Andreas and the Committee should be commended, they have done an incredible job on a very difficult subject. However, there are some aspects I believe remain unclear for the senators trying to understand the entire scope of bitcoin and digital currencies and what they mean to our society. I truly believe I can give some points that may shed much light on this confusion.
The senate committee, like many other entities are in a state of shock and may or may not realize it. Andreas does an incredible job in giving a very diplomatic argument and explanation for bitcoin and its relation to the future of the world’s economic systems. But such diplomacy is not important in this time of confusion, and I truly believe the committee’s collective intelligence could do with a more truer explanation of what is going on.
I think it is best to start with the end game quote to understand exactly where we as society and you in your government roles sit. We should observe the concluding paragraphs from the significant and relevant lecture/manifesto “Ideal Money”:
There perhaps will always be “politics”, like also “death and taxes”. But it is sometimes remarkable how political contexts can evolve. And in relation to that I think that it is possible that ‘the Keynesians’ are like a political faction that will become less influential as a result of a political evolution….(All over the world varieties of states make claims to have governments very properly or even ideally devoted to the interests of the citizens or nationals of those states and always an externally located critic can argue that the government is actually a sort of despotism.)
The Keynesian implicitly always have the argument that some good managers can do things of beneficial value, operating with the treasury and the central bank, and that it is not needed or appropriate for the citizenry or the “customers” of the currency supplied by the state to actually understand what the managers are managing, what exactly they are doing and how it will affect the “pocket book” circumstances of these “customers.”
I see this as analogous to how the “bolshevik communists” were claiming to provide something much better than the “bourgeois democracy” that they could not deny existed in some other counties. But in the end the “dictatorship of the proletariat” seemed to become rather exposed as simply the dictatorship of the regime. So there may be an analogy to this as regards those called “the Keynesians” in that while they have claimed to be operating for high and noble objectives of general welfare what is clearly true is that they have made it easier for governments to “print Money”.
So I see the Keynesians as in a weak sense comparable to the “Bolsheviks” because of the support of both parties for a certain “lack of transparency” relating to the function of government as seen by the citizenry. And for both of them it can be said that they tend to think in terms of government agencies operating in a benevolent fashion that is, however, beyond the comprehension of the citizens of the state.
And this parallel makes it seem not implausible that a process of political evolution might lead to the expectation on the part of citizens in the “great democracies” that they should be better situated to be able to understand whatever will be the monetary policies which, indeed, are typically of great importance to citizens who may have alternative options for where to place their “savings”.
So if you have read this far you may have realized we have simply failed to listen to this intelligent man that has, for the last 20 years, toured the world giving a lecture about a new kind of money technology that is going to put you in the exact position you are in today.
I have much to point out about this because seemingly very few people are willing to recognize this “political revolution” for the truth that it is. Bitcoin has an instruction book in the form of a blog. This blog is maintained by a pseudonymous identity and it describes the entire history of the systems involved in the creation of bitcoin as well as the future of technology that will come out of it. The site describes what the government will look like in the future and how it will function in a decentralized fashion like bitcoin, and it describes this in at a level that is very accessible to the general public (ie it is easy to understand his explanations if you give them each a little sincere thought).
What are humbly referred to as “concise tutorials” are a very meticulous and well thought out explanations of the new technology we are waking up to today
It is very true to say, we are being schooled. To understand bitcoin we need to read:
Shelling out…A history of money and a re interpretation that gives a more correct understanding of economy.
The Kula Ring…A key explanation to understand the power of connecting economies through currency and trade.
They are very interesting and enlightening and please allow me to go so far as to say that they were written specifically to YOU as the audience.
Nick Szabo is on Twitter and it is important that each of you follow him. Everyone in the bitcoin community knows that his identity is the godfather of bitcoin. He will help you understand what you are facing. As will reading his encyclopedia of links. I urge you to seek advice from those that are familiar with his works.
I leave you with a slightly different interpretation of the questions and ideal answers in relation to your discussion with Andreas. Then I will leave some links to explain what ideal money is, what your relation to it can and should be, and how we might have arrived in this strange situation in the first place.
