Dear Ivor Vale,
They can’t stop it.
Governments and
financial authorities can’t stop the rise of cryptocurrency.
They’re trying… boy are
they trying.
China has banned bitcoin
exchanges. Malaysia is considering doing the same. South Korea has banned ALL
new cryptocurrency sales. And in the US regulators are readying to try and
control the market.
And just this week,
they’ve stepped up their game even more.
As reported in The
Telegraph: http://bit.ly/2BLm21y
“Treasury crackdown on
Bitcoin over concerns it is used to launder money and dodge tax”
The above extract in
italics is from an article in Capital and Conflict sent to me in an email
Link to full article and Book here -- http://bit.ly/2BLm21y
I heard about
Bitcoin 5 or 6 years ago when it was called funny money, but paid little
attention to it. (Boy, how wrong can you be !)
When I joined
Steemit 12 months ago I found that it was a Social Media site with connections
to a Cryptocurrency Steem Dollar (Exchange sign SBD)
The site has
a lot of contributors talking about Bitcoin and Cryptocurrencies and my
interest and knowledge has been gained from there.
Particularly
fascinating on the platform is the view held by many that governments will not
be able to stop or ban this new electronic currency because transactions can be
made directly by individual to individual or to business or shops without
involving Banks, from where governments traditionally obtain money flow
information and can control money supply.
There are
many with the view that the new currency has the power to bring down
governments and create Anarchy.
I wrote the
following on Steemit –
Will the Bitcoin revolution bring Anarchy?
Anarchy, State, and Utopia is a 1974 book by the American political philosopher Robert Nozick.
Nozick argues in favor
of a minimal state, "limited to the narrow functions of protection against
force, theft, fraud, enforcement of contracts, and so on." When a state
takes on more responsibilities than these, Nozick argues, rights will be
violated.
To support the idea of
the minimal state, Nozick presents an
argument that illustrates how the minimalist state arises naturally from
anarchy and how any expansion of state power past this minimalist threshold
is unjustified.
Many consider that Bitcoin technology will eventually
make banks unnecessary, and also use
it’s potential to make redundant, social networks, the markets for share
dealing, and some financial observers go as far as including national
governments as well!
Bitcoin is making world
headline news. It is established and accepted in many countries, but it’s full
power and latent forces for disruption and anarchy are not fully understood
In short, Bitcoin could be the trigger for a coming
digital rebellion – “a catalyst for change that creates a new and different
world,” to quote Jeff Garzik, one of Bitcoin’s most prolific developers.
It has already started.
Bitcoin and rival crypto currencies such as Doge, Ethereum, and Steem have
shown that banks can be replaced with software and smart algorithms.
And rebellious and creative programmers
are starting to ask what else can we manage without?
That is just the start
Digital anarchy could transform
our lives with machines that answer to you, your employers, crime syndicates…
or no one at all. Nearly every aspect of our lives would be uprooted.
This would be brought about
by the power of the “Blockchain” – a party-to-party ledger which creates and
records transactions and agreement on contentious issues using cryptography.
A blockchain forms the beating
heart of Bitcoin. In time, blockchains will power many radical, disruptive
technologies that clever people are continuously working on.
Historically, we’ve needed
central bodies – banks, stock markets, governments, police forces – to settle
vital questions. Who owns this money? Who controls this company? Who has the
right to vote in this election?
Let’s start with money and the
attraction of digital currency. Right now, in the wake of the subprime mortgage
lending crisis in 2007, it’s easy to understand the appeal of a new money that
lies beyond the grasp of banks and governments.
No treasury can print more
Bitcoins and inflate away the value of your savings, or recklessly lend them
out for years to people with no chance of meeting repayments, eventually
bringing the whole system crashing down. The rules of Bitcoin are set in
digital stone.
This small programme of unbreakable
computer code will allow people to solve the thorniest problems without
reference to any authorities.
The benefits of decentralised
systems will be huge: slashed overheads, improved security and (in many
circumstances) removal of the weakest link in the financial chain, the
opportunity for manipulation by – the selfish, the greedy, and the corruptible.
