What happens when bitcoin is secured by fees?

Hello everyone!

As you probably know as a reader of this blog or as somebody who has heard of woodcoin, I've been particularly concerned with this issue.  It's the issue that LOG tries to solve.  So lets take yet another look.

To be explicit: the rapid drop of the coinbase reward given to miners, chosen to be in a geometric series, means that BTC will change from paying those who secure it with coinbase rewards (new money) to paying those who secure it with transaction fees (old money paid by existing users).

This has come up a few times recently as other people besides me have considered the issue.

Today we have full blocks that contain something on the order of 2000 transactions per block.  The average fee is about half a millie so the fees per block come in at something like 1 BTC per block.  That's almost 10% of the coinbase reward already.  Another halving, and another factor of 10 jump in fees, and 2020 could see the new era upon us already.

In 2020 the coinbase reward drops to 6.25 BTC per block.  A factor of 10 increase in fees as people compete to get their transactions into limited block space would mean 10 BTC in fees.  This implies a per TX fess of 0.05 or 5 bitcents.  Today that is roughly worth a case of beer.  In other words - you aren't going to buy a case of beer with bitcoin anymore after 2020.

Part of the problem here is that BTC doesn't exists alone.  There are thousands of other bitcoins all vying for miner's time and consumer's transactions.

It's 2032 and you're 18 years old, what coin will you use?

Imagine for a minute that you now are starting to work, to spend, to save.  The year is 2032 and only 63/64 of the total bitcoin supply have already been given out.  The coinbase reweard is now 0.78125 BTC.  This looks an awful lot like a premined coin doesn't it.  To make matters worse the fees are higher than some other coins (cough) that still have substantial coinbase rewards to pay miners.  Are you going to jump into bitcoin as this person with the same enthusiasm that others jumped into bitcoin back in 2012?  I suggest that no, you wouldn't.

So what happens then?  As people move out to other coins, the price lowers, the fees lower in chorus with this so perhaps the effect is slowed somewhat, but also the network security against double-spends lowers also in chorus.  In short, this is something of a crisis for mainnet BTC.

How about LOG ? 

OK so if BTC doesn't look that great to our newly financially independent teen in 2032, lets take a look a LOG.  Instead of 63/64 of the supply being already released, well under half the supply is released.  This means that compared to BTC you are still an "early adopter" of logarithmic release coins, and yet without the spectre of no-cap inflation.  The fees are also lower for the same level of double-spend security.

So you tell  me, what coin are you going to use for spending your allowance on the latest virual-sex sim-stim, purchasing your hoverboard for delivery from the space station, or for saving up to buy that camel?


What is money?

Opening Joke:

Q:  How many bitcoiners does it take to tell you what money is?

A:  All of them, apparently.

OK so that joke was shamelessly ripped off from one about how many singers it takes to sing "Summertime", but the point is similar.  Way too many of us are eager to tell you "what money is".  The tune is a good one, and the topic is also of interest, they are just overplayed is all.  And here I am just following the usual script.  Mea culpa.  Hey wait!  Stay!  I am going to give you something different here.

But this song gives a different kind of feeling
It's a new kind of dealing, it's a special kind of healing

Masta Ace

Well the first thing one has to say is that money is an exchange commodity.

The usual script then continues with discussion that the object itself under consideration needs to be scarce, fungible, long-lived, transferable, and easy to transport.  All well and good, but you've heard this before.

The trouble is that this all focuses on the object itself and leaves out the very important context.  Without context there is no meaning.  We're going to take a more systemic approach here, one which comes - as you might expect - from studying public coin.

Let's just jump right in:

To use money one needs 4 separate components, or to put it another way - money is a system of four linked components:

1-  network
2-  ledger
3-  wallet
4-  mint

Many people ignore items 1,2, and 4, because they focus on what's in their wallet.  However what's in the wallet wouldn't be money if the other components were not in place.  Let's look at each component in a little more detail.


