Wednesday, 12 November 2014


"I do not agree with what you have to say, but I'll defend to the death your right to say it."

"When government fears the people, there is liberty. When the people fear the government, there is tyranny."
Thomas Jefferson

Glenn Greenwald does a great job of explaining why privacy is so important to us all.

The Edward Snowden revelations made us all question our views and beliefs on privacy. When Edward Snowden first came out the majority of Americans believed him to be more of a traitor than a patriot. As more details came to light a majority of Americans now view him instead as a Patriot. Edward Snowden, who is only 5 months older than myself, was incredibly brave to do what he did knowing full well what the consequences would be not only for himself but for his family and friends. 

Now companies and individuals are fighting back with Apple and Google now offering encryption built into their devices. As Edward Snowden says "encryption works" and the NSA and GCHQ have become worried as they know full well they can't break modern cryptography (the only weaknesses are usually found for example with the random number generators or some other side issue, not the algorithms themselves which would take thousands of years to break even with supercomputers). In reality we all want privacy for some reason or another. Medical conditions we may have. Personal communications we make with our loved ones. Little secrets that make us who we are. If we didn't then why would we password protect our emails accounts, as Glenn states in the video.

We should all take privacy seriously. Women in Afghanistan who are trying break free of their repressive male dominated cultures by utilising encryption. Political dissidents from totalitarian regimes. People who question our own Governments actions and have the privacy to do so. Everyone has a right to their own opinions even if it goes against conventional thinking. Such thoughts drive humans forward, it opens all our minds to new and better ideas. We should always defend privacy, if not for the sake of our own interests then for others who do need it and one day we will all be grateful for such peoples actions.

Sunday, 2 November 2014

Freedom not Regulation Creates an Inclusive Society

On first listen this may seem like Nigel Farage is playing up to the UKIP stereotype of small minded bigotry, in contrast to the radio hosts who may seem quite evidently correct. If it does then I urge you to listen again to what Nigel is really saying regarding employing women of child bearing age. Rather than say what is politically correct Nigel actual states what happens in the real world.

The majority of people believe we need employment laws to protect employees. Living wages, anti-discrimination acts and rights to certain working conditions have been solved by markets, not legislation. For centuries Jewish minorities were persecuted, excluded from society and discriminated against yet they generally flourished economically. Why? Because they made themselves economically valuable and employable to overcome these barriers and gain acceptance. Cheap Eastern European workers continue to get jobs despite prejudices of many here in the UK. Information Technology has little or next to nothing in terms of workers unions yet enjoys very favourable working conditions. Flexible hours, working from home, good pay/benefits, interesting work and many other free perks. Workers in such fields actually have more power over their employer due to the competition for software developers. These rights have been gained not by unions but in spite of them. The best tool to combat prejudices and enable full opportunities for all is freedom. Markets are amoral. Morals are left with the individual which in a free marketplace means there will be little place for discrimination and disrespect. Employers who do, fail and go bust.

The current laws in the UK dictates that an employer can not discriminate against a women who potentially may have children in the near term future. So long as the women has worked for their employer for 26 weeks before their maternity leave takes place then they are entitled to a number of partially paid weeks leave that can vary from 2 weeks all the way to 52 weeks absence. Women are also entitled to pay rises and accrued holidays in their absence with the guarantee of a job when they do decide to return to work. The position Nigel Farage takes is "are you naive enough to believe a small employer with very limited resources doesn't take all this into account?"

The alternative without such mandated laws would be to reduce the current discrimination women face in the workplace due to these laws. It is true that women would no longer be entitled to Maternity leave which instead would be at a employers discretion. However more importantly women would find it far easier to get a job. Small businesses would not have the current legislation in the back of their minds when interviewing such a candidates. Instead the topic could be discussed in a mature manner rather than the women not even been given a real chance to the position before they discuss the candidates credentials. Getting a job and regular income is far more important than having no job which is exactly what the current laws cause. 

If you believe different you are either naive or arrogant. Small businesses, where someone is risking their own assets on borrowed money, have to take this into account thus will favour a male candidate as it currently stands. They may even do such an action when a more competent female candidate would be willing to do the role. When faced with two such candidates with an absence of the current laws the employer may be willing to take on the female over the male. Instead with no laws they could ask if they plan to return to work? What their career aspirations are? How long do they plan to take leave? Currently you can't even raise any of these issues in an interview as you may get a legal case on your hands. All of this would not cost the employee the current headache of where the women may take a whole year off and in the meantime the employer would have to employ another member of staff to cover the absence, pay the women maternity pay and still have to guarantee a job if the women decided to rejoin the workplace despite originally only having a single role available (otherwise they find themselves with a legal case). Women and young families would adjust accordingly to no guarantees in maternity leave. They could save in anticipation. Adjust their finances to a single income for couples. Private companies may start offering insurance, whereby a women saves with the third party in anticipation of becoming pregnant. They could even negotiate with the employer to still get a regular set of pay checks and stagger the unpaid leave across a 12 month period for example. Many options exist, far more exhaustive than the list given here, as freedom creates many more possibilities than one mind can think of.

So would people discriminate? Possibly but when markets are amoral it doesn't matter. Women may become more competitive then their male counterpart due to no laws. There will be entrepreneurs who employ such individuals because they believe, even with the maternity leave a women may voluntarily take, are far more productive than the other male candidate. I'm sure we have all heard hiring a good worker is worth two or more incompetent employees. Markets would quickly remove most such discrimination. Currently this discrimination is nationwide, however with freedom it would be relegated to small pockets. 

Women grafted their way into the workplace not from war, regulations or the enactment of laws. They got jobs and respect from their male counterparts because they proved themselves highly competent if not more able than many males. The key concept to understand is under the current laws the job for the female never exists. Under a complete absence of laws, the small company now has more incentive to employ the female. The two parties can have a rational conversation with one another to determine the exact circumstances. An employer doesn't want to let a good candidate go and would prefer to follow one of the options listed above. As Nigel Farage states its time to get rational and realistic rather than following some infantile political correctness thinking.

Monday, 9 June 2014

March Towards Freedom

With the recent elections in the UK I thought it was time to delve into the present political structure, how history has shaped where we are and what is to come during the 21st Century. I believe history will look back at the 21st Century as a golden era in humanities progress. Not only from a technological view, but politically also. 

We have to start with a conventional view of the current system. At school you are taught about the political spectrum, a view that places all political views on a sliding scale from left to right with current positions of the political establishment rooted in the center. The picture below illustrates this concept for anyone who is not familiar with the spectrum.

Click to enlarge

I have plotted various political ideologies along with popular UK political parties. In school you are taught that both the left and right sides of the spectrum are political extremes and should be avoided, leaving the centre ground as the only option by default. Incidentally this ground is occupied by all major western political parties. For example in the UK I have drawn from left to right, Labour, the Liberal Democrats and the Conservatives as this represents their historic political views but in recent years they have blurred to the point of being nearly indistinguishable.