But how far will disruptive
effects reach? Are we rapidly approaching a singularity where, thanks to
Bitcoin-like tools, centralised power of any kind will seem as archaic as the
feudal system?
If the internet revolution
has taught us anything, it’s that when change comes, it comes fast.
It’s not funny money any more.
It began with a paper written
by someone calling himself "Satoshi Nakamoto" and quietly published
via a cryptography mailing list in 2008. It laid out a plan for a form of money
based on “cryptographic proof.
The true identity of Satoshi
has never been revealed, although rumours abound: a lone academic, a group of
disgruntled anarchist programmers working in the financial sector, the CIA...
What is known is that the
number of coins in circulation is finite, limited to 21 million. The plan is
immutable: around 13 million are already in existence and the last ones will be
released in 20 years or so.
Nakamoto wrote about his idea
of keeping a digital ledger of all transactions – the blockchain – to prove who
owned what. It was a breakthrough which solved a longstanding computer science
problem: how to run a complex system with no central control.
Bitcoin has no bank to
maintain security, record ownership or handle transactions. With the Blockchain
none is needed.
Critics who say Bitcoin is
nothing but zeros and ones in a computer file and therefore can’t hold value,
miss the point that their bank balance is also nothing but a number on a
computer.
The dollar is worth something
only because people decide to place value in it. If that consensus broke down,
then – as in the rampant inflation in Germany after the first world war – a
wheelbarrow full of dollar bills couldn’t buy a cup of coffee. The US dollar is
a famously stable currency – but just occasionally we’re brought up with a
jolt.
For example, in 2007 UKs Northern Rock was
forced to go cap-in-hand to the Bank of England. A few customers rushed to
withdraw their money, then a few more... and soon there was panic. Loss of confidence.
Shades of Weimar Germany, or even Zimbabwe.
If national currencies can
fall victim to a chain-reaction erosion of faith, why should a new currency
like Bitcoin not experience the same phenomenon in reverse and soar?
Cyprus horrified citizens
when it announced that it would seize up to 60 per cent of all savings over
€100,000 to save its struggling banks.
Suddenly Bitcoin seemed less
risky and transaction volumes soared as people poured cash into the digital
currency to keep it out of government coffers.
There were protests in
Nicosia, Cyprus, in 2013 against a tax on bank deposits This same cash grab
could not happen with Bitcoin. There is no central power with the ability to help
themselves.
Neither are credit-fuelled
binges possible. The smoke-and-mirrors system that banks use to magic money
into existence when they create loans is not possible in a Bitcoin world.
This holds a lot of appeal.
Financial Times columnist Martin Wolf recently called for banks to be stripped
of this bizarre right to create money from thin air, claiming that it is the
root cause of credit bubbles and busts such as the painful cycle we have recently
witnessed.
In his view, they should be
confined to only lending the amount they have taken as deposits from savers.
It’s hard to argue against such a common sense proposal.
The idea for radical change
to the financial system was almost certainly motivated by the recession
following the 2007 crash. Although Bitcoin and crypto currencies are radical in
many ways, it is also strictly conservative: no debt is possible, no complex
derivatives, no untrustworthy middlemen. You either have money or not.
The timing was impeccable,
the perfect antidote to a financial system which can’t be trusted not to lead
us into another round of boom and bust..
In that regards some
financial watchers believe the blockchain is one of the most important
inventions of the 21st century
“It’s ironic how what
terrifies the banks today is actual free market capitalism. They don’t like
that. They don’t like competition. Actually having to compete with smaller
competitors that are nimbler and less costly is something that they’ve been
able to prevent for years with the use of regulation as a barrier to entry.”
This success in the financial
sector will be a springboard to other industries and applications. And there is growing opinion that the blockchain
will be the tool to ultimately target democracy.
More on that in the next post.
Image Credit Time Magazine.
The above information brought
to you by – http://bitcoin-in.net - the website for all things bitcoin and
cryptocurrencies. Books. Hardware. Gifts. Clothing i.e ‘Bitcoin Accepted Here’ T Shirts, Baseball Caps .Door Signs.
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Amazon reported to have bought 3 Cryptocurrency related domain names!
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