Blockchain Helps With India’s Digital Determination

India’s central bank is getting into the blockchain business. A central bank research group will focus on the blockchains. The Institute for Development and Research in Banking Technology (IDRBT) is the group that will build them.

India wants to use blockchain to help digitize the rupee. The government has already started down that path, even while denying it. It has taken many higher notes out of circulation and says the withdrawals are only temporary, designed to deprive criminals of usage.

But the notes haven’t been replaced and the idea is that India has advanced toward this new goal, without admitting it. There is bound to be plenty of controversy going forward. It has hardly begun.

Dubai Focuses on a Public Blockchain

The Hong Kong Securities and Futures Commission (SFC) and Dubai are partnering.

It is a cooperative agreement. Hong Kong will help Dubai build technology. Dubai wants to be is already putting documents on a  blockchain and is setting up digital passports.

as we have  observed before, this progress is in the public sector. Crypto may have public applications but many of the changes will take place  privately.

Dubai is using technology  to re-enforce the way things are currently, not to make things less controlled.  Dubai’s government may think crypto will just strengthen what is already there, but in fact it may move over time in opposite direction.

That won’t help Dubai’s government but it will help rationalize regulation and eventually make it more modest.

East Outshines the West

Japan is considering how to thoroughly integrate bitcoin into the country’s economic fabric. And South Korea is doing something similar, seeking to formally accommodate bitcoin.

Perhaps as a result, cryptocurrencies have moved up a good deal. Three of the world’s top exchanges now residing in Korea, have moved up sharply.

Contrast this to Canada. In Canada, regulators have been leading the charge. The US has a similar situation where the SEC is in charge.

The bottom line here is that legislative authority, which tends to have more concrete boundaries, is preferable to regulatory dictates, which may know no boundaries at all.

Here at Blockcity, we have argued that less regulation is better than more. These latest results playing between East and West would tend to reenforce this hypothesis.

Cryptocurrencies Raise Questions

The US Consumer Financial Protection Bureau has noticed that Coinbase is getting a lot of complaints.  Coinbase has expanded a good deal, making it more inconvenient for people to use their services.

Coinbase is not alone. There have been  over 200 complaints aimed at cryptocurrency companies recently. Increased complaints probably come from the higher prices and resultant attraction to their services.

Kim Dotcom Sets Up New Service

Kim Dotcom is introducing Bitcache which allows people to pay for content directly. Most money doesn’t actually go to creators  But there is a better way. The new system is aimed at Youtube f0r now.

Using the new service, you can give money directly to creators. Security isn’t much of an issue because people usually pay small amounts of money for an individual video.

Dotcom wants participation. He is asking interested individuals to join in a “beta partnership” to try the system out and to message him via Twitter if they wish to do so.

Plagiarism is an increasing issue as such systems because usable.  That’s because content is conveniently monetized. However, the idea is that more media makers will connect to their audience.

The plagiarism issue becomes less important if people  decline to care about it. That sounds harsh, but there is so much money available if people would concentrate on generating content instead of restricting it.

Countries  have made  plagiarism more and more of an issue. But the result is that the biggest companies get most of the money. If creators can use Bitcache and ignore the additional monetization, then everybody can do better.

It is a difficult suggestion but one that makes sense if people are interested in getting more for their  products and are less concerned about others getting some of it.

AbjCoin Begins in Africa

Africa is getting its own blockchain. AbjCoin is a Nigerian blockchain solution that will bring Africa into the 21st century when it comes to the latest technology,

The AbjCoin involves a one-of-a-kind algorithm, the POW/POS, that resides on the system which itself allows for the purchase of an interest-bearing asset that returns some 15 %. You simply need to buy an AbjCoin. The coin can be mined as well.

AbjCoin is issuing 9 million coins. The coin will be listed on 3 major international exchanges. Additionally,  online and offline stores will accept AbjCoin.

AbjCoin will set up a blockchain institute in Africa. The institute hopes to bring the best heads in the blockchain industry to help students take advantage of the industry and to foster pan African economic and infrastructural development.