I started having a real problem with this picture as I began to branch out my thinking during my twenties and saw alternatives. Such alternatives could not be mapped onto this conventional model. Even before I formed such views I still had issues with the old model as it places both Communism and Fascism at opposite ends yet both ideologies share common views. They both despised Capitalism, favoured central planning, implemented price controls along and deficit spending. The right wing is supposed to be the side of Capitalism, yet as Joseph Gobbels said;

"It would be better for us to go down with Bolshevism than live in eternal slavery under capitalism"
Nazism was called National Socialism as its members aligned more with Socialist principles than Capitalists and free marketeers.

Therefore a new political model is required not only to make this anomaly correct but the very nature of it assumes society with be stuck in stasis with a state.

Click to enlarge

I have labelled it "Real Political Spectrum" as I believe all political views can be mapped onto such a model with consistency. The real spectrum has at one end Totalitarianism and slavery. Such regimes have little or no rights for the individual. In the past all of the western world used to fall under such a description. Our ancestors lived under serfdom which closely resembled slavery and the landowners could do as they pleased with the people who worked there. Slowly people gained more rights removing the shackles of serfdom. Democracy would take a long time to establish itself. In the past the King had complete autonomy over the people but this belief would be challenged. The Age of Enlightenment espoused radical ideas such that an individual had the right to pursue happiness and a freedom. These concepts were non-intuitive to many at the time who had always been directly governed by strict central authorities. Such ideas began in Scotland, England and Holland with the emphasis on tolerance to one another. Thinkers such as John Locke would inspire a whole generation to emigrate to the Americas and spread the concept of liberty. Schools were appearing as early as the 15th Century, such as the scholastics of Salamanca in formulating a theory which declared the rights to life and liberty; at the time a novel thought. Later schools would come along, such as the Austrian School, repeating and supplementing arguments for subjective value, price theory, business cycles, inflation, interest rates and so forth. These ideas enlightened many who found them.

During the age of reason another group of thinkers began distorting the word freedom. Jean-Jacques Rousseau argued that true freedom was the individuals submission to the wills of others in power. Freedom of the individual was not real freedom. Real freedom was the collective view of the elite few over the many. These ideas were explored in further detail by a later generation of thinkers. Hegelianism explained that the state had supreme rights over an individual. Such views would influence next generation thinkers such as Karl Marx. The left would go on to pollute the very essence of freedom, liberalism and human rights. Freedom became associated with a submission to the state for a collective good. Liberalism was associated with state grand plans to organise and plan for societies needs. Rather than individuals choices, human rights became one that was ever more influenced by the states needs.

During the 19th century regions such as Britain, the Low Countries, North America and Scandinavia became incredibly rich as liberty and the individuals rights to pursue happiness were embraced. America experienced deflation and a rapidly growing economy, Sweden had moved from a relatively poor country in Europe to one of the richest by the end of the century. Germany unified and became a world beater in the Chemical Industry due to its liberal patent system compared to Britain and France where the State still granted monopoly patents. Freedom was creating wealth and materialism for the first time in human history. 

During the next century these countries would all succumb to the collective will of the state. Loss of freedoms and the expanse of Government was a slow process. During the Great Depression in America people still believed they were better off dead then accepting handouts from the state. How societies morals changed over the course of a couple of generations. The social ratchet kept tightening as the size of Government expanded. Some countries decided to nationalise the farm, notably Russia, Eastern Europe, many parts of Asia, South America, Africa and sporadic islands most famously Cuba came in for good measure. Britain, the Low Countries, North America and Scandinavian, the very nations who cradled liberty, expanded their states but never going the full distance. Swedens state expanded vastly during the 1950's, 60's and 70's, slowly destroying the gains that free market capitalism had bestowed on them during prior years. Americas slow abandonment of their founding fathers constitution and growing Government influence which got worse during the 1960's guns and butter programs left them with a social system that made a mockery of their slogan "land of the free". Reaganomics had shown how muddled the term liberty and free markets had become. Regan spent more than any previous president with large deficit spending policies and expanded the size of Government, yet ironically was labelled a free marketeer. Britain descended into the abyss on a couple of occasions; blackouts, never ending strikes, decline of industry and mass socialist programs. The biggest shock came in the form of Germany the only country to fall into a totalitarian state. The atrocities were no different than those committed in China, Russia or Cambodia. Mao once commented that a nuclear war would be good; it would clear out half the worlds population to start again. The fascination that Nazisim brings to people is the fact it happened in Germany, an industrial power. 

After the war Germany was split, one side more free than the other. Other countries had a similar setup. China and Hong Kongs relationship, North and South Korea. These real life examples would show us all the benefits of individual autonomy over submission of our free will to central authorities. West Germany would become one of the economic powerhouses in Europe once more, South Korea gave its people some of the best living conditions on the continent, despite the fact that the North started out richer and Hong Kong; well in the end China under Deng Xiaoping just copied its neighbour with similar polices. Taiwan, Singapore and notably Japan all blazed a trail in showing the power of unleashing individual autonomy. Japan's 1950's, 60's and 70's bee-like workers transformed one of the poorest nations (just after it had lost everything during WW2) to one of the wealthiest; a first world nation.  

Meanwhile cracks were beginning to show under countries that had opted for the submission to the state. The Soviet bloc would begin to unravel and its leaders gave its people more autonomy over their lives. China and India would move out of their shadows and during the later part of the 20th Century would begin to show their potential. Chile has now become one of the most prosperous nations in South America due to its belief in free markets. Pinochet was a nasty piece of work but this had nothing to do with the economic policies put in place. America, Canada, Britain and many others who had traditional left leaning parties would become pro-market. New Labour was created in the UK; their direction was copied from the Clinton administration who realised that people had spoken and they wanted the Government off their backs.

The trend will continue throughout the 21st Century. At the other end of the spectrum is the endgame for society, freedom for all individuals on the planet and I believe over the course of the 21st Century we will make tremendous progress towards such a goal. The 20th Century will be viewed as a tragic experiment with the state and the submission of our rights in the false belief that this was true freedom. Holocausts, wars; regressions in many nations of basic human freedoms. More people were killed through State inflicted conflicts than in any previous century in human history. Many countries regressed into insular Totalitarian states. Countries that had so much potential; Russia, India, China, Spain, Italy; even Germany. Whole continents such as South America, Africa and Asia all embraced centralised dictatorships. 

Many of developing countries have gained ground and will continue gaining ground on the West but it will be the West that continues to spearhead the charge towards freedom and an abolishion of the state. Its Citizens are still the freest. They are critical thinkers with little respect for their elders conventional views. Many of its brightest and dynamic don't follow; they lead. 

