While I am generally opposed to bitcoin, I make an exception for South Florida. Miami is the rightful home of everything fraudulent, weird, and sleazy. And I say this with love. https://t.co/7erEwDjSDK
— Matt Stoller (@matthewstoller) February 12, 2021
This succinctly sums up both the current cryptocurrency craze and south Florida.
As Zathras would say, “But at least there is symmetry.”
I have been blogging for more than 12 years, and when I posted about the suspicious death of a Canadian cryptocurrency mogul, and subsequent efforts by shorted investors to exhume his body to confirm his death, I missed a most obvious and beautiful pun.
I have always claimed to be the worst writer on the internet, but today especially so, because I was not the one who came up with this:
Putting the Crypt in Crypto Currency
I am clearly unworthy.
The official story is that he died in India on December 9, and no one can access the BitCoin stored on the service because only he had the passwords to the service.
Weird, but here is where it gets weirder: Like many BitCoin wallets out there, but much of the deposits is kept offline in something called a “Cold Wallet”, the theory being that if it is offline, no one can hack into it.
The thing is that this means that you have to regularly transfer from a cold to a hot wallet when your customers need it.
A meat-space analogy would be the difference between the teller’s tray and the bank vault.
It appears that the money was never moved, which strongly implies that something hinky was going on with the accounts.
The only two logical conclusions to be reached are either that Mr. Cotton is on the lamb spending his ill-gotten gains, or with exposure of his fraud imminent, he took his own life.
Presented for your consideration:
When Quadriga Fintech Solutions Corp. founder Gerald Cotten died, account holders feared the encrypted access keys needed to recover C$190 million ($143 million) of cryptocurrencies held by the exchange in offline storage could be lost forever.
It looks now like the storage Quadriga is known to have used — dubbed cold wallets — has been empty since April.
………
Ernst & Young identified six cold wallet addresses used by Quadriga to store Bitcoin in the past. Five of those wallets haven’t had any balances since April 2018, and a sixth “appears to have been used to receive Bitcoin from another cryptocurrency exchange account and subsequently transfer Bitcoin to the Quadriga hot wallet” on Dec. 3. The only activity since was an inadvertent transfer of Bitcoin into that sixth wallet last month, which was disclosed earlier.
Crypto investors and exchanges often keep their holdings in cold wallets — typically, physical devices disconnected from the web that can be plugged into a computer when needed since internet-connected hot wallets can be vulnerable to hackers.
A preliminary review of transactions of the six wallets using public blockchain records showed that from April 2014 to approximately April 2018, aggregate Bitcoin month end balances in the identified cold wallets ranged from zero to a peak of 2,776 Bitcoin. The average aggregate month end balance over the four-year period was approximately 124 Bitcoin. Some Bitcoin in the wallets appear to have been transferred to accounts at other crypto exchanges.
………
Another 14 user accounts created outside the normal process were also identified, with deposits artificially created and used for trading. The monitor has reached out to 14 exchanges and received responses so far from four. It didn’t name the exchanges.
It sounds to me like Cotten used BitCoin to play the horses, or, even more disastrously, play the BitCoin markets.
Reality has completely outdone the human capacity for satire:
French startup Qarnot unveiled a new computing heater specifically made for cryptocurrency mining. You’ve read that right, the QC1 is a heater for your home that features a passive computer inside. And this computer is optimized for mining.
While most people use laptops, back in the golden days of computer towers, you could heat a room with a couple of desktop computers. And heat is still one of the biggest challenges when you’re building a data center. You have to cool thousands of computers that run 24/7.
Qarnot started thinking about edge computing for data centers back in 2010. The company has built three generations of computing heaters with multiple CPUs and sold them to construction companies looking for heaters for their new buildings.
………
And now, the company is selling its first devices to end users directly. The company thinks it’s the perfect use case for cryptocurrency mining. The QC1 features two AMD GPUs (Sapphire Nitro+ Radeon RX580 with 8GB of VRAM) and is designed to mine Ethers by default.
