Crowdfunding with Bitcoin

Bitcoin For Dummies

Rather than relying on one  investor, or one  major source of funding, a crowdfunding campaign allows you  to decentralize the funding process by  acquiring backers and  supporters to provide money up front. By  accepting bitcoin as  a payment method for your campaign, you can  decentralize things even  further and  reach a global audience.

Bitcoin provides businesses and  individuals with a powerful tool to raise funds for an upcoming or existing project. Considering the fact that  bitcoin is not  taxable in most countries, many people view it as  a safe  haven for “tax‐free” funding.

When  you  convert the  raised funds to fiat currency, you  may be taxed on them, depending on the  amount you  receive.

When  crowdfunding, never list  a fake project or claim to do some- thing  with the  money you  never intend to fulfill.  Even though bitcoin is a non‐reversible payment method, people will  hunt you down if you  try  to run  off with their money.

Luckily for bitcoin enthusiasts, most crowdfunding projects so  far have been  legitimate, and  most have delivered on their promises as well.  Depending on what type  of project you  list, it may take additional time  to reach your goals, especially if it involves block- chain technology development.

But  not  every project is using crowdfunding platforms for the  right reasons. Some  people view crowdfunding as  a way to get some funds quickly, without ever having to pay  it back. Even though most platforms implement security against misuse, there is always a minor chance of a project not  delivering on the  promises made. But  that  has nothing to do with bitcoin per  se  — it can  happen with any type  of crowdfunding campaign. Simply look  at how many people backed projects in Kickstarter and  never received the  item  for which they pledged a certain amount. Check out  www.kickstarter.com/help/stats for more.

Whenever you  help  crowdfund a bitcoin project, always determine whether you  are  entitled to some form  of reward. Crowdfunding is not  the  same as  buying a share of a company or product at a cheaper rate.  It simply means you’re willing to spend money in order to make  someone’s dream come true, which may or may not include a reward. However, you  should not  partake in a crowd- funding campaign just for the  reward. That’s not  why this system was invented in the  first place.

Source: Bitcoin For Dummies

A short history of bitcoin mining

Bitcoin For Dummies

Over the  years, bitcoin mining has seen a tremendous evolution in terms of the  required hardware to mine  bitcoins. Very little  hardware was required when bitcoin launched in 2009, as  there was little  to no interest in the  project. But  as  more and  more people caught wind of bitcoin and  joined the  network, the  computational power increased exponentially. The mining difficulty  parameter (which determines how much computation power is required to solve the  mathematical equations associated with generating bitcoins) adjusted accordingly, in order to make  sure new  blocks on the  bitcoin network were  still ten minutes apart. The reason for keeping bitcoin blocks ten minutes apart is to collect as  many broadcasted bitcoin transactions into  one  block and  validate these transactions at the  same time.

In 2009, the  first versions of the  bitcoin client had  a built‐in process that  would let anyone running the  software mine  bitcoin with their computer’s central processing unit  (CPU) — the  main proces- sor in a computer. Because every computer has a CPU,  and  only a handful of people were  mining bitcoins at that  time,  there was very little  competition. In fact,  most of the  coins in the  first few months were  mined by  Satoshi Nakamoto, who also gave  away some coins to other people in order to allow testing of the  bitcoin network.

It didn’t take  long  for one  of the  miners to figure  out  that  the mining feature could be adapted to use  a graphics processing unit  (GPU), rather than just a CPU.  Because a GPU — also called a video card — is specifically designed to solve complex mathematical  tasks, it is able  to mine  bitcoin more efficiently than a CPU. However, that  performance is offset  by  a large  increase in electric- ity  use, as  GPUs  draw a lot more power from  the  wall  compared to CPUs. This change was the  first chapter in a long  and  storied bitcoin mining arms race.                                          

Developers and  engineers started tinkering around with the  idea of creating a new  piece  of hardware that  mined much faster and more efficiently than GPUs  and  CPUs. Field  Programmable  Gate Arrays (FPGAs) saw the  light  of day  a few years ago, and  they out- performed CPU mining by  quite a margin. Furthermore, any FPGA could mine  nearly as  fast  as  a GPU available at that  time  — while using far less electricity to complete the  task of mining bitcoins.

When  reading up on bitcoin mining these days, one  term  people often  come across is ASIC, which stands for application‐specific integrated  circuit.  This is a microchip designed specifically to mine bitcoin. The first bitcoin ASICs started hitting the  street in early 2013, and  they outperformed GPU and  FPGA  mining by  such a margin that  miners scrambled to get their hands on one  of these shiny machines. But  ASICs have a major downside as  well:  They are  very power hungry, they make  a lot of noise, and  they generate a ton  of heat.  On the  flipside, a bitcoin ASIC  miner is vastly superior to any other type  of hardware in existence today and  remains quite costly in some cases.

As  these new  devices started popping up,  the  need  for electricity increased exponentially. As  a result, mining bitcoins is extremely unprofitable in most parts of the  world, unless you  have access to cheap or free electricity. In most cases, the  investment cost of bitcoin hardware, combined with the  electricity costs, make  it impossible to make  a profit by  mining at home. But  there is a solution  to that  problem: Bitcoin cloud  mining lets  you  mine  bitcoin by purchasing mining power from  a machine hosted in a different part of the  world.

Cloud mining has become somewhat popular in recent years. It allows you  to mine  without needing to buy and/or host the  hard- ware yourself. Most  bitcoin cloud mining providers charge a daily or monthly fee to cover electricity costs. Cloud mining allows a user to start earning money directly, rather than waiting on the delivery of some fancy machine. Chapter 11 talks more about cloud mining.

In the  future, as  with all computer advancements, microchips will be made  smaller without sacrificing computational power. And  with smaller chips, more of them can  be fitted  onto  a board, increasing the  machine’s overall mining power. Engineers are trying to reduce the  energy use  of these microchips too.  Making mining more energy efficient could lead  to more profitability in additional parts of the  world.

