Posts Tagged ‘economics’

9
Dec

Current Bitcoin Price & Yearly Price History

by adminadam in home

Weekly Average Bitcoin Prices from Mt. Gox until its collapse in February 2014:


Weekly Average Bitcoin Prices from BitStamp since it opened in September 2011:

Average Monthly Price in October since 2010:

YEAR PRICE EXCHANGE
2010 $0.11 Mt. Gox
2011 $3.53 Avg. Mt. Gox & BitStamp
2012 $11.56 Avg. Mt. Gox & BitStamp
2013 $163 BitStamp
2014 $358 BitStamp
2015 $268 BitStamp
2016 $639 BitStamp
23
Dec

The Extropy of Bitcoin

by adminadam in articles

What is Bitcoin?

Bitcoin is a highly extropic virtual currency and payment platform. It is resistant to entropy, theft, political corruption, and market manipulation (i.e. arbitrary inflation).

Here is an under-two-minute Bitcoin intro video from weusecoins.com:

What are Bitcoin’s novel features (both as a currency and as a technology)?

  • The coins themselves cannot be burnt or destroyed, nor can they be stolen (if encrypted and backed-up properly). Coins can also be stored offline in a paper wallet or an indestructible, encrypted aluminum wallet.
  • Bitcoin is a peer-to-peer, decentralized currency and banking/ledger system with no single point of failure.
  • It has worldwide appeal and utility; different people are interested in it for different reasons and all can participate freely.
  • A whole cryptocurrency ecosystem has evolved from it. See: Litecoin, Namecoin, or Anoncoin for examples of this.

What are its downsides commonly thought to be?

There are a number of arguments leveled against Bitcoin. Most posit that it will either be rendered null or that there are no legitimate uses for it. Briefly, here are a few of the more common arguments:

  1. That governments and banks will soon feel so threatened by it that they will shut it down.
  2. It’s volatile; it’s difficult to speculate on; it’s not a good investment.
  3. Only criminals and tax-evaders use it. (And/or high frequency traders.)
  4. It’s not accepted anywhere; you can’t really use it for anything.
  5. It would fail if the internet went down.

Now to examine these arguments.

First, that someone or some entity might shut it down:

Bitcoin cannnot be shut down by any authority as could Napster, or Wikileaks, or even the Pirate Bay for that matter. It is completely decentralized and has spread around the world. It is not dependent on ICANN or any centralized protocol or institution controlled by any one entity. I don’t think any conceivable level of coordination could remove enough copies of the peer-to-peer software necessary to run it — existing on many millions of devices around the world at this point — in order to shut it down. Also, as we move forward people are increasingly meeting in person to exchange bitcoin and other coins for cash, meaning that 3rd party bitcoin services (like Coinbase or Mt. Gox) are non-essential to obtaining cryptocurrencies.

Recently China declared that Bitcoin would not be accepted as currency there and that 3rd party Bitcoin/Renminbi exchanges would have to shut down at the end of 2013. This caused the prices to halve as there was great excitement and a surge of interest in Bitcoin in China previously. And while it will be harder for Chinese people to get and sell potentially, it certainly doesn’t spell the end for Bitcoin around the world. For example, Germany accepts it, as do the US, the Netherlands, Canada, Japan, France, and others. (I expect even in China it will continue to play some, albeit marginalized, role.) Note also: Swiss lawmakers are considering treating it as they would any other foreign currency as we speak.

Second, on the volatility, the usefulness for investment purposes:

It is difficult to speculate on, but less so, I believe, if you think in longer time frames than does a high-frequency trader.

BTC price history - all time - to Dec 11, 2013

Looking at this chart of the all-time price history of Bitcoin (above), we can see a number of big peaks and valleys, but the general trend is up — in a big way. It is new and subject to an extent to hype and speculation (as is any new commodity or currency, of course). One glance at the overall trajectory, however, and it appears to be more of an exponential trend than a linear one. I cannot conceive of traditional commodities or other physical currencies growing in this fashion, and believe it is only possible with a digital, peer-to-peer, distributed, low-barriers-to-entry system such as Bitcoin. Take a look at this all-time price history with weekly (instead of daily) price points and tell me that the growth is not astonishingly exponential in appearance…!

BTC price history - all time - to December 2013

I think over the long term the value will continue to increase. If we look at a few examples of how Bitcoin (and the underlying protocol) are already being used I think it will become obvious why its value — and the value of other cryptocurrencies — is likely to increase over time.

