A Geek With Guns

Chronicling the depravities of the State.

Archive for the ‘Bitcoin’ tag

Possible Theft Versus Guaranteed Theft

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There are a lot of criticisms against cryptocurrencies. One criticism that I see come up periodically is that transactions can’t be reversed. If somebody manages to steal your cryptocurrency, there is no way to reverse the fraudulent transfer. Fraudulent electronic transactions in dollars, on the other hand, can be reversed.

That is a valid criticism. But I would like to point out something that is generally ignored by advocates of government issued money. Holders of dollars are being stolen from every moment of every day via purposeful inflation and there is no way to recover the purchasing power lost to inflation.

Cryptocurrencies can be stolen and if your cryptocurrency is stolen, there isn’t a damned thing you can do about it. However, government issued money is guaranteed to be stolen and there isn’t a damned thing you can do about it.

Written by Christopher Burg

March 1st, 2018 at 11:00 am

Legalizing More Thievery

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Civil asset forfeiture is simply a euphemism for theft. Unlike most other forms of government theft, civil asset forfeiture doesn’t even have the thin veil of criminal or civil charges either being proven in court or confessed to by the accused to justify it. Instead civil asset forfeiture relies on the concept of guilty until proven innocent. If a man with a badge believes that your assets are in any way tied to a drug crime they can legally steal them and the only way you can get them back back is by proving they aren’t, which is an impossible task.

While there has been a lot of pushback in recent years to civil asset forfeiture by a handful of individual states, the United States Senate is working hard to expand it:

A new bill seeks to track your money and assets incessantly, will enjoin any business with government ties to act as a de facto arm of DHS, and would steal all of your assets — including Bitcoin and other cryptocurrencies — should you fail to report funds when traveling with over $10,000.

Under the guise of combating money laundering, Senate Bill 1241, “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017,” ramps up regulation of digital currency and imposes other autocratic financial controls in an attempt to ensure none of your assets can escape one of the State’s most nefarious, despised powers: civil asset forfeiture.

The best thing about a law like this is that most people won’t know about it and therefore will fail to comply with it out of sheer ignorance. Since ignorance of the laws isn’t an excuse a law like this creates a huge number of new criminals for the State to prey on.

There are a lot of banking laws that people violate every day because they are simply unaware of them and the government loves to go after them. The Internal Revenue Service was going after people who turned their legitimate deposits over $10,000 into multiple smaller deposits to avoid filling out reporting paperwork. Legally this is known as structuring and the law that prohibits it was passed under the guise of catching tax evaders but most people are entirely ignorant of it so they violate it accidentally. Senate Bill 1241 aims to create a similar law that will likely be violated by innocent people who are simply unaware of the law, which will give the State an excuse to seize their assets. Best of all, if it happens under civil asset forfeiture, the government doesn’t even have to prove guilt.

Written by Christopher Burg

June 20th, 2017 at 11:00 am

Technology to the Rescue

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One of the reasons that the State fails to maintain its control is because it’s competing with the creative potential of every human on Earth. Let’s take the drug war. The federal government of the United States has been dealt significant blows in its crusade against cannabis in recent years as individual states have legalized consumption of the plant either entirely or in approved manners. Hoping to regain some semblance of control, the feds tried to use their influence on the banking industry to make life difficult for cannabis related businesses. However, the centralized banking system isn’t as powerful as it once was:

Enter bitcoin, the cryptocurrency that consists of digital coins “mined” by computers solving increasingly complex math problems. At least two financial-technology startups, POSaBIT and SinglePoint Inc., use the cryptocurrency as an intermediate step that lets pot connoisseurs use their bank-issued credit cards to buy weed.

[…]

Once a customer decides on which marijuana product to buy, an employee asks if he or she would like to use cash or digital currency, Lai said. If the buyer prefers the latter, the Trove employee explains that the customer can use a credit card to buy bitcoin through a POSaBIT kiosk, with a $2 transaction fee tacked on.

The customer, who would now own bitcoin equal to the value of the purchase, can then redeem the currency in the store. Or the buyer can keep their bitcoin and use it anywhere else that accepts the currency. If the customer finishes the purchase in the store, POSaBIT, which pockets the transaction fee, then sends the value in U.S. dollars to Trove’s bank account.

Cryptocurrencies have been making the State red in the face ever since the first person realized that they could be combined with hidden services to perform anonymous online transactions. Now they’re disrupting the fed’s war on drugs in the physical world in states where cannabis has been legalized.

