Strategic tricks used against the Coinsman

What could be the two most important political writings of the past decade were both written from prison cells, by political prisoners who spent substantial time in solitary confinement.  One is the "Manifesto for a Democratic Civilization" by Abdullah Öcalan, who had been an important member of the PKK.  The other is "Maroon the Implacable", by Russell Shoatz, who had been an important member of the BPP.

The latter of these describes in one section the problems which plagued a liberation movement of people striving for self determination and to escape the existing yoke of an oppressive system.  The American history presented is all too often ignored, and some parts in particular are relevant to the situation which faces current users of public coin systems ((A system where some people work for economic tokens and others simply issue arbitrary quantities in private at no cost is an oppressive system)).  They outline how great progress in a first wave of change can be lost.  Here's the quote from Russell Shoatz which inspires this post:

Strategic Tricks Used Against the Youth

Understanding these tricks and their various guises and refinements is the key to everything.  You will never really understand what happened to get us to the present moment or be able to really move forward until you become a master at recognizing them and at devising ways to defeat them.  They remain:
1. Co-Option;
2. Glamorization of gangsterism;
3. Separation from the most advanced elements;
4. Indoctrination in reliance on passive approaches;
5. Raw fear;
6. Drugs;

It might be that you don't see eye to eye with me on this analogy of black liberation to bitcoin.  You might consider bitcoin of use as a revolutionary tool, or the opposite: as a counter-revolutionary tool.  You might disagree with my opinion that bitcoin is being adopted by what is effectively a global maroon community, giving individuals and communities democratic leverage against authoritarian systems such as states, republics, corporations, or plantations.  However you probably will not disagree that the use of bitcoin or public coin represents some kind of change to the status quo, compared to the system of the late 20th century.  From here, we must recognize that there are forces, not necessarily consciously due to single or multiple specific actors but forces none the less which collectively work to hold the status quo in place and which use the above techniques to trick "The Youth" (that is, those spear heading the change).  In other words: strategic tricks that work against your vision of success for crypto.  To quote Russel Shoatz again:

First off, let me make clear that even with all of the glorious strides that youth made within the first wave, they were not the only ones fighting for radical and in many cases revolutionary change.  These young people were usually only the tip of the spear, the shock troops of a global struggle.  They were motivated by youthful energy and impatience, with no time or temperament for elaborate theories. They were rushing forward into the fray, ill prepared for the tricks that would eventually overwhelm them.

So to understand what happened we must examine some of the main "tricks" used to slow down, misdirect, control, and defeat them.  Without a point, a spear loses all of its usefulness.

If we are to learn from this history, and to not make the same mistakes, we must pay close attention to this kind of sage analysis.  So lets consider how the six tricks are used against the youth so that we might escape a lost generation or worse in the struggle to obtain a sane financial system, or at least to give us respite from the debt slavery and rule-by-counterfeit systems as we strive towards more enlightened social systems.


Co-Option was used extensively to trick just about all of the first wave youth into believing that they had won the war.  Strategically, among every segment of the youth that we can name - university students to lower-class communities - billions of dollars were made available.

Sound familiar?  It should.  Venture capital dollars have "poured into bitcoin" in a process called co-option.  The best and the brightest spearheading the bitcoin revolution (or counter-revoluation if you prefer) were given jobs, titles, and other supposed benefits, provided they play according to certain scripts.

Supposedly these funds were to enable the youth to determine what should be done to carry out the far-reaching changes they desired.  In reality they were being expertly monitored and subtly coaxed further and further away from their most radical and advanced elements, mainly through control of this funding.  This was part of the strategy adopted by ruling-class foundations, by government, and by corporate Amerika for defeating the youth with sugar coated bullets.

I will avoid mentioning names in this post, because it would be too long.  However mentioning them is important.  Stick to your vision and say no to the sugar coated bullets.  Notice and understand the forces of co-option before you make those important decisions.

