Ken's Weblog

People should not fear their governments; governments should fear their people.

Tag: Bitcoin

  • This won’t end well

    Texas Bullion Depository Begins Construction. In June 2015, Gov. Greg Abbot signed legislation creating the state gold bullion and precious metal depository. The facility will not only provide a secure place for individuals, business, cities, counties, government agencies and even other countries to store gold and other precious metals, the law also creates a mechanism to facilitate the everyday use of gold and silver in transactions. In short, a person will eventually be able to deposit gold or silver – and pay other people through electronic means or checks – in sound money.

    […]

    According to an article in the Star-Telegram, state officials want a facility “with an e-commerce component that also provides for secure physical storage for Bullion.” While in the development phase, officials said plans for a depository will include online services that would let customers accept, transfer and withdraw bullion deposits and related fees.

    Ultimately, depositors will be able to use a bullion-funded debit card that seamlessly converts gold and silver to fiat currency in the background. This will enable them to make instant purchases wherever credit and debit cards are accepted. [Tenth Amendment Center]

    In other words, they’re trying to recreate E-gold as a state-run entity. This effort is doomed from the start. The Evil Empire destroyed E-gold because it can’t afford to permit a threat to the Federal Reserve’s monopoly on money–they’ll destroy any state-run equivalent for the same reason. This is why Bitcoin came along–it removed the ability of a government to destroy a threat to their fiat currencies.

  • Promising technologies

    Recently there have been a couple of stories about promising pro-liberty technologies: DarkMarket, for enabling free market transactions, and Dark Wallet, for preserving financial privacy.

  • Not so interesting after all

    It turns out that bitcoin vending machine at the local coffee shop requires a palm print and a government ID before it will sell you bitcoins. Naturally, that killed my interest pretty quickly.

  • Interesting development

    A few days ago the coffee shop nearest my apartment, Dominican Joe, installed a Bitcoin vending machine. I haven’t tried it yet, but according to the screen it can both buy and sell bitcoins.

  • A Bitcoin Introduction

    Bitcoin – The Libertarian Introduction [On Life and Liberty – Erik Voorhees]

    An excellent general overview of what Bitcoin is. It does gloss over a few things that I consider problem areas, though, so I’ll mention them here.

    The first time a new user launches the Bitcoin client, it has to download the existing blockchain (that is, the record of all previous Bitcoin transactions). Right now this is about 1.5 GB, which may not seem like much to anyone with a good Internet connection, but the download mechanism is extremely slow. This means that the first-time user’s experience is going to be along the lines of “launch the client and wait at least a day before you can do anything with it.” This is likely to put off anyone with a casual interest, especially given the way that it’s glossed over by Bitcoin advocates. In theory this will eventually be overcome by clients that don’t download the entire blockchain, but it’s certainly a problem now.

    While the decentralized nature of Bitcoin makes it invulnerable to the kind of government attacks that have destroyed earlier attempts at alternate currencies such as e-gold and the Liberty Dollar, it’s still possible for someone with more than 50% of the network’s computing power to destroy it. This is the thing that has me wary about Bitcoin’s future, as the Evil Empire does in fact have a great deal of computing power available and a previously demonstrated willingness to destroy alternate currencies. As Bitcoin increases in popularity the network will get bigger until it’s beyond any government’s ability to destroy, but it’s still a danger now while it’s not widely used.

    Finally, Bitcoin is based on cryptography, which in most respects is a very good thing. However, in cryptography something which is unbreakable today may not (indeed, probably will not) be unbreakable in twenty years. When you’re securing your hard drive that doesn’t matter, because you can just upgrade the encryption as needed, but when your money supply is dependent on the security of SHA-256, it’s a different story. I haven’t seen anything I’d consider reliable on just how easily (if at all) the algorithms behind Bitcoin can be changed when it becomes necessary.

  • Donating to WikiLeaks

    The Evil Empire has done everything it can to shut down donations to WikiLeaks, and it’s been pretty successful. I decided to try making a donation of $100 using one of the alternative methods available: Bitcoin. This was a multi-step process. First, I had to transfer money from my checking account to Dwolla, which took four days. From there, I transferred the money to Mt. Gox, which took another day. Once it was there I purchased $100 worth of bitcoins, which was about 7.14 at the time. Finally, I sent those bitcoins to the donation address for WikiLeaks. The last two steps took just a few minutes, most of which was spent dealing with the Mt. Gox interface.

    Overall, this was rather inconvenient due to the hassle involved in actually getting the bitcoins. I expect this will only get worse in the future, as Bitcoin is something of a competitor for Dwolla. Paypal has a long-standing policy of cutting off businesses which are in any way involved with alternative currencies (stealing their balances in the process)–we saw that with e-gold well before they were attacked by the Evil Empire. I wouldn’t be at all surprised if Dwolla either adopted an anticompetitive policy themselves, or else were ordered to by Gestapo agents.

    The good news that once I actually got my hands (figuratively) on the bitcoins, it was trivial to bypass the blockade on WikiLeaks.