I can not explain exactly how we will transition or when the state will go in its entirety or geographically where this will occur; that's for the future to decide. My excitement lies with the fact that I know it will happen and its only a matter of time. The state will fall from a combination of factors. One they will over-stretch themselves. In doing this they will wittingly and unwittingly hand over more of societies functions to the free market. Second, people will create new de-centralised systems that can not be shut down through acts of third party aggression and will directly bypass Government controls. These systems will run in parallel to the established industries, covertly changing the public's perception that certain services must be provided by a Government. The Internet has proven itself to be a remarkable source of free-willed information. Dictators, notably in Egypt tried to shut it down only to find their economies have now become too dependant on the platform and had to turn it back on. China tries to ban information but projects such as Tor are allowing these people to exchange and read ideas that the state has tried to blackout. Bitcoin will revolutionise money and finance. It or its successor, will prove hard to contain. Many other decentralised systems are coming into play subverting the central authorities. The third reason; new Blood. Young people are great. They have no baggage, no pre-conceived ideas or ideologies that they have espoused for a lifetime. Instead they are open minded and receptive to new concepts with an inquisitive nature unlike older people who are comfortable with the reality they have always known. I was once new blood and during my twenties rejected all beliefs I held dear. My parents held conventional views, all my relatives had no background in social and political issues. I was the first on my mums side to go to University and many people I came across had no interests in such topics. I formed my views completely on my own and through inquisitiveness and sheer graft. When there is no one to show you the door, finding the right one can be hard and time consuming taking a lot of effort. My point is, if I can do it with my background anyone can. All the time its getting easier as more and more convert to realising that individuals have the right to their own destiny.

The mental shift I believe is already starting. Voter apathy, with cynical views towards politics as it seems to fail no matter who obtains power. People bad mouth all the mainstream political parties and are no longer dogmatically tied to a single party, instead select on the day which "handouts" they like best (one of the reasons the parties have all merged to a very common centre ground chasing the ever increasing floating voters). More people are embracing liberty and its principles of limited Government. People who are non-politicised are getting more sceptical of broken promises made by successive parties. 

History will view the 21st Century as a Golden Age in human prosperity and progress. There will be steps back, volatility, ups and downs; its all part of the ongoing struggle to distribute complete autonomy to the individual, to have complete control over their own life. I like many others look forward with excitement to what the future will bring. You should too.

Tuesday, 20 May 2014

Political Will, or more the lack of it

David Cameron has recently talked down the recent house price rises as more people are identifying its bubble like nature. He has used the recent 2007 peak as guidance for normality. It seems a distant memory when Mr Cameron was taunting Gordon Brown regarding credit bubbles and debt issues. As stated in the article if we are currently only 15% off the 2007 peak in real terms then we will soon be in real terms back at the bubble price and everyone knows with historical hindsight how that turned out. The Government deficit and debt levels are worse than 2007 and the interest rates are far lower along with Quantitative Easing propping up asset prices. Its funny how politicians when out of power convey the image of responsibility but when they obtain power act in the same reckless manner as the predecessor. I agree with a recent article published on moneyweek, both the Bank of England and the Government have no political will to reign in all these shenanigans and the real cause behind rising house prices is monetary policy, as I detailed in my eye of the storm post.

Any centralised system is doomed to failure, lawful anarchy based on the non-aggression principle is the end game for society. Democracy was a substantial step forwards for human liberty but suffers from mob rule and therefore acts of third party aggression. David Cameron is acting rationally as any democratic leader does. He is using monetary policy to engineer an artificial boom in order to obtain as much of the mob rule to win next years election. There is no reason for the Prime Minister to worry about the fallout. Political will, to do the "right" thing, is an illusion. In reality it never even existed, its all about the majority mob rule. Many just pretend it does.

Sunday, 18 May 2014

In the Eye of the Storm

House prices are once again on the rise. London has seen the fastest increases to date with money slowly filtering out towards the rest of the country. Mark Carney, the Bank of England Governor, pays empty lip service to interest rate rises. Even if they were to go up tomorrow the damage is already done. It was done when they bailed out everyone, slashed rates and embarked onwards with Quantitative Easing. Raise interest rates tomorrow and we would be back where we started only worse. However history shows that central banks are always reluctant to raise their rates in a timely manner, even when they are raised they stagger it over months and it then takes months or years for the broader economy to feel the restriction of credit once more and fall back into a recession.

The 21st Century will view the central planning of money as an absolute disaster and free market alternatives will replace the current defunct system, good money always drives out bad and Government money is never good. Many Central Banks are using their faulty inflation rates as guidance as to when interest rates should rise but their metrics are critically flawed. 

Inflation is not just the price of staple goods such as milk, televisions, cheese or oil. If the price of the stock market rises that's inflation. If house prices rise that is inflation. If Gold rises that is inflation. If the price of a Picasso masterpiece rises, its inflation. If we take these items into account, the hard assets, then inflation is rising at increasingly faster rates. Its important to understand that the prices of these items are inflation the Central Banks just choose to ignore them in their indexes.

Another problem facing the planners is that interest rates can't rise or at least not by much. Many Governments don't want them to rise as it impacts on their already woeful deficits. It would hurt their tax receipts. It would ruin the "feel good" feeling in the run up to the UK election. People are beginning to stretch themselves once more and pile up debt on the low rates that are currently on offer. Mark Carney blames everything but loose monetary policy the real fuel to the fire that sparks off an asset price bubble. The same reasons that were cited during the previous boom are once more trumpeted to causing the recent house price rises:

  • Too much Demand
  • Too little Supply
  • Not enough building
The real reason is excess credit. Its loose monetary policies that are causing house prices to rise once more. Demand and supply dynamics have changed no more than back in 2009, the difference is Central Banks have turned on the taps once more to release more credit and banks are once more recklessly lending to anyone with a pulse. Same with Gold. Same with art collectables or with vintage cars, the free market can not produce hard assets to keep up with inflation. Electronics and consumer goods hide real inflation as capitalism does such a wonderful job of providing these services in ever greater quantities at lower prices. We are not building more land. Houses are getting built but its the land they sit on that causes them to rise in value. 

So we are in the eye of the storm and if I'm a betting man it will go on for a few years at least. "Get it on tick" is once more a way of life for people. Once the tanker moves in one direction it generally holds course for longer then people can call it. When will the crash come? No one knows. What format will it take? Again no one can say for sure. All we do know is that the fundamentals are progressively deteriorating. When the 2000 stock market bubble popped the central banks re-leveraged the system, cranking down interest rates to low levels. Then 2007 and interest rates went to zero and monetisation actions were also taken. So once interest rates rise (if they do) then once more they will see-saw back to zero but it will be very hard to get credit moving with all the extra problems. Again monetisation of debt will happen, this time will see even more draconian manoeuvres. We could get "Bail-ins", similar to a Cyprus situation where money is simple taken from the wealthiest account holders (or even across the board) to try and bail out the system; a direct attack on freedom. One thing is for sure, it won't be pretty and it won't be moral.

