Russia will issue its own CryptoRuble (and free essay: How CryptoCurrencies Work)

[ThePythonicCow]

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From CoinTelegraph.com comes the following report (posted about eight hours prior to my starting this thread):

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BREAKING: Russia Issuing ‘CryptoRuble’

By Jon Buck; 15 Oct 2017

Russian President Vladimir Putin has officially stated that Russia will issue its own ‘CryptoRuble’ at a closed door meeting in Moscow, according to local news sources. The news broke through Minister of Communications Nikolay Nikiforov.

According to the official, the state issued cryptocurrency cannot be mined and will be issued and controlled and maintained only by the authorities. The CryptoRubles can be exchanged for regular Rubles at any time, though if the holder is unable to explain where the CryptoRubles came from, a 13 percent tax will be levied. The same tax will be applied to any earned difference between the price of the purchase of the token and the price of the sale. Nikiforov said:

“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.”

Embracing and rejecting

While the announcement means that Russia will enter the cryptocurrency world, it is in no way an affirmation or legalization of Bitcoin or any other decentralized cryptocurrency. On the contrary, Putin quite recently called for a complete ban on all cryptocurrencies within Russia.

The statement from Putin seemed apparently to contradict the earlier comments from other ministers who seemed pro-crypto, but only with regulations, as well as Putin’s recent meetings with Buterin and others. Now, with the issuance of the CryptoRuble, the apparent contradiction has been made clear.

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This is the sort of thing that I've been expecting, that major political entities would introduce distributed ledger technology (DLT), blockchain or similar technology based, currencies.

I expect that these national crypto-currencies will be debt-money based, meaning that they are issued in the same manner as other forms, whether digital or printed notes, of national currencies, in exchange for debt bonds owed by that nation (excepting for a few nations that tried to go off the "debt-money" central banking standard and that were then bombed back to the stone age by the American military, on its mission to "bring democracy" to the world </sarcasm>.) The Oxford English Dictionary needs a another definition for "democracy": A form of national government that is funded by a central bank issuing money in exchange for debt </more sarcasm>.

Distributed ledger technology (DLT), such as blockchain technology, will have a bright future in the new world financial order. Bitcoin and its hundreds of alternative crypto-currencies will go the way of AOL Instant Messenger (AIM), which has gone from being a dominant means of electronic messaging in the 1990's, to shutting down on 15 December 2017, as recently announced.

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Actually, come to think of it, this might not even be a distributed ledger, meaning it might not be maintained on a distributed network of servers, each server maintaining a copy of the ledger, with the servers voting in some manner on what updates to the ledger are accepted. Such distributed architectures allow for a collection of unreliable and minimally trusted servers, under the control of a variety of sometimes uncooperative owners, to arrive at an agreed and trusted concensus as to the changing state of the ledger.

Such distributed technology has been an essential part of crypto-currencies such as Bitcoin, but might be less essential to a nationally controlled crypto-currency.

So ... if cryptorubles are

• not mined by individuals,
• not necessarily accounted using distributed ledgers, and
• issued like current national currencies, in exchange for national debt,

then in what way are they still "crypto" currencies?

The key remaining distinction could be the way that one asserts ownership of a unit of such a currency.

Unitl now, the primary ways in which someone (person or corporation) could assert the ownership of a unit of a nation's currency have included:

• holding a gold or silver coin (or nationally issued facsimile debased with base metals),
• holding a fancy printed piece of paper issued by that nation as currency, or
• holding access to a bank account that is credited with that currency unit.

Now a new way of holding currency is coming into existence:

• holding the private crypto-key that can decrypt anything encrypted using the published public key of a transaction on a publicly visible ledger account that currently has that currency unit credited to it.

What the heck did I just say?

I have been studying in these subjects, such as the mathematics involved, distributed computer algorithms, economics, monetary systems, financial markets, and cryptography for a long time, so I think that I have a pretty good understanding of some of this. However I may or may not be able to explain this in a way that others will be able to follow.

Let me give it a try.

How these cryptocurrencies work, using a bus station locker analogy.

I don't know if they still have them, but back in my youth, bus stations often had storage lockers, with a removable key. You could store something in one of them, walk off with the key, and then come back a week later and use that key to open your locker and get back out what you had stored there.

Imagine a bus station with many, many such lockers ... not just billions or trillions of them, but trillions of trillions of trillions of trillions of them, which is trillions of trillions of times the number of atoms in the entire known universe.

With that many lockers, one could just pick some random locker number, say for example, 724665446580366854807265243073616370864745515597 and be so confident that no one else had ever picked that locker number that one could just start using it. (That number is an actual 160 bit random number, the appropriate size here, that I just generated using a fairly high grade random number generator that I've been improving over the years.)

Ok - we've picked our locker - it's the one with the easy to remember (hah!) locker number 724665446580366854807265243073616370864745515597.

Now imagine this locker, and all the other such lockers, have not just a private key that lets the holder of the key get back into the locker, but also have an "input slot" like in some Postal Office mail boxes, that lets anyone who knows the locker number make deposits into the locker, but doesn't let them get anything back out. You need your private key to get stuff out.

Now ... these lockers are not physically maintained by my local bus company (there are way, way, too many for that ever to happen) ... rather they are electronic accounts maintained on some computer(s), perhaps a few big Russian computers in Moscow, or perhaps a bunch of distributed Bitcoin mining computers scattered around the world (but usually close to a cheap source of electrical power in China.)

These electronic accounts keep track of transactions as money (digital credits):

• moves into lockers,
• transfers from one locker to another, and
• moves out of lockers.

