It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
Bitcoins are largely considered digital currency (or “crypto currency”) so you’d expect it to be treated like currency on a retail web site. But the Internal Revenue Service might not think so.
Politicians — elected officials — are street smart rather than book smart.If you care about influencing government policy it helps to know how they think.Forbes contributor Nathan Lewis argues that:“Too much is done today on the oral tradition. That is, literally, what it is. In this post-Gutenberg age, we have some better alternatives.“Thus, we need […]
Bitcoin has been making headlines for months now. Extreme price fluctuations have sparked a vigorous debate: Is it a currency or a scam? Is Bitcoin viable in the long-term, or are we witnessing a bubble waiting to burst?The answers to these questions are simple: Yes, Bitcoin is a currency, but we cannot know if it […]
The Silk Road was an undercover website where you could buy or sell illegal goods — drugs mainly. I believe passports were changing hands for about $6,000, and I understand weapons were also sold, but that was ceased in response to the spate of shootings in the U.S. over the summer. The essence of the […]
The market has selected different things as money throughout history. Some of these items have served as money in isolated places for specific periods of time — for instance, cigarettes in prisoner-of-war camps. Cigarettes continue to be a currency in prisons if allowed, but if not, according to Wikipedia, “postage stamps have become a more […]
[Ed. Note: This article originally published on Jan. 24, 2013]Stocks up. Gold down. Bitcoin… waaay up.The S&P 500 busted through the 1,500 mark this morning. Stocks haven’t been this expensive since 2007… right before they got a whole lot cheaper… for a whole lot longer. Gold, meanwhile, dipped a tad. This, despite central bankers of […]
Now, this is sheer entertainment. The Chicago branch of the Federal Reserve has addressed the great monetary question of our day. A researcher has taken a detailed look at the prospects for market-based crypto-currency, with a special focus on Bitcoin. It concludes that Bitcoin is not a viable replacement for the dollar. The report includes […]
The standard version of how money came to be goes like this: First, there was barter. (A handful of nails for a pint of ale!) Then, along came various forms of money. An evolutionary derby eventually crowned gold and silver as the supreme money. And finally, credit (or debt) was born. This is the apex […]
2013 represents another turning point in the demise of the American Empire. If you view it in economic (rather than ethical or moral) terms, the high water mark of Empire was probably in the late 1990s.But the Internet bubble and bust marked an important turning point. It coincided with the birth of the euro, a […]
It was a wild ride last week in the world of the Deep Web, that section of the Internet that requires special tools to access. The feds took down the site called Silk Road and claim to have arrested its founder and administrator. The news streams were filled with lurid tales of derring-do in this […]
My community in the Deep South prides itself on friendship, community feeling, and an overall happy spirit. So it was a bit strange for all of this to be utterly smashed and obliterated in the course of a few calamitous weeks in which friend turned against friend, colleagues became antagonists and enemies, and families were […]
A new assessment of state pension obligations suggests the problem is even worse than it already appears.How much worse?EMPTY COOKIE JAR: Pension liabilities are worse than many states’ official figures indicate.Using a more conservative method of accounting for financial gains in the marketplace, there is a $4.1 trillion gap between assets and liabilities — known […]
I dreamed I saw Bernard von NotHaus, alive as you or me.Said I, “But Bernard, you’ve been jailed two years.”“I never was,” said he.Bernard has been the called the Rosa Parks of the alternative money movement. More than 10 years ago, he had this idea that he would make his own money — not the […]
When NSA whistle-blower Edward Snowden wanted to talk to reporter Glenn Greenwald, he insisted that they use encrypted chat. Unfortunately, Greenwald didn’t know how to go about setting that up. In fact, he needed a tutorial in how to do it. Indeed, many people do. I was looking at the download figures of various encryption programs, and they are not impressive (about 52,000 for one popular program). Apparently, this approach to securing conversations is far from mainstream.
Why should anyone bother? Encrypted chat is like the “dome of silence” in the old Get Smart series, except that it actually works. It makes conversations impossible for outsiders to listen to. So far as snoops are concerned, the conversation might as well have not happened.
How can we be sure? The best case is precisely that Snowden trusted it. He knew exactly what the NSA could surveil and what was invisible. He knew that this level of encryption was NSA-proof. Otherwise, he would not have taken the risk.
Why would anyone but a whistle-blower need it? Let’s say you want to talk about a business deal with a remote party and it is extremely important that there be no security breaches. You would be crazy to use email, but even chat is a mistake. One party has a full record of it even aside from all issues of surveillance.
