Tag Archives: Bitcoin

Bubbles Get Ever Bigger and Busts Become Ever More Destructive

Brett Scott has recently posted a new article, The Whale of Mass Destruction: How a fundamental weakness in Bitcoin might (technically) crash our economy, in which he provides an excellent analysis and clear explanation of the valuation processes in the financial markets in general, and the forces that shape price movements of Bitcoin (and other similar virtual commodities), in particular.

In the world of finance, a whale is an entity that has the power to move large amounts of capital or to exert an inordinate influence on markets. Among these are venture capital funds, central banks, and governments.

If you want to understand the essential nature of Bitcoin, the factors that drive its market price, and the implications of the current government plans to establish a Strategic Bitcoin Reserve fund, that article is a “must read.” The lessons you will learn extend far beyond Bitcoin and into the realm of global money, finance, and economics.

I will add that the expected government manipulation of the Bitcoin market by means of massive purchases is analogous to the massive purchases of US government bonds and notes by central banks, commercial banks, and others who still have faith in them despite their lack of any solid backing in the real world. Just as Bitcoin will never be “redeemed” for anything of real value, the massive accumulation of US government debt will never be repaid. That itself is a bubble that will eventually burst in spectacular fashion. God help us!

A Real Alternative to the Dollar; It’s not Bitcoin

Brett Scott has recently written an article titled The Art of Crypto Kayfabe, with the added tagline “You know the cage-fight between Bitcoin and the Dollar was staged all along, right?”

That article is masterful in debunking claims that Bitcoin and similar artificial digital commodities provide an alternative means of payment to the Dollar and other political currencies. He argues that “The actual monetary system is a coercive and extractive credit vortex underpinned by powerful legal structures, military, and the commercial banking sector around the world,” and that “Capitalism isn’t some merry ye olde market. It’s a gigantic global organism built upon state foundations that uphold private property laws, allows corporations to exist, and hold the reins of a transnational money system that both expands and contracts.”

It has long been my position that a real Dollar alternative requires reclaiming the “credit commons,” i.e. community control of credit that producers and sellers of real value allocate to one another, and that credit needs to be quantified in units that are defied on the basis of a real commodity or group of commodities that are in regular demand.

My paper titled, Invoice Factoring as the Basis for a Digital Token Currency, presented at the RAMICS Conference in Rome on November 6, 2024, described how that can be done by creating a digital token currency that, unlike present-day crypto currencies, is based on, and redeemable for real goods and services. This presentation describes the structure, processes, and protocols for creating and circulating a digital voucher token currency on a continuous recurrent basis. I’ve summarized my proposal in this 12-minute video posted on YouTube.

Read the full paper here.

Fake News, Fake Money, How to Tell the Difference

Why is it so hard these days to tell fact from fiction? Who can be trusted to tell us what’s really going on? Can the New York Times and Washington Post still be believed? And what about money? Can we still trust the dollar, the euro, the pound sterling? What supports national currencies, anyway? Is this Bitcoin thing real or fake money, and should I buy some?

Here’s a compelling presentation by Andreas Antonopoulos, that addresses all of these questions. Antonopoulos is a technologist and entrepreneur and probably the most knowledgeable and insightful expert on bitcoin, blockchain technology and the profound changes that lie just ahead.

MUST WATCH!

Here’s the YouTube link: https://youtu.be/i_wOEL6dprg

Now take a deep dive into the political realities of our time by watching this presentation by CIA officer Kevin Shipp, in which he exposes the Shadow Government and the Deep State. If you question his credibility here is a brief bio from Information Clearing House:

Kevin Shipp, former Central Intelligence Agency (CIA) officer, intelligence and counter terrorism expert, held several high-level positions in the CIA. His assignments included protective agent for the Director of the CIA, counterintelligence investigator searching for moles inside the CIA, overseas counter terrorism operations officer, internal security investigator, assistant team leader for the antiterrorism tactical assault team, chief of training for the CIA federal police force and polygraph examiner. Mr. Shipp was the senior program manager for the Department of State, Diplomatic Security, Anti-Terrorism Assistance global police training program. He is the recipient of two CIA Meritorious Unit Citations, three Exceptional Performance Awards and a Medallion for high risk overseas operations. Website/book: fortheloveoffreedom.net

Here’s the YouTube link: https://youtu.be/rQouKi7xDpM

Is Big Brother coming to the blockchain?

Financial advisor Jim Rickards thinks so. In a recent article titled, The Global Elites’ Secret Plan for Cryptocurrencies, he says,

“…the crypto-hysteria is distracting you from a scary truth no one is talking about. There is every indication that governments, regulators, tax authorities, and the global elite are moving in for the crypto-kill. The future of Bitcoin may be a dystopia in which Big Brother controls what’s called “the blockchain” and decides when and how you can buy or sell anything and everything. Furthermore, cryptocurrency technology could be the very mechanism used by global elites to replace the dollar based financial system.”

