Monthly Archives: March 2017

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Cryptocurrencies are a form of money specifically designed to take advantage of the architecture of the internet. Instead of relying on a standard financial institution to guarantee and verify transactions, cryptocurrency transactions are checked, or "confirmed," by the computers of the users on the currency's network. The computers that verify the transactions usually receive a small amount of currency as a reward. The process of receiving rewards in exchange for verifying transactions is called "mining," and it is the main way that new currency is produced. Mining works differently for different currencies.

Because cryptocurrencies are completely digital, they can be used in ways that ordinary currencies can't; primarily, they are used like the digital equivalent of cash. Unlike credit or debit cards that are issued by banks, you don't need an account or good credit to use cryptocurrencies, yet you can use them to buy goods and services from an increasingly diverse selection of retailers and individuals. For instance, Overstock.com and Newegg.com accept Bitcoin as payment. There is typically a very small fee for almost every transaction, but it's typically much lower than credit card processing fees and interest, and the fees support the network.

Another common practice is to use small amounts of cryptocurrencies to "tip" people on IRC chat, social media and blogs. For instance, independent developers have designed "tipbots" for Reddit, Twitter and other social platforms that allow you to send money to a friend or anybody you feel has made a tip-worthy comment. The amounts you can send can be very small, like fractions of a penny, or quite substantial.

Cryptocurrencies can be converted at lightning speed or used to represent things that aren't normally currencies, such as domain names or consumer goods. Depending on the currency being used, it is also possible to anonymize transactions, turning cryptocurrencies into a form of discreet online cash. Most importantly, cryptocurrencies can be sent anywhere in the world, almost instantaneously, enabling users to deal directly with each other over the internet, rather than through a third-party financial institution, paying currency conversion fees or waiting for a bank to release funds.

While they are not entirely immune from fraud or theft, they are generally safe to use and difficult for malicious hackers to steal. As with cash, you'll need to take some precautions to protect your coins. For one, you'll want to encrypt your wallet with a very strong password and take regular backups, and it's a good idea to keep the backup and a written copy of your password in a remote location. Never give your password or wallet to somebody you don't trust, and keep the wallet software up to date at all times. Just like cash, if it's lost, damaged or stolen, you can't recover the funds. It's also a good idea to keep the bulk of your money offline, either in a "paper" wallet or on a storage device that may be disconnected from the internet when it's not in use. Three of the top cryptocurrencies are Bitcoin, Darkcoin and Nxt.

Cryptocurrencies use a number of different algorithms and are traded in different ways. Here are the main characteristics that you should consider.

Market Capitalization and Daily Trading Volume A cryptocurrency's market capitalization is the total worth of all coins currently in circulation. A high market capitalization can indicate a high value per coin or simply a lot of available coins. Perhaps more important than market capitalization is daily trading volume: the value of the coins that exchange hands every day. A high daily trading volume relative to the market capitalization indicates a healthy economy with many transactions.

Verification Method One of the major differences between cryptocurrencies is their verification method. The oldest and most common method is called proof of work. To gain the right to verify a transaction, a computer has to expend time and energy solving a difficult math problem. The trouble with this method is that it requires a massive amount of energy to operate. Proof-of-stake systems attempt to solve this problem by letting the users with the largest share of the currency verify the transactions. These systems require less processing power to operate and claim faster transaction speeds, but concern over security means that few coins use an entirely proof-of-stake-based system.

Retailer Acceptance A cryptocurrency isn't much use if you can't buy anything with it. That's why it's important to know who accepts a currency before you invest in it. A few cryptocurrencies are widely accepted, even boasting partnerships with major retailers. Most, however, have more limited acceptance, and some can only be exchanged for other cryptocurrencies. Some coins simply aren't designed to be exchanged for goods and are built for other purposes.

Cryptocurrencies are an exciting new development in the world of finance. No one is quite sure yet where the technology will lead, but the fact remains that these new currencies offer possibilities that traditional cash can't.

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The Best Cryptocurrencies of 2017 | Top Ten Reviews

Reality is perceived in models. Or maps, if you will. But the map, observed Alfred Korzybski, is never the territory. Meaning, the best we can do is create effective models that work well with reality yet, with full knowledge that it will never represent the full scope of reality. And will, therefore, need uncompromisable adaptability.

Some maps, then, are more effective than others. And it usually goes that the more mainstream the model, the less effective it works in helping you navigate through the tangled webs of reality.

Looking at politics in terms of partisanship, for example, is a very poor representation of reality. It fails to give you the big picture. It fails to represent politics as politics really works which is, in reality, transcendent of partisanship.

Looking at politics, rather, in terms of centralization vs. decentralization is not perfect, but it is, we think, a much better representation than the latter.

Politicians are generally centralists (there are exceptions but very few). They see a perpetual need for more privileged (AKA powerful, but little-to-no skin in the game) fixers (see:pseudo-experts) to give the plebs what they need. Whether the plebs want it, need it, or ask for it is, of course, entirely irrelevant.

On the other hand, those who see this aforementioned mentality as an enormous and fundamental problem are, generally, decentralists.

