Featured Archives: California Sends Bitcoin Foundation Cease and Desist Order

By Mike Bruschini

Reason Magazine

June 24, 2013

https://reason.com/2013/06/24/california-warns-bitcoin-foundation-of-m/

California's message to Bitcoin supporters: if you "may be" doing the crime, we'll tell you what you'll do in hard time.

The California Department of Financial Institutions' cease and desist order dated May 30 wasn't as explicit in implicating the Bitcoin Foundation, a nonprofit with a mission to standardize and promote the Bitcoin technology, of any legal wrongdoing as it was in outlining punitive consequences if the electronic currency advocacy group was to be transmitting money without licenses or the state's authorization. Jon Matonis, who sits on the Board of Directors for Bitcoin Foundation, brought California's order to attention in a column for Forbes published yesterday.

Read the rest of the article.

Featured Archives: Bitcoin Raises Its Profile But Investors Demand More

The Irish Times
Monday, August 4, 2014

https://www.irishtimes.com/business/bitcoin-raises-its-profile-but-investors-demand-more-1.1884918

The Bitcoin Foundation’s executive director, Jon Matonis, travels the world to promote the virtual currency as a replacement for traditional money. Some of his members want him to focus on a less lofty goal: helping them make lots of old-fashioned cash.

Matonis, a longtime advocate of what he calls “non- political money”, has built the group into a kind of a bitcoin governing body. Last week, he unveiled a website aimed at raising the virtual currency’s public profile. Some foundation members are dismayed by Matonis’ leadership and grander plans.

Investors from Silicon Valley, in particular, would like the group to focus on more technical matters, particularly fortifying the underlying bitcoin software so it can grow into a viable, large-scale payment network.

Running the foundation is like “going downhill in a go- cart trying to keep the wheels on,” Matonis said. “There are different constituencies going in different directions.”

Venture capitalists and entrepreneurs, lured by the technology’s promise, have ploughed time and money into bitcoin businesses – and they’re demanding software upgrades to develop the digital currency’s commercial potential.

“The impact of the bitcoin protocol is economic,” Jeremy Allaire, chief executive of Circle Internet Financial, a bitcoin start-up. “These are higher stakes than with other open-source software.”

The organisation, established in 2012 and modelled on the Linux Foundation, the open-source operating system created in the early 1990s, has tried to mix stewardship of the code with political advocacy.
Digital assets

Unlike Linux, bitcoin rapidly became a channel for billions of dollars in transactions, making security and capacity bottom-line issues for entrepreneurs.

Matonis said that pressure to invest more in bitcoin’s computer code reflects a “fight over who controls the policy dialogue”, and whether the group will continue to fund lobbying. “Tech investors want to make sure that all the resources in the world are there on the tech side,” he said.

Bitcoins are part of a software system that transfers digital assets from owner to owner without using a third party. Start-ups are seeking to use the innovation to disrupt the existing payment system dominated by firms such as JPMorgan Chase, Visa and Western Union.

The core software managed by the foundation contains instructions that let computers communicate with one another to verify transactions on bitcoin’s public ledger, called the blockchain.

Another program enables users to conduct those transactions. Software upgrades are made through an informal system of mostly part- time developers who communicate in internet chat rooms.

Gavin Andresen, the foundation’s chief scientist, was until May the only paid coder working on bitcoin. Online discussions sometimes devolve into virtual shouting matches, according to Andresen.

This year, the bitcoin network processed between $20 million and $580 million per day in transactions, according to the data aggregated on blockchain.info.

“This is not sustainable,” said Mike Hearn, one of bitcoin’s core developers. “You can’t have an infrastructure held together by chewing gum and sticky tape and people who work evenings and weekends.”

Software upgrades have helped ward off hacking and increased commercial utility. A change in March, for example, improved the security of transactions conducted through online merchants by adapting bitcoin software to the Internet’s existing system for authenticating websites.

