Month: June 2017

What Happens When You Rely on a Third Party for Revenue

Earlier this year many gun channels on YouTube reported that their videos were suddenly disqualified from receiving ad revenue. This change in policy happened without warning and the rules established by YouTube were vague to say the least. In the hopes of appeasing both advertisers and content creators, YouTube attempted to clarify its rules. But if you read YouTube’s guidelines you’ll notice that they remain incredibly vague.

A lot of people have been screaming about free speech but that’s irrelevant. YouTube is a private entity and therefore can make whatever rules it wants. The real issue here is relying on a third party for revenue.

There are two ways content creators can guard their income from arbitrary rule changes made by their hosts. The first is having a contractual agreement where the host can face penalties if they arbitrarily change the terms. The second, and this is the one I generally prefer, is to host their own material on their own systems. This is what I do with this blog (and every other service I rely on). If you own everything you get to make the rules. If, for example, I decided to monetize this site, there would be no way for a third party to cut of my revenue by changing the rules.

YouTube looks like a sweet deal because content creators can put their material online without facing the costs of hosting the material themselves. But there ain’t no such thing as a free lunch. The price content creators pay for using YouTube is being entirely at the mercy of its one-sided user agreement, which can be changed at any moment without prior notice being given. Content creators can scream about free speech or censorship or whatever else makes them feel oppressed. But they only have themselves to blame because they put themselves into a position where their revenue source could be cut off by a third party at any moment.

Never Forget

Never forget… your password. Doing so could earn you some jail time:

US courts are still torn about how to handle defendants who refuse to give up passcodes for encrypted smartphones, judging by two recent court cases reported in the Miami Herald. In one, child abuse defendant Christopher Wheeler got six months in jail for failing to provide a correct code, despite pleas to the judge that he couldn’t remember it. In a different court, a judge let off Wesley Victor (accused of extortion), even though he also claimed to have forgotten his iPhone code.

The main difference in the cases is that ten months had passed after Victor’s initial arrest, and as his lawyer argued, “many people, including myself, can’t remember passwords from a year ago.” In the same case Victor’s girlfriend (and reality TV star) Hencha Voigt was ordered to divulge her code to police, but provided one that didn’t work. She’s also facing contempt of court charges, and is scheduled to appear next week. Both defendants are accused of threatening to release sex tapes stolen from social media celeb YesJulz unless she paid $18,000.

Holding somebody in contempt of court for claiming to forget their password is a fascinating concept to me. There is no way to prove whether or not somebody actually forgot something or lied about forgetting something. Under the concept of innocent until proven guilty a judge should have to refrain from punishing somebody for claiming to forget their password since it’s impossible to prove if they’re lying. But this country doesn’t operate under the principle of innocent until proven guilty, it operates under the principle of granting people in muumuus the power to arbitrarily decide whether somebody is telling the truth of lying.

Even the man who gave the police officer an incorrect password has a plausible excuse. He was in a stressful situation where an armed man was ordering him to do something against his will. It’s not unusual for people to forget or misremember basic information during stressful situations so it’s not implausible that the man simply misremembered his password at the time. But now he’s going to prison even though his guilt cannot be proven.

Choosing the Easy Battles

As an outside observer, when both the alt-right and antifa tout their magnificent triumphs on the battlefield of Berkeley you realize something. Both groups have pursued easy fights instead of hard fights. In this article an individual who considers themselves a leftist performs a bit of introspection and notes that his team has a tendency of choosing battles that can be easily won over the hard battles that need to be won:

Incidents like the black bloc protests at Berkeley or the punching of Richard Spencer grant people license to overestimate the current potential of violent resistance. Hey, Spencer got punched; never mind that the Trump administration reinstituted the global gag rule on abortion the next day. Hey, Milo’s talk got canceled; never mind that the relentless effort to deport thousands, a bipartisan effort for which the Obama administration deserves considerable blame, went on without a hitch. Better to make yet another meme out of Spencer getting hit than to attempt to confront the full horror of our current predicament.