The lockers all start out empty. The current contents (if any) of any given locker can be calculated, by simply adding up all the transactions that moved money (credits) in or out of that locker.

Anyone with web access to the system, which might mean anyone on the planet with an Apple or Android phone, can request that a new transaction be recorded by the computers managing these accounts.

Of course, these managing computers will enforce some rules on what transactions are allowed. Presumably I won't be able to connect to the upcoming Russian cryptoruble system and request that a trillion rubles be created out of thin air and deposited into random locker I have just chosen. (Though, if it does, I promise to make a small donation to Project Avalon, before I get on board my new jet and fly off to my new mansion, with a nice big computer room.)

The rule for Bitcoin is that the -only- way that new Bitcoin are created out of thin air is that this happens when one of the computers keeping track of the accounting records (the "ledger") is the very first computer to successfully finish calculating the next update to the shared ledger. There's quite a bit of luck involved (the "winning number" has to be guessed each time), so a slow computer might win over a fast computer, if it got lucky. But more often than not, the winner is someone in China with a room full of thousands of highly specialized computers, custom designed for this particular calculation, using electric power supplied at unusually low rates by the Chinese government.

The rule for the upcoming Russian cryptoruble will be that you can buy newly created cryptorubles by paying for them with traditional rubles, perhaps I'd guess either as paper currency or as payment from a Ruble denominated banking acount.

What's "crypto" about this is how the key works.

You don't actually choose a locker (make up one of those long random locker numbers), and then get the key that's in it.

Rather you (well, some software on your behalf) makes up a new private key, and then calculates from that what locker number corresponds to that private key. Then you can safely publish that locker number to the world and invite all your friends and fans to deposit money (credits) into your locker, by publishing that locker number. But only you know what the private key was that can be used to open that locker and get stuff out.

(Some geeky details: It turns out that not -all- possible 160 bit random numbers are valid "locker" numbers. Rather, if one is using a cryptocurrency that relies on RSA Cipher prime number factoring crypto, then by the Prime Number Theorem, only about 1% of all possible 160 bit random numbers would be valid "locker" numbers. I guess that means that there are only ten billion trillion trillion trillion lockers in our locker room, not a trillion trillion trillion trillion of them. Still ... that's a lot of lockers. Bitcoin uses a more efficient elliptic curve crypto, not RSA, so it has more possible lockers.)

I pay 100 cryptoruble for a cup of Starbucks coffee in Moscow.

Here's how a transfer of funds (credits) would work, from your locker, to someone else's locker (Starbucks in this example):

1. Let's say I am in Moscow and I purchase a cup of Starbucks coffee, for 100 ruble.
2. The Starbucks "cash" register displays a QRL code that might look like the following

   

3. That QRL code is just a smartphone readable form of the number of a cryptoruble "locker" owned by Starbucks, along with a request for payment of 100 ruble to go to Starbucks.
4. I bring up my cryptoruble payment account on my smartphone and let it read that QRL code with its camera.
5. My smartphone asks me if I want to send 100 cryptoruble to Starbucks.
6. I tap Yes, and a transfer request is sent to the big Russian cryptoruble computer.
7. That transfer requests asks to transfer 100 cryptoruble from one locker (one that I hopefully have the private key for) to another locker (the Starbucks' locker whose number was in the above QRL code.)
8. That big Russian computer will check that my locker really does have at least that much credit in it.
9. It will also check (this is the essential check) that I am the rightful owner of that locker.

   It could do this by depositing a random secret number into my locker and having me (the software I'm using) verify that it can read and play back that secret number. Only someone (hopefully just me) who has the private key for that locker can open it and see the secret message. That's not how it's actually done - cryptographic signing is used, to equivalent effect, but that's slightly more difficult for me to describe using my locker analogy

10. Then if the checks pass, the big Russian computer will "accept" the transaction request, deducting 100 cryptoruble from what it thinks is in my locker, and adding the same amount (perhaps minus a sales tax or transaction fee) into the specified Starbucks locker.

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So .. the essence of the national cryptocurrencies that I predict will be forthcoming, of which the Russian cryptoruble is one of the first, will be that "ownership" of (the right to spend) one cryptoruble will be in the hands of whomever has the private key to an account (aka "locker", above) that currently holds at least one cryptoruble.

[ThePythonicCow]

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What I am predicting, with the national cryptocurrencies such as the above cryptoruble, and with any other "private" cryptocurrencies, such as Bitcoin, is a far cry from what the current Bitcoin evangelists are claiming.

These evangelists include many of those who lucked out and happened to own a few Bitcoin, back when they were worth a tiny fraction of one dollar, not over $5000 like today. They have bought into the sales pitch for Bitcoin, and many of them could afford to retire early from what had been their "day job" and take up video blogging about the "wonders" of Bitcoin. They have not studied the history of money and of its use by the elite bastards to control human civilization for thousands (at least) of years.

The Bitcoin evangelists claim that Bitcoin is completely independent from any government or central bank control. They claim that Bitcoin or similar cryptocurrencies will replace traditional central bank issued currencies and provide all humans very low cost access to world-wide money transfer, practically anonmously and free from interference by oppressive governments.

The Banksters will NOT allow this to happen, and the methods by which they will do that are unfolding before our eyes as I write.

