How Cryptocurrency Can Abolish the Fed (Part 2: Disruption through Bitcoin)

Knowledge of the Federal Reserve and its effects on the economy embolden people to abolish it. The vampiric embrace central banking has maintained on society has endured for too long. Technology now exists to push humanity into the next epoch, and move away from the current state of monetary cannibalism. The tools to propel this economic reformation have arisen from underground capitalism, from online shadow markets, and from the individual desire to be socially and financially independent.

This tech is referred to as cryptocurrency. It was established without the guiding hand of authority overseeing its manufacture. It was created by cypherpunks for the purpose of escaping clumsy and heavy-handed bureaucracy. It was built to be decentralized and to evade institutional control. It was meant to be the people’s money, to liberate the populace from the oppression and corruption of State banking. It was forged to shatter financial totalitarianism, and level the playing field. It is the ultimate form of technocratic nonviolent disruption and disobedience.

The White Paper

Many different cryptocurrencies exist. The most popular is Bitcoin. It first emerged in 2008 when an enigmatic figure named Satoshi Nakomoto submitted a paper to the cypherpunk mailing list referred to as the Bitcoin white paper. In the abstract of the paper Nakomoto elaborated on his intention.

He said, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

A year later, this culminated in the creation of the Bitcoin software and the Blockchain that it is founded on. The Blockchain is a public ledger that documents every transaction ever made through the protocol, and publishes it transparently. The blockchain is essentially the vertebrae of Bitcoin. It gives it all its fundamental characteristics.

However, it is not readily apparent how Bitcoin is going to revolutionize finance, much less bring down the banking conglomerate and Federal Reserve system. There are several major characteristics as to why Bitcoin and its protocol have the capacity to disempower and disrupt those who wield too much control over the economic infrastructure.

The Disruptive Power of Bitcoin

The underlying disruptive power of Bitcoin is simple yet elegant. Decentralization represents the mainstay of this tech. It does not rely on central planners. It is automated. It is programmed to spit out a limited number of Bitcoins over the course of years. The implications of this are huge. There will never be a crypto-authority, or a few guys sitting in a room deciding what is best for people, economy, or country. This is why the technology puts a check on human corruptibility, and invalidates the Federal Reserve.

Bitcoin is peer-to-peer. Transactions only occur between the people directly involved or chosen. There is no middleman. No institutional stranglehold. People no longer have to rely on a third party. They can send their money to each other without going through an organization. People can essentially debank, or become unbanked. Or looked at another way, they become their own bank. They are the masters of their own money. They do not have to worry about having their accounts frozen either. No one besides users have access to their funds. This removes the possibility of institutions stopping transfers or confiscating money.

Bitcoin represents the height of computer functionality insofar that it is also tamper resistant. If a group of tyrants or banksters wanted to access the money supply and control it for themselves, they could not accomplish this easily. The Bitcoin protocol is distributed over a large network and operates with many computers. This increases the strength and flexibility of the network, which deters hackers and tyrants. In its current State, it is almost impossible to acquire the computational power to successfully hack the protocol. Several security experts and professionals have already tried. They openly admitted failure.

As an aside, it is true that Bitcoin exchanges such as Mt. Gox have been hacked, but it was not the Bitcoin protocol itself that failed--only Mt. Gox's servers. The protocol is currently resistant to outside threats because of its size. Bitcoin's distributed nature is what makes it astoundingly resistant.

Targeting the CEO

The aforesaid reasons are why the Fed cannot deal with cryptocurrency on a practical level. Usually, when someone tries to compete with the Federal Reserve and government, they simply get arrested for counterfeiting or another bogus charge. Bernard Von Nothaus was a monetary architect who created the Liberty Dollar. His money was backed by gold, and it looked "authentic." This caused it to gain popularity. Shortly after, the Feds caught on. They arrested Nothaus for alleged domestic terrorism and then confiscated his money. He ended up getting a light sentence and not going to prison, but he lost all his revenue.

This can never happen to Bitcoin. Since the system is decentralized and no one person controls it, the State cannot just issue a warrant and arrest a CEO for "domestic terrorism" or counterfeiting. There is no central commander. The Feds would have to run around and round up all the miners and programmers involved in the network. In other words, it is impossible for them to act against Bitcoin in an efficacious manner. The system does not care about authority and bureaucracy. It will function anyway, regardless. Even if they did arrest everyone, new miners would crop up and create new nodes on the network, like new dealers crop up to sell more pills in the drug market. There is a potential threat to Bitcoin neutrality, but realistic threats to the protocol will be examined in the next part of this series.

The Age of Economic Freedom

The most important reason why the Fed will die an agonizing death is because of Bitcoin's utility. It is safe, secure, and efficient. It works and works well. There is incentive to use it. Anyone can send Bitcoin anywhere around the world for negligible fees. The fear of being defrauded is reduced because users don’t have to share private data. They can also keep multiple wallets with Bitcoin and spend their money from anywhere so long as they have an internet connection, which is becoming easier to access, even in third world countries.

Bitcoin will not dismantle the governmental banking empire by assaulting it with guerrilla warfare; it will abolish the system with guerrilla economics. The central bankers have to compete with it. Since they can’t arrest anyone, they will be forced to outpace it. Their attempts will fail, though. Decentralized currencies are the next step in innovation, not improvements of existing money and payment technologies. This implies the Fed has been subjected to a Zugzwang: all their potential moves worsen their situation. All cryptocurrencies have to do is continue growing. This is not a problem. Bitcoin has become of a phenom. It is not a matter of whether it goes mainstream, only when. The age of economic freedom has arrived, and the Fed is sounding its death knell.

