The Political Nature of Cryptocurrencies

“Government is instituted for the common good; for the protection, safety, prosperity and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; Therefore the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity and happiness require it.”

Massachusetts Constitution, Part VII, John Adams

Cryptocurrencies by their very nature are political because no single government can control them. They act as an explicit form of wealth for the individual alone, that no state can expropriate. Unlike all other forms of wealth that can be expropriated from the individual, cryptocurrencies cannot because of the cryptography that they are build on top of. People are coming to understand that cryptocurrencies are better forms of money because they are governed by code alone, which makes the contract a digital sacrosanct.

Cryptocurrencies exist only for the benefit of those that hodl and use them while creating an explicit economic program of counter-economics in which the state’s coercion and violence is banished. Through building money on top of cryptography–a communication explicitly designed for war–a new kind of value is created from the explicit incapacity of governments to control them.

With the recent abolishment of the largest bank notes in India, Venezuela, Pakistan, and Australia’s announcement to join them, the war on cash is coming. This is a war for the total economic control of money by both governments and banks. This is not for our safety, or security–it is to ensure the theft of our wealth, and the continued enslavement to banking and political interest of the oligarchs.

To have a truly independent form of money strikes at the very root, the very heart of the issue: politics and economics are one in the same.

To Politicize Money

Money is the most fundamental of the social contracts. When we can come to understand that the monopoly that all governments and banks have on the issuance of money under the guise of ‘safety and security’ is nothing more than a ruse for their own enrichment, we can start to understand the very real power we now have to fight back.

Through taking our economic power and choosing to put it into a form of money that they cannot control, we create the most powerful form of political resistance that is possible: economic resistance.

If money is the only thing that these corrupt monsters care about, then lets make it about money–how much money we can cost them? What can we do together when we all withhold our economic power from their parasitic system?

Because it is for each and every dollar that is not spent in there system, we get strong. For every single economic transaction that does not occur in their system, we become strong. For each person that realizes that the state should never have had control of the monetary system, we get stronger.

It is only a matter of time until we are strong enough to take them on publicly and openly. What should be apparent is that money itself is the strongest and the most potent political weapon that there is. Once we acknowledge that money itself is first political, and secondly economic, that we can start to understand the true nature of bitcoin.

Bitcoin is not about money, it is about power.

Cryptoism

crypto-Anarchism

A spectre is haunting the world — the spectre of Cryptoism. All the powers of the old world of flesh and steel have entered into a holy alliance to exorcise this spectre: political puppets of every party around the globe, regulators and bankers from every corner of the planet, and police and military forces of every nationality.

Two things result from this fact:

I. Crypto and cyberspace is already acknowledged by all world powers to be itself a power.

II. It is high time that Digital Natives should openly, in the face of the whole world, publish their view, their aims, their tendencies, and meet this nursery tale of the Spectre of Cryptoism with a manifesto of objectives.

To this end, digital citizens around the world have started running nodes to distribute our code, and create a new society across the global. Arise Digizens! You have nothing left to lose but the chains of the old world, and a whole world to win!

From each according to the code, to each according to the keys!

The Global Revolution is Here!

Since my last post Building The Revolution for Fun and Profit the price of Bitcoin has increased almost 100%, Ethereum has gone up 1200%, and Monero has increased 50%.

This is not a fluke.

A new economy is being built on top of cryptocurrencies, and a whole new asset class is being born. One which no state government or banking cartel can stop.

Our new forms of money are fair and transparent, they are available for everyone to use. They are fundamentally better than any form of fiat money and are superior to them in almost every way. Through this new kind of money, we are going to change the world.

What we are witnessing is the creation of an economic base for the coming Revolution. One in which our totalitarian corporate statist nightmare will be annihilate without a drop of blood being shed. We are on the brink of a new global society being born.

Through the destruction of state capitalism and the implementation of crypto-anarchism we can change anything.

Building The Revolution for Fun and Profit

bitcoinBitcoin turned eight years old this week and the price is back above $1000 per coin. For those of us that have valiantly and steadfastly been working on the finance system of the future for the last few years, we are all reaping the rewards of our efforts today.

Every person that you ask about investing in cryptocurrencies will tell you, “Don’t invest more than you can afford to lose,” but keep in mind that is a knife that cuts both ways.

If you really want to make money, big time money with trading bitcoin and other digital currencies, here is the strategy:

  1. Buy bitcoin and maybe a little of some other crytocurrencies like Ethereum or Monero.
  2. Move those funds into cold storage, into a safe location.
  3. Make backups.
  4. Wait and forget about that money.
  5. Profit.