There will be at least three major control points by the existing debt-money central bank issuers over cryptocurrencies:

1. Cryptocurrencies that are legally usable as money to buy and sell real goods, services and property, to pay taxes and to receive government "benefits" or payments will be exclusively issued, controlled, and managed by centrally controlled computer systems, under the offices of the national treasury or the nation's central bank. Whether or not these computer systems are implemented using distributed ledger technology (DLT), such as blockchain technology, will not matter to the user of the system and might not even be known to the public. It will be, as in my above discussion of the cryptoruble, "the big Russian computer", or whatever nationality applies. Any other remaining monetary equivalent cryptocurrencies will likely be banned, just as counterfeit money is today.

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2. Any movement in or out of cryptocurrency markets, into real goods, services, or property, even if no "national currency" is involved (e.g. - buying a house directly with Bitcoin), will also be either banned or tightly regulated. This is true even now. For example I have setup an account at one of the cryptocurrency exchanges, Kraken, to allow me to move my small fraction of one bitcoin around. I had to go through more paperwork hoops than I would for a bank ... with copies of a variety of tax, legal and identity providing documents and self images, in order to document who I was. They have to abide by the same laws to detect and report anything resembling money laundering, and are likely under tighter scrutiny than my local bank. Some nations, including Russia, are already well along toward banning cryptocurrency exchanges. They can't easily stop Ivan and Mikhail from trading bitcoin, but they can stop either of them from exchanging those bitcoin for "real" ruble or for a house in the Moscow suburb of Barvikha. China is taking a similar approach.

   .

3. If there gets to be any serious volume of trading in cryptocurrencies, relative to say the markets for booze, oil, copper, drugs, arms, or other large markets, then the tax man will come down hard on cryptocurrency trading, and even Ivan and Mikhail trading bitcoin will become a taxable event, on whatever profits either made. Not reporting any such profits to the tax man willl risk substantial penalties and imprisonment if the tax man finds out about it anyway.

The debt-money basis for our civilization's monetary system will remain in force ... of that I am about as certain as I can be. It is far too fundamental to how the elite bastards running rough shod over this planet operate and have operated for thousands of years.

Such control points as above are the ways obvious to me so far that the elite bastards will use cryptocurrencies, as they are using the Internet, not as an opening for true freedom for the common man and woman, free from the oppressive control and surveillance of the powers that have been for so long, but rather as a means for structuring a global information and monetary system, that includes all of us and pretty much all we do that is potentially of any significant consequence to them.

This integrated new world order is, in my estimation, the essential prerequisite, in the elite's view, to unveiling wide spread usage of the advanced energy, propulsion, genetic, materials, manufacturing, computational, robotic and other such technologies that have been hidden on the black ops books for so long.

That technology is essential, in turn, to getting human civilization off planet and bound for the stars (at many times light speed travel.) The sciences of physics and astronomy, amongst others, are going to undergo massive and fundamental changes in the next few decades, if this happens.

[indigopete]

Posted by Paul (here)
.They claim that Bitcoin or similar cryptocurrencies will replace traditional central bank issued currencies.

"Some" make that claim. I certainly don't.

We have to make a distinction here between stores of value and units of exchange because the latter (e.g. national currencies) is simply an arbitrary measure - like a temperature scale. It doesn't actually correspond to anything specific in terms of tangible assets.

So while I agree with Paul's prediction that native (non government backed) cryptocurrencies such as bitcoin will increasingly encounter adverse regulation to the point of potentially preventing it from being traded for goods, I disagree that this will significantly impact its role as a store of value.

The word “banning” tends to be an overused term in this context. A state authority can’t actually stop people from holding gold but it can establish - and enforce - the units of value in which statutory trades should be denominated. (In other words, they can force Amazon to price their goods and denominate trades in national currencies rather than ounces of gold, but they cannot prevent the value of those trades being backed by gold if that’s how a particular Amazon customer had his savings invested over a number of decades).

Statutory regulation implies just that - regulation of the statutory realm which is a well defined concept and necessarily requires counterparty involvement. For example, if I hand the keys of my house to my house cleaner so they can come and do the weekly cleaning, I’ve effectively given them “posession” of my house. However there was no statutory transfer of ownership. On the other hand, if I ask my lawyer to invoke a deed of transfer and register it with the appropriate authority then I have made a statutory transfer even without handing over the keys.

Posted by Paul (here)
hey have not studied the history of money and of its use by the elite bastards to control human civilization for thousands (at least) of years.

Yes we have, Paul, and that history does not necessarily lead to the conclusions you draw. For a start, there are 2 distinct categories of money in terms of the “who is in control” aspect: cash and credit. The “PTB” are only in control of the latter. That’s because they serve as the universal counterparty for the entire monetary supply in that case. Cash - on the other hand - has never been controlled by them, at least not in terms of controlling its quantity or defining its value. They can of course restrict its use in certain regulated markets but that doesn’t prevent it from having a store of value role. (By cash I mean commodity money, not necessarily national currency denominated “guvpaper”).

So I therefore remain optimistic and don’t share your sense of inevitability of Bitcoin’s demise.

[ThePythonicCow]

Posted by indigopete (here)
Cash - on the other hand - has never been controlled by them, at least not in terms of controlling its quantity or defining its value. They can of course restrict its use in certain regulated markets but that doesn’t prevent it from having a store of value role. (By cash I mean commodity money, not necessarily national currency denominated “guvpaper”).

Hah ... that's not how I see it.

First of all, presenting a dissenting opinion to mine as to the value of "cash", and then parenthetically explaining that by "cash" you mean something different than the common meaning that I obviously used is rhetorical confusion ... dirty pool.

Using the word "cash" as I used it above and as it is commonly used to mean paper currency, central banks and national treasuries have vast control over the value and quantity of cash, both of printed paper (as the term "cash" usually means) and of any claimed gold or silver backing of cash.