Who uses it, where, and for what:

Bitcoin is a freely accessible, open-source, distributed, digital currency. That means that anyone with a smart phone or computer and internet access can use it. This ease-of-use and convenience may allow for it to supersede conventional payment and banking technologies, like paypal, moneygram, and bank transfers. As there is no bureaucracy involved, coins can be transferred to anyone, from anyone, at any time and for any reason. All this within minutes. All this without fees.

Here’s a few example uses:

  • Trade sanctions can be bypassed. Cubans in the US can send their families money without hassle.
  • Money can be sent anonymously (and if not then at least pseudonymously) over the internet for the first time in history. For more on the issue of true anonymity and the technical discussions surrounding it see: Zerocoin.
  • Woodlank Patchwork, a new micronation which is both an enclave and an exclave of Japan, has chosen Bitcoin as its official currency.
  • WordPress users can pay with Bitcoin.
  • Reddit accepts it for advertising, tipping other users, and other promotional uses.
  • Shopify allows merchants to accept it.
  • OKcupid accepts it for premium services.
  • Nesbit’s Fine Watch Service (near me in Seattle) accepts it.
  • Seattle-based Accountable Moving & Storage accepts it.
  • Cheapair.com accepts it for purchasing plane tickets.
  • Khan Academy accepts it for donations.
  • Tesla accepts it for the purchase of their electric cars.
  • Virgin Galactic recently sold their first ticket into space purchased with Bitcoin.
  • See CoinMap.org and useBitcoins.info for 1000’s more locations worldwide where Bitcoins are accepted.

Here, additionally, are some fascinating non-monetary uses:

  • Proof of Existence allows users to anonymously time-stamp and create a record of a document’s existence. The cryptographic signature of this time-stamp is then stored for all time in the Bitcoin blockchain, the redundant, distributed ledger of transactions. With this you can certify that a given document/idea/etc exists without the need for a central authority. Think patent/copyright office, but peer-to-peer and open-source. Also, think censorship-proof publishing platform. Proof of Existence is built on top of the Bitcoin protocol.
  • Namecoin is an ‘altcoin’, an alternative cryptocurrency with features that distinguish it from Bitcoin. Namecoin is specifically designed to create an open-source, distributed DNS network. While most every website you would visit currently is ultimately controlled by ICANN (who assigns domain names like thrivenotes.com), Namecoin is creating an alternative, decentralized system, whereby censorship will be impossible, and anyone will be able to create and host a website without risk of it being removed from the internet by ICANN or other influential parties (See: Homeland Security domain name seizures). Namecoin is a fork of the Bitcoin source-code.

What if the internet went down? Are there any other security issues to be aware of?

Besides the fact that the whole internet going down would be disastrous for everyone and all internet-based services, consider the following way in which Bitcoin could possibly even survive or thrive were the net to go down:

In an amazingly ambitious announcement, Bitcoin Developer Jeff Garzik declared his intention to launch cubesat Bitcoin nodes into space to store extra redundant copies of the blockchain in case of certain types of attack or internet outages. This apparently would cost only around $2 Million to do and would provide an additional layer of extropy (higher-order, complexity, and resiliency) to Bitcoin. I find this just fascinating. Perhaps Bitcoin would be okay..!

Regardless, I would like to provide some additional details on the security of the Bitcoin ecosystem, but thought it best to leave it to the experts for this one. Here is some useful Q&A from the Bitcoin Security FAQ:

Is Bitcoin secure?

The Bitcoin technology – the protocol and the cryptography – has a strong security track record, and the Bitcoin network is probably the biggest distributed computing project in the world. Bitcoin’s most common vulnerability is in user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.

The best way to be safe is to be sure of who you’re dealing with (trusted exchanges, for instance, are a good place to start) when purchasing, and then to store your wallet encrypted (with an 8+ word password, for example) in multiple (that is, 3+) locations.

Hasn’t Bitcoin been hacked in the past?

The rules of the protocol and the cryptography used for Bitcoin are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations. Like any other form of software, the security of Bitcoin software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more Bitcoin is gaining maturity.

There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve Bitcoin itself being hacked, nor imply inherent flaws in Bitcoin; just like a bank robbery doesn’t mean that the dollar is compromised. However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.