You can set it up in a few minutes by plugging an Ethernet cable and putting your Ethereum wallet address in the mobile app. You’ll then gradually receive ethers on this address — Qarnot doesn’t receive any coin, you keep 100 percent of your cryptocurrencies.
………
But that’s where the Qarnot QC1 stands out and could be the crypto miner we’ve all been waiting for. Mining has become increasingly harder if you have to pay the electricity bill. But you still need to heat your home during those cold days of winter. So why not mine at the same time.
Seriously? This is the most insane consumer heating technology since Ford Motor Company marketed the Pinto as a 4 passenger portable stove.
After panic in the bond markets, 5 Star and the League will be forming a government in Italy:
After 88 days of impasses and negotiations, two Italian populist parties with a history of antagonism toward the European Union received approval Thursday night to create a government that has unsettled the Continent’s political order and promises a sweeping crackdown on the illegal immigration that helped fuel their ascent.
Only days ago, President Sergio Mattarella of Italy rejected a populist government over concerns about a proposed finance minister who had helped write a guide for withdrawing Italy from the euro, Europe’s single currency. The political chaos and sudden uncertainty about the euro helped send global financial markets reeling.
On Thursday, the populists reshuffled, keeping the same prime minister, Giuseppe Conte, and other top players, but moving the objectionable finance minister to a less critical post.
I would note that the “Objectionable” former pick for FM, Paolo Savona, is a former member of the Bank of Italy who pioneered econometric models of the Italian economy, so he was clearly qualified.
The issue here was his philosophy, not competence.
That was apparently enough to satisfy the president, who preferred an elected government to a caretaker alternative he had in reserve. The populist parties constituting the new government won the most votes in a March 4 election.
I tend to think that the general freakout over snap elections, and talk of impeaching Mattarella, had more to do with this than any profession of devotion to the Euro by the now incoming government.
The cabinet still included the minister blocked by President Mattarella — Paolo Savona, the euro-skeptic economist. But Mr. Savona has now been moved from the powerful finance ministry to the less consequential European affairs ministry.
He will nevertheless be Italy’s representative in Brussels, a key spot for a coalition that wants to change the rules of the European Union.………
In a retort to the European Commission president, Jean-Claude Juncker, who suggested that Italians must work harder and be less corrupt, Mr. Salvini made clear that the days of Italy going “hat in hand” to Brussels were over.
Fasten your seat belts, we are in for a bumpy ride.
It is hard to argue that you cannot trust the government when the government isn’t really all that bad. This is the problem facing the small but growing number of Swedes anxious about their country’s rush to embrace a cash-free society.
Most consumers already say they manage without cash altogether, while shops and cafes increasingly refuse to accept notes and coins because of the costs and risk involved. Until recently, however, it has been hard for critics to find a hearing.
“The Swedish government is a rather nice one, we have been lucky enough to have mostly nice ones for the past 100 years,” says Christian Engström, a former MEP for the Pirate Party and an early opponent of the cashless economy.
………
There are signs this might be changing. In February, the head of Sweden’s central bank warned that Sweden could soon face a situation where all payments were controlled by private sector banks.
The Riksbank governor, Stefan Ingves, called for new legislation to secure public control over the payments system, arguing that being able to make and receive payments is a “collective good” like defence, the courts, or public statistics.
“Most citizens would feel uncomfortable to surrender these social functions to private companies,” he said.
“It should be obvious that Sweden’s preparedness would be weakened if, in a serious crisis or war, we had not decided in advance how households and companies would pay for fuel, supplies and other necessities.”
The central bank governor’s remarks are helping to bring other concerns about a cash-free society into the mainstream, says Björn Eriksson, 72, a former national police commissioner and the leader of a group called the Cash Rebellion, or Kontantupproret.
Until now, Kontantupproret has been dismissed as the voice of the elderly and the technologically backward, Eriksson says.
“When you have a fully digital system you have no weapon to defend yourself if someone turns it off,” he says.
