Daily Archives: June 9, 2015

Bitcoin isn’t the future of money it’s either a Ponzi …

Posted: June 9, 2015 at 4:42 am

(Photo by Ethan Miller/Getty Images)

Sometimes it's hard to tell whether Bitcoin is more like Ponzi scheme or a pyramid scheme.

Whatever it is, though, it isn't a currency. It's a tech stock. Each Bitcoin is really a share in a systemthat seems to make it cheaper to transfer things onlinemoney, stocks, bonds, even the deed to your houseby cutting out the middleman. Well, kind of. Bitcoin doesn't remove the middleman so much as replace himwith middlemen who don't make you pay much, but make society as a whole do so instead. Is this progress?

It's supposed to be. Ever since the early days of the Internet, people have been trying to figure out how to transfer money online without having to go through the financial system. The problem, though, is if Isend youmoney, how do you know I haven't already spent it or sent it to somebody else? You don't. So the only solution has been to have a trusted third-party, like a bank, sit in between us. I send the money to the bank, it verifies that I actually have this money to send, and then it sends it on to you, all for a 2 percent fee, of course.

Bitcoin's breakthrough is to have a decentralized network of "miners" sit in between us instead. Now, remember, these miners are trying to win new Bitcoins by solving computationally-taxing math problems. The clever part, though, is that in the process of doing so, they also create a public ledger of every single Bitcoin transaction, what's called the blockchain. That includes every Bitcoin that's ever been won, every Bitcoin that's ever been used, and every Bitcoin that's ever been transferred. So now we don't need a bank to know that I have the money I'm sending to you, and that I'm only sending it to you. The miners confirm all this. And the best part is that instead of having to pay the bank myself to do this, the system pays the miners in new Bitcoins.

The question, though, is howyou get people to mineBitcoin to begin with. Sure, you can tell them that Bitcoin is digital money they can use to buy things online, but they already have money they can already use to buy things online. And while merchants would be more than happy to save the 2.5 percent they pay in credit card transaction fees, customers are a lot more more blas since they don't pay them directly.The answer, then, was to do what makes anything popular: make it exclusive. Specifically, Bitcoin limits the total number of coins that will ever be created to 21 million.Now, for Bitcoin's first year and a half, as Nathaniel Popper documents in hispage-turning history Digital Gold, there were still only a handful of people, if that, mining it. But that began to change when libertarians, who were convinced, just convinced, that the Federal Reserve's money-printing would mean the doom of the dollar, discovered Bitcoin and its non-inflatable money supply. A boom was born.

But what made people mine Bitcoins is what has kept from spending Bitcoins. Think about it like this. Bitcoin's finite supply means that its price should go up, and keep going up. So if you have dollars that are losing a little value to inflation every year and Bitcoins that are gaining it, which one are you going to use to buy things with? The question answers itself, and it raises another. Why would this ever change? Unless you can't buy something online with dollarslike drugsyou'd always want to use your dollars instead. Buying things with Bitcoin would be like cashing out your Apple stock in 1978 to go grocery shopping even though you have plenty of actual cash lying around.

The catch-22is people buy Bitcoins because they think the price will go to infinity and beyond once everybody uses them, but they don't spendtheir own Bitcoins because they think the price will go to infinity and beyond once everybody else uses them. And so nobody uses them. But if nobody uses them, then the price will stay stuck at something a lot less than infinity let alone beyond. So the Bitcoin faithful have tried to not only convert people, but also convince them to martyr themselves, financially-speaking, for the crypto cause. It goes something like this. Hey, do you want to hear about the future? It's a digital currency called Bitcoin that lets you spend or move your money online without paying any fees. Sounds great. How does it do that? Well, Bitcoin saves you money by making transactions irreversible. So ... if I get scammed, I got scammed? There's nothing I can do about it? Yes. Okay, but is it at least easy to use? The thing is, I don't actually use it. I just hoard it. I'm waiting for some greater fools to push up the price by using theirs. Oh. Yeah. So you should buy some Bitcoins and use yours. I'll get back to you on that.

But Bitcoin is good for something other than redistributing wealth from one libertarian to another. That's transferring money, or anything else for that matter, online. "The design supports a tremendous variety of possible transaction types," Bitcoin's shadowy inventor Satoshi Nakamoto wrote back in 2010, including"escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc." So anytime you needto send any kind of financial asset or agreement to somebody else, you can send it along with a Bitcoinand, through the beauty of the blockchain, avoid having to pay a lot of fees. That's why Wall Street banks are looking into whether they can build their own blockchains to cut costs before their competitors do. And while sending money is cheap within the U.S., it's not not across international bordersthe average transfer fee, according to the World Bank, is 7.5 percent. It's not hard to imagine, in other words, that Bitcoin could claim a big chunk of the $500 billion remittance market, although the difficulty of actually getting the physical cash to people in developing countries is still a significant hurdle.

Wait a minute, though. How does the blockchain cut costs again? Remember, instead of you paying the bank a fee to process a transaction, the Bitcoin system pays miners new coins to do so. Then these transactions get added to the list of all others in the public ledger, the blockchain. Butanytime it seems like you're getting something for nothing the costs are probably just being hidden. What are those costs? Well, Bitcoin mining is a pretty expensive business. Even the most specialized computers, which mine Bitcoins and only mine Bitcoins, require a lot of energy. So much so that Bitcoin miners have set up shop in far-flung places like Iceland where geothermal energy is cheap and Arctic air is cheaper stillfreefor them to run and cool off their machines at the lowest possible price.