One decentralist, Paul Rosenberg of the Freemans Perspective blog, outlines why stacking on more centralization to our over-centralized Jenga Economy is counterproductive in his latest piece:

#1: Centralization disrupts price discovery: Disrupting price discovery that sounds very economic.

What it means is this: Whenever headquarters decides to meddle in business transactions, large sections of the marketplace are thrown out of order. The biggest offenders in this area were the 20th centurys socialist states. Im not sure precisely how many people died (mainly of starvation) from their economic experiments, but the number is in the range of 100 million.

#2: Centralization robs the people: Centralization creates a group of people who eat (and generally grow rich) at the expense of everyone else. Every dollar that goes to politicians for their very fine offices and cars and travel budgets and everything else is money that is stolen from you and your neighbors.

#3: Central bosses enforce arbitrarily in order to gain artificial legitimacy: Did you ever notice that politicians are forever creating new fears? And why? Well, because solving those fears (even if theyre mostly imaginary, as most are) makes them seem necessary.

From this we get any number of disasters, especially wars. Have you noticed that presidents become far more popular when they wage a war? Fear sells, and war is a tremendous spectacle. And it makes the centralizers look necessary. (Too bad about all those dead guys.)

#4: Centralization is limiting.Centralized power solving our fears requires an ever-increasing number of laws, and each law is a restriction of some kind. Pretty soon, you cant do half the things you could a couple of decades before. Theres a law for every problem and a department to solve it. Address it yourself and youre likely to get hurt.

So, to keep us safe from our professionally cultivated fears, your kid cant run a lemonade stand without a license, your older aunt cant watch the neighbor kids, and God help you if you try to give a lost child a ride home.

#5: Centralization kills cooperation: There are rules for everything. So, you can no longer cooperate with your neighbor because you enjoy it. No you cooperate because its commanded by law and youll be punished if you dont.

Have you noticed people yearning for the old days and talking about small, rustic communities where the people still look out for each other? Well, theyre right to yearn for that, because its a very healthy way to live. And its centralization that stole it from us.

#6: Centralization robs you of self-worth: Following on from #5 above: What happens inside you when you help people because you, by yourself, give a damn? I think we all know the answer: You become a better, happier, and more beneficial person. You know you did a good thing. And then you feel good about yourself.

Every time you do the right thing because its mandated by law, you are being robbed of self-worth and self-improvement. And your friends and neighbors are robbed of your improved state.

Decentralization wont happen if the decentralists wait for full permission from the centralizers.

Thats just the truth.

Fortunately, we live in an era where decentralization has a fighting chance because it, ultimately, doesnt need permission. Permissionless innovation truly does have the ability to creatively destroy (and, at the same time, create anew), the forces which hanker for unlimited control and resources to themselves and their cabal.

(Take, for example, this piece in Reuters on how Venezuelans are bypassing backwards currency controls with bitcoin.)

This is precisely why weve spent much time the past year digging deep into the cryptocurrency space. Cryptocurrencies have incredible potential to compete economically with the worlds governments.

Maybe not subvert them completely, as some claim (such as, for example, the author of todays featured article below) but they can certainly, at the very least, whip them into shape.

Today, to explain the broad view, we invite Rick Falkvinge to the show to share his perspective: Cryptocurrency, according to him, will cripple todays centralizing forces. And, unfortunately for them, they wont see it coming.

Read on.

Cryptocurrency will cripple governmental ability to collect taxes, and they wont see it coming. When its already happened, expect major changes to take place in how society is organized on a large scale but also expect governments to act in desperation to retain control.

As bitcoin launched in 2009, most early adopters saw its disruptive potential. While bitcoin has stalled for some time approaching a valid use of the term stagnation, cryptocurrency in a larger context is still just as disruptive. In 2011, I stated that bitcoin (cryptocurrency) will do to banks what email did to the postal services. This is not just true, but it will be even more brutal to governments, and by extension, governmental services.

Now, governments love anything that smells like innovation, because it means jobs, this magic word that smells of magic unicorns to anybody in government. Therefore, people who like innovation are nurturing this bitcoin thing, this cryptocurrency thing, this ethereum thing (as if governments made a difference, but still).

Lots of startups in tip-of-the-spear financial technology means that their government may get a head start over other governments. They have no idea that cryptocurrency will radically scale back the power of government, not just their own one, but also all those other governments over which it seeks a competitive edge.

Individual people in government can also love bitcoin because it gives them something to do. More specifically, it gives them something to regulate. Fortunately, other people in government see that this gives them something to do, which is to hold those government regulators with an overdeveloped sense of order somewhat in check.

Youll hear no shortage of wannabe regulators saying that bitcoin is bad because its being used in crime and contraband trade!, to which I usually respond, well, bitcoin is a currency, so I mean you put it in relation to the US Dollar, which then is not used in crime and contraband trade, is this the argument youre using to support your position?, at which point the discussion generally changes topic.

This completely disregards the observation that bitcoin and cryptocurrency were designed to not submit to regulation in the first place. Well, at least not governmental regulation. It is heavily regulated but by its source code, and by its source code alone.