• They can and often have destroyed that value, by printing too much money. Well known examples of hyperinflation include the Weimar Republic and Zimbabwe, and of slow but steady inflation include the US Dollar over the last half century at least. Sometimes slowly, sometimes rapidly, sometimes at the point of a gun ... the gold backing vanishes.
• They have caused major panics, recessions and depressions by cutting back on the lending of "new" money into the economy, as I believe the Federal Reserve is in the process of doing as we write.
• Bank runs, whether to obtain the claimed gold backing a gold backed currency, or to obtain the cash of a claimed cash backed bank account, are common throughout history ... often neither the gold nor the cash is there, when the crisis arrives. See Jimmy Stewart in the 1946 movie "It's A Wonderful Life" for a famous fictional, but all too real, example.
• They issue new currencies, steal the "gold" supposedly backing existing currency, reprice the exchange rate between cash and gold (as FDR did in the US in 1933), and severely punish or confiscate the property of anyone who would try to compete with them in this "money" business.
• They can change the terms of the backing, as happened in the US in the late 1800's when silver was made illegal as tender for payment of Dollar denominated debt. See William Jennings Bryan's "Cross of gold" speech and L. Frank Baum's "Wizard of Oz" novel for details.
• In times of war, it is common for a nation's gold stores to be stolen by an invading nation, as the US has done frequently in recent times, and as Japan did to China in the 1930's.
• In times of both peace and war, the business of the money changers is one of shifting fortunes and deceitful practices, well deserving Jesus Christ's only fit of anger, when he threw them out of the temple.

Money lenders, money changers, banks, governments and central banks have many control points in this matter, and they often have the will and the power to use those control points in a variety of ways harmful to the interests of the common person.

Gold and silver backing, and the fair market exchange rate between a paper currency and gold or silver, are "fair weather friends" ... they ride the stormy seas of the shifting deceits and fortunes of usually far better armed and often far less trustworthy central governments and banks in present times, or of money lenders and money changers in some times past.

Using the word "cash" in the twisted way you used it, to include in particular gold and silver coins, then yes, gold and silver coins have had value in many places and times ... but as with Bitcoin, that value is often, and for most of us presently, at the pleasure of the powerful. As a practical matter if I had a gold coin and wanted to use it to purchase a good suit (or, as in Roman times, a good toga), I would first have to exchange it for the currency of the realm (dollars, yuan, ruble, euro, yen, whatever), as most good tailors take currency, not gold coin. Any such exchange of either gold or silver coins or of Bitcoins or other cryptocurrencies for the currency of the realm is regulated or prohibited, depending on what realm you live in and on the ever changing the laws and regulations of the moment.

Posted by indigopete (here)
So I therefore remain optimistic and don’t share your sense of inevitability of Bitcoin’s demise.

Look around ... as I already noted above, governments far and wide are already clamping down on the exchange of Bitcoin both for real goods and services and for any claimed gold backing. That's as plain as day ... there is no need to crack open a history book to see that.

Perhaps you have spent too much time studying history in the form of the myths told by gold bugs and crypto bugs, and too little time trying to dig out what really happened ... and continues to happen even in the present.

By the way ... I own gold, silver and several cryptos, all in ridiculously small amounts, befitting my presently quite modest fortunes. They are not in all ways and in all times forever worthless ... but in my view the popular myths told by their present day enthusiasts are in some ways deeply deceived and in some cases I suspect deeply and deliberately deceptive.

[Foxie Loxie]

"...shifting fortunes & deceitful practices..." Sounds exactly like what our friend the Dutch banker was talking about!

[Morbid]

personally, i believe that these national currencies could be somehow similar to what ripple (xrp) is today - a company. a centralized entity.. cant see why masses would willingly use it unless they are being forced to. i think that bitcoin is here to stay as network effect is enormous, its being recognised as an international unit of exchange and store of value.

[indigopete]

Posted by Paul (here)
Using the word "cash" in the twisted way you used it, to include in particular gold and silver coins, then yes, gold and silver coins have had value in many places and times ... but as with Bitcoin, that value is often, and for most of us presently, at the pleasure of the powerful. As a practical matter if I had a gold coin and wanted to use it to purchase a good suit (or, as in Roman times, a good toga), I would first have to exchange it for the currency of the realm (dollars, yuan, ruble, euro, yen, whatever), as most good tailors take currency, not gold coin. Any such exchange of either gold or silver coins or of Bitcoins or other cryptocurrencies for the currency of the realm is regulated or prohibited, depending on what realm you live in and on the ever changing the laws and regulations of the moment.

Paul - I was using the term “cash” in the strict bookkeeping sense of a realtime settlement medium which is the pertinent characteristic here since it distinguishes between counterparty-free asset money and counterparty-dependent liability (or ‘debt’) money, the latter of which is the ‘controllable’ of the two as far as the supply is concerned.

Also, it does seem kind of relevant to point out that the PTB already “regulate and prohibit” the fiat gateways to crypto and despite that it’s done nothing but grow in value, adoption and proliferation of hodlers, so I don’t see any evidence of your theory being borne out in practice, in fact to the contrary. People have been saying for 8 years now that governments “will eventually do this” or “will eventually do that”, then governments do the aforementioned “this and that” and….presto, no cigar. No collapse and no big disappearing act of cryptocurrency.


The reason for that is simple when you think about it - it works as a store of value, and if it works for “us” then it works for “them” as well. Cryptocurrencies are holder agnostic so this idea that they’re Guy Fawkes on a blockchain that will puncture the dominance of whatever corrupt forces prevail is a myth. It’s just a digital asset and can be used by anyone for any purpose, no different from any other asset.