Source: Bitcoin For Dummies

Network Security through Data Analysis by Michael Collins

Network Security through Data Analysis

Traditional intrusion detection and logfile analysis are no longer enough to protect today’s complex networks. In the updated second edition of this practical guide, security researcher Michael Collins shows InfoSec personnel the latest techniques and tools for collecting and analyzing network traffic datasets. You’ll understand how your network is used, and what actions are necessary to harden and defend the systems within it.
In three sections, this book examines the process of collecting and organizing data, various tools for analysis, and several different analytic scenarios and techniques. New chapters focus on active monitoring and traffic manipulation, insider threat detection, data mining, regression and machine learning, and other topics.
You’ll learn how to:

• Use sensors to collect network, service, host, and active domain data
• Work with the SiLK toolset, Python, and other tools and techniques for manipulating data you collect
• Detect unusual phenomena through exploratory data analysis (EDA), using visualization and mathematical techniques
• Analyze text data, traffic behavior, and communications mistakes
• Identify significant structures in your network with graph analysis
• Examine insider threat data and acquire threat intelligence
• Map your network and identify significant hosts within it
• Work with operations to develop defenses and analysis techniques

Source: Amazon.com

Contents

This book is divided into three sections: Data, Tools, and Analytics. The Data section discusses the process of collecting and organizing data. The Tools section discusses a number of different tools to support analytical processes. The Analytics section discusses different analytic scenarios and techniques. Here’s a bit more detail on what you’ll find in each.

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Part I discusses the collection, storage, and organization of data. Data storage and logistics are critical problems in security analysis; it’s easy to collect data, but hard to search through it and find actual phenomena. Data has a footprint, and it’s possible to collect so much data that you can never meaningfully search through it. This section is divided into the following chapters:

Chapter 1
This chapter discusses the general process of collecting data. It provides a framework for exploring how different sensors collect and report information and how they interact with each other, and how the process of data collection affects the data collected and the inferences made.

Chapter 2
This chapter expands on the discussion in the previous chapter by focusing on sensor placement in networks. This includes points about how packets are transferred around a network and the impact on collecting these packets, and how various types of common network hardware affect data collection.

Read more > Network Security through Data Analysis by Michael Collins

The Role of Self-Esteem in Foreign Language Learning and Teaching

The Role of Self-Esteem in Foreign Language Learning and Teaching (March 2018)

Introduction

Any class of learners, regardless of the stage of education, type of school and its location (in a metropolitan or rural area), comprises an amazing variety of individuals who are distinct in the name, height, weight, possibly in ethnic background, etc. What bears particular relevance to an instructor, though, is the fact that each of the students displays special talents, aptitudes or attitudes that account for the more or less rapid progress, or, in some cases, lack of progress and serious learning difïculties. There will be students who are keen to work, who stay in good relationships with the teacher and classmates, and others, who are easily demotivated, withdrawn and remain a matter of constant concern for the teacher.

The theory and practice of English language teaching has come a long way from the days when success or failure in learning was attributed solely to cognitive processes. The recent years have seen a growing appreciation of the role of affective factors that determine how the learner feels about the subject, the learning activities and themselves. These feelings translate into the sense of agency, motivation and commitment on the learner's part. The acknowledgement of the role of the emotional aspects of learning has become part of the foundations of applied linguistics.

Compared to other areas of study, language learning is far more ego-involving, which means that it vastly engages the emotional sphere, whose crucial constituents are the learner's unique self-beliefs. These beliefs account for how the learner views their past experience, their current performance and their future goals. The book is concerned with the role of foreign language self-esteem in learning as a facet of self-beliefs that exerts a notable influence on learner attitudes and behaviours. The construct refers to the learner self-perception in the domain of language learning, i.e. how they feel about themselves in both cognitive and affective terms. Despite its asserted  importance,  many  questions  about  the  impact  of  foreign  language self-esteem on learner attainment have not been thoroughly answered yet. It is believed by the author that by integrating elements of linguistic and psychological exploration, the current research will attend to the characteristics of the construct, its dynamics and its interplay with other factors.

Given  the  absence  of  studies  examining  foreign  language  self-esteem  in a developmental perspective, the current research embraces an investigation of                                                                                                                     

a sample that represents three stages of education—from lower secondary to tertiary, distinguishing further between varied proïciency levels and demographic characteristics of the participants. The insight into the developmental dynamics, major correlates and predictors of foreign language self-esteem may enable to transform the findings into practical pedagogical advice applicable in foreign lan- guage classrooms, catering for ego-protecting, learner-friendly atmosphere.
The study is divided into a theoretical and practical part, further subdivided into chapters, each of them concluded with a résumé of the main points. The first chapter begins with a brief reminder of the inseparability and reciprocity of cognitive and affective domains in learning, followed by an outline of the major constituent processes belonging to each of the domains. The next section addresses the question of ‘what is self-esteem’ and explicates the definitional concerns in distinguishing between the main self-related concepts. The major theoretical models of the core construct are reviewed, departing from the historical perspective towards developing its working definition for the purposes of the volume. The chapter also describes the structure of self-esteem, followed by its most prominent typologies. In view of the subsequent parts, the section which presents the multidimensional and multifaceted nature of self-esteem seems crucial as it depicts the position of foreign language self-esteem in the hierarchy of self-views. The next parts explain the sources of high or low self-esteem, its dependence on cultural background and its development across lifespan (with special emphasis on adolescence and the onset of adulthood) as well as its influence on psychological functioning, as it is viewed by modern psychology. A broad theoretical background to the construct having been introduced, the analysis of its relevance to learning follows. Self-esteem is then situated in SLA context, and its relation to other important constructs in the domain of FL learning is considered. It is also discussed why self-esteem bears importance for attainment in FL learning.

The aim of Chap. 2 is to present a review of empirical research on self-esteem in its  various  dimensions. It  opens  with  an  overview  of  designs,  methods  and instruments that have been developed by other researchers and a discussion of challenges and pitfalls in measuring self-esteem that researchers need to be aware of. There follows an inventory of researches into the impact of self-esteem on a range of aspects of psychological functioning, selected on the basis of their rele- vance to educational context. The chapter continues by outlining the findings of studies into the interaction between self-esteem and learning, and it contains a separate section on the interplay between the focal construct in a multidimensional perspective and some important aspects of FL learning. The chapter ends with considerations of correlates of foreign language self-esteem scrutinized in reference to different age groups, educational settings and proficiency levels. The part also pertains to  skill-specific correlates of  self-esteem. Each  section closes  with  a summary of findings that partly informed the research design used in this study.

Chapter 3 opens the empirical part, and its initial paragraphs present the general aim of the research conducted for the purposes of the study. The rationale for the current  study  encompasses  three  major  goals.  The  first  one  is  to  observe the dynamics of foreign language self-esteem across three stages of education in the Polish system, and between varied levels of proficiency. The second one is to examine selected correlates and predictors of the central construct, and the third one is to present a profile of a high and low self-esteem learner, enhancing the symptoms of either of the types of experience and its possible antecedents. The next parts contain detailed descriptions of the method adopted, specifications of instruments, procedures and analyses, as well as an account of the sample and research design. The remaining sections contain a thorough report of the results obtained in the quantitative and qualitative research. The chapter is concluded with a summary of findings and the specification of limitations of the study.

