True Government Transparency, is Bitcoin the Answer?
Bitcoin, that digital ‘crypto’ currency that we have blogged about several times over the years, by default provides an automated public ledger – a techno-currency that provides trading value instantaneously without the added ‘friction’ and third-party (banking) profiteering. Bitcoin is impossible to counterfeit and promises many amazingly apparent uses, including government openness and transparency.
In principle, such crypto-currency could finally bring transparency to governments.
Bitcoin transactions are ‘anonymous’ because senders and receivers are represented by long sequences of code (Bitcoin wallet addresses) in lieu of personal data, but its public ledger logs every single transaction to provide the ultimate transparency.
“[But] don’t confuse anonymity with privacy,” writes Eric Blair at Activist Post. “Anonymity means ‘we know what you’re doing but we don’t know who you are’, while privacy means ‘we know who you are but we don’t know what you’re doing’. The U.S. government seems to be increasingly outlawing both anonymity and privacy for citizens while it simultaneously becomes more secretive. This path is truly the antithesis of a free society. Yet, this lack of transparency for government and privacy for average citizens can be reversed if the government embraced bitcoin technology.”
Adds Blair: “For example, imagine paying at the gas pump and the funds are immediately dispersed to the proper accounts; to the gas station’s wallet, $.20 per gallon to the federal government roads’ wallet, and about $.30 per gallon to your state’s road wallet (exact fuel taxes here). Not only is this far more efficient than current systems, but let’s follow this through a bit more. Now imagine that the government’s wallets are public where anyone can view income and expenditures in real time.”
How Bitcoin Threatens the ‘Currency Monopolies’
On Wednesday, The US Department of Homeland Security seized a payment processing account belonging to Mt. Gox, the largest international Bitcoin trader over claims the monetary exchange service had falsified financial documents, as reported at Ars Technica.
Bitcoin threatens both the financial elite’s monopoly over the economy and the online web of payment systems which have been used as a tool to crack down on free speech on the Internet, Amir Taaki, a bitcoin software developer, told RT.com in this interview.
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Lynnea Bylund is managing director of Gandhi Legacy Tours, Director of Gandhi Worldwide Education Institute, founder of Catalyst House and has nearly three decades of experience in administration, marketing and business development. She was a nationally recognized spokeswoman for the emerging alternative video and information delivery industries. She has a degree in holistic health-nutrition from the legendary and controversial health educator and activist Dr. Kurt Donsbach, she is the founder of two not-for-profit small business-based wireless trade associations and has lobbied on Capitol Hill and at the FCC where she has spoken out strongly against the cable TV monopoly, illegal spectrum warehousing and ill-conceived congressional schemes to auction our nation’s precious airwaves to the highest bidder.
Ms. Bylund is a founder and former CEO of a Washington DC telecommunications consulting and management company with holdings in several operating and developmental wireless communications systems and companies. In 1995 Lynnea became the first female in the world to be awarded a Broadband PCS operating permit – she was one of only 18 winners, along with Sprint, AT&T, and Verizon in the biggest cash auction in world history, raising a whopping $7.7 billion. Lynnea also spear-headed the successful effort to launch the first cable TV network in the South Pacific islands.
… > Follow Lynnea on: +LynneaBylund – Twitter – LinkedIn – FaceBook – Pinterest & YouTube
Bonner: The Runaway Paper Money Bubble is a Laughing Matter
US stocks are still going up. Gold is still dillydallying…
Guest post by Bill Bonner / Rogue Economist
Gold is waiting to see what happens. Japan and the US are pumping up the monetary base – fast. But collectively, their balance sheets actually contracted by $415 billion in the first quarter – led by a $370 billion decline in the ECB’s balance sheet.
Result: slightly less paper money in the developed economies… and a slightly lower gold price. Seems logical. Seems sensible.
You see, since the start of the secular bull market in gold, there has been a nearly perfect correlation between the gold price and the rate of balance sheet expansion (aka money printing) at the Fed, the ECB, the Bank of England and the Bank of Japan.
