tag:blogger.com,1999:blog-46071484635302561702024-02-18T23:01:35.277-08:00Deon OppermanB.A.(Rhodes), B.A.Hons.(U.C.T.), M.A.(Northwestern, Chicago), M.B.A.(Wits) Deon Opperman is an established South African playwright and commentator who writes in both Afrikaans and English. Twitter: @deonopperman6Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-4607148463530256170.post-19909668798954832832014-06-13T19:12:00.001-07:002014-06-13T19:12:17.201-07:00BITCOIN - MORE SANE THAN A YEAR AGO<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTY-vscC9II-goh-2igOLQPbH9W33_BptiyLRJLI54GU74cNxk_TtZhMqF4wf3r7-DnHqMfItFgqRl_eXOFGVQHOPjzViLSBFudV8YBDlLSjAWhS60Id3pSgPXUVW6ZnFfP8wmj1uBUOo/s1600/Bitcoin+Questionmark.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTY-vscC9II-goh-2igOLQPbH9W33_BptiyLRJLI54GU74cNxk_TtZhMqF4wf3r7-DnHqMfItFgqRl_eXOFGVQHOPjzViLSBFudV8YBDlLSjAWhS60Id3pSgPXUVW6ZnFfP8wmj1uBUOo/s1600/Bitcoin+Questionmark.jpg" /></a></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">I</span>n April 2013 I wrote a short essay entitled <a href="http://deonopperman.blogspot.com/2013/04/why-people-who-are-usually-sane-are.html" target="_blank">Why people who are usually sane are buying bitcoin</a>. At that
time the price of a bitcoin was hovering at around $100. Since I wrote that piece, bitcoin has had a
roller-coaster ride that has not been for the faint-hearted. Some highlights include:<br />
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<span style="text-indent: -18pt;"><br /></span></div>
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</div>
<ul>
<li><span style="text-indent: -18pt;">A price surge (thanks to Chinese manic buying) </span><span style="text-indent: -18pt;"> </span><span style="text-indent: -18pt;">to just over $1000, only to fall back to $400
before settling in the $500s for quite some time.</span><span style="text-indent: -18pt;"> </span><span style="text-indent: -18pt;">Volatility continues, but nothing as violent
as this one was (yet)</span><span style="font-size: 7pt; text-indent: -18pt;"> . </span></li>
<li><span style="font-family: Symbol; text-indent: -18pt;"><span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><span style="text-indent: -18pt;">The largest bitcoin exchange, MtGox, turned out
to be a poorly managed enterprise, if not downright fraudulent. It's collapse cost bitcoin investors millions.</span></li>
<li><span style="text-indent: -18pt;">The Chinese government went from allowing the
promotion of bitcoin on national media, to the prohibition of bitcoin trading
for any banks in China, which caused the massive plunge from $1000 to $400. </span></li>
<li><span style="text-indent: -18pt;">Prominent figures of the bitcoin community were charged with illegal activities, some of which resulted in resignations from the newly formed Bitcoin Foundation board. </span></li>
<li><span style="text-indent: -18pt;">High-profile prosecution of the (in)famous Silk
Road website owner and the confiscation by the US government of his large cache
of bitcoins.</span></li>
<li><span style="text-indent: -18pt;">An almost non-stop barrage of vilification by
the main stream media of bitcoin and all things Bitcoin, particularly with reference to narcotics, money-laundering and other illicit dealings.</span></li>
<li><span style="text-indent: -18pt;">Chronic uncertainty regarding state regulation
of the bitcoin currency, particularly in the USA.</span></li>
</ul>
<br />
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And yet, despite all this battering and bashing, bitcoin has
simply chugged on, like the little train that could. </div>
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<br /></div>
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Why?<o:p></o:p></div>
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Well, first of all, disregarding the bitcoin cryptocurrency
itself, it has become clear that the Bitcoin protocol as created by Satoshi
Nakamoto, is a robust protocol with vast potential for many other applications
other than a cryptocurrency.
