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Author Topic: Bitcoin Explained on Vimeo  (Read 1329 times)

Offline thorfourwinds

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Bitcoin Explained on Vimeo
« on: December 18, 2014, 05:21:41 pm »

Greetings:
We found this video to be of interest.
What say you?
BTW, we do not own a single Bitcoin.
Our friend Petrus4 probably has an insiders view on this - ring, ring... ;)




This video explains how Bitcoin works in 3 minutes.

Directed, Designed and Animated by Duncan Elms - duncanelms.com?
Written and Voiced by Marc Fennell - marcfennell.com?
Sound Design by Sebastian Oliwa - oliwa.tv
Updated in September 2014.
Original video here - youtube.com/watch?v=SEbCbp1vc9Y
EARTH AID is dedicated to the creation of an interactive multimedia worldwide event to raise awareness about the challenges and solutions of nuclear energy.

Offline petrus4

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Re: Bitcoin Explained on Vimeo
« Reply #1 on: December 19, 2014, 11:22:36 pm »
BTW, we do not own a single Bitcoin.
Our friend Petrus4 probably has an insiders view on this - ring, ring... ;)

I will offer what information I can, Thor.  I will talk about Bitcoin directly to a small extent here, but I want to focus more on the topic of money more generally; which I think is more important. 

I have had an extremely negative attitude towards money for a long time, but my real problem with money, only generally exists when said money is in either gold or paper forms.  It is important, first of all, for us to get very clear about exactly what wealth (as opposed to money) really is.

Wealth is energy.  More specifically, wealth is that which enables us to meet our needs.

[youtube]4mz90E9e8QQ[/youtube]



I am going to talk about Bitcoin directly now, for a bit; but I want you to keep Bashar's words above in mind while I do, because it's going to become important.

Bitcoin is a good example of the kinds of new, disruptive, potentially anti-state technologies which were predicted in Davidson and Mogg's book, The Sovereign Individual.  This potential for disruption also tends to be the reason why the libertarian Right are so excited about it.

Bitcoin is also the prototype of a family of technologies called cryptocurrencies.  These are virtual currencies, where a certain amount of the currency is generated, every time a given computer solves a certain mathematic equation.  In order to regulate the number of coins available, the equation keeps getting more difficult so that the solution time is lengthened.  There is also a finite total amount of Bitcoins, that can ever be permitted to exist.

The system does have three immediate, glaring problems, however:-

a}  AFAIK, neither Bitcoin nor any other cryptocurrency (LiteCoin, FairCoin etc) have any relationship whatsoever with tangible, physical goods; and as such, they are also no measure of the scarcity of any physical good.  It should be remembered here that, as Aristotle tells us, the regulation of scarcity was the very reason why money was invented in the first place.

Originating in the use of coin, the art of getting wealth is generally thought to be chiefly concerned with it, and to be the art which produces riches and wealth; having to consider how they may be accumulated. Indeed, riches is assumed by many to be only a quantity of coin, because the arts of getting wealth and retail trade are concerned with coin. Others maintain that coined money is a mere sham, a thing not natural, but conventional only, because, if the users substitute another commodity for it, it is worthless, and because it is not useful as a means to any of the necessities of life, and, indeed, he who is rich in coin may often be in want of necessary food. But how can that be wealth of which a man may have a great abundance and yet perish with hunger, like Midas in the fable, whose insatiable prayer turned everything that was set before him into gold?
        -- Aristotle, Politics, Book One.

b}  Because there are only a limited number of Bitcoins available, once all of them are in the system, it will be possible for a single person or company to buy all (or at least most) of the Bitcoins in the system, thus creating a monopoly.

[youtube]PfeA94BedQI[/youtube]



The above video describes another reason why Bitcoin is not scalable, because the blockchain or record of transactions, grows with every transaction, and is reaching sizes where it will not be feasible for every individual to store a copy of it locally.  Thus we will be taken back to the original problem that we had with gold; the fact that in large quantities, it is non-portable.

c}  Bitcoin exchanges are not secure.  MTGox, which was a particularly large Bitcoin exchange, has been hacked and robbed.  The Silk Road underground market was also repeatedly hacked, with large numbers of Bitcoins stolen.