Glamorization of Gangsterism

This is perhaps part of the story of the rise of bitcoin as well, in a different way.  Ponzis, exit scammers, web-wallets, premines, wallet thieves, pump-and-dumpers, cloud-miners, ASIC non-deliverables, fake-hacks, real-hacks, and obsolete miners: All have a certain glamor about them if we read the forums and focus only on the fact that they "got the money".  But is this going to help us reach our goals?  Gangsterism ostracizes us from the mainstream and pits us against each other.  You will be happier in the end to call out scammers and to hold the hands of those who might fall prey to gangsters rather than to take advantage of these people for supposed short term gains.  We should at the very least be wary of the pitfalls and the innate push by the status quo to lure us too far down this path.

Separation from the most Advanced Elements

This is really tricky.  It's hard to know who the most advanced elements are or where to find them.  Forums are co-opted, and people claiming to be the most advanced almost never are.  It takes constant vigilance, as there is no authority capable of simply telling you.  We must continuously search ourselves.  We must be willing to consider the opinions of those who might have appeared crackpots, co-opted, or wrong in the past - just in case.  We must be willing to abandon those leaders who might have become co-opted, degenerate, or simply lost their touch and would lead us astray.  We must be wary of forming tight-knit groups that discard potentially vital intelligence as being external.  What makes this task harder still is that we must above all continue to be decentralized.  This is an earlier theme of maroon success, continually mentioned by Shoatz, and fortunately for us one at which bitcoin excels.  However, it makes adherence with the most advanced elements a constant struggle.

Indoctrination and reliance on passive approaches 

Because the conflict is an economic one, we might be tempted to say this trick is less applicable.  However the key is education, and in this theater reliance on passive approaches is a major mistake.  Without active education and insistence on the use of public verifiable exchange, when monetary exchange is deemed necessary, there will be no further progress and our remarkable gains will be lost.  Indoctrination in this theater is massive, as every school, movie, TV show, songs, organized religions, nearly every possible facet of media will tell us that privately issued currency is money and that we should just accept that.  On the other side there is almost no regular education of information theory, encodings, public-key encryption, or open-source software management.  To avoid losing ground we need an active approach, simply "Hodling" is not enough.

Raw Fear

From the early days of bitcointalk raw fear was there.  "FUD" of all sorts, yes, and also "bitcoin will be banned".  I'm sure you know the name of at least one coinsman who has been imprisoned or robbed by agents of state or fiat for their noble efforts.  As one early commenter put it:  "Nearly every serious student of the subject seems to believe that Bitcoin will be ruthlessly suppressed in the near future.  The only disputed details appear to be: what form the ban will take, and how it will be enforced."

However in the case of bitcoin, numbers, appearances, and crucially finances are on our side in addition to just common sense, decency, and history.  Educating people in the problems with privately issued currency might seem risky if you just consider the powerful forces in question, but it isn't.  Henry Ford spoke eloquently on the topic, as well as many others over the last century from all positions in the social hierarchy.  If you aren't calling out specific names, then you are not drawing specific ire - and also, you are not alone.

Rest assured - bank accounts and paypal accounts will be closed, and more arrests will be made.  Again, if we plan ahead for such contingencies, and recognize the trick that fear can play to make us weak, keeping in mind that this is our chance today to make a difference, we can make decisions which properly weigh all possibilities.


It's tempting to go off on a tangent because drug education and policy is in such a barbaric sorry state, but I'm going to avoid that for now.  We should keep in mind that we will need all our wits about us to navigate this period wisely, and whatever that means in terms of your drug use is for you to determine.  The thing I've personally seen do the most damage to bitcoiners is that king of defocusing agents, the amphetamine, the worst damage of course (as all drug abuse) coming from when it is taken regularly.

Hopefully I'll get an electronic version of these books up here for you soon.  For now, that's all folks.


Woodcoin - Two Years of Chopping LOG

Happy birthday Woodcoin!


I'm going to use this excuse to take a look at the current state of the network and review the motivation behind using woodcoin.