Consequently Bitcoin has seen substantial (and growing) investment from
VC companies ever vigilant to catch a ride on the next big thing. Like candy floss around a stick, more and more
clever minds (technical) and greedy hearts (capital) have gathered around the
Bitcoin stick. It is now clear that the
Bitcoin protocol is at the heart of a bifurcation that is fundamentally
changing the way we think about money, banking, contracts and even personal
freedom.<o:p></o:p></div>
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Second, I would argue that during the course of the year
since last April it has become more clear to more people around the globe that
the world economy indeed is in deep
trouble, despite the economic “growth and recovery” propaganda pumped out daily
by central banks and governments. The Sword
of Damocles hanging over fiat currencies’ heads is plain for all to see. It is
becoming harder and harder to pull the wool over citizens’ eyes. <o:p></o:p></div>
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So you have bitcoin surviving all measure of scandal and
assault as well as seeing an increase in its credibility precisely because it
has survived AND endorsed by Wall Street capital on the one hand,
and on the other hand you have the growing realisation by more and more people
that the probability of a worldwide economic meltdown is high and growing
higher every day.<o:p></o:p></div>
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<br /></div>
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In short: faith in
bitcoin has increased over the last year while faith in the world economy and
fiat currencies has diminished.<o:p></o:p></div>
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<br />
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Therefore, it seems to me at this point in the parade, where
the custodians of our economic system appear to have gone insane, that, unlike
it may have seemed to Joe Smith a year ago, having some bitcoin in your
portfolio is one of the more sane things you can do to increase your chances of survival when
that sword comes down.<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com2tag:blogger.com,1999:blog-4607148463530256170.post-26784497069134958772013-05-25T04:44:00.000-07:002013-05-25T14:17:50.063-07:00BITCOIN OR BITCON?<div class="MsoNoSpacing" style="line-height: 115%;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ2MuNIN62BmcYMq43GVyZ65h_C-THfJDShz4BPam-SGk5iM8Wrzcgofz9cXwYynpcCvX_PJt7b7bpcXqkJI-XN483tkMo2eWDaJgdAAotms6UA2Ynb1HnKVjeOGikvxedSxQGeXvme6o/s1600/Bitcoin+Questionmark.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ2MuNIN62BmcYMq43GVyZ65h_C-THfJDShz4BPam-SGk5iM8Wrzcgofz9cXwYynpcCvX_PJt7b7bpcXqkJI-XN483tkMo2eWDaJgdAAotms6UA2Ynb1HnKVjeOGikvxedSxQGeXvme6o/s1600/Bitcoin+Questionmark.jpg" /></a></div>
<br />
Let me make it very clear: I am an avid supporter of cryptocurrencies,
of which Bitcoin is arguably the most dominant at present. I own bitcoins, and consider every retreat or
crash in the bitcoin price as a buying opportunity. I do not speculate. I buy and hold for the
long term. I encourage my friends and
colleagues to buy bitcoin and take the time to explain to them how it works
(not easy when dealing with a non-tech friend).
I am, as they say, “in it for the
ride”.<o:p></o:p></div>
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<br /></div>
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That said, I also warn my
friends that we are in uncharted territory here. And as any pioneer will tell you, uncharted
territory is fraught with danger.<o:p></o:p></div>
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<br /></div>
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Bitcoin supporters frequently
point out that the great flaw in fiat currencies is precisely the word “fiat”. A fiat currency is a currency that has no
intrinsic value. It has value because a
government says it does, i.e. the government has issued a fiat declaring it to
be so, and then, when the citizens accept the government’s fiat (which they
usually do having little or no alternative), the currency becomes legal
tender. Given the questionable integrity
of governments one must rightfully have grave concerns about the reliability
of such a currency.<o:p></o:p></div>
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<br /></div>
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Furthermore, because governments
and/or their central banks control the fiat currency, they can inflate or
deflate that currency’s value at will, by either reducing or increasing how
much of that fiat currency is in circulation, either by withdrawing some from
circulation (literally burning notes or pressing delete buttons) or putting
more into circulation (printing more or typing a one followed by a couple of
zeros on a spreadsheet). The
quantitative easing (QE) programs of many governments since 2008 is an example
of the printing side of this equation.
Markets are literally being flooded with money – trillions! - created
out of thin air, with the result that the inherent value is decreasing. The current currency devaluations have led to the current global “currency war”.<o:p></o:p></div>
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Like a nuclear war, a currency
war carries the danger of mutually-assured destruction (MAD). As one country devalues to give its currency competitive
advantage in the global markets, so another country devalues its currency even
more to counter and negate that advantage.
A global tit-for-tat reaction is
triggered and countries find themselves locked in a race to the bottom. At some point a tipping point is reached and
then…chaos. Hyperinflation or severe deflation or stagflation, massive economic turmoil and even
war. Citizens wake up in a
post-apocalyptic economic wasteland. Once financially sound families find
themselves , through no fault of their own, in queues at soup kitchens.<o:p></o:p></div>
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<br /></div>
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The global economy is currently
experiencing a currency war led, most
notably, by the USA and Japan, with the European Union and the UK hot on their
heels. Make no mistake, these are big
guns, and they are firing wildly. There
will be blood. You can run, but you
cannot hide. Or maybe you can.<o:p></o:p></div>
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Bitcoin supporters, having
pointed out the above, claim that Bitcoin offers a way out. Follow the
literature, the tweets and the soapboxes and you will hear the following:<o:p></o:p></div>
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<br /></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]-->Bitcoin is not issued by government fiat. As such it is not controlled by any
government or central bank anywhere in the world. Bitcoins are issued by a
computer protocol in the cloud, which has (so far) proved itself impervious to
hacking or manipulation.<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]-->Consequently the Bitcoin money supply cannot be
inflated or deflated at the whim of a government, or anybody else for that
matter.<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]-->The Bitcoin protocol is programmed to issue only
around 21 million bitcoins by the year 2140, at which point no more will be
created. In other words, the money
supply remains fixed thereafter and the value of a bitcoin determined solely by
unfettered supply-demand market forces, i.e. the value of a unit determined by perceived value.<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]-->Bitcoins are stored with the people who own
them, and can be transferred peer-to-peer.