That’s it. That is the brilliant and amazing way that people have made huge fortunes in the last few years with bitcoin and other digital currencies. Go ahead and buy some, and see how you feel about it at the start of 2018.

The Economic Efficiency of Digital Currencies

capital flows

Bitcoin and other digital currencies are new kinds of money and exchange networks that are superior in nearly every way to state-controlled fiat money. Due to the fact that all monies are directly competing with one another as economic units, money create a zero-sum game of competitive economics against one another. When we see the kind of capital efficiency that bitcoin and other digital currencies exude from their near-zero transaction cost, scalablity, security, and most importantly not being controlled by any government, we can see there is no way that fiat money can ever win over digital currencies in terms of their economic efficiency.

Capital Efficiency

Capital EfficiencyBitcoin and digital currencies will always be a cheaper monetary systems to maintain and utilize than a fiat money, partially when we consider the cost of scaling and security over the long-term, and on a global scale. Due to the unique construction of digital currencies from a security stand point, digital currencies create nearly perfectly secure money systems at rest. Out of the box, through cryptographic functionalities built directly into digital currency protocols; they are magnitudes more secure, efficient, and scalable than fiat money. Fiat money must be defended from counter-fitting, banking fraud, note destruction, and physical theft. Fiat money will always be more expensive to service, use, and maintain as a whole monetary system than any kind of digital currency system because of those weaknesses and flaws. Digital currencies have greater security and scalability than their fiat counterparts as well.

Scalability and Security

mobile banking penetrationPayment and storage of value systems are huge social networks of economic acceptance. This is why new, crisp $100 bills are accepted almost anywhere in the world due to the economic hegemony of the U.S. dollar. However, there is nothing in the dollar bills themselves that have true value; just that the next person who gets that bill will know that it is worth $100–a relatively stable value against many local currencies like the Venusalian Bolivar, or the Argentinian Peso, which have both experienced bouts of hyperinflation.

Despite the wide acceptance of the U.S. dollar, it still has the fundamental problem of transportation, security, and counterfeiting that all fiat money has–a huge expense that cost the US economy about $250 billion dollars a year. That expense is imbued into all U.S dollar transactions due to the inherent nature of fiat monetary system. As the size and scale of the U.S. dollar usage increases, so does the degree of fraud, and counterfeiting that occurs. This amount of counterfeiting and fraud is proportional to the total supply of hard money within a fiat money system, and is a fundamental flaw of any kind of state-issued fiat money.

It is this scalability flaw within all fiat money system that digital currencies exploits to be superior money. This allows for digital currencies to be magnitudes more efficient at being a mode of exchange, and a storage of wealth than any money there is today. Digital currencies have the capacity to scale so much more securely and efficiently then fiat money that they will prove themselves to be more efficient then all fiat money.

Capital Competition

capital competition Due to a condition that is similar to undercover interest rate parity, digital currencies will always offer an opportunity for profit over fiat. This is not due to an actual higher interest rate of digital currencies, but due to an increase in the demand for digital currencies over the total available, fixed, known supply. This causes for value appreciation of digital currencies as demand outstrips the limited supply. What gives digital currencies their distinct advantage over fiat is that the networks is that the money supply cannot be inflated at will. This creates an unmailable supply which is nearly impossible to change, unlike all fiat monies.

When comparing whole monetary systems, bitcoin and other digital currencies will always out preform fiat currencies because of how both currencies create their structural value. Fiat money will always be bonded to a state legal system that finds its value in the force of law, not the nature of value. Digital currencies value because the nature of markets and the protection offered by cryptography–people desire cryptocurrencies because of the traits of good money that they exude.

Digital currencies will never have the same legal and economic burdens to service as fiat money does. This means digital currencies will always have a lower systemic transaction cost than any fiat system, which makes them more economically efficient. Sovereign digital capital will always out preform state fiat capital.

Digital currencies are simply better forms of money than state-controlled money.

Conclusion

Funny that he sees that, yet bitcoin is going to destroy his wealth.

Funny that he sees that, yet he seems to be unaware that bitcoin and other DCs are going to destroy his wealth.

Due to the zero-sum nature of how currency competition economics function, bitcoin and other digital currencies present an existential threat to all forms of state fiat money. Bitcoin and other digital currencies have a lower transaction cost and greater security and scalability than fiat money. Over the next decade we are going to see one of the greatest transference of wealth the world has ever seen, and it will be from the failure of fiat money the coming economic hegemony of digital currencies.