Part 1 PRICE

Fig. 1   Market Capitalization of Woodcoin over first 2 years.
Woodcoin is a small coin listed with a capitalization of ~200BTC.  This puts it at the 109th largest "mineable and non-premined" coin listed on coinmarketcap.  As you probably know by looking at this metric before, it is easily skewed by small distributions of stackers, small volume, and coins burned or lost.  I expect many of the coins in this top 100 list to disappear just like paycoin did.  The half a million LOG sent to the address WeHonorTheForestsAndTheTrees4pPXTQ are not included here so really the spendable coins are at least 6% smaller than reported.

Woodcoin is fully public and decentralized with no ICO, no registered foundation or corporation, nor any solicitation or acceptance of fiat currencies during its creation.  If you squint a bit you can see this in the charts.  One immediately notices in Figure 1 that the usual fractal pattern exhibited in most coins (large pumps followed by slow decreases) is not visible here.  Where are the pump and dumps?  Where is the ICO spike?  Woodcoin shows a stable (but slow) growth, which is no surprise to those who understand the supply curve (see details below).  Of course because woodcoin is open to all, this is no guarantee of future behavior.

While woodcoin is currently listed on at least four currently operating exchanges, most all of the volume is on C-CEX.  They have proved to be reliable and trustworthy custodians as of today, and have also shown consistent growth over the last two years.  You know the deal with exchanges by now.

It's also worth pointing out that C-CEX reported LOG trading hands for as high as 8000 sat (during one emptying of supply about six months ago) and a couple of faucets currently sell them in small quantities for 0 sat.  That should give you an idea of the ranges of prices.

The total supply (including permanently tied LOG) is now just over 8 million.  This is out of a maximum of 27.6 million, which as you probably know, will take a long time to chop 🙂




Fig. 2  Hash rate of LOG choppers over the first two years of woodcoin.

The constant battle which is a proof-of-work network has been very exciting to watch here.  Recently (as in yesterday) the difficulty has touched all time highs.  There are quite a lot of skein hash functions being calculated, to say the least.  The network is currently in the GPU phase of growth, which is to say that the vast majority of the hashpower appears to be in GPU rigs.

There have also been hash withdrawl "attacks" which began almost a year ago, in November of 2015.  Certain GPU farmers dedicated their relatively large rigs to chopping LOG for short time periods, then left the network when the difficulty increased, presumably to mine other coins.  This led to periods of very long block times.  LOG users waited patiently and the network recovered as it should.  While some people reported being annoyed by long confirmation times, all transactions went through.  In addition to complaints there was much discussion on what could be changed (with a fork) to alter these dynamics.  A recent talk by Mark Friedenbach at Scaling Bitcoin in Milan touched on these issues.  Difficulty adjust algorithms such as the one employed by woodcoin look dreadfully simple to a control systems engineer (why is there no PID controller?), but their simplicity and resilience make them work - even if at times their overshoots and undershoots are aggravating.

This summer further hash warfare activity was detected on the network, in the form of block withholding "attacks".  These enabled certain woodcutters to re-chop blocks of LOG (which had been chopped by hash-withrdawl players as discussed above) after the original hashpower was withdrawn.  This caused a certain amount of confusion but good will was displayed by all involved as no transactions were reported double-spent, despite indications that some woodcutters had the power to perform a dreaded 51% attack.  The woodcutters involved even went so far as to generously refund any smaller choppers who had lost their rewards as orphans.  This led one woodcoin user to ask me "Why is it raining LOGs?"  There were even one or two chain reorganizations that numbered as high as thousands of blocks.  While hardly a selling point on the security of woodcoin transactions at that moment, this was very exciting to see that the consensus network can recover from such shenanigans.  Small and decentralized proof of work chain dynamics can be very exciting.

Also related was a brief "Quantitative Easing" period sponsored by the secretive dwarven Kawg trust, in which large transaction fees were paid to woodcutters.  There are rumors that another period of quantitative easing or QE2 will emerge on the network.