The asset price bubble is global. This pod-cast with Krassimir Petrov highlights Asias problems and how it is creating reckless bubbles. House prices are rising there even faster than the UK, yet no doubt the same reasons are given, limited supply, too much demand not enough new builds and so forth. As mentioned near the end of the pod-cast central banking really does change the morality of people for the worse. Excessive credit does great harm to us all.

Thursday, 15 May 2014

Everythings Amazing

Sometimes we forget how far we have come as a species in such a short time even between generations. When our family went on a holiday recently my daughter kept demanding certain television programs. I had to keep telling her that we can't do catch up or watch YouTube content and this was how TV worked when I was a child; you watched what was on at the time with four channels to choose from or nothing at all. She couldn't comprehend and still kept demanding certain programs. Similar to when my mum said their first house didn't have a phone, I struggled to get my head around that concept as I'm used to having instant communications on tap.

The video does actually make an excellent point. Most people always feel like the world owes them something. That's why everyone moans at capitalism, rich people, companies but really we have nothing to moan about when we sit down and think about it. The people who moan the most are generally the ones who gain the most. Think about someone who is wealthy in a monetary sense and didn't inherit that wealth. They in all probability worked long hours, sacrificing all sorts of comforts to gain that wealth and in turn create wealth for others. They most likely enjoyed what they did but still had to sacrifice many hours of leisure. Compare that to a lazy person who doesn't even work. They gain all the fruits of human ingenuity for free without even breaking a sweat. Providing economic freedom to the great thinkers and doers gives them untold riches. Capitalism always favours the lazy, poor and ignorant. It's ironic that such people are generally the first ones who wish to take wealth and freedom from the wealth creators, thus hampering their free lunch.

We should all be grateful for the entrepreneurs, inventors, business leaders who contribute in changing things. Life really is amazing for the developed world in the 21st Century and its only going to get better and I can't wait to see the progress we make during my life.

Saturday, 10 May 2014


Jobs are constantly being created and destroyed in a free market. Its a continuous process, human labor being automated with the jobs being redeployed into some other line of work. There's also new business models that are spawn to challenge convention. Decades ago car workers didn't like the sound of automation so mobilised their unions to try and stop the progress of humanity. In countries like the UK they hampered innovation but they could never win. Germany for example embraced robotics during the 70's and 80's and eventually the UK car companies collapsed as they had fallen so far behind. Instead of maybe mild job redeployments it was a complete collapse of the industry. It would take foreign car companies to come into the UK until the jobs reappeared at which point the companies said "This is the way we make cars now".

The taxi business is rife for innovation. Black cabs have had it too easy for too long and entrepreneurial individuals have noticed there is room for competition. Applications such as Lyft and Uber are giving consumers and businesses increased choice of how to travel and generally lower the costs for us all. The concept is to use peoples cars as the taxis and lower the barriers of entry into the sector. Of course black cabs are not best pleased as their relative monopoly is being challenged. Is it the moral role of society to protect these jobs? Of course not, for if it was we would all still be living in caves. People got to where they are as the most dominant and prosperous species on the planet by constantly innovating and finding new way to do things more efficiently. 

During the industrial revolution the Luddites used to smash the factories that were popping up all over the country. Their logic? No one would have any jobs as the mills would do all the tasks many were used to doing manually. Instead what happened was a golden age in human history. Prior to this time, wealth had remained fairly static, then along came the industrial revolution and changed all that.

Those who abandoned the mills suffered. Those who embraced them, prospered. The West got ahead of everyone else because it embraced individualism, the challenge to authority and had the conditions for economic freedom.

In the long run Cabbies should embrace changes. They should adapt to the new methods and techniques to secure their jobs. If they don't then they will have to find new lines of work.

It won't be long until driver less cars will be a common sight and I suspect my daughter may never need to learn to drive if I decide to shell out for one. Taxi drivers won't even be required at this point as the automation continues. Should we be fearful? Would you fear much cheaper fees and a car tracking system all automated so it can efficiently send a car out to pick you up? The Taxi drivers will move into other lines of work; for the job destroyed ten more will be created. We don't need to protect jobs, in a true free market jobs are always abundant and we need to automate as many laborious tasks as we possibly can.

Who will build the Roads?

The title of this post causes many people with free market views to tear their hair out. The free market revolutionised global telecommunications, built the vast complex Internet we now know today and has banished starvation for many in the developed world. Laying down some tarmac? We need a Government. Who else could possibly perform such a vital and complex function for society. One of the most important philosophical concepts to understand regarding human economic freedom is its spontaneous creative nature. Just because you can not envisage an alternative world where entrepreneurs, not state planners build roads, does not mean there are not more efficient means to building such infrastructure like we are used to seeing. Not only could a free market build roads but they could do it far better than any Government.

Roll back 30 years. We had phone lines. The Internet existed but lay dormant for decades, used solely by Government Agencies with no consumer services. Visionaries saw the potential - what if we connected everyone's computer? No one knew how this could be done. Who was going to pay for the infrastructure? Who was going to build the applications? Who was going to invent the technology to deliver the content? Who was going to build this new Global Information "Highway"? Surely the cost of such operation would never take off, it would be far too expensive for people to bother with? 

So the Entrepreneurs, Venture Capitalists and Angel Investors set to work with their time, money and passion. The pioneers bore all the costs, that of money and time to get this going, we didn't have to pay a dime. Early adopters stepped in and began using such systems but at very high costs. Computers costing thousands of dollars with Internet Connections making funny sounds down your phone line at blistering speeds of 14K or lower. All the while the people with no vision, the same people who can't see how roads could be built by a free market proclaimed "It's too hard to use", "Its too expensive", "Its too slow", "It has no use" and so on. We must remember these were real complaints made in the past by the majority. Many other claims were made. Ethernet can not go faster than 1Mbs, it will never scale, Voice over IP will never have the quality of fixed line telephony and so on; the technical complaints kept coming. 

We now know that all these concerns proved false. Never underestimate human ingenuity. What can I currently consume for a £10-20 month internet connection in the present time frame as I write this article on a second hand £60 computer? Unlimited email, video (HD) content, the complete library of humanities knowledge, Instant communication, News as it happens. I can sell my house, my car, get a job, book a holiday, insure my dog and literally shop for everything and anything from the comfort of my armchair. Now that's free market value. Value that was created by economic freedom devoid of state planning. The developed world are not the only ones who have benefited. It has exposed numerous totalitarian states with no respect for human rights making such regimes more transparent. Google and Facebook now plan to roll out free Internet access to Africa. They may be connecting a whole continent for the selfish reason to get new users but those people will gain access to one of the most important tools ever developed for humanity. 