That tweak pales in comparison to the “non-trivial problem” of raising the number of transactions the bitcoin network can process, Allaire said. The system can handle about nine transactions per second, far off the roughly 2,400 on Visa’s network. Investors have raised the idea of earmarking donations to the foundation for work on the software.

“A lot of people would give a million dollars if it would go solely to development,” said Brock Pierce, a venture capitalist who was recently elected to the foundation’s board. Under pressure from the entrepreneur side, the foundation has commissioned a “feasibility study” to determine whether the software development could happen as part of a partnership with a major university, Matonis said.

Digital wallets

“If we don’t have the underlying core development, it diminishes the other policy and advocacy work we do,” he said. Matonis has frequently argued that bitcoin is a political project that will displace money issued by governments, and has at times disavowed close work with regulators.

“The foundation is not pro-regulation as some have claimed, but it is pro-education,” he wrote when he became its director in 2012. He has dismissed money laundering as an overly broad category of crime, “like buying a drive-thru donut in a stolen vehicle”.

Many entrepreneurs are keen to dodge the politics that Matonis courts. Nic Cary, the chief executive officer of Blockchain, the largest website for creating digital wallets to hold bitcoins, said the group should improve software and promote consumer adoption of the virtual currency.

“What we’ve seen is a lot of mission creep,” Cary said. “We need to fund the people who are working on development.”

Matonis and the other founders of the group have rules on their side. They set up a system in which individual members elect the same number of board members – three – as do all the corporate members. That has raised the possibility, mentioned by Matonis at a meeting in Amsterdam in May, that the foundation could split. The Electronic Frontier Foundation, an early Internet advocacy group, spun out the Washington-based Center for Democracy and Technology in 1994 after similar conflicts.

Matonis told his members that he won’t go quietly if the Bitcoin Foundation cracks. “If we’re going to fracture,” Matonis said in May, “I want to make sure I’m running the one we remember.” – Bloomberg

Featured Archives: Real Crypto-Anarchy

By Oleg Andreev

December 28, 2015

http://blog.oleganza.com/post/71410377996/real-crypto-anarchy

По-русски: http://bitnovosti.com/2014/01/02/cryptoanarchy-and-anonymity/

Crypto-anarchy is not some crazy utopian ideology, but a very viable thing that unfolds in front of our eyes this very moment. The Internet and Bitcoin will soon allow people solve social problems in a novel way: instead of ancient formula “the strongest wins and beats the shit out of the loser” we all can achieve a peaceful society where both rich and poor, strong and weak can protect their property and freedom on more equal grounds without relying on violent institutions like governments.

But first, lets start with some history.

Cypherpunk movement started as a mailing list in 1992. In 1993 Eric Hughes publishes a “A Cypherpunk’s Manifesto” [1]. In 1994 Timothy C. May publishes “Cypherpunks FAQ” [2].

Here’s an excerpt from the FAQ:

2.3. “What’s the ‘Big Picture’?”

Strong crypto is here. It is widely available. It implies many changes in the way the world works. Private channels between parties who have never met and who never will meet are possible. Totally anonymous, unsinkable, untraceable communications and exchanges are possible.

Transactions can only be voluntary, since the parties are untraceable and unknown and can withdraw at any time. This has profound implications for the conventional approach of using the threat of force, directed against parties by governments or by others. In particular, threats of force will fail.

What emerges from this is unclear, but I think it will be a form of anarcho-capitalist market system I call “crypto anarchy.” (Voluntary communications only, with no third parties butting in.)

In 1994 Nick Szabo coins the term “smart contract” [3] and describes all use case categories that are talking about today: from digital cash to synthetic financial assets and smart property.

In 1998 Wei Dai & Nick Szabo came up with the ideas for “b-money” [4] and “bit gold” [5] during their conversation on the libtech-l mailing list. Wei Dai captured the essence of the movement in an immortal quote:

I am fascinated by Tim May’s crypto-anarchy. Unlike the communities traditionally associated with the word “anarchy”, in a crypto-anarchy the government is not temporarily destroyed but permanently forbidden and permanently unnecessary. It’s a community where the threat of violence is impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations.