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Transhumanism and law :: The Patriots

Posted: at 4:42 am

by Kamil Muzyka

Law generally falls into two incongruent categories: the natural law and the positive law. While the natural law encompasses universally accepted moral principles and social sense of justice, reflecting the zeitgeist or the spirit of time, the positive law ignores these premises, focusing instead on human-made laws, such as statutory and common law.

In its current state of legal advocacy, transhumanism does not exactly fit into either of these categories, representing an amalgamation of the two. Some transhumanist lawyers support same-sex marriage and morphological freedom, viewing it as the zeitgeist, as opposed to the morality-based fossil socio-legal structure.

Others, seeing death, aging and anthropocentrism as archaic and obsolete, advocate for granting legal rights to individuals in suspended animation and personhood rights to non-humans, such as sufficiently advanced AIs, cetaceans, great apes, elephants, etc.

Transhumanists certainly need skillful lobbyists and litigators in their ranks to effectively advance their cause, but what do they really want? Do they want absolute and unsanctioned by the federal government or international authorities freedom of scientific pursuit, such as chimerical engineering of humans, neural emulation, cyberware, senescence suppressants, cognitive enhancements or morphological modifications, with no legislation prohibiting or inhibiting privately funded research? Or do they want governmental funding for anti-senescence treatment, suspended animation, cyberware implants, and enhancements?

Do they contemplate the need for enforcing medical treatments, such as vaccination, and establishing a morpho-law where proper authorities would supervise and monitor human and non-human modifications and protect the modified from the unstable and harmful mods, or do they intend to follow the my body, my right, my choice initiative with all the pros and cons such freedom entails?

So what will the legal system look like in the future? Will the Computer Assisted Everything age dispense with the need for a real life attorney? As the computer technology introduces new means of controlling our environment, it seems likely that future legal services would be provided by our AI assistants, whose skills would certainly exceed the capabilities of any traditional law office. Equipped with the Internet of Things technology proficient at gathering, processing, and analyzing legally significant data from our environment - though relays, sensors, displays, etc. - our AI assistants would instantaneously provide us with sound legal advice in any area of law.

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Government Explains Away Fourth Amendment Protection for …

Posted: at 12:42 am

People have a reasonable expectation of privacy in their private digital communications such as email, and therefore the Fourth Amendment protects those communications. It's a simple extension of the Supreme Courts seminal 1967 ruling in Katz v. United States that the Fourth Amendment protected a telephone conversation held in a closed phone booth. But in a brief recently filed in a criminal terrorism case arising from surveillance of a United States citizen, the government needs only a few sentences to argue this basic protection doesnt apply, with potentially dramatic consequences for the rest of us.

United States v. Mohamud

Mohamed Mohamud is a Somalia-born naturalized U.S. citizen who was convicted in 2012 of plotting to detonate a car bomb at a Christmas tree lighting ceremony in Oregon. Shortly after he was arrested, he was given notice by the government that it had used evidence obtained under the Foreign Intelligence Surveillance Act (FISA) against him.

But it wasnt until after Mohamud was convicted and just a few weeks before he was to be sentenced that the government belatedly gave him notice for the first time that it had also used evidence derived under Section 702 of the FISA Amendments Act (FAA). The government continues to withhold the details of the FAA surveillance, forcing Mohamud (and other defendants receiving delayed FAA notice) to raise generalized challenges to the constitutionality of the FAA based only on what is publicly known about Section 702 surveillance. Mohamud did exactly that in April, raising several legal challenges to the FAA and arguing he should receive a new trial.

The Governments Talking to a Foreigner Exception to the Fourth Amendment

While theres a lot unknown about Section 702 surveillance, we do know it authorizes the targeting of foreigners even when this targeting results in the incidental collection of constitutionally protected Americans communications. As a result, the government can acquire the contents of Americans e-mails, VOIP calls, chat sessions, and more when they communicate with people outside the US.

In its recently filed response to Mohamuds motion to suppress and for new trial, the government concedes for the sake of argument that an American whose communications are incidentally collected as part of Section 702 surveillance has constitutional interests at stake. So far so good; these constitutional interests are in fact at the core of what the Supreme Court describes as the Fourth Amendments protection of the privacy and security of individuals against arbitrary invasions by governmental officials. But then the government dismisses this fundamental protection with one staggeringly broad passage:

The Supreme Court has long held that when one person voluntarily discloses information to another, the first person loses any cognizable interest under the Fourth Amendment in what the second person does with the information. . . . For Fourth Amendment purposes, the same principle applies whether the recipient intentionally makes the information public or stores it in a place subject to a government search. Thus, once a non-U.S. person located outside the United States receives information, the sender loses any cognizable Fourth Amendment rights with respect to that information. That is true even if the sender is a U.S. person protected by the Fourth Amendment, because he assumes the risk that the foreign recipient will give the information to others, leave the information freely accessible to others, or that the U.S. government (or a foreign government) will obtain the information.

It is true that individuals assume the risk that the people they communicate with will turn over a recording to the government. So, for example, in the cases the government cites in the passage above, United States v. White and Hoffa v. United States, the Supreme Court found there is no Fourth Amendment violation if you have a private conversation with someone who happens to be a government informant and repeats what you said to the government or even surreptitiously records it. In those instances, individuals misplaced confidence that people they are communicating with wont divulge their secrets is not enough to create a Fourth Amendment interest.

But the government stretches these cases far beyond their limits, arguing that its own incidental collection of an Americans communications while targeting a foreigner is the same as having that person repeat what the American said to the government directly, even though it is the government that is eavesdropping on the conversation. In essence, when you communicate with someone whose communications are being targeted under the FAA, you have no Fourth Amendment rights. Under this reasoning, any time you send an email to someone in another country, you assume the risk that your intended recipient may be a foreigner and that the government can obtain the contents of the email without a warrant.

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