If we had economic freedom in the road business then I can guarantee you they would be in far better shape then they are now. Just as we now know the information highway lay dormant until peoples imagination and freedoms were allowed to transform it into one of the greatest tools.

Many people assume that toll roads will be required, that people won't able to access certain geographic locations because they will be denied access. As can be seen from the example above, people could have assumed that high speed internet access would only ever be for the rich but is now even accessible for people on their mobile phones. I can't possibly propose what form road networks would take under the free market as I can't predict the millions of creative minds out there, but I know there are a lot of vested interests in maintaining good roads. For example:
  • Retailers - Physical retailers rely on making it as convenient as possible for people to come buy goods in their stores, after all they now have to compete with online shopping. They don't want people stuck in traffic jams or high toll road costs to put people off. Similar to making private shopping centres a pleasant environment they would also wish to make roads as efficient as possible. 
  • Car makers - Without roads these companies go out of business. Car makers have a large incentive to make driving a pleasurable experience and to make roads as accessible as possible to all consumers. Who wants to buy a budget car, the bulk of the market, if they think roads are too expensive to drive on?
  • Distributors - Think of the wall-marts of the world who have massive distribution costs. Think of how these guys have streamlined their distribution system to remove any inefficiencies. Now think if they were given that freedom with roads. Lots of great ideas would enter the space along with capital. They don't want poor quality roads damaging their vehicles or traffic jams slowing down delivery times.
  • Private Businesses - All our workplaces rely on people getting there by car. No business wants to see their employees come in to work an hour late and tired. They want them there as soon as possible and fresh for the days challenges.
  • Bus companies/private taxis - Traffic jams do not help profits. Many smaller companies who offer transportation services would also face the same challenges.
How all of this would be funded is like asking how will the Internet be funded in the early 90's. It has to be left to human ingenuity to solve such issues. Advertising? Companies could pay to sponsor a road, the BMW bypass? A company would want to ensure it was a quality road to uphold their image. Road subscriber fees to end users based on mileages similar to buying Internet packages from Internet Subscriber Providers (introducing the concept of consumer demand)? Maybe over time roads would be free for the poorest. Premium services could be provided to power users, similar to many computer services such as email. Who knows. I am neither an expert in the field nor do I have the talent or the creative imagination that many others will have.

Railways were initially completely funded by the free market. Huge expanses of track were laid by private investors. They did this from prices, consumer demand and had the freedom to do so. It wasn't the mess of a railway system we see today after years of state interference. It was a marvel at the time, holidays to the seaside for the first time, allowing people to live in the suburbs for the first time. A great liberator.

I know there are lots of suppressed Entrepreneurs out there who are waiting to transform the road business but have a hard time even getting funding or started due to the Governments monopoly provider status. Some people still try. Instead of using asphalt, engineers are now proposing using pre-fabricated slabs to try make roads more robust and easier to maintain. Instead of having road works that take months how about days? How about just at night then the road is re-laid for busy periods? How about less human labour, more automation and thus lower prices for consumers?

97% of city pavements are asphalt because it's cheapest to put down and easy to dig through if you need to access utilities. Asphalt lasts 7-15 years but needs service every couple years. Patches are easy, but low quality. Concrete lasts 25-35 years but has a cure time, is tougher to fix, and harder to get to utilities. Our products should last 50 years with minimal service or maintenance, and it's fairly easy to remove and replace a slab if need be. We have utility access slabs that can go over utilities so that you can pull out the piece, fix the problem, and put the same piece back in. 
I just got tired of the constant resurfacing. The formative moment was probably when I spent an entire summer driving down the wrong side of the highway because they were reconstructing the other lanes - only for it to start snowing, and they had to re-do the grade again in the spring. It just seemed obvious to me that they could build the pieces for the road off-site then assemble them on-site like they do for bridges & buildings.

Of course, it took a long time to get from there to here.

I don't know if this will succeed or if it is even a good idea. There are probably a dozen competing ideas out there and thousands more to be explored. All I do know is that human prosperity is built by failures and by people trying different ideas. To have failures and to try ideas you need complete economic freedom with no central authority, no monopoly and no select committee. 

Always have faith in humans. Socialists and Statists mislead you to believe that people can't solve societies problems and you need the state there to provide core services. It used to be food, clothes, manufactured products, cars and so forth. When it became clear to many that this was not the case; that the free market was doing a far better job the Government repositioned itself into having you to believe that healthcare, education, money, laws and so forth needed a Government; and of course who will build the roads! I propose people will build roads. Free people. No monopoly. The public as individual consumers will decide who will build our roads not a small set of central planners with little accountability. Just like the information highway was built now known now as the Internet, our transport highway has so much unseen potential. We just need to release the human mind to create it.

Sunday, 27 April 2014

Pro-Choice or Pro-Intervention?

Are you pro-choice or pro-intervention? Many people in modern society believe themselves to be pro-choice however in reality people are generally pro-intervention, happy to surrender theirs and others individual liberties to centralised powers. Many of the people in the video fail to see their contractions and hypocrisy.

Myself? You can be Left wing, Right wing or just plain consistent in my view. People have a right to make bad choices. I know I do and it enriches my life greatly. Western states may have a veneer of choice but actually their role is to limit choices in many aspects of out lives. Pro-Choice means removing this 3rd party and empowering individuals to live their life as they please.

Sunday, 2 March 2014

Bitcoin Crisis, What Crisis?

Mt Gox was at one time the largest Bitcoin exchange. With its recent demise many have been bringing to the forefront the issue of regulating Bitcoin. I knew this would become the centre piece of discussion as Bitcoin became more prominent. Its important we all remember how regulation in our current financial system works; not only does if fail to prevent fraud but it creates a form of crony capitalism that we should all be rallying for its removal. 

Mt Gox was big. It had a market cap of around 7-8% of the entire Bitcoin economy. One thing I have noticed during its collapse is how little effect it has had on the network. The price of Bitcoin has remained remarkably stable. Other exchanges, businesses and the whole payment network are all working as normal. There are no taxpayer bailouts. There were no bonuses to "claw" back. We didn't have to hear superficial Government hearings where CEOs and Directors on multi-million dollar payouts give empty lip service along with their false apologies

People have lost money with Mt Gox. We all must remember that is the choices we make in life. Holding cash in bank, under a mattress, in stocks and shares; you name the choice, they all have risks. All those people who lost funds with Mt Gox will in the future realise the risks and will ensure a safer distribution of their funds. Exchanges in the wake of the collapse may wish to prove they are solvent to their customers. The Bitcoin ledger is public. All they need to do is prove their public addresses by moving money and publish such information (Mt Gox did years ago when they were the market leaders). New security mechanism will be created. People will realise if they don't own the private keys to their funds, they don't own the money.