In 1999 Nick Szabo coins term “intrapolynomial cryptography” [6] for the entirety of proof-of-work algorithms and describes what we call now a “private blockchain”, a chain of property ownership enforced by a consensus of “property club” members [7]. The latter article is especially valuable today as it explicitly states that the job of voting in the consensus mechanism is used only for secure execution of the agreed-upon rules and database replication, but not for changing the rules themselves.

In 2004 Hal Finney implements a RPOW server [8] (“Reusable proof of work”) inspired by the bit gold proposal. The RPOW scheme uses a secure processing module that simultaneously acts as a mint and as a custodian for the ledger of proof-of-work tokens.

In late 2008 Satoshi Nakamoto publishes an overview of Bitcoin [9] and on January 3rd, 2009 releases the code and begins the blockchain.

Bitcoin is the exact implementation of the system envisioned by Tim C. May, Wei Dai and Nick Szabo. The only requirement is for transacting parties to remain anonymous. If there’s no trace to physical persons, there is no place for the violent intervention and thus the contracts can only be enforced according to the voluntarily agreed-upon rules between the parties. Bitcoin allows encoding these rules right in the transactions so they are automatically enforced by the whole network.

In practice, we cannot imagine living in full anonymity. Human beings live in a physical world and enjoy a lot of physical things. Anonymity is not something you can easily manage like a single encryption key. It must be maintained via careful dissemination of one’s actions among actions of others. And since the network activity is easily recordable, one mistake is enough to reveal oneself. In other words, the cost of anonymity is rather high compared to the benefits. Does this mean crypto-anarchy is an utopia?

I would argue, it’s far from it. Cypherpunks being rigorous scientists made a much stronger assumption than needed in practice. For transacting parties it is enough to have costs of cheating (e.g. resorting to violent coercion) meaningfully higher than the cost of following the contract (that is, keeping the promise). If that condition holds for the majority of interactions in society, there will be a great incentive for people to protect themselves against remaining rare cases of cheating thus keeping the system sustainable. Anonymity is simply one of the ways to raise the cost of the attack.

Bitcoin raises the cost of many kinds of attacks, going far beyond protecting against central banks meddling with money supply.

First, all sorts of computational services will flourish. Machines never need to disclose their physical locations and can freely automate both payment verification and payments themselves. Denial-of-service and spam can be largely eliminated by simply requiring a smallish payment for every request.

Second, personal services can be protected by peer-to-peer insurance deposits [8] that literally raises the cost of cheating by making both parties agree to a greater sacrifice (“bilateral insurance deposit”).

In a similar manner, crowdfunding can be fully insured by allowing raised funds to be reverted if the majority of shareholders decides to do so.

Finally, systemic predation by the state becomes economically impossible. Most modern states fund themselves by debasing money supply (also known as “bond issuance”, “budget deficit”, “inflation”, “quantitative easing”, “stimulus package”). Bitcoin-based economy simply does not allow this as it is very cheap to store bitcoins and verify transactions yourself and completely avoid all kinds of fraud associated with modern banking. As central banking disappears from the state’s arsenal, federal government activities including wars become unfunded and quickly come to an end.

Local governments may continue their operations funded by local taxes, but that would become increasingly voluntary. Extracting bitcoins costs much more than protecting them. There is no highly centralized and monitored banking network, so it’s much harder to track taxable transactions. Every additional tax evader defunds the local police department and makes it safer for the next person to underreport earnings if he wishes to do so. Considering that the law enforcement is paid only a small portion of the total budget to be extracted (50% goes to bureaucrats and the rest to other public services), consistently extracting bits of information from millions of individuals is unsustainable in the long run. If anyone is good at stealing bitcoins, they are much better off doing it alone and taking all profits for themselves.

Governments, of course, can also tax in kind (like your underreported Ferrari or a house), but this would be even costlier than seizing any kind of money and those costs must be paid by the state in bitcoins that it does not have to start with.