This means that banks and central banks are removed from the equation
with an attendant drop in transaction fees and general “bankster corruption”
and, very important – central bank manipulation of value is negated. <o:p></o:p></div>
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This all sounds good. And it is.
But show me the gain without risk and I will show you La-La Land.<o:p></o:p></div>
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Much has been written regarding
the inherent (and very real) risks attendant upon the storage of your bitcoins,
the reliability of your bitcoin client wallet, and the vulnerability of bitcoin
exchanges to state regulation and even shut-down (using the criminal use of
bitcoin as an excuse). This author is
of the conviction that these are issues that the profit motive will incentivise
some clever people to solve in due
course.<o:p></o:p></div>
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But the issue that is seldom
addressed or discussed is ironically one that lies at the very heart of Bitcoin’s
apparent strength – that it is not a fiat currency. <o:p></o:p></div>
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No-one really knows for sure who
created the Bitcoin protocol in the first place. There is a name – Satoshi Nakamoto – but whether
this is one individual or a group, a pseudonym or the actual name, nobody knows…for
sure. And I mean <u>for sure</u>.<o:p></o:p></div>
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So here you have a currency that
has been created, not by a government, but by a mystery. Citizens can call a
government to account, even storm its Bastille (or White House) if they
choose, but how do you call a mystery to account? More important: How do you know for certain, as in one hundred
percent certain…and let me repeat that:
ONE HUNDRED PERCENT! – that the apparently impervious Bitcoin protocol
really is just that…impervious…especially to manipulation by its creator/s.<o:p></o:p></div>
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Yes, avid Bitcoin supporters
will tell you that no-one, not even the mystical Satoshi Nakamoto can alter the
protocol, and they will inundate you with techspeak, but say what they might,
the Bitcoin protocol was written by a person, or persons, and as such cannot,
by definition, be declared to be “untouched by human hands”. And we all know that where human hands can
go, well…things don’t always turn out for the greater good.<o:p></o:p></div>
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One thing that characterises a
zealot is confirmation bias – the inclination to exclude any evidence that
negates his or her belief structure and focus only on the evidence that
confirms it. There are many Bitcoin
zealots. I am not one of them.<o:p></o:p></div>
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Yes, I believe that
cryptocurrencies are the future of money.
Yes, I believe that cryptocurrencies offer a place to hide from the vagaries
of central banks and governments and the corrupt practices of banks. And yes, at
the moment Bitcoin is the crypto to beat.<o:p></o:p></div>
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<br /></div>
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But there are also deep
uncertainties involved, and only time will tell whether I used my devalued fiat
currency to buy bitcoin…or a bitcon.<o:p></o:p></div>
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Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com4tag:blogger.com,1999:blog-4607148463530256170.post-90940622339938692542013-05-06T08:21:00.000-07:002013-05-12T08:51:45.278-07:00WHAT THE CHINESE HOUSEWIVES AND THE LITTLE DWARVES KNOW THAT THE PAPERGOLDBUGS DON'T<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBOmnezmxnH8QZbRxyyaB8wzMJfXP503_Z4cbCflXaRxlSdM24uw2a23-s08luSxeLRS4PRoMjeudqlRn_v5EkyQ-SZuRxxAcU9JcI9ydQ1xV1PUaU2nclJtTpWOwYKsGNoPkPD0uAKS8/s1600/golden-sand_w520.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBOmnezmxnH8QZbRxyyaB8wzMJfXP503_Z4cbCflXaRxlSdM24uw2a23-s08luSxeLRS4PRoMjeudqlRn_v5EkyQ-SZuRxxAcU9JcI9ydQ1xV1PUaU2nclJtTpWOwYKsGNoPkPD0uAKS8/s320/golden-sand_w520.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">free-picture.net</td></tr>
</tbody></table>
<b>One could not watch the events in April surrounding the massive naked shorts issued on gold, the
sharp plunge in the price, and the subsequent gold rush for physical
gold, without shaking one's head at the
astonishing levels of delusion demonstrated by the guardians of paper fiat. </b>What did they think was going to happen when, like gangsters, they put out a contract on gold and whacked
the price overnight? People cheering in the streets? Accolades and praise? <br />
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<o:p></o:p></div>
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Perhaps they were expecting a general panic and rush for the door. Certainly
they did not expect the Chinese housewives to lead a charge, not for the door, but deeper into the room to grab
all the physical gold they could like so many little dwarves. But
that’s the thing about dwarves – they like gold. The kind you can touch and bite and rub.<o:p></o:p></div>
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<br /></div>
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There is a form of cognitive bias referred to as ‘attribution
bias’. This describes a cognitive bias in which individuals see their own responses
as the reasonable response to a situation.
