Tag Archive | ethereum

How Coinbase is Saving the Crypto Market

People like to talk shit about Coinbase. And, in a lot of ways, I get it. They certainly didn’t make it easy for people to retrieve their Bitcoin Cash (much less Bitcoin Gold–which may not be retrievable at all), but at least they’ve done better on that front than Jaxx. But there’s more to it than that. There’s also some elitism, which I also get. I have the same elitism, as a tech person, toward Apple users in general, but especially people with iPhones. I refused to watch Rick & Morty for a long time, simply because it was popular. And people who played Final Fantasy XI absolutely hated World of Warcraft players. There’s this whole “Our thing is more complex and cool than your thing. Our thing is for the hardcore, freaking noobs!” aspect to it. Then there’s the fact that Coinbase holds onto your private keys, but the only people who care about this also know how easy it is to get around–simply send the cryptos to another wallet.

A lot of these types would deny that Coinbase is doing anything good, despite how they are attempting to stand up to the IRS to protect their users from invasion by government goons. The government, predictably, doesn’t like that it has no idea who has crypto and who doesn’t, and the best way to find out that info is to break into Coinbase’s vault, steal their records, and create a database of known crypto users to watch. They’re actively attempting to do this, and Coinbase is attempting to stop it. If I was CEO, I would be preparing to close my U.S. operations and permanently wipe all our data before the U.S. government could get their hands on it. Coinbase is also attempting to bring in huge investors–people who would be dropping millions at a time on crypto purchases, and Coinbase has a phenomenal track record of security and protection.

But there’s one other thing they do that they’re often criticized for, when, in reality, it’s the best thing that they do:

Coinbase is notoriously unwilling to put new coins on its store.

This draws the ire of people who love Ethereum and the seventy-six million different bullshit Ethereum tokens available. I could create an Ethereum token right now if I cared to, and it costs almost nothing to do. Ethereum is a good idea, but there’s no gatekeeper to it, and anyone with a half-baked idea can create an Ethereum token, get some momentum going for it, and land it under dApps in Coinomi’s Ethereum wallet. If that wasn’t enough, there are thousands of entire cryptocurrencies that use their own blockchain and programming, some of them ridiculously niche and with less-than-half-baked concepts behind them.

Take Potcoin, for example. It’s a standard proof-of-stake coin long after Blackcoin proved that Proof of Stake is viable. So what is it? It’s a cryptocurrency that is essentially riding on the fact that it has “pot” in the name to be successful. It wants to be the primary payment method for the legal marijuana industry.

That’s stupid, and the exact opposite of what currencies are supposed to do. An Ethereum token would have been more suitable for this, but no. They went and created a currency. I don’t like the token idea anyway. I’ve long ripped into gaming companies like Microsoft and Nintendo for making you buy 800 Microsoft Points to buy a $10 game, instead of just buying the $10 game. They do this because they sell Microsoft Points in uneven packs. Maybe 1000 or 2000. The goal is for the person to have some “points” left over that are too small in quantity to use, forcing them to either pay more money to bring them up to a usable quantity (there’s nothing on the Microsoft Store for 100 points, after all), or to abandon the remainders as lost forever. This is an insidious way of charging people an extra $2 or $3 here or there, without their realizing it and without their noticing it. It’s a way of nickel and diming customers to death, and gaming companies are really nickel and diming their customers these days, with pre-orders, season passes, digital deluxe editions, Complete Editions, Definitive Editions, Collections, remakes, rereleases, and shitloads of DLC, not all of which is even covered by the season pass that players stupidly pay $30 for. But anyway.

So what they want to do, in effect, is bring that business model to the marijuana industry. There’s no other way to put it. That’s precisely what they want to do. They want to create “tokens” that customers have to use to buy pot. And since it’s Proof of Stake and they’re certainly holding half of that stake, every single purchase gets them more tokens–not to mention often leaving customers with quantities of tokens that can’t be used, just like Microsoft, Sony, and Nintendo do. We’ve been down this game before. I play the browser-based game Tribal Wars, and it does exactly the same thing. Due to selling some in-game resources, I ended up with 5 Premium Points that were utterly unusable. This is by design. It is a principle that is built into such systems. They don’t care if you have 0.0002 tokens that you will never, ever be able to use. Actually, they do care, and they want you to end up in that position. Because that’s free money for them.

There are tons of these currencies. Potcoin is just the most obvious example, by trying to frame itself as a token when it’s defined as a currency, setting such a horrifically stupid role for itself, and calling itself “potcoin” on the hope that the stoner crypto people will go “Hur hurr hurr, I want to hold some potcoin! yeah! Pot is awesome!”

There remain to this day people who think the Tool song “The Pot” is about marijuana. In fact, it’s a reference to “the pot calling the kettle black.” Maynard did this on purpose, of course, using lyrics like “You must have been high” throughout the song. For whatever reason, “pot” is a word that gets people to love the thing, presumably still in that high school mentality where it’s cool to be dumb and nothing is cooler than pot.

Let me just whip up Coinomi and look at random coins that I know nothing about:

  • Bitsend
  • Belacoin
  • Britcoin
  • Canada eCoin
  • Cannacoin (with a pot leaf as its logo, naturally–good, we certainly needed two marijuana coins)
  • Digibyte
  • Digitalcoin
  • EDRCoin
  • Feathercoin
  • GCRCoin
  • Hempcoin (ooh, THREE of them!…

You know, finding the third mariuana cryptocurrency just proves my point better than anything I could write, and I don’t think I’m even running the latest version of Coinomi on the phone I’m looking at. This is a disaster waiting to happen. It is classic market oversaturation. We need only look to 1983 and the video game crash of the same year to see exactly how this plays out.

If I cited your coin as a shitcoin above and you feel that this is in error, reach out to me at aria@anarchistshemale.com, and I’ll interview you for my new show, No Gods, No Masters, and we can clear the air. However, the odds are against you. However much you might think otherwise, chances are that yours is a shitcoin. I excuse Blackcoin only because it’s the world’s first 100% Proof of Stake coin, and it has been around now for nearly 4 years. I’ll be surprised if half of these are still here four years from now.

Video game makers and console manufacturers of the 80s did nothing to protect their hardware or their software, which I’m okay with them doing as long as there are no laws against piracy. They have every right to attempt to protect their products from being copied. But we have every right to attempt to bypass that protection. Anyway, what followed was predictable. People began releasing clones of clones of clones of clones of inferior games, and the market was flooded with Pak-Man, Tax Man, Pac-Man, Capman, APacman, and so on, and, in a lot of cases, consumers didn’t know the difference. Like an average person looking at Bitcoin, Bitcoin Cash, Bitsend, Bitcoinplus, Bitcoin Gold, and Bitcore. It confuses them, and I have to think some of this is intentional.