If this speculation does not sound to you like a complete lunacy yet, here is the fun part. Most governments are completely broke already and can only pay with the IOUs they print. When people start a massive run for bitcoins to protect their wealth, everyone will be able to earn bitcoins for their work, except those who work for the government. Policemen, public school teachers and alike will be the first ones to notice prices rising faster than their salaries. They will be the first ones to switch jobs or become largely corrupt on all levels, like it was in Russia after the fall of the Soviet Union. Bureaucrats will smell the approaching panic and, instead of trying to retain control over the employees, will privatize as much public goods as possible. Again, exactly like during the fall of the Soviet Union. People will see how all promised public services are either abandoned or stolen, and this time everyone will have a method to protect their own property and do business voluntarily and in an even safer and cheaper way than before. Crypto-anarchy will quickly become a boring reality without the need for anyone to remain fully anonymous.

[1] http://www.activism.net/cypherpunk/manifesto.html

[2] http://www.cypherpunks.to/faq/cyphernomicron/cyphernomicon.txt

[3] http://www.virtualschool.edu/mon/Economics/SmartContracts.html

[4] http://www.weidai.com/bmoney.txt

[5] http://unenumerated.blogspot.co.uk/2005/12/bit-gold.html

[6] https://web.archive.org/web/20011217091748/http://szabo.best.vwh.net/intrapoly.html

[7] https://web.archive.org/web/20020202165211/http://szabo.best.vwh.net/securetitle.html

[8] http://cryptome.org/rpow.htm

[9] http://bitcoin.org/bitcoin.pdf

UPDATE on March 22, 2016: correct attribution and timeline for Nick Szabo’s proposals.

Featured Archives: Economic Fallacies and the Block Size Limit

By Justus Ranvier

February 9, 2015

Part 1, Scarcity: 
http://web.archive.org/web/20160423041910/https://bitcoinism.liberty.me/economic-fallacies-and-the-block-size-limit-part-1-scarcity/

Part 2, Price Discovery: 
http://web.archive.org/web/20160318120539/https://bitcoinism.liberty.me/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

The average size of a block is approaching the 1 MB protocol limit for the first time in Bitcoins history, and not everybody agrees regarding what to do about it. Many objections to raising or removing the block size limit are based on misunderstandings about the nature of economic scarcity and operation of markets in general.

ECONOMIC FALLACIES AND THE BLOCK SIZE LIMIT

This is the first article in a series about the economics of the Bitcoin protocols block size limit. This article covers scarcity. The second article covers price discovery and the third article will cover why the block reward is fundamentally different than the block size.

Production Quotas

As you may have heard, Bitcoin usage is growing. In every way, that graph represents the kind of healthy exponential adoption that we all want to see.

Unfortunately there's a problem on the horizon which threatens to stop or even reverse Bitcoin adoption.

Several years ago, Satoshi added a protocol limit to the maximum size of a Bitcoin block. Prior to this change, there was no explicit limit, just an implicit 32 megabyte maximum message size. This limit was explained as a temporary anti-spam measure, and Satoshi said at the time that it could be raised when the network needed the additional capability.

The economic effect of having a maximum block size is that of a production quota. Production quotas are tools of economic central planning that either mandate or limit the amount of production of a good or service, as opposed to allowing the production rates to be governed by supply and demand.

Production quotas are inherently harmful to an economy, as shown in the 1920 essay, Economic Calculation in the Socialist Commonwealth, and so do not represent a sustainable long term strategy for allocating the supply of Bitcoin transactions.

From the time it was implemented until now, the harm caused by the block size limit has been hypothetical rather than real since there has not yet been enough demand for Bitcoin transactions to be hampered by the limit. For the last few years, the block size limit has been like a minimum wage law that forbids salaries lower than $0.01 per year. There is no market demand for salaries that low, and so such a minimum wage law might as well not exist it has no effect on the economy. Likewise, the 1 MB block size limit has not yet had any effect on the Bitcoin economy since there has not yet been a market demand for more than 1 MB of transactions every 10 minutes.