Chapter 4 is devoted to the discussion of the results. It commences with the analysis of changes that foreign language self-esteem is subject to according to changing proficiency (operationalized for the purposes of the book as the growing length of exposure, intensity of instruction or achievement in L2). The middle part features considerations on some important correlates and predictors of L2 self-esteem, divided into demographic or educational. The final section is an analysis of characteristics of students who hold either high or low foreign language self-esteem.

The final chapter recapitulates the main aims pursued by the book and its main hypotheses. It strives to propose a comprehensive framework for understanding foreign language self-esteem against the Polish secondary and tertiary educational background. There is also an outline of directions for further studies into the construct with proposals of  alternative research designs, sample or  instrument selections. Further, the chapter contains an extensive set of implications for FL teaching practices, all of which could engender class atmosphere conducive to developing an optimal level of foreign language self-esteem.

In conclusion, as the author of the book, I strongly hope that the findings of my research reflect some aspects of the complex and manifold reality that every teacher faces in a classroom and that it will increase the sensitivity of educationalists to the immense diversity of self-related issues that learners of all ages bring with them to lessons. For both practitioners and academics, I hope it might be a humble inspiration for future work towards optimization of ELT methodologies from the global and local point of view. It needs to be admitted that the work on the research has given me invaluable opportunities to enrich the understanding of the affective domain and discover some fascinating mechanisms or relationships that may amplify or invalidate the outcomes of the efforts of the learner, their teachers, course book writers, syllabus designers, etc. The insights gained in the process of writing the book have intimidated me with the immense complexity of the domain, impossible to embrace by the research, but at the same time they have helped me to develop new sensitivity to foreign language learner differences and their diverse needs.

Source:  The Role of Self-Esteem in Foreign Language Learning and Teaching (March 2018)

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Valley of the Gods: A Silicon Valley Story by Alexandra Wolfe

Valley Of The God

There is no greater subject of fascination in Silicon Valley right now than Peter Thiel, seminal Facebook investor, PayPal Mafia don, Palantir founder, billionaire venture capitalist, oceanic city-state enthusiast, sworn enemy of political correctness, scourge of Gawker Media, recent New Zealander, prospective vampiric consumer of young people’s blood, and President Trump’s chief envoy to the CEOs of the tech industry. Or you might describe him as Alexandra Wolfe does in Valley of the Gods: A Silicon Valley Story: He is the tech sector’s “first philosopher,” who possesses “the big ideas, contrarian outlook and a willingness to back crazy concepts,” and who is, as Wolfe acknowledges in her author’s note, a friend. That chumminess might have been the germ of a revealing, insider-y unpacking of Silicon Valley and the utopians, dystopians, geniuses, and strivers who populate it—a This Town of the Left Coast geek elite. Instead it largely provides her access to Thiel’s first formal class of acolytes, a group of young men and women who in 2011 Thiel paid to skip college and attempt to incubate ambitious, world-shaking ideas, like asteroid mining. Whether Thiel’s radical libertarian outlook and declinist view of American innovation mark him as emblematic of Silicon Valley or as an eccentric, these ideas have never been worthier of interrogation. And yet, though Thiel hovers above Wolfe’s narrative like an Oz-like godhead, he is barely a presence in it, except when he’s the recipient of its adulation.

The author is a reporter for the Wall Street Journal and the daughter of Tom Wolfe, the New Journalism pioneer and author—a lineage that might not be fair to note except that Wolfe fille invites the comparison with at least two references to Ken Kesey (the subject of her father’s beloved The Electric Kool-Aid Acid Test) and a chapter titled “Asperger’s Chic,” a plain nod to her father’s liberal-ribbing essay “Radical Chic.” Her prologue certainly kicks off the book with a bit of Wolfean verve, hop-scotching through the haunts of Silicon Valley’s casually attired oligarchs and the investors and engineers riding their vapors. There’s the deck lounge overlooking the “Olympic-size pool skirted in fuchsias” at the Rosewood Sand Hill hotel in Menlo Park, and Prius-driving, Blue Bottle–guzzling entrepreneurs in Palo Alto, and the “Left Coast Ladies Who Lunch,” who “do so over Clif Bars while walking the Dish, the popular hiking trail on Stanford property.”

Eventually Valley of the Gods reveals itself in part as a tour through Silicon Valley’s cultural mores, from its group houses and startup accelerators and dating scene (insofar as it has one) to its highest-flying obsessions, like human immortality and advanced A.I. Wolfe describes the region, evocatively, as a place founded by “visionary puppies who realized that the Internet would become the world’s first great new industry in a half century—created, developed, operated, and more important, owned by children.” But the energy begins to lag quickly, as when Wolfe, visiting the shared home of several Thiel Fellows, pauses to offer a deadening description of the contents of their fridge: “It was fully stocked with sausages, vegetables, pasta, fruit, and loaves of bread from Whole Foods.” Pasta! Wolfe never hesitates to conjure up a sense of place to heighten the absurdities of her book’s setting, but the occasional polyamory compound aside, those places, at least in her telling, turn out to be kind of boring. The rest of the country has CrossFit gyms and jerks on Segways, too.

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Less boring are Wolfe’s main subjects, the Thiel Fellows, most of them the kind of young, brilliant oddballs that the culture founded by those original visionary puppies continues to cherish. John Burnham, the one with the asteroid-mining idea, is awkward in the classroom but an autodidact who thrills at the notion of taking Thiel’s $100,000 to forgo traditional schooling; he ends up “pivoting” repeatedly as each of his Next Big Thing ideas fails to take off, and he eventually does go to college. In taking the fellowship, Burnham and his peers attempted to realize a particular utopian dream of Silicon Valley heavyweights: that they could “stop out” of the old, orthodox system; that they might embody the new tech industry’s meritocratic ideals; and that, in the industry’s parlance, they might change the world. (Mark Zuckerberg did it, after all.) But as Burnham realizes, to the people standing between a visionary and investment capital, changing the world actually means being profitable. “It’s just a really interesting phenomenon that if you’re running the company that does nothing, you can feel like king of the world,” he tells Wolfe.