Specialization and The Cryptoeconomy

Bitcoin and alternative digital currencies (altcoins) are much more that just simple currencies–they are a means of exchange, and the entry point into the new digital economy: the cryptoeconomy. Their development represents a technological protocol for digital ownership and economic exchange. This has far reaching ramification for both the internet and money as they both evolve to create their own new economic machine totally removed from state command economies and monetary systems.

With digital currencies acting as a new sovereign monetary force, they are facilitating the growth of a radical new sector of the digital economy that is total unregulated, and removed from the onerous regulations of all state governments. This is allowing for a proliferation of specialized ‘altcoins’ which range from useless to spectacular, each which seeks to create their own specialization within this new digital economy. While many are duds and even outright scams, there is a whole new economy being built, and many of the ideas are both huge in scope, and with the impact they want to create.

Specialization, Money, and Transaction Cost

smith ricardo

Adam Smith and David Ricardo

Adam Smith first presented the idea of specialization in Wealth of Nations. David Ricardo later expanded on this idea with his theory of comparative advantage, which is the idea that that nations should specialize in industrial production that they have distinct advantages in. Digital currencies can specialize in the same way, creating their own comparative advantage by working directly within the framework of the internet, rather then limiting themselves with anachronistic limits of state forms of money, and their laws. This, in turn, radicalizes not just money and finance, but anything to do with the internet and economics.

One of the most important economic features of bitcoin and other digital currencies is the near-zero transaction cost they have, which means that in almost all cases over an extended timetable, digital currencies will always have a lower systemic transaction cost than any form of fiat money. Thus, using bitcoin as a mode of exchange to invest in new and exciting technologies not only is quicker, cheaper, and more secure (when using appropriate security protocols!) than in the fiat economy, but also opens up a whole new world of investing opportunity that could not exist otherwise.

With digital currencies being native to the internet, unlike fiat money, they are empowered to create a totally new kind of economy which is not based on regulations and permission-seeking, but through creating totally new markets and technological opportunities. There is a plethora of new digital currencies and projects which all are using this same near-zero transaction cost to radicalize pretty much every single area of the contemporary economy through applying this technological advancement of money to their field. Each one of these project are focused on an area where the traditional economy is failing or falling short, and where a new digital version of it can change everything.

Initial Coin Offerings

ICOUsually a public offering from a company is going to take millions of dollars, lots of legal fees, and huge amounts of regulatory oversight. The massive inefficiencies and regulatory burdens of this process has locked out most people from being able to be involved in this process, and unable to reap the massive profits that can come from high-risk investing like this. Now with the ability to raise tens of millions of dollars using cryptocurrencies, almost anyone can create a public offering for just fractions of what it once cost. The most common way of doing this with crypto at this time is through an initial coin offering (ICO).

ICO are one of the most powerful modes of investing in the cryptoeconomy. Cutting through all of the red tape of investing and assuming the risks and rewards for oneself; there are huge opportunities (and scams!) that are occurring right now in the cryptoeconomy that are going to fundamentally destroy the old economy modes, in exchange for newer and better ones. The creative destruction of cryptocurrencies is changing all of the old way of investing and economic control, and imbuing that into the digital sphere.

One of the reasons that this can be done is because of the stable store of value and the unit of accounting that bitcoin provides to these new investments. Through acting as a unit of accounting, people are able to invest directly into ICOs by sending bitcoin directly, and in some cases taking their profits in bitcoin directly too. There are also several great projects being built in the Ethereum ecosystem that are taking this same approach, with profits being paid out in Ether, the currency native to the Ethereum blockchain.

Let’s take a look at just a few of the great projects that are currently being working on in the cryptoeconomy.

Ethereum

I see bitcoin as being a core stable money of the internet, like gold throughout the world for most of modern history, and ethereum as being finance for the internet.

I see a lot of ‘bitcoin 2.0’ being developed with ethereum, and a lot of amazing project are being built on top of it creating ‘Dapps’ or decentralized app. These Dapps are the applications which are going to fundamentally restructure the economy. From self-driving cars that pay for themselves and take themselves to the repair shop, to drones that will drop off your tacos once you send some bitcoin, Dapps are going to change the world.

These project range from simply dice games, to robust prediction platforms, and public offerings for decentralized companies. Much of the reason for this is the simple object-oriented programing language, Solidity, that was developed for building smart contracts in Ethereum. This allows for simple smart contract to be built in a few days, rather then the few months it would take to do the same with bitcoin.