Rickards goes on to say “Blockchain does not exist in the ether (despite the name of one cryptocurrency) and it does not reside on Mars. Blockchain depends on critical infrastructure including servers, telecommunications networks, the banking system, and the power grid, all of which are subject to government control,” then lists a number of significant developments involving major banks, governments, and supra-governmental organizations like the IMF, all relating to their plans to legislate and control the use of blockchain technology, including its use in virtual currencies and financial transactions.

Can they really do that? Of course they can. In the mid-1800s, the U.S. government imposed a tax on banknotes issued by private banks driving them out of circulation; in 1933 the government made it illegal for private individual to own gold, requiring them to surrender their gold holdings in exchange for government sanctioned paper money at the arte of $20.67 per ounce of gold.

What will be the popular response to such measures against virtual currencies? Will people docilely comply, or will there arise massive disobedience and flaunting of the law, just as occurred in the 1930s during Prohibition, and has been ongoing more recently in the war against drugs? If there is such an uprising, I think it will be in defense, not of Bitcoin, but of some yet-to-be-created virtual currency that rewards virtuous behavior and contributions to the common good. –t.h.g.

 

 

 

 

Israel Slaps Capital Tax on Bitcoins

According to Barter News Weekly, the Israeli government will now charge capital gains tax on profits made from Bitcoin transactions. here is their report:

TEL AVIV – Transactions involving Bitcoins in Israel could be treated as barter transactions, and profits from coin sales could be charged a capital gains tax.

Late last week the Israeli Tax Authority issued a circular detailing the authority’s stance on the taxation of cryptocurrencies, saying that the Bitcoins and other cryptocurrencies shall be treated as assets when sold.

Cryptocurrencies are often considered to fall into a legal grey area for the purposes of taxation, with some countries classifying them as financial instruments, or currency, or an equivalent of a currency, or an asset.

The ITA has now decided that any cryptocurrency sold in Israel shall be regarded as the sale of an asset, and, subsequently, will carry a potential capital gains tax obligation.

The profits made from the sale of cryptocurrencies will need to be declared to the tax authority.

Some experts have noted that if the currency is treated as assets, any businesses accepting crypto-coins as payment will need to treat the transaction as a barter transaction, and will be required to complete their tax filling obligations accordingly.

The treatment of cryptocurrency as an assets does not preclude any transactions from falling under the scope of the country’s VAT system.

It has been said that, “the power to tax is the power to destroy.” Well, the decision of the Israeli tax authorities to tax Bitcoin transactions as asset transfers may not destroy Bitcoin as a speculative medium, but it will surely inhibit its use as a payment medium. The money and banking cartel hates competition.–t.h.g.

Bitcoin, Blockchain Technology, and Crypto-Currency

There has been lots of chatter lately about bitcoin, blockchain technology, and crypto-currency. Everyone, including me, is trying to wrap their head around it all. This is what I’ve come up with so far:

  1. Bitcoin is a virtual commodity that is created by running some obscure algorithm. The people who get rewarded are the “miners” who burn up enormous amounts of computer time and electricity to create Bitcoin. That makes it akin to mining gold or silver—not a very useful pursuit, and like any commodity, people will prefer to use it as a savings medium or hedge against inflation rather than circulating it as a currency. Bitcoin is NOT the answer to the money problem.
  2. The important thing about blockchain technology is what it can do, what functions it can perform. You hear a lot about “smart contracts” and a secure trail of transactions. It seems to be something that is needed when using digital forms of contracts and transactions conducted over the internet, but provides no new functions compared to what has always been done with paper trails and records, but maybe I’m missing something.
  3. The term “crypto-currency” is ill defined and there is much confusion about the characteristics of such a currency and what it can achieve.
  4. The fundamental principles of reciprocal exchange still hold. The substance of a currency or payment medium is CREDIT. Claims still need to be authenticated and promises need to be guaranteed.

My grand, audacious vision is this:

TO ENABLE ANYONE, ANYWHERE TO USE WHAT THEY HAVE TO PAY FOR WHAT THEY WANT.

What they might have is skills, abilities, products, services and credit that is advanced by a circle of people who know them and trust that they are ready, willing, and able to deliver value on demand in the near term.

I have argued that the truly disruptive technology of exchange is a global network of small credit-clearing circles that provide “a means of payment that is locally based and controlled yet globally useful. It makes money and banks, as we’ve known them, obsolete.