In simple bitcoin this consists of a simple list of "peers", that is - nodes, possibly information about them, and a simple protocol for communicating to them.  TCP Port 8333, packet format, etc.  In more generality, one needs to be able to convey and hear information about money to make it of use.  In practice there are sometimes hierarchies of networks.  Different nodes use different networks or pieces of networks than others.  If you want to accept credit cards, you need a line of communication to a merchant account provider.  If you want to cash a check, you need a line of communication to a bank teller - sure this could be desk that you walk up to - but this is still a network.  ATMs, Swift, ACH, SEPA, Hawala, the list goes on and on.  For an individual on a desert island, one could have gold, dollars, or bitcoin - but one doesn't have money really.  Without a network to use the things, you are just holding a bag and wishing it were plastic so you could turn it into a desalination system.  Now there's real value.


Unless you have some idea of how much of the stuff exists, and in who's hands it lies, you are basically financially lost.  Is one Drachma a lot?  Is 1 ZXcash a lot?  You don't know do you, unless you have some clue about the ledger.  For bitcoin this is called the block chain.  You maintain and verify a copy so that you know how many coins are outstanding and when you got paid, to name two crucial elements.  If you don't have your own copy, at least you have a way to access somebody else's copy (blockchain explorers or simple payment verification systems).  With dollars this is the bank accounts.  Somebody has to keep track of who has what.  With gold this is harder to visualize but it is still there.  If nobody had any idea of where all the gold was, the system wouldn't work.  With gold there's not always a hard ledger, but there's a vague one.  "Tons of new gold have been taken from the new world and brough to Europe" was at one point an important news item for those living on the gold standard.  "The king has a lot of gold" was also important to know, perhaps.  This knowledge is part of the ledger.  With gold one can easily see how much is in hand, by getting out the scale.  With bitcoin one needs to check the ledger.  Perhaps somebody has added more coin to that address?  Consult the network, check the ledger.


The wallet is where you keep the coin, and the mechanism you have for signing it off - transacting.  In bitcoin this means selecting unspent outputs (from the ledger if you aren't prepared), selecting a change address, and signing it, at which point you pass the transaction on the the network and hope for the best.  Well, if you know what goes on behind the scenes that's what it means.  Simplistically it could also mean a device that you whip out, scan a QR code, and hit "pay".  To make the payment operative and final, this will require interaction with the network.  With gold this means your scales and your pouch.  The network will mean handing the stuff over.  With dollars this means your checkbook, rolled up wad of cash in your sock, and possibly mother's credit card number scrawled on a paper napkin, though lets note in passing that third party payment providers like credit cards really could work with any of these underlying units.  Don't forget your pin number and your encrypted key password if you have these, they are technically part of your wallet as well.


Without a mint none of this stuff would exist.  With gold it's a mine, it's where you get the stuff.  With dollars it's people with a printing press, and some other people in a back room toggling entries in a database.  With bitcoin, this is the infamous miners (and woodcutters).  Mining in bitcoin has an important feedback with the ledger portion, but if you think about it - this is true for other kinds of money too.  Privately issued dimensionless coins are known as fiat, and require effectively no work or expenditure for the minters.  Gold is privately issued (no way to know for the public how much you pulled out of the ground or created in your nuclear reactor), but having a physical dimension eliminates a certain amount of abuse.  Bitcoin is publicly issued, so there's no question about how much was created.


With public coin, all these elements are out in the open for inspection by anyone who cares to inspect.  They are fully regulated and verifiable.  With other systems, not so much.  But that doesn't mean they don't exist.  All these elements must be there to some degree for the thing to be a usable money.

The Satoshi client is a chunk of software that performs all four of these important tasks.  It mines, it networks, it ledgers, and it wallets.


And so we come to the devious point of this whole exercise, which is to as you dear reader - should a public coin client really be four separate pieces of software?  As per UNIX philosophy?  Or is their interactivity so heavy that they cannot be separated?



The coin test of artificial intelligence

In an earlier blog post we pointed out that the Turing test, unlike most of the guy's brilliant and influential work, is meaningless.  Basically the thing checks to see if a given system can fool a human into thinking it is a human, and if a human is thusly fooled - ascribes intelligence to the system.  A wax dummy can fool a human, but is hardly intelligent.  Therefore we have a proof that the test doesn't work.

Thanks to public coin, we have another test that does remarkably better as a determiner of a true artificial intelligence.  The test is rather simple in nature, though there are some difficult details.