Contrast this to the 2008 Financial Crisis. We had mountains of regulation but still, it happened. We had trillions of dollars of taxpayers money to bailout everyone. The incompetent were not punished; many empty apologies and false promises that it wouldn't happen again. State coercion forced taxpayers to protect deposits for all banks, including the weak ones. We all guaranteed loans for people who had been irresponsible, wreakless and spent like there was no tomorrow. Tomorrow came; unfortunately people who had been prudent were instead punished in the form of negative interest rates on their savings. The Government and Regulators have been actively promoting bad behaviour prior to the crisis and post crisis. Bad Bank? The Government will bail it out. Consumers choose a Bad Bank? The Government will bail you out. More big bank bonuses? The Government encourages reflation, so go nuts. Flipping Homes? Its the policy. Be prudent and save? The Government will punish you.

With all the Regulation we have in place another financial crisis will happen and they have ensured it will be much worse. The same signs are there again. It feels like we have rolled back the clock and I'm thinking the same thoughts I had back in 2005/2006. Flipping of houses encouraged by the Government is happening yet again. The Government continues to spend like there is no tomorrow, despite the liabilities they have taken on. Banks are being reckless once more. Interest rates are at rock bottom with people once more taking on huge debts. 

Regulation. Nothing has been learnt. In fact its history repeating once more only we won't have any more bullets to fight the next crisis. Reflation works; until it doesn't. It always fails in the long run. History has proven that. 

Back to Bitcoin. Mt Gox collapsed. The only people who lost out were the ones who voluntary took the decision to hold funds with them. The crisis lasted days but is now over. Contrast that to the 2008 banking calamity that is taking years to subside. I say 'taking' as its still ongoing. Bitcoin users have all learned a valuable lesson; diversify your funds and have the majority of your money stored with keys you control. Mt Gox was not Bitcoin. It was a business that failed and under Capitalism and free markets it has been liquidated. Resources have been relinquished to the more competent. Consumers have learned some valuable lessons. All this ensures a far healthy market moving forward.

Bitcoins big game changer is the very fact that it liberates finance for individuals. There are many other innovations in Bitcoin; transparency and secrecy (your choice); low transaction fees; amoral; deflationary; lightening fast payments, but personal finance is the big one. People own their money in the purest sense of the term. It can't be a ponzi scheme for this very reason. I am the only person that can access my bitcoins. I'm not dependant on another 3rd party to release my funds, therefore I can always access my money, whenever and wherever. You may think you own the money in your bank but in reality you don't. The bank owns it. If you wish to withdraw your money you have to ask the bank for permission. The Bank can dictate how you transfer your funds. Bitcoin fundamentally changes that. With Bitcoin you can own your private keys to your funds. 

Bitcoin works on public/private key cryptography. With conventional banking  your public key is your sort code and account number. We all give these out if we wish to accept payment. Your private key is your bank number (in reality the bank holds another private key, the ability for you to withdraw your money. Ask the public in Cyprus to hear about this). Bitcoin works on the same premise; public and private keys. You publish your public key to accept payment and keep your private key under your ownership. In this system the private key is really completely under your control. No one can stop you transferring money. No one can confiscate those funds. No one can really know you own those funds if you wish for that to be the case. It really is Gold 2.0. The catch? You are the sole gatekeeper to those funds. If you loose the keys there is no one to help you (In reality if you think Bitcoin will never take off due to this, think again. People are already talking about multi-signature transactions where you and a trusted 3rd party could access the funds. If one lost the keys then the other could recover them. If thats what you want, similar to old banking with more permutations). 

A limit of 21 million meaning your money will gain value; not loose it as we are all so indoctrinated to accept. A boarder-less currency; no more exchanging money for holidays. Funds that you alone have spread among as many wallets as you wish. Funds that can be taken with you if political tyranny is a problem. A currency that has no political liabilities; backed instead with Mathematics. Divisible down to 10 to the minus 8 (and potentially more). A ledger that is public for all to see and unlike the closed ones of your standard bank can't be hacked. From that list everyone will value at least one property; hence Bitcoin has inherent value. It takes a long time for the majority of people to see that value. Think of the Internet, electricity, cars. Members of the public took years to see the value of such creations.

Currency Crisis? Bitcoin has only been on the scene for 5 years yet I've seen many so called "collapses", the death roundabout of Bitcoin. When I started reading up about it in 2012 I read about the 2011 panic; people said it was doomed. I witnessed the April 2013 panic. And now another in 2014. It won't be the last and I look forward to them; it gives a good point to buy and in my opinion is a once in a lifetime startup type investment; only this one is affordable for us all. The difference between a Bitcoin Crisis and the conventional banking crisis we see is timespan and how efficient the free market is, when left alone. Its gone in days, not years or decades. With the crisis comes a more resilient and efficient system. The Mt Gox Crisis? Less than a week gone and Bitcoin veterans are already saying, what crisis?

Saturday, 1 March 2014

Regulation: Tyranny in Practice

“People own their own bodies, and have the absolute right to put anything they want into it ... People like the FBI, and DEA agents who want to lock people in cages for buying, selling, or using drugs are the ones committing evil, and they need to stop. I look forward to the day when they see the error of their ways,  and stop committing evil acts in the name of ‘law enforcement’.”   Roger Ver, Venture Capitalist
My last post highlighted the misgivings of regulation and why there is no need for such a policy. 2013 will be known as the year that Bitcoin appeared on many regulators radar and 2014 will be the year that they intensify their focus on the new technology. Regulation, as I stated, stomps on innovation, it impedes the wealth producers. One such example was a young startup known as I covered it back in 2012 which was created by an Individual called Ben Reeves. Ben was a 20 something Software Developer who had only recently graduated from the same University I went to, Newcastle. Since that posting Ben has been ousted from his creation that he spent day and night developing. Not from competition or from incompetence; in fact his service was increasing in popularity all the time. He was ousted by the wealth destroyers.
One thing that cannot be emphasized strongly enough is how absolutely amazing Ben is. He created the entire website by himself, the iPhone app by himself, the Android app by himself, and up until nine months ago he was also running a service that allowed people to buy bitcoins through wire transfers and cash deposits in the Eurozone.

He was handling all of that, including customer support, by himself. But then, the powers that be in the banking system shut down his personal bank account, his business bank account and his brother’s personal bank account without warning. While he’s an amazing developer, he didn’t want to have to deal with banks and lawyers and regulators. That’s when I got more actively involved.