A flood of overhyped, bullshit games called E.T.: The Extra Terrestrial finally broke the camel’s back, but it was a long series of abuses and shitty products that led up to that. Consumers had simply had enough by the time Atari showed its own abject disdain for consumers by releasing that ungodly abomination as a completed game. By that point, they’d already been ripped off by Protector, which was a ripoff of Helper Jet, which was a ripoff of Laser Ship, was a ripoff of Defender. The consumer had already lost hundreds buying shitty games, and the overhyped E.T. was simply the last one–pretty much because it was so hyped (much like Bitcoin is becoming).

Everyday I see ads for “Don’t buy Bitcoin! Look at these 5 cryptos that are certain to pass Bitcoin!!!!!!11!11” bullshit. Have you been to Novacoin lately? They’re closing, but there seemed like thousands of freaking coins on that site, almost all of them junk. You could even see people in the chatroom call them out for being junk and scams. Novacoin and Coinomi’s standards are way too low, evidently.

Coinbase, thank goodness, is acting as the Nintendo of cryptocurrencies. They have tight and rigid standards for cryptos and whether they will or won’t add them, and we should all be on our knees thanking them for this. If Joe Plumber decides he wants to see what “all that thar Bittlecoon stuff is about,” he’s going to google it, and he’ll almost certainly end up on Coinbase. There, he will be introduced to three safe, secure, reliable, non-scam coins: Bitcoin, Ethereum, and Litecoin, in a safe and relatively risk-free environment. He won’t be flooded with a hundred different cryptocurrencies and left feeling like an idiot who picks one at random because he doesn’t want to feel like an idiot and wants to feel like he knows what he’s doing. He’ll see three.

Odds are, he won’t ever hear the words “Hempcoin” or “Belacoin” or “Cannacoin,” and thank God for that. Because most of these shitcoins are going to go under within a year or two, and do you know what would happen if the masses of people poured their money into these shitcoins, and then had the shitcoins vanish?

That’s right: a crash. And an enormous one.

In fact, due to Coinomi, Jaxx, Novacoin, Kraken, etc.’s looser standards, a crash is inevitable. Coinbase is merely delaying it. They can’t prevent it entirely, not when so many people want to create shitcoins that serve no purpose except to scam people out of money and then fade into oblivion because they never had more than a half-baked idea in the first place.

I’m not saying people who genuinely believe in Hempcoin shouldn’t be able to get it, and shouldn’t be able to store it in a wallet. Obviously, I’m not saying that. But I’m saying until your shitcoin has truly proven itself–I’d say that 2 years of survival should be the bare minimum requirement–you should be stuck using a coin-specific wallet.

Oh, look. Orangecoin no longer exists. I’m so surprised.

Buying shitcoins like Orangecoin and Hempcoin simply shouldn’t be so easy that stupid and careless people can do it accidentally. Careless and stupid people exist. We know they do. And if we don’t want government to step in and protect them from the consequences of being careless and stupid, then it’s on us to do so. It’s on Coinbase, Coinomi, Kraken, Novacoin, and Jaxx to do, and Coinbase is the only one stepping up to do it. I’m not saying bail people out. And I’m damned sure not saying let government get involved. In fact, I want you people (whoever is out there making bullshit currencies and bullshit ethereum tokens) to stop doing it so that the government doesn’t get involved. They will. They’ve done it before, man. And “Wah! We lost our money because we couldn’t be bothered to do any research before dropping our life savings into something!” has always been the excuse used for government power grabs. You think they won’t crush Coinbase if they get a good enough excuse? This is stuff that we can’t afford, in the long-run, to allow to happen.

We have to stop this. We have to prevent the crash. This means you, jackasses who made Britcoin, jackasses who made Putincoin, jackasses who made three separate marijuana coins. If you don’t have the self-restraint to not serve out bullshit, then Coinomi, Jaxx, et al. will have to step up and stop you. We need them to, and we need you to go away. And we need to be thankful that Coinbase’s extreme reluctance to add new coins is keeping cryptos accessible and relatively safe for the masses. Because if the ordinary person was presented with Coinomi’s massive list of coins the first time they went to purchase, we’d already have experienced the crash by now.

 

Why You Should Crypto

It didn’t take much thought for me to realize what changed between my initial crypto purchases and the more recent ones that turned me into a Cryptocurrency evangelist: Porcfest. By sheer coincidence, I happened to have my laptop with me, which gave me access to my meager amounts of crypto, but the drive had also been damaged in the drive, so I wasn’t actually able to use them (and will never be able to recover them). But I saw there something I didn’t expect: cryptos in use as currencies.

Since, I’ve been paying more attention to that, and I’ve noticed that we are not far from the threshold of widespread crypto acceptance. In Keene (to where I’m soon moving), many brick-and-mortar businesses accept it, for example. This all caused me to really consider them as viable currencies–ones that will ultimately shatter state power over us.

So why should you begin moving money into Cryptocurrency? There are many reasons, but let’s start with the obvious.

Profits

Are profits guaranteed? Of course not. Nothing is ever certain. But the indestructible and immutable nature of cryptos means that the wealth can’t be destroyed by any government or any coalition of governments. The internet unleashed a power that we haven’t really begun to harness, but one thing has been repeatedly made clear: the governments of the world can’t stop anything on the internet. Scientific research papers leaked and given away for free, software, The Pirate Bay–which is centralized and has been repeatedly and directly attacked by governments–continues to stand, undefeated. It has become a hydra, they learned; cutting off the head caused thousands of copies to spring up (of varying legitimacy). Now there is LBRY (tell me before you join, and I’ll send you an invite, so we both receive 3 LBRY credits, valued at 22 cents per presently), which is like a decentralized world wide web. It’s like Tor, except it has a built-in currency that rewards contributions. In all their efforts, the state never took down the Tor version of The Pirate Bay, because they can’t. Not without shutting down the entire internet, which would cause instant revolt. Ditto for cryptocurrencies.

So your wealth is imminently safe, as long as you don’t make stupid decisions. The government can’t and won’t bail you out if you buy Scamcoin. And while there’s no guarantee of short or mid-term profits, one is virtually guaranteed long-term profits.

Cryptos Inflate

Contrary to much confusion, almost all cryptocurrencies are inherently inflationary–to a point. This is because they are Proof of Work based (It’s not really important to know what that means), which means miners that verify transactions are rewarded for their intensive calculations by spontaneously-created coins. Each transaction, therefore, increases by some small degree the total number of coins in circulation. This is verbatim inflation, as no new wealth is created–only new tokens spread across the same amount of wealth.

However, people are adding value to cryptos in the form of Demand. As long as this demand, represented by people purchasing cryptos, is higher than the rate of inflation, the value of the coins increases. Say one new coin is created each day. This would make everyone’s currency less valuable unless people out there wanted to buy more than one coin each day. If people want to buy ten coins each day, then values will increase despite the inflation. That’s a bit simplistic, but the reason it works is that prices and values are generated dynamically by all these factors, not by a central authority making educated guesses.

