[cryptome] Re: 1st British Bitcoin Exchange due to open

  • From: "Douglas Rankine" <douglasrankine2001@xxxxxxxxxxx>
  • To: <cryptome@xxxxxxxxxxxxx>
  • Date: Sat, 11 Apr 2015 11:30:19 +0100

Hi Peter,
May I say, it isn't a competition between you and I, or anyone else for that
matter, rather, we are sharing information and your contribution was very
good stuff, in my opinion, I learnt quite a lot from it.

Just a couple of points, all currencies have to "cash out" i.e. get turned
into another currency or realise their value through exchange for goods or
services. See Capital Vol 1 by K. Marx or The Wealth of Nations by Adam
Smith, for a definition of capital value. If they don't cash out they are
worth nothing, or hypothetical billions. That is if I am understanding what
you mean by cashing out.

Money is just an easy, cheap and efficient way of realising value and it
occurs through exchange. Barter is another way, but clumsy and inefficient
in todays world for large money users. Value is relative and not absolute,
in my view. No currency is controllable these days, as the value of any
single currency is based on the value of other currencies. There is no gold
standard, they are all fiat currencies, i.e. the amount of a nation's
currency in circulation is determined by its government. There are no
storage problems either, there are plenty of pockets, safe deposit boxes and
other such devices for storing the stuff, as well as those in virtual
reality... :-). The recent economic crisis and the "solving" of it through
quantitative easing, was brought about by trillions of money being created
and distributed in such a way as to minimise inflation, buying duff
(toxic...did you know that money was an anti-toxin?) bonds, increasing bank
security deposits, making loans between banks easier etc. Governments
depend on the markets, more than anything else to determine currency flows
and ratios, and their economists are not much good at predicting which way a
currency is going to go, up or down or how quickly, or by how much or for
how long. The cost of quantitative easing is that it turned economic theory
on its head and decreased interest rates for savers...like me...:-). The
"Philips Economic Model" is now well and truly out of date. See url:
http://en.wikipedia.org/wiki/MONIAC_Computer :-).
A global economy means that no individual nation state has control over its
own currency, never mind anyone else's.

Black boxes get used by most large financial trading companies now. Black
boxes contain algorithms which are supposed to predict the above. Some black
boxes are better than others. Huge premiums are paid to have a fibre cable
next to the New York Stock Exchange, because the time to trade is short and
a few microseconds can make a difference. However, the problem is that if
there was a perfect black box, then we would all have them, and if we all
had them, then currency variations would cease. Kill the risk and one kills
the market. Just like there is nuffink better than certainty for killing an
argument... :-). Nash's Equilibrium Theory. See url:

For those reasons, I submit that governments aren't in the slightest
bothered about the influence of Bitcoin...it is just too small in the market
place. In fact, though a wonderful piece of mathematical invention, it is
quite useless, like all good art...to paraphrase Oscar Wilde... :-).
P.S. I notice that some peer to peer organisations are putting bit mining
into their sharing systems...without asking permission...Lots of folks
aren't very pleased about it...including me...I don't have enough bandwidth
as it is, without sharing it surreptitiously. Now, that is something to be
shit-scared of... :-).

-----Original Message-----
From: cryptome-bounce@xxxxxxxxxxxxx [mailto:cryptome-bounce@xxxxxxxxxxxxx]
On Behalf Of Peter Presland
Sent: 08 April 2015 16:51
To: cryptome@xxxxxxxxxxxxx
Subject: [cryptome] Re: 1st British Bitcoin Exchange due to open

On 08/04/2015 15:29, John Young wrote:

Odd that Bitcoin users believe its anonymity features, as though
exchanges occur in the untappable, invisible, untrackable byways of

What better way to track bitcoin users than anonymizing bitcoins.

I can't compete with Dougie's epistle about technical Bitcoin
anonymity/Authorities matters. Suffice to say that my post was primarily to
point out a couple of misunderstandings - misunderstandings which I now
suggest evidence a lack of familiarity with the issues and may therefore
affect his speculations.

However, my 'shit-scared' characterisation had nothing to with the alleged
anonymity (or lack thereof) of Bitcoin transactions.

The thing that really bothers the financial authorities is the absence of
centralised control over issuance and all that flows from it. Since Bitcoin
issuance is known and finite, it is analogous to gold as a currency but with
none of its storage and exchange problems. How to exercise a similar degree
of control over Bitcoin value and flows, that is their problem and they are
working on it.

Bitcoin take-up remains constrained by the need to cash-out. So long as that
is so, then its use will likely remain confined to the fringes. The
financial authorities absolutely need to be able to prevent any serious
break-out from this constraint and they don't appear to have a plan - yet.
Hence my 'shit-scared' remark.

OTOH, the Powers that drive the NSA (ie those who also pull the strings of
the ones who are 'shit-scared') have almost certainly got the whole thing
well in hand - even designed it this way :-)

Mr Nakamoto may indeed be a maverick but co-opting the technical brilliance
of mavericks (among its vast array esoteric capabilities) is after all an
NSA speciality.


Recalls the case of Crypto-AG being rigged by NSA to spy on its crypto
machines. Or Tor and Snowden implementing digital Crypto-AGs.

Still, biblical faith in unverifiable protection is as ancient as
authority warnings of enemies at the gate, in the soul, in the private

Not to mention invention of money and taxes conjoined to
mortality: death taxes a great way to assure filled tills.

But no authority can survive without porn, liquor and gambling.
And heavy-handed alarms about their danger if not carefully controlled
to assure dependency on defiance of authority.

Cheating humans is supremely human.

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