Since its inception, Bitcoin has been operating as if there was no block size limit at all. If this limit is kept in place when the market demand for transactions rises above 1 MB/10 minutes, then suddenly Bitcoin will be in uncharted economic territory.

People will want to use Bitcoin, but they will be forbidden by protocol from doing so. No matter how much they are willing to pay, no matter how willing miners are to include their transactions in a block, no matter how willing the full node operators are to forward their transactions, they simply wont be allowed to transact.

A block size limit that is low enough to have a real effect on actual block sizes is the ultimate blacklist.

The Alternative to Central Planning

The best alternative to a production quota on Bitcoin transactions is, like in any other situation of central planning, to allow the market to decide the optimum block size.

Nobody gives McDonalds a maximum number of Big Macs they are allowed to produce each day their customers tell them how many they want to buy and McDonalds responds appropriately. At any given time, there exists a price at which the willingness of McDonalds to produce Big Macs is exactly equal to the willingness of their customers to buy them, and that determines the number that will be produced. The process of price discovery is an emergent property of the actions of millions of independent actors expressing their preferences in a competitive open market.

This is exactly how we want Bitcoin to behave. The Bitcoin network, like any other product or service in the economy, should change its production capability to respond to supply and demand.

It is not currently designed to do this, however, and one of the barriers preventing Bitcoin from being improved in this way is a series of economic fallacies or misconceptions that cause otherwise skilled people to distrust market-driven price discovery over central planning, or to assume that resource allocation in computer networks operates in a manner fundamentally different than resource allocation in any other part of the economy.

Objections to Market-Determined Block Sizes

"Transaction fees are too low and won't rise unless space in a block is scarce. We need a block size limit to ensure block space scarcity and thus price transactions."

This objection is based on a common misunderstanding of the word scarcity as it applies to economics.

In economic terms, something is scarce if people cant have an infinite amount of it at a price of zero.

On the surface of the Earth, air is not scarce. Its not scarce because every human can breathe as much as they are capable of breathing, without paying for the air, and theres still enough to go around. Because everybody can consume as much as they are capable of without reducing anyone elses ability to do the same, air does not require allocation. In practical terms, the amount of available air at a price of zero is infinite, therefore air is not scarce.

Almost everything else is scarce, certainly any services that require time and/or energy to produce.

The space in a block will always be scarce as long as our computers are still made of matter and still occupy space. Constructing a block isn't free, storing a block isn't free, and the bandwidth needed to transmit a block is not free.

There will always exist some cost to a miner to add a transaction to a block. That cost may be very small, but it will never be zero.

If transaction fees emerge from the operation of a competitive open market, then we would expect them to approach the marginal cost of production, plus a small profit margin.

What if the the market-set block size is so big that only Google can afford to run full nodes?

This is a real problem that could emerge, and is actually the reason that the block size limit was enacted in the first place.

The reason this could happen is because of poor P2P network design: miners do not need to pay the cost of relaying blocks throughout the network, therefore this cost becomes an externality which is not reflected in their marginal cost of production.

The solution to this objection is a better P2P network design, not a production quota that limits the maximum transaction rate.

A description of how to build a better P2P network will be the subject of a future article.

What if the market-set transaction fee doesn't pay enough for a hash rate that protects the network for well-funded adversaries?

If there is not enough market demand for Bitcoin transactions such to pay for sufficient hashing power to protect the network, then Bitcoin will fail.

This will happen with or without a block size limit.

Since its inception, Bitcoin has been on a collision course with extremely well funded, entitled, and politically powerful interests. Its only hope of surviving this collision is by attracting a very broad base of support.

Bitcoin needs millions, and then billions, of users who demand better money. The demand for Bitcoin must be strong enough that they will break the law if that's what it takes to obtain it.

The above strategy isn't particularly novel or extreme  this strategy has been employed in the conflict between peer-to-peer filesharing networks vs the copyright mafia, and more recently by ridesharing companies vs the taxi licensing cartels.