However, each new block (basically, a set of transactions) involves a lot of complicated calculations, and these calculations are steadily becoming more difficult in labor-intensive. Additionally, hard-written into many of these currencies is a soft limit and a hard limit. As more coins are created, the number of coins created spontaneously by miners decreases, which obviously slows the rate of inflation. This decrease in supply increase means the Demand and Supply ratios change, allowing Demand to further overtake Supply. What happens then? Value increases exponentially. Once the hard cap is reached, there is no more inflation, so Demand causes even further value increases. This, of course, is years away for most currencies. Technically, they may never hit the hard cap for the same reason humans are unlikely to ever drill 100% of the oil on the planet–eventually it stops being cost effective to drill (or “mine”).

No one can predict what will happen around that time, but I expect that Bitcoin, like Blackcoin is and Ethereum is doing, will move to Proof of Stake. But given that Bitcoin can’t go through with a plan that nearly everyone signed, maybe such a shift is beyond its capabilities. Anyway, crypto values increase because more people are acquiring them with other money (work) than there are people spending them. Growth appears to be exponential, as well; Bitcoin took years to get to $600, but just a few months to go from $600 to $3,000.

Anti-War?

If you’re against war, then the best course of action is to begin defunding the war machine by diverting money from USD to cryptos. There is a strong libertarian and anarchist ideological dominance among cryptocurrencies, and it’s by design that they’re resistant to hacking, theft, corruption, spying, and centralization. Use of HD wallets such as Jaxx and Coinomi allow no one else to know how much you actually have, because “you” to outside observers are dozens or hundreds of random strings of characters, which are linked to one another only by the software itself and the local copies of your private keys. No one but your software can tie your many wallets together.

The Cusp of Change

It should be clear to anyone who has been paying attention to national and world events that we are on the cusp of change, and that changes have been happening for twenty years at a quickening pace. When personal computers first made their way into the home, it was revolutionary. Then there was the modem, which was revolutionary. Then the smartphone, which was revolutionary. Then torrenting (actually, BitTorrent came before smartphones, but it doesn’t matter), which allowed every single computer on the Internet to be a server. Then came the blockchain, a remarkable innovation the full scope of which I, a tech person, cannot fully grasp. It’s like the General Relativity of technology–yes, it’s that serious.

Imagine you have a spreadsheet that two or three people can work on. That’s a bit of a problem, isn’t it? Being a tech person, I know this problem well. Clients tend to throw the spreadsheet onto a shared drive and, oops, it turns out to be locked by another user who left it open. Different versions come into existence, one person overwrites another person’s data accidentally, someone’s computer crashes and there’s now an Auto-Saved version and no one is sure which is the correct and most recent… Take it from someone who has no less than thirty copies of Dancing in Hellfire on her harddrive–it’s a real problem.

The blockchain is like a spreadsheet that everyone shares, while it also solves the version difference problems. Imagine what this will ultimately mean. Take democratic elections, for example. The government should be at the forefront of this, because blockchain could be used to record votes. The data, the calculations are complete and stored in a block, is immutable and unhackable. It will remain in that block untouched until the end of human technology. It’s called a “chain” because each block points to the block in front of it and the one behind it–like if one spreadsheet ended 00003 and the next one began 00003, which ended in 00004 while the next one began 00004, only the “numbers” are much more complicated. So it’s a chain of these spreadsheets, really, and, once stored, they cannot be changed. This is what causes “hard forks” to happen. When a change is made to the protocol and technology, it creates a distinctly new thing–that “change” doesn’t apply to older blocks before the change, and it never will, because those blocks cannot be changed.

So if your vote is in 00003, it’s there forever–no changes to the vote process or anything else can ever change your vote. It’s permanent, immutable, fixed, and safe. And this is just one such application. There are countless others. One company is using blockchain technology to verify that all fish are safe or something like that. Another is using blockchain to monitor for ebola in realtime. The underlying technology that is the blockchain is the greatest breakthrough in technology since the invention of the Internet itself, and we’re still trying to fully incorporate the Internet, thirty years later.

Golem uses blockchain technology to share computing power for 3D rendering software Blender. I hate Blender. But it’s a proof of concept, especially for complex animations. Imagine being able to use five thousand processors all at once to compile your animation–Golem is making that happen, and Blender usage is its proof of concept. What further uses will we see this put toward? Password cracking? Probably–and hopefully, since that’s my only hope for getting into my encrypted backups that contain, I believe, a number of Litecoins (perhaps as many as ten, but I don’t recall, because I wasn’t really into it then, because I hadn’t seen… the proof of concept at Porcfest).

The world is changing. All throughout the world, people are deciding that they don’t want to be ruled by others, and, yes, this is even happening in the United States. The only thing holding us in our current system is our addiction to ruling over others. California won’t secede from the union because they are too eager to have the power once more, they are too eager to get a Democrat in the White House in 2020 and “make the Republicans pay” for four years of Trump. It is true that they don’t want to be ruled over by Trump and a Republican-controlled federal government, but they won’t secede, and they won’t demand decreases in state power, because they’d rather bide their time until they are, once more, the ones with the power, and can then make the GOP pay for the years of President Trump. Conservative states did the same with President Obama–that’s why we have Trump now, in fact.

We saw it with Brexit. We see it with Kurdistan, Catalonia. We are slowly reawakening to the reality that we don’t like being told what to do by governments who aren’t us and who don’t have our best interests at heart. Meanwhile, the American behemothian military machine is weakening, losing its grip, with its only hope of survival being continuous warfare–warfare that Americans (and the rest of the world) are losing their patience for. The USD will inevitably collapse (the national debt is already beyond twenty trillion dollars), and some politicians are floating the idea of making the raising of the debt ceiling an automatic process. That’s not much different from how it currently is, since the whole “Will they or won’t they?” question is a dog and pony show, but once that is erased, hyperinflation will quickly follow. And if the Democrats succeed in a national, socialized medicine scheme, that hyperinflation will be immediately necessary to pay those costs, because no American is going to submit to 80% taxes.

We live in interesting times. The state’s power is slipping away from it, and it can do nothing to stop it, because we aren’t fighting it with guns and tanks. We’re fighting it with ingenuity, creativity, and brilliance. We are, as the market always does, working around the state and its unlawful, immoral impositions. Anyone who has noticed the strange trends of the last several years should probably be investing in four things: themselves, gold, cryptos, and lead. The Age of the State is coming to an end.

Okay, I’m In. Now What?

The easiest way to transfer your wealth from United States Dollars into cryptocurrencies is via Coinbase. Some people have problems with them; I don’t. The people who dislike Coinbase are angry primarily because Coinbase, like all exchanges, keeps people’s private keys for themselves, so the user never actually owns the money in the wallet. It’s complicated, and we’re getting to that.

Think of a wallet (also called a “ledger”) as a bank account. It serves exactly the same purpose. It is a unique identifier that you, and only you, have, and comes in three parts: the public key, the private key, and the address. This is where the “crypto” part of “cryptocurrencies” comes in–encryption is heavy here. Every encryption has two pieces, the private and public key. Having the public key allows people to see the balance of the ledger and the transaction history, but they cannot send funds out of that wallet. It is the private key that is necessary for that. Coinbase and other Exchanges (places to buy cryptocurrencies) keep the private keys on servers, and you sign up to them with email addresses and stuff, and they match your email address and other information to the private key.

