New currency..underground economy

[Krystic]

http://www.activistpost.com/2011/06/new-decentralized-currency-stimulating.html

Friday, June 3, 2011New Decentralized Currency Stimulating Underground Barter Economy
New grassroots cyber currency, the Bitcoin, may provide the perfect vehicle to operate outside the establishment economy and snub the all-powerful banking cartels -- it's decentralized, quasi-anonymous, and its supply is regulated by an algorithm to actually create deflation over time.


Source: BitcoinMe.com
Eric Blair
Activist Post

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 th

http://www.activistpost.com/2011/06/new-decentralized-currency-stimulating.html

[Dragonfly]

Most dangerous current project for the current economic system? Lol! Let's see....it's an interesting approach, but bitcoins aren't the only alternative currency, here is a very short overview according to Wikipedia:
http://en.wikipedia.org/wiki/Alternative_currency

http://launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html

[Northern Boy]

Any one have any opinions about this system they would care to share

Thanks Luke rather then create a new post I`ll use this one and put your quote in it


from what I understand this is typial fiat (faith-based) money scheme .. only difference there is no central printer, instead every computer processing transaction data receives "freshly minted coin" as reward. There are diminishing returns there so algorithm is said to grind to halt after issuing about 21 million units or whereabouts.




Imo, we would have more chance with Wampum, but that maybe be just me being cynical.:haha:

[Luke]

Any one have any opinions about this system they would care to share

from what I understand this is typial fiat (faith-based) money scheme .. only difference there is no central printer, instead every computer processing transaction data receives "freshly minted coin" as reward. There are diminishing returns there so algorithm is said to grind to halt after issuing about 21 million units or whereabouts.

Pros: decentralized
Cons: traceable, hackable, prone to "adjustements", no tangible value attached, dependent on internet infrastructure (see: http://nexus.2012info.ca/forum/showthread.php?3313-internet-to-be-censored-..bilderberg&p=23520#post23520)

Imo, we would have more chance with Wampum (http://en.wikipedia.org/wiki/Wampum), but that maybe be just me being cynical.


Amid this variety of moneys, it is possible to analyze the qualities which led the market to choose that particular commodity as money. In the first place, individuals do not pick the medium of exchange out of thin air. They will overcome the double coincidence of wants of barter by picking a commodity which is already in widespread use for its own sake. In short, they will pick a commodity in heavy demand, which shoemakers and others will be likely to accept in exchange from the very start of the money-choosing process. Second, they will pick a commodity which is highly divisible, so that small chunks of other goods can be bought, and size of purchases can be flexible. For this they need a commodity which technologically does not lose its quotal value when divided into small pieces. For that reason a house or a tractor, being highly indivisible, is not likely to be chosen as money, whereas butter, for example, is highly divisible and at least scores heavily as a money for this particular quality.

Demand and divisibility are not the only criteria. It is also important for people to be able to carry the money commodity around in order to facilitate purchases. To be easily portable, then, a commodity must have high value per unit weight. To have high value per unit weight, however, requires a good which is not only in great demand but also relatively scarce, since an intense demand combined with a relatively scarce supply will yield a high price, or high value per unit weight.

Finally, the money commodity should be highly durable, so that it can serve as a store of value for a long time. The holder of money should not only be assured of being able to purchase other products right now, but also indefinitely into the future. Therefore, butter, fish, eggs, and so on fail on the question of durability.

A fascinating example of an unexpected development of a money commodity in modern times occurred in German POW camps during World War II. In these camps, supply of various goods was fixed by external conditions: CARE packages, rations, etc. But after receiving the rations, the prisoners began exchanging what they didn't want for what they particularly needed, until soon there was an elaborate price system for every product, each in terms of what had evolved as the money commodity: cigarettes. Prices in terms of cigarettes fluctuated in accordance with changing supply and demand.
more: http://mises.org/daily/3122

[Luke]

Ok... seems BitCoin just got shot. Reason? malware that "got" the "keys" to one user's e-wallet. Not funny if all your stash can be got by some script-savvy kiddie?
http://forum.bitcoin.org/index.php?topic=16457.0


Hi everyone. I am totally devastated today. I just woke up to see a very large chunk of my bitcoin balance gone to the following address:


1KPTdMb6p7H3YCwsyFqrEmKGmsHqe1Q3jg

Transaction date: 6/13/2011 12:52 (EST)


I feel like killing myself now. This get me so f'ing pissed off. If only the wallet file was encrypted on the HD. I do feel like this is my fault somehow for now moving that money to a separate non windows computer. I backed up my wallet.dat file religiously and encrypted it but that does not do me much good when someone or some trojan or something has direct access to my computer somehow.