You don’t have to be breaking the law to use this technology. It might be useful for talking about health records or household finances or some issue that might be embarrassing to have on record or dragged up and put in your face later. There is a good reason for privacy. Encryption makes it possible.
The most common encryption standard today, Pretty Good Privacy (PGP), was created by Phil Zimmermann in 1991. As an anti-nuclear peace activist, he wanted to make it possible for people to communicate with each other even in totalitarian countries that prohibited speech. To his amazement, it was the U.S. government that tried to stop the code from being released. In 1993, he was prosecuted for illegal export of munitions (go figure).
A huge protest ensued. The code swirled around the Internet like a crazy global storm — a clear sign that the Internet cannot be stopped from distributing information. Even more strikingly, MIT Press published the entire code in a book (that actually sold rather well) that was protected under the First Amendment. In time, the government backed down. It was a great victory for technological progress and the freedom of speech.
In other words, if the government had had its way, we might not have this type of encryption at all. But we do have it, thanks to a series of simultaneous discoveries of the logic of public-key cryptography in the 1970s. (From Wikipedia, I’m amazed to learn that William Stanley Jevons, economist of the late 19th-century marginal revolution in economics, actually anticipated the logic of public-key cryptography.)
PGP is not the only one. There is OTR (Off-the-Record) Messaging as well. Both go far beyond the encryption used in most Web commerce (SSL), which only masks the communications between your computer and a company’s servers, but such companies still maintain the data.
The technology has been around for a long time. But users have mostly not bothered. That could change in light of all the news about government snooping. For some communications in the future, people might be willing to give up some convenience of commercial programs for the security of encrypted communications.
By the way, here is an obvious and quick answer to the NSA’s claim that it must harvest as much data as possible as a way to stop terrorism and protect the American way of life from dangerous criminals. If you are a dangerous criminal or terrorist plotting an attack and you are not entirely stupid, it is very likely that you would choose cryptographic communications over commercial services.
Hence, the very communications that the NSA supposedly seeks are the ones that it cannot get. What, then, is the point behind the huge data centers and the invasions on everyone else’s liberty? The purpose is to control the rest of us and shore up its power. You don’t have to be a conspiracy theorist to accept that truth. You need only have your eyes open.
If government criminalizes private communications, only government and criminals will have private communications.
A friend wrote me the other day and said, “I just had a startling revelation. Public-key cryptography is the only thing standing between us and a totalitarian state.” That is sobering, indeed.
This is why it is so important for any freedom lover to pay special attention to the uses of cryptography. It most certainly should be at the heart of any monetary system of a free people in a digital age. A digital money should be more like trading gold or physical dollars. We don’t need to cough up our identities when we spend physical stuff like gold or silver. The money itself should be separate from our person and all the data about our lives.
This is how Bitcoin uses cryptography. It makes money behave more like a physical thing. There are no chargebacks, promises to pay, layers and layers of trust, waiting periods for banks and regulators to verify, and so on. Nor is there any prospect of identity theft. This is a serious matter: There are some 17 million cases of identity theft associated with the uses of digital dollars each year. Bitcoin eliminates all of that by putting a cryptographic wall between us as persons and the money we use.
It’s for this reason that Bitcoin is getting more popular in unusual sectors of the population. I bumped into a charming video a few days ago. It was of a family farm. The kids were giving a tour of their goats, their pigs… and their gigantic Bitcoin mining operation.
It turns out that Bitcoin has become very popular in these settings. One person wrote me to explain why:
“My wife and I have been Bitcoin farmers for a while, although we don’t mine. Our little agorist homestead accepts Bitcoin for our beautiful purebred French Marans and Ameraucana chickens and their fancy chocolate and blue eggs. We stick with a small flock of just the two most valuable breeds on the market, raised free range on just over an acre. We ship fertile eggs all over the country to supply the growing backyard chicken revolution. You might be surprised to know that mailing eggs is a gray-market activity. In Texas, it costs a minimum of $100 a year to get a permit to mail live chicks, and regulations on the import of eggs vary wildly from state to state. Carefully packaged eggs containing live embryos can be shipped undetected and hatched in an incubator in three weeks. Egg regs are so restrictive in Virginia that most breeders won’t ship there. Bitcoin is a perfect medium to conduct commerce, considering the increasing prohibition of benign things.”
In our heavily patrolled, regulated, browbeaten and regimented system of commerce, the need to separate identity from the property of money itself has become a practical necessity. Without this ability, you risk everything and you don’t have the capacity to live out your dream. This is how cryptography has made it possible for commerce to continue even amid the police state. For many people, then, Bitcoin is not just about privacy. It is a lifeline to financial survival.