Three Years of Woodcoin

On this occasion, let's go through why the LOGarithmic bitcoin we know as woodcoin is still alive after three years, has increased in value steadily, and is set up for further increase in value:

1) Decentralized

There is no woodcoin company, no woodcoin premine, no woodcoin ICO.  Like bitcoin, there's no person or group of persons who can take a fall, get bought out, compromise, or tarnish this coin.  There's no system of checkpoints, no coordinator, no foundation, and no login page.

2) Logarithmic Release

The logarithmic release is still the only crypto monetary policy with a long term plan that doesn't eventually either implode or explode.  Despite the existence of public coin, in which monetary policy is a real verifiable thing rather than a question of trusting some people with special titles and suits, there has been markedly little experimentation in monetary policy.  Lets look at the alternatives which have come up in public coin offerings:


Many coins (litecoin, bitcoin, monero, ..) use a geometric curve to increase the supply.  This will quickly leave these coins in a state where their transaction confirmations (mining) will need to be supported by fees.  At that point, there will be a market force, namely the desire to make transactions without paying too much, which will force holders to make at least small investments in other coins.  While a geometric series coin looks great to the early adopters, we can say at that at the very least there will be negative market pressure on these coins as they asymptotically near their supply cap.


Many other coins (doge, eth, eth classic, ..) use a linear curve - simply paying a fixed amount to miners every block.  This has the advantage that it avoids the problem of the geometric series - there will always be payment for the miners, so the fees will be low.  However it introduces another problem - unlimited supply.  Without a supply cap to point to, it becomes difficult to convince an investor that this is a great store of value in the long term.


Some coins, usually proof of stake coins, add a certain percentage of the total supply to the current supply every year.  This leads to an exponential growth in the money supply.  This is done to reward stakers.  While fees certainly will remain low in this scheme, and there is some early potential to benefit from price as people clamor to get some of the valuable initial capital, this scheme often implodes as a ponzi, or becomes centralized.

Delta function

Some coins (NEXT, ripple... ) simply issue all the currency up front in a 100% premine.  This leads to a centralized system, as the only people with the incentive to mine are those who wish to see the system continue, which are those who hold the coin.  Without a miner subsidy there is no other incentive to secure the network.  Such coins can indeed be public, but they are not so decentralized.  This leaves them vulnerable to issues of centralization.


The logarithmic release schedule gives us a middle ground.  We have a capped supply (for the case of woodcoin, there will never be more than 28 million), so we don't lose the trust of those folks who are inflation averse.  However we also have a slowly decreasing reward schedule, which provides for non-vanishing coinbase rewards in the very long term future.  We also don't lose the folks who are high-fee averse.

3) Proof of Work

Woodcoin is the highest hashpower coin using solely the Skein hash function.  Proof of work is real value in a way that proof of stake cannot provide.  This is the original basis for decentralized consensus.  It represents an incentive to save energy, understand software algorithms, and build better hardware.

4) Public  

Woodcoin is a public coin like bitcoin.  Anyone can see how many coins are outstanding and every LOG creation event is auditable by all parties.  This means counterfeiting and other money supply fraud is not possible.

5) No Counterparty Risk

Like bitcoin and other decentralized coins, it is possible to make a long distance transfer with no counterparty risk.  While holding precious metals also can be done without counterparty risk, the transfer of value over large distances is more problematic.


I'd love to say other benefits of woodcoin such as the ecologically aware community, their efforts to end financial colonialism and orcish patriarchy, and how they are good looking responsible and educated people.  However while this stuff is true, it isn't really part of the coin itself.

Comments please 🙂




The Lorax - Doctor Seuss

Well I have read this thing out loud hundreds of times, it's a great story and hugely important literature.  Thanks Dr. Seuss!  Here's the original text for you, a not-so-subtle reminder that Trees and not Coins are what everyone needs.


THE LORAX ~Dr. Seuss At the far end of town where the Grickle-grass grows and the wind smells slow-and-sour when it blows and no birds ever sing excepting old crows... is the Street of the Lifted Lorax. And deep in the Grickle-grass, some people say, if you look deep enough you can still see, today, where the Lorax once stood just as long as it could before somebody lifted the Lorax away. What was the Lorax? And why was it there? And why was it lifted and taken somewhere from the far end of town where the Grickle-grass grows? The old Once-ler still lives here. Ask him. He knows.

You won't see the Once-ler. Don't knock at his door. He stays in his Lerkim on top of his store. He lurks in his Lerkim, cold under the roof, where he makes his own clothes out of miff-muffered moof.