It’s true that Thiel’s interests include things much loftier than earning a mint, like life extension. But Wolfe doesn’t seem interested in mounting a critique of Silicon Valley writ large that is anywhere near as perceptive as Burnham’s, and she certainly doesn’t pursue the uglier directions that Thiel’s view of the universe has taken him. His bullying, surreptitious campaign against Gawker Media, which he swore to litigate out of existence by any suit necessary after one of its sites wrote that he was gay, rates a brief, just-the-facts treatment. The narrative ends before the 2016 campaign, during which Thiel was Silicon Valley’s only prominent backer of Trump. While the Thiel Fellowship continues, and being accepted to it is tougher than getting into Harvard, it is now more like a gap year, requiring just one year out of school. And though many of those initial Thiel Fellows remain strivers in Silicon Valley—1 in 10 went back to college, by the way—the ones that populate Wolfe’s book seem to spend much of it being, well, lost and miserable.



To Wolfe, that outcome is no indictment of the project itself. “In the end,” she writes, “the Thiel fellowship was a microcosm of the millennial generation. It said, ‘If you’re so good, let’s take the best and brightest among you and see if you can prove it’—and maybe the fact that they didn’t start billion-dollar companies didn’t matter.” Even if the fellows didn’t get out of the experiment what Thiel intended, she writes, the experience was still worth the doing as a growth experience for them and especially for its core tenet, “the idea of breaking away from what an institution enforced and had to be.” And yet even Peter Thiel, she concedes, “couldn’t necessarily create” success stories like his own, even as his own triumphs have convinced him that only he possesses the right vision for a better future. But figures like Thiel, both outliers and central cogs of Silicon Valley’s dream machine, aren’t ominous for the moonshots they take and the ambitions they describe. They’re ominous because they keep trying to inflict their harebrained ideas on the rest of us.

Source: www.slate.com

Fire And Fury

Fire And Fury

The reason to write this book could not be more obvious. With the inauguration of Donald Trump on January 20, 2017, the United States entered the eye of the most   extraordinary   political   storm   since   at  least   Watergate.   As  the  day approached,  I  set  out  to  tell  this  story  in  as  contemporaneous  a  fashion  as possible, and to try to see life in the Trump White House through the eyes of the people closest to it.

This was originally conceived as an account of the Trump administration’s first  hundred  days,  that  most  traditional  marker  of  a  presidency.  But  events barreled on without natural pause for more than two hundred days, the curtain coming down on the first act of Trump’s presidency only with the appointment of retired general John Kelly as the chief of staff in late July and the exit of chief strategist Stephen K. Bannon three weeks later.

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The events I’ve described in these pages are based on conversations that took place over a period of eighteen months with the president, with most members of his senior staff—some of whom talked to me dozens of times—and with many people  who they in turn spoke to. The first interview  occurred  well before  I could have imagined a Trump White House, much less a book about it, in late May 2016 at Trump’s home in Beverly Hills—the then candidate polishing off a pint of Häagen-Dazs vanilla as he happily and idly opined about a range of topics while his aides, Hope Hicks, Corey Lewandowski, and Jared Kushner, went in and out of the room. Conversations with members of the campaign’s team continued through the Republican Convention in Cleveland, when it was still hardly possible to conceive of Trump’s election. They moved on to Trump Tower with a voluble Steve Bannon—before the election, when he still seemed like an entertaining oddity, and later, after the election, when he seemed like a miracle worker.

Shortly after January 20, I took up something like a semipermanent seat on a couch in the West Wing. Since then I have conducted more than two hundred interviews.

While  the  Trump  administration  has  made  hostility  to the  press  a virtual policy, it has also been more open to the media than any White House in recent memory. In the beginning, I sought a level of formal access to this White House, something  of a fly-on-the-wall  status.  The  president  himself  encouraged  this idea. But, given the many fiefdoms in the Trump White House that came into open conflict  from the first days of the administration,  there  seemed  no one person able to make this happen. Equally, there was no one to say “Go away.” Hence I became more a constant interloper than an invited guest—something quite close to an actual fly on the wall—having  accepted no rules nor having made any promises about what I might or might not write.

Read more > Author's Note

Michelle Obama, A Life

Michelle Obama, A Life

It’s the summer of 1860 on the Friendfield plantation in Georgetown, South Carolina - coastal low country whose snake- and mosquito-infested fields produce half of America’s rice crop. A young African slave by the name of Jim Robinson is working there. Owned by another man, Robinson has no freedom, no choices, no opportunities. It’s hard to imagine his dreams include a vision of his great- great-granddaughter as First Lady of the United States, living in the White House, hosting state dinners, an inspiration to her own country, and one of the most admired women in the world. But it happened. Her name is  Michelle Obama - and we can be sure that Jim Robinson would be as proud of his descendant as she is of him.

After the  Civil War, Robinson became a sharecropper on the plantation. He married and in 1884 had a son, Fraser, who lost an arm to an infection when he was 10. A local white man took a liking to the boy and got permission from his family to raise him. Although he didn’t send Fraser to school, his own children went, and education was stressed in the household. This made a lasting impression on Fraser  -  who grew  up to  be  a  successful  small-time  entrepreneur -  and education has  been a cornerstone of the Robinson family ever since.

Fraser married and had a son. Fraser Jr., Michelle’s grandfather, was a smart child, but opportunities were few - when it came to racial equality the south was regressing in the aftermath of Reconstruction. He moved to Chicago as part of the great black Diaspora in the early twentieth century,  when millions  of  blacks  from the  rural  South moved  to  northern cities  in  search of opportunity. He took a job at the post office, and met and married LaVaughn Johnson. Their son, Fraser Robinson III, was born on August 1, 1935. He was a handsome, intelligent man, and in 1960 he met and married the Marian Shields, then a secretary at Spiegel’s catalogue store. Marian’s family came  from Alabama and her  great-great-grandfather was the  child of a  white man. Fraser  and Marian’s first child, Craig, arrived in 1962. On January 17, 1964, Michelle came into the world - the fruit of a uniquely American family tree, one whose roots run deep and strong.

Source: Michelle Obama, A Life

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A short history of banking

The earliest-known money-lending activities have been identified in historical civilizations and societies including Assyria, Babylon, ancient Greece, and the Roman Empire. Modern-day banking can be traced back to medieval and early Renaissance Italy, where privately-owned merchant banks were established to finance trade and channel private savings into government borrowing or other forms of public use. Private banks were typically constituted as partnerships, owned and managed by a family or some other group of individuals, and operating without the explicit sanction of government. Amsterdam became a leading financial and banking centre at the height of the Dutch Republic during the 17th century; succeeded by London during the 18th century, partly as a consequence of the growth in demand for banking services fuelled by the Industrial Revolution and the expansion of the British Empire. The first shareholder-owned bank in England was the Bank of England, founded in 1694 primarily to act as a vehicle for government borrowing to finance war with France. Despite its important role in raising public finance, the Bank of England did not assume its modern-day position as the government’s bank until the 20th century.