If a given system can hold public coins on its own, spend and receive, without humans gaining control of the coin, then the system is said to have artificial intelligence.

As is always the case with AI, plenty of folks will claim to have such a system before one really exists.  Sadly, it will be difficult to determine the truth.  However the test stands and those those that know the system will at least know if they have a system which truly shows emergent AI.

To build such a thing requires that the humans controlling the hardware on which the AI runs cannot get access to the data that controls the coin, despite the fact that the data is somewhere in the hardware.  Such behavior appears to require one of two paths:  fully homomorphic encryption or multiple system decentralization.  In the first path, the AI in question must generate software for itself and run it in such a way that those controlling the hardware can't figure out what it is doing.  In fact it is harder than just homomorphic encryption because a homomorphic encryption system might have a key which is visible.  This thing can't have a visible key.  Impossible?  I don't know.

The other option is for the thing to exist in multiple places, so many that the people managing the system don't know where they all are.  The keys of the coin are split in such a way that the thing can still spend them by communicating, but can do this communication in such a way that the people who are holding the system hostage cannot determine the keys.  In such a case it seems like there will always be some threshold at which after enough of the system is discovered and monitored, people will be able to recover the keys.  Is it possible that such a system could detect such infiltration and take the appropriate poison pill?  I don't know.

It's instructive to look at how this might work for a wetware box.  A person for example might have a brainwallet, or a password protected private key.  If held and threatened, even tortured, it is conceivable that the person would not reveal the wallet.  The person could on their own accord spend the funds.  When provided with the right equipment, a faraday cage and computing hardware inside, the person could sign transcations without revealing the key.  This passes the test.

We can see that the test as phrased requires that a child be an independent person from their parents, perhaps not an unreasonable requirement of an AI or intelligence in general, though surely it doesn't imply that much.  Here we phrase the independence specifically in a financial manner, in a way that public digital coin makes possible.  Hard money like gold can always be wrenched from the hands of any creature, and so this is not adequate for our purposes, though secrets of hidden treasure might suffice.  Virtual currency like the modern dollar is also not adequate as it isn't provable or verifiable.

Basically, to sum up, the argument is that an emergent artificial intelligence ought to be able to "make its own way".  This implies being able to make active decisions and affect the world with one's own motivation.  Public coin provides one way to test this ability.  It's not exclusive (plenty of intelligent systems will never hold coin) and it isn't proportional (no way does amount of coin affect this) but it is at least something we can look for / work on.

Good luck!

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.


The bad guys

One of the first criticisms of the bitcoin proposal on the cryptography email list appeared on Monday, Nov. 3, 2008:

> As long as honest nodes control the most CPU power on the network
> they can generate the longest chain and outpace any attackers.

But they don't. Bad guys routinely control zombie farms of 100,000 machines or more. People I know who run a blacklist of spam sending zombies tell me they often see a million new zombies a day. This is the same reason that hashcash can't work on today's Internet -- the good guys have vastly less computational firepower than the bad guys.

I also have my doubts about other issues, but this one is the killer.

Before we get further, lets point out that the author of this critique is entirely correct.  However, his point here - if taken further - becomes not a critique of bitcoin but in fact the thing's very raison d'etre!

Today this kind of critique is phrased differently.  "Bitcoin is controlled by a conspiracy of chinese miners" claim similar voices across the blogosphere.  And perhaps they also are correct.  While the veracity of a claim that one party or another is "the bad guy" is beyond the scope of this post, we can still agree that the bad guys could control the hashpower, and could conspire to cartelize or make a monopoly in the business of bitcoin mining.

Can you agree that it's possible?  It's important to consider this before we move on.  Perhaps you feel the majority of SHA256 hashpower on the bitcoin network is "good guys", but..  do you acknowledge that bad guys could get their hands on more, at least temporarily, if they needed to?

Now that you are in the suspicious mindset, lets take a look at another kind of coin:  the fiat unit, for example the so-called "united states dollar".  The means of production of this coin are printing presses and bank computers.  The limits of the production are, well, there aren't any public limits because this is a private coin.

Do you think maybe the bad guys could get a hold of some printing presses?  Do you think the bad guys could get control of a bank computer?  Maybe, right?