When a new technology has to compete against entrenched interests on a non-level political playing field, civil disobedience is a proven effective tactic.

We don't yet know whether or not Bitcoin will gain enough of the right kind of support it needs to survive.

We can say, however, that arbitrarily rationing the transaction rate is counterproductive toward achieving that end.

What if competition results in the profitability of mining being so low that it drives out smaller pools and Bitcoin mining converges to a monopoly?

This objection is a restatement of the natural monopoly argument, and is in no way specific to Bitcoin.

Natural monopoly as an economic theory has been conclusively debunked, and the same principles that explain why natural monopolies do not emerge from free market forces in classically-cited industries apply equally well to Bitcoin mining.

Rather than repeat those arguments here, anyone who is concerned about natural monopolies should read The Myth of Natural Monopoly by Thomas J. DiLorenzo.

If the market should set the block size, why shouldn't it also set the block reward?

This objection is based either on a fundamental misunderstanding on the nature of money, or else on the misconception that Bitcoins value is not derived from its monetary properties.

Exploring these misconceptions fully will be the subject of a future article.

This concludes part 1. Future articles in this series will address the subject of how to build economically-scalable P2P networks, and why the block reward is fundamentally different than the block size limit.

The Fate of “E-gold” As a Warning To Cryptocurrencies

By Pieter Cleppe
Brussels Report
April 13, 2021

https://www.brusselsreport.eu/2021/04/13/the-fate-of-e-gold-as-a-warning-to-cryptocurrencies/

The large gains in the price of bitcoin over the last year have once again increased attention for this so-called “crypto currency”. Meanwhile, however, regulators are preparing a response.

While the ECB has published an opinion paper advising the EU Commission to enable it to require crypto currencies to obtain a license, India would now even be considering to criminalize possession, issuance, mining, trading and transferring of crypto-assets, something which was later contradicted by the Finance Minister, who stated that India would still “allow certain windows for people to do experiments on the blockchain, bitcoins or cryptocurrency.”

Belgian Bitcoin enthusiast Tuur Demeester belongs to bitcoin’s early adopters and is considered an eminent expert in the field. Before he was into bitcoin, he translated the magnum opus of one of the leading representatives of the Austrian school of economics, Spanish Professor Jesús Huerta de Soto. This book, called “Money, Bank Credit, and Economic Cycles”, is a fundamental critique of the contemporary banking system, which allows people to assume they are always and at any point able to collect 100% of their bank deposits, while in reality they can only dispose of a small fraction, if everyone would decide to exercise the right they assume to have at the same time.

Like other libertarians, he gained an interest in bitcoin. In a 2012 interview with well-known bitcoin prophet Max Keiser, he explained that “when there is a link [between money] and the real world, the authorities can go there, confiscate, regulate, intimidate. This is what happened with E-gold”

E-gold: crucial to understand the whole point of Bitcoin

“E-gold” was a digital payment system, created in 1996, in the early days of the internet, by an American oncologist, Douglas Jackson, and an attorney, Barry Downey.

The idea was simple: develop a system which enables people to pay each other with gold, instead of with U.S. Dollars, whereby the transfer of the physical gold between clients of the website is facilitated through the use of internet technology, obviously with all kinds of safety precautions. The Gold that was owned by E-gold clients was stored by banks in Europe and Dubai. Without the internet, such a system could have never been as performant. In the 1990s, with the arrival of the internet, it really was an idea whose time had come. Technology made it possible for people to easily pay each other in gold, and avoid state money.

The E-gold system of facilitating payment in gold turned into a great success. E-gold, which was founded two years before PayPal, was described by the Financial Times in 1999 as “the only electronic currency that has achieved critical mass on the web”. By 2004, it counted two million users and by 2006, 3 billion of transactions had been happening through E-gold.

There were of course hacking attempts, while also criminals have used the system, but according to founder Douglas Jackson, a lot of criminals were also caught as a result of their use of the system.