In other words, you think that everyone else sees the world in the same
way that you do. <o:p></o:p></div>
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Attribution bias
becomes a real problem when reinforced by ‘groupthink’, especially when the group that is doing the
groupthinking also thinks that it is cleverer than the rest of humanity. And when there is no-one in the group to play
devil’s advocate, to shout, “Hey, the emperor has no clothes!”, then you get
the kind of reversal of expectation that the masters of the paper fiat universe
suffered in April. <o:p></o:p></div>
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<br /></div>
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Clearly the
little dwarves did not get the message the masters intended : “See, your gold is
worthless! Get rid of it now before it
loses even more value!”<o:p></o:p></div>
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<br /></div>
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Indeed, the
masters of the universe must have felt a little less masterful when the sheer
volume of physical gold being snapped up all around the globe, especially in
the East and near-East, drove the price right back up, with one crucial
before-and-after difference: more real gold
was now in the hands of the little dwarves than there was before. I can actually hear those masters contemplating the aftermath of the gold rush and sighing (with a certain John
Cleesesque on-the-out-breath tone): “Right…”
as they turned back to their drawing boards.<o:p></o:p></div>
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What these mighty
masterful morons don’t get (and maybe this is a side effect of million dollar
bonuses) is that while the little dwarves might not be clever, they do have
common sense. And common sense tells you
that something that has retained its status as a store of value since homo
sapiens replaced bartering with coin, that unlike paper money cannot be printed at will by a central bank or government, stands an infinitely better chance of continuing
to store value than pieces of paper that have been around for less than a
century, especially when the reliability of those pieces of paper as a store of
value is faced with a very clear and present danger . <o:p></o:p></div>
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<br /></div>
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While ordinary,
non-economist-type folk may not be able
to articulate their sense of that clear and present danger using the opaque language
of econospeak, they nevertheless know, down in the very marrow of their bones
(where common sense lives), that the danger is <i>very</i> clear and <i>very</i>
present.<o:p></o:p></div>
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<br /></div>
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Perhaps the little
people know only to well that, unlike the masters of the paper fiat universe, they will not be bailed out when the dollar, the pound, the euro and the yen
are used for confetti at weddings.
They know this, not as an intuition or a suspicion; they know it for
certain, because when the dung hit the fan in 2008, instead of being bailed
out, they saw their taxes being used to bail out the very masters that had
caused the problem in the first place, while they, the little people, lost their
homes and their jobs. And a few years later, when the government of a certain little island in the Mediterranean
needed more cash, they saw that government simply reach into the savings
accounts held in its banks and steal the cash.<o:p></o:p></div>
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<br /></div>
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So when the
banksters issued that contract on the
price of gold and it got whacked, rather than mourn and lament the price’s passing, the little people cheered and
charged. You could almost hear them from
around the globe: "Get gold! As much as you can. The kind you can touch and bite and
rub. And then dig a hole in the cellar
of your house and bury it like a squirrel buries acorns for the winter."<o:p></o:p></div>
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<br /></div>
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Because that’s another thing those little people
know: Squirrels might not be clever, but
they have a lot of common sense.<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com0tag:blogger.com,1999:blog-4607148463530256170.post-46499794223181058502013-05-03T13:24:00.000-07:002013-05-03T14:20:40.461-07:00QUANTITATIVE EASING CAN MAKE YOU SOBER<br />
<div class="MsoNormal" style="line-height: 150%;">
<span style="line-height: 150%;">If it is an irrevocable law of
physics that energy cannot be created out of nothing, then it is also
irrevocable that money cannot be created out of thin air.</span></div>
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<span style="line-height: 150%;"><br /></span></div>
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<o:p></o:p></div>
<div class="MsoNormal" style="line-height: 150%;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOdd4d0vdF0BA_JvREWNwflzb5saOjrWpJ4yD6ABexF7K2cjCMa4VseA1K4Zfi6TZgSHxskRArPNc1IReMrnpvKcYczvINsLl-pFrnW2EbTZlmlLmB4ujM9TLliHLGBZE1FOQQiRiAw_Y/s1600/Whisky.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOdd4d0vdF0BA_JvREWNwflzb5saOjrWpJ4yD6ABexF7K2cjCMa4VseA1K4Zfi6TZgSHxskRArPNc1IReMrnpvKcYczvINsLl-pFrnW2EbTZlmlLmB4ujM9TLliHLGBZE1FOQQiRiAw_Y/s1600/Whisky.jpg" /></a>Money is "stored energy" - it stores work. When you spend money you unlock energy, e.g.