It must be stressed here that Bitcoin in particular is a prototype for this form of technology.  Bitcoin is one of the oldest cryptocurrencies in existence; and is therefore the most well known.  Numerous other cryptocurrencies have since been developed, and they may address some of Bitcoin's flaws.

To again go back to the general topic, Bitcoin does serve as a powerful reminder of the inherent disadvantage of money itself.  Money is associated with an unavoidable problem.  This is the fact that the less portable a currency is, the less intrinsically valuable it is, and the easier fraud becomes.

This is what happened with fractional reserve banking.  As a metal, gold is very heavy.  Back when gold was used, a lot of people had stores of gold that were sufficiently large, that they did not want to have to carry all of it around everywhere.  So the idea was developed to store gold in centralised, ostensibly secure vaults, (banks) where certificates of ownership of certain amounts of gold were circulated, while the gold itself stayed in one place.  In time, only the bankers themselves knew how much gold they actually had stored, so they came up with the fraudulent idea that they could issue more ownership certificates or promissory notes than what they actually had in gold. 

The logical extension with computers, was to do what we do now; disassociate currency from the real quantity of tangible goods entirely, and simply have a scenario where the amount of money in existence is mere numbers on a screen.  It is completely arbitrary, and this is also the reason why usury is even easier with this system than it was with gold, as well.

Indigenous societies often used forms of food (cacao beans or rice, as two examples) as forms of currency, as not only do these have a greater intrinsic use value than gold, they are also much lighter.  These are comparitively easier to transport than gold, (although still heavy in large quantities) and are also more easily divisible, which means that the risk of fraud can be reduced to close to zero.  The main argument against such a commodity as a form of currency, is that it is perishable, whereas gold does not rust.  I consider that to be a psychopathic argument, however, as most of society's current problems can be attributed to the permanent concentration of wealth.  The myth about King Midas graphically illustrates the disadvantages of gold as a representation of wealth, as well.

Only when the last tree has been cut,
Only when the last river has been poisoned,
Only when the last fish has been caught,
Will you learn, that money can not be eaten.


Here in Nimbin, where I live, cannabis is an indirect form of currency; with one gram generally being worth $10 AUD.  As mentioned, however, I consider rice the best store of wealth.  It still stores for a relatively long time; and unlike gold, it can be eaten.  This brings me to another very important point.

Wealth is meant to circulate.

The problem with an imperishable substance like gold representing all wealth, is that if that substance is then rare or finite, a single person can concentrate all of it and lock it up; which effectively gives you the scenario of the Rothschilds.  We have a minority of people who are living gloriously, while literally the rest of the planet starves and dies.  Given their Service to Self polarisation, they don't care about that at all; as long as they themselves are fine, then as far as they are concerned, everyone else can die, and that is why you have philosophies like objectivism and eugenics, to justify that sort of thing.  So if anyone says to you that an important characteristic of a commodity to be used as money, is imperishability, then they are wrong.  They are either ignorant, or deliberately immoral.

It is also important to emphasise here, that the people who are running things, do not want you to think critically about money; or more specifically, about wealth.  They want you to willingly trade that which is valuable, for that which is not, and not to give it a second thought. 

This is why food is as adulterated and unhealthy as it is, why consumerism has crept in and everything we buy is disposable.  Consumerism in that sense has had two effects:-

a}  They receive our real wealth; we receive rubbish, or in the case of something like gambling, we really receive nothing at all, most of the time.

b}  Successive generations are literally born into a scenario where they are not permitted to discover what real wealth is from the practical examples around them, and they are certainly not taught it in theoretical form.  As a result, they are much easier to manage and control.

Cryptocurrencies are an exciting form of technology, as mentioned; and some people think they have the potential to bring massive change.  Personally, however, I would stick with physical wealth.  As sexy as it might look, in the end you're still trading physical wealth for strings of numbers.
"Sacred cows make the tastiest hamburgers."
        — Abbie Hoffman

 


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