Continuing with the Sucker Filter of bitcoin.
Another obviously fraudulent claim is privacy. Running all of your transactions through NSA is not the ideal way to preserve privacy. NSA is a SPY AGENCY which knows better than anyone else how to break cryptography and bust through software limitations. Even more obviously, the transactions themselves can be seen by anyone, which utterly eliminates normal commercial secrecy.
The recent idiotic fraudulent FAKE “attempt” to bid on a copy of the Constitution illustrates this point. If you want to win an auction, you don’t want to let the other bidders know IN ADVANCE how much you’re able to spend. The idiotic DAO was running on the blockchain, so Ken Griffin could see their total funding. He knew in advance how much he would have to bid, so he just went ahead and bid enough to beat the DAO.
Rentier + spy is Griffin’s job. He makes money by providing “free” investment services through front companies like Robinhood. Idiots think they’re trading for free. In fact Griffin is paying Robinhood to open all transactions to his computers so he can frontrun them.
Time for a reprint on REAL decentral finance.
= = = = = START REPRINT:
How do you cure economic abstraction? I was making the point that MMT claims to cure abstraction by even worse abstraction, like curing crack addiction with flakka. Bitcoin is another reverse “cure”, pulling economics even farther into the world of pure software. You need to cure abstraction by REDUCING abstraction, but you don’t have to go all the way back to gold.
You just need to keep the abstraction MINIMAL and LOCAL.
America discovered the cure ALL BY ITSELF, without government help, in 1933 when FDR closed the banks. As I’ve noted before, a system of SCRIP self-organized almost instantly.
Scrip was not exactly currency; it was more like pre-printed and pre-denominated checks. It was issued by city governments or major businesses or the Chamber of Commerce. All local businesses agreed to use it for paying workers and selling stuff. And it worked.
Populists missed the chance to grab onto Scrip and maintain it. They were still trapped in the pluponent idiocy of bimetallism.
Another decentralizer was Mutual Benefit Societies, universally active from 1870 to 1920 and still existing marginally. (See Christian Medishare.) These were nonprofit businesses that handled all insurance services from medical to property to burial, and often specialized in care for the elderly.
Still another was Fordist corporations. When you worked for NCR or Ford or Conoco, you had the same all-around service as an MBS.
Populists did help to create and spread MBS, and Fordism was the last big push of Populism.
Both of these trends were displaced and scattered by the financialist boom of the 20s. When the boom crashed, some Fordism remained but the MBS were gone. The government picked up the elderly side with SS, then the profit-making insurers picked up the medical side after WW2.
= = = = =
Hawala or scrip is the economic implementation of a principle that’s painfully familiar and even trivial in other areas.
Decentralizing works ONLY when the modules or units share a common ground.
A trust network (like MBS) holds up ONLY when the units are built with a shared purpose. Ideally each unit should be physically incapable of harming the network.
When you can count on the units to follow the same rule in the same situation, you don’t need a heavy controller sending commands to the units, and you don’t need a lot of communication between the units.
When the modules have different grounds or different limits or different operating systems, you need a strong central controller, and even then the overall system will be inefficient. Most energy will be chewed up in the contradictory and redundant operations of the bureaucratic control system.
In electronics the common ground is literal, and the modules may also need to agree on limits of output voltage and input impedance, or may need to be sync’d to a common phase. It’s easy to design modules that are physically incapable of violating the limits.
In law and morality, the common ground is a shared immersion in the same system of commandments and taboos. Natural Law works best because Natural Law was scientifically settled by 50k years of experimentation. Other systems and charters and constitutions are generally designed to violate Natural Law, so they don’t hold up. (Our insane constitution held up for only 16 years, 1787 to 1803.)
The Chaotizers of Deepstate understand this principle better than anyone. After you eliminate the common operating system, the common understanding of reality, the units will DEMAND a strong controller.
With hawala or scrip, the separate bankers share a common PURPOSE of helping the ethnic group or township. A banker isn’t physically incapable of breaking trust, but he knows that the group or township will physically break his legs if he goes wrong, so he remains trustworthy.
Hawala has both sticks and carrots. The banker earns a small fee on each transaction. The American scrip system didn’t last long enough to grow carrots, but a fee structure would undoubtedly evolve given more time and experience.
Paper checks were the Patient Things that saved us when the banks dissolved. Paper is OUTSIDE THE CONTROL OF NSA. That’s exactly why Deepstate hates it and tries to make total control COOOOOOOOOL with the Agents Provocateurs of Bitcoin and MMT.
= = = = = END REPRINT.
Addendum: Paper is also the best guardian of privacy. Paper documents in a fireproof safe are infinitely more secure than anything running on AWS or NSA servers. Thieves can break into an office and jimmy the safe. But breaking takes work and knowledge and planning, and physical entry leaves visible evidence. When your data is in AWS, anyone can grab it with zero effort and zero evidence.