Month: October 2016

Bitcoin: A New Age For Money

While it is true that countries are likely to impose “harsh taxes and capital controls,” if recent trends in financial regulation are a clue, there are some key misunderstandings of the nature of the world wide web and Bitcoin in the above-quoted Time article.  Anonymity – indeed, even pseudonymity –  through either medium, the internet or Bitcoin, is a difficult state to achieve.

This misunderstanding is understandable. Bitcoin and other so-called crypto-assets (while crypto-currency is a term commonly used, many of these coins actually exhibit the characteristics of a financial asset, not currency) are a brand new advent. The internet itself has been around now in our collective conscious for just over twenty years, and it still remains a mystery to many people.  

When we look back on what humans thought about the internet when it first popped into the collective conscious as a real thing in the nineteenth century, we twenty-first century “digital natives,” get a kick out of their understanding (read: misunderstanding) of the world wide web. More on that later.

The burning question remained for nearly everyone who had been involved with Bitcoin prior to its big break, landing on mainstream media seemingly in regular rotation like a payola scheme. But on mainstream sources this burning question was scantily asked.  Instead, themainstream reported that Bitcoin was strictly digital currency, and thus should be regulated as such. Never once asking the big question in an honest scope:

A New Age For Money

Bitcoin challenges not only the way the globalized world does business in the twenty-first century, but also certain assumptions about money altogether. Sure, Bitcoin might not last forever, but Bitcoin has already changed the future by changing the present. This transformation started long before Bitcoin went mainstream in the spring of 2013.

Few were expecting a supposedly one

There are, to be sure, considerable advantages of digital money over traditional, paper-based fiat currencies become obvious upon first use of Bitcoin.

Yet another benefit of Bitcoin is its proclivity to lead users to become more aware of internet privacy and computer security, exposing some individuals to software they would not otherwise experience. A digital currency regime at the national level would increase users’ daily interaction with software systems, perhaps improving the skills and knowledge of users regarding personal finance software and finance optimization technology, as well as computer and Internet science generally.

Those nations which promote the use of decentralized digital currencies could earn a competitive advantage at the international level when it comes to computer literacy.  Because of technologies like Bitcoin, computer literacy is more important than ever.

Is Bitcoin the new Cayman Islands or a better memory? In a way, both.  Hip-hop and punk rock audiences mention often that these styles are not music genres, they are lifestyles. Bitcoin can be seen the same way. It’s not just a money, it’s not just a technology, it’s more a way of life. A worldview, but more fluid. A philosophy. It is an open-source software community, and many of its participants are open about their work, not trying to hide illicit activities. Bitcoin is also a better memory. Thus, Bitcoin is both a new sort of paradise and a better brain.

Expect unimaginable technologies to come from the same school of thought that brought the world Bitcoin. I hope that, within these pages, a clear understanding of Bitcoin basics can be achieved, as well as a broad look at the changes to human life its technology could foster. Many of which already exist.

Although following in the footsteps of past forms of private money, Bitcoin is wholly different, for, not only is it digital, but also the technology is decentralized.  

Commercial banks have indeed looked into creating their own virtual currencies. According to Kirk Hope, the chief executive officer of the New Zealand Banker’s Association, some commercial banks wish to compete with bitcoin. “If it’s not bitcoin it might be some other type of digital currency that could come into play,” Hope said. The currency still faces problems around legitimacy, Hope said. “They are being used to buy things like arms and drugs,” he said. “I suspect tax isn’t being paid on bitcoin transactions.” (11)

All-in-all, Hope demonstrates an acute lack of understanding about bitcoin. For instance, he cites that there can only be 21 million bitcoins in existence as a rationale to argue in favor of bitcoin having shortcomings. But, that “satoshies” can be spent (up to the eighth decimal place) make bitcoin a potentially very robust exchange unit. He says, “you wouldn’t want to pay $300” for a cup of coffee, as if he doesn’t understand that a bitcoin can be subdivided at all.

There are many ways in which bitcoin could be adopted by the more mainstream banking institutions. Products and services are brought into the payment space all the time. Bitcoin is two products: both the exchange unit and the processing mechanism. This might be intimidating for a company like MasterCard, Visa and banks.  What they will have to understand that, for many users, bitcoin’s decentralized nature is one of its primary benefits. Certainly, 2013 was the year in which everyone from bankers to regulators began to come to terms with the existence of something like bitcoin.  2014 will likely be the year of bitcoin education.