You can see clearly it in this chart courtesy of our friends at the Sprott Group.
According to Sprott, for every extra $1 trillion in collective balance sheet expansion by these central banks, gold has risen $210 per ounce.
Gold is the world’s alternative money. It and bitcoins. New supply of paper money is expanding rapidly. New supplies of gold and bitcoins are much more stable.
But many mainstream pundits are sure the end of the secular bull market in gold is at hand.
Who knows? Maybe they’re right.
But it seems more likely that when the Japanese get their presses running hot, the price of gold will resume its upward climb.
The Importance of Bitcoin, a Perspective
Neal Stephenson’s cypher-punk sci-fi novel The Diamond Age takes place in a future where encrypted currencies and e-commerce have moved most economic transactions into “darknets” beyond government’s capability of monitoring and regulation, causing tax bases around the world to implode and bringing on the collapse of most nation-states.
This recent video below from OnlineMBA explaining Bitcoin, while well made, appears to be grounded in such fears as the darknets raised in the Stephenson novel.
Encrypted currencies and darknet economies have been promoted by such thinkers as David de Ugarte and John Robb as a real-world model for resilient communities in the impending age of empire collapse.
Jason Calacanis and his colleagues at LAUNCH describe Bitcoin as “The Most Dangerous Project We’ve Ever Seen” (May 15, 2011). Not only is it “the most dangerous open-source project ever created,” but “possibly the most dangerous technological project since the Internet itself.” It “could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.”
Update on Bitcoin: The Rise & Fall
Bitcoin, the virtual peer-to-peer currency that was launched in 2009 (see CAT blog June: Barter P2P Currency Gains Traction), had a meteoric rise in April-June of this year—but after a hacking attack on the premier bitcoin exchange, the currency plummeted, then rose again. Today it traded at $2.40, down from a peak of $30, but still way up from the pennies it priced at 18 months ago.
In a recent WIRED article Benjamin Wallace reports that –
In the public’s imagination, overnight the bitcoin went from being the currency of tomorrow to a dystopian joke. The Electronic Frontier Foundation quietly stopped accepting bitcoin donations. Two Irish scholars specializing in network analysis demonstrated that bitcoin wasn’t nearly as anonymous as many had assumed: They were able to identify the handles of a number of people who had donated bitcoins to Wikileaks. (The organization announced in June 2011 that it was accepting such donations.) Nontechnical newcomers to the currency, expecting it to be easy to use, were disappointed to find that an extraordinary amount of effort was required to obtain, hold, and spend bitcoins. For a time, one of the easier ways to buy them was to first use Paypal to buy Linden dollars, the virtual currency in Second Life, then trade them within that make-believe universe for bitcoins. As the tone of media coverage shifted from gee-whiz to skeptical, attention that had once been thrilling became a source of resentment.
Decentralized Barter Currency Gaining Traction
In 2006 Douglas Rushkoff, when asked The Edge Question, “What is the most dangerous idea?,” replied, “Open source currency, of course.”
Well now a new P2P digital currency, called Bitcoin, may provide the ideal medium to engage in commerce outside the official economy and — it’s decentralized, anonymous, and its supply is moderated by a mathematical formula to automatically deflate it over time. A truly dangerous idea.
Eric Blair at Activist Post writes: “The masses are beginning to understand that the greatest threat to human freedom is the international banking cartel and their debt-based monetary system. Together with governments, they squash any manifestation of a free marketplace and personal freedom. Between runaway money printing, corporate cartel control, subsidies and taxes, and regulations and fees; the free market is nothing more than an ideology — for now.”
It would seem that the precise remedy to such a system would be decentralization of currency and banking, or functioning in an underground economy outside the system. There may be hope for accomplishing both with the new crypto-currency that is beginning to gain recognition, the Bitcoin. Can this decentralized barter currency free humanity from the grip of the slave masters and provide for a truly free-market economy?