[…]

But consider the claim that he was going to out an undocumented student during his visit to campus. Who really threatened that student? Yiannopoulos, or the uniformed authorities who would have actually carried out the actual violent application of state force? (It is entirely unclear to me why Yiannopoulos would not have simply shared that information with ICE after his appearance was shut down anyway. Does Milo not own a cellphone?) Again, the same dynamic: Yiannopoulos’s followers seem punchable, subject to the application of a level of force that we imagine we can bring to bear. ICE doesn’t. The forces of state violence, I assure you, are perfectly capable of rolling right over the most passionate antifas. It turns out you can’t punch an MRAP or a Predator drone.

[…]

It’s become a cliché, at this point, but it’s still a powerful image: the man who searches for his keys at night not where he lost them but next to a lamp post, because that’s where he has light to look. That’s what I think about when I see the left fixating on these things, a political movement that is so desperate for good news that it’s willing to lie to itself to find it.

The author’s criticism is equally applicable to libertarians as it is to his fellow leftists. Wars have been fought over lesser tyrannies than we suffer today but most libertarians can’t even bring themselves to perform a little unlawful commerce to withhold their resources from the parasite known as government. And I understand why. Talking to people about ending the Federal Reserve is easy. There are few consequences for doing so. Likewise, voting for politicians who promise to audit the federal reserve has few consequences. Performing a little unlawful commerce for the express purpose of avoiding taxes? That can have real consequences. And when those consequences befall a libertarian they’re unlikely to win their court case. Talking about evil is an easy battle, taking action against evil is a difficult battle.

Much like the leftists though, if libertarians continue favoring the easy fights over the hard fights they will have an abundance of pats on the back but nothing real to show for their efforts.

Heads Will Roll

A lot of people were making a big stink about some washed up comedian posting a picture of herself holding up a fake severed head of Donald Trump. Apparently the people flipping out about that picture haven’t heard of GWAR:

Comedian/actress, etc. Kathy Griffin has found herself under fire this week after posing with a fake severed head of United States President Donald Trump. GWAR have been quick to point out in the below video however, that they did it first. You can watch the band’s Beefcake The Mighty discuss that below.

People’s selective outrage has always fascinated me. GWAR has had severed heads of presidents as part of its show for ages now and nobody gave a shit. But when a comedian who most people have probably forgotten does the same things people get butthurt. I’m not sure why this is but if I had to hazard a guess, I’d guess it’s because GWAR isn’t being overtly political. Inserting politics into something that unremarkable has a tendency to make it remarkable to many people.

Create Wealth, Not Jobs

Expanding on my previous post, many people have fallen into the trap of believing that the solution to unemployment is to create more jobs. On paper is seems to make sense. If people don’t have jobs then the solution is to create jobs. However, unemployment is a symptom of a problem, not the actual problem itself:

But employment is not an end in and of itself. Rather, it is a means to an end: namely the increased standard of living that the worker obtains by trading his labor for wages.

In a free market, employment is a value creation process — with jobs stemming from the wants and needs of consumers as conveyed through the price system.

It is this productive nature of free-market jobs that make them desirable and capable of increasing a worker’s standard of living.

Wages spring directly from, and are proportional to, the degree in which a job creates wealth by helping to satisfy an unmet need. As is the case for all mutually-agreeable trades in a free market, both sides gain and wealth is created: the worker receives wages that he values more than his labor and the consumer receives a product or service he values more than its price.

In other words, a worker’s wages are reflective of the additional wealth he helped create, which enables his newly improved standard of living.

Because government-created jobs are devoid of this wealth creation process, they are merely a transfer of wealth from taxpayers to the program’s beneficiaries.

Unemployment stems from a lack of wealth. Most often the lack of wealth is caused by government. Through their burdensome regulations governments place roadblocks in front of entrepreneurs that prevents them from creating new wealth. Through their burdensome taxes governments siphon wealth from practically everybody under their rule. Government regulations also force currently existing wealth to be misallocated.

Solving unemployment by having the government create jobs actually exacerbates the problem. Since governments needs to siphon more wealth from the economy to create jobs there is less wealth in the hands of producers and consumers, which means consumers aren’t able to buy as much so producers respond by producing less. Eventually the drop in production forces producers to lay off employees, which increases the amount of unemployment. You can see where this vicious cycle ends up.

The solution to unemployment is to reduce the amount of wealth being siphoned by governments. With more wealth in hand entrepreneurs can create more wealth, which will actually allow the unemployment issue to be solved.