The transaction sent belongs rightfully to this address: 1J18yk7D353z3gRVcdbS7PV5Q8h5w6oWWG

Block explorer is down so I cannot even see where the funds went.

I tried restoring an earler backup of my wallet but naturally that does not work because the transaction has already been validated.

Needles to say I feel like I have lost faith in bitcoin.

Anyone have any ideas what I can do besides just jump off a bridge?!

also:

https://financialcryptography.com/mt/archives/001327.html


Predictions based on theory have been presented. Not good. BitCoin will fundamentally be a bad money because it will be too volatile, according to the laws of economics. You can't price goods in a volatile unit. Rated for speculation only, bubble territory, and quite reasonably likened to a ponzi scheme (if not exactly a ponzi scheme, with a nod to Patrick). Sorry folks, the laws of economics know no bribes, favours, demands.

Hope there are lessons to be learned here.

[sjkted]

I've been watching bitcoin for a few weeks and think it's an interesting idea, which does have some flaws and benefits.

The benefits are that transactions are anonymous and it will be difficult to tax by authorities. In addition, it is a good solution for electronic payments which could provide an international standard without having to submit to the beast system.

The detractors remain to be seen:
- Will it be secure? If I save up a lot of bitcoins, can someone steal my account and take all the money?
- Will it be a store of value? If a large number of bitcoins are created, will there be massive deflation which causes instability in the system?
- Can a massive powerhouse of computing power such as Google or IBM create new bitcoins with an unfair platform? And, can the system be scaled to millions or billions of users?

All in all, I think it's a great idea but it may need to make it to version 3.0 or 4.0 for it to be a viable alternative.

--sjkted

[Luke]

People will always find a way to trade, one way or another. This is not a concern for me
Real problems lies in WHAT to trade.

Manufacturing is controlled. Transport relies on oil, so is agriculture. And they need giant infrastructure to operate, which is excuse for giant bureaucracy to run it. That involve internet too.
From traffic cop that can seize your transport to cybersecurity force tasked with controlling your "content" and secure the "proofs" ie: your hardware.

Every free energy scheme proven to be either scam or failure- no goods delivered.

Actually- 50 years ago there were some frontier areas where you could get a semblance of self-sustainability, but this is not the case now - you can only choose a relative level of oppressiveness.

Message is clear : obey there is nowhere to run. Your life is controlled. Deal with it.

The coin in which you buy your slave-goods is kind of secondary, don't you think?

Problem we are facing is building "shadow" economy - or face the implosion of current one among trade restrictions, travel blockades and wars, which are unavoidable, as those in power will cling to it no matter the cost.

[Luke]

More:
http://www.sovereignman.com/expat/what-are-the-social-implications-of-economic-collapse


For the last few days, we’ve been having an important discussion about the magnitude of the economic challenges in the west; if you didn’t read yesterday’s letter, I really encourage you to do so before proceeding because it’s important to understand why the west has truly passed the point of no return.

Simply put, the United States and much of Europe are borrowing an extraordinary amount of money now just to pay interest on the money they’ve already borrowed. They cannot even self-fund their mandatory entitlement programs without going into the hole, and their options are limited:

In the longer term, only options 2-5 remain: inflation, austerity, default, and cannibalism. Each of these remaining options will shake the financial system to its core. More importantly, each of these has the power to create widespread social upheaval.