And on special dank midnights in August, he peeks out of the shutters and sometimes he speaks and tells how the Lorax was lifted away. He'll tell you, perhaps... if you're willing to pay.

On the end of a rope he lets down a tin pail and you have to toss in fifteen cents and a nail and the shell of a great-great-greatgrandfather snail.

Then he pulls up the pail, makes a most careful count to see if you've paid him the proper amount. Then he hides what you paid him away in his Snuvv, his secret strange hole in his gruvvulous glove. Then he grunts, "I will call you by Whisper-ma-Phone, for the secrets I tell you are for your ears alone."

SLUPP! Down slupps the Whisper-ma-Phone to your ear and the old Once-ler's whispers are not very clear, since they have to come down through a snergelly hose, and he sounds as if he had smallish bees up his nose. "Now I'll tell you,"he says, with his teeth sounding gray, "how the Lorax got lifted and taken away... It all started way back... such a long, long time back...

Way back in the days when the grass was still green and the pond was still wet and the clouds were still clean, and the song of the Swomee-Swans rang out in space... one morning, I came to this glorious place. And I first saw the trees! The Truffula Trees! The bright-colored tufts of the Truffula Trees! Mile after mile in the fresh morning breeze.

And, under the trees, I saw Brown Bar-ba-loots frisking about in their Bar-ba-loot suits as they played in the shade and ate Truffula fruits. From the rippulous pond came the comfortable sound of the Humming-Fish humming while splashing around. But those trees! Those trees! Those Truffula Trees! All my life I'd been searching for trees such as these. The touch of their tufts was much softer than silk. And they had the sweet smell of fresh butterfly milk.

I felt a great leaping of joy in my heart. I knew just what I'd do! I unloaded my cart. In no time at all, I had built a small shop. Then I chopped down a Truffula Tree with one chop. And with great skillful skill and with great speedy speed, I took the soft tuft, and I knitted a Thneed!

The instant I'd finished, I heard a ga-Zump! I looked. I saw something pop out of the stump of the tree I'd chopped down. It was sort of a man. Describe him?... That's hard. I don't know if I can. He was shortish. And oldish. And brownish. And mossy. And he spoke with a voice that was sharpish and bossy.

"Mister!" he said with a sawdusty sneeze, "I am the Lorax. I speak for the trees. I speak for the trees, for the trees have no tongues. And I'm asking you, sir, at the top if my lungs"- he was very upset as he shouted and puffed- "What's that THING you've made out of my Truffula tuft?"

"Look, Lorax," I said."There's no cause for alarm. I chopped just one tree. I am doing no harm. I'm being quite useful. This thing is a Thneed. A Thneed's a Fine-Something-That-All-People-Need! It's a shirt. It's a sock. It's a glove, It's a hat. But it has other uses. Yes, far beyond that. You can use it for carpets. For pillows! For sheets! Or curtains! Or covers for bicycle seats!" The Lorax said, "Sir! You are crazy with greed. There is no one on earth who would buy that fool Thneed!"

But the very next minute I proved he was wrong. For, just at that minute, a chap came along, and he thought the Thneed I had knitted was great. He happily bought it for three ninety-eight I laughed at the Lorax, "You poor stupid guy! You never can tell what some people will buy." "I repeat," cried the Lorax, "I speak for the trees!" "I'm busy," I told him. "Shut up, if you please."

I rushed 'cross the room, and in no time at all, built a radio-phone. I put in a quick call. I called all my brothers and uncles and aunts and I said, "Listen here! Here's a wonderful chance for the whole Once-ler Family to get mighty rich! Get over here fast! Take the road to North Nitch. Turn left at Weehawken. Sharp right at South Stitch."

And, in no time at all, in the factory I built, the whole Once-ler Family was working full tilt. We were all knitting Thneeds just as busy as bees, to the sound of the chopping of Truffula Trees. Then... Oh! Baby! Oh! How my business did grow! Now, chopping one tree at a time was too slow. So I quickly invented my Super-Axe-Hacker which whacked off four Truffula Trees at one smacker. We were making Thneeds four times as fast as before! And that Lorax?... He didn't show up any more. But the next week he knocked on my new office door.

He snapped, "I am the Lorax who speaks for the trees which you seem to be chopping as fast as you please. But I'm also in charge of the Brown Bar-ba-loots who played in the shade in their Bar-ba-loot suits and happily lived, eating Truffula Fruits. "NOW... thanks to your hacking my trees to the ground, there's not enought Truffula Fruit to go 'round. And my poor Bar-ba-loots are all getting the crummies because they have gas, and no food, in their tummies! "They loved living here. But I can't let them stay. They'll have to find food. And I hope that they may. Good luck, boys," he cried. And he sent them away.