The Result of Relying on Coercion Instead of Market Forces

Minimum wage laws are seen by many as a mechanism to uplift the poor by ensuring every employee receives a “living wage.” For the economically ignorant that fairytale makes sense. For those with even a slight understanding of economics it’s a recipe for disaster.

The problem with minimum wage laws is the same problem with any government writ, they’re based on coercion instead of market forces. Market forces are based on wealth creation. When more wealth is created employees can be paid. Government writ doesn’t create new wealth so minimum wage laws rely on the current amount of wealth. Since the employers don’t have more wealth to draw from they’re forced to increase their prices to compensate, which often makes their product unaffordable to those who could previously afford it:

The U.S. restaurant industry is in a funk. Blame it on lunch.

Americans made 433 million fewer trips to restaurants at lunchtime last year, resulting in roughly $3.2 billion in lost business for restaurants, according to market-research firm NPD Group Inc. It was the lowest level of lunch traffic in at least four decades.

[…]

Cost is another factor working against eating out for lunch. While restaurants have raised their tabs over the past few years to cope with rising labor costs, the price of food at supermarkets has continued to drop, widening the cost gap between bringing in lunch and eating out.

Statists often scoff at the idea that minimum wage laws hurt the poor. How could laws that are advertised as helping the poor possibly hurt the poor? By forcing employers to increase their prices and thus make their product that was previous affordable to poorer individuals unaffordable.

The best way to help uplift the poor is to create more wealth. Creating more wealth requires fulfilling the wants and needs of consumers. Commands from governments cannot accomplish that no matter how many people vote in favor of them.

What Could Kill Bitcoin

I greatly appreciate Bitcoin. By enabling pseudonymous transactions it has made many forms of commerce, specifically those deemed illegal by various governments, easier. It also offers an opportunity for individuals to conceal at least some of their wealth from the State. However, Bitcoin exists in a market environment, which means a superior competing product could come along at any moment and topple it.

When Bitcoin first came on the scene its community promised low transaction fees. They often compared the transaction fees of, say, Western Union to the miner fees of Bitcoin for sending money across the globe. At the time sending money via Bitcoin was significantly cheaper.

Fast forward to today. The price of sending Bitcoin has skyrocketed. If you want a Bitcoin transaction to clear in a reasonable amount of time you’re looking at a transaction fee of over $2.00 (as of this writing). Why is this? It’s because the Bitcoin network is running into a block size ceiling problem. This problem has created an environment where more transaction are being made then can be processed so convincing miners to process your transaction requires offering a significant reward. No problem, right? It’s just the market at work after all.

It’s true, Bitcoin’s current state is an example of supply and demand. Demand has exceeded the supply of miners so the price to get transactions cleared has increased. But markets are finicky things. If enough people decide that they’re unwilling to spend $2.00 on a transaction fee for a $5.00 coffee they’re going to look for a better solution. Bitcoin isn’t the only cryptocurrency in town so failing to address the block size ceiling problem will likely encourage consumers to find an alternate cryptocurrency.

Considering this you would think that the Bitcoin community is working diligently to solve the problem, right? As it turns out, not so much. Now a lot of the Bitcoin community is changing its tune. Instead of addressing the issue they are denying the fact that low transaction fees were a selling feature of Bitcoin not too long ago. In addition to denying the past they’re trying to explain how high transaction fess are acceptable. I highly doubt most consumers see the “wisdom” in paying a $2.00 transaction fee to buy a $5.00 espresso at Starbucks. And that’s the thing, for a cryptocurrency to succeed it needs to be useful.

I can hear some Bitcoin advocate saying, “But, Chris, Bitcoin will simply become the new gold while another cryptocurrency will become its silver!” Gold and silver run into a divisibility problem. You can only divide gold so far until it becomes difficult to use. Nobody is going to pay for a coffee using gold dust because it’s a pain in the ass. Instead they use a less valuable metal, silver, for smaller payments. Cryptocurrencies don’t have this problem. You can divide a cryptocurrency down to as many decimal places as you want and it’ll be equally easy to use. Whether a cup of coffee costs me 1 Bitcoin or 0.000001 Bitcoin doesn’t make a usability difference to me. This means that any cryptocurrency that takes over Bitcoin’s current task of handling small transactions will likely rise to dominance overall.

Governments have been unable to destroy Bitcoin but the unwillingness of its community to address technical problems very well could lead to its destruction.