Late in 2013, JPMorgan attempted to renew a patent they first filed in 1999. It was reported the bank was designing its own digital currency for use with digital “wallets.” The patent itself related to a “method and system for processing Internet payments using the electronic funds transfer network.”  Although the patent application was lengthy, it did not mention bitcoin, although it did hint that “new Internet payment mechanisms have been rapidly emerging.” (12)

Quickly, however, it was reported that JP Morgan’s patent application had been rejected 175 times. JP Morgan filed the original patent application on August 5, 2013 for an electronic mobile payment system. By October 18, 2013, all claims had been rejected. (13)  By the time of JP Morgan’s patent filing, bitcoin had been in the public eye for a couple years.
Since then, bitcoin has shown tremendous growth, and individuals can now buy many online and offline services (Internet, professional, travel services) and digital and physical goods (clothing, accessories, electronics, books) with the decentralized currency. Divisible to eight decimal places, bitcoins can be used for micro-payments, and some employers are now offering to pay employees in bitcoin. Bitcoin can be exchanged for over thirty traditional fiat currencies. (i.e., EUR, USD, CAD, GBP, PLN, JPY, HKD, SEK, AUD, CHF).

If the World Series were Today

The baseball season is a 162 game long, grueling marathon. Throughout the season, people mutter, “it’s just one game,” when their team loses. As the American League Wildcard game is set to take place to tonight between Toronto Blue Jays and Baltimore Orioles, and the National League Wildcard game tomorrow between the San Francisco Giants and the New York Mets, what would the World Series look like if it started today?

The two best teams in Major League Baseball in 2016 were the Chicago Cubs and the Texas Rangers. The Chicago Cubs, who haven’t won a World Series since 1908, finished the season with a 103-58 record. Good enough for First in the NL central. The Texas Rangers finished the season with a 95-67. Good enough for first in the AL West.

The Rangers had an emotional event during the season, having said goodbye to Prince Fielder who doctors would not clear after a second spinal surgery. They also made headlines when Matt Bush beaned Jose Bautista then Rougned Odor punched him in the face at second base.

Celebrated manager Joe Maddon’s team cut through the league like butter, and cemented their potential fate only further when they went out and got closer Aroldis Chapman, who routinely throws harder than 100 MPH.

So, if the World Series were based on the two best teams from the Regular Season in each league, the game would be between the Texas Rangers and the Chicago Cubs. The Texas Rangers made it to the World Series in 2010 and 2011, losing to the San Francisco Giants and the St. Louis Cardinals, respectively.

The headlines would read: Bryant, Rizzo, Arrietta, Lester square off against Beltre, Hammels and Gomez.

Instead of this game, though, tonight starts the American Wildcard Game. Tomorrow, the NL. Then, the playoffs to see which two teams will truly star in the 2016 World Series.

Newly Released Blockchain App Brings Rideshare Back To Austin

The Arcade City app, featured in numerous headlines in 2016 as an alternative to Uber and Lyft, has been released. Residents of Austin, Texas, where other ridesharing services have been banned, have another option in Arcade City  to get around.

In order for drivers to use the Arcade City app in Austin and other cities, one million Karma points must be accrued by doing things like donating food to the needy. To keep track, this is done through Unsung.org, an app aimed at ending hunger. Austin was the first city to accomplish this, reaching its karma point threshold September 17.

Participants there, who refer to themselves as “the people of Arcade City, Austin” and “Members and Citizens” of Arcade City, started drafting a constitution. All groups must create their own constitution which describes how the group operates.

The group finished earlier in the week with their Constitution, but went back to work on it after Arcade City founder and CEO Christopher David – who is referred to as Mayor of Arcade City –  rejected it. He cited that it asked him to appoint leaders, which he won’t do. Later in the week, the group, located mainly in the Arcade City Austin Facebook group, finalized their constitution.

Arcade City allows drivers to set their own rates, contract directly with riders, and build their own recurring customer base over which Arcade City has no oversight by simply not really providing any of the infrastructure to handle it, as the recently released app demonstrates.