………
But an opinion poll this month revealed unease among Swedes, with almost seven out of 10 saying they wanted to keep the option to use cash, while just 25% wanted a completely cashless society. MPs from left and right expressed concerns at a recent parliamentary hearing. Parliament is conducting a cross-party review of central bank legislation that will also investigate the issues surrounding cash.
I would also add that with a fully digital system controlled by private banks, they could effectively hold a country hostage for a bailout when they need one, and all banking sectors eventually need a bailout.
In fact, when you account for various bailouts, the banking industry has not made a profit throughout its entire existence.
*It’s a very old internet meme, nothing to see here, move along.
German researchers have discovered unknown persons are using bitcoin’s blockchain to store and link to child abuse imagery, potentially putting the cryptocurrency in jeopardy.
The blockchain is the open-source, distributed ledger that records every bitcoin transaction, but can also store small bits of non-financial data. This data is typically notes about the trade of bitcoin, recording what it was for or other metadata. But it can also be used to store links and files.
Researchers from the RWTH Aachen University, Germany found that around 1,600 files were currently stored in bitcoin’s blockchain. Of the files least eight were of sexual content, including one thought to be an image of child abuse and two that contain 274 links to child abuse content, 142 of which link to dark web services.
“Our analysis shows that certain content, eg, illegal pornography, can render the mere possession of a blockchain illegal,” the researchers wrote. “Although court rulings do not yet exist, legislative texts from countries such as Germany, the UK, or the USA suggest that illegal content such as [child abuse imagery] can make the blockchain illegal to possess for all users.”
When the crypto currency was invented by “Satoshi Nakamoto”, it was seen as a step toward a mythical Libertarian paradise.
Now it appears to be a step toward a libertarian reality.
The rise of cryptocurrencies, particularly Bitcoin, disproves the most efficient market hypothesis, which is the basis of neoliberal economics and hence the basis of deregulation:
The spectacular increase and recent plunge in the price of Bitcoin and other cryptocurrencies have raised concerns that the bursting of the Bitcoin bubble will cause financial markets to crash. They probably won’t, but the Bitcoin bubble should finally destroy our faith in the efficiency of markets.
Since the 1970s, economic policy has been based on the idea that financial market prices reflect all the information relevant to the value of any asset. If this is true, market prices are the best estimates of the value of any investment and financial markets should be relied on to allocate capital investment.
This idea, referred to in the jargon of economics as the efficient market hypothesis (technically, the strong efficient market hypothesis), implicitly underlay the deregulation of financial markets that started in the 1970s. Although rarely stated now with as much confidence as it was during its heyday in the 1990s, the efficient market hypothesis remains a background assumption of much central-bank and economic policy.
The hypothesis survived the absurdities of the dot-com bubble in the late 1990s and early 2000s, as well as the meltdown in derivative markets that led to the global financial crisis in 2007 and 2008. Although the hypothesis should have been refuted by those disasters, it lived on, if only in zombie form.
But at least each of those earlier bubbles began with a plausible premise. The rise of the internet has transformed our lives and given rise to some very profitable companies, such as Amazon and Google. Even though it was obvious that most 1990s dot-coms would fail, it was easy to make a case for any of them individually.
As for the derivative assets that gave us the global financial crisis, they were viewed favorably in light of a widely held theory, known as the “great moderation,” that suggested that major economic crises were a thing of the past, thanks to certain systemic changes in the way developed nations ran their economies. The theory was backed by leading economists and central bankers. Asset-backed derivatives were, ultimately, a bet on the great moderation.
The contrast with Bitcoin is stark. The Bitcoin bubble rests on no plausible premise. When Bitcoin was created about a decade ago, the underlying idea was that it would displace existing currencies for transactions of all kinds. But by the time the Bitcoin bubble took off last year, it was obvious that this would not happen. Only a handful of legitimate merchants ever accepted Bitcoin. And as the Bitcoin bubble drove up transactions charges and waiting times, even this handful walked away.
………
But even if the claim is true, the idea that Bitcoin is valuable simply because people value it and because it is scarce should shake any remaining faith in the efficient market hypothesis.