I addressed the questions in the following order they appeared, you can click your name to short link to your individual questions. And perhaps if we find the explanation new or useful we might investigate what I present to you further (ie read through all the questions of fellow senators and follow up on all the relevant links):
Irving Gerstein
Douglas Black
Larry W. Campbell
Stephen Greene
Paul J. Massicotte
David M. Wells
Pierrette Ringuette
Don Meredith
Celine Hervieux-Payette
David Tkachuk
Ghislain Maltais
Irving Gerstein
Douglas Black
Paul J Massicotte
Stephen Greene
I suspect that the misuse or the potential misuse of bitcoin for nefarious purpose is very much a concern to Canadians as well as this committee…would you have any comments on that…?
“Nefarious” personalities are essentially products of a broken or sick economy. We tend to believe the driving force of the global conciseness drives our economy, where as it might be more correct to suggest the state of the global economy drives our collective consciousness. Simply put, scarcity causes war, and a universal currency of stable value ends scarcity on all levels.
What is needed to ensure this innovation can continue to develop?
We are simply watching the natural process of evolution from single cell life to humans that are capable of creating “technology”-bitcoin is inevitable. The best thing to do is sit back and watch with an non-biased view. We are all going back to school, and learning a new economic paradigm very akin to Austrian economics with a technological twist. The mechanisms and control for its spread and adoption were built in from the beginning of the “solution”.
Considering that other groups have echoed the statements of https://cavirtex.com/home help me with the disconnect that I’m hearing between the evidence of Cavirtex and what you have said today?
They simply want clarity so the public can grow its confidence in digital currencies. It was Adam Smith that showed in “the wealth of nations” that the markets are to be of the freest flowing possible. It is difficult and unnecessary to decide what the best regulations might be, and how Adam Smith felt we might get to the ideal balance. Every country in the world is discussing how to regulate bitcoin, and the truth is bitcoin is dissolving old and archaic regulations everywhere at a remarkable pace. Economy has always fueled regulation and law, and we are simply just now realizing it because it is happening fast enough to watch in real time.
So your answer is what in terms of what this committee should do?
The committee is arbitrary or trivial at this point, a decentralized version of our government is already being created by the strongest and most natural force available, the invisible hand alluded to by Smith. There is now economic incentive and channels for building value towards a decentralized governing process. This is something Andreas downplays because it’s not something we have in tangible form, but it is something that was essentially designed over the last 20 years with bitcoin in mind. In truth, what he probably can’t say, is that the senate itself should start thinking about how it can dissolve and hand its power over to the decentralized process.
Would it be fair to say that the younger generation gets this, more so then my generation?
I don’t think it is fair or should remain accurate. The older generations have seen more disruptive technology than the younger ones. They know what it was like to not have the internet, they know when the internet was really hard to use, and they know when the internet got user friendly. They know what it was like to not have cell phones, and internet apps on their cell phones, to not have video cameras in their pocket. Nobody expects the group of you to “get it”, bitcoin is something even the brightest minds are only making conjectures about the changes it will bring, but we all know that it is a great technology that is going to bring a stability to our global economy that we never knew didn’t exist. So I think your generation can easily and perfectly identify this technology as game changing and exercise your duty and give it the greatest freedom possible on any levels you “control”.
I doubt very much that I will get into bitcoin’s?
Bitcoin was introduced to the world like gold, which was perfect because it caused people to hoard it. By acting in the “greedy” way it actually helped the adoption of the technology. But as digital currencies evolves so will our global economy, on a magnitude and speed that we cannot fathom. We will move from a society of scarceness to one of plenty, and the hoarding and storing of wealth will be less important. So it is more true to say, you will probably never invest in bitcoin, however by this time next year, every single activity you partake in, will involve bitcoin in some form of the underlying architecture, more so than mobile phones and the internet does today.
I’ve been told to keep my nose out of this?