Arcade City is not much more than a virtual gathering place or the Craig’s List of ridesharing combining bitcoin with Facebook’s pre-existing infrastructures. It’s trying a radical new model so that it does not fit within the purview of regulations which brought down Uber and Lyft in Austin. Yet, the city has taken notice.

I reported in Motherboard in June that the Austin Transportation Department sent six officers to Capital Factory, a tech-focused co-working space where Arcade City addresses its headquarters, in order to serve David a ticket. A few days after, ATD sent David what he called a “nice email” requesting a sit down meeting to discuss the transportation ordinance.

David spoke with officials for approximately an hour and explained why he believed Arcade City is not a transportation network company, the business model used by Uber and Lyft to connect paying passengers with drivers who provide their own transportation.

“They didn’t fully agree with my reasoning,” he told Motherboard. So, it’s not clear if ATD will let the model persist. In June, Austin police impounded a female Arcade City driver’s vehicle for violating local transportation regulations. In a test of a central tenet of Arcade City’s model—community—other Arcade City drivers reportedly band together and crowdsourced the funds to get her back on the road.

“Arcade City the corporation has laid out an ambitious vision of total decentralization over time, a vision that will take resources and solid corporate strategy to attain,” David said. “We have a corporate interest in ensuring that people representing our brand in new cities aren’t making stupid mistakes that give customers a poor impression of Arcade City, mistakes that could have been avoided if they’d been connected with experienced drivers in our network.”

David believes ridesharing apps like Uber and Lyft “bastardized” the sharing economy. “They manage their drivers centrally, tightly control rider/driver interactions, and don’t allow service providers the leeway to set their own pricing or terms of service,” he said. “Their model is transitional: it fills the gap between the legacy transportation services of the past and the decentralized, stakeholder-owned marketplaces of the future.” But, David said, the modern ridesharing model will soon be obsolete.

“The value of that peer-to-peer, community-centric network will be orders of magnitude higher,” David said.

How Broke And Stoned Are You?

Rodrigo studied law, but never became a lawyer. The Mexican-American lives in Tijuana and works as a cannabis activist in California. He bounces between jobs. Depending on income, he smokes as much cannabis as possible.

35, Rodrigo laments how hard liquor leads him to spend money on friends and cocaine. He spends the most money on dates with his girlfriend.

Thanks to Mexican marijuana prices, he’s able to smoke cheap. He prefers US medical, and would only smoke that if he had the funds.

Raised in San Diego, Rodrigo has saved money living in the same place in Tijuana for seven years. A rough stretch once meant an entire year passed in which he failed to pay rent. His landlord said nothing. Does it depress him to be broke?

“Yes, it depresses me,” he says, “but, Tijuana makes it easier. I can make the money last.”

Rodrigo got paid the day before we spoke. Before payday, $4 were in his checking account. Now he had just under $1,000 which would need to last him until his next paycheck in two weeks.

“I am going to spend $500 this month on a co-working space in the heart of Tijuana I am trying to start with a friend,” he said. The co-working space has no workers, he said.

Rodrigo once laundered currency across the Tijuana-San Diego San Ysidro border. He profited from different exchange rates.  He got caught crossing without declaring $30,000. He was making more money than ever. He’s now a convicted felon.

“Man, if I had to live in San Diego, I’d have to move to Tijuana,” the American citizen, and Tijuana resident, quipped.

47% of US based respondents to the Federal Reserve board’s recent tri-annual Survey of Consumer Finance revealed that, in the event of a small emergency, they would not have more than $400 set aside. They would borrow from friends, family or sell belongings. Fifty seven percent said they burned through most of their savings after the 2008 financial crisis.

In a 2015 Bankrate.com survey, 62 percent of respondents claimed to have fewer than $1000 in savings. 21 percent (mostly 35 through 54 year olds) had no savings account.

Older generations – especially those without money – have a hard time discussing money. MERRY JANE easily found stone broke cannabis users willing to talk financial misfortunes. Though like their older impecunious counterparts, they prefer to use pseudonyms.

No one knows how much former Lance Corporal Lew, 31, spent on marijuana before or after the marine corps, but he did smoke on a nearly daily basis. While without disability cheques last year, he lived residentially with the Veterans Administration for free boarding and housing.