Acceptance of the principle that banks could be owned by large pools of shareholders was key to the evolution of modern commercial banks. Shareholder-owned banks could grow much larger than private banks by issuing or accumulating shareholder capital. The shareholder bank’s lifetime was indefinite, not contingent on the lives and deaths of individual partners. The Bank of England was originally incorporated with unlimited shareholder liability, meaning that in the event of failure shareholders would not only lose the capital they had invested, but were also liable for their share of any debts the bank had incurred. The same applied to private banks constituted as partnerships. Unlimited liability was seen as essential, because banks had powers to issue banknotes, and might do so recklessly unless their shareholders were ultimately liable when the holders of banknotes demanded redemption.



In England the introduction of shareholder banks was inhibited by the prohibition, until the early 19th century, of the issue of banknotes by banks with more than six partners. During the 18th century, the population of small private banks had increased; but many had insufficient resources to withstand financial shocks. Legislation passed in 1826 granted banknote-issuing powers to private banks with more than six partners headquartered outside a 65-mile radius of London. In 1844 the issue of banknotes was tied to gold reserves, paving the way for the Bank of England eventually to become the sole note-issuing bank. The inscription that appears on all English banknotes ‘I promise to pay the bearer on demand  the sum of ....., signed by the Chief Cashier on behalf of the Governor of the Bank of England, dates historically from the time when the Bank of England accepted a liability to convert any banknote into gold on request. The gold standard was abandoned by Britain at the start of the First World War,  reintroduced  in 1925 but abandoned again, permanently, in 1931.

Read more > Banking Information

The Great Bitcoin Scam

Bitcoins

At the outset, let me clarify that Bitcoin itself is not a scam, but how Bitcoin is being sold is a scam. Moreabout that below.

To start out, it is important to understand what Bitcoin really is. It would be easy to bore you with a discussion of the technology, about peer-to-peer servers and sophisticated algorithms, but that is not what you need to know.

What you need to know about Bitcoin is that distilled to its technological essence, each Bitcoin is simply a number. That's it: A number. It is simply a series of digits, with each number being assigned to each Bitcoin.

To illustrate, I'll randomly pull a $1 bill from my wallet, which bears No. L88793293J. Assuming some minimallevel of competency by the U.S. Treasury, no other bill bears that number.

The face value of a $1 bill is, of course, just $1 dollar. But two people could privately agree that No.L88793293J is actually worth $5,000.

To illustrate Fred wants to buy Joe's golf clubs, but Fred doesn't want his wife to know -- at least just yet -- that he spent $5,000 for golf clubs. So, Fred and Joe agree that No. L88793293J is worth $5,000 and Fred gives No. L88793293J to Joe. Fred then tells his wife that he bought the clubs for the $1 bill. At some later time, when Fred's wife doesn't care so much, Fred pays $5,000 to Joe for No. L88793293J, and gets the $1 bill back.

The only difference between Bitcoin No. ABC123 and $1 Bill No. L88793293J is that at the end of the day, the $1 bill physically exists and has a face value that is worth something, i.e., Fred could take the $1 bill and buy something off the $1 menu at McDonalds.

By contrast, Bitcoin has no intrinsic value -- it is just a number. The number may have an agreed value between two parties, but the number itself has no value. Consider a bank account number, such as Wells Fargo Account No. 456789. The depositor and Wells Fargo essentially agree that the account designated by No. 456789 has the value of what the depositor puts into it, less what the depositor takes out. But the number itself, No. 456789 has no value. The same situation occurs with credit card transactions, whereby the credit card processing company assigns are unique value to each transaction, but the number itself has no value.

Let's now talk about uniqueness. Bitcoin does have some value because there are only a finite number of Bitcoins available, because the algorithm that is used limits Bitcoin to a particular number of units, of which there should only be somewhere in the neighborhood of 21 million that fit the algorithm.

Uniqueness certainly has value. Because there is only one Hope Diamond, it is estimated to have a value in the neighborhood of $350 million. Because there are only 100 of that 24¢ stamp with the upside down airplane, they are estimated to be worth about $1 million each. Ditto for rare coins, original Picasso paintings, etc.

But here is where the fundamental flaw in Bitcoin's value lies: It is simply a number, and numbers are infinite  -- there will never be a shortage of numbers. Even if you are the world's greatest mathematician and think that you found the largest number ever, there is always that number plus one, plus two, etc.

So, Bitcoin may be limited to 21 million numbers, but that doesn't mean that somebody else can't come up with a similar algorithm and thereby create their own unique set of numbers, i.e., their own cybercurrency.

For example, let's say that somebody creates a cybercurrency that is based on known prime numbers. There are about 50 million of those, so another 50 million cybercurrency numbers could be created. Indeed, the recent boom in Bitcoin has triggered numerous companies offering their own cybercurrencies, and the amount of such numbers that they can generate is limited only by the ability of their mathematicians to create the necessary algorithms, which of course is similarly infinite.

According to that tome of all knowledge known as Wikipedia, as of November 27, 2017, there were 1,324 cybercurrencies in use. Just multiple each cybercurrency by the number of units they each support, and you get a pretty big number. And that is just the presently existing cybercurrencies, recalling that all it really takes is a sharp mathematician to come up for an algorithm for a new one.

And that brings us back to the main point: Cybercurrency units are simply numbers, and there is not a finite supply of numbers. Rather, the numbers available are infinite. This further means that the supply of cybercurrency units is likewise infinite. This has profound implications for pricing.

The true value of any widget is determined by the aggregate street price of the item, i.e., the sum total of what all units could be purchased for today, divided by the number of additional units which are available for sale. This is where uniqueness comes into play. There is only one Hope Diamond, which means that you take its estimated value of $350 million and divide by one, yielding $350 million. Collectively, those 24¢ stamps with the upside-down airplane are worth $100 million, but there are 100 of them, so they are worth about $1 million each. Or think of it simply in common-sense terms: The more there are of something, the less valuable each one is; if the market is flooded with something, they each have little value. Consumers see this every day at the gas pump, as the price of fuel varies primarily based upon available oil supplies.

Herein lies the problem with cybercurrency, which is that there are an infinite number of cybercurrency units available. Divide anything by infinity, and you get a number that is almost zero -- not quite zero -- but as close as you can get to it as possible. This is true even if we assign a current aggregate value of all the existing cybercurrency units at $500 billion. Because it is not quite zero, we can assign it a value of 1¢, not because it is necessarily worth 1¢, but simply because that is the smallest unit by which we can designate value in our currency.