I hope the opposite and instead you “bury” your nose in this knowledge and learn like we are children again. Get this into the eyes of as many important and intelligent people you can, and discuss it. But do exercise a hands off approach, the best you can, and that will facilitate the best possible transition to a decentralized and freer society. Those that do not will obviously seem silly and tyrannical in the near future. Canada could not only lead the way and position itself well economically, it could also help bring many 3rd world type countries into a higher standard of living even we in Canada enjoy today.
How much time does it need to breath?
Forever.
If you don’t need any centralized over site, who provides it..? How can we be so sure we won’t see Isis or one of these other whack-jaw crews, use this as a method of transferring money around the world?
Isis/Isil and such groups are actually a product of unstable global economies. In short when the US and other western countries dropped the gold standard and started to print fiat using the Keynesian money printing system for inflation control, the result was that competing economies that do not participate in the Keynesian method threatened those that control the money supplies. Islamic type economics (as one example) does not subscribe to this system and so by natural economic laws western economic theory needs to destabilize non western type economies in order to retain its order. It was observed that if a country could produce a money of stable supply then a true value of that money could be established and not manipulated. But the economic invisible hand is so strong that a country that achieved a stable money supply would natrually be attacked by external economies, so the only possible way then to bring stability to the world would be to create a money supply that is decentralized to the point that no one can gain control of it or shut it down. By having a universal currency, if we can give the freest exchanges possible, we can “naturally” force all governments to either issue a money of equal quality money as bitcoin, or just give up all together. It is self imposed by natural economics and greed of “mankind”. It is inevitable and the best we can do is try to steer our controls and fears away from it. Malicious groups and people happen because we don’t have a universal currency with a proper standard of value and measurement for it. Such a realization was a gigantic leap forward for mankind.
Bitcoin is not hackable because there is nothing to hack?
I think you can stand for a more technical explanation. The mechanism for bitcoin was described in letters to the NSA and Rand by John Nash. The bitcoin network “senses” how much computing power is “hacking” it and creates its “locks” based on it. So if there is more hacking power it ups its own security. The balance that creates a perfect dynamic lock, is that mechanism. And the “inventor” of it realized that if they “incentivize” the computers on the internet to cooperate, then you can create a perfect formula for balancing the cooperative effort. Basically you pay all the people more to cooperate than they would get for defecting. Since its a self adjusting free market price vs the electricity and hardware used, eventually an equilibrium is reached and you have a working system that is self sustaining. Value is created simply from the worth and the efficiency it brings to our society. Like a wildfire virus that is doing incredibly good things as it spreads throughout all our economic systems currently in place. It has something like 2500 times the power of 500 super computers (I’ve read different number on this stat), and you need to gain half that power to hack it. So we don’t have enough power or economic incentive in the world to hack it, and this is why Andreas is before you today, its not going away and its already time to have a serious discussion about what that means (thankfully the senate is doing great).
Do you foresee a time in the interest of economic development, a nation state decides to forgo its own currency and adopt bitcoin?
Possibly by the end of the year, for sure by the end of next year (http://www.coindesk.com/philippines-government-consider-bitcoin-e-peso/). Currency in the form you describe as national or fiat is a thing of the past. It is not the useful thing to use for the means of facilitating exchange and it is now going out of style. Perhaps it will always exist in some collectable form but no doubt its popularity is over. It might be like letters and wired phone lines that still seem to exist, yet it might be that bitcoin is the final nail in the coffin for these things too. I wish you asked if Canada should do this and I think Andreas, if he spoke from the heart, would say “It would be amazing if you considered it”. It might be too early to jump that far in, but I commend you for this question, as I do all the senators for theirs. Smaller countries with smaller economies, and less intricate regulatory bodies are definitely already talking about this, and they are better positioned for speedy adoption. Don’t forget as we move to a digital money, the difference between this currency and that currency will be largely back end and not on our front end as the user. Think of it like different forms of public water supply or electricity. This is what it is changing too.