“Obviously, I didn’t smoke during that period,” he told MERRY JANE. At present, Lew lives disability cheque to disability cheque, and therefore was not comfortable answering questions about current cannabis use. He admitted bouts with alcohol abuse had hurt his wallet far more than marijuana.

“I’ve never had a savings account even though I started working very young – around the age of ten,” he revealed.

Lew would mow neighbors lawns, babysit, do odds and ends and later gave swim lessons, all under the table.  At the age of fourteen he started working in restaurants.

“On one side of town, I worked at the Chinese stir fry, and at the other side of town I flipped burgers,” the Fallujah combat veteran recalled. That has led to a longstanding restaurant “career,” one he since re-entered after his time in the marine corps.

“Somewhere in the 2007-08 collapse one needed to work twice as hard for half the money,” he said. “I live off of my service connected disability and am going back to school for retraining. It’s extremely difficult to get hired in the non-federal field as a combat veteran. A certain stigma goes with the history. After twenty years of work, I still don’t have a savings account.”

Long Beach City resident Edmond, who works in physical therapy, says he “had the luxury” of being disabled – he lost the use of his legs –  and receive $800-$900 in disability per month.

“In Southern California, that might not even pay rent,” Edmond, 29, said. “I really struggled in marginal apartments.”

Now he makes “maybe” $2,000: “That doesn’t go too far either.”

Edmond says he is lucky there is public transportation to take him throughout Los Angeles. If he had to pay for a car outfitted for his disability, he’d be “flat broke each month.”

Currently working towards a masters, Edmond is now going into debt to improve his financial prospects. “It’s what it takes,” he said. “Pay at entry level jobs is a joke. If you’re single, and you’re trying to make it in So Cal, you need to pull in six figures with the tax implications. I do well with my disability, but it’s still a matter of scraping by.”

He buys marijuana from friends who harvest the plant in Northern California. They’ve supplied him since college. Marijuana doesn’t arrest Edmond’s budget too much. The self-admitted social alcoholic spends most of his money drinking. Edmond can spend a quad of marijuana (one month’s supply for him) worth of money in one night of drinking.

“I’ve lowered my alcohol intake,” he said. “Granted, today is Wednesday and I am going out tonight. And I will prob go out tomorrow and Friday. So, yeah, definitely alcohol is a greater detriment to my wallet and bank account than marijuana.” He contends marijuana saves him money.

“It helps me chill and take it easy, enjoy free festivals around Long Beach, concerts and art galleries,” the San Diego County native said. “With marijuana, I don’t get stuck in a bar. It helps me to be a bit more adventurous. It keeps me in check.”

Edmond injured himself drinking. It’d never have happened stoned, he says. No chronic pain, smoking bud just gives him “more enjoyment of life.”

“I just like to get stoned every once in awhile, relax and not worry about money or fucking whatever it might be with how expensive So Cal is,” he says. “Marijuana brings me back to the old school Cali’ days of enjoying the beach and enjoying life.”

“I’m not gonna be poor i always have enough to do what i want to do. Maybe i dont have a lot of savings i always have enough to get all my things.”

The Pirate Party Could Form Iceland’s Next Government

The Pirate Party, which promises asylum to Edward Snowden and accepts Bitcoin, could form the next Icelandic government.

The Pirate Party is symptomatic of great distrust in the traditional political system gripping Europe. Drug decriminalization and promises of economic improvement have inspired people skeptical of corruption.

Iceland’s Parliamentary election takes place October 29.

“Across Europe … increasingly many people think that the system that is supposed to look after them is not doing it anymore,” Pirate leader Birgitta Jonsdottir, who is also a published poet, told Reuters.

He added: “We know that we are new to this and it is important that we are extra careful and extra critical on ourselves to not take too much on. I really don’t think that we are going to make a lot of ripples in the economy in the first term.”  The party says it won’t do things too dramatic. 

“We will not be doing any dramatic things in this regard, we will carry on with the lifting of capital control. We are not going to make any dramatic changes in the financial sector,” said Jonsdottir.

What Is Kim Dotcom Doing?

Kim Dotcom’s pinned tweet reads: “I never lived there, I never traveled there, I had no company there, but all I worked for now belongs to the USA.”  

A dedicated Twitter user and political activist, Dotcom’s tweets revolve around the US’s copyright infringement case against him, his businesses, Bitcoin, and, recently, a new Kiwi law interpreted by many as giving government more powers to spy on its citizens.