Actually, it is some number larger than zero, and thus 1¢, mainly because the Bitcoin folks have put in a lot of effort to keep each number unique and assignable to a given owner, and there are some merchants who will accept Bitcoin as if it were a government-issued currency. But how much does that really add, and how unique are those features as other cybercurrencies take hold? Suffice it to say that the answer is much closer to 1¢ than $15,000 per unit.

This now brings us to the economic law of supply and demand, by which value is determined by what a willing seller will let a unit go for, and what a willing buyer will pay for that unit, at a particular moment in time.

Take the 24¢ stamp with the upside-down airplane as an example. Presumably, the U.S. Postal Service would honor the stamp only for 24¢, which is its face value. Otherwise, the stamp creates no other value. But collectors of stamps and other valuables would offer $1 million or more for such a stamp, due to its rarity, and their belief that the value of the stamp will increase over time.

This now brings us to the topic of tulip bulbs. Tulip bulbs have no intrinsic value, other than that they can produce a pretty tulip flower. Yet, beginning in 1636, the price of tulip bulbs in Holland began to skyrocket, as buyers started believing that -- with demand driven by exports to the apparently then tulip bulb hungry French -- the price of tulip bulbs would keep appreciating. They were right. Eventually, the price of a single tulip bulb hit many multiples of the average Dutchman's average wages, and reportedly 12 valuable acres of land were traded for one particular tulip bulb. Individual tulip bulbs were traded for many times each day, with the price increasing with each trade. Then, one day in February of the following year, 1637, the price of tulip bulbs quit going up, and by May 1, the price for tulip bulbs had fallen back to their original value. Thus, was tulip mania the first recorded bubble.

Many centuries later, more specifically in November, 2013, the President of the Dutch Central Bank, Nout Wellink, reflected on the tulip bulb bubble with the following: "At least then you got a tulip, now you get nothing." He was referring to Bitcoin.

But Wellink wasn't exactly right, since with Bitcoin you get a unique number. What that unique number is worth,as discussed above, is something pretty close to zero, which makes Wellink's statement much closer to the truth.

All of which means that the value of Bitcoin, and any other cybercurrency, is established by agreement of the willing sellers and willing buyers as to what point they would be willing to let go of or buy up Bitcoins as the case may be. This means that an investment in Bitcoins is purely speculative -- it is utterly no different than investing in gold, social-media stocks, or tulip bulbs. So long as the number of buyers outnumbers the sellers, the price will go up, but when the sellers outnumber the buyers the price will go down.

You'd think that folks would be able to spot bubbles by now, since we have three in the last 20 years, being the Dot.com (or, maybe more accurately, Dot.con) bubble of the late 1990s, and of course the housing bubble that ended in the crash of 2007, and then the instant Bitcoin bubble. These bubbles illustrate that they occur not because of sophisticated Wall Street traders looking a business fundamentals, but because the less sophisticated investors who start taking money out of their nice, safe FDIC-insured deposit accounts and money-market IRAs, and start trying to shoot-the-moon with investments that they barely understand. Yet, they see other folks making money overnight and want to do so too. Ask about anybody what the key to successful investing is, and they'll repeat the old mantra "Buy low and sell high". The problem with people chasing investments which are already hot is that they will end up buying high and selling low.

All of this brings us to the scam element of Bitcoin. Again, as I stated at the start of this article, Bitcoin itself is not a scam. Now let me tell you what is. The scam in Bitcoin is in talking average man-on-the-street investors into investing in Bitcoin by intentionally obfuscating what it really is, just a number, into some super-sophisticated investment by throwing out the technical verbiage that surrounds cybercurrencies, such as Blockchain technology and peer-to-peer servers. These technologies actually accomplish only one critical thing, which is that they keep particular numbers peculiar to Bitcoin, but they sure sound like Star Trek level stuff. Yet, to those not familiar with these technologies, it makes Bitcoin sounds like it has a lot more worth than it really does.

To push Bitcoin, there are now a lot of internet gurus who claim to have inside knowledge on the ever-imminent rise of the cybercurrency, very similar to how such gurus appeared so that the Iraqi Dinar Scam (which is very similar, although Dinars at least exist in paper) was able to take off. There are also Bitcoin sellers who spin a load of bull so that they can sell Bitcoins to the unsophisticated investors who can't seem to bring themselves to confront the question that "if something is anywhere as valuable as they say, then why are they selling it?"

The answer is that those who trade in anything make their money on their commissions for selling. It doesn't matter what they are selling, so long as they can make a commission on it. The more trading, the more in commissions. Investments that are perceived as "hot" will generate a lot of trading, and so traders will naturally flock to those investments and try to gin up further interest among investors who heretofore had no interest in that investment at all.

Sure enough, getting away from the wealthy folks who have the spare cash to speculate in stuff, we're now seeing pooled funds set up just so that the average mom-and-pop investors who are simply trying to set some money back for retirement, can throw their bucks in too. What these folks don't realize is that they might as well just take their money to the nearest casino and drop it all on red for a single spin of the roulette wheel. They'll either win or lose, just as Bitcoin is either going to go up or down.

And, at least the casino will pay if you win. I get the idea that some of these "Bitcoin funds" actually own no, or very few, Bitcoins, but are simply the next wave of Ponzi schemes.

I got into a discussion about Bitcoin with retired financial advisor Charles Padua, who expressed concern that so many small investors seemed to be falling for Bitcoin. His take was that smaller investors should be in carefully asset-allocated portfolios so as to spread and minimize their risk, and if -- and this is a big if -- somebody determined to invest in any speculative investment, such as Bitcoin, they should limit their portfolio exposure to no more than 2%. But, he says, better not to invest in purely speculative investments at all.

This takes up back to the fundamental rule of investing, which is simply to buy low and sell high. Bitcoin is already high, and astronomically high compared to its true value. Folks who buy into Bitcoin now are quite likely to be buying high and will end up selling low. There is also an old investment adage to the effect that "the quickest way to lose money is to invest in something which is already hot." The idea there is that the folks who are going to profit have already made their money investing, and now are just looking for suckers to unload their investment on. Bitcoin is certainly hot; in fact, it's now the hottest thing going. That by itself should raise a bright red flag for investors.

Will Bitcoin fall? Maybe not today, tomorrow, or next week, but eventually it will fall as the novelty wears off and folks figure out that they are really just buying a number, and the number of buyers diminish.