I should give a few related Ideal money quotes from ideal money the lecture:
The special commodity or medium that we call money has a long and interesting history. And since we are so dependent on our use of it and so much controlled and motivated by the wish to have more of it or not to lose what we have we may become irrational in thinking about it and fail to be able to reason about it like a about a technology, such as radio, to be used more or less efficiently.
And also, if we view money as a of importance in connection with transfers of utility, we can see that money itself is a sort of “utility”, using the word in another sense, comparable, to supplies of water, electrical energy or telecommunications. And then, if we think about it, we can consider the quality of money as comparable to the quality of some “public utility” like the supply of electric energy of or water.
The usefulness of those measures identifying who is behind those transfers is lesser than the use for society for letting this thing develop, is that accurate…?
Yes it is correct, even if its not its a great way to start thinking about bitcoin and understanding it. And we tend to think then we have a choice on how our governments can react to bitcoin, but it is more true to suggest that in these changing times, the existence of bitcoin itself is going to change the regulations. And the ‘formula’ you point at creates a value for its adoption and so it is self sustaining and inevitable.
New theories every 20 or 30 years, about money supply or money growth or control inflation. ..and we learn later we got it wrong… what are the 2 things of weakness where you say I could have gotten this wrong…?
I am going to answer your question by changing it to “What did we do wrong in the past, and how can we know that this isn’t wrong too?” The keynsian method of manipulating monetary supply to target inflation, mixed with national currencies that have regulations that work against the free flow of trade, has perpetuated a global instability that a nationalistic type analysis cannot identify. Since it cannot be identified with the current axioms and beliefs of economy, any presentation of theories to the contrary with be met with literal violent opposition. So bitcoin needed then to be implemented and actual a working currency in place before it could be presented and explained to the general public (and governments that represent the peoples). Now we face an interesting new choice. The infrastructure is nearly, and inevitably in place so that people can actually decide how much they value each currency. Provided they can exchange currencies, in and out of good or bad ones, there is great incentive for poor quality currencies to disappear and new ideal currencies to arise. So we are simply watching a break through in currency evolution that is leading to an incredibly fast real-time evolution of our economic system. These things are changing in ways we didn’t generally realize would be possible. So what we got wrong was we weren’t evolving our currencies and now we are.
Please do read this concise and interesting essay on a lost or misrepresented history of money: http://nakamotoinstitute.org/shelling-out/
The keynesian view was a very short sited one and many brilliant economists such as FA Heyak were warning us of the dangers of it. Once you wade through the material it gets clear where the confusion stems from and what is the correct direction to head.
What are bitcoins biggest detractors, and why are they enemies of bitcoin?
People who are generally top level academics, mathematical, computer scientists, altruistic, global thinking, are all on the side of bitcoin. Detractors are those people that have held a disproportionate amount of the wealth in this world (mostly in gold). The banking figures and heads of the global economic systems that are the root causes for global economic crashes and instability are against bitcoin. People that don’t understand bitcoin are against bitcoin. Ignorance is against bitcoin, but I should mention it was almost purposeful that the general public grew a distaste to the taboo subject of bitcoin, because then it could grow and evolve into a very secure machine before the general public adopted it. It has already been through its trials before the general public decides to adopt the technology as a whole. In this for its infancy stage it attracted nearly only many of the brightest minds in the world through anonymous discussions (some of which are now public). The bitcoin.pdf has a citation on there that is truly a link to these discussions and so it can be thought of as a calling to all like minded people. They are essentially “extropians” that decided we will have a better governing system because we can. Bitcoin was released in 2009 or so, yet since then there has been a great beacon of light attracting these intelligent and like minded people through anonymous and semi anonymous discussion groups.
What would be bitcoin’s biggest threat to growth?
There is no threat to its growth, it will grow as it is part of our inevitable evolution fueled by the economic force. It will spread to all aspects of each nations economy, and will cause us to think above nationalistic perspectives. Eventually the collective public of the world will turn to it as a form of cooperation, something we never thought possible because we never conceived of such a universal “tool”.
….who would constitute the biggest user group…?