Overall the network has behaved well, which even after 8 years of watching bitcoin blocks appear still seems somewhat of a miracle.  Lets not forget this was proven by some of the very best cryptographers to be impossible 🙂


The real motivation is for our betters, the trees, to survive and thrive, and for us to secure our life support and to gain a second spaceship to ensure survival of Gaia.  That's a long story we won't get into here.  To get started with that, one thing we need is to remove the gaping wound on humanity and middle earth which reliance on private coin issuance has opened, and to do that we need a strong ecosystem of public coins.  Woodcoin aims to be one of these coins.

When I presented the logarithmic supply curve, and implemented it with the woodcoin genesis block two years ago, I didn't go out of my way to explain it.  Some people figured it out anyway.

The problem we are solving here has been largely overlooked, but it hasn't gone away.  Namely:  What is going to incentivise miners on the bitcoin (or other geometric supply curve coin) network when the block subsidy reward drops to near zero?  Satoshi's answer, and perhaps the only answer that makes any sense, is transaction fees.  However, we have a large segment of bitcoin users who fear that large transaction fees will push users to other coins.  Some even suggest raising the maximum block size to avoid these large fees.  In addition to this big question mark of how the network will work when block subsidies drop to near zero, as they do rapidly in a geometric release curve, this rapid release makes the supply look unattractive to new users for another reason: it appears as a premine and as an unfair distribution.  Currently more than three quarters of all bitcoin to ever be mined are already in the pockets of early adopters.  Many critiques of BTC harp back to this point.  [Half the LOG will be released by 2305.  Three quarters won't be hit for thousands of years after that, I'll let you do the calculation.]

One potential way around these problems which has the advantage of simplicity is to have a constant inflation.  This is the solution of dogecoin and of ethereum: an eventual minimum non-shrinking block subsidy.  This plan has its attraction, but it also might scare new users away because it means that the money supply is not capped.  As time crawls on, value in a single token thus inevitably goes down, and long term store-of-value seekers flee.  Another uncapped strategy is that of many proof-of-stake coins, namely an constant percentage reward, leading to a still faster exponential supply growth.


Fig. 3  Three existing supply curves, taken from Margrit Kennedy "Interest and Inflation Free Money".  Curve A is a geometric release, like bitcoin or litecoin.  Curve B is a constant subsidy, like doge or ethereum.  Curve C is a constant percentage inflated release like most proof of stake coins.

The logarithmic supply takes a middle road between the geometric release curve and the constant release curve (A and B in figure 3). Unlike a constant release curve, the supply is capped - there is a limit which will never be passed (due to the discrete nature of the supply).  However it approaches this limit incredibly slowly which ensures there will be some subsidy to support securing the chain.  Further, there is always an advantage to securing the network today, as compared to securing it tomorrow.  Every block is worth less than its prior.


Once you understand the purpose of the logarithmic release function, the rest of the woodcoin design mostly follows.  The satoshi codebase was the choice of instantiation, due to the relatively well tested nature and the existing tools to work with it.  Several clients have emerged, as well as tools for address manipulation and so forth.  Simplicity is an overall goal here, as we want people to be able to use this just as easily as any other public coin.  Design consideration was conservative, as recommended here.

Once the supply curve was decided, the big question was what to use for a PoW hash.  It's not a good idea to use a hash function that other big coins are already using (for background see why Doge is now mergemined on litecoin or why NMC is now mergemined on Bitcoin).  At the time, Quarkcoin had just come out and people were excited about chaining together hash functions to make it more difficult to do custom hardware.  As I saw it, custom hardware was an eventuality for any coin if it lived long enough to become popular, and chaining hash functions only made the thing more complex and I saw it as reducing the value.  At the time SHA3 was just being chosen, and one of the potential candidates was the Skein function.  Bruce Schneier and a few fish told me it worked, the NSA rejected it, some research suggested it was fast and would be relatively easy to optimize in custom hardware, and so I went with that.  I wasn't about to roll my own hash function yet, sorry 🙂  [It's worth pointing out that woodcoin is the current leader in pure Skein hashrate].

The only other major thing different about woodcoin is the elliptic curve.  I've written about this before so I'll spare you the discussion again.  I went with something different than bitcoin because it was easy, well tested, and recommended by many of the experts.  Conservatism again, boring but that's the way it is.