I love this line: a bank robbery doesn’t mean the dollar has been compromised. So perfect. I feel this is very important to consider in discussions of crytocurrencies: ‘Is this a local vulnerability that’s been exploited, or a global/universal one tatamount to the annihilation of Bitcoin (et al.)?’

Could users collude against Bitcoin?

It is not possible to change the Bitcoin protocol that easily. Any Bitcoin client that doesn’t comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending bitcoins without a valid signature. Therefore, It is not possible to generate uncontrolled amounts of bitcoins out of thin air, spend other users’ funds, corrupt the network, or anything similar.

However, a majority of miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because Bitcoin only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow. As a general rule, it is hard to imagine why any Bitcoin user would choose to adopt any change that could compromise their own money.

Consensus-based, democratic, open-source projects FOR THE WIN.

Is Bitcoin vulnerable to quantum computing?

Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don’t yet exist and probably won’t for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.

Just imagine: Quantum-Encryption-Protected Bitcoin. What would we call it? QuBitcoin? Bitcoin-Cubed? 5th-DimensionalCoin? Whatever form it takes, whatever it’s called, I love their assertion that Bitcoin and Cryptocurrency Developers will continue to develop and maximize the extropian potential of these liberating technologies — even in the face of quantum-supercomputer highway-robbery-attempts.

TL;DR – What about Bitcoin?

  • You can send money to anyone, anytime.
  • It can’t be shut down by governments.
  • It can’t be controlled by corporations or the Federal Reserve.
  • It may be protected from other conceivable, future forms of interference through the use of space-based redundancy satellites.
  • And you can buy everything from a cup of joe to an electric car with it.
Seems pretty awesomely versatile, valuable, and revolutionary to me!

bitcoin-logo-3d

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12
Apr

Long Cycles and the Possibility of a Third World War Coming Soon

by adminadam in articles

Basándose en la teoría de los ciclos largos de la actividad económica, la tercera guerra mundial podría empezar en los próximos 10 años, según un académico ruso.

En esta década le espera al mundo una “gran inestabilidad política y tecnológica” y los países que no se adapten al nuevo ciclo se retrasarán unos 50 años en su desarrollo, afirmó el miembro de la Academia de las Ciencias de Rusia y profesor de la Universidad Estatal de Moscú (UEM) Serguéi Málkov, en una reunión en el Consejo Presidencial de las Ciencias y la Educación de Rusia.

Un grupo de científicos de la UEM analizaron los ciclos económicos y el nivel de conflictos militares en los últimos 200 años y concluyeron que estos dos fenómenos están relacionados entre sí.

En la moderna economía mundial capitalista, los ciclos largos, también llamados ondas de Kondratiev, son unas fluctuaciones cíclicas de largo plazo, entre 40 y 60 años, compuestas por fases de ascenso y de descenso de entre 20 y 30 años.

Durante la fase de ascenso, el crecimiento rápido de la economía provoca también la necesidad de cambios sociales. Sin embargo, el desarrollo social no alcanza el ritmo económico, abriendo la fase de descenso, que se caracteriza por crisis económicas y ánimos depresivos en la sociedad. Eso, por su parte, obliga a reestructurar el sistema económico, político y social.


Las dos guerras mundiales del siglo XX demuestran las fases de crisis de las ondas de Kondratiev. La Primera Guerra Mundial (1914-1918) puso fin a cuatro grandes imperios (el ruso, el austrohúngaro, el otomano y el alemán).

La Segunda Guerra Mundial (1939-1945) es considerada como el conflicto armado más grande de la humanidad al implicar a 61 países en los que vivía un 80% de la población mundial. Fue la única guerra en la que se emplearon armas nucleares.

Mientras la Primera Guerra Mundial pertenece a la llamada onda de la revolución técnica (1880-1940), la Segunda corresponde a la de la revolución científico-técnica (1940-1985).


Los partidarios de la teoría de los ciclos largos consideran que actualmente está terminando la quinta onda de la moderna era capitalista, que es la onda de la revolución de la información y las telecomunicaciones (1985-2015). Los científicos admiten que el paso al siguiente ciclo hipotético puede implicar un tercer conflicto mundial. Algunos ven señales de la llegada del nuevo ciclo en la crisis financiera y las tensiones en la península de Corea.


FUENTE: actualidad.rt.com, 7/4/13

Based on the theory of long economic cycles of activity, the third world war could start within the next 10 years, according to one Russian academic.