Tweets about his ongoing legal battles are especially telling. A federal appeals court ruled last Friday the U.S. government was justified in its seizure of millions in assets from Dotcom.

Further, the Megaupload founder has no problem tweeting his thoughts about his judge: “Because Judge O’Grady was a partner at Disney’s favorite law firm. It’s now paying off for the US copyright elite.”

While fighting the Department of Justice, the German born mogul simultaneously courts the anarcho-capitalist and libertarian “Bitcoin community.”

“The #Bitcoin community seems excited about Bitcache,” he tweeted about a recent project to blend Bitcoin and Megaupload.   

Dotcom and BankToTheFuture, a self-described “online investment platform that brings financial innovation & technology investment opportunities to qualifying investors” with particular attention to compliance, are working on an investment opportunity for qualifying investors in Dotcom’s newest venture, BitCache.

“Coming this August,” Dotcom tweeted.

The investment opportunity was hatched when financial journalist Max Keiser introduced Dotcom and BnkToTheFuture CEO Simon Dixon.

“This type of financing deal is only possible today due to the fact that the legal environment for storing encrypted files has come much further, the world’s first peer to peer decentralised currency Bitcoin has become the largest in the world,” Dixon told Bitcoin Magazine. BnkToTheFuture allows qualifying investors to pool their funds together to make investments in companies involved in building “the future of finance.”

Dixon says BnkToTheFuture has been involved in investing nearly $70m in companies over the past year. Keiser, a BnkToTheFuture client, suggested a deal between Dotcom and Dixon as soon as Dotcom announced he’d incorporate Bitcoin in Mega Upload 2.0.

Mr. Dotcom seems determined to combine bitcoin and cloud storage. The 2017 reboot of Megaupload – the first version of which was seized in 2012 by the US government – pairs with Mr. Dotcom’s vague blockchain project, Bitcache.

Mr. Dotcom, who founded Megaupload in 2005, foresees a mass online storage solution, with Bitcache using bitcoin to power micropayments. Dotcom also claims he will solve Bitcoin’s blockchain scaling problems. Encryption will secure user privacy.

Dotcom’s three ongoing projects pair: BitCache, Megaupload 2.0, and MegaNET. BitCache, Mr. Dotcom claims, could solve the Bitcoin block size debate.

“Bitcoin is currently involved in a debate on how to scale the number of Bitcoin transactions that can be processed each second and new technology is being developed to make that scaling happen on the Bitcoin protocol level,” Dixon said. “Kim identified a problem that he needed to solve in order to scale Mega Upload 2.0 to the number of transactions he needs to meet his business needs.”

Towards that end for Mega Upload 2.0 and other customers who need larger Bitcoin transaction volumes than currently possible, Dotcom is building Bitcache.

Mr. Dotcom plans on Megaupload 2.0 to deliver the “instant critical mass” MegaNet needs from a robust user base. Megaupload 2.0 Platform will enable Bitcoin micropayments via BitCache, allowing users to white-label their own applications.

MegaNET is designed to become a decentralized internet via mesh networks and the unused processing power and storage in cell phones. BitCache and Megaupload 2.0 are designed to bring processing power to the MegaNET system.

Dotcom says the project will be open sourced. Known currently? Not much. Yet Dotcom promises to bring Bitcoin to the masses: “I know how to create tech with mass appeal. I’ve done it for 20 years. #Bitcache will take #Bitcoin to the masses.”

Full details won’t be available until the pitch is launched on BnkToTheFuture. That Mega Upload enjoyed a userbase of millions underpins much of the planning for Megaupload 2.0.

“If successful this project can be instrumental in bringing new user cases to Bitcoin from large scale enterprise users potentially bringing millions of first time users to Bitcoin in a way that is more user friendly,” Dixon said. Dixon believes Bitcache could allow Bitcoin to scale to a volume akin to Visa and Mastercard without the need to change the code, as suggested by others.  

What’s the big picture? According to Dotcom, his masterpiece:
“I’m creating a perfectly legal privacy masterpiece,” he tweeted. “I can’t wait to show you. Trust me when I say “You won’t need anything else.’”