I, the old Once-ler, felt sad as I watched them all go. BUT... business is business! And business must grow regardless of crummies in tummies, you know. I meant no harm. I most truly did not. But I had to grow bigger.So bigger I got. I biggered my factory. I biggered my roads. I biggered my wagons. I biggered the loads of the Thneeds I shipped out. I was shipping them forth to the South! To the East! To the West! To the North! I went right on biggering... selling more Thneeds. And I biggered my money, which everyone needs.

Then again he came back! I was fixing some pipes when that old-nuisance Lorax came back with more gripes. "I am the Lorax," he coughed and he whiffed. He sneezed and he snuffled. He snarggled. He sniffed. "Once-ler!" he cried with a cruffulous croak. "Once-ler! You're making such smogulous smoke! My poor Swomee-Swans... why, they can't sing a note! No one can sing who has smog in his throat. "And so," said the Lorax, "-please pardon my cough - they cannot live here. So I'm sending them off. "Where will they go?... I don't hopefully know. They may have to fly for a month... or a year... To escape from the smog you've smogged up around here.

"What's more," snapped the Lorax. (His dander was up.) "Let me say a few words about Gluppity-Glupp. Your machine chugs on, day and night without stop making Gluppity-Glupp. Also Schloppity-Schlopp. And what do you do with this leftover goo?... I'll show you. You dirty old Once-ler man, you! "You're glumping the pond where the Humming-Fish hummed! No more can they hum, for their gills are all gummed. So I'm sending them off. Oh, their future is dreary. They'll walk on their fins and get woefully weary in search of some water that isn't so smeary."

And then I got mad. I got terribly mad. I yelled at the Lorax, "Now listen here, Dad! All you do is yap-yap and say, 'Bad! Bad! Bad! Bad!' Well, I have my rights, sir, and I'm telling you I intend to go on doing just what I do! And, for your information, you Lorax, I'm figgering On biggering and BIGGERING andBIGGERING and BIGGERING, turning MORE Truffula Trees into Thneeds which everyone, EVERYONE, EVERYONE needs!"

And at that very moment, we heard a loud whack! From outside in the fields came a sickening smack of an axe on a tree. Then we heard the tree fall. The very last Truffula Tree of them all!

No more trees. No more Thneeds. No more work to be done. So, in no time, my uncles and aunts, every one, all waved me good-bye. They jumped into my cars and drove away under the smoke-smuggered stars. Now all that was left 'neath the bad smelling-sky was my big empty factory... the Lorax... and I.

The Lorax said nothing. Just gave me a glance... just gave me a very sad, sad backward glance... as he lifted himself by the seat of his pants. And I'll never forget the grim look on his face when he heisted himself and took leave of this place, through a hole in the smog, without leaving a trace. And all that the Lorax left here in this mess was a small pile of rocks, with one word... "UNLESS." Whatever that meant, well, I just couldn't guess.

That was long, long ago. But each day since that day I've sat here and worried and worried away. Through the years, while my buildings have fallen apart, I've worried about it with all of my heart. "But now," says the Once-ler, "Now that you're here, the word of the Lorax seems perfectly clear. UNLESS someone like you cares a whole awful lot, nothing is going to get better. It's not. "SO... Catch!" calls the Once-ler. He lets something fall. "It's a Truffula Seed. It's the last one of all! You're in charge of the last of the Truffula Seeds. And Truffula Trees are what everyone needs. Plant a new Truffula.Treat it with care. Give it clean water. And feed it fresh air. Grow a forest. Protect it from axes that hack. Then the Lorax and all of his friends may come back."


Bitcoin is a bubble we've seen before

Personal correspondance brought in a link to a piece by McClellan Financial Publications, Inc:

This was my reply in email:

Thanks for bringing to my attention! Lets look at the text:

"As a brief review, a bitcoin is a “cryptocurrency”, or a digital asset designed to take the place of money. "

Sure, kind of like an apple is something from a tree designed to take the place of fruit.

"Adherents are attracted to them because of their (supposed) anonymity, and portability without border restriction, or so it has been believed."

Perhaps adherents also like apples because they have a pretty color? Well really, it's because they taste good. Adherents are attracted to publicly issued currency because it can't be counterfeit by anyone not even the banks or the governments. That's the real reason the author of the piece seems to miss.

"So if you are “holding” any Bitcoins (not that anyone can actually hold something so ethereal), your moment to exit and flee is rapidly approaching."