When inflation eats away at a family’s already meager standard of living, when austerity eliminates the benefits to which recipients have grown accustomed, when default vanquishes a retiree’s savings, when high taxes make workers feel like they’re just government serfs– this is when the real turmoil will begin:

* Rising crime: devoid of a job or means to support their families, people will turn to crime out of desperation

* Class warfare: with dividing lines drawn between have’s vs. have-not’s, it will become unpopular and even dangerous to be successful

* Corruption: low-level public service officials will look to supplement their income through bribery and kickbacks

* Black economy: An underground, cash-only (probably gold or foreign currency) economy will emerge with people getting paid in envelopes

* Censorship: Of course they’ll blame it on national security, but the idea will be to prevent public disparaging of government policy

* War: The government will need another major event to distract people from the real problems

* Protests/Riots: This is when things turn bloody

* Police state conditions: The government will close ranks and send the cops out to show all the little people who’s really in charge

How to get your life going, when by one random act or another, you can be raided at 5am by a group of licensed or un-licensed thugs?

[Myst]

People will always find a way to trade, one way or another. This is not a concern for me
Real problems lies in WHAT to trade.

Manufacturing is controlled. Transport relies on oil, so is agriculture. And they need giant infrastructure to operate, which is excuse for giant bureaucracy to run it. That involve internet too.
From traffic cop that can seize your transport to cybersecurity force tasked with controlling your "content" and secure the "proofs" ie: your hardware.

Every free energy scheme proven to be either scam or failure- no goods delivered.

Actually- 50 years ago there were some frontier areas where you could get a semblance of self-sustainability, but this is not the case now - you can only choose a relative level of oppressiveness.

Message is clear : obey there is nowhere to run. Your life is controlled. Deal with it.

The coin in which you buy your slave-goods is kind of secondary, don't you think?

Problem we are facing is building "shadow" economy - or face the implosion of current one among trade restrictions, travel blockades and wars, which are unavoidable, as those in power will cling to it no matter the cost.

There is an underground or shadow economy quietly growing in the cracks of the decaying dominant system.

Kevin Carson believes the existing hierarchy will collapse under its own weight as described in his credo Why Self-Organized Networks Will Destroy Hierarchies (http://blog.p2pfoundation.net/why-self-organized-networks-will-destroy-hierarchies-%E2%80%94-a-credo-by-kevin-carson/2011/04/17), to be replaced by the elements of the Homebrew Industrial Revolution (http://homebrewindustrialrevolution.wordpress.com/) and Open Source Government (http://desktopregulatorystate.wordpress.com/).

This transition from hierarchies (which inevitably concentrate power and attract to their pinnacles the small percentage of psychopaths and sociopaths among us) to decentralized, distributed, localized, peer-to-peer modes of manufacture, agriculture, technology, scientific research, education, governance and currency is already under way.

I think currency is the most important element. The elite's power rests on their control of the currency, which they use to bring about enormous transfers of wealth through at least three different processes: creeping inflation, periodic boom and bust economic cycles and wars. The more wealth they confiscate, the easier it is to influence politicians and regulators to favor their interests.

There are two currency initiatives which could shift the balance of power relatively easily. One is for people to exchange their debt-based paper money for gold or silver. The other is to use alternative currencies including local currencies and an international digital currency such as bitcoin. Gold/silver can coexist as currencies along with other alternatives such as bitcoin. They are complementary.

Bitcoin is still in the beta development stage and has some flaws, but it has some important features which will probably be incorporated into a long term solution. Since bitcoin is open source, anyone (including this community) can use the software to start a new currency, perhaps with improvements.

[Myst]

from what I understand this is typial fiat (faith-based) money scheme

It does look like a fiat currency at first glance, but maybe its not that different from traditional forms of currency such as gold and silver. Copied from a post I made on another site:


I don't see any way to create a sound currency that is not based on something scarce. If there were no shortage of anything, we would not even need money. Money is useful as a medium for exchanging one scarce thing for another, or for storing value to be used for future exchange.

Bits in computer systems are not scarce. To make a particular combination of bits scarce (immune to counterfeiting), an algorithm is needed that involves the use of a significant amount of some physical resource. The bitcoin hashing algorithm requires so much computation that a significant amount of hardware and electricity use is needed, which trace back to limited resources such as the oil used to generate electricity.

So, it is no more wasteful and no less necessary to consume resources to generate bitcoins than to mine and refine gold or silver for coins. And in both cases, the process can be viewed as less wasteful if the coin creation process has side benefits. Generating a bitcoin can help heat a house in a cold climate, and the nearly pure gold or silver in coins can readily be used in many manufacturing processes.