………
Whatever happens to Bitcoin, we must not lose sight of a more fundamental — and more worrisome — development: A financial product with a purely arbitrary value has been successfully introduced in the world’s most sophisticated financial markets.
Bitcoin probably won’t bring financial markets crashing down. But it shows that regulators need to cut those markets down to size.
We need to regulate, and we need to throw the banksters in jail.
Long Island Iced Tea Company renamed itself, “Long Blockchain” and its stock exploded:
The Long Island Iced Tea Corporation is exactly what it sounds like: a company that sells people bottled iced tea and lemonade. But today the company announced a significant change of strategy that would start with changing its name to “Long Blockchain Corporation.”
The company was “shifting its primary corporate focus towards the exploration of and investment in opportunities that leverage the benefits of blockchain technology,” the company said in a Thursday morning press release. “Emerging blockchain technologies are creating a fundamental paradigm shift across the global marketplace,” the company said.
The stock market loved the announcement. Trading opened Thursday morning more than 200 percent higher than Wednesday night’s closing price.
Remember when everyone added dotcom to their company names JUST BEFORE IT ALL IMPLODED in the late 1990s?
Yeah, that.
*The largest shark, and likely largest predator fish ever. It died out some 1.5 million years ago. The Genus is still in dispute, between either Carcharodon (Great White) or Carcharocles (broad toothed Mako). So in jumping C. Megalodon, you have jumped the biggest shark ever.
In Italy, the 5-Star Party has said that it is open to holding a referendum on leaving the Euro Zone:
The leader of Italy’s main opposition party said he was keeping the option of a referendum on the euro open in the event his party won elections and failed to convince Brussels of the need to change some of the euro zone’s economic rules.
In comments made on state TV on Sunday, Luigi Di Maio, the man widely tipped to be the candidate for prime minister of the anti-establishment 5-Star Movement, said he wanted to negotiate concessions on EU governance.
“If we succeed, Europe will be changed and we won’t need a referendum on the euro. Otherwise we’ll ask Italians if they want to stay in or not,” he said.
Obviously, leaving the Euro Zone is different from leaving the EU, but Italy is the 3rd largest economy in the Euro Zone, and the fact that a major party in Italian politics is explicitly putting leaving the Euro on the table is a big deal
The Euro increasingly resembles a suicide pact that leaves only Germany standing, and so leaving the Euro, or getting Germany, and failed German economics, out of the Euro, is an essential step to fixing the Euro.
Things just don’t work well when the Germans dominate Europe.
It needs to be there when you need to spend it, and not appreciate by 1000% in a year or lose one-fifth of its value in 24 hours.
While there are exceptions, Wiemar Germany Deutschmarks and Zimbabwean Dollars come to mind, currency should be a relatively stable means of exchange of commerce.
Bitcoin is not this. It’s a trip to the casino:
Bitcoin slid to as low as $9,000 in volatile trade on Thursday, having lost more than a fifth of its value since hitting an all-time high of $11,395 on Wednesday. BTC=BTSP.
The cryptocurrency fell as much as 8 percent on Thursday on the Luxembourg-based Bitstamp exchange to hit $9,000 exactly, marking a fall of well over $2,000 in under 24 hours. It then edged back up to trade at around $9,400 in the hour that followed, still down roughly 4 percent on the day. (Graphic: Bitcoin searches exceeds that of Trump – reut.rs/2zSavA6)
One market-watcher attributed the fall to outages in bitcoin exchanges and the heavy price surge of recent times.
“Naturally a few of the early bitcoin traders are taking some profits off the table,” said Charles Hayter, founder of CryptoCompare.com.
“Volatility is in the market at the moment and that means both positive and negative moves.”
While the technology behind Bit Coin, the block chain, appears to be generally sound, for any crypto-currency to function as a working means of exchange, it needs to have some sort of stability engineered in.
Otherwise, it’s just a speculative vehicle.