Monero

MoneroMonero in many ways is what bitcoin originally wanted to be. Using a new kind of cryptographic protocol that is different from bitcoin, Monero provides strong anonymity that ensures that users financial information, along with their personal identity is much harder to track then it is with bitcoin. For this reason, several darknet markets have recently started supporting Monero, and Monero looks like it is trying to create its own niche within the cryptoeconomy centered around true anonymity and privacy.

I personally also like that the devs of Monero are anonymous, as I cannot imagine the state would ever let someone build a cryptocurrencys like this, and not attack them directly. Overall, Monero looks like a strong privacy-centered digital currency that could one day be the privacy currency.

Augur

AugurAugur is a Dapp, meaning that it was built on top of etheruem as a decentralized app. Augur is the first of a few different prediction market apps that seek to create a prediction platform by letting users bet on pretty much anything. You can check out more information about it here: https://www.augur.net/

FileCoin

filecoinThere are a few different projects similar to FileCoin such as Storj and Madesafe, which are all seeking to create a decentralized storage and hosting solution for the web. These are the kinds of huge, infrastructure changing, decentralizing projects which I think can radically change the internet, and in turn society itself. While FileCoin has not had an ICO yet, both Madesafe and Storj have, and they also have small limited application of the project released. These are the sort of radical project that are creating the new cryptoeconomy.

Dual Power

Through creating alternative, decentralized networks that have the same functions as more expensive, centralized, state-sanctioned networks; we are creating the conditions of dual power in order to collapse the state. It is not just the market efficiency of these systems that will do this, but the very decentralized nature of them that will come to fully challenge the power of the state, and the networks they use. Each state-sanctioned network (facebook, fiat money, ISPs, exchange markets, etc.) will come to be challenged by a non-state network, and over time, simply because of the lack of onerous regulations, and the well-placed mistrust of the state; they will come to prevail over the state-sanctioned network.

The digital age is presenting the interregnum between centralized state power, and decentralized digital power. Over the course of the next decade, states will find themselves struggling more and more with the spectre of the internet and the new forms of power it has created. As states do everything in their power to try to stomp out these new decentralized networks (particularly in more extreme ways as their power is challenged), they will come to find that they do not have power in this space. They will see the destituent power of cryptosystems, and will only be able to show their powerlessness against the immanence of systems built upon the power of mathematics, rather than the wills of men.

The Brinkmanship of Crypto

“A specter is haunting the modern world, the specter of crypto anarchy. Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the true name, or legal identity, of the other. Interactions over networks will be untraceable, via extensive rerouting of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.”
― Peter Ludlow, Crypto Anarchy, Cyberstates, and Pirate Utopias

States believe themselves to be above and beyond the laws and constitutions that created them. They believe they are the law itself, no different from the kings and emperors that came before them. This has driven the world under the leadership of state governments into a dangerous power struggle with their own people. This game of brinkmanship has led to the extreme development and deployment of cryptography as a means to resist tyranny, and will cause for the downfall of states in the coming years as they lose control of the means of communications, exchange, and ultimately their population.

Due to the constant transgressions of all States into a territory to which they have no claim, we have been forced to use the power of encryption to shield ourselves from their glaring eyes. We use encryption to protect the very rights to which we are entitled, but which the state would still deny us. The same aggressive, violent and illegal behavior states display outwardly towards each other, they now present towards their own people. The have pushed us into a brinkmanship that can only end in our mutually assured destruction:

The people, as bound and sworn subjects, and States, as sovereign governments that reign through the power of the Social Contract and constitutions that bind us.

This is how the old social contract is destroyed, and new smarter one is deployed.

Encryption as Resistance to Tyranny

The power struggle for states to control all communications has each state engaged in a civil war against their own citizen for control of all information. States violate civil liberties of their citizens systematically, utilizing violent police actions to respond to our political actions. We are fed propaganda that such actions are for our own safety, and that the state must see all and approve of all to protect against ‘terrorist’ that are little more than a fabrication. We are brainwashed from a young age not to disobey authority or we will be met with the truncheon and broken teeth. Direct physical resistances is impossible and merely gains us broken bones, and lengthy prison sentences. To abscond into bits is our only hope now.