You see, the improvement of bitcoin here is that it limits the power of those bad guys who have taken control of the system.  Money creation events become public and therefore limited by checks and balances of oversight.

The bad guys can leverage their resources here to get 12.5 BTC every 10 minutes.  Now you do the analysis for fiat please: how many dollars do the bad guys get, and what resources does it cost them?




The urban vs. rural dispute

Well they say a picture is worth a thousand words:


In this case you probably get the idea.  "Urban" is a word which can effectively mean cancer, as far as Gaia is concerned, which is by the way your name.  It's hard to forget the look of Denver from high in the Colorado rockies, a small black tumor on the landscape when viewed from great distance - yet one which draws the eye in horror.  Biodiversity is hugely destroyed by modern urban environments.  There are practically no amphibians (natural mosquito predators), even the plants find it difficult - seeing as there is not even a base of living earth in some places.  Pigeons, rats, and cockroaches seem to have found a niche, along with a couple hardy species of grass which poke up here and there.  That's about it - the urban environment is basically a desert.  This is why building "modern cities" (meaning old box crap designed with no thought to the future) in a desert is doable.

HOWEVER, what is the density of violin teachers in rural areas?  What is the likelihood of hearing some different languages?  How easy will it be for you to sell your craft items?  What diversity of health-delivery agents?  An "urban" environment is simply a necessity for us, at least to some extent.  Sure, the idiot density goes up a lot faster than the total population density in a city, but even so - the literate density is still somewhat higher than it is in rural areas.  There are many benefits to having areas with higher population density.

So what can we do about this?  Well we can recognize how the dichotomy is a false one.  Sure, we know that certain places are urban, and others are rural, but that doesn't mean that after we cross a certain line we should start paving every square inch of land, and putting street lights up so we can burn more fuel because we are afraid of the dark.  It doesn't mean we shouldn't compost.  In fact even in densely populated areas it is possible to live in a conscious feedback with some local flora and fauna.  One CAN compost, and garden.  There could be densely populated areas in a forest!  Obviously, we aren't that intelligent yet, but we know it is possible.

The days in which nature was a scary force to be pushed out were in fact never here, for anyone other than the orcs.  We need to invite her in, as we know with 100% certainty she is in fact our own life and health.  There is no urban and rural dispute really.  The trouble is just that urban areas tend to attract those developmentally challenged individuals who think that the world ends when they die, and that remaining ignorant is a skill to aspire to.  These individuals will live out their unhappy lives, and the rest of us will compost the corpses.

"A great place to visit but a better place to rob" -  Michael Diamond

The big lie of colonialism

Mea culpa: I was told to address colonialism, then this thing sat in my drafts folder for about a year.  Lets give it a shot shall we?

You probably have some idea what I am going to say now, based on the title.  What is the big lie?  Maybe one of the many lies told by the colonialists to the locals?  We come in peace?  Work for us and you'll be rich?  We want a truce?  Your children will be safe?  No, I have no reason to rehash any of these lies here, for the lie I refer to is in some sense a bigger one.  It is a lie that colonialists tell themselves.  It is a lie that people today still tell themselves.  It is a more subtle lie than one which is part of any single colonialist story.  It is more of a general psychological phenomenon than specific to colonialism, but as colonialism will be our entry point into this lie we might tell ourselves we will name it thusly.  In fact this big lie is one of many simple related psychological bugs that occur often in primates of the homo persuasion.

When you burn books instead of reading them, you have won.  (1st version)

To begin lets consider a problem in game theory.  Suppose you play some game, in which ten choices need to be made, yes and no for each.  You aren't entirely sure what the choices do, but you make some guesses, pick yes for the first five, no for the second five, and you get a score.  Let's say the score is 1.  You hear that somebody else got a 0.  So, it looks like you did pretty well doesn't it.  In comparison to that somebody else, you have "won" haven't you.  So, it seems we can safely conclude that the first five choices should be "yes" and the second five choices "no".  Right?  Give yourself a pat on the back, right?

Of course not.  First of all we haven't even been clear here about what the "score" means.  Do you want a higher or lower score?  Are we even supposed to compete with the other player?  And even if we determine that a higher score is better and we are to compete, how are we to judge our decisions?  We don't know exactly how the score was calculated so we can't judge them properly.  How can we learn from this experience?  It's hard isn't it.  Even if we can clearly delineate a substantial win based on some criteria, it is hard to figure out just what plays were good and which were bad.  Maybe only the 7th question was answered correctly.