the work that went into making the candy
or clothes or whatever, for which you
exchange the money. So when you simply
print money with no reference to any work done, the energy that is stored in all the “good”money
that was created with reference to work will have to spread out to cover the “bad”
money that was simply printed with no reference to work, thus devaluing the “good”
money. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
To use a metaphor: If you turn one bottle of whisky into two
bottles by watering it down, the whisky that you then will have will not be as
potent (energised with alcohol) as the whisky you had in the original bottle of
undiluted whisky. While you may have two
bottles of whisky, you will have to drink twice as many shots to get the same
level of inebriation achieved before you watered the whisky down. <o:p></o:p></div>
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<br /></div>
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If you were to buy this watered
down whisky in a bar, you would be paying twice as much to get the same level
of inebriation that you got when you were served whisky that had not been
watered down. In other words: the same amount of money now only buys you
half the pleasure (if inebriation is your pleasure). Subsititute “pleasure” with “standard of living” and you
get my point. You will be paying twice as much to maintain your standard of
living (getting as drunk as before) or you will be spending the same amount as
you used to spend, but you will be living at half your previous standard
(leaving the bar half as drunk).<o:p></o:p></div>
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<br /></div>
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This would not be a problem if your
income doubled every time the purity of the whisky was halved. Yes, you would eventually need a very large
wallet, even a wheelbarrow, to carry the cash needed to pay for your whisky,
but at least you would still leave the bar as drunk as before. But, and this is a big but: Will your income double each time the purity
of the whisky is halved? Ay, there’s the rub. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
Economists argue extensively about
the why’s, the if’s, the
how’s and the when’s regarding the relationship between income and cost
of living. But ask yourself this: Does it feel like your salary is keeping pace
with the cost of living? If your answer
is yes, then you are as happily inebriated as you were before; if no, then you might want to consider to
what levels of sobriety all the money that the central banks of the largest economies in the world are printing
will drive you in the coming years.<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com0tag:blogger.com,1999:blog-4607148463530256170.post-20704926706258800292013-04-28T15:42:00.001-07:002013-05-12T05:04:18.161-07:00WHY PEOPLE WHO ARE USUALLY SANE ARE BUYING BITCOIN<br />
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt; line-height: 14.4pt;">Who in their right mind would
take their hard-earned cash and convert it into a unit of supposed value that
is:</span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">not insured;<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">not backed by gold or silver or any commodity of any kind;<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">extremely volatile in its price movements, so much so that its
daily movements would be considered insanity on any stock market in the world
(including those in the Third World);<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">traded on exchanges of which nearly 50% have been shut down and
its largest exchange brought to a halt by hackers, traderbots and DDOS attacks;<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">kept in digital “wallets” of which some brands have been hacked,
and others simply closed down;<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 4.8pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10pt;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Arial, sans-serif; font-size: 10pt;">and which poses the biggest threat to central bank power since…well,
since central banks were invented, making it a prime target for the banking
monopolies (and their friends in government) that dominate world finance?<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">Who in their right mind would do
this? One would hope very few, except
that more than a few, normally right-minded people around the globe have done
just that (this author included). <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">The question is: Why?<o:p></o:p></span></div>
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<br /></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">A thought experiment: Imagine you are standing with your back to
the edge of a cliff. A river courses
through the bottom of the ravine two hundred feet below. In front of you a pack of twenty wolves slowly
advances in a semi-circle. There is no escape. If you
stay where you are, there is 100% certainty that you will die. If you jump, there is a 95% chance that you
will die, and a 5% chance that you will survive after plunging into the
river. Would you jump?<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<br /></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">The behavioural psychologists
Kahneman and Tversky, in their research paper <i>Prospect Theory: An Analysis of Decision under Risk (1979)</i>, showed
that most people would jump. In the
summary/abstract to their paper, Kahneman and Tversky summarised a key finding
as follows:<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 35.45pt; margin-right: 75.65pt; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">“In particular, people
underweight outcomes that are merely probable in comparison with outcomes that
are obtained with certainty. This
tendency, called the certainty effect, contributes to risk aversion in choices
involving sure gains, and to risk seeking in choices involving sure losses.” (Kahneman and Tversky, 1979)<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: -2.3pt; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">In summary: sure gain = low risk appetite; sure loss = high risk appetite. In other words – standing on that cliff,
faced with the ‘sure loss’ of your life in the jaws of 20 wolves, you will look
down at that river two hundred feet below and most likely come to the
conclusion that you have got quite a good chance of surviving – better than 5% - and jump. You will probably also be thinking something
along the lines of: “If I don’t jump I’m dead anyway, so any chance of survival
is better than none.” Kahneman and Tversky called this phenomenon “loss
aversion” – the willingness to take high risks when faced with certain loss. <o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<br /></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">I would argue that a significant
portion of the world’s population is either certain, or at least strongly
suspects, that the world’s financial system is in trouble. Deep trouble. This
portion of the world’s population knows with 100% certainty, that sooner or
later (and probably sooner) there will be a catastrophic collapse of financial
markets that will be worse than the crash of 2008. It also knows that in the event of such a
collapse, the vast majority of the world’s population will feel very serious
pain, something akin to (or worse than) the pain of the Great Depression of the
1930’s, which only came to an end with the gigantic public works project
remembered as the 2<sup>nd</sup> World War. Except this time many of the governments of
the West and East are already so indebted and have already printed so much
money that they would not be able to pay for a public works program on the
scale of the 2<sup>nd</sup> World War to pull the world economy out of its
mire.<o:p></o:p></span></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<br /></div>
<div style="background: white; line-height: 14.4pt; margin-bottom: 6.0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 4.8pt;">
<span style="font-family: Arial, sans-serif; font-size: 10pt;">So to return to the thought