[ThePythonicCow]

Posted by indigopete (here)
Paul - I was using the term “cash” in the strict bookkeeping sense of a realtime settlement medium which is the pertinent characteristic here since it distinguishes between counterparty-free asset money and counterparty-dependent liability (or ‘debt’) money, the latter of which is the ‘controllable’ of the two as far as the supply is concerned.

You pretty clearly knew that I was using "cash" in the common sense of "paper money", as you chose to expliclity explain how you were using it.

Insisting on interpreting my words as being wrong, because they are wrong, in your view, when applying your definition of "cash", not mine, is a bogus argument.

Posted by indigopete (here)
Also, it does seem kind of relevant to point out that the PTB already “regulate and prohibit” the fiat gateways to crypto and despite that it’s done nothing but grow in value, adoption and proliferation of hodlers, so I don’t see any evidence of your theory being borne out in practice.

So are you saying that there is not now, and will not ever be, any effective suppression of cryptocurrencies, because the partial and recent regulations and prohibitions have not already suppressed the US Dollar price of Bitcoin?

At least you agree that there already are some regulation and prohibition efforts in place .

However the recent price action in one or another cryptocurrency does not inform us that there will not be more extensive efforts in the future, as various nations and central banks bring on line their own, controlled, cryptocurrencies ... such as the one anticipated in Russia by the opening post of this thread.

There are many and various pressures on this, or most any other, market, and no particular short or medium term price action by itself proves the non-existence, now and forever, of any particular one of these pressures.

History tells us (well, tells me at least) that the elite bastards running rough shod over this planet use the control of money, in particular of debt-money, as one of their most powerful and flexible tools of control. This is the case far and wide, and has been the case for thousands of years. They will not let this tool out of their grasp; rather they will adapt the tool over time to use improved mechanisms, such as the cryptocurrency technology now being developed.

Posted by indigopete (here)
The reason for that is simple when you think about it - it works as a store of value, and if it works for “us” then it works for “them” as well.

So were Beanie Babies and Tulip Bulbs stores of value ... for a while.

Yes, cryptocurrencies do work ... which is why they will own the cryptocurrencies that are allowed to gain wide spread usage amongst most of the individuals, corporations and governments on the planet.

Posted by indigopete (here)
Cryptocurrencies are holder agnostic so this idea that they’re Guy Fawkes on a blockchain that will puncture the dominance of whatever corrupt forces prevail is a myth. It’s just a digital asset and can be used by anyone for any purpose, no different from any other asset.

Cryptocurrencies are, internally, within the blockchain, agnostic.

But this is perhaps my key point:

The exchange of cryptocurrencies for anything of value in the "real", physical or legal, world, anything representing individual or corporate assets (stocks, bonds, derivatives, ...) and any other form that currencies take, is Not agnostic.

Such exchanges (without which anything purporting to be a currency is practically useless as a currency) involve the eventual transfer of the legal right to use property, assets, or money, and are very much the focus of whatever long standing legal, financial, police, and military operations are necessary to maintain control over our civilization.

In other words ... sure ... you and I can exchange our Beanie Baby collection to our hearts content ... but if enough real world property, assets and money are denominated and traded using Beanie Baby Currency, then "they" will crack down on any such use fo Beanie Babies, as hard as they deem necessary, including bombing your village and mine back into the Stone Age.

If Saddam Hussein or Muammar Gaddafi had chosen to step outside the US Dollar centric world using Bitcoin, instead of gold, oil and euros ... they'd be just as dead, just as brutally murdered and their nations just as devastated.

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I realize that I am presenting a view that runs counter to the dominant views of those involved with cryptocurrencies. Whenever I do this, I risk "triggering" someone well versed in that dominant view to repeat those views, as if I simply must be wrong for not knowing what is well understood and might benefit from being informed of such.

Good discussion begins with actually understanding what the other person is saying, which can be especially difficult if the other person is saying something "odd", outside the "normal" paradigm.

Please give that a try ... rather than repeating the conventional "wisdom", consider more carefully the points I've been making discrediting that wisdom and be more careful to understand the alternative view I am presenting. This may not be easy, unless you have studied so many aspects of this, for as long as I have ... which from all that I can tell so far, you have not yet had the opportunity to do.

The popular myths about cryptocurrencies are a mix of truth and deception, as is usually the case for popular myths of most any sort.

[Joe Akulis]

I wonder if Russia has had its own version of Visa and MasterCard over there, or if they've been stuck having to use Visa and MasterCard in order for people to buy stuff without having to carry cash...

Seems like one thing the move to crypto might do is give them the ability to kick Visa/MC out of the country so to speak. Cashless transfers now use a "state owned" bank instead of something that makes a profit for a non-state owned bank...

This is the part where we lay odds on whether those profits would be spent ethically by said state on honest needs, like infrastructure, social improvements, etc... :-)

Joe

[indigopete]

Posted by Paul (here)
Good discussion begins with actually understanding what the other person is saying, which can be especially difficult if the other person is saying something "odd", outside the "normal" paradigm.

As far as I can see, you're saying that cryptos will basically be regulated out of existence, even though governments may not control the supply, because any meaningful use of such digital assets must involve some kind of exchange or trade which exposes its participants to statutory control.

So what ?

There’s no significant form of commerce in existence that IS’NT subject to statutory regulation so how can that affect cryptocurrencies adversely ?