This brings me to another phrasing of the big lie:

The colonialists won.   (2nd version)

It's not really a solid lie because it's not clear what is claimed as being won, but it is certainly not truth.  A year's supply of rice-r-roni, the San Francisco treat?  Misery and ignorance for generations?  A massive loss of social, biological, and financial capital?  When this statement is made, it is specifically NOT declared as to what the contest details were, and what criteria would define a winner.  The idea is supposedly a justification of the hardship endured through the process.  As if we need somebody declared a winner every time one, or a million people are killed, or to justify any idiocies of our forebears.

Ion: Well I can think of something they won
Socrates: Sure, what?
Ion: Their lives.  They lived, the locals didn't.
Socrates: Actually the individuals involved are all long since dead.
Ion: But their children lived.
Socrates: Gaia still lives on, yes.
Ion: Specifically, the people alive in that region today on average have a higher genetic similarity to the colonialists than to the locals.
Socrates: So?
Ion: So, they won the battle of what the noses of people in the future would look like.
Socrates: That's not entirely clear.  Mostly other folks came in and picked up the pieces, contributing their genetic material.  Anyway, is that really a win?

Is this a worthy goal?  Or one that a person capable of thought and having interests and concerns of their own in the world would consider?  Of course not.  But it might be a childlike enough goal to have been considered at the time, who knows.  You see, colonialists are by definition not in certain ways mentally acute.

Lets step back a bit.  What is colonialism?  What makes a colonialist a colonialist?

Well it can become more clear upon some inspection.  A colonialist is one who enters an area but is, lets say charitably, less clued in to local networks than the residents thereof.  If the traveler is of some equal footing in intelligence, and can say, learn the language, make friends, earn a living, etc., we might call the traveler an anthropologist, a businessman, an immigrant, scholar, a thief, or something like that.  If the traveler is afraid of his own shadow (and his own family), and doesn't appear to learn quickly (or rather, at all), we avoid him like the plague, give him some space, and call him a colonialist.

Ion: Let me get this straight, you are saying the local savages are always smarter than the colonialists?
Socrates: I am calling colonialists savages.
Ion: But the locals sometimes don't even wear uncomfortable clothes all day.
Socrates: That's right.
Ion: But the locals sometimes thought sexual relations were healthy.
Socrates: That's right.
Ion: But the locals sometimes don't even value fiat marks on coins
Socrates: That's right.
Ion: But the locals sometimes don't practice ritual genital mutilation or state marriage.
Socrates: That's right.
Ion: But the locals sometimes had coming of age ceremonies which involved psychedelic plants and difficult, dangerous endeavors.
Socrates: That's right.
Ion: But the locals are sometimes unwilling to accept religious doctrine instead believing their own senses and thoughts and wisdom of their elders.
Socrates:  Yes.
Ion: The locals didn't want to kill everything.
Socrates: Yes.
Ion: OK, I see where you are going with this this, but there's one problem with your argument.  We know the colonialists were smarter because they killed a lot of the locals.  If the locals were so smart, how come they were often killed or enslaved?
Socrates: Do you believe killing is a sign of some sort of intelligence?
Ion: No, but it takes some to be the survivor.
Socrates: By your argument then, is a child who kills his siblings and parents the smartest of the family?  Is suicide a mark of sanity?

The colonialists stole from the natives.   (3rd version)

When it's phrased this way, it is couched as a criticism of colonialism.  However it is really anything but.  For there is nothing wrong with stealing or killing per se, at least for the narrative at this stage.  Sometimes, these things might make sense to do.  A person who travels to a foreign land, burgles valuables, and is a successful thief, even a murderer, is thus a successful thief and a murderer - not a colonialist.  To take that step down to colonialist, you have to tell yourself the big lie and act like you believe it.  Manifest destiny!  You have to pretend you are superior in some larger Dunning-Kruger sense and that you can learn nothing else.  You cannot have passed the 1st enemy of knowledge.  You must be afraid of any knowledge, and work to destroy it.  You must actively work against your own progress and fear any information you might learn from.  It's about closing yourself off from the world and putting fingers in your ears while saying "Na na na I can't hear you".