experiment: The wolves are the “real
crash” that’s coming (to use Peter
Schiff’s phrase), and the river in the ravine two hundred feet below is
Bitcoin. Under normal circumstances, i.e. when not faced with certain
death-by-pack-of-wolves, no right-minded individual would jump. But these are not normal circumstances, and so, standing on the edge of the current economic cliff, usually sane people conclude that while jumping into the Bitcoin river <i>may</i>
very well prove to be fatal, not jumping certainly will.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com2tag:blogger.com,1999:blog-4607148463530256170.post-17333446118997659792013-04-17T14:54:00.001-07:002013-05-16T02:33:05.176-07:00BITCOIN? WHAT THE HELL IS THAT?!<br />
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I recently had a conversation with a friend that went
something like this:</div>
<div class="MsoNormal">
<o:p></o:p></div>
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<br /></div>
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FRIEND: Bitcoin…? What the hell is that?<o:p></o:p></div>
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<br /></div>
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ME: It’s a crypto-currency.<o:p></o:p></div>
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<br /></div>
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FRIEND: <i>(blank
stare) </i>Crypto-what?<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Well it’s a seriously encrypted
protocol that exists only in the internet cloud that generates units of value
called bitcoins (lowercase “b”) that you can buy and sell on an exchange just
like shares, except they’re not shares, more like forex, except they’re not forex because they’re not a fiat currency like
a dollar or a pound, more like gold, except that they’re not gold because you can’t hold them in your hand
or lock them in a safe. You keep them in
a wallet that doesn’t really exist except as an encrypted algorithm , and if
you lose your wallet you’ve lost your bitcoins, just like cash. But they’re not
cash. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: <i>(after a long pause)</i> What
have you been smoking?<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: No, seriously, there’s
really a new internet currency that people from around the world are buying and
selling and using to buy stuff, although the “buying stuff”part is in its
infancy. Not many places accept bitcoins
as payment. Yet. And just like a dollar
can be fractionalised into a hundred pennies, so a bitcoin can be
fractionalised into satoshis, hundred million per bitcoin. And the really cool thing is that Bitcoin is a
world currency that no central bank or government controls.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: You’re shitting me?<o:p></o:p></div>
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<br /></div>
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ME: No, I’m dead serious.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Let me get this straight. Are telling me that you have spent some of your
own, real money to buy some of these bitcoin things that don’t exist?<o:p></o:p></div>
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<br /></div>
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ME: Yes.<o:p></o:p></div>
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<br /></div>
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FRIEND: And keep them in a “wallet” that
doesn’t exist?<o:p></o:p></div>
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<br /></div>
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ME: Yes.<o:p></o:p></div>
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<br /></div>
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FRIEND: You’re out of your mind.<o:p></o:p></div>
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<br /></div>
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ME: Maybe, but I don’t think
so.<o:p></o:p></div>
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<br /></div>
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FRIEND: <i>(realises that I really am dead serious)</i> Well…where does this
“encrypted protocol” come from?<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Apparently it was
written by a person…or persons… called Satoshi Nakamoto.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: What do you mean “or persons”?<o:p></o:p></div>
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<br /></div>
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ME: Well, nobody really know
if it’s one or more people, male or female.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Dear God! And this algorithm
that this…whatsisname…?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: …Satoshi Nakamoto….<o:p></o:p></div>
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<br /></div>
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FRIEND: …this algorithm he, she or they
wrote gives out bitcoins to anyone who wants them.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: No. Only to miners.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Miners?! You said bitcoins don’t exist, except in the
cloud.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Yes. As encrypted algorithms.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Then what the are the miners
mining?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: It’s a bit complicated,
and I don’t really understand it myself, but the miners are like serious maths
boffin geek guys who use hardcore computing power to do these really
complicated sums called a hash, that are
easy to reproduce but impossible to reverse so
a hacker cannot easily reverse-engineer the sum from its answer.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Okay, you lost me there.<o:p></o:p></div>
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<br /></div>
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ME: The point is that the
sums that these miners “mine”are really hard to do and take a lot of energy and
time. So when the miners (the maths
boffin geek guys) finally do a hash (sum) that the Bitcoin protocol (uppercase
“P”) accepts as valid according to the rules it has laid down, it (the Bitcoin protocol) then “pays”the miner
some bitcoins (lowercase “b”) that the miner then can sell on for dollars or
pounds.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: So the miners get real money for
these sums.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: No, the miners get
bitcoins.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: That they then sell for real
money.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Yes. But don’t forget that “real”money is just paper with a picture
printed on it that everyone agrees has a certain value. Just like bitcoins.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: At least I can put paper money
in a real wallet.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: So you keep all your
paper money in your wallet?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Obviously not.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Exactly. Most of your money is an encrypted algorithm in your bank account that is also just an
encrypted algorithm…just like a bitcoin wallet.
So what’s the obsession with “real”?
<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: At least I can go to the bank
and take it out when I want to.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Only if the bank allows
you to, as the Cypriots recently discovered.
The cool thing about bitcoins is that they cannot be confiscated by a bank
or government or anyone alse. There’s no
bitcoin “bank” where you keep your bitcoins, only your wallet. And you are the only person on earth with
access to your wallet. It’s like being your own bank. That’s why you lose everything if you lose the
password/key to your wallet.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: <i>(after another long silence)</i> Okay, suppose I get me some of these
bitcoins, what can I buy with them?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: At the moment, not much.