In my opinion, you’re conflating several things that actually have independent existences and attributing the conclusions of your observations simply to the “fortunes of cryptocurrencies”. For example, the scope of statutory regulations is markets. Bitcoin itself on the other hand is regulated by its own protocol. They are independent domains - the market and the monetary medium, yet you lump these together as if they are one and the same.

You could make all the same arguments about the world wide web, with the same basis, that you’ve made for cryptocurrencies. Ask yourself why didn’t the World Wide Web get banned ? The answer is that it was too useful to too many people. Everyone - including “the state” saw opportunity, not threat.

Bitcoin is exactly the same. Of course it will be a technological and monetary football which will get pulled in every direction with each stakeholder attempting to maximise their advantage according to their own perspective, but it isn’t about to to get ‘banned’ or regulated out of existence any more than the web is. On the contrary, that's exactly the kind of tension that has and will continue to drive it forward into greater adoption.

[Joe Akulis]

How can regulation affect a cryptocurrency negatively?

What if they make it so no one on a computer inside the US can access an exchange site? I'm quite illiterate about all this stuff so maybe I'm putting forth an example that isn't even possible. Dunno. But it seems like, since all bitcoins are valued by how much you can sell them for in dollars, then if you make it impossible for anyone to exchange their bitcoins for dollars, then they just got a lot less interesting to hold... They become more like gold is used today, you buy some in case the SHTF and you need to trade it for a bucket of wheat. :-)

As long as the guy with the bucket of wheat has a pc and a hard drive with this stuff on it, and has a locker at this bus stop and stuff...

Seems like they're more likely to just pocket a silver coin, or take a bottle of whiskey in trade, rather than carry around a hard drive...

Yeah, I'm definitely exposing my level of ignorance on all this stuff now. Apologies.

[ThePythonicCow]

Posted by indigopete (here)

...

As far as I can see, you're saying that cryptos will basically be regulated out of existence, even thought governments may not control the supply, because any meaningful use of such digital assets must involve some kind of exchange or trade which exposes its participants to statutory control.

...

You could make all the same arguments about the world wide web, with the same basis, that you’ve made for cryptocurrencies. Ask yourself why didn’t the World Wide Web get banned ? The answer is that it was too useful to too many people. Everyone - including “the state” saw opportunity, not threat.

...

Bitcoin is exactly the same.

You really are NOT seeing what I am saying.

Yes, the Bitcoin and the Web examples are much the same.

Neither has been or will be regulated out of existence. Quite the contrary.

Both were initially sold as extraordinary opportunities for humanity to get out from under the thumb of whatever evil bastards have been oppressing us for centuries.

Both are actually being fashioned into powerful and major tools for the construction of the New World Order. Both provide a means for automated world-wide surveillance and control, of individuals and groups.

The depth, breadth and speed of the reach of the Web, social media and online news into the (sub-)conscious of humanity far exceeds what had been possible with the printed word or even radio and television.

Similarly, the depth, breadth and speed of the reach of cryptocurrencies into the monetary, financial and associated legal affairs of humanity will far exceed what has been possible with bank accounts, paper money and even online banking, transfers, and payments such as Paypal and current smartphone apps.

¤=[Post Update]=¤

Posted by Joe Akulis (here)
Seems like they're more likely to just pocket a silver coin, or take a bottle of whiskey in trade, rather than carry around a hard drive...

Agreed ... for times like that, I have a silver coin, a bottle of whiskey and a pack of cigarettes stashed away ... just in case.

[indigopete]

Ok, now I see what you're saying...

Posted by Paul (here)
Both are actually being fashioned into powerful and major tools for the construction of the New World Order.

I'll assume that you didn't in any way, shape or form arrive at that conclusion due to informing yourself using "online resources"

[ThePythonicCow]

Posted by indigopete (here)
I'll assume that you didn't in any way, shape or form arrive at that conclusion due to informing yourself using "online resources"

Of course not ... my insights come entirely from reading some ancient Sanskrit scrolls that I inherited from a scholarly ancestor .

[Morbid]

Posted by Joe Akulis (here)
I wonder if Russia has had its own version of Visa and MasterCard over there, or if they've been stuck having to use Visa and MasterCard in order for people to buy stuff without having to carry cash...

Seems like one thing the move to crypto might do is give them the ability to kick Visa/MC out of the country so to speak. Cashless transfers now use a "state owned" bank instead of something that makes a profit for a non-state owned bank...

This is the part where we lay odds on whether those profits would be spent ethically by said state on honest needs, like infrastructure, social improvements, etc... :-)

Joe

yes they do have one. its called мир aka peace or world.

https://en.m.wikipedia.org/wiki/Mir_(payment_system))

[Morbid]

..........

[ThePythonicCow]

.
Not surprisingly, it's not just Russia that's working toward a national cryptocurrency. Other nations are also, including China.

Here is an article posted on The Daily Coin three days ago -- China and Russia: Full Steam Ahead Towards a Cashless Society:

============

China and Russia: Full Steam Ahead Towards a Cashless Society

by Rory, The Daily Coin · Published October 17, 2017 · Updated October 18, 2017

We reported back in November 2016 – Cashless World: 1 out of 3 People Never Use Cash – fewer and fewer people understand the importance of using cash to protect themselves from an overarching government warlord. At the time China’s use of digitized currency was growing at about 40% per annum. This means millions of people each year freely hand over their cash and opt to use their cell phone, online currency transfers or a plastic debit/credit card to make 100% of their purchases. We see this as nothing short of happily going into the gulag of digital enslavement.

Today we learned China is taking another step toward being a cashless society. Not just any cashless society, but the largest populated nation on the planet. Please keep in mind this announcement is coming on the heels of China’s closest ally, Russia, announcing she would be issuing a crypto-ruble – Which is a digitized currency as well. Once these two nations go cashless that will be a huge blow to hard currency in circulation around the world.