How the government ended the party

The “Patriot Act”, American legislation passed in the wake of the attacks on September 11th, 2001, which violated civil liberties, according to its opponents, introduced new restrictions on transmitting money. The U.S. Treasury and Justice Departments came up with a stricter interpretation on what was legally allowed in 2006, on the basis of which E-Gold was been charged with several federal charges, including money laundering, conspiracy, and operating an unlicensed money transmitting business. This eventually led to the company’s demise.

Despite founder Douglas Jackson denying that the tough treatment by U.S. authorities was inspired by fears E-Gold or similar initiatives could eventually emerge as a viable alternative to the U.S. Dollar, this was effectively something many in the so-called “crypto start-up community” believed.

 
“The end of E-gold renewed interest in crypto currencies”

In an interview last year, Jackson pointed at an article on the history of crypto currencies, which recalled that the first crypto currency, called “E-Cash”, had been developed in 1991 and that no big developments had really taken place between the development of “S/Key Unix login” in 1994 and bitcoin in 2009. This, according to Jackson is because “E-gold exposed the disutility of crypto-based monetary schemes and as long as E-gold was active, none of them could get a foothold.”

The official launch of bitcoin in January 2009 noted that it was a “decentralised”digital currency, “without the need for a trusted third party”, according to the bitcoin white paper, a technical manifesto published by Satoshi Nakamoto, the pseudonym of the inventor of bitcoin.

Looking back on this in 2012, Jon Matonis, who then served as the Chair of the Bitcoin Foundation, wrote:

“The timing of Bitcoin’s appearance, and subsequent growth, is no accident either…An alternative money provider that was centralized would probably not survive long in any jurisdiction. The emergence of Bitcoin was baked into the cake already. We can see from the case against digital money provider e-gold that an efficient challenger to the provision of a stable monetary unit will not be permitted… really.”

E-gold founder Douglas Jackson refers to this quote to back up his case that E-Gold delivered for a while what bitcoin ultimately was created for.

Read the rest of the article.

Cypherpunk Holdings Joins the Cypherpunk Guild Council

News Release

Tuesday, June 22, 2021

https://www.newsfilecorp.com/release/88201/Cypherpunk-Holdings-Joins-the-Cypherpunk-Guild-Council

Toronto, Ontario--(Newsfile Corp. - June 22, 2021) - Cypherpunk Holdings Inc. (CSE: HODL) (OTC Pink: KHRIF) (the "Company"), a sector leader for privacy technology investments, is pleased to announce it has joined the Cypherpunk Guild Council on NEAR Protocol, which is focused on funding the deployment of the next generation of privacy solutions.

Chief Economist and director of Cypherpunk Holdings, Jon Matonis, has joined the Cypherpunk Guild Council as a representative of the Company. The Cypherpunk Guild Council is a new initiative funded entirely by the NEAR Foundation in order to support the development of privacy infrastructure on the NEAR Protocol blockchain platform and beyond, and to increase the overall deal flow for the sector.

"Cypherpunk Holdings' support for the Cypherpunk Guild Council is rooted in our belief that privacy solutions must be encouraged and actively developed across different crypto ecosystems," said Mr. Matonis. "As an organization that seeks to embody the original cypherpunk mission, we look forward to supporting a host of new privacy applications that will both strengthen the community over time and engage a new generation of users. Through its participation in the Cypherpunk Guild Council, the Company aims to benefit from early deal flow access to investment opportunities."

Seeded with 100,000 NEAR, the Cypherpunk Guild is led by second-generation cypherpunks Arto Bendiken and Frank Braun. The initiative was created to incubate a community of privacy advocates, developers and entrepreneurs interested in building robust privacy solutions on NEAR Protocol.

As a core member of the Cypherpunk Guild Council, the Company expects that Mr. Matonis will hold a direct influence and voice on the funding and resource allocation of the Guild. Since launching in early April, the Cypherpunk Guild Council has funded two projects to fully develop privacy transactions on NEAR Protocol, Suter Shield and Zecrey. Support is actively being provided to a third project: ZeroPool.