Will Bitcoin go away entirely? Probably not, because Bitcoin still can serve some usefulness as a unit of exchange, to the extent that it can convince merchants to accept it as currency. The caveat here is that when a bubble finally bursts, the object of the bubble usually falls into deep disrepute.

By then the scammers who prey on the little investors will have moved on to the next "big thing". It is all a never ending cycle, limited only by the number of available suckers.

And that is a big, big number.

Source: www.forbes.com

The Internet Of Money - Blockchain, Bitcoin And Cryptocurrencies

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Digital Gold

 It was after midnight and many of the guests had already gone to bed, leaving behind their amber-tailed tumblers of high-end whiskey. The poker dealer who had been hired for the occasion from a local casino had left a half hour earlier, but the remaining players had convinced her to leave the table and cards so that they could keep playing. The group still hovering over the felt and chips was dwarfed by the vaulted, wood-timbered ceiling, three stories up. The large wall of windows on the far side of the table looked out onto a long dock, bobbing on the shimmering surface of Lake Tahoe.

 Sitting at one end of the table, with his back to the lake, twenty-nine-year-old Erik Voorhees didn’t look like someone who three years earlier had been unemployed, mired in credit card debt, and doing odd jobs to pay for an apartment in New Hampshire. Tonight Erik fitted right in with his suede oxfords and tailored jeans and he bantered easily with the hedge fund manager sitting next to him. His hairline was already receding, but he still had a distinct, fresh-faced youthfulness to him. Showing his boyish dimples, Erik joked about his poor performance at their poker game the night before, and called it a part of his “long game.”

 “I was setting myself up for tonight,” he said with a broad toothy smile, before pushing a pile of chips into the middle of the table.

 Erik could afford to sustain the losses. He’d recently sold a gambling website that was powered by the enigmatic digital money and payment network known as Bitcoin. He’d purchased the gambling site back in 2012 for about $225, rebranded it as SatoshiDice, and sold it a year later for some $11 million. He was also sitting on a stash of Bitcoins that he’d begun acquiring a few years earlier when each Bitcoin was valued at just a few dollars. A Bitcoin was now worth around $500, sending his holdings into the millions. Initially snubbed by investors and serious business folk, Erik was now attracting a lot of high-powered interest. He had been invited to Lake Tahoe by the hedge fund manager sitting next to him at the poker table, Dan Morehead, who had wanted to pick the brains of those who had already struck it rich in the Bitcoin gold rush.

 For Voorhees, like many of the other men at Morehead’s house, the impulse that had propelled him into this gold rush had both everything and nothing to do with getting rich. Soon after he first learned about the technology from a Facebook post, Erik predicted that the value of every Bitcoin would grow astronomically. But this growth, he had long believed, would be a consequence of the multilayered Bitcoin computer code remaking many of the prevailing power structures of the world, including Wall Street banks and national governments—doing to money what the Internet had done to the postal service and the media industry. As Erik saw it, Bitcoin’s growth wouldn’t just make him wealthy. It would also lead to a more just and peaceful world in which governments wouldn’t be able to pay for wars and individuals would have control over their own money and their own destiny.

 It was not surprising that Erik, with ambitions like these, had a turbulent journey since his days of unemployment in New Hampshire. After moving to New York, he had helped convince the Winklevoss twins, Tyler and Cameron, of Facebook fame, to put almost a million dollars into a startup he helped create, called BitInstant. But that relationship ended with a knock-down, drag-out fight, after which Erik resigned from the company and moved to Panama with his girlfriend.

 More recently, Erik had been spending many of his days in his office in Panama, dealing with investigators from the US Securities and Exchange Commission—one of the top financial regulatory agencies—who were questioning a deal in which he’d sold stock in one of his startups for Bitcoins. The stock had ended up providing his investors with big returns. And the regulators, by Erik’s assessment, didn’t seem to even understand the technology. But they were right that he had not registered his shares with regulators. The investigation, in any case, was better than the situation facing one of Erik’s former partners from BitInstant, who had been arrested two months earlier, in January 2014, on charges related to money laundering.

 Erik, by now, was not easily rattled. It helped that, unlike many passionate partisans, he had a sense of humor about himself and the quixotic movement he had found himself at the middle of.

 “I try to remind myself that Bitcoin will probably collapse,” he said. “As bullish as I am on it, I try to check myself and remind myself that new innovative things usually fail. Just as a sanity check.”

 But he kept going, and not just because of the money that had piled up in his bank account. It was also because of the new money that he and the other men in Lake Tahoe were helping to bring into existence—a new kind of money that he believed would change the world.

 THE BITCOIN CONCEPT first came onto the scene in more modest circumstances, five years earlier, when it was posted to an obscure mailing list by a shadowy author going by the name Satoshi Nakamoto.

 From the beginning, Satoshi envisioned a digital analog to old-fashioned gold: a new kind of universal money that could be owned by everyone and spent anywhere. Like gold, these new digital coins were worth only what someone was willing to pay for them—initially nothing. But the system was set up so that, like gold, Bitcoins would always be scarce—only 21 million of them would ever be released—and hard to counterfeit. As with gold, it required work to release new ones from their source, computational work in the case of Bitcoins.

 Bitcoin also held certain obvious advantages over gold as a new place to store value. It didn’t take a ship to move Bitcoins from London to New York—it took just a private digital key and the click of a mouse. For security, Satoshi relied on uncrackable mathematical formulas rather than armed guards.

 But the comparison to gold went only so far in explaining why Bitcoin ended up attracting such attention. Each ingot of gold has always existed independent of every other ingot. Bitcoins, on the other hand, were designed to live within a cleverly constructed, decentralized network, just as all the websites in the world exist only within the decentralized network known as the Internet. Like the Internet, the Bitcoin network wasn’t run by some central authority. Instead it was built and sustained by all the people who hooked their computers into it, which anyone in the world could do. With the Internet, what connected everyone together was a set of software rules, known as the Internet protocol, which governed how information moved around. Bitcoin had its own software protocol—the rules that dictated how the system worked.

 The technical details of how all this worked could be mind-numbingly complicated—involving advanced math and cryptography. But from its earliest days, a small group of dedicated followers saw that at its base, Bitcoin was, very simply, a new way of creating, holding, and sending money. Bitcoins were not like dollars and euros, which are created by central banks and held and transferred by big, powerful financial institutions. This was a currency created and sustained by its users, with new money slowly distributed to the people who helped support the network.

