Deep State and Ethereum

Deep state: “I can lie to you. But you can’t lie to me.”

Ethereum: “I can change your transactions. But you can’t change my transactions.”

You can’t lie to to the deep state, or if they catch you in a lie because they recorded you, it’s a felony. And if you record them, that’s a felony.

Oh, and you can’t change vitalik’s transactions, because you’re not in the ethereum foundation.

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technical elite of 2020 are fucking pussies (bunnie’s precursor crowdfunding campaign)

Bunnie’s Precursor Crowdfunding Begins (crowdsupply.com)

https://news.ycombinator.com/item?id=24961342

I think this is an important project and plan to join the campaign.

From top rated comment on hacker news:

“Let’s see now. A device that has no onboard microphone, no camera, and an architecture that makes the surest it’s possible to be that nothing unknown is between your keyboard, screen or headset, and the (inspectable) encryption algorithm. No binary blobs, not even uninspectable CPU microcode. Given the political situation in certain places in Asia, a device that either communicates securely or doesn’t communicate at all, with no grey area inbetween, is more than a geeky obsession. It’s a tool. Compare to all those fancy “hardened” Android phones where it turns out afterwards that the authorities had them tapped all along…”

Meanwhile, if you read the hacker news thread, you will conclude: technical elite of today are fuckin pussies.

They’re all like “ooh, but government could seize the package and tamper it while it is being delivered… so why even bother…”

Man up you weenies! Take back control of your lives!

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And this is why you don’t use printers for hardware wallet backups

This is why you use pen and paper and not a printer (even air gapped) for a hardware wallet backup:

https://www.eff.org/deeplinks/2020/11/ink-stained-wretches-battle-soul-digital-freedom-taking-place-inside-your-printer

“Cui found that simply by hiding code inside a malicious document, he could silently update the operating system of HP printers when the document was printed. His proof-of-concept code was able to seek out and harvest Social Security and credit-card numbers; probe the local area network; and penetrate the network’s firewall and allow him to freely roam it using the compromised printer as a gateway. He didn’t even have to trick people into printing his gimmicked documents to take over their printers: thanks to bad defaults, he was able to find millions of HP printers exposed on the public Internet, any one of which he could have hijacked with unremovable malware merely by sending it a print-job.”

Printers shouldn’t have operating systems, and shouldn’t be squirreling away data.

Too much magic, HP!

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33 years ago, miners in the ukraine caused an environmental disaster when they attempted a 51% attack on bitcoin

The plant operators did their best to resist the dangerous order, but the directive to attack bitcoin came from on high in the communist party. In the end, the workers had no choice. The outcome was more catastrophic than anyone could have predicted.

From the compelling new series “Today in Bitcoin History.” Coming to netflix soon.

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Dollar 2.0 Will be Collateralized with McMansions

T-Bonds: 30 year loans to US treasury (no collateral)
T-Notes: 2-10 year loans to US treasury (no collateral)
T-Bills: 1 month to 12 month loans to US treasury (no collateral)
Mortgage-Backed Securities: loans to commercial banks (houses as collateral)

That’s from https://www.thestreet.com/mishtalk/economics/the-fed-now-owns-nearly-one-third-of-all-us-mortgages.

“The newly created Rentenmark replaced the old Papiermark. Because of the economic crisis in Germany after the First World War, there was no gold available to back the currency. Luther thus used Helfferich’s idea of a currency backed by real goods. The new currency was backed by the land used for agriculture and business. This was mortgaged (Rente is a technical term for mortgage in German) to the tune of 3.2 billion Goldmarks, based on the 1913 wealth charge called Wehrbeitrag which had helped fund the German war effort from 1914–1918. Notes worth 3.2 billion Rentenmarks were issued. The Rentenmark was introduced at a rate of one Rentenmark to equal one trillion (1012) old marks, with an exchange rate of one United States dollar to equal 4.2 Rentenmarks.[3]

From https://en.wikipedia.org/wiki/German_Rentenmark

It’s easier to collect wealth taxes on real estate, than wealth taxes on bitcoin that got lost in a boating accident. See https://en.wikipedia.org/wiki/Georgism

Dollar 2.0 (US rentenmark) will be collateralized with McMansions.

Well, at least it will be collateralized with something!

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PBOC has 500,000 bitcoin

PBOC has 500,000 bitcoin.

Following the forum link and digging into this further, I find the claim plausible.

Plustoken arrests yielded 220k btc in chinese custody and there were other scams. 2.3% of the total bitcoin supply would be a helpful hedge for the PBOC, along with gold, as they slowly divest US treasuries.

There are claims the plustoken asset forfeitures got sold, as with the silk road coin in the US. But were they? I can’t find solid information either way. Chinese language readers, I could use some help here.

I don’t like the idea of the bitcoin-hostile PBOC having 500,000 bitcoin to jerk markets around. On the other hand… adoption, I suppose.

I’d prefer it was the US fed.

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The Federal Reserve is a Non-Profit

People resent the Federal Reserve. It’s The Creature From Jeckyl Island. Who really owns the Fed? Who really owns NPR? It’s a non-profit. Who cares.

The Layer1 bitcoin mine is a for-profit.

Layer1 controls 100 megawatts. Their goal is to control 25% of the bitcoin hashrate. Scribbling on a napkin would put the total energy spend of the bitcoin network around 400 megawatts. This is off by an order of magnitude from the 7000 megawatts estimated by cbeci.org and I don’t know who’s right here, but close enough for a blog post. I’ll use layer1 numbers… So a fifth of a Hoover Dam… a 50th of Three Gorges. (For reference, total global energy spend is 1,140,00  megawatts.)

So when there are 50 Layer1s, competing for hash to collect bitcoin transaction fees, bitcoin price will be 50x higher? Could take a few years but, basically, yes.