The exact same as the ever and rapidly expanding internet. Every single person (and living entity) on the planet, as well as those beginning to travel into space. “If” there were Alien civilizations we could even now exchange wealth and knowledge with them through bitcoin in ways never thought possible before.
If Canada would move forward with some regulations and the world did not follow…what would be the pros and cons of such a move?
This is specifically addressed in Ideal money:
For example, if all sorts of non-European countries decided to define the values of their currencies as on a par with the euro, without actually joining into any system of cooperative regulations associated with that , then the effect of that would seem likely to destabilize the stability of the euro if it would otherwise be highly stable and of good value quality.
Its true the example was written in relation to a world that did not yet have a “bitcoin” however we can understand that there is a “game” being played here, where each of the actors act for their own best interests. The basic idea and end result is simply this: the clear solution is for everyone to cooperate and participate, and there is great incentive to NOT defect. Every government is seeing this in their own way in relation to their own peoples, their own currencies, and their own “markets.” It is not different than the creation of the Atom bomb in relation to the letter Neils Bohr sent to the UN explaining that such a destructive weapon could be used to a bring an equilibrium of power to the world through creating an incentive for countries to play fair. Not just out of fear but also that each country may receive nuclear technology and capability for such advancement as a reward for joining in a cooperative effort. Bitcoin is the granular computational and tangible solution to that regard, it has the marks of those intellectual geniuses such as Einstein and those that followed his footsteps even specifically at Princeton University. We are simply to recognize and get over the shock at the truth of its existence.
You are advocating a decentralized system…talk to us about the security as aspect and how would we go forth with respect to protecting Canadians how are engaged and will be more engaged with transactions going forward..?
Going forward there will be decentralized systems floating on the internet for everyone that supersede any existing paradigm of nationalistic perspectives. Decentralized banking, ID, security, applications, any system society has is now possible because of the blockchain technology that was the foundation for “bitcoin”. It is that foundation that is the true technological advance, and it will soon be able to every facet of our society. All over the world “hackers”, not meaning the malicious kind, but the pop culture name for good programmers, are working together in a cooperative manner to create these systems that are based on the fundamental teachings of scholars such as Hobbes and Locke Not only is this much written about and explained by Nick Szabo, but the distinct issues forming US and different countries constitutional rights has been clarified into an implementable solution. Bitcoin puts our society’s political and legal frame work in its place, and the “phenomenon” of it is making it impossible for you to ignore and not follow suit.
What would be a suitable time frame….we believe there has to be some sort of regulations put in place, similar to the internet….with respect to the breathing time, and if we were to enact some sort of legislation, give us your opinion as to what that would look like, to govern bitcoin and it’s transactions?
Your body the senate committee will eventually (and quickly) dissolve into a “non corporeal” form with no power to enact any regulations. You do have the choice to recognize this and attempt to facilitate the process. But it’s important to understand that no regulations will stick to bitcoin, as it powers and fuels itself on such changes. If you keep up with bitcoin news around the world in relation to banking systems and government policies on them, it is clear that although many countries make statements against the free flowing adoption of bitcoin, no countries can find it economically and politically feasible to do so. As quick as they announce they are against it, or making policies on it, each country re issues statements suggesting they will reconsider their stance. Bitcoin fuels policy, economics always fueled our government systems, as Nick Szabo explains in “shelling out”. Even 100’s of thousands of years ago.
What systems to currently have in place with those individuals who abuse the system?
For all of the important moral reasons, bitcoin is not “abusable”. It has, in static place, all the things that should be static to bring about an altruistic and cooperative society, via a stable global economy. When you talk about system abuse we were taught monetary policy in the form of inflation control is what is ideal. But it is truly the opposite because then the markets do not get to act on their most natural accord. What is ideal is to take away any power from anyone’s ability to manipulate the money supply, and let the markets sort out their prices. We want everything in the world priced at exactly what it is truly worth and a stable international medium of exchange is the way to bring this about. This is something we did not previously realize the value of, but we are going to, in our life time, see technological advancement at a pace none of us thought possible. Having a stable global economy is nothing less than a miracle, any there is very little that could possibly stop it from becoming a reality (short of a global catastrophe). We are to see the effects within a year perhaps, months or even weeks, in many ways it has already drastically effected the world to the good. It’s created this conversation. People are now learning about the economy in the truest most passionate fashion.