Yesterday, Cointelegraph reported that local news sources in Russia had been informed by the Minister of Communications, Nikolay Nikiforov, that President Putin has approved a plan for the issue of a “CrypoRuble.” There was no detail, however, on timeline and no any subsequent confirmation that we’ve seen. Coincidentally, or not, Nikiforov is quoted as saying “I confidently declare that we run (sic) CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.” Source

As ZeroHedge reported

In a story that seems to have gone largely unnoticed by the western press, the China Daily reported that the PBoC has successfully designed a prototype that can regulate its future supply of digital fiat currency.

In a report, “PBoC inches closer to digital currency”, the newspaper stated that China’s central bank “has completed trial runs on the algorithms needed for digital currency supply, taking it a step closer to addressing the technological challenges associated with digital currencies, according to a top official associated with the project.”

China’s has been preparing for digital currency since 2016. In June this year, the PBoC “finished several digital money trials involving fake transactions between it and some of the country’s commercial banks.” Given over-invoicing of imports and the shenanigans in the shadow banking/WMP sector, we suspect that the commercial banks took to these trials like proverbial flies to feces.

The China Daily article goes on to suggest that, while there is no timetable, “China is likely to become the first country that would deploy a digital fiat currency.”

Far be it for us to question the accuracy of the China Daily – which Wikipedia notes is often used as a guide to Chinese government policy – but we were expecting Sweden (already the world’s most cashless society) to be first. It has been widely reported that the introduction of an “e-krona” is being investigated by the Riksbank. Forbes noted last month that “The inquiry is expected to be finalized in late 2019.” It would not replace cash, which accounts for 1% of transactions in Sweden according to a recent BBC report, but operate alongside physical cash initially.

So…while China expects to be first, it will be “some time before the currency goes public”. According to Di Gang, a senior engineer of the Institute of Digital Money at the PBOC, a number of concerns need to be solved like “managing risks and improving efficiency.” He added that “the government also needs to factor whether the public would use the currency.”

We know the answer to that.

Yes, although it would be much quicker if Chinese citizens could somehow use it to get their savings out of the country.

Back to the serious work of the PBoC’s Institute of Digital Money. Yao Qian, the director-general no less, said that the successful simulation of money supply had paved the way for the central bank to become the future sole regulator and policymaker governing the value of digital currency. That sounded like a veiled explanation for the recent heavy-handed clampdown on Bitcoin trading in the Middle Kingdom. Indeed, the story notes that “Unlike Bitcoin or other digital money issued by the private sector, the digital fiat currency has the same legal status as the Chinese yuan” Source

This sounds like a rebuttal to bitcoin and other privately issued cryptocurrencies and a way for the Chinese government to begin the process of outlawing private cryptocurrencies. It’s not just another major step in moving to a cashless society, it’s a major step in attacking cryptocurrencies as they continue to gain notoriety

We have been arguing these totalitarian governments, like China, the U.S., Russia and most other governments, are not going to simply hand over the mechanism that produces their power and control. We are now seeing the first real steps by a major government to maintain their control and power through the issuance of currency. If the people want to enslave themselves through the use of digital currency why wouldn’t the government be on board with that idea and fully assist the citizens in their desire to willingly hand over their sovereignty?

============

I keep thinking that the word "cashless" is a bit of a distraction here. I expect that small denomination currency will remain in circulation for many years to come.

The primary move that I see here is a move to make inter-bank, cross-border, and larger amount payments digital - to move such payments, still denominated in some national currency or other, into the "digital, internet" world using cryptocurrencies, as I described in posts above. I won't have to pay for that cup of Starbucks coffee with cryptocurrency, but I will be able to, and most of the younger generation will prefer to do so. Old farts like me will still have leather wallets or purses with cash ... small denomination government issued paper notes with fancy printing.

Just as families and communities have been and are being eviscerated, similarly nations are being eviscerated. Moving not just our social and information sharing to the World Wide Web, but also soon our (not trivially small) monetary transactions to the World Wide Web is another key part of the move to weaken nation-states. Nation states will become increasingly obvious agents of world-wide institutions, corporations and the uber-elite. It will become increasingly apparent that nation states are not servants of those residing within their borders, but agents of the elite bastards who lord over us on this planet.

The controls over who can exchange what national cryptocurrencies for either some other national cryptocurrency (can I exchange my US Dollars for Russian ruble or Chinese yuan?), or for real goods, services and property (can I purchase stock or real estate or some electronic gadget from some person or some company in China?) will be complex and varying. Just as there is a dark web (such as a Silk Road where I am told one can purchase all sorts of drugs) similary there will be a dark web of monetary transactions, always "on the run from the law."

As with guns, so with whatever monetary or financial transactions are outlawed:

When something is outlawed, then only those outside of, or above, the law will have it.

There are several aspects of a civilization that determine its structure, including (1) the flow of information and social interaction, (2) the flow of money, finance and legal claims to property, (3) the flow of energy supply and demand, and (4) the locus of military and political power.

The flow of information and social interaction (which includes this post, this thread and this forum) is already well along the path of migrating to the World Wide Web.

The flow of money, finance and legal claims to property is now being moved onto the World Wide Web ... in the manner being discussed on this thread, using cryptocurrencies and distributed ledger technologies.

The move toward greater use of electricity, such as replacing petro powered trucks and cars with electric powered trucks and cars, is part of centralizing the "last mile" of energy consumption. Once that process is well along, then oil wells and pipelines can be replaced with more "exotic" energy supplies using technology that has been suppressed for the last half century.