My talk in Malaysia in October at the International Forum on Inclusive Wealth (http://ifiw.my/) will be on that topic and will build upon the framework that I laid out in my book chapter, https://beyondmoney.net/excerpts/chapter-17-complete-web-based-trading-platform/. –t.h.g.

#     #     #

Newsletter – July, 2014

Contents

  • From Visby to Bisbee
  • Website improvements, slide shows, and videos
  • My upcoming events
  • Ecuador leading the way toward a “Commons Economy”
  • Kalikalos Summer School/Vacation.
  • Bitcoin—the currency and the technology
  • J. W. Smith and the Institute for Cooperative Capitalism Worldwide
  • More lessons in global economics, finance, and internet access

From Visby to Bisbee

Last year around this time I was in Visby, on the island of Gotland in Sweden where I was privileged to be able to attend the annual Almedalen event, an exciting convergence that brings together a wide variety of business people, politicians, academics, grassroots activists and ordinary folks for several days of presentations, discussions, and festivities.

This year I’m in Bisbee, Arizona, a former mining town turned artist’s mecca and tourist destination where I have the use of a comfortable house while my friends who own it summer in New England. Bisbee is located in Cochise county which is in the southeastern corner of Arizona, close to the Mexican border. I’ve gradually been adjusting to small town living and finding it to my liking. At five thousand feet elevation, the climate is pleasant—not too hot, and the summer monsoons have provided abundant rains over the past couple weeks. The ocotillo plants, which most of the time look like clumps of dead sticks splayed out toward the sky, are now covered with lush green leaves and tipped with red blossom tassels. _____________________________________________________

Website improvements, slide shows, and videos

The slower pace of small town Arizona has given me the opportunity to focus much of my energy and attention on consolidating the considerable body of work that I have built up over the past three decades, work that has taken a variety of forms—articles, books, websites, presentations, and interviews. Thanks to modern technologies, much of this work has been recorded and thus can be made readily available to present and future generations. I’ve spent a lot of time going back over my accumulated material—reworking and updating it, finding ways to make it more accessible, and in some cases, publishing it for the first time. I’m proving (to myself at least) that an old dog can learn new tricks, and I’ve been having a fun doing it.

I’ve been using Power Point for several years but up to this point had not tried to learn more than its basic functions, nor had I made much of an effort to learn how to edit audio and video files. With the acquisition of Power Point 2010, which has some powerful new features, plus some new found motivation on my part, I’m now beginning to master it along with audio editing software like WavePad and Audacity (both are free). Together, these tools are enabling me to create videos of reasonably good quality from many of my Power Point presentations that have been recorded over the years. I am posting these for viewing on my Vimeo channel at https://vimeo.com/tomazg/videos.

One of my best presentations, A New Paradigm in Exchange and Finance: The pathway to peace, justice, freedom, and a dignified life for TG-PBIbySL-0496CRsall, was delivered at the Public Banking Institute conference in Philadelphia in 2012. I’ve made a video of that slide show presentation, which you can view at https://vimeo.com/100765695.

I’ve also done some work on my YouTube channel. I’ve sought out and collected materials in which I am featured. You can find these in my YouTube playlist labeled, My presentations and Interviews.

These links are also provided in a new menu button labeled, My Videos and Sites, that I’ve added at the top of the home page on my website https://beyondmoney.net/. That button also brings up links to my other sites.

As you explore my sites, please let me know if you find any broken links, errors, or other problems. You can reach me at thgreco@mindspring.com.

_____________________________________________________

My upcoming events

I’ve been invited by the Sunbelt World Trade Association to give a presentation in Tucson on Monday, August 18. This presentation will describe how local businesses can create local liquidity on the basis of their own production and collaborative credit, thereby reducing their dependence on bank borrowing and protecting the local economy from the ill effects of national and global monetary policies (Details at https://beyondmoney.net/wp-content/uploads/2014/07/2014-tucson-flyer-063014.pdf). If there is sufficient interest, I may follow that up with a workshop covering the issues that need to be addressed in preparing to launch a complementary community currency for southeastern Arizona.

In October, I’ll be going to the San Francisco Bay area. I will present at Living the New Economy conference in Oakland, October 23-26 (http://www.bayareaneweconomy.org/), being organized by the people at Bay Bucks, a complementary currency and trade exchange for the SF Bay Area. Their banner reads: “We help local businesses cut costs, increase revenue and in the process, build local resilience.”

On October 30 I will present, The Evolution of Money and its Potential to Improve Humanity at the Institute of Noetic Sciences (IONS). Details can be found here.

_____________________________________________________

Ecuador leading the way toward a “Commons Economy”

In 2013, the government of Ecuador embarked upon a program to rethink the fundamentals of its economy and plan its transition to a free and open knowledge society. Friend and colleague, Michel Bauwens, founder of the P2P Foundation was engaged to lead a ten month process of research and discussion.