Not in dollars though. In energy.

Stop thinking in dollars. Bitcoin may be a lot higher than 50x in dollars by the point there is a Three Gorges worth of hash mining, or maybe not, but either way it doesn’t matter. Energy is what matters. Because energy is real.

Difficulty is curently 16.8 trillion. Layer1 is profitable at $1000/bitcoin. And when difficulty hits 34T it will be profitable at $2000/bitcoin. That is a lot of buffer, because with a doubling in difficulty under these conditions we will probably see a (albeit temporary mania) 10x or 20x in price.

How much spare power is there in Texas? How much scale can be applied? When do the main line power plants start copying what Layer1 is doing?

The American retiree depends on the survival of the municipal bond market for his survival. Food, too, is energy.

When do U.S. electric utilities, which are backed by municipal bonds, which are backed by the federal credit, do the sensible thing and start hodling bitcoin?

The uncomfortable thing is, electricity may get a whole lot more expensive. Thinking about places that rely on air conditioning. When you are actually paying for what you use, in a non-subsidized coupon currency, the truth can be painful.

Puerto Rico — where 10% of electricity is stolen — could suffer a lot now that i think about it.

New slogan…. want to be able to afford air conditioning? Buy bitcoin.

People aren’t going to like this. I don’t like it. It’s not going to stop it from happening.

The truth is the Federal Reserve is a non-profit entity created for the public benefit… which private entities can parasite on… which is true of a lot of non-profits.

The Fed, along with other banks getting their arms twisted, buys things for more than they are worth. Things like corporate bonds, municipal bonds, someday soon I guess stocks.  It’s the Japanese central bank model, coming to America, coming to everywhere. Because people need air conditioning, people need to eat. There’s nothing wrong with trying to keep people alive, and there’s nothing wrong with socialism, within limits. But it’s non profit. Meanwhile someone needs to do the actual work, or people actually will die.

The not-for-profit Fed is becoming dysfunctional in the way that NGOs or National Public Radio is. You can see the future in places like Argentina or Greece. The vibe of working for a central government bank there. There is a lot of compliance, ritual, not a lot of aggression or chasing real things that generate a profit.

Think of dollar as an affinity coupon, created to support your local non-profit.

Layer1 is a for-profit.

Non-profits depend on for-profits.

Municipal bond investors, and electric utilities, and the Fed, should be talking to Layer1.

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Whiny programmer whines about bitcoin

https://www.stephendiehl.com/posts/crypto.html

Stephen Diehl starts by rightly decrying that haskell is popular among altcoin snake oil vendors, then lumps bitcoin in with the snake oil, referencing David Golumb’s whiny book from my last post.

“New religious movements like the cryptocult provide a psychological and philosophical framework that provides sense-making for a world that seems hostile and out of their control. The crypto movement fits all the textbook criteria, it provides a mechanism for determining an in-crowd and an out-crowd (no-coiners vs bitcoiners). It gives a framework for assessing the virtue of other followers based on their faith (HODLing) in the cause. It offers simple answers to complex issues in economics and monetary policy. It gives a linguistic framework of “thought-terminating clichés” and acronyms to quell dissent. It gives a mechanism of social control in which one can acquire influence and status in exchange proselytizing and onboarding more followers to buy tokens. It makes miraculous promises of wealth, not derived from effort but from faith. It presents an eschatological narrative of retributive justice about the end-times of the global financial system, in which the true believers will be reborn with a new life in an anarcho-capitalist utopia. And most importantly, it gives people a sense of a community, hope and belonging which is a powerful force that can be exploited by charismatic leaders. David Golumbia’s excellent book The Politics of Bitcoin: Software as Right-Wing Extremism outlines the rabbit-hole effect that this ecosystem is having on software engineers onboarding them into deeper forms of right-wing extremism.”

Well… then don’t buy bitcoin Stephen! Nobody is forcing you to hodl. Unlike all those people in argentina and tin pot places where you can’t freely convert the currency, and it is jail time if you try.

Once again I roll my emoji eyes…

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Whiny academic whines about bitcoin

I am too tired to argue with this so I just quote the best amazon comment I could find in under 30 seconds…

“Any time the author mentions “central banking”, he seems to only be referring to the “US Federal Reserve” as if that was the only central bank in the world. The fact is that many central banks have failed in the past, and is failing today (see Venezuela). That is not a leftist or rightist position, that is just reality. He also makes a huge and inexcusable omission of the 2008 financial crisis and the Occupy movement under which Bitcoin was created from. This omission is intellectually dishonest as the Occupy movement and “too big to fail” are leftist movements that parallels Bitcoin’s development. In summary, the author’s thesis is incorrect and over simplified. Even if he was correct, the viewpoint is so narrow (looking at Bitcoin in the current American political context) that his analysis has limited use.”

Emojipaste is broken so… emoji face with rolling eyes….

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US Banks Can Now Hodl Bitcoin

“The Office of the Comptroller of the Currency (OCC) has confirmed in a letter dated July 22, that it allows all “national banks and federal savings associations’ authority to provide cryptocurrency custody services for customers.”

https://coinfomania.com/occ-u-s-banks-can-offer-crypto-custody-services/

This could go good, if banks get invested in success of btc. Or bad, if it’s an attack vector seize bitcoin, as roosevelt seized gold.

https://en.wikipedia.org/wiki/Executive_Order_6102

I think it will probably play out as a bit of both. It’s going to critical to get proof of reserves, otherwise banks will cheat like fiends.

While I have reservations about this because of potential 6102, I’m seeing this as the best news of 2020 for bitcoin. This may not have an immediate effect on the markets, because it will take time for banks to roll out services. But in the long term it’s huge. Much, much bigger than paypal or mastercard.

Buy buy buy!

 

 

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