But more and more shops and places are accepting them as payment . But I’m not buying bitcoins to use to buy
things. I’m buying them as a hedge.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Against what?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: The world economic
depression.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: What depression?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: The one we’re in.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: We’re in a recession, not a
depression.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: We’re in a depression
disguised to look like a recession by the printing of trillions of dollars and
pounds and yen and God knows what other currencies. Sooner or later (and I believe it will be
sonner) those trillions are going to bite the world economy in the arse because
there’s no way that we can pay them back.
It’s like the God of all bankers somewhere in the universe is calling in
the loan and our governments who borrowed those trillions on our behalf cannot
pay, so he’s coming to repo whole economies. And then we'll see this "recession" will show its true colours.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: And that’s why you’re buying
bitcoins?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Exactly.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: What’s stopping the God of all
bankers from taking your bitcoins?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: The only way he can do
that is to put a gun to my head for the key to my bitcoin wallet. By the time it comes to that the world will
be in such chaos already that my bitcoins will be the least of my worries.
Until then I’m buying bitcoins. They’re
very cheap now because so few people in the world are buying them, but when the
crunch comes there’s a very good chance that lots more people will want to buy
them and because the supply of bitcoins is limited and cannot be expanded by
any government, they could be worth a lot. <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: How much?<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: No idea.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: This Bitcoin business sounds risky to me.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: It is. But how safe are you feeling about the world
economy at the moment? <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: You could lose everything on
Bitcoin.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Sure, but only if I put
everything into Bitcoin. I might be mad, but I don’t put all my eggs in one
basket. <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: So you’ve still got some of that
paper money that you don’t trust.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
ME: Yes, but I’ve also got
bitcoins. All you’ve got is paper money.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<br /></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<i>(Longest pause of the conversation)</i><o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
<i><br /></i></div>
<div class="MsoNormal" style="margin-left: 72.0pt; text-indent: -72.0pt;">
FRIEND: Sounds too complicated to
me. Can I have another beer?<o:p></o:p></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com0tag:blogger.com,1999:blog-4607148463530256170.post-5462777954869943052013-04-14T14:40:00.001-07:002015-02-13T22:39:28.970-08:00I’M A WHITE MAN IN AFRICA <br />
<div class="MsoNormal">
I’m a white man in Africa a survivor in the
south</div>
<div class="MsoNormal">
<span lang="EN-US">we got one man one vote but we live from
hand to mouth</span><span lang="EN-GB"><o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">apartheid was a fuck up now we free, free
at last<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but some of us are paying for the sins of
the past<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">they learned their lesson well the anger
and the hate<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">when it comes to revenge it never is too
late<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">it’s the spirit of the age redistribution retribution<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">reverse apartheid is all the rage - after
action affirmative satisfaction<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">but this continent is cool, a place of
plenty, abundant riches<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">we still believe in witches and treat our
wives like bitches<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">we use cell phones to tape a friendly gang
rape<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and if you get AIDS spend an hour in the
shower<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but if it’s HIV drink garlic in your tea<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">welcome to Africa it’s the coolest place to
be<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">don’t get me wrong I’m happy in this new bureaucracy<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">the blacks learned from the whites how to
do democracy<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">if they lose the election don’t get an
erection<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">it’s the basic supposition – kill the
opposition<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">ask Robert Mugabe from Zimbabwe<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">Rwanda Somalia Liberia Ethiopia<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">Angola Uganda welcome to utopia<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">our misery is custom made to suit your
every need<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">this place is a paradise with billions to
feed<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">some graft and corruption an occasional
disruption<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but better than that we’re on our backs
flat, check our welcome mat<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">unexploited mineral wealth enough for a
thousand years<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and a labor force to mine it with their
hopes their dreams their tears<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">and fuck the bleeding hearts who curse the
corporations<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">economic liberation, without them
starvation<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">come on be rational no-one cares like a
multinational<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">they can help you self-destruct if you got
diamonds in the ground<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">or force-remove your locals if you got oil
lying round<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">in your Swiss account any amount<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">that’s what World Bank debt is for<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and if you still want more they can start a
war<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">nothing second rate, it will escalate<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">‘till all your citizens are killing each
other<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">AK47’s for you and your brother<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">you can run my friend but you cannot hide<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">the first world will provide<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">especially genocide<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">and don’t forget the kindness of our
European friends<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">in fact the list of good deeds is so long
it never ends<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">the pommies and the krauts and the porras
and the frogs<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">thank God they insisted when the heathens
resisted<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">okay there was some slavery and they
treated men like dogs<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and some random orders moved a shitload of
borders<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">which caused some double bubble toil and
trouble<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and reduced the continent to ashes and
rubble<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but they brought education medication
conservation <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">preservation…with just a touch of
deprivation<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">small price to pay for civilization<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">and besides…the Africans learnt an
important lesson – <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">a civilized man doesn’t bring a spear to a
gun fight<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">you can run my friend but you cannot hide<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">the first world will provide<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">especially genocide<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">but this continent is cooking though it
might look tattered and torn<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">we got elephants and lions and a lot of
rhino horn<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">our poachers are all innocent they just
working for the Japs<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">whose cocks are all so tiny they can’t find
them without maps<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but hey those pricks got dollars -
international currency<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">hallelujah Mammon and the USA – the gods that
keep us free<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">don’t get me wrong I’m happy, at least I’m
still alive<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and as long as I don’t argue I reckon I’ll
survive<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">it’s a garden of Eden owned by the ANC<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">I can say what I like as long as they agree<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">just ‘cause you can vote doesn’t mean you
free<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but it does mean you can live in abject
poverty<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">oh say can you see our monopoly<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">it took a revolution to get this constitution<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">no-one is rejected all of us protected<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">the Party is so clever it’s going to rule
the roost forever<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">it’s an African tradition - we don’t like competition<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but we like to trade for international aid
so our leaders can get paid<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and we like to fight for human rights but
go to China to get laid<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">I’m a white man in Africa from sixteen fifty-two<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">I’m stuck here can’t get out, nothing I can do<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">I’ve got my dobermans, electric fence, machete
and a gun<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">they’ll get me in the end but ‘till then
I’m having fun<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">I’m a white man in Africa at least I got a
tan<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">I’m feeling pretty lonely ‘cause the rest
all cut 'n ran<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">Perth Sydney London Vancouver Quebec Montreal
<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">they saw the writing on the wall - the colonies
will fall<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">like rats off a ship ‘cause they saw what
was coming<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">there were jujus in the night and they
heard the distant drumming<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">and lucky for them they had the cash so
they all ducked<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US">but me?