These repressive bodies of armed men under the authority of the state has driven the circumstances which impels the development of cryptosystems. This dangerous game that has all states engaged in brinkmanship against their citizens, violating their right to privacy and interloping into every facet of life for ‘security reasons’. Through these actions, states have caused for the extreme development and use of cryptosystems across the global. States have proven themselves to no longer be trusted, and we must use crypto to protect ourselves from them. People around the globe can now use crypto to negate the economic and political functions of the state, and evade their unjust draconian laws.

Digital currencies are the economic empowerment of cryptosystems that fights against both corrupt bankers, and the corrupt state fiat money system. Over the next several years there will be a florishment of activity from System D, and the global south as they discover what crypto can do for them. This will be at the expense of the contemporary economic and political system, as more and more people choose to exit state economies and political systems, and join the new digital ones.

Economic Resistance Through Digital Currencies

It is inevitable that this new form of technological capital will clash against the old forms industrial capital. Through the creative deconstruction of money as a social ideal, bitcoin recreates capital as access to, and direct ownership of the social network that is money. It renders a new kind of capital that is based upon mathematics, encryption, and technology; which is superior and more efficient that the violent monetary monopolies of state fiat capital.

Crypto provides absolute protection of both ones communications, and now wealth as well. It is from this base of power that we can start to understand the true power at the root of digital currencies.

Bitcoin and cryptocurrencies are new forms of capital that any person can use from anywhere on the planet. We are creating a new world that all may enter without privilege or prejudice accorded by race, economic power, military force, or station of birth.  We are creating a world where anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity. State legal concepts of property, expression, identity, movement, and context do not apply to us. They are all based on matter, and there is no matter here.

Through the understanding and application of cryptocurrenices and cryptosystems to the modern economic and political machine, we are forging a new future; outside and beyond the controls of states from the past.

Digital Solidarity

There is solidarity to be found in our mutual quest to have transparent, privacy-protected form of wealth. This solidarity is transnational in its nature, and can be found among people in every corner of the globe. We now have a mode of true economic resistance that will allow for us to reject the corrupt beast of government and capitalism, while forging a more egalitarian system for all. There is now an economic system which makes economic exploitation much more difficult. This will create a rising tide for all, at the expense of the contemporary capitalist class. Crypto gives people a way to organize, communicate, and exchange for themselves, without the approval of the state and outside of the banking system. This new form of international money can operate outside the bounds and beyond the limitations of any, and all states. It is truly a manifestation of a digital sovereign; an economic and political power that is beholden only to itself.

People of the world will adopt cryptocurrencies in the coming decades, not from the majesty that is offered by the mathematical security of these systems, but the from the sheer economic efficiency they present against the old monetary system. Digital currencies are too efficient and inexpensive when compared to the expensive, corrupt, inept system of finance, exchange, economics, and banking the world has today–the transaction cost of cryptocurrency systems are just too low compared to fiat ones. Digital currencies can help our society solve the fundamental issue that has always existed between money, and exploitation: the control of money itself.

Hidden from the all-seeing oppressive panopticon of the technological totalitarian state; crypto is the organizational weapon against the bureaucratic state, their police armies of death, and their alliances with corrupt capitalist who poison and permanently destroy vast swaths of the natural world. We can now fight back without needing to subjugate ourselves to the violence that will meet us if we organization in the streets. We must strike at the root of the problem, which is economic in nature, and has manifest itself though the control money by a small corrupt group of politicians and bankers. We must end this exploitation, and the only way is to create and use another system of money which they can have no power over.

Crypto Endgame

There is a total war that is happening against all people right now–a grand civil war that has all states engaged against all people. This war is pervasive, all-seeing, and complete in the most insidious ways. The web of torment and despair we have endure can only be made present by the catastrophe as Angelus Novus sees it. This is about far more than just money and economics–this is about justice, redemption, and the creation of a free future for all.

As people start to see through the illusion of money and how governments use that to control their populations; their will be a slow abandonment of government fiat currencies for cryptocurrencies. Through withdrawing our support of fiat money, the old system will collapse upon itself, and there will be a grand jubilee. States will be forced to acknowledge our economic power, and ask for our help–to which we will say no, and we will watch them burn.

The war by the state against citizens is larger than about simply having privacy, or a right to personal wealth–this is about fascism. The insidious, hidden mode in which intolerance and oppression is allowed to exist through an authoritarian state masters commanded by capitalist. These people in government care more about controlling people through violence, than to resolve the problems that propel their populations to demand justice. We can now create that on our own; without their help and beyond their control.

We are creating a civilization of the Mind in Cyberspace. May it be more humane and fair than the world your governments have made before.