The irony is that the bitcoin is far more physical, and less ethereal, than the (also digital) dollar which is presumably what the author is recommending you trade your coins for. The phrase "exit and flee" is appropriate, but oddly the author is telling you to run away from the exit - back to a seat in a burning theater 🙂

Point Counterpoint - Chinese is Hard - Chinese is Easy


中文很容易! ( Chinese is very easy )

Let's start with the character for wood:  木

It's a vertical line for the trunk, a horizontal for the ground, and two more strokes to make the roots.  Got it?  I thought so.  Not hard to remember is it.  Chinese is built on such simple and logical symbolic representation.  Building blocks with which to form communication.  口 is mouth.  水 is water.  That's a little harder to see (it's like a splash) but really it's not so hard to remember, especially once you do the stroke order and draw it a few times.  田 is a field.  See how it's broken up into four sections for different crops?  With this already we have enough to do some more complex characters.  Let's look at 果.  A field, and tree.  What could that be?  What kind of trees do we put in fields?  OK so this would be easier if you were seeing it in context, such as seeing this character at a market on top of a bunch of fruit.  果 is fruit.

How about 林 what do you think that means?  Or 森 ?  If you guessed "forest" congratulations, it appears your mind was made for thinking in Chinese.

Let's look at another harder example:

Monday =  星期一

Tuesday = 星期二

Can you perhaps guess what the written form of "Wednesday" is?  Good work!  Things are all simply laid out and logical here.

Now you might have heard that tones are important and that lack of pronunciation clues makes the language difficult.  Not true!  If you speak quickly nobody will notice what tones you use, and even native Chinese speakers don't remember the formal tone of some words (amongst the first three at least, the difference to the 4th is more crucial).  What's really important is context.  As it should be in a language eh?

Is that all?  Nope, just getting started.

In Chinese, every character represents one spoken syllable.  That's right, only one syllable per character.  Like baby talk.  Easy, eh?  And get this:

是  = To be  (shi)

It's a sun on top, and something walking below.  Everything under the sun "is".  Now here's the kicker:  you just learned the verb to be, in all persons, all cases, and all tenses.  That's right, ser y estar, sommes et serrions, all that stuff.  All delegated to context.

Now is this not the easiest human language or what?  One syllable words, built logically and symbolically, with minimal grammar.  No wonder so many people have learned it!


中文很难 (Chinese is very difficult)

Uh, OK there.  Lets start by pointing out that suggesting learning a human language is "easy" is absurd.  You're talking about a lifelong study which will never be completed.  Add to that countless idioms, irregularities, and nonsense which is there because it's there.  Chinese is no exception.  Even an average level requires studying root linguistics (in this case studying ancient Chinese), reading lots of books, and speaking for years.  Hardly 容易 is it.

Lets look at two things that make Chinese even worse than that, perhaps the hardest language in existence.  The first is that it has more homophones than any other language.  Heard somebody say "shi"?  Guess what, that could be hundreds of different words.  Sure the verb to be but also teacher, city, stone, feces, ten, and much much more.  Ditto - every other word.  At the end of the day, one word is useless on its own.  You need to provide context out the wazoo.  AND it better be the expected context, or else people will be confused.  You thought three genders was tough for nouns?  There are dozens of different "measure words" in chinese designed to help give context.  Without them you are likely to not be understood.  Good luck.

The other problem is that reading doesn't link with talking all that well.  A full 20% of the characters have no pronunciation clue at all.  This means you will be stuck with knowing words that you don't know how to say, and knowing how to say others that you have no clue how to write.  Good luck with that.

Let's look at the word for "nose" for example: 鼻   Can you even see all these strokes?  How many are there?  OK that's not so hard, it's an eye over a field with a greek pi.  Sure.  Oh it's spoken as pinyin "bi" like the English word bee.

How about the difference between 己 and 已 did you spot that?  Don't confuse either with 巳.

Oh and don't forget sentences like 我了解了。  "Wo liao jie le"  Yes, like other languages you also have different characters written the same.  Good luck!

Sure, having "no grammar" sounds nice at first.  But the fact is that if you have a certain scenario in mind, involving persons and tenses and case, there IS a way to say it in Chinese.  Just use one of half a dozen to a dozen "particles" in just the right way to make sure your context is clear and the order is right.  Sometimes it seems like more work learning how to use these particle suffices than it would be to have a formal grammar.

To make matters worse the situation on the ground is a chaos of dialects.  People from neighboring provinces can hardly understand each other.  Even the writing is different on occasion.

So no, not easy.  Sure a lot of people speak it but it takes kids several years of school to get to the level of reading a chapter book.



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?