Roger Ver, Angel Investor in BlockChain
What did Ben do? He created a service that anyone was free to use under their own free will, for free. I used it and still use the service and think it is excellent. He was shaken down because the established order saw this as a direct threat. Remember the big guys are always trying to shut down the little guys. We may live in the West but don't be mistaken that we are absolutely free from acts of tyranny. Closing down bank accounts was an act of aggression with no regards to personal freedom. If a Communist Government had shut down an entrepreneurs bank account for starting a convenience store many in the West would regard this as tyranny. It is no different. Ben has since given the service over to avoid these acts of harassment. 

Then we have another recent example, BitInstants CEO Charlie Shrem has been under house arrest and was arrested at JFK Airport on charges of assisting in money laundering. Of course Charlie just ran his service in order for customers to transfer value as they wished. Its like a commercial bank being sued for assisting with money laundering because they unwittingly allowed a criminal to deposit cash under a relatives name to name many permutations. Charlie Shrem has been targeted so the regulators can make an example of him. Its to scare future entrepreneurs from even thinking about starting up a business related to Bitcoin. They don't want the status quo to be disrupted.

These are real life examples of the wealth creators and risk takers being subject to unjust attacks by the state. Recent news has been full of Bitcoin headlines after Mt Gox, a Bitcoin exchanged, collapsed. A lot of people have lost a lot of money. There is no doubt that this will be painful for the individuals involved and my sympathies are with them. However this is how free markets are supposed to work. Bad businesses fail giving resources to the people who prove themselves competent. This is why markets and capitalism always reign supreme to wealth creation over Central Dictation. The Financial Industry we have now has the "Too big to Fail" mantra where the incompetent can succeed just as well as the competent, creating a stagnant industry.

Mt Gox isn't the first nor will it be the last to fail and take peoples money. More exchanges and Bitcoin related businesses will follow a similar fate. This will not weaken Bitcoin. In fact it will strengthen the platform. More innovations regarding personal security will happen from these failures making the services that use the protocol more robust. Bitcoin, the platform and protocol, is still sound. What it doesn't need is regulation. Regulation is for old finance which is a complete mess. 

I will repeat what I said in my previous posts. No one is forced to take part in Bitcoin; it is voluntary. We all know the risks. These are the risks with building the future financial platform. We have to build the ecosystem and that takes time. Until then, there will be wild swings in price; businesses will fall; scams will come and go.

Erik Voorhees, a Bitcoin entrepreneur, lost over 500 BTC through Mt Gox so if anyone is bitter then Erik more than qualifies. However I think he sums up what needs to be done and its not regulation. Spoken like a true entrepreneur; upbeat in the face of despair; always positive on tomorrows challenges.
And finally, the lesson is not that we ought to seek out "regulation" to save us from the evils and incompetence of man. For the regulators are men too, and wield the very same evil and incompetence, only enshrined in an authority from which it can wreck amplified and far more insidious destruction. Let us not retreat from our rising platform only to cower back underneath the deranged machinations of Leviathan. The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow's finance, and we put ourselves at risk in doing so.

We are at risk from accidents. We are at risk from fraud, from corruption, and from evil. We are at risk from journalists seeking headlines and from politicians seeking power and glory. We are at risk from the very market we are trying to build - a market which cares not about our portfolio, our ambitions, or our delicate sympathies.

For all these risks, devastation will befall us repeatedly. Some of us will be discouraged. Some will be ridiculed and insulted. Some will be tricked, or swindled. Some of us will be crushed or caged. We will be set upon by all manner of antagonists, repeatedly, for a long time.

So why do we do it? Why do we build these towers that fall down upon us? Why do we toil and strain and risk our precious time, which is the only real wealth we possess?

Because the world needs what we're building. It needs it desperately. If that matters to you, as it does to me, then hold to that thought. You will see through the smoke, and your wounds will heal.

So shake it off, brothers, for this won't be the last calamity endured before the win.

Tonight, my heart is with you all.

Tomorrow, my head is down. My eyes are open. And I am building.

Toward peace and freedom,

-Erik Voorhees

Sunday, 16 February 2014

Regulation vs Freedom

. Which competition do you fear the most? Oracle? Sun Micro-systems?
Answer. The two guys inventing away in a garage somewhere.
A quote from Bill Gates during Microsofts height of dominance during the late 1990's

Human history has been a constant struggle for individual liberty. A belief to allow individuals to make choices for themselves and to allow everyone the right to pursue their own happiness. We should always bear this in mind. In the past the minority used to fight for the abolishment of slavery. They won. They fought for the vote for the common man. Then women. The key word is minority. Liberty is always initially pursued by the minority. The majority get used to the status quo and what is preached by the intellectuals paid for by the centralised powers. The majority of people are passive thinkers. They listen and obey. Then there are people who are able to question conventional intellectual thinkers and critique the theories that are espoused. 

Regulation. We need it. Or so we are told. Do we need central authorities telling individuals what they can and can't do? If people wish to enter into a mutual two way interaction then who has the moral right to stop such a human action? Regulation manifests itself as a third party, dictating to people what actions they can and can not perform. The false promise of regulation is protection. Protection of "consumer rights". Its classic twisted Government logic that in fact tramples on consumers rights and slows the progress of humanity. Big companies love Regulation. Its sold as protection to the little guys from the big guys. In reality it performs the complete opposite function. Bureaucracy in the form of regulation is big corporations way to stop the small competitors from even getting off the ground. It ensures they won't eat their lunch. Some of the most sluggish sectors in Western economies are also some of the most regulated ones.

Finance has become a big web of regulation. I find it embarrassing when people call it a bastion of freedom. During the so called "de-regulation" of the 1980's for every regulation Regan repealed in America, he created several new regulations. Small banks are no longer on the landscape, the megabanks are getting ever more powerful and larger. They can always pay for the armies of compliance officers and mountains of paper work. Small banks have no chance. 

Lets take the Financial Crisis of 2008 (soon to be eclipsed by the next financial crisis due to similar policies that are still in place). Interests rates which many agreed were too low were not just regulated but are set directly by the Government. Paul Krugman, one of the Governments paid intellectuals said at the turn of the century, that the Federal Reserve needs to lower interest rates in order to create a housing bubble to replace the Nasdaq bubble. Prior to this we had the near failure of large fund called LTCM. In a free market it would have failed, ensuring banks would always maintain prudent polices; if they didn't they would go to the wall. Instead, in what became known as the "Greenspan Put", they were bailed out by the Federal Reserve. This also had the effect of ensuring banks would be more reckless as the bigger they were the more likely they would fall into the Federal Reserves "Too big to fail" category.

A lot of media coverage was given to sub-prime, a so called failure of the free market. Yet it was the Government who encouraged reckless lending. From Clinton, to Bush, Acts were passed that actively lowered lending standards. This isn't fiction, feel free to look this up. The Government witnessed banks more prudent lending practices, the type that assesses a persons income, dependability etc as too restrictive in order to "give" everyone a home. Politicians demanded everyone should have a right to a home rather than having to earn one. Acts were passed that instructed banks to lend to people with poor credit histories and no incomes. Sub-prime was a Government initiative.