Cryptocurrencies are a technology gun stores should also be looking into. Banks have been closing the accounts of many businesses tied to the gun market. Technologies like Bitcoin and Ethereum could allow these businesses to circumvent the need for centralized banks by either utilizing an intermediary like the cannabis industry is starting to do or by being a direct store of wealth outside of a third party’s control.

Written by Christopher Burg

June 15th, 2017 at 11:00 am

What Could Kill Bitcoin

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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.

Written by Christopher Burg

June 1st, 2017 at 10:00 am

Using Bitcoin in Venezuela

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State socialism is quickly reaching its inevitable conclusion in Venezuela. The economy is in shambles. The nation’s currency, the bolivar, is in a state of hyperinflation, which makes buying even a loaf a bread with it difficult. While the Venezuelan government scrambles to maintain its control over the people the people are adapting. One of the adaptions they’re making is using an alternative currency, one that is effectively impossible for the Venezuelan government to control. That currency is, of course, Bitcoin:

Amid growing economic chaos, and the highest inflation rate in the world, some Venezuelans are swapping bolivars for bitcoins in order to buy basic necessities or pay their employees

The digital currency is free from central bank or government controls, and users in Venezuela see it as a safe alternative in an economy where the government has enforced strict foreign exchange controls, and inflation is running at an estimated 500%.

This week, Venezuelans rushed to unload 100-bolivar bills – the largest denomination – after the government announced that it would be withdrawn from circulation on Wednesday in what it described as a move against profiteering.

Mainstream economists have been decrying Bitcoin since it started becoming popular. Since the currency isn’t issued by a central bank the mainstream economists have declared it worthless. But the value of Bitcoin continues to rise. When I last checked it was around $800 per Bitcoin. Why does Bitcoin continue to succeed in spite of mainstream economists? Because mainstream economists are fools.

All of the things mainstream economists criticize Bitcoin for are actually important features. Not being controlled by a central bank means that a government can control it. Venezuela can’t just decide to withdraw Bitcoin or print more of it. The fact that there is a cap on the total amount of Bitcoin that will ever exist is also an important feature. Without the ability to print an infinite amount of Bitcoin no government can inflate it. The lack of inflation means that Bitcoin can be a safe method of preserving one’s purchasing power over time (a fancy way of saying savings). Bitcoin’s pseudoanonymity can protect users from the prying eyes of the State, which means it can be used in countries where the State would rather see people starve to death than utilize a currency it isn’t issuing.

Bitcoin’s popularity will likely continue to increase as more national currencies collapse. As its popularity continues to increase the technical limitations, the only valid criticisms against Bitcoin, will continue to be addressed and addressed more rapidly.

Written by Christopher Burg

December 21st, 2016 at 10:00 am

I’m Satoshi Nakamoto! No, I’m Satoshi Nakamoto!

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The price of Bitcoin was getting a little wonky again, which meant that the media must be covering some story about it. This time around the media has learned the real identify of Satoshi Nakamoto!

Australian entrepreneur Craig Wright has publicly identified himself as Bitcoin creator Satoshi Nakamoto.

His admission follows years of speculation about who came up with the original ideas underlying the digital cash system.

Mr Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin’s creator.

Prominent members of the Bitcoin community and its core development team say they have confirmed his claims.

Mystery sovled, everybody go home! What’s that? Wright provided a technical proof? It’s based on a cryptographic signature? In that case I’m sure the experts are looking into his claim:

SUMMARY:

  1. Yes, this is a scam. Not maybe. Not possibly.
  2. Wright is pretending he has Satoshi’s signature on Sartre’s writing. That would mean he has the private key, and is likely to be Satoshi. What he actually has is Satoshi’s signature on parts of the public Blockchain, which of course means he doesn’t need the private key and he doesn’t need to be Satoshi. He just needs to make you think Satoshi signed something else besides the Blockchain — like Sartre. He doesn’t publish Sartre. He publishes 14% of one document. He then shows you a hash that’s supposed to summarize the entire document. This is a lie. It’s a hash extracted from the Blockchain itself. Ryan Castellucci (my engineer at White Ops and master of Bitcoin Fu) put an extractor here. Of course the Blockchain is totally public and of course has signatures from Satoshi, so Wright being able to lift a signature from here isn’t surprising at all.
  3. He probably would have gotten away with it if the signature itself wasn’t googlable by Redditors.
  4. I think Gavin et al are victims of another scam, and Wright’s done classic misdirection by generating different scams for different audiences.