In response to the Teutonic sado-monetarism Italy has taken to using tax credits to allow the government to pay for some of the services that it needs.
The interesting point here is that they are a very short distance from actually creating money without coming hat in hand to the European Central Bank (ECB)
If the Italians take their program one more step forward, and they are creating money:
Italy is experimenting with giving tax-cuts to its citizens in exchange for public services―such as pulling weeds and cutting grass. Wow. What an amazing idea! The government issues a tax credit, and uses it to pay a citizen in exchange for the citizen’s services to the government. The government could even make this arrangement more formal by printing the tax credits on pieces of paper called “LIRIES” (or something like that) and paying for the weed-whacking services with this “cash.” That way the citizen who’s earned the “LIRIES” has the option of using them as payment to another citizen (who’d also like a tax-cut) for, say, a bag of potatoes. So, the first citizen pulls some weeds, gets paid in “cash” and then uses the “cash” to buy her dinner. If you thought about it, you could possibly run an entire economy in this fashion. The only thing you’d have to worry about, of course, is that the government might run out of the tax-credits it needs to pay the citizens to do the work! If that happened, where could the government possibly get more tax-credits? Could it collect tax-credits as “taxes”? Could it borrow them from all the street-sweepers and weed-whackers who’ve earned them? (In which case it would have to pay “tax-credit interest”―which just seems to exacerbate the problem!) Hmmm. I’m going to have to think about that one. But in the meantime, doesn’t this mean that any Eurozone country has the option to stay IN the Eurozone while at the same time operating its own local economy using its own local “sovereign” currency?
In a followup, it is explained how this can be used to essentially create money:
As I said, Italy, is now experimenting with paying for public services with tax credits. Presumably, this is happening because Italy doesn’t possess enough Euros to pay its citizens to provide all the goods and services needed to maintain and run the public sector of its social economy. And Italy can’t “create” the additional Euros it needs because that prerogative is the exclusive right of the EU Central Bank which Italy, even as a sovereign member of the EU, has no control over. But, as the news article explains, Italy still needs to have the grass mowed and the weeds pulled in its public gardens. So it has decided (out of desperation, the article implies) to pay the gardeners with tax-credits. The gardeners are willing to do the work in exchange for the government’s tax-credits, because it means the Euros they earn (in other ways) can then be used to purchase goods and services rather than for paying their taxes. So, in practical terms, it is “just like” getting paid in Euros.
This, in fact, is way more interesting than it seems. In fact, it might even be mind-expanding! Here’s why:
Presumably, the tax-credit payments described take the form of notations on the gardeners’ tax account. An hour’s worth of weeding is noted as 15 Euros worth of extinguished taxes. If the gardener has a tax liability of, say, €3750, her taxes would be completely paid after providing 250 hours of weeding and pruning. After that, obviously, she’d have no more incentive to provide any services in exchange for the tax-credits. So the amount of services Italy can obtain in this fashion is directly limited by the amount of tax liabilities it can impose on its citizens.
It would be possible, however, to structure the tax-credit payments in another way which would have a very different outcome. Instead of making the payment as a credit notation on a citizen’s tax account, the Italian government could issue paper tax-credits and pay them to the citizens for their gardening services. To be specific, this would be a piece of “official” paper, signed with an important signature, on which was printed something like the following:
The Sovereign Italian Government promises the bearer of this paper ONE EURO of credit on taxes owed to the Sovereign Italian Government.
………
Now we have to ask an important question: Is the amount of services Italy can obtain by issuing and “spending” its paper tax-credits still directly limited by the amount of tax liabilities it can impose on its citizens? In other words, if every Italian citizen theoretically has received enough PTCs to pay their taxes with—either having received them directly from the government for providing public services, or having received them from other citizens in exchange for lasagna dinners—will the citizens’ willingness to exchange real goods and services in exchange for the PTCs come to a halt?