To cover all bases, I will include an edge case.  Suppose someone travels to the foreign land, learns the local language, customs, and body of knowledge, determines it is totally wrong for some reason and decides it should be destroyed, and works to the destroy it.  This person is not a colonialist!  Willingness to learn and curiosity of the unknown excludes one from the label of colonialist.  Mere violence and oppression, even if self destructive, are not enough.

Ion: Well they did steal the land.
Socrates: Not really, no.
Ion: How can you say that?  They took it.
Socrates: The land was free to take, it was not "stolen".
Ion: They drove the people from the land.
Socrates: And in doing so - they lost valuable materials, assitance, and knowledge.
Ion: But they did take it.
Socrates: They could have had all that land and much much more if they had been willing to learn instead of fear.  If I bulldoze an olive tree and now stand guard over a patch of dead earth, am I a successful thief?
Ion: In some cases they stole metals like gold.
Socrates: True.  But recall thievery does not a colonialist make.

Basically it is a question of celebrating mental illness.  To take the trait which most holds you back in the world, holds you back from spiritual, social, sexual, and intellectual fulfillment, which lowers your chance of survival, which makes you a petty tyrant and strips you of any real power, "look I am a cause of suffering".  To take this trait and hold it aloft for anyone to see and to yell "WIN".  That is the great lie of colonialism.

If others suffer, I am powerful.    (4th version)

Keep it up, it's great comedy.  How could working solely to affect a feeling in others be considered powerful?  It's too absurd to consider, and yet people still tell themselves this lie on a regular basis.  It's the kind of idiocy that was observed in the Milgram experiment.  That's part of the colonial mentality.  The big lie.  Shouting "win" while your behavior is that of every loser.

It's not a bug it's a feature!       (5th version)

Sometimes people take that very trait which makes themselves unhappy or unsuccessful and grab onto it for dear life.  I don't really know why.  Perhaps it's because they want to say "it can't have been for nothing".  It might also just be because "I learned it from watching you, Dad".  In all cases, it is quite sad - for the colonialist.  The justice of natural law is inarguable:  in penance for their crimes they must live out their miserable lives - devoid of the joy that normal folk can achieve with respectful productive relationships rooted in equality.  The function of the colonialist in the world is to provide an example to others of the archetype of failure.


Those better versed than I in the issue of colonialism have done a far better job explaining the underlying psychology.  I know of no better psychologist than  Malidoma Somé on the issue.  The psychological state arises from a combination of several factors, of which two are made clear:

The first is an absence of connection to ancestors of any kind, creating a mistrust and psychological void that apparently is very difficult to overcome and become whole.  Without a breadth of self in time, it is difficult to have a breadth of self in space, and hence - the extremely small self image.  This in turn can drive the lack of self confidence which drives the fear of knowledge and general "egotistical" behavior associated with retarded self awareness.  This mindset is then projected onto everything else in the world "the world couldn't possibly be intelligent or empathetic, because I am not" and hence "kill them before they kill you".

The second is pure neoteny.  The colonial mentality is one of an adolescent, as they have not had any ritual to guide them into adulthood.  Instead they continue the Freudian emphasis on adolescent sexuality, anger and jealousy, bile, and lack of responsibility or recognition of their larger body.

Some have suggested the big-lie-colonialist or the petty tyrant can be useful in training for a young warrior, and as continual demonstration of the archetype of failure.


The word "colony" need not be associated with the big lie as represented here.

Bitcoin is socialist some more

In the first post of the series, we stated the obvious: that exchange commodities form the basis of a social system of sorts, in which participants are at some base level equal in their valuing of a token, and at a base level equal in their presentation of a token.

This applies to exchange commodities from wampum and gold to dollars and bitcoin.  They are inherently tokens which are valued due to support and belief in a social system in which everyone is at some level equal (my dollar is just as good as your dollar).

Today we are going to point out that because bitcoin is a public coin, it is markedly more "socialist" than other currencies.  I use the word socialist here in full knowledge that it is woefully under-defined and a polemic term, and the intent is to be a balance for others who claim that bitcoin might be somehow anti-socialist.  Of course, definitions for these words exist such that both statements are correct.  Why not look into the details of what's happening rather than taking sides in a loyalty-to-a-word battle?