I’m a white man in Africa…and I’m fucked<o:p></o:p></span></div>
<div class="MsoNormal">
then again…aren’t we all.</div>
<div class="MsoNormal">
<br /></div>
Anonymoushttp://www.blogger.com/profile/17517737002400012889noreply@blogger.com1tag:blogger.com,1999:blog-4607148463530256170.post-64824119294800184902013-04-14T01:07:00.002-07:002016-04-25T14:40:19.870-07:005 STEPS FOR THE BITCOIN BEGINNER<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnpxy3HlHExN9C3bcWzzzCld0tMA4f99OIaKmcFZ84UAnALXMujrcTo5kMUI2ChwWpnbUdIxYhZ9bUuIjPo9bfrCXpyYWH-xYEfdC05J5aDjcyhNCoF0ME6CrMak01UJ2DpLgkKVn2mpY/s1600/Bitcoin.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="317" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnpxy3HlHExN9C3bcWzzzCld0tMA4f99OIaKmcFZ84UAnALXMujrcTo5kMUI2ChwWpnbUdIxYhZ9bUuIjPo9bfrCXpyYWH-xYEfdC05J5aDjcyhNCoF0ME6CrMak01UJ2DpLgkKVn2mpY/s320/Bitcoin.png" width="320" /></a></div>
<b></b><br />
<div style="text-align: center;">
<br /></div>
<b>
STEP 1</b>: Get to understand the macroeconomic realities of
the world you are living in. Decide whether you feel comfortable with where
things are headed. Bitcoin may turn out to be a place where, in the event of a very severe world depression, hyper inflation and the hardcore depreciation of paper money worldwide, you could safeguard some purchasing power. But remember: Bitcoin is new, uncertain, volatile, high risk. I recommend you have this attitude: "I'm going to put some cash that I can afford to lose in bitcoin as a backup plan that might work in the event of world economic collapse." I am of the view that the global economy is going to get much, much worse before it gets better.<br />
<div class="MsoNoSpacing">
<o:p></o:p></div>
<div class="MsoNoSpacing">
<br /></div>
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<b>STEP 2</b>: Go online
and do some proper research so that you have a good idea what Bitcoin is
all about.</div>
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<b>STEP 3</b>: Decide
whether you think Bitcoin is the madness of crowds or the wisdom of crowds. If you think it is wisdom…see STEP 4:<o:p></o:p></div>
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<b>STEP 4</b>: Set aside
an amount of cash that you are willing to put at risk because Bitcoin is relatively new technology. Much volatility lies ahead I believe. Remember: you don't have to buy a whole bitcoin every time. You can buy fractions of a bitcoin. So you could buy R100 worth of bitcoin if you so wish.<o:p></o:p></div>
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<b>STEP 5</b>: The South African bitcoin exchange is at <a href="https://www.bitx.co/" target="_blank">https://www.bitx.co/</a> Sign up and follow instructions.<br />
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Done.<br />
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<b>PS</b>: Apart from the bitcoin wallet that you automatically get on BitX, you can also download other wallets from other providers. I believe it is prudent to spread your bitcoins between wallets, so that all your eggs are not in one basket. I have three wallets - one on the BitX exchange, and two wallets with <a href="https://blockchain.info/en/wallet" target="_blank">Blockchain Wallet</a> </div>
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<b>PPS</b>: I personally do not attempt to day-trade on bitcoin. I am a buy and hold bitcoiner, given the view I have taken that the bitcoin price will be much much higher five years from now.<br />
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<b>PPPS: </b>high volatility = high risk/reward. Bitcoin crashes and bubbles WILL happen from time to time. When the bitcoin price takes a dive, I buy. But that's just me. Cum est
sanguis in plateis, emite!<o:p></o:p></div>
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