Large parts of the mortgage market was underwritten by Freddie Mac and Fannie Mae who were in effect backed by the US treasury. The so called "saviours", the guys who are regulating the market, were instead running with more leverage than hedge funds. They lent with complete disregard to credit-worthiness, heck, it was a good old Government Ponzi scheme. Many sub-prime mortgages were pushed through these Government mortgage institutions. Credit Default Swaps, Mortgage Backed Securities, the so called financial instruments of mass destruction, were, you guessed it; Regulated. Of course who was rating all this packaged sub-prime mortgages? The credit agencies who were funded and run by the Government. AAA grade for mortgages that were worth less then the Zimbabwe Dollar. America has several financial regulation (not just one!) institutions all with armies of workers and armed to the tooth with regulation laws. Yet the financial crisis still happened. It happened not from the absence of regulations but from the presence of such distortions. The crisis had been brewing for years. Just like the next one to come (the Government bond bubble).

We could look at a number of other sectors and we would see a long list similar to finance. Medicine continues to have increasing costs and a lack of consumer innovations due to regulation. Drug companies keep the little guy out by ensuring the FDA impose huge barriers for entry; in the supposed interests of the consumer. 

All regulation does is impede the producers, the wealth creators. It stops the trial and error process that creates prosperity. There are regulations to instruct Restaurants what colour tiles they are allowed, as certain colours could "hide" dirt (despite the fact the most deadly "dirt" to humans is invisible bacteria). Many have had to amend under such restrictive planning laws, passing costs onto society. Not contempt with current infringements on liberty the "do-gooders" now want to ban knives that are over 4 inches, ban fast food, ban certain fats to name a few ridiculous ideas. If people wish to eat in a dirty restaurant then they should be free to; likewise to eat so called "junk food". That's personal freedom and choice. To take those away is tyranny; pure and simple. If I wish to harm my body then no one has the right to tell me otherwise (we all do. Alcohol, wheat based food, cigarettes, sugar, man made fats - that's our choice). That's where the majority of passive thinkers give away their liberties. They are mislead into being told it is the duty of others to make decisions on their own behalf. It is supposedly the Government that has the moral right to protect us, despite the fact that freedom has done a far better job of protecting humanity throughout history that centralised authorities. 

What about the oil snake men wouldn't they just run rampant in an "unregulated" market? People like Bernie Madoff? First off all you will always get the con men in any economic system, it is unavoidable  Crooks are just a part of life. Its not freedom that creates such people, but they are who they are. The free market limits their powers. Secondly, Madoff was investigated a number of times by the SEC, the very regulators who "protect" us.
I was astonished. They never even looked at my stock records. If investigators had checked with The Depository Trust Company, a central securities depository, it would've been easy for them to see. If you're looking at a Ponzi scheme, it's the first thing you do.
Madoff was also in bed with the Regulators. He got away with it for so long because of their very existence. The freedom of choice that exists in all us is the ultimate form of regulation  Any rip-off businesses soon get punished with bad consumer reports and with the transparency of the Internet dispersing information in seconds to billions, no business can survive long with such a tool on the side of consumers.

From all the regulations imposed on finance a new digital finance sector is emerging to challenge conventional banking, known as Bitcoin. People involved in such communities are not seeking permissions for their own liberty; they are taking liberty into their own hands. Bitcoin has the potential to revolutionise finance the way the Internet revolutionised information. Finance is just the tip of the iceberg. By solving the Byzantine Generals Problem, Bitcoin will revolutionise anything that involves a trusted third party. "Smart Property" could be held on the blockchain such as the deeds to your house, saving society billions in legal fees. Shares in companies, bonds, tradeable assets such as Gold could be transacted through the blockchain. No need for expensive fraud services that costs the economy trillions, automated mathematics will handle that moving forward. Peer 2 peer lending reducing lending fees and removing the middle man that is banks with all their expensive offices, paper work and high paid staff. Another such example of enriching us all.

Yet with innovation comes the regulators. Usually for technology the Government turns their back but not when the technology imposes a direct threat on their monopoly of money. Their guise will be to protect the people but the real motive is to stop the competitor. Conventional banks will demand regulations as they, like Bill Gates, fear the two guys working in the garage. Its been too cosy for too long. Regulators aren't sure what to do, but they want to regulate something about Bitcoin even if its just to make a name for themselves. The most common slur against Bitcoin is that its used for "illicit" activities. Under such logic the US dollar should be banned as this funds 99% of global criminal activities. The government can not pass moral judgement on free will. Bitcoin is amoral and allows individuals to transfer value as they please. Peoples actions are their own choice. Bitcoin doesn't need regulation. It got here with no regulation. In the space of 5 years a Global Currency run by the free market has been created. Anyone with no documents, can set up an account and transfer money to anyone, anywhere around the globe in minutes. A single unit of the currency has gone from no value to hundreds of dollars in value. The services are increasing in sophistication by the day now that intellectual and monetary capital has started pouring in. When I started with Bitcoin there were very little startups. Now they pop up daily and regularly raise millions of dollars in cash. The accounts ledger is public for all to see, a truly revolutionary concept that has far more security than conventional centrally held ledgers. All of this has been done so quickly because there was no regulation. There were no barriers for entry. People under their own free will used Bitcoin at their own risk. If they didn't like the risk or the eco-system then they were free not to participate. Free Choice. There is no place here for regulation.

One common concern for people outside of the Bitcoin community is stories of Bitcoins being stolen. First off; if you don't like this, then don't use Bitcoin. People have no right telling other people who wish to take such risk that they can't use such a system. Second; in many cases there are some fly-by-night banking setups. Reputable businesses such as coinbase or build a reputation of trust, removing the unreputable con men in the long run. Third; many cases have been poor security implementations. Bitcoin is new, its on the cutting edge; its called growing pains. Market forces without regulation solve such problems. They implement two factor authentication, open source their implementations. They come up with hardware wallets such as the Trezor or paper wallets; pulling the security out of cyber space and into the physical dimension. What would the regulators do to solve such issues? They would shut down such innovations. They don't understand any domain, the wealth producers do and go about solving such problems and create the wealth that the regulators ride along on. 

The Quote at the top from Bill Gates is what happens in the Technology sector. Regulation is minimal. The producers are free to challenge the status quo. There is no rule book to follow; anything goes. Regulators aren't producers. They are not even on the same level as consumers who earn their income. They are parasites, paid for by society. Not contempt with that they go around and stop the progress of human ingenuity, the trial and error process that enriches us all. Regulation will one day be banished, just as slavery was. Liberty; choice; freedom. They are the ultimate forms of regulation.