If a senator Ringuette were to issue a “Ringuete coin” this week and if our chair had his bitcoin for a number of months already…I would like to know what the value of one in relation to the other would be?
This is an amazing question, and I believe Andreas was impressed that you asked it, as I know I was. We all want to know the value of these coins in relation to each other, and truly the only way to do this is to have a free flowing market. And now we are seeing with currency evolution, a freer and freer market, where the price of the goods are not manipulated by a third party “government”. This is very valuable “information” to have and it cannot be otherwise found than having a genuine market. This is the very thesis of the whole project and your question points to the very heart of it. It is the genius of Adam Smith, FA Hayek, and John Nash.
If all operations are conducted in bitcoin, and the value is constantly changing, how would a government be able to exercise its fiscal power?
Adreas should have said, it cannot and it will not. This is the end of the keynesian money printing era and the beginning of the currency revolution towards “ideal money”. It’s very simple and i know you will understand. Instead of “fiat” currency, we have X currency. X can be “fiat” or it can be “bitcoin” or it can be “Ringuete Coin”, and provided we can be free to decide on the price to exchange them at, then we will naturally evolve our currency to an amazing a super system we couldn’t conceive before this conversation. This will become “ideal money”. We are experiencing the effects of what Nash calls asymptotically ideal money. He added a variable to the formula that we didn’t realize could exist, it’s quite a simple change, and perhaps even obvious now looking back.
We value would we use if we wanted to make a conversion to tax authorities…how would it be possible to monitor control this type of deceleration of income or revenue?
Taxes are on the out as they are not part of the economic model of the future. Everyone understands and agrees some form of government and social system should be in place. The “means” to get to that is very debated but thankfully we have tangible proof of the truth. The idea is that privatization in a STABLE and FREE market society is ideal, and this will bring about the proper social order we are looking for. Often we mistake ends for means, and we want to apply socialism to bring about a free and well taken care of society. But it is truly the opinion of the brightest economic minds in this world (yet not the central banking and elite 1%), that free competition breeds the most efficient solution for an ideal society. Taxes today are used not very efficiently and bitcoin and digital currencies will give people the option to put their donations and contributions straight into the individual “entities” that provides the solution services or society needs. We can think of it as dissolving and starving the government or we can think of it as granulating the government system into ultra specific and highly efficient systems. Everything each of you do as a senator is being written into a program that acts as a servant to the public with no moral authority of its own, no room for corruption, no room for mistake of policy or procedure. And the cost of running these systems to our society is virtually nothing compared to the current system, so the value goes back to the people naturally.
http://szabo.best.vwh.net/contractlanguage.html
http://szabo.best.vwh.net/formalize.html
What probably hasn’t been brought up yet is “ethereum” which is going to be the next technology we weren’t yet ready for. Ethereum is a building technology that will allow “programers” to build with the bitcoin technology.
The other virtual currencies are they based on an algorithm as well and is it the same as bitcoin?
Great question. Some are and some have their own algorithms. Each coin has unique features, and some coins get merged in ways we both probably can’t fully understand. What is important about your question to understand is that bitcoin is special essentially because it is first. This means its our first true and perfect and public historical record that is not manipulated by centralized authority. Most bitcoin enthusiasts believe bitcoin will eventually be replaced but truly I think it will not. It is the pillar and foundation with which our economy now rests on it will always remain significant because of that, even beyond the invention of mainstream quantum computing I suspect.
Does it have the ability to develop a monopoly? Are there controls on that, how does it work?