Crucially, the answer is No. This is because the act of “embodying” the tax-credits in exchangeable pieces of paper has given the PTCs a usefulness in addition to their usefulness as tax payments: This additional usefulness, of course, is the ability to use them to buy goods and services from other Italian citizens and businesses. Thus, the number of paper tax-credits in “circulation” could vastly exceed, at any given time, the total actual tax liabilities of the Italian citizenry. The PTCs would continue to be accepted for lasagna dinners, because the Trattoria owners know they can use the PTCs they receive to subsequently buy Italian shoes and motorcycles— in addition to using them to pay their taxes.
It will no doubt have dawned on most every reader that what we’ve just created is “money.” Specifically, we’ve created what is called “fiat money”—which happens to be the kind of money the world has been using now for the past half century (ever since the U.S. formally abandoned the gold-standard in 1971). Having thus conjured a rudimentary image of fiat-money to life we should quickly make some important (and perhaps startling) observations about it.
………
Having made these observations, it appears the Italian government has stumbled on an actual solution to the “austerity” it has been forced to impose on itself by the European Union. Except we must now confront the fact that the rules of the EU do not ALLOW Italy to issue and spend its own sovereign fiat currency! The only “money” Italy is allowed to use is the Euro—and the only way the Italian government can obtain Euros is either by collecting them as taxes from its citizens, or by borrowing them from the European Central Bank, which has the exclusive prerogative of issuing them. And these methods of obtaining Euros to spend are falling short of what Italy needs to pay its citizens to do. So…. Italy has decided to pay its citizens with tax-credits, and then (why not?) with paper tax-credits. And then, presumably, the EU says, “Whoa, hold on here! It looks like you are printing your own money, which is not allowed by our rules!”
While I don’t think that the Italians would have the guts to take this to the next level right now, but this would a good way to deal with the current problems with the Euro. (Not as good as getting the Germans out of the Euro, but a pretty close 2nd)
If you are paying attention, going the full Magilla on this is actually an application of MMT, and the British city of Bristol has been trying something rather similar with the Bristol Pound, which in accordance with Modern Monetary Theory, can be used to pay local taxes.
It really is fascinating.
H/t Naked Capitalism.
Venezuela is moving its oil sales to non dollar currencies.
The last guy to do this was Saddam Hussein in 2000, and it was seen as a challenge to the position of the US dollar as the world’s reserve currency, and we know how that turned out.
Rebecca Rojer has done meticulous work describing Modern Monetary Theory (MMT), and seeing as how it is an approach that is both becoming more popular, and is in opposition to the (almost always wrong) economic orthodoxy, it pays to understand this:
Too often the origins of our economic ills are cloaked by a mystical reverence for some autonomous money spirit. The economists behind Modern Monetary Theory (MMT) seek to lift money’s veil by studying the specific actions that occur as money is created, circulated, and destroyed.
For those seeking a grand, unifying sociopolitical economic theory, MMT will disappoint. But as an analytic tool, MMT clarifies who holds genuine power—sovereignty—within society, and how they organize the money system to serve their interests. Unsurprisingly, this is often a story of tremendous cruelty and exploitation.
But the revelation that the rules of money are not immutable laws of nature but are instead created and constantly modified by people opens up possibilities beyond the scope of our current political imagination. The questions become: What sort of society do we want? Do we have the physical resources to support that society? And finally, how the hell do we muster the political will to get there?
At its core, MMT sees money as being a construct that derives from the willingness of the state to use coercion, and frequently violence, to enforce the use of a token for value.
Typically, this is done through taxation. The sequence runs like this:
Thus, Money is born.
Read the rest. It opens a world of possibilities not imagined by our current leaders..
It looks like support is growing in Italy for establishing a parallel currency as an alternative to the Euro:
There have been some amazing Italian inventions over the centuries. The newspaper. The pistol. The radio. The stock exchange. The motorway. And who could overlook those staples of modern life, jeans (originally from the French word for Genoa: genes) or the pizzeria.
Few other countries have contributed quite as much to creating the world we live in.
Right now, Italy could be on the brink of another major innovation. A parallel currency to run alongside the euro. It already had the backing of the former Prime Minister Silvio Berlusconi, and the parties supporting it are steadily gaining ground in the polls.