So you’ll need to create an account at an exchange like Coinbase. From there, you can use a checking account or debit card (some states prohibited, because fuck freedom, that’s why) to buy cryptos. Coinbase offers only Bitcoin, Litecoin, and Ethereum, but I’d still recommend using them primarily. It’s easy to get mixed up in a bunch of scamcoins otherwise. Coinbase locks in the value of your coins at the time you make the purchase, so if Ethereum is $300 each when you make a purchase of “1 ETH for $300,” it won’t matter if Ethereum has gone up to $900 when the purchase completes 5 to 7 days later–you’ll still get 1 Ethereum, not 0.33 ETH. This is a big deal. Be wary of exchanges that do not do this. Some of them will give you just 0.33 ETH, since that would be what $300 would get at the time the purchase completed. This also goes both ways–if ETH drops to $100 by the time the purchase completes, you’ll only get 1 Ethereum, not 3.

All of this is totally legal, and simple to do. Just go to Coinbase and sign up, link a checking account (the only option in many U.S. states), and start buying.

Once your coins arrive, though, you won’t want to keep them in your Coinbase wallet. Note that you can also use the Coinbase Android (iOS perhaps?) app. In fact, I don’t think I’ve ever actually been to Coinbase’s website. With Coinbase, you don’t truly own your money, just like you don’t truly own your money when it’s in a bank account. Especially in the EU, the bank owns it, and legislation gave banks in the UK the “right” to take up to 35% of the money out of anyone’s accounts at any time. So yes, exchange wallets are very much like bank accounts. However, most exchanges won’t allow you to buy crypto and automatically deposit it into another wallet; you’ll have to have it deposited into your exchange wallet.

I would recommend Jaxx or Coinomi. I use Jaxx primarily, and Coinomi only for more obscure coins like LBRY and Blackcoin. For Bitcoin, Ethereum, Litecoin, DASH, Golem, and Ethereum Classic, I use Jaxx. Install the Jaxx application on PC or Android, open it, and copy your wallet address. Jaxx puts a “copy” button right by your address to make this easier. Go back to Coinbase, choose the “Send” option, paste your Jaxx Wallet address into the “To” field, choose the amount you want to send (almost all of it, minus about 0.001 or so, to pay for the transaction fee), and confirm it. A minute or so later, your funds will show up in your Jaxx wallet, where you and only you control it.

It’s really that simple. It used to be a lot more complicated. My first Bitcoin purchase was for a client who had been hit with ransomware. I ended up sending $548 through Western Union to freaking Tel-Aviv. It was an ordeal. It took an entire day to get that one Bitcoin. It’s no longer anything like, but that’s part of why there’s the delay in Coinbase. It’s all about liquidity, after all–in the grand scheme of things, if you want to buy, then you have to find someone willing to sell, right? Coinbase cuts out that labor by acting as the middleman. People sell their coins to Coinbase (more or less), which has given Coinbase a nice cache of them. But yes, that’s really all there is to it. Exchanges have made the process so much easier than it used to be.

If you do want a riskier, more obscure coin (if you’re operating under the idea that any given crypto could shoot its way up to $50, so getting 100 of a currency for $0.15 is a great idea), you can instead use the Coinomi app instead of Jaxx. Jaxx and Coinomi both include a feature called Shapeshift (which is an unrelated, independent company) that, for a small fee (usually it’s a small fee, but nothing involving Bitcoin has a small fee anymore), will allow you to turn your Litecoin into Dogecoin or DASH or Ethereum Classic. Coinomi has more options, such as Belacoin, LBRY, and Blackcoin. So, to do this, here would be the basic steps:

  1. Create account at Coinbase, link a checking account (probably, unless you’re in one of the few states that will let you use a debit or credit card, you lucky devil).
  2. Purchase some amount of Bitcoin, Litecoin, or Ethereum. Litecoin has the lowest transaction fees right now.
  3. Wait for the purchase to complete. 4 to 8 days later, your coins will be deposited into your Coinbase wallet.
  4. Immediately send them to your Jaxx or Coinomi wallet. This will involve a small fee.
  5. Hit the fox head-looking thing. It will show you the maximum number of coins you can shapeshift, and will allow you to choose which currency you want to shapeshift them too. This will involve a small fee.
  6. The Shapeshift will automatically send your new coins to the corresponding wallet in whatever software you’re using. If you shapeshift Litecoin into Dogecoin using Jaxx (for some ungodly reason), it will automatically send the Dogecoin to your Jaxx Dogecoin wallet.
  7. Hold onto the currency until you’re ready to spend it or sell it.
  8. Selling it is basically these steps in reverse–convert it back into LTC, ETH, or BTC (be mindful of the relative values of these currencies! If Blackcoin goes up to $1 apiece but Bitcoin has gone up to $500,000, then Blackcoin relative to BTC will have gone down in value, even if it’s technically worth more in USD). Send the currency to the Coinbase wallet, and hit the Sell button.

So good luck out there. The state is going to come down. Bruh, do you crypto?

A Crypto Constitution

I made a joke post earlier making fun of scam ICOs, encouraging people to send Ethereum and Litecoin to me, in return for which they will receive an equivalent number of meaningless, worthless, no-shits-given Anarchist Shemale Coin, in a humanitarian effort to facilitate the divorce of money from those who lack common sense. But to be totally honest, I’ve been watching Bitcoin and Ethereum for a while (perpetually rooting for the underdog, I am), and I actually would like to launch a cryptocurrency. I quite obviously lack the technical expertise to do this–I fix computers and networks and do light programming. I don’t write communication protocols. I could have delved that deeply into the mechanics if I wanted to, but I didn’t.

The question is worth asking, though. Given that there are countless (at least five hundred) altcoins (seemingly a label that means “not Bitcoin cryptocurrency”), of what value would another be? Actually… I have a pretty good answer for that. Bitcoin is currently in the process of showing us why communism and raw equality generally fail, why flat hierarchies fail. There are too many cooks in the kitchen, many of whom refuse to compromise, all of whom have their own way of doing things. By December, Bitcoin will have hard forked and created at least three new currencies–Bitcoin Cash, Bitcoin Gold, and either Bitcoin Classic or B2X–or some other acronym, depending on how November plays out. Regardless, it is splitting quite a lot.

On the one hand, this is good. If you owned a Bitcoin in August, then you suddenly 1 Bitcoin and 1 Bitcoin Cash once it forked. In that sense, it mirrors stock splits in a lot of ways–it doubles the amount in existence and splits the value across that amount. Someone who owned 100 Exxon shares 70 years ago now owns probably twenty thousand. Companies do this to drive down investment costs, which brings in more investment money. Bitcoin faces similar problems, because so many people are reluctant to spend $40 on 0.01 BTC when they can spend $40 and get 0.76 LTC. Ostensibly the growths and values are the same, but, psychologically, they are not. 0.76 LTC feels psychologically like a more substantive purchase. I would bet that more than 75% of this year’s newcomers to the industry purchased LTC, ETH, DASH, or another alt-coin before they purchased any BTC. Anyway.