The rest, as they say, is history.


Many thanks to all the great folks I have met through this project!  Keep up the good work in all endeavors, public coin and otherwise.



The Sheeple - Navigating Social Meadows of Investment


There are two kinds of people on this Earth: those who were born to be leaders, and those who were born to be followers.

Ha ha 🙂  Such juvenile thinking is of course only to break the ice here for this post.  Seriously though, in the same vein as those who retreat behind "us vs. them" or "people are either black and white" embrace the lowest possible bar of labeling the world, lets look at another comedic and broken false-dichotomy:  the alpha and the beta male.

Huzzah, lets keep our eyes closed and attach labels to the world!  This time the labels come from a largely discredited theory of canid social behavior.  But you get the idea, it doesn't really matter.  Just state the label, loudly, and close your eyes and ears tightly to avoid any contamination by the cesspool of observation.  The world is your enemy!

Haha, I crack myself up sometimes.

HOWEVER if the first trap here is the false dichotomy, the second trap could very well be that of being too frightened by the first trap to look carefully at anything salvageable.  For although a division into two (or more, or even a continuum of) groups based on some statistical propensity (to lead or to follow) is not a generally instructive cataloging, we should not yet discard the notion that the urge to follow (or to lead) could be an important consideration or at least a data point which could add something to our model of the world around us.

So lets try another slightly more advanced dichotomy: There are two kinds of people in the world.  The sheeple and the people: Those who let their lives be ruled by social pressure (such as the desire to lead or to follow) and those who take imperatives from personal desires and seek to achieve goals unrelated to a social concern.

While this is another false dichotomy, the bar has been raised quite a bit.  Keep in mind here that the "sheeple" includes those who "just want to be in charge" as much as those who "just want to follow".  Both are strategies related with elevating the concerns of others above one's own concerns.  Whether we seek to fulfill or to circumvent the concerns of others, while our efforts are going towards or against their concerns specifically and therefor not towards independent concerns of our own, we are sheeple.

Lets consider some examples of possible sheepleisms:

"I hope I'm not underdressed"

"I just want to be famous"

"Everyone watches that"

"I just want to be commander of an army"

"Which way do they want us to go here?"

"That's not what wikipedia says!"

"Sure, I'll do it if you have a camera"

"All the big guys were buying bitcoins, I better buy some too"

"I want to make others suffer, because somebody did that to me when I was a kid"

Yup, all sheepleisms.

Sure, we are all social animals, and social pressures make themselves felt in a variety of ways.  There's nothing inherently wrong with at some juncture or other being a sheeple.  They say that when in Rome one should do what the Romans do.  OK, the reference to the orcish empire is distasteful to me but there is yet some truth to it - in a social world one must pay attention to the thoughts of others.  In fact social capital is perhaps the most valuable of all forms of capital.  Therefore we don't seek to "not be sheeple" but to understand the forces of ovine motion.

My point with this introduction is just to get you thinking a bit about the social pressures that have given rise to the term "sheeple" so that we can apply the concept to investments and academia, and a wide variety of other consensus dependent mechanisms.

Let's get started.


A discipline such as rock climbing is one in which an individual can set a goal and achieve it.  While dangers of meeting folks on the route, and considerations of taking pictures at the summit might exist, one can face problems encountered en route directly and either solve, or not solve them.  Whether a hold works to get your body up a section of rock face does not depend on what some other people might do or label you or really on any social concern.  The same might be said about determining the volume of a truncated pyramid, producing a working program, playing a Bach partita, or countless other endeavors.

Investment on the other hand is something for which one must intrinsically follow the school, the gaggle, the murder, or the flock.  The sheep define what a successful investment is:  it is one which all the sheep have flocked to.  It could be that company B has a product that really is vastly superior, however if you went all in, and the sheeple all supported company A - you have lost the round of investment (we've explored this theme once before here).  You've been left alone outside the safety of the flock.  Perhaps eventually the sheep will shift toward the greener field, however a wise man once said that the market can remain irrational longer than you can remain solvent.