David Bollier has provided a good overview of the project and a progress report in his magazine On The Commons.

_____________________________________________________

Kalikalos Summer School/Vacation

If you’re in the market for a European vacation combined with an educational and community-building experience, you must check out Kalikalos Summer School where you can experience “Alternative holistic holidays on Mt Pelion above the sea.” Their three campuses are all in close proximity to one another in one of the most beautiful parts of Greece. This short video will give a good idea of what to expect.

_____________________________________________________

Bitcoin—the currency and the technology

The story of Bitcoin goes way beyond alternative currency. As a “virtual commodity,” Bitcoin represents a step backward toward a more primitive form of currency, but the “block chain” technology that Bitcoin uses has far reaching applicability. An interesting article that speaks to that point appeared in The Telegraph (UK). Titled, The coming digital anarchy, the lead-in to the article reads, “Bitcoin is giving banks a run for their money. Now the same technology threatens to eradicate social networks, stock markets, even national governments. Are we heading towards an anarchic future where centralised power of any kind will dissolve?

An interesting counterpoint to that one is Matthew Slater’s excellent article, What happens after the crypto-revolution?

And the nerds among us would do well to read Marc Andreesen’s New York Times article, Why Bitcoin Matters. Andreesen has invested almost $50 million in Bitcoin-related start-ups. He begins by painting this picture:

“A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers.

Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it.

On the other hand, technologists – nerds – are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it.”

_____________________________________________________

J. W. Smith and the Institute for Cooperative Capitalism Worldwide

The Institute for Cooperative Capitalism Worldwide (ICCW) is the latest project of J.W. Smith, a long-time scholar and advocate of economic democracy, who has been writing on “full and equal rights economics” for many decades. I’ve know J.W. for many years and have a high regard for his work. I first became aware of him from reading his book, The Worlds Wasted Wealth. Now in his eighties, J.W. is still going strong and making a difference. His latest book is Periphery of Empire is Free: Empire’s Citizens Soon Will Be Free, which is being offered as an e-book at the bargain price of $5.50, along with books by William Kotke, Alanna Hartzok, and others.

The ICCW seeks to publish e-books by authors who share this full and equal rights philosophy. See their “creative commons” page. For responses and questions you can contact Dr. J.W. Smith at cc@ccus.info or phone 623-875-4624 .

________________________________________________________

More lessons in global economics, finance, and internet access

Whenever you need to take a short break from whatever you’re doing, Clarke and Dawe’s video can provide you with some deep insights about the global financial crisis, with a few chuckles thrown in.

And for a few more laughs relating to an important current topic, view John Oliver on net neutrality, and sign the petition to protect internet access at The Daily Kos.

Wishing you a pleasant summer,

Thomas

Excitement mounts over upcoming IRTA Convention!

The International Reciprocal Exchange Association (IRTA), the premier association of the commercial “barter” industry, has been for more than forty years promoting the interests of small and medium sized enterprises by assisting its member trade exchanges to provide them with liquidity and effective opportunities for moneyless trading.

Since 2005, IRTA has been reaching out to the wider grassroots community of researchers, developers, and organizers of private currencies and complementary exchange mechanisms and has broadened its advocacy to include them.

The upcoming 34th Annual International Convention of the IRTA in Las Vegas will provide a unique opportunity for social entrepreneurs and monetary activists to further consolidate programs of cooperation with the well-established commercial “barter” sector of the moneyless exchange movement. The Convention will be held from Sept. 19 thru 21 at the Venetian Resort in Las Vegas.

Along with IRTA President and experienced trade exchange operator Annette Riggs, and Rob van Hilten, Executive Director of QOIN, a consultancy for community currencies, I will be a panelist in a Saturday session (September 21) titled Understanding Diverse Exchange System Models: From Bitcoin and Berkshares, to Transparent Credit Clearing Networks. This session will consider three basic topics of discussion:

Bitcoin, the good, the bad, and the ugly.

The benefits and limitations of cash-based local currencies.

The emerging global exchange network.

There is still time to register for this important event. You can get details about the convention program and secure your place by visiting the IRTA website at http://www.irta.com/.

#     #     #

Bitcoin vs government, what are the stakes?

Bitcoin is analogous to gold  in that it is hard to produce and acquire, its supply is limited, it can be exchanged anonymously, and it’s path cannot easily be traced. That has some good socio-political  implications and some bad ones. Here is an article that sketches a fairly clear picture of some of that. http://www.bloomberg.com/news/2013-04-05/bitcoin-really-is-an-existential-threat-to-the-modern-liberal-state.html