The hard-forking appears to be a permanent feature of Bitcoin, and there isn’t really any reason to suspect that it’s going to die down as time goes on. After S2x there will be something else, some other point of contention. Markets don’t like unpredictability and uncertainty, and this is going to hurt Bitcoin’s value, whereas the primary thing keeping it popular these days seems to be that it was the first and is simply the most well-known. I wouldn’t touch it, even with the possibility of having my coins duplicated into several alt-coins. In fact, I converted my BTC into freaking DOGE, which is forever going to be worthless.

“White papers” are well and good, but you know what is really missing from the ICOs and the altcoins?

A Constitution

That’s right. A constitution.

See, we anarchists are not anti-government. We’re anti-state. Many of us have pointed out numerous times that the state is merely one form that a government takes, just as a truck is one form an automobile takes. If I hate trucks, that doesn’t mean that I hate cars or vans. In fact, I do hate trucks, because 98% of the people driving them in Mississippi have absolutely no need for them, and are just driving them because of cultural reasons, wasting copious amounts of gasoline and doing unnecessary damage to the environment (yes, I said that).

The White Paper would serve basically as the Constitution itself. I’d love to enlist people like John McAfee and other brilliant minds for such a project. Security, anonymity, and individualism would be the core tenets of the currency. Most importantly, however, would be that it would have amendments similarly attached to it immediately upon being adopted. First among those would be the requirement that, at any time, 5% of currency holders could request a vote (the blockchain itself could be used to store these votes, too), whereupon each member on the Board would be recalled with a simple 51% majority.

It’s anarcho-capitalist in the sense that it wouldn’t be the individual’s vote that mattered, but how much of the currency they actually held–voting with their wallet, so to speak, which is a more accurate imitation of the market. Someone with 1,000 of this currency has a much higher vested interest than someone with 0.01 of the currency, and it simply stands to reason that the person with 100,000 times the stake should have a much more powerful voice. They have more to lose, which will cause them to be more conservative and considerate. People don’t risk millions of dollars regularly in a free market (and they only do so in the United States because of the socialized losses / privatized profits system that we have).

It is necessary, all evidence suggests, to have some authority that determines the direction that a ship should go. Having 3,000 passengers attempting to decide a heading is bedlam, and there is too much noise for the system to be efficient. It is necessary, for the sake of productivity and progress, for there to be a hierarchy, a group of informed, knowledgeable individuals who make the decisions on how the ship should be sailed. The problem with the state, of course, is that we have no choice but to get on the ship. This system I’m talking about would be voluntary–no one would have to take part in it (thereby consenting to “rulership” of the board and its Executive Committee). It would be entirely their choice to submit to the board’s decisions by purchasing the currency. The Second Amendment would be that measures shall always be taken to ensure that the system is voluntary. This means it must have competition, even if this means that the board must hard-fork the currency themselves. Not that it would come to that, of course. The odds of one cryptocurrency overtaking all others are so low that it can almost be discounted entirely–but not entirely, not really. The protection must be written in as one of the first few amendments.

Competition is what’s important. When people are forced to participate in a system, then that system has no competition. The result is inefficiency, fraud, corruption, and direct abuses of people’s rights. Decentralization is not the goal, nor is a flat hierarchy. These are merely ways of ensuring that no small group or single person has the power to abuse in the first place. Another, more effective, method is to ensure that people only submit to this group voluntarily, and that market forces like competition keep this small group behaving in a way that ordinary people approve. Having a centralized cryptocurrency, even one offered up by the United States Government, isn’t really a problem, because we have so many better alternatives. It would only become a problem in the event that the United States Government used its state power to eliminate its competition (which it probably would try, honestly). JP Morgan Coin isn’t necessarily a problem for the same reason. As long as their is competition, the market will sort it out, and market pressures will ensure that JP Morgan doesn’t do anything too screwed up.

The right of users to not have any personalized information stored would be a critical tenet. Nothing but a long string of hex characters could be stored. The coin would officially boycott (even though it couldn’t prevent) any exchanges that required identifying information in order to make purchases. Even the P2P exchange Airwave (which hasn’t launched yet) asked me for my freaking government ID, are you kidding? Considering that its white paper states that its goal is to make exchanges resistant to government interference, that is a bizarre move on their part, but, given that it was to be whitelisted rather than simply accepted, I’ve chosen to ignore it and pursue it anyway.

Besides, the purchasing of crypto-currencies is not nearly as important as the manner in which they are stored. HD Wallets are a necessity. By using rotating wallet addresses, a particular user can have their true wealth made completely invisible by anyone watching the network–a feature of Jaxx that caused 0.63 LTC to temporarily vanish from my wallet yesterday, in fact. Once the coins are purchased, it is easy to tell the IRS and government officials that one was hacked, and all the coins stolen, and it’s upon them to prove that this didn’t happen in the United States. Wish them the best of luck attempting to prove that you were not hacked. Golly gee, I certainly was. Yeah. Definitely. All of my crypto vanished, IRS. Some clever hacker just got my phone, and, yep… All of it went Poof. Just in case any government agencies are curious about why “constitution” and “crypto” are being discussed on an anarchists’ website, they should know that. That 0.63 LTC I mentioned? Hacked away, almost as soon as it reappeared in my wallet. Alas, alas, que sera, sera.

I’ve not given this the thought to actually put forward any serious white paper for any enterprising crypto-interested individual to consider, much less ten critically important amendments. That isn’t my point in this. I’m simply attempting to draw attention to a huge problem that crypto-currencies face, and the obvious solution to that problem. Bitcoin is proving that some sort of central leadership is necessary, and that having too many cooks in the kitchen just causes them to create too many freaking dishes, because Bob insists on using pepper, which would clash with the paprika that Janet is using, and Janet’s paprika would clash with the garlic in April’s dish.

Meanwhile, Ethereum continues on almost exactly as planned, with its hard-forks literally planned into the process for the beginning, and about to be implemented without devastating the network. But Ethereum, however well-intentioned and noble they may be, and however useful ether and the ethereum blockchain (separate from the currency) are, the fact remains that they are a standard company, and are far from incorruptible. This is the case with nearly every alt-coin. They are like people who seized government because they wanted government power, instead of seizing government because they wanted the people to be free. Obviously, because this last group requires such a high degree of principle that they are exceedingly rare, the Ron Pauls, John McAfees, and Daryl Perrys out there. They created crypto companies to make money, not to create a new currency and turn it over to the masses via democratic processes. No, the founders and creators want to keep themselves at the top.