AbjCoin holds a lot of promise and will foster trade, ecommerce, banking and educational development. For more info about visit https://www.abjcoin.org.

Chinese Liqueur Debuts ICO as Skepticism Heightens

Originated from local superior glutinous sorghum,”Xiao’hong’liang kun’zi pure draft liquor” has a production process that takes five years in total.

“After blending and leveling,” according to a marketing document, “it will take one more year to stockpile. The texture of liquor  … will be softer and tenderer before being packed in the bottle and leaving factory.”

Sounds good. The liquor is also involved in an ICO, and is one of a number of Chinese companies now exploring the cryptyo space. Here are rules according to the company:

The total value of Hua’yang “Xiao’hong’liang kun’zi puree draft liquor” in this publicity is RMB 100,000,000. Jiangcoin holders can make redemption of the Jiangcoin tokens at certain price according to the demands. The Jiangcoin token can be used to exchange with the China digital standard token NPC, thus realizing the assets exchange circulation through the media of the NPC.

While the Chinese are invading crypto, The Daily Economist recently published an article explaining that the basics of cryptocurrency were known at least nine years before Satoshi Nakamoto  published his now famous white paper.

In 1996 the NSA (that’s right, a government agency) published a White Paper titled,HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONICCASH.  And in this white paper, analysts and researchers laid out the entire breadth and scope of replacing cash and other fiat currencies with a completely digital one, based on anonymous cryptocurrencies.

… Certain documents uncovered from the NSA going back to 1996 may point to a correlation between the government and Bitcoin, and how the current cryptocurrency frenzy might possibly be an experiment for the future of government controlled money.

This suggests clearly that the CIA or some other government agency was behind cryptocurrencies to begin with. However this does not mean that all such money is destined to crumble and fall away when this latest bull market ends.

First of all, money can be anything as  Murray Rothbard suggested, so long as there is acceptance. Second, the people in charge of our financial system want to go digital, and crypto is a good  way of acclimating people to that. Third, at least some cryptocurrencies will probably survive whatever bear market is to come.

This would not be surprising given that cryptocurrencies are private money. Private money has been issued  successfully for millennia and there is no reason to think it has ended its run today.

 With a single bitcoin worth thousands, it may seem unusual to forecast a large crypto shake out, but surely one is coming sooner or later. The larger issue is which currencies will survive and why – and in what shape.

Unlike in past centuries, regulation is increasingly aggressive and invasive. Cryptocurrencies are  subject to wholesale confrontation and are usually giving way because the alternative is time consuming and expensive.

But this may not always be the case and, in any event, there are more chapters to go before this story is fully written. It does seems fairly obvious now that Satoshi Nakamoto is probably not what he seems and that his white paper was launched in part to ready the  West and world for transparent, digital money.

If you value privacy, you should make an attempt to secure at least part of what you have away from prying eyes before it is too late.

Bitcoin Is Not Untraceable

Bitcoin is not untraceable for the taxman. According to IRS documents, anonymous bitcoin addresses can actually be traced, at least sometimes.

IRS documents show the IRS has been involved in tracing addresses since 2015. They use analysis software from Chainalysis to “trace the movement of money through the bitcoin economy.”

The Daily Beast first had this story which emerged from a Freedom of Information Act request. It makes clear just how determined the IRS is to ensure that US citizens did not use cryptocurrency to dodge bitcoin taxes.

The IRS gave Chainalysis some $88,700 to access its anti-money laundering software. From the Chainalysis website:

“Through formal partnerships with Europol and other international law enforcement, our investigative tools have been used globally to successfully track, apprehend, and convict money launderers and cyber criminals.”

Bitcoin coins are not tracked on the Internet. But if you know where the coin has landed and think you know the person, you might then get a subpoena for the wallet if you are an appropriate government agency.

The IRS is currently fighting with Coinbase over revealing customer identities if the IRS considers such individuals potential tax cheats. The IRS is focused on supporting its bitcoin tax. It says only about 800 people declared bitcoin in 2016.