The reason this will cripple todays governments todays idea of what a government is and does is because todays economy is built on one layer doing actual work and three layers of abstraction on top.

At the first and bottom layer of our economy are the individual people doing all the actual work.

The second layer on top of the first is the abstraction we call corporations, which is a way to organize our economy and optimize transaction costs.

The third layer on top of the second would be banks, which handle money for corporations and individual people in a middleman gatekeeper position.

Finally, the fourth layer is the government, which takes advantage of the banks gatekeeper position to siphon off taxes from money flows in order to fund itself and governmental services. In other words, layer four completely depends on layer three for its operations or at least for the relative simplicity of funding its operations.

Now, what bitcoin and cryptocurrency do is make away with the banks cutting them out of the loop entirely, making them redundant, obsolete, dinosaurified. This resulting absence of anything where banks used to be creates an air gap between the functional part of the economy people and corporations and governments who want funding.

The way governments want to tap all money flows in order to fund itself is not entirely unlike how the surveillance agencies want to tap all information flows in order to have an information advantage.

In this way, the deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance. The government can no longer reach into money flows and grab what it wants, but will be dependent on people actively sending it money. The government cant point a gun at a computer and have it give up its money; you can only make a computer operator feel very sorry for not voluntarily producing the keys to that money. So the government is no longer able to collect taxes without the consent even if coerced and forced consent of the people being thus collected.

The deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance.

Governments, and individual people in government, have no idea about this bigger picture. Theyre far to wrapped up in things-as-usual to notice. They wont see it coming until its already happened.

When this happens, there will be no shortage of people in government who suddenly want to regulate cryptocurrency only to find out it will be as effective as regulating gravity. When this happens, government as we know it will be redefined from a coercive Colossus able to take what it wants and do what it wants into a construct that actually depends on people wanting to fund it. This will be a very interesting time to live in. While todays governments will see themselves as getting crippled, I suspect most citizens will regard it as unquestionably healthy that governments will actually begin to depend on the approval of the people at large.

Were just beginning to see the changes to society that the Internet brings. This is one of them.

(Note: I write cryptocurrency and not bitcoin on purpose here, just as Id prefer proclaiming the success of social media over the success of Myspace.)

[Ed. note: This article originally appeared on Ricks blog at this link.]

Regards,

Richard Falkvinge Head of Privacy, Private Internet Access

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Cryptocurrency Will Cripple Governments - lfb.org

Back in 2009 when the first Cryptocurrency, Bitcoin, was announced, no one thought this industry would reach these heights. The truth is, the Cryptocurrency community has grown a lot over the past eight years. After Bitcoin was released many developers have come out with new digital currencies. Right now there are hundreds, if not thousands of them, out there. Cryptocurrency users have also increased almost exponentially. At the moment, many industries are accepting digital currencies as forms of payment. Merchants and retailers have also not been left behind, they have realized that Cryptocurrencies can be viable alternatives to fiat currencies.

According to Coin Market Cap, Cryptocurrency Market Capitalization has reached an all-time high of more than US $24 billion. The main drivers to this all-time high milestone are the major coins right now namely Bitcoin and Ethereum. Dashhas also been causing waves lately, as it has gained more than $70 million this week alone, therefore rising to number three among all Cryptocurrencies. Cryptocurrency users, since the beginning of the year, have been on a spending spree and these three coins have benefited a lot from this because they have attracted adoption based on different use cases.

Bitcoin by far dominates the Cryptocurrency Market Capitalization, its market cap is $20,682,061,514 and thats 84.7% of the entire Cryptocurrency market cap. Bitcoin is now viewed by many as an addition to investment portfolios, its uniqueness makes it desirable to many investors since it reduces total risks while at the same time it has a potential to increase gains. At some time this week, Bitcoin surpassedgold parity and this proves how much it has been growing steadily, especially in 2017. This week, major investors have been talking about their optimismon the approval of the first US Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC). This is definitely very good news to Bitcoin users, especially those based in the US. Investors are really waiting on the SEC to give its final decision on this matter because, if approved, Bitcoins price is expected to increase.

Moving on to Ethereum, this coin was released in 2015, so its barely two years old, but it has risen to number two among all other Cryptocurrencies. It has grown so fast both in terms of price and value. Its pricehas almost doubled in the past two weeks i.e. up from around $10 to $19. Its market cap has also risen to more than $1.7 billion which is an all-time high. Ethereum is the second coin to reach the $1 billion mark after Bitcoin. The Ethereum community has always spoken of a flipping the point where its market cap surpasses Bitcoins. These are some bold words to say especially when you compare the numbers, but they argue that what Bitcoin can do, Ethereum can do better. I dont see how the two can be compared because they use different ideologies. Ethereum is concerned with a wider range not just money.

For details on Dash, and the reasons behind its rise read this article. Investingin Cryptocurrency, especially the major coins is something worth a try. Its clear 2017 promises big returns.

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Cryptocurrency: Major Coins Are Booming - Eastern Daily News