You Won’t Believe How This Guy Secures His Passwords

Store your passwords in a spreadsheet? Sounds ridiculous. That’s what Breck Carrow, President of StopSpreadsheetErrors LLC, does.

“My business and personal data are on separate tabs and each tab is

organized into categories for easy retrieval. Also included are a hyperlink to the pertinent website, logon name, multiple security clues, reference email account and the last revision date. The ability to peruse all of this data at once also facilitates the establishment of unique logon data sets, thus avoiding duplication. And yes, the file is password protected.”

Carrow defends his “low tech” approach to password management. “…it is simple and secure, there is no system to learn, nothing to purchase and it is inaccessible to hackers on the cloud. Even though cars have new high tech accident avoidance systems, anti-lock brakes and SRS airbags, the low tech seat belt is still the most effective safety

feature. Sometimes simple is better.” (http://www.stopspreadsheeterrors.com)

David J Dunworth, Founder of BlueStone Networks LLC, devised quite the imaginative system for password management. It even allows him to manage his passwords from the grave. He chose a word that had nothing to do with him. A simple word. He then found a simple word that reminds him of that word.

This simple word is used on sites with no financial data, address, phone number and so on. Dunworth then changed that word with capital letters and symbols strategically placed for other sites, clubs, etc. He further changed that same word and symbol combination with extensions of additional words and symbols. He then identified one letter or symbol to represent each variation of the password, and keeps a simple one or two digit code listing near his desk.

He files a complete list of the code and what it stands for in his “after I’m gone” secret file that only one family member knows of. He describes his process in detail:

“Starter, simple word = retail – – – Reminder = Shopping or Goods or

some other word that relates to the core word.

Extensions in order of intensity

RetAil, Code R

ret@il, Code @

Ret@il, Code R@

Ret@1l, Code @1 or 1

R3t@1l, Code 3

R3t@1L, Code 3@

R3T@1L, Code T

R3T@1LeR, Code e

R3T@1L3r, Code 3r

R3T@1L1ng, Code 11

R3T@1L1&g, Code &

R3T@1L1&G Code G

According to Dunworth, “There is sufficient differentiation between each of the passwords, and the code is progressive as you utilize them.” His process is “a take on the old OICU812, only using symbols to replace letters that you can remember. Extensions of OICU812 are OICU8124me, OICU8122day,OICU812UC.

I have used this simple system for years without a single problem.”

Brian Pancoast, President of The Pancoast Concern (http://mrktpros.com/), prefers an old school way of password management as well. He laments how, while managing three companies, he had issues with upgrading his password keeper alongside the new technology of the day. At first, it was palm pilot, then a Blackberry. When he tried to export/import his passwords, it was incompatible. When he got a Droid, he had the same problems. When he upgraded to the iPhone, he decided to go old school.

“After watching the movie ‘Ghost’ I figured if a little black book was good for Patrick Swayze its good for me. I have had no compatibility issues since.

Nice People Have More Sex

Nice people get laid more.

A study found altruistic people are getting having more sex, especially men. That includes casual sex and long term relationships. The British Journal of Psychology, with a team led by Professor Steven Arnocky of Nipissing University, looked into the links between one’s sexual history and how nice they are.

‘This study is the first to show that altruism may translate into real mating success in Western population, that altruists have more mates than non-altruists,’ according to Professor Pat Barclay, of the University of Guelph, who worked on the study as well.

Professor Arnocky added: “It appears that altruism evolved in our species, in part, because it serves as a signal of other underlying desirable qualities, which helps individuals reproduced.”

Researchers interviews 800 people about their relationships and how often they helped others through charity, blood donation, helping strangers cross the street, donating winnings and helping classmates, and other things.

Altruism increased men’s chances at finding sex more than women’s. Both genders look for altruism in their partner. Men who hunt and share meat, according to food sharing studies, enjoy greater reproductive success.

Another study asked 524 college students about their sexual history and a question designed to test altruism. The question was: “if you won $100 would you donate it all to charity, keep all of it, or give some to charity and keep some.”

People who donated some or all of the money reported more casual sex partners, more sex partners in the last year and more sex partners in their lifetime.

‘Given the importance we place on attractiveness, resources and intelligence, it would be worthwhile to explore how individuals ‘trade-off’ altruism against other desirable qualities,’ Professor Arnocky said.