Some congratulations should go to Wright — who will almost certainly claim this was a clever attempt to troll people so he doesn’t feel luck a schmuck for being too stupid to properly pull off a scam — for trolling so many people. Not only did the media get suckered but even members of the Bitcoin community fell for his scam hook, line, and sinker.

Written by Christopher Burg

May 3rd, 2016 at 10:00 am

Is That A Bitcoin In Your Pocket

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Considering the Transportation Security Administration (TSA) achieved a 95 percent failure rate it’s not surprising this happened:

The TSA attempted to “screen” airline passenger Davi Barker for the virtual currency Bitcoin.

Barker is co-founder of BitcoinNotBombs, a Bitcoin advocacy group that gets donation-based organizations and social entrepreneurs set up to handle the currency. He’s written a very detailed telling of what happened right here. After going through security (he opted out of the body scanner but was successfully cleared through the checkpoint), two people stopped him, and it got uncomfortable quickly.

What next? Will some random TSA goon demand to see the Transportation Layer Security (TLS) certificate in your briefcase?

The agency’s 95 percent failure rate makes a lot of sense when stories like this keep popping up in the news. When your agents are so clueless that they harass passengers after seeing something entirely imaginary there’s little hope that they’ll catch any of the real dangers.

Written by Christopher Burg

February 22nd, 2016 at 10:30 am

Technology is Trumping Statism Again

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Regardless of the laughable claims made by an author at Daily Kos, market anarchism is showing how practical its rhetoric is once again. This time the place is Venezuela, the problem is currency controls and economic collapse, and the solution is Bitcoin:

(Reuters) – Tech-savvy Venezuelans looking to bypass dysfunctional economic controls are turning to the bitcoin virtual currency to obtain dollars, make Internet purchases — and launch a little subversion.

Two New York-based Venezuelan brothers hope this week to start trading on the first bitcoin exchange in the socialist-run country, which already has at least several hundred bitcoin enthusiasts.

While the Venezuelan government continues its attempt to control its population through economic controls its power is quickly fading as its economy collapses and more people turn to the “black” market for basic necessities. This is similar to what happened during the collapse of the Soviet Union.

Once the state’s controls have been circumvented its death is inevitable.

Written by Christopher Burg

October 9th, 2014 at 10:00 am

US Marshals Auctioning Off 29,656.51306529 Bitcoin

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Do you have $200,000? Are you registered to participating in auctions held by the United States Marshals Service? Have you been looking to buy a lot of Bitcoin? If you answered in the affirmative to all three then I have an auction for you:

This auction is for 9 blocks of 3,000 bitcoins (“Series A Blocks”) and 1 block of 2,656.51306529 bitcoins (“Series B Block”).

The Bitcoin were supposedly seized from Silk Road although the auction description specifically states that they are not the Dread Pirate Robert’s. What I find interesting is that no trial has been held regarding the Silk Road so I’m not sure how the seized property is being auctioned off. It’s almost as if the state can just take your shit and sell it without due process. But being the land of the free I know that we couldn’t possibly have some kind of civil forfeiture laws that allow the state to get away with such things.

As of this writing Bitcoin is hovering right around the $600 mark so, assuming the Marshals get around market value for the Bitcoin, the auction is looking to bring in approximately $17,793,907.839174. That’s a nice chunk of change.

Written by Christopher Burg

June 16th, 2014 at 10:30 am

The Difference a Quality Codebase Makes

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As I mentioned Tuesday, I rewrote a major chunk of WristCoin, my Bitcoin price checker for the Pebble wristwatch. Now that I’m working with a far more modular design adding exchanges requires almost no effort at all. I to add in Bitfinex support:

added-bitfinex

It took me roughly ten minutes to do so (most of that time was invested in writing the JavaScript code that grabs the current prices and feeds them to the Pebble). So let me iterate a lesson that most developers have pounded into their heads but fail to follow: don’t start with quick and dirty code, start with quality code from the beginning. Mind you in all liklihood I will fail to follow this advice as soon as I start my next project. Getting a prototype up and running quickly is just so tempting and it feels so good.

Written by Christopher Burg

May 16th, 2014 at 11:30 am

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