Friday, June 3, 2011
New Decentralized Currency Stimulating Underground Barter Economy
New grassroots cyber currency, the Bitcoin, may provide the perfect vehicle to operate outside the establishment economy and snub the all-powerful banking cartels -- it's decentralized, quasi-anonymous, and its supply is regulated by an algorithm to actually create deflation over time.
The masses are beginning to understand that the greatest threat to human freedom is the international banking cartel and their debt-based monetary system. Together with governments, they squash any manifestation of a free marketplace and personal freedom. Between runaway money printing, corporate cartel control, subsidies and taxes, and regulations and fees; the free market is nothing more than an ideology -- for now.
As the "Too Big to Fail" private banks consolidate even further with the help of their central baking partners and government puppets, it would seem that they form an all-powerful cartel. They force us to use their monopoly money to pay for all necessary goods and services. They track every economic transaction to plunder as much manufactured taxes and fees as possible. Income taxes are extracted to prop up the debt-based system, the Wall Street casino, the domestic surveillance prison, and endless wars. And on top of that, the consumer is ravaged by increasing inflation. Indeed, the system smashes personal and economic freedom.
Incidentally, it seems the precise remedy to such a system would be decentralization of currency and banking, or functioning in an underground economy outside the system. There may be hope for accomplishing both with the new crypto-currency that is beginning to gain recognition, the Bitcoin. Can this decentralized barter currency free humanity from the grip of the slave masters and provide for a truly free-market economy?
First, what is a Bitcoin?
Bitcoin is a voluntary digital currency that can be transferred peer-to-peer over the Internet. The open-source cryptographic program secures the electronic transactions without the need for a third party, like a bank or PayPal. There are no transfer fees or centralized clearing house needed for peers to trade Bits. Bitcoins are held in a wallet that carries an anonymous address in the system. Watch the brief video below for a concise description:
MIT's Technology Review recently reported on the functionality of the Bitcoin and its "booming" rise to $40 million in circulation:
In 2008, a programmer known as Satoshi Nakamoto—a name believed to be an alias—posted a paper outlining Bitcoin's design to a cryptography e-mail list. Then, in early 2009, he (or she) released software that can be used to exchange bitcoins using the scheme. That software is now maintained by a volunteer open-source community coordinated by four core developers.
...Nakamoto wanted people to be able to exchange money electronically securely without the need for a third party, such as a bank or a company like PayPal. He based Bitcoin on cryptographic techniques that allow you to be sure the money you receive is genuine, even if you don't trust the sender.
The report explains what makes the peer-to-peer currency secure and anonymous:
Once you download and run the Bitcoin client software, it connects over the Internet to the decentralized network of all Bitcoin users and also generates a pair of unique, mathematically linked keys, which you'll need to exchange bitcoins with any other client. One key is private and kept hidden on your computer. The other is public and a version of it dubbed a Bitcoin address is given to other people so they can send you bitcoins. Crucially, it is practically impossible—even with the most powerful supercomputer—to work out someone's private key from their public key. This prevents anyone from impersonating you. Your public and private keys are stored in a file that can be transferred to another computer, for example if you upgrade.
Understandably, many readers of this will be leery of a "cashless" currency due to the stigma attached to the idea by the global banking cartel's stated agenda of creating a "cashless society" allowing for total economic dominance. However, the Bitcoin is the antithesis of centralized control. The nature of the peer-to-peer digital transfers of bits is uncontrollable, as we've seen with BitTorrents.
The shutting down of Napster back in the day and the DHS' endless efforts to seize "pirate" websites will never stop peer-to-peer sharing of information. With Bitcoins, the transaction takes place from your personal computer out into a vast network of servers that process the transaction into the recipient's anonymous wallet located in his computer. This realization that this currency is virtually impossible to consolidate or shutdown would seem to make Bitcoins one of the biggest threats the control system has ever faced.
As evidence of Bitcoins being used to openly defy the system, an underground online drug trade has sprung up, as reported by Gawker. This so-called "Amazon" of illegal drugs accepts only Bitcoins as payment and is virtually untraceable unless the authorities assign massive resources to the endeavor; and even if they shut down the website, another will likely pop up to replace it. It's probably not the kind of press that the founders of Bitcoin would like, but it underscores the unconquerable nature of voluntary exchange between two individuals and the Bitcoin technology. When an authority tries to prohibit products that people demand, black markets will always pop up. And as we've seen with the war on drugs, it is impossible to stop no matter how much they throw at it.
As for how the long-term supply and value is controlled, MIT reported:
Nakamoto's rules specify that the amount of bitcoins in circulation will grow at an ever-decreasing rate toward a maximum of 21 million. Currently there are just over 6 million; in 2030, there will be over 20 million bitcoins.
Nakamoto's scheme includes one loophole, however: if more than half of the Bitcoin network's computing power comes under the control of one entity, then the rules can change. This would prevent, for example, a criminal cartel faking a transaction log in its own favor to dupe the rest of the community.
It is unlikely that anyone will ever obtain this kind of control. 'The combined power of the network is currently equal to one of the most powerful supercomputers in the world,' says Garzik. 'Satoshi's rules are probably set in stone.'
It is unlikely any major retailers will sign on to accept Bitcoins because they are deeply entrenched in the establishment economy and are likely saddled with debt to the banking cartel. The Bitcoin economy is more a grassroots opportunity for small businesses and individuals to sell used or self-produced products or services. Look for Ebay or Amazon knock-offs to pop up and allow individuals to sell items. Look for online casinos to spring up for Bitcoin players. Look for local organic cooperatives to implement them. Anything that a consumer desires that can be facilitated online can conceivably be done with an anonymous Bitcoin transaction in this emerging peer-to-peer barter market.
Nothing could be a more genuine example of a free market than two people voluntarily bartering for an item without a middleman or big brother snooping the transaction. The banks serve no purpose in online commerce except that most people pay for things from money in banks. Now, their role will seem to be diminished should the Bitcoin economy take off. Bitcoin seems like the ideal online currency to support if one wishes for freedom and anonymity, or to protest the centralized power of the banking cartel and their tax-thirsty puppet regimes.
Maybe I want to believe in it too much, so tell me where I'm wrong in the comment section. Activist Post may soon accept donations in Bitcoins and add a miner to support its growth. Tell us if your research says it passes the smell test or not.