We’ve seen the same thing with many of the new caucuses within the Libertarian Party, one of which I recently helped form before I became inactive in it because I observed exactly this phenomenon. The trick, it seemed, was that they wanted not to form a caucus that advocated and implemented a certain set of ideas independent of themselves while they were merely the ones who set it up, but wanted to form a caucus to be the heads of. It’s like the Libertarian Party county affiliates who wrote nothing into their bylaws about replacing the Chairperson. Imagine if Nolan and others had neglected to include any method of replacing them as the party leaders–it would have said quite a lot about their intentions, wouldn’t it? Props to the Audacious Caucus, however, for not doing this, and for having, from the start, bylaws that were about the principles, not the individuals who at that moment were advocating those principles.

And that’s fine that they created a crypto-currency and blockchain for the purposes of heading the company and being the ones with wealth and power. That’s fine, because Ethereum competes. But we badly need a structured crypto company to determine the direction of a currency that exists for the users, rather than for the company. What kind of person starts a new company and, before that company is even launched, writes into the very company’s constitution that the person who created it can be replaced and is not certain to lead it?

Such a currency would be successful, because it would be stable. It would remain successful because it would be competitive. It would offer people a place to store their wealth where they have a real voice to influence the direction, whether they were ignorant or wealthy, well-informed or poor, but where safeguards in the form of the “Bill of Rights” would ensure that, even if a vote did not go their way, there were constraints and limits on what could and could not be done with their wealth.

So someone do this. Be the next Satoshi. Do something not to be at the head of a powerful and wealthy company; do it to help the people of the world.

 

The Inevitable State War on Crypto

I’ve been watching the crypto market for a long time. Naturally, being a tech person and an anarchist, Bitcoin was something that I was deeply interested in, but it wasn’t until last year that I actually started putting any money into it–and even then, only small amounts. More recently, I’m putting in literally every penny that I can afford. It’s pretty clear to me that crypto-currencies are the future, and that fiat currencies are going to be crushed. But before we get into that, let’s discuss this idea first that BTC and other cryptos are “fiat” currencies.

Fiat?

Fiat means “by decree,” basically. A fiat currency is one that some authority figure decrees to be the currency. This is why the USD is a fiat currency–the U.S. government has made it our currency and has, in the way that monopolies do, fought very hard to keep any competition from existing. It’s not being inflationary that makes a currency “fiat.” It’s having a government say, “This is your currency.” If the USD was abolished and the government switched to BTC, then BTC would be a “fiat currency.” In fact, a isn’t the right article to use when discussing fiat currencies; the is usually more accurate. The USD is the fiat currency.

The Past

In the past, kings and nations had to pay for wars using their gold and silver coins. War is expensive, and it has always been expensive. Historically, men who otherwise could have been doing something productive are instead paid to go out and be destructive. This obviously constitutes a net drain on wealth. You not only have people not being productive–and being paid to not be productive–but they’re also being deliberately destructive. Resources, gold, labor, man-hours… all of these things are destroyed during war, and all of them could have been used in a more capitalist sense by investing them and turning them into more wealth and resources.

Taxes were historically high upon barons and lords, who in turn taxed the shit out of their peasants to pay the king’s taxes. The peasants were not usually taxed directly by the king; the king commanded the barons, dukes, and lords to give him money, and they did so. However, the barons, dukes, and lords didn’t really do anything to earn money (neither did the king, of course), and so they had to steal it from the peasants through taxation. The king had to pay his soldiers to fight the wars, had to pay for swords and ships, and all of these other things, because an unpaid soldier is a disloyal soldier.

Soldiers are always the first people to be paid by the ruling power. We see this today in Venezuela where, despite crippling national poverty, soldiers still enforce the government’s bidding because they are still being paid, and offered extra toilet paper for their service. It becomes a matter of survival for the soldiers–everyone else is starving, but they can keep themselves and their families provided-for by continuing to serve the system that has made everyone else poor, but if they refuse to serve, then their families will starve with everyone else.

Because it was a necessity to pay soldiers and because it was impossible for any king to do everything they needed to do while also paying for a war, they instead resorted to inflation. Inflation is when the amount of currency increases while the amount of wealth it represents stays the same or decreases (typically, it decreases). Let’s use a silly example to explain it.

I give you ten M&Ms and I say “These are worth $100.” This means that each M&M is worth $10, yes? Then I say, “I’m going to make you more wealthy. Here’s twenty more M&Ms.” But you find, once you have thirty M&Ms, that they’re still only worth $100. You have more M&Ms, sure, but you still only have $100. Instead of making you richer, you have the same amount of money that you had before. This is inflation. The value of the M&M was inflated. Real life inflation is more dangerous than this, because I don’t actually give you the other twenty M&Ms. In reality, I keep them, and let you keep yours. You still have ten M&Ms, but they’re only worth $33.33 now. I didn’t make you wealthier, did I? I made you poorer.

I robbed you.

Instead of paying with pure gold coins, kings stretched their gold further by taking cheap metals like tin and plating them with gold. It was still “a gold coin,” but it was worth much, much less than a pure gold coin. Instead of having only one thousand gold coins, the king had ten thousand of these gold-plated coins. So if a soldier was paid one coin a week, then he was able to pay ten thousand soldiers that week, instead of only one thousand.

Today the United States Government does this by printing money instead of adding tin to gold coins, but it has exactly the same effect. Earlier today I watched a video of some obnoxious twats who rented dinosaur costumes to go to the White House and “protest” with signs saying that the government should fund national sciences. They may think that now, because the government’s inflation allows them to mask the true cost of this crap. But if the government had to actually steal from us tax us to pay its bills, they wouldn’t be out there asking for their taxes to be increased.

You know, people think our taxes pay for our roads, our education, our bridges, Medicare, Medicaid, and these wars… That’s so untrue. Our taxes leave a huge deficit, to the tune of about $600 billion dollars every year, and that deficit just increases, raising the National Debt ever more. Even with obscene taxation (because we are taxed far more heavily than the colonists would have stood for), the government must inflate the currency to obscene degrees by borrowing it from the private banking cartel that is the Federal Reserve Bank.

The Future

So how do crypto-currencies fit into this? Well, the U.S. government can’t inflate them. They’re decentralized, so they can’t be inflated like that. The U.S. Government can drop money into bank accounts and buy large amounts of crypto, and it’s certainly doing so, but this is pouring value into the cryptos because the USD represents value because it’s easier to exchange and is used in wage payments. If clients paid my invoices in LTC and ETH… That would be fantastic. Anyway, if they did so, then my labor would be pouring value into LTC and ETH, and every new coin would be a representation of the work that I did to earn it. As it is now, it’s a representation of how much USD I spent and, in theory, the USD is a representation of the work I did to earn it.

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The government can’t just tell Crypto Managers, “We want 35 Bitcoins to pay for something,” because there are no “Crypto Managers” they can tell it to. This is the way the Federal Reserve System works, of course–the government tells this cartel of privately owned banks that it wants money (which has Interest attached to it, naturally), and the bank coalition hands it over, because they’re assured to make money in the long-run since the government will steal from us to pay it back. This money is created out of thin air, devaluing all the existent money like the M&Ms above.