The genocidal ugliness of the imperial American military over the last half century serves both to hammer down any would be non-compliant nation, and serves to further discredit the nation state. The rest of the world pretty much already realizes that the American government is treacherous and evil; the American people are being taught this lesson now. Upon this foundation will be the justification for further moving to world-wide dominant military and political power ... "Never again should an evil nation such as the United States be allowed such unfettered power!"

[ThePythonicCow]

Posted by Paul (here)
There are several aspects of a civilization that determine its structure, including (1) the flow of information and social interaction, (2) the flow of money, finance and legal claims to property, (3) the flow of energy supply and demand, and (4) the locus of military and political power.

Another aspect of a civilization's structure is (5) the control of natural resources of this planet - the land, minerals, water, forests, fields, coal, petro, and other such resources.

James Corbett does an excellent job of explaining how the new world order is taking control of these resources in his brand new documentary: What Is Sustainable Development?, which covers such topics as Agenda 21, updated to Agenda 2030.

Source: https://youtube.com/watch?v=_ofmAGaMfkA

[ThePythonicCow]

.
A Green Beret of the United States Army Special Forces (Airborne) who goes by the pseudonym of Jeremiah Johnson posted the following article at Crypto Currency Calm Before The Storm: “Governments Are Studying It To Find The Means To Take Control Of It… And You”.

This article does an excellent job of stating my views on cryptocurrencies.

Crytpocurrencies will become the new dominant form of national currencies ... as they provide the elites with better ways to monitor and control our financial activity.

==============

The new “shell game” is to replace one illusion…the fiat currency…with another illusion, the “bitcoin.” Russia announced last week several measures to “deal” with the Cryptocurrency…first, by issuing a Crypto-ruble. If you read the fine print, the Russian government is moving in to tax and regulate it, at a rate of 13% on trades for profit, as well as “Crypto-Rubles” that suddenly appear out of nowhere.

It won’t affect the Black Market as much, because 13% is going to be paid to turn a blind eye to the billions of rubles being stolen by the Russian Mafia and oligarchy alike. The gimmick here is for the government to take a chunk out of it: for now. The reason “now” is being used, is that eventually they’ll shift gears, pass legislation, and eventually outlaw private trading in it that is not government-sanctioned or government-approved.

A government is only concerned with perpetuating itself and maintaining power. The most basic way it does this is by controlling the currency of the nation, regulating it, and taxing the citizens. In the United States, it has been reported by several sources that JP Morgan Chase is going to embrace Cryptocurrency. Europe is well on its way to establishing a “Euro-BitCoin,” and China has recently relaxed some measures regarding it.

This is the calm before the storm: the governments are studying it, and studying the masses to find the means to take control of it.

The gullible masses are playing right into their hands. The problem with Cryptocurrency is not just in the fact that it is backed by nothing (a fool’s errand before it has been started), but there is no privacy. None. If the governments control and monitor all electronic and computer media, then there is no such thing as privacy regarding electronic currency. This will be the death of cash, and thus the death of any privacy for citizens.

There will be no hiding from the taxing authorities. All the accounts will be monitored: taxed on any growth, and every single penny accounted for. The government will know what work you do, for how much, and how much “Crypto-currency” you have in your accounts. All electronic, nebulous, unbacked garbage. How about a nice “glitch” where suddenly, your entire account falls to a zero balance? That “glitch” can happen anytime.

No, the politicians and the oligarchs will have gold, silver, real estate, mining rights and contracts, and ownership of every utility and municipal function upon which the public is dependent. Eventually the Crypto-Dollars will be handed out sparingly to “exchange for food, clothing, and to pay their bills,” and the whole thing is designed for one thing:

To keep the population at a starveling, subsistence level while those in power own everything, and them as well: Ruled by the politicians and oligarchs, fooled by the press and the religious pulpits, and killed by the enforcement arms of police and military.

...

The aim is global governance. The Cryptocurrencies arose out of a desire to use something other than the dollar and other failing fiat notes not backed by anything. The irony is that the Cryptocurrencies are the vehicle for the globalists.

Once each nation has its Cryptocurrencies in place, they can “align” them, and virtually abolish all economic buffers and barriers…which will come crashing down just as the illegal aliens in Europe and the United States are destroying the borders, language, culture, and societies. The whole thing is trumpeted as a recourse, but it is nothing more than an extension of an Alinsky principle “organizing the organized.” At the right moment, the governments will swoop in, regulate, and tax these Cryptocurrencies.

Once cash is eliminated, hard assets such as gold, silver, and other resources will be simple to control. Where did you obtain that gold? How did you obtain it, and is it in our records?

The power lies in the receipt, the payment receipt showing where you obtained that product and how you obtained it…all based on POS (point of sale), the electronic monitoring of every expenditure at the register. The “successful” employment of Cryptocurrency will mean that the people have been completely duped and have handed all privacy into the control of the government. Once they control everyone economically, they will use that control to seize other aspects of daily life that are not regulated. They’ll know how much you make, where you work, and how much you have available.

==============

I only posted a couple long excerpts above. You can read the entire article at Crypto Currency Calm Before The Storm: “Governments Are Studying It To Find The Means To Take Control Of It… And You”.

[Foxie Loxie]

Thanks, Paul! Whew! The last two posts make it very plain what happened in Houston & with the CA fires; Puerto Rico, etc. Sustainable Development is going to take over the entire world unless stopped at the local level. But if people don't even realize what the heck is going on????