Nonetheless, there will be battles over Bitcoin neutrality that have to be fought and won. The Fed and bankers will not go down without a fight. There are limitations and weaknesses in the protocol and network that the community must overcome in order to succeed...

(To Be Continued)

Do you agree that cryptocurrencies will usher in a new age of economic freedom? 

Image Sources:
jeff-gomez.com
scannellkurz.com
usnewsghost.wordpress.com

Resources:

http://dankaminsky.com/category/security/
https://bitcoin.org/bitcoin.pdf
https://www.cryptocoinsnews.com/digital-currencies-like-bitcoin-will-disrupt-global-finance/

The Block Size Debate and 'Sock Puppet' Accusations

A recent post on reddit titled “5+5 BTC Bounty for proof of block size debate manipulation” shows some interesting parts to the highly debated block size discussion. The post is a research PDF written by Andre Haynes on July 10, stating that many of the people commenting on this topic were “sock puppets” Most of these multiple account were found debating high profile core developers, most notably Peter Todd.

A “Sock Puppet” is an anonymous account created by a user typically used to “troll” or rustle a debate or conversation. Sock accounts can be found all over the internet on literally every social media application. This is why platforms such as Facebook have recently been requiring identity confirmation. Sock puppets are seen quite a lot in debate on r/bitcoin, u/bitcoin, and u/petertodd which were recorded by Haynes.

In his introduction Haynes writes:

“The current block size debate is critical to reach consensus on issues that affect the scalability and overall future of the Bitcoin network. The process for consensus is one that typically involves Bitcoin core developers, miners, merchants and other experts and stakeholders, but there has been difficulty reaching a viable agreement on the block size.”

The difficulty being multiple accounts manipulating the discussion. The paper is in response to two people offering a bounty of 5 Bitcoins each for proof of debate manipulation. Haynes tries to attack the problem in an unbiased way and uses machine learning throughout the research process. Haynes writes: “this report seeks to identify cases of multiple account use on the Bitcoin subreddits.”




The data collected used the reddit API to gain access to all threads related to the block debate. All users comments stored into the database were compiled into two groups, “Seen Data” and “Unseen Data”. Both groups commentary were analysed and broken down to 10 or more comment collections. From here the commentary was pre-processed to remove common words in the activity.

“Other users who responded to the bounty did not dig deep enough into the data and were not able to find evidence of socks. An analysis of this scale takes a lot of time and computational resources.”

The project found similar styles in each author's commentary throughout the debates. Finding that commentary on these threads were indeed coming from multiple accounts. Although Haynes says on reddit: “The title is click bait and I should have been more careful in my choice of words in this post. To be clear, I am not accusing anyone of being a sock puppet. I am simply stating that given the assumptions of the models, the listed users were suggested as probable cases of sock puppets by the model.” Rankings and possible sock puppet pairs can be found here.

Haynes is a data scientist by trade and says that his analysis methods may help people find out about the true identity of Satoshi. Or whether Satoshi was a sock puppet, which seems to be the case. Haynes insists his studies are not perfect saying: “ There is a high False positive rate, but this was done as a tradeoff to recover as many relevant cases as possible. These could have been removed by hand but that would have introduced the same subjective biases that this analysis was trying to avoid. The above lists represent a starting point to look for sock puppets and nothing more.”


Do you think this research has found Sock Puppets manipulating consensus? Let us know in the comments below.

Images Courtesy of GitHub and Crypto-Graphics.com

Deadline for Filing MTGox Bankruptcy Claims Extended

On April 22, 2015, the MtGox bankruptcy trustee initiated a process enabling MTGox users to claim their lost funds. The trustee created a system that enabled users to file claims against MtGox in order to try and retrieve their lost funds. The deadline to file claims against the bankrupt bitcoin exchange was set to end on the 29th of May. However, this period has been extended until July 29.

The bankruptcy trustee has been accepting filings of bankruptcy claims after the expiration date. The trustee decided that the deadline for filing bankruptcy claims using the online method would be extended until 12 noon on July 29, 2015 (Japan time). The case is likely to be drawn out further before creditors receive what remains of MtGox’s assets.

Meanwhile, the bankruptcy trustee is still accepting bankruptcy claims filed in the system by Gox victims. However, the system seems to have had some issues and is currently temporarily unavailable. After July 29, the only things that users will be able to do with the online method will be to view bankruptcy claims filed by the user and transfer the bankruptcy claims to another person.

The exchange collapsed over 15 months ago, taking with it approximately 850,000 bitcoins, 200,000 of which were later rediscovered. After the Bitcoins went missing in early 2014, Mark Karpelès -- the CEO of MtGox -- initiated a bankruptcy process for the exchange. In 2015, an official bankruptcy proceeding against MtGox and its parent company, Tibanne, began. In April 2015, San-Francisco-based exchange Kraken got involved in dealing with the procedure for the distribution of the user’s funds.

Close to the time of distribution, the trustee is planning to give users an opportunity to use the system again. They will be able to make changes to the details of their bankruptcy claims other than increasing the amount of the bankruptcy claims that users have filed.

The bankruptcy trustee will not be able to answer inquiries regarding individual cases until the process is complete. Further details regarding transfers of claims will be announced later. After the ending period, creditors will still be able to view the status of their filed claims and transfer them to another person or change personal details.

Judging by the fact that after the revised deadline, new claims will no longer be accepted, we strongly advise everyone who haven’t made their claim yet to do so as soon as they can.

Were you affected by the MtGox collapse? Let us know in the comments below!

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