Meanwhile, some  cryptocurrencies such as Dash, Monero, and Zcash are more anonymous and may grow as bitcoin potentially subsides. Dash and Monero prices are at all-time highs.

The IRS still has not been disciplined for discrimination against Tea Party entities to which it would not grant a tax exempt status during the Obama years. It lost paperwork and computer files that it has never recovered and otherwise declined to cooperate with Congressional committees looking into IRS wrongdoing.

Now the IRS is going after a bitcoin tax, but presumably the IRS itself has decided that bitcoin is legal to tax and not Congress. Surely Congress should take up the issue of cryptocurrency taxes rather than leaving it to solely to the IRS. Why just tax bitcoin. Or, to reverse it, why tax bitcoin at all, considering there are well over 1,000 cryptocurrencies.

Right now the IRS is more like a rogue agency than a responsible one in some ways. Maybe it ought to pay more attention to obeying laws and less time creating and enforcing new ones.

Community Based Marketing Takes Charge

Large-scale corporate marketing is generally being disrupted by community consensus.  Big companies are gradually dying off as community-based marketing becomes more ubiquitous.

Corporate communities, digital or otherwise, are gradually taking the place of large companies that are struggling with blockchain-related difficulties. These include record-keeping and other repetitive elements gradually being removed by blockchain, which records items only once. A slew of work will be done away with – and staff too.

Corporate communities are natural substitutes for over-large corporations because they are brought together by similar interests.  As big corporations shrink and even fail, groups that spring up to take their place are digital, physical or both.  People don’t trust big business and big finance. But blockchain will give people more control and allow them to be in charge of their own data and actions.

Blockchain’s revolutionary qualities are similar across industries. Blockchain allows people to collect information at one time in one place. And the information, while widely dispersed, can be considerably safeguarded. Over time, the community itself will end up with considerable control as a result of blockchain and SMART contract operations.  The result will be an empowered community that runs contrary to surveillance and overreach.

The local consensus may prevail if the circumstances are appropriate, but the very largest firms will be stripped of judicially granted powers. Meanwhile, the natural evolution of community based marketing along with its disruption will be strengthened by deregulation.

Contracts and the like are privately negotiated and delivered.  If there is a need for further authority, people may vote on the individuals who would participate, or simply be appointed as part of a larger hierarchical structure. Buying and selling will have to be negotiated either by voting or by those charged with making the decisions, as in any normal corporate environment.

Ultimately, the digital or physical community works with other such communities locally and even internationally. When the project is large, the communities join forces. When they don’t need to work together anymore, they go their own way.

These digital or physical communities are for the most part modest-sized. They expand when necessary and then subside. They are the future, one that is gradually being built without much commentary but which will continually increase around the world.

Central Banks Won’t Fail Unless Elites Do

Eugéne Etsebeth worked for the South African Reserve Bank from 2013 to 2017 but is not with it any longer.  He recently explained why central banks won’t be able to survive cryptocurrencies in an article at Coindesk.

But Etsebeth may be wrong about reasons why cryptocurrencies won’t compete with central bank money and he may be wrong about central bank powerlessness.

Etsebeth has a list of 10 reasons why central banks are not going to be competitive. However, most of the list deals with central bank relationships, either internally or externally.

Yes, central banks have difficult or somnolent  relationships with other banks or with the government. But the tenor of these relationships doesn’t matter. That’s because the bank relationships are mandated by law.

Even more importantly, central banks are empowered to set the value and volume of money. They set short-term interest rates and print as much money as is necessary, which is usually too much.

Central banks are a prime engine of monetary slumps and crashes. In various counties, including perhaps the US, people would get rid of central banks if they could. They cannot because the central bank is tied to elite banking control, and moving the stock or money up or down – and therefore the economy – is an ability that elites will not easily give up, if at all.

Central banks do not have power because they are good at what they do. No, central banks are actually positioned to make the monetary system fail at regular intervals. It is not coincidence when they do, though the causes may be variable.

The bottom line here is that central banks probably won’t fail just because they are big and clumsy. They will only fail if elites leading them give them up. They probably will not do so voluntarily.