In this decade the world is expected to experience a “great political and technological instability” and the countries that do not adapt to the new cycle will be left behind by some 50 years or so in their development, claimed Seguéi Málkov, a member of the Academy of Russian Science and professor of Moscow State University (MSU), in a (recent) meeting with the Russian Presidential Advisor of Science and Education.

A group of scientists from MSU analyzed economic cycles and levels of military conflict during the last 200 years and concluded that these two phenomena are (closely) related.

In our modern capitalist economic world, these long cycles, also known as Kondratiev Waves, are long term fluctuations that last between 40 and 60 years, which are themselves composed of phases of ascent and descent each lasting between 20 and 30 years.

During the ascent phase, the rapid growth of the economy provokes many social changes as well. However, social development that does occur does not match the rhythm (or speed) of the economic change, and furthermore, once the economy enters the descent phase again, society experiences economic and social stagnation and depression. This, in part, leads to political, economic, and social restructuring.


The two world wars of the 20th century demonstrate the phases of crisis of Kondratiev Waves. The First World War (1914-1918) put an end to four great empires (the Russian, Austro-Hungarian, Ottoman, and German Empires).

The Second World War (1935-1945) is considered the largest armed conflict in the history of humanity and involved 61 countries (in which 80% of the whole world’s population lived). It was the only war in which nuclear weapons have been used.

While the First World War belonged to the so called wave of the Industrial Revolution (1880-1940), the Second corresponds to that of the Scientific & Technical Revolution (1940-1985).


The proponents of the theory of Long (Economic) Cycles opine that the fifth wave of the modern capitalist era, that of the Information & Telecommunications Revolution (1985-2015), is currently ending. These scientists fear that entry into the next hypothetical cycle could mean a third global conflict. Some see (early) signs of its arrival in the financial crisis and the tensions in the Korean Peninsula.


SOURCE: actualidad.rt.com, 4/7/13

Kondratieff_Wave

3
Mar

Curious: The Muqaddimah

by adminadam in links

I am very curious about this book. I have just learned about Ibn Khaldun through wikipedia and he is perhaps best known for this and the series it is part of. Seems it is probably the first attempt at a Philosophy of History. It also recounts much of the history of the Middle East and delves into many fields, like economics, sociology, and religion. If you want to preview or read it online, please click on the cover photo.

The Muqaddimah - An Introduction to History - Ibn Khaldun

I will of course post a review and continue to add quotes to my quotes page as I get into it.
(At this point I have yet to order it, but hope to very soon!)
— 84adam, Mar. 3, 2013

23
Apr

Thrive Countries, 1st Issue

by adminadam in articles

This is a mostly personally relevant list of 10 countries I thought I ought to travel to or live in at some point. However, it does contain a few good general insights and some interesting cross-referenced information from the Index of Economic Freedom and the Freedom on the Net report (links below). For example, you may be interested to know that Estonia is among the top 15 economically free countries in the world, but that it also tops the charts in press freedom and has the world’s greatest internet freedom.

I have included crosses (†) to indicate my own interest in the culture of countries listed where applicable, in addition to minuses (–) to show places that I am not interested in going to or spending that much time in (for now). For example, the United States is ranked 9th in Economic Freedom, extremely high in Press and Internet Freedom, but nonetheless it is my country of origin and therefore less interesting to visit than many of the others. For this reason it gets a minus. Note that I am also very interested in learning other languages and that I studied Spanish and Japanese for many years. Hence, Australia is less interesting, while Japan, Chile, Brazil, and others are more so.

Press Freedom I haven’t included but hope to in future editions of my list; This is something that is, of course, intimately connected with Internet Freedom and very important for every nation on Earth. It is another attribute that, for me, increases the gravity and draw of a place. If you are curious about Press Freedom as well right now, know that Freedom House publishes both reports: (PRESS FREEDOM) and (FREEDOM ON THE NET 2011).

This list is comprised of well-established, demonstrably-free societies that also happen to interest me personally. In later lists I hope to include information from the Human Development Index, Press Freedom statistics, and more.


Top 10 Thrive Countries for 2011

1. United States
2. Germany (†)
3. Hong Kong
4. Switzerland (†)
5. Estonia (†)
6. Japan (††)
7. Singapore
8. Chile (††)
9. Brazil (††)
10. Australia


Thrive Countries, 1st Issue (PDF)

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