind digital currencies such as Bitcoin), such problems can now easily be solved.

It’s all about establishing a trusted ledger of ownership and transfers that cannot be tampered with. This is exactly what can be accomplished with Blockchain-based registers.

It doesn’t even have to be managed by the government. It can just as easily be set up by a chamber of commerce, a development organisation or a private company. The important thing is to provide solid records that can be accepted by everyone.

This would benefit agriculture, commerce and rule of law. And it would provide a stable base for economic development.

/ HAX

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The strengths of Bitcoin vs. old currencies

By on September 22, 2015 in Bitcoin, Blockchain, Free Markets

So, people say Bitcoin (and Blockchain) is difficult to understand? Well, not if you compare it to our traditional monetary system.

The growth of the number of Bitcoins is foreseeable and limited. At the same time the Fed, the ECB, Bank of England and other central banks can print as much money as they want. And they do, on an unsound scale.

There is a well established procedure for mining Bitcoins. When it comes to the USD, EUR, GBP and other common currencies — they are created out of thin air by central and local banks in an endless debt loop.

The “value” of Bitcoins might be a bit volatile. At the same time old currencies are constantly sliding downhill, with inflation making peoples money and wages worth less. (Thus imposing a stealth tax on the people.) With the limited influx of new Bitcoins (and while being adopted by more and more people and business) their value should steadily increase.

Some argue that there is no underlying value of Bitcoin, but trust. The same can be said about all old currencies. For example, the USD left (what was left of) the coupling to gold in 1973. (Since then inflation has made things ten times more expensive, in absolute terms. During the same time the total money supply has increased 80 times.) And trust is much better upheld in the Blockchain than in banks computers and spreadsheets.

Talking about trust: Bitcoins cannot be controlled or manipulated by banks, central banks or governments. Given that traditional currencies in turmoil obviously results in banks being closed, caps on withdrawals and confiscation of bank deposits (like in Cyprus) — Bitcoins may in some situations be the only usable currency.

More and more people are realising that the old monetary system is questionable and possibly unsustainable. So, I would not be surprised if the Bitcoin Moment will arrive shortly.

/ HAX

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The coming War on Cash

By on March 24, 2015 in Big Brother, Big Government, Bitcoin, Blockchain, Economics, EU, Privacy, surveillance

War on terror has become an convenient excuse for governments to start a war on cash.

Naturally, cash can be used by terrorists. But it will not mainly be terrorists who suffer from tighter control. It will be ordinary people.

One of the real reasons behind tighter cash regulations are convenient is quite obvious: taxation.

If you want support for this theory, take a look at the EU directive against money laundering. Where implemented strictly (like in Sweden) it makes handling of any substantial amount of cash almost impossible.

The latest is the French tightening the regulations on cash. From Mises.org…

“These measures, which will be implemented in September 2015, include prohibiting French residents from making cash payments of more than 1,000 euros, down from the current limit of 3,000 euros. Given the parlous state of the stagnating French economy the limit for foreign tourists on currency payments will remain higher, at 10,000 euros down from the current limit of 15,000 euros. The threshold below which a French resident is free to convert euros into other currencies without having to show an identity card will be slashed from the current level of 8,000 euros to 1,000 euros. In addition any cash deposit or withdrawal of more than 10,000 euros during a single month will be reported to the French anti-fraud and money laundering agency Tracfin. French authorities will also have to be notified of any freight transfers within the EU exceeding 10,000 euros, including checks, pre-paid cards, or gold.”

The whole idea is based on the presumption that people are up to something suspicious. This seems to be the new default mode, replacing the presumption of innocence (that happens to be one of the fundaments of rule of law).

But this is not just about distrusting citizens with their own money. The common European currency, the Euro, is in a precarious state. Cash regulations can (and will) be used to stop people from rescuing their own money when the shit hits the fan. Just see what happened when the Euro-crisis overwhelmed Cyprus. The government confiscated money directly from peoples bank accounts — and most people had no possibility to rescue their savings.

“Coincidentally” mass surveillance is an excellent tool for governments to enforce financial regulations aimed at the general public…

Is this the moment when people finally will have to turn to free digital currencies in a big way? Is this the tipping point?

/ HAX

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Crypto-currency will rule in a decentralized world

By on November 3, 2014 in Bitcoin, Blockchain, decentralization

Via Decentralize, I have just discovered the Ledra Capital blog. This might very well be one of those places where future is being shaped.

One LC post puts words on something I have tried to make understandable (for myself as well as for others) for a long time is: Bitcoin Series 26: the Polemitis Impossible Trinity »

This explains why crypto-currencies such as Bitcoin are just as good as the dollar or the euro. Or rather, it’s not worse than fiat currencies. It’s just a dog with different fleas. Kind of like… gold.

Then, let’s move on to the post: Bitcoin Series 27: Bitcoin – a 6-sided Market and Network Effect »

It’s about Bitcoins “superb setup of market incentives for the first currency to hit escape velocity”. It’s smart. It’s intuitive. It’s plausible. And it’s arousing, kind of.

What first lead me to the Ledra Capital blog was the Decentralize blog post about all the stuff LC has listed as possible to decentralize with Blockchain technology: Anything you can do I can Decentralize! »

Birth certificates, gun permits, wills, contracts, accounting records, car keys, betting records, coupons, trademarks, licenses, vehicle registries, spam control, nuclear launch codes… You name it.

I guess this is what happens when spontaneous order and a truly free market (politicians don’t know about it yet, and they will never understand it) meets with new and disruptive technology. I like it. I like it very much.

/ HAX

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