A Fund For Privacy Solutions Is Here: Submit a Proposal Today

As an experienced community of privacy advocates, the Cypherpunk Guild has emerged as one of the most popular guilds on NEAR Protocol, and one of the most serious privacy organizations in crypto. With hundreds of thousands of dollars in funding available, the Cypherpunk Guild is openly encouraging privacy-related proposals for new applications. Any project in line with the mission of NEAR Protocol is considered and evaluated after the project proposal is posted on the NEAR Governance Forum.

To join the Cypherpunk Guild community or to stay up to date with the latest updates, interested users can follow on Twitter (https://twitter.com/CypherpunkGuild) or join the community Matrix group.

About Cypherpunk Guild:

The Cypherpunk Guild is a group of privacy-minded developers, marketers and entrepreneurs, collaborating to pioneer a future built around private transactions on NEAR Protocol and the larger crypto ecosystem. Led by two second-generation cypherpunks, the Cypherpunk Guild supports the development of privacy applications on the Open Web as a means of safeguarding user privacy and freedom.

About Cypherpunk Holdings Inc.

Cypherpunk Holdings invests in companies, technologies and protocols which enhance or protect privacy. Its strategy is to make targeted investments in businesses and assets with strong privacy, often within the blockchain ecosystem, including select cryptocurrencies. Current equity investments include Samourai Wallet, Wasabi Wallet, Chia Network, NGRAVE, and Hydro 66.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the Company's planned participation in the Cypherpunk Guild Council and the Company's expected benefits therefrom. There is no assurance that the Company's plans or objectives will be implemented as set out herein, or at all. Forward-looking information is based on certain factors and assumptions the Company believes to be reasonable at the time such statements are made and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such factors include the historical price volatility of bitcoin; uncertainty regarding the regulatory treatment of bitcoin under various securities, commodities, and other regulatory regimes; the potential for significant impairment charges to the Company's earnings in the event of a decrease in the price of bitcoin and resulting volatility in the Company's reported assets and earnings; the potential for security breaches or other cyberattacks that could result in a partial or total loss of the Company's bitcoin assets; and other risks detailed in the Company's disclosure documents filed under its profile on www.sedar.com. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.

Investor Relations Contacts:

veronika@cypherpunkholdings.com, Veronika Oswald, Investor Relations

Cypherpunk Holdings Inc.,

Office: +1 416.599.8547 & +44 (0) 20 3143 7418

The Alt-Currency Martyr

By Brian Doherty
Reason Magazine
Monday, March 15, 2021

https://reason.com/2021/03/13/the-alt-currency-martyr/

In the mid-1990s, just before the arrival of PayPal and more than a decade before bitcoin, an oncologist from Florida named Douglas Jackson created a system by which people could send each other digital payment tokens backed by gold. Jackson's e-gold became the world's first truly successful digital currency, serving over half a million customers and doing billions of dollars' worth of business.

But after a decade of success, the feds came after him, raiding his company's office, taking computers, freezing bank accounts, and ultimately extracting a guilty plea for conspiring in an "unlicensed money transmitting business." Once trailblazing, e-gold was quickly forgotten, derailed first by legal hassles and then by the tsunami of interest in blockchain technology.

Now Jackson has uncovered information that he thinks can not only overturn his conviction, and thus ease the path to him restarting his business, but help wean alt-currency from what he regards as a ruinous addiction to Satoshi Nakamoto's brainchild. While the value the markets place on cryptocurrency keeps rising precipitously and no e-currency model closely emulating e-gold has grabbed significant market share in its wake, Jackson remains convinced that if he could only get back in the game, things would be very different. The guilty plea that he now insists was squeezed from him through government trickery blocks his doing legal business in the e-currency space.

"It's as if I'm the only person in the world not allowed to go and compete in this area where I'd pioneered the industry," he says. "It's like everything came off the rails and it's been a decade of unprecedented malinvestment."

Read the rest of the article.