A public coin is more socialist than a private coin precisely because it removes barriers between participants, enabling the people to have some ownership over the means of production.  Perhaps a few examples are in order.

--1)   Gold

It could be the case that one gram of pure gold offered by one person is the same as one gram of gold offered by another.  It also could be the case that anyone is to some extent free to go try to dig up more.  However, how much gold is outstanding?  The information might be out there to make a reasonable estimate, however it isn't exactly easy.  Certain people could become privy to information about where certain stashes of gold are, information which would be hard to obtain for somebody off the street.  In fact it isn't easy to verify the purity of a sample of gold either, or to make change.  How much gold could be mined from a given hill?  These things are effective barriers to a person who has just arrived to the golden age.  An inequality due to a pole position is maintained.

Compare these facets to those in the public coin world.  Yes, one bitcoin offered from one person could be the same as one bitcoin offered by another.  And further, anyone is free to go mine more.  But how much is outstanding?  Well, this is dead easy public information, and verifiable too.  While there may be stashes of bitcoin of appreciable market-changing quantity, the total amount - and the purity of a sample - are dead easy for anyone to assay or figure out.  Bitcoin appears to be more accessible to the public, even if at this stage, like gold, it already appears "premined" in that there is surely an advantage to the early adopters.

--2)  Fiat (privately issued coin)

Again with fiat, we see that a note from one person is in some sense equal to a note from another.  And further, anyone is free to start producing the notes.  Well, in theory this is the case.  However in practice, there are enormous hurdles in place.  Issuance is dominated by cartels, and not anyone can simply open a bank or start printing banknotes without facing retribution from established competitors.  In practice, arriving at a position of an established fiat issuer is not in any sense a straightforward path.  The system is maximally pole-positioned, as any newcomer not only has no way to find out how the system works (who is printing the money, how much, or where) but also is maximally unable to participate.  The issuer is free to issue at will, in private, at no cost, and with no oversight.  The means of production are held the strongest by the smallest hands in what might be called "fiat feudalism", and inequality is therefore maximized.

--3)  Public coin

With publicly issued digital coin again we see the basic equality of an exchange commodity, in which a coin from one person can be just like a coin from another.  This is not exactly true, as tainted or colored coins can exist, but to the level it matters for this conversation public coins are effectively fungible.  Again we also see a basic inequality of exchange commodities: some people have more than others.  Whether a person has more or less than another is rarely "fair", it is simply a matter of history.  So lets not get ahead of ourselves and claim that public coin presents a utopia of social balance.  However, a public coin removes some of the inherent advantages of existing stakeholders.  While fiat issuers can create tokens ad infinitum at no cost, public coin holders absolutely cannot.  Fiat stakeholders are able to use this power and also the power of secret issuance to great effect, creating remarkable injustice.  Coin stakeholders, while certainly capable of pressing their advantage, do not have these abilities.  They can hide assets, but always creation and money supply are limited.

Means of production

So, who owns the means of production?  In a public coin system, he who has amassed a fortune by hook or by crook can still purchase the means of production.  So it's not necessarily socialist, but can enable a socialist picture.  In a fiat economy, the fiat issuer can always obtain the means of production with no work, by issuing a bank account with the total amount required to purchase the factory.  A socialist economy is simply impossible in such an environment.


As you have probably realized by now, it is an absurdity to give a currency a political label - just as it would be an absurdity to call guns communist or hammers capitalist.  It is what people do with the stuff that really counts.  A better way to view it then is that public coin can enable a more socialist system, by allowing us to avoid huge concentrations of power which have beset us in the age of fiat feudalism.  Public coins are more amenable to the ownership of the means of production by the people.  They do not enable psychopaths to obtain as much power as fiat does.

Once you see it, it's dead obvious.  If we trade the means of production for a fiat currency, the means of production are thus owned entirely by a small group of fiat issuers.  The temptation at that point becomes too great, and the checks and balances too miniscule.  Waste, inefficiency, and unmitigated disaster are the inevitable results.  It's time we moved on from that era.