If the government wants crypto, it has to buy them. To do that, it must raise money. To do that, it must steal from us. This will work for a while, and the government will buy cryptos, but the continual increase in value that cryptos are seeing will continue to cause people to move away from the USD and into cryptos. Amazon, Wal-Mart, and Target will inevitably start taking the more popular cryptos. We saw exactly the same thing with credit and debit cards, and with personal checks. There are minimal differences, because the debit cards and the personal checks also represented wealth. When people store their wealth, they want it to still be there when they go to retrieve it. A history of it “not being there” is why we have FDIC today, and is what the movie It’s a Wonderful Life is sort of about. Think of each crypto as its own MasterCard or Visa or Discover or American Express. Right now, I’d say BTC is Visa, ETH is MasterCard, LTC is American Express, and DASH is probably Discover.

In the beginning of cards, no one took them, because not enough people had the cards for the companies to justify the expense in setting up their systems to accept them as payment. There are also legal hurdles, but let’s put those aside for the moment. As more people make money in cryptos and find that they are excellent places to store wealth, more people will store their wealth in them, and more people will carry the “cards” and motivate Target et al. to install “card processing machines.” In time (and, due to how accelerated social changes have become, I’d bet it will be within ten years), larger corporate employers will offer employees the option of being paid in crypto currencies.

This is something that cannot be stopped. Pandora’s Box is open, and the only way to pull the plug now is to shut down the entire Internet and never let it come back online. Every BTC miner has a full copy of the blockchain and could restore the network. There is no amount of cracking down that could get and destroy every single part of the crypto networks. They will try, of course. They have no choice. To survive, they must try. We’re getting to that.

There already exist completely anonymous wallets like Jaxx, which allow a person to send and receive crypto without giving up any personal identifying information. This stuff is extremely difficult (although not impossible) to track. I purchase through Coinbase and then send to one of three other wallets. If the state zoomed in on me, they could certainly figure out exactly how much money I have where, but they can’t do this for everyone, and eventually they’ll be overwhelmed solely by numbers–it’s like how torrent sites openly exist today, such as the Pirate Bay. And even if The Pirate Bay one day finally goes down, a hundred will pop up in its place.

The Internet gave us far more power than they ever anticipated, and cryptos are the next stage of that. Once we have cryptos, we can be paid, and we can make purchases, all without ever touching the USD. The USD, which steadily loses value, is a terrible investment. It takes $20 today to buy what $1 bought in 1913. Meanwhile, it takes 0.1 BTC to buy today what it took 1 BTC to buy a year ago. Cryptos have been moving in the opposite direction from the USD; while it becomes less valuable, they become more valuable. Which would you want to be paid in? Which would you rather have–a one hundred dollar bill, or 1.2 Litecoins?

To make matters even worse, they will find that it’s very, very difficult to tax. And it’s impossible to tax in large amounts. Every single person would have to be audited. Massive amounts of wealth will slip right through the IRS’s fingers. “How much crypto do you have?”

“I plead the Fifth.”

They can easily look up your social security number to find your checking and savings accounts, and to find your stocks and shares, and tax you accordingly. But how are they going to find your crypto wallets? What if you store your crypto wallet on an Onion server–on the Tor network? Anonymity within anonymity.

What will happen when Saudi Arabia says, “Sorry, man, but you have to pay us in ETH for our gas”?

It won’t matter by that point, of course. By that point, every American citizen will have started moving away from the USD. Wal-Mart and other corporations will accept it as payment, and they’ll offer to pay people in the same currency. The government’s stranglehold on our wealth will have been broken. So how will it pay $300,000 to teach hookers in the Phillipines how to use condoms? How will it pay $1.6 trillion to fight in foreign countries? The soldiers wouldn’t accept the USD as payment, and neither would the tank and missile manufacturers.

“Taxation” is the only way–inflation will have been ruled out, because they don’t control the currency and can’t inflate it.

And this is why the anonymity matters. They cannot tax what they cannot track. And if they begin kidnapping random people to extort money from them, I don’t believe even the slothen, lackadaisical Americans would put up with that. “We’re going to institute a 0.01 BTC tax to pay for a hammer for NASA to use.”

lol.

Yeah, right.

Once we have to actually be directly taxed to pay for this shit, these government schemes will evaporate. You want to End the Fed? You want to abolish the Department of Education? You want to end Medicaid and welfare? You want to stop the wars? You want to keep the government from paying ludicrous amounts of money to teach hookers how to use condoms?

It’s done with cryptos.

I don’t know if Bitcoin will be one of the holdouts in the end. It has a lot of baggage attached to it. To many people, Bitcoin is used for money laundering and for paying ransoms. It’s going to be very difficult for BTC to get out from under that shadow, even if it’s possible. And I know BTC people are celebrating as it approaches $5,000 per (and I would be, too), and I congratulate them–but their excitement is a little undue. We’re still in the very, very early phases of this. We haven’t even come close to 5% adoption rates. We’re still deep in the Early Adopter phase.

Once we get around 5%, television shows and movies will begin featuring cryptos. Popular mainstream figures and shows like Pewdewpie, Family Guy, Rick & Morty, and South Park will begin mentioning it in regular conversation. They’ll show characters making money with it, making purchases with it… Then, with the Trend Setters like them on board, we’ll reach about 15% adoption. The Trend Setters will bring in the Trend Followers, and that is when Target et al. will start accepting it at the cash registers.

Many people will enter expecting to multiply their wealth by twenty times, hundred times, and so on, but that phase of the cryptos will mostly be over, and a few primary cryptos will be in the lead, and there they will stay until the next paradigm shift. Some new crypto with some new, novel algorithm won’t sway the masses of people. They won’t be impressed by Newcoin’s shiny new algorithms, and will stay with whatever cryptos are in the lead. I think it’s going to be Ethereum, Litecoin, and something else–probably not Bitcoin, because of all its baggage (and its price). Adoption rates will slow down, as these trend followers tell everyone that the “wealth people were making” must have been greatly exaggerated, because they’re only making 1% or 2% gains. The late arrivers will finally get on board, leaving only the iconoclasts, rebels, and conservatives out of the loop, and by then the Gold Rush will officially be over. There will be no more meteoric rises from $40 to $100, or from $600 to $5000.

And there will be losses. I see a lot of people excited about LTC’s climb right now–myself among them, and I really can’t afford for it to plummet–but it did plummet earlier this year, coming in at about $15 per and dropping to less than $2 each around February. Someone who bought 100 LTC while it was $15 each and sold them when it fell to $2 each lost $1300.

I don’t like Bitcoin, to be honest. It has too much baggage, and I’m more than a little envious of the people who bought it at $10 a pop and now have tens of thousands of dollars. What can I say? I’m honest about my motives. I want to see BTC collapse because I’ll feel better about having missed that boat, and I want to see the smugness wiped from Bitcoin Champions’ faces. It’s petty, I know. But the smugness! My god, the smugness. They act like it’s impossible for BTC to rapidly collapse. And it’s not only possible, it’s extremely likely to, around the time the Trend Setters start coming in.