In all likelihood you have made this image in your head before, and perhaps included wolves in the scenario.  Sometimes it is tempting to imagine certain investors, houses, brokers, loan "sharks", or something, as wolves.  However for the purposes of our considerations here, they are not immune from the forces of the flock.  Those folks have investments too, and that makes them sheep.  The wolves in our analogy will be the existential forces which cause loss.  Sure the losses might have gone to other sheep, this is understood.

The center of the flock is hard to get to.  Everyone wants to be there, so it's very expensive and crowded.  It's the center flock bubble.  Everyone watches this area, looking for any sudden movements.  Why?  Because one wants to stay with the bubble, wherever it goes.

"Don't question the grass, watch the other sheep".
"Don't watch the road, watch the lights on the car in front of you"

Suppose now you have some indication that the grass is in fact greener to the west.  Where should you stand?  Well you'll nibble your way slightly in that direction out of the bubble, towards the edge of the flock.  Perhaps it's a calm day with good visibility and you see other sheeple picking up little bits of this westwardly investment.  So you'll keep a sharp eye on your path back toward the center, and depending on how courageous you are you'll extend a little further.

Suddenly one of the wealthy sheeple near the center of the flock senses danger from NW and the center pushes opposite that direction a bit.  The move scares a large fraction of the sheeple near you who compensate moving east.  What do you do?

Fortunately you made it back to safety.  A lot of leveraged sheeple who couldn't get back in time were hung out to dry.  Note that it doesn't matter one whit that the grass really was greener to the west.  What matters is the movement of the other sheep.  Don't forget it!

If you want to know where the sheep are, you try to follow the indexes.  Indexing the center of a large flock with some accuracy or utility is a lot easier than doing so for a small flock or smaller trend.  This is because the indexes are usually not to be trusted, being created for some purpose or another, but enough mass of bodies becomes hard to hide.


Academia is another kind of flock of sheeple.  You might want to blame this opinion on some defect of my own experience with an ivy league institution, postdoctoral work, and some teaching.  Perhaps so, but consider the metaphor anyway please.

If you have some great academic idea, pursue it, expand and grow it - however unless it is accepted by at least some subset of the flock of academics it is not considered part of academia.  It is crackpottery and academic failure.  If one sees a region of "greener grass" in a given subject, the prudent path is to nudge the other sheep to take a look in that direction, gaining enough adherents that you can remain safely ensconced in a flock.  Packing one's bags and setting off is a dangerous step, just like it was on the investment side.  Of course, if the journey doesn't require straying far from the existing walls of the Royal Baa-cademy, then by all means - go.  It is when the journey requires upsetting some other sheep that the difficulty begins.

Similar to the center-flock bubble in investments, there is center-flock bubble in academia.  Papers which push the center are sure-in candidates for the "high impact" journals.  And we can also be sure that the "high impact" journals will not publish papers which might have a high impact, that is, which promote a shift of the center.  Instead, we can be sure that there is a very strong social pressure that any research conclude toward the direction of motion currently underway by the academic center.  Got an interesting measurement?  Better compare it to the right literature and adjust it a bit.  Got an interesting epidemiological survey?  Better compare it to the interests of the sheeps in shepherds clothes, and to those sheepish forces that would guide academia and control your position therein.

A shift of the center is known as a "paradigm shift" and these very concerns I bla-blaa-baa about here were addressed in much higher style by many others over the years, including Thomas Kuhn in his "Structures of Scientific Revolution".  The conclusion is often that moving a flock of sheep - even in the face of dead obvious improvements, will take a long time.

When a paradigm shift is upon us, one waits for those sheep which have most strongly staked the center position to die off.  And even after they have died off, often there is a residual force which pulls people towards the previous center.  Notice how we still use roman numerals on occasion, or consider monetized gold, biblical evangelism, or the pledge of allegiance.  These things are not just caused by sheeple who "just want to follow" but also by sheeple who "just want to lead".  Both are forces that contribute to the ovine inertia.

Tune in next week for a Generalized Lagrangian Theory of Ovine Motion.