Could it work? The mainstream economic establishment will no doubt heap scorn on the idea. And yet, in reality, a parallel currency could provide an elegant exit from the euro, maintaining some of the advantages of the single currency, while freeing the country from endless recession. If it ever gets off the ground, Italy could quickly become one of the most attractive economies in the world.
It is hard to find any words to describe Italy’s experiment with merging its currency with Germany, France and the rest of the eurozone other than “dismal failure.” Since it adopted the euro, Italy’s average annual growth rate has been zero, according to calculations by the Bruegel Institute. You read that correctly. Absolutely nothing, over almost two decades.
………
Italy’s unemployment rate is a crippling 11%, the highest of Europe’s three biggest economies, and youth unemployment is a scary 35%. The national debt has climbed to a giddy 133% of gross domestic product, not because the government is especially extravagant, but because that’s what happens in a zero-growth economy.
I’ve always said that the best way to fix the Euro is to kick the Boche out of the common currency, but a parallel currency as a way to create infrastructure for leaving the Euro is not an unreasonable tactic for dealing with the deep problems of the Euro as a currency.
A primary characteristic of currency is that it is available for immediate use. (i.e. “current”)
This means that unlike things like stocks, bonds, and derivatives, you can use it immediately to get stuff, and there is no one sitting astride that transaction taking a cut.
It turns out that this is a major problem:
Anyone and everyone’s attention in bitcoin is currently transfixed on a single number: the amount of unconfirmed transactions building up on the bitcoin network.
Earlier on Wednesday, the number surpassed 200,000, an unprecedented level.
Professional bitcoin OTC traders FT Alphaville spoke with see this as an alarming development and one of the drivers of rival cryptocurrency ether’s growing popularity. The views of one trader:It definitely tempts people into ether. This is the biggest problem with bitcoin, it’s not just that it’s expensive to transact, it’s uncertain to transact. It’s hard to know if you’ve put enough of a fee. So if you significantly over pay to get in, even then it’s not guaranteed. There are a lot of people who don’t know how to set their fees, and it takes hours to confirm transactions. It’s a bad system and no one has any solutions.
Transactions which fail to get the attention of miners sit in limbo until they drop out. But the suspended state leaves payers entirely helpless. They can’t risk resending the transaction, in case the original one does clear eventually. They can’t recall the original one either. Our source says he’s had a significant sized transaction waiting to be settled for two weeks.
………
All of which proves bitcoin is anything but a cheap or competitive system. With great irony, it is turning into a premium service only cost effective for those who can’t — for some reason, ahem — use the official system.
So, Bitcoin has become, as Yves Smith so pithily notes, “Prosecution futures.”
At some point the authorities are going to use the block chain to track money in ways that they never could with cash.
The British have come up with a new fiver, and vegetarians are losing their sh%$ because there are tiny quantities of animal fat used in the process of making the notes:
Britain’s new £5 note contains animal fat, the Bank of England confirmed on Twitter.
In reply to a user who asked if the substance is used, the central bank said that there is “a trace of tallow in the polymer pellets used in the base substrate of the polymer £5 notes.”
Tallow is the fat that surrounds a cow’s organs and is often used in soaps and candles.
Vegetarians and vegans reacted furiously to the news that animal fat is used in the note, which is the first to be made of polymer and has been touted as Britain’s most advanced ever.
Twitter user Steffi Rox asked “what consideration was given to vegans & their human rights,” while another user said the news gives a whole new meaning to the term “blood money.”
As an aside, this tallow is also used in credit cards, many plastic toys, wire insulation, etc.
Still, this does not prevent the Granola crowd from going full Sepoy Mutiny over this.
Sorry, but society does not have any obligation to accommodate your particular lifestyle choices in the production of currency, though if I were in Parliament, I would put forth a bill to replace the plastic bills with ones made from dried beef, but I’m kind of a jerk.
On second thought, I would make the currency from veal confined in boxes until the calf’s throats were slit.