Monopolies are a product of a bad and unstable economic system. Bitcoin is literally the solution that dissolves monopolies. Monopolies are something not well understood and talked about for this very reason, there is incentive for some people to argue not factual arguments to hold up the current economic system. They may even believe their view, but what will be increasingly clear is that it was the “currency” monopoly that governments created that was the cause of the spawning of monopolistic entities.
If I have Yen in Canada, I have to go to a bank to exchange it…does the virtual sphere itself have it’s own stability? When something is priced in Europe for 1 bitcoin can I buy that for 1 bitcoin even though the value has changed in relation to my countries dollar?
This is another incredible question with a very succinct answer. Ideal money:
Our view is that if it is viewed scientifically and rationally (which is psychologically difficult!) that money should have the function of a standard of measurement and thus that it should be comparable to the watt of the hour or a degree of temperature.
And this is what will bring a kind of stability to the global economy we didn’t know could exist.
Is that where we are heading where internationally things will be priced in bitcoin and bought and sold in bitcoin? Is that where we are going?
Yes, we are essentially there, with only the need to realize it.
Is there a virtual wallet where you keep your bitcoins?
Everyday newer and newer more user friendly technology is being rolled out. Much of it has been in design for a few years now. Soon you will use bitcoin and not even know you are using it.
Can you pay payroll of thousands of people with bitcoins?
One of the big benefits is the ability to granularize this type of service. Perhaps pay employees down to the minutes they work, also giving the employee specific control over their own work hours. And we can also think of utilities and service that can bill for specific use rather than generalized blanketed contracts. This will bring prices in to asymptomatic decline. I hope you understand the importance and reality of this.
http://szabo.best.vwh.net/smart_contracts_idea.html
http://szabo.best.vwh.net/micropayments.html
If a user of bitcoin such as the chair is able to predict the monetary supply 30 years from now, it seems to me that the minister of finance probably should have made use of this for the next 5 years or whatever…if you are able to tell what the monetary supply will be it seems this is very useful knowledge?
Yes because they are essentially out of a job.
I think any insurance company when they establish an annuity, they are able to make a good prediction, so they don’t need bitcoin, they are able to make and extrapolation, its a very simple mathematical formula. Do you think that the bitcoin system will duplicate the present banking system, the banks are able to adapt to any type of new technology? And the world banking association when it comes to capital are probably investment more in research on digital currency than bitcoin can ever be?
No you missed on this, please allow me to clarify with a quote from the lecture Ideal money:
Consider a society where the money in use is subject to a rapid and unpredictable rate of inflation so that money worth 100 now might be worth from 50 to 10 by a year from now. Who would want to lend money for the term of a year?
You see the instability is like a bet or gamble by insurance agencies, and so the interest people pay on these loans is actually astronomically and unreasonably high, its just we don’t tend to see or realize this because we have been taught bad math.
Our observation, based on thinking in terms of “the long term” rather than in terms of “short range expediency”, was simply that there is not ideal rate of inflation that should be selected and chosen as the target but rather that the ideal concept would necessarily be that of a zero rate for what is called inflation.
So we can understand bitcoin as the intermediate step, eventually stops printing its money supply altogether but starts out as a very understandable system of 10 million halved every 4 years until it stops. This will have a significant effect on “insurance” companies and interest rates on loans that people pay. Things are going to get better and better for the citizens of the world because a stable currency system breeds a stable and flourishing economic environment.
The cost saved by such entities like insurance and loaners not having to “predict” the future value of a currency is going to land as value in the hands of citizens, in the form of the currencies we are offered and use.
Do you not have the impression that you were swallowing up before you came into existence because the banks will never let you have so much operating scope, I don’t think the banks will let this go by without reacting? I don’t think banks will let themselves be disposed because bitcoin is not a solid organization for the time being its a virtual one?