 Gven that it aimed to challenge some of the most powerful institutions in our society, the Bitcoin network was, from early on, described by its followers in utopian terms. Just as the Internet took power from big media organizations and put it in the hands of bloggers and dissidents, Bitcoin held out the promise of taking power from banks and governments and giving it to the people using the money.

This was all rather high-minded stuff and it attracted plenty of derision—most ordinary folks imagined it falling somewhere on the spectrum between Tamagotchi pet and Ponzi scheme, when they heard about it at all.

 But Bitcoin had the good fortune of entering the world at a utopian moment, in the wake of a financial crisis that had exposed many of the shortcomings of our existing financial and political system, creating a desire for alternatives. The Tea Party, Occupy Wall Street, and WikiLeaks—among others—had divergent goals, but they were united in their desire to take power back from the privileged elite and give it to individuals. Bitcoin provided an apparent technological solution to these desires. The degree to which Bitcoin spoke to its followers was apparent from the variety of people who left their old lives behind to chase the promise of this technology—aficionados like Erik Voorhees and many of his new friends. It didn’t hurt that if Bitcoin worked, it would make the early users fabulously wealthy. As Erik liked to say, “It’s the first thing I know where you can both get rich and change the world.”

 Given the opportunity to make money, Bitcoin was not only attracting disaffected revolutionaries. Erik’s host, Dan Morehead, had gone to Princeton and worked at Goldman Sachs before starting his own hedge fund. Morehead was a leading figure among the moneyed interests who had recently been pumping tens of millions of dollars into the Bitcoin ecosystem, hoping for big returns. In Silicon Valley, investors and entrepreneurs were clamoring to find ways to use Bitcoin to improve on existing payment systems like PayPal, Visa, and Western Union and to steal Wall Street’s business.

 Even people who had little sympathy for Occupy Wall Street or the Tea Party could understand the benefits of a more universal money that doesn’t have to be exchanged at every border; the advantages of a digital payment method that doesn’t require you to hand over your identifying information each time you use it; the fairness of a currency that even the poorest people in the world can keep in a digital account without paying hefty fees, rather than relying only on cash; and the convenience of a payment system that makes it possible for online services to charge a penny or a dime—to view a single news article or skip an ad—skirting the current limits imposed by the 20- or 30-cent minimum charge for a credit card transaction.

 In the end, though, many of the people interested in more practical applications of Bitcoin still ended up talking about the technology in revolutionary terms: as an opportunity to make money by disrupting the existing status quo. At the dinner a few hours before the late-night poker game, Morehead had joked about the fact that, at the time, all the Bitcoins in the world were worth about the same amount as the company Urban Outfitters, the purveyor of ripped jeans and dorm room decorations—around $5 billion.

 “That’s just pretty wild, right?” Morehead said. “I think when they dig up our society, all Planet of Apes–style, in a couple of centuries, Bitcoin is probably going to have had a greater impact on the world than Urban Outfitters. We’re still in early days.”

 Many bankers, economists, and government officials dismissed the Bitcoin fanatics as naive promoters of a speculative frenzy not unlike the Dutch tulip mania four centuries earlier. On several occasions, the Bitcoin story bore out the warnings of the critics, illustrating the dangers involved in moving toward a more digitized world with no central authority. Just a few weeks before Morehead’s gathering, the largest Bitcoin company in the world, the exchange known as Mt. Gox, announced that it had lost the equivalent of about $400 million worth of its users’ Bitcoins and was going out of business—the latest of many such scandals to hit Bitcoin users.

 But none of the crises managed to destroy the enthusiasm of the Bitcoin believers, and the number of users kept growing through thick and thin. At the time of Morehead’s gathering, more than 5 million Bitcoin wallets had been opened up on various websites, most of them outside the United States. The people at Morehead’s house represented the wide variety of characters who had been drawn in: they included a former Wal-Mart executive who had flown in from China, a recent college graduate from Slovenia, a banker from London, and two old fraternity brothers from Georgia Tech. Some were motivated by their skepticism toward the government, others by their hatred of the big banks, and yet others by more intimate, personal experiences. The Chinese Wal-Mart executive, for instance, had grown up with grandparents who escaped the communist revolution with only the wealth they had stored in gold. Bitcoin seemed to him like a much more easily transportable alternative in an uncertain world.

 It was these people, in different places with different motivations, who had built Bitcoin and were continuing to do so, and who are the subject of this story. The creator of Bitcoin, Satoshi, disappeared back in 2011, leaving behind open source software that the users of Bitcoin could update and improve. Five years later, it was estimated that only 15 percent of the basic Bitcoin computer code was the same as what Satoshi had written. Beyond the work on the software, Bitcoin, like all money, was always only as useful and powerful as the number of people using it. Each new person who joined in made it that much more likely to survive.

 This, then, is not a normal startup story, about a lone genius molding the world in his image and making gobs of money. It is, instead, a tale of a group invention that tapped into many of the prevailing currents of our time: the anger at the government and Wall Street; the battles between Silicon Valley and the financial industry; and the hopes we have placed in technology to save us from our own human frailty, as well as the fear that the power of technology can generate. Each of the people discussed in this book had his or her own reason for chasing this new idea, but all their lives have been shaped by the ambitions, greed, idealism, and human frailty that have elevated Bitcoin from an obscure academic paper to a billion-dollar industry.

 For some participants, the outcome has been the type of wealth on display at Morehead’s house, where the stone entranceway is decorated with Morehead’s personal heraldic crest. For others, it has ended in poverty and even prison. Bitcoin itself is always one big hack away from total failure. But even if it does collapse, it has already provided one of the most fascinating tests of how money works, who benefits from it, and how it might be improved. It is unlikely to replace the dollar in five years, but it provides a glimpse of where we might be when the government inevitably stops printing the faces of dead presidents on expensive paper.

 The morning after the big poker game, as the guests were packing up to go, Voorhees sat at the end of the pier behind Morehead’s house, which was sitting high above the water after a winter with little snowfall. The joy he had shown at the poker table the night before was gone. He had a look of chagrin on his face as he talked about his recent decision to resign as the CEO of the Bitcoin startup he had been running in Panama. His position with the company had prevented him from speaking about the revolutionary potential of Bitcoin, for fear that it could hurt his company.

 “My passion is not running a business, it is building the Bitcoin world,” he explained.

 On top of that, his girlfriend had grown tired of living in Panama and Erik was missing his family back in the United States. In a few weeks he was planning to move back to Colorado, where he grew up. Because of Bitcoin, though, he would be going home a very different person from what he was when he left. It was a situation that many of his fellow Bitcoiners could sympathize with.