The dumbest thing I heard this week was someone saying that “the number of coins purchased doesn’t matter–its percentage of growth relative to the USD is all that matters.”

That’s Old Paradigm thinking. In fact, the amount of coinage is all that ultimately matters. If the USD collapses, which it ultimately will, and cryptos will be the reason why, it won’t matter one tiny freaking bit that BTC was valued much more highly, according to the USD, than ETH. 0.01 BTC may be worth $100 right now, but if you take that USD away, what do you have? You have 0.01 of a currency. And without the USD, that 0.01 of a currency is a lot less than 1.00 of another currency. Without the USD measuring these currencies relative to one another, the amount of coinage will be all that freaking matters. You could have your wealth vanish in a heartbeat if people decide that a car is worth more than 6 BTC. Without the USD there saying those 6 BTC are worth $30,000, how are you going to get anyone else to accept that your 6 BTC are an even exchange for a car?

This is why the amount of coinage matters. If you get trapped in the Old Paradigm and attempt to apply it to the New Paradigm, in the end I don’t think you’ll have any wealth left at all. Right now, the only thing keeping BTC so valuable is literally the existence of these other currencies. Erase them from the equation, and what do you have? 0.04 BTC. Well, I’ll have quite a lot more than that of ETH and LTC.

And most people intuitively understand this, even if they couldn’t elucidate it. Most people won’t be willing to drop $500 on a tenth of a Bitcoin when they could spend that same amount of money and get five Litecoins. Who would buy a tenth of a BTC instead of five LTC? Not very many people. And their reasoning is solid, even if they don’t realize it, and even if they don’t know why, exactly, they prefer “five of one thing” to “0.1 of another thing,” even if the values are theoretically equal: those values will vanish. Cryptos themselves will make sure that those values vanish, and that the only thing that will be left is “five of this coin” and “0.1 of that coin.”

Crypto Thoughts

I don’t talk about my personal life often, because I instead use social media for impersonal things (No one online knows I broke up with someone a few weeks ago, for example), but I broke the silence when I returned from Porcfest to share a small tragedy that had befallen me: the laptop on which I kept my BTC, LTC, and ETH suffered an unknown catastrophic failure on the trip to Porcfest.

Total data loss.

No worries, right? I’m an I.T. chick–surely I had backups. In fact, I did, and do, but there is a small problem. In a truly worthy lesson about procrastination, I encrypt things. Pretty much everything. My entire hard drive is encrypted. My phone is encrypted; the removable storage in my phone is encrypted.

On that laptop was a text file that contained several broken series of strings of characters, encoded in a way I designed mentally. “Move the first 56 digits to the end, invert the entire thing,” that sort of thing. Someone who managed to get access to the file would still have unusable private keys, because of these changes I’d made to them. It was tedious sometimes, but secure. There was no fear of anyone, independent or state hacker, getting into my stuff.

In a separate text file was another key–one that was the private key to the encrypted backups. If you’re not familiar with encryption, then this is what I basically said: I created the perfect safe, and then locked the key inside of it. I kept telling myself, “I need to move that text file somewhere else.” But I only ever really used the laptop for work, so on those moments when it occurred to me, I wasn’t in a position to move it anywhere. Of course, my writings, music, and all that are backed up redundantly in other places, so there’s never a risk of losing those.

But each separate backup is a vulnerability point. When dealing with money, it’s not a great idea to throw the unencrypted private key on Google Drive.

So when the drive failed, I lost the crypto I had. Vanished forever into the ether. It was not a lot of money, then or now, but I could really have used access to it while I was at Porcfest.

C’est la vie.

The lesson was learned, and now that I’m rebuilding wallets and purchasing again, I’ve got better redundant methods to protect my investment. Take my warning: don’t leave your encryption keys inside of encrypted backups thinking “nothing will go wrong in the next few days, and I’ll move it later.”

Bitcoin, Ethereum, and Litecoin are my coins, primarily Ethereum. Probably for the same reason I prefer Pepsi to Coke, and the Rolling Stones to the Beatles. So let me get started this crypto discussion.

The Past and Future Coin

In olden days, people broke coins in half and quarters to make purchases. We’ve repeated this with modern crypto currencies, and this is part of Bitcoin’s problem: I don’t have a ton of money, and I have no desire to purchase 0.0003 of a coin. It feels like nothing. It feels like turning $40 into nothing. It’s true that it’s not “turning $40 into nothing,” but how it feels is an important consideration when we’re discussing investments.

This is why I prefer ETH and LTC. $40 in LTC gets you an entire coin (or very nearly). $40 in ETH gets you more than a tenth of a coin. It’s important that these coins can be broken into such small chunks, and BTC is probably the best investment of them, but that’s the other major thing worth thinking about.

Different Denominations

In practice, BTC, LTC, and ETH aren’t different currencies. Yes, they are, strictly speaking, and they have different philosophies, goals, and code. But for the average user, that isn’t important.

What’s important is that BTC is on its way to being the Ten Thousand Dollar Bill, ETH to being the $1,000 bill, and LTC to being the $100 bill. The future will see fiat state currencies wiped away, but it will take numerous cryptos to do it, and I’m not sure BTC will be the leading contender in the end. I strongly suspect BTC is in a bubble, and that when it bursts, people will move en masse to ETH and less so to LTC, and the crypto-currency market will begin to stabilize. BTC will recover, of course, but I don’t see it holding its place in the long run.

What we’ll see in forty years (or longer–I’ve not thought much about the timeframes) are purchases made for “Five ETH, three LTC, and one DASH.” I don’t think we’ll see “5.76352715 ETH is the price.” It’s simply not practical for denominations to be split, cut up, and tossed around like that. It will remain possible in theory, but I don’t see it happening indefinitely, and I don’t see a car being sold for “3.21234221 bitcoin”. It’s happening now, yes, but “3 BTC and 9 ETH” is a lot more succinct and easier to communicate.

We may even see the rise of a single crypto designed to do exactly this, to provide multiple denominations of a single currency. I think most ordinary people would flock to such a currency. On a higher level, it would really just be set fractioning of a single coin–like if we called eight bitcoins a “bytecoin” and half a bitcoin a “slipcoin.” But the ease and convenience of it would attract people, and people would gladly give up precision for convenience (just look how many people round pennies down).

I don’t think the crypto market is where it’s going to stay in the long run. I don’t think they’re ready to be taken as primary currencies, because “0.00031 BTC” is too sloppy of a price. “One ETH and one LTC” is far more attractive.

Time will tell, of course, but I was right about the August split, even as self-professed experts poured out to tell me that there would be no split, and that I didn’t know what I was talking about. Who knows? The future is going to be interesting.

But if you’re not buying crypto currencies, you should be.