Ideal money which we still have not yet realized is an idea from the 1960’s, it took a long time and many peoples and coincidences to occur in order to get to this stage. But the whole exciting point is that it is already beyond its critical mass, this is why it is before you today. It already won, if the “powers that be” those that might want to stop it, could do so, they would have already. It is an unstoppable force and that is its genius. The message it teaches us is that it is no certain masters that control this world, it has simply been evolution all along, and that evolution eventually naturally progresses to a universal currency system in which the entire global community can put value where it is most useful. The systems we can all admit are broken and possibly many governments and banking systems are corrupt. But the people within them are not necessarily this way. It may be that government officials have a sincere interest in creating and running an ideal society for the citizens they represent and that they simply do not have the ability to always exercise the most ideal options. Perhaps they cannot please everyone. It is each and every one of those individuals that will realize the importance of digital currencies and decentralization and do their best to facilitate it within the scope of their mandate.
Could you just expand a little of what you see bitcoin, or mpesa in terms of Africa?
We actually expect many 3rd world counties to outpace larger economies in the short and relative term. They have less friction to over come in terms of politics and bureaucracy. They have less to lose in terms of ignorance and prejudice and more to gain. There has been a wave of attempts so far and many articles on this aspect of bitcoin in relation to global economy, and I’m confident by the next time you ask someone this question it will be more of a reality. The infrastructure is nearly in place, and it will dramatically change the lives of many families. It makes sense we would want ways to invest in these countries in order to allow them to create value for the world.
We have been exploring the opportunity for Canada if we get this right, can you succinctly tell us what you think that opportunity is?
Canada can advertise the most reasonable stance possible, which is full support for global adoption of its use, and use its political “pull” in the world to help and encourage other countries, especially poorer ones, to participate. This creates obvious pressure on all countries to join into the most stable economic system available today. Get the people behind the concept and begin to teach it in school. Get the public and media discussing this.
Is their a software (tax) already in place?
Yes the software that comes out everyday isn’t even “software” so much as decentralized applications that they themselves float on a decentralized cloud like network. Some of them you pay to use, but also you can rent out hard drive space and join the “network” so that you get paid automatically. So we are now seeing a huge evolution of cheaper priced yet optimal “software” accessible anywhere by anyone virtually for free. This software is highly automated compared to yesterday because it can actually read and manipulate the transaction data in real time. The user doesn’t need to see this, but its going to change every system society has in amazing way, and an amazing pace.
It’s a form of property…whats 5 years forward…give me some examples?
http://szabo.best.vwh.net/history.html
http://szabo.best.vwh.net/securetitle.html
Yes you nailed it. We are shedding our beliefs on what a “currency” should be, and what it realyl means to have these property rights. 5 years forward is too far ahead. Right now bitcoin mining is producing so much heat that some of the mining farms have moved to Greenland. Eventually it will be useful to move them to the poles, and possibly safer to move them to the moon, outer-space, and other planets. So you see we have created economic incentive for space exploration, while simultaneously freeing up gold for use in space technology rather than as a store of wealth.
There is also economic incentive now to create a quantum computer to “hack” bitcoin, if at all possible. And of course people will try and we are now understand such technological progress would actually be a good and amazing thing. And we are realizing that by the time that happens, our economy of the world will be stable, and we will be a more cooperative and altruistic society and quantum computing will be used for the good things and value it brings to our society.
That’s prob less than five years.
What would your reaction be if we report there be no regulations and we revisit this in say 5 years?
I think Andreas’ reaction was perfect, I think you stunned him for a moment. I think he is from the US and was not thinking he would be approached in such an intelligent manner. Bitcoin cannot and shouldn’t be regulated, and you all seem to understand it. They were all great questions. The general consensus about government officials is that they only can act in their own self interests, but we have an interesting time we are facing where you all get to make the decision to serve the public in the best way possible-allow government to evolve into the decentralized fashion it was designed to be.
Understanding the importance of “Ideal Money”:
These links will make sense of bitcoin, and explain what your optimal strategy is for “dealing with it”, in relation to both your individual and current role in Canadian government and also in relation to the entire global economy:
What is Ideal Money?
And interesting biography, an interesting blog, and an interesting lecture on “Ideal Money”
Why bitcoin is and isn’t ideal money
Understanding the bitcoin money supply
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thewealthofchips 