What’s Not Being Said About Bitcoin by Coinbase Founder Brian Armstrong

Before I get to today’s excellent article by one of the co-founders of “next-gen” Bitcoin company Coinbase, I want to add a few of my own updated thoughts on the Mt. Gox fiasco.

While I am not at all surprised by the end of Mt. Gox (I predicted it in my piece several weeks ago), it happened much faster and in a much more spectacular fashion than I imagined. So the question here is: What comes next? Well that’s a two part question in most people’s minds, there’s the price action and the future of the protocol itself in the long-term. Let’s start with the first point.

For a while now, I thought the price pattern in Bitcoin might resemble what we saw following the last 10x run up and crash. In that case, we saw a six month consolidation from last spring to the Silk Road shutdown, after which the price exploded 10x again. If such a pattern was to reoccur, we’d be looking at the next move in Bitcoin around June. So we are still very much in a price consolation phase with wild moves within a wide trading range. I continue to work under that assumption.

What concerns me about the “missing” 750,000 bitcoins from Mt. Gox is that we don’t know who has them now. What if it is the feds, or some banking interest? The feds already own a lot of Silk Road coins, so let’s hope this is not the case. That would be the worst case scenario for the price in the near-term. Still, even if they do have these coins, they can only dump them on the market once. The problem is, we have no idea who has access to them at this point. It’s also worth considering that the market has already priced this in. After all, the Mt. Gox Bitcoin price was already trading at a massive, bankrupting predicting discount for weeks before the actually filing.

As far as the future of Bitcoin, the protocol itself as well as peer-to-peer, decentralized crypto-currencies in general, I have no doubt the future is extremely bright. It’s the financial equivalent of the invention of the internal combustion engine. However, this point is much more eloquently made by Mr. Armstrong of Coinbase. So here are some excerpts from his recent article: What’s Not Being Said About Bitcoin.

Over the past few weeks, we’ve seen a string of issues in the Bitcoin space, from the transaction malleability bug that ultimately closed Mt.Gox’s doors to a corresponding distributed denial of service (DDoS) attack that delayed transfers on multiple exchanges and services. These attacks, along with recent phishing scams and money-laundering arrests, have cast doubt on the Bitcoin space and caused consumer panic — which is fair.

But what hasn’t been communicated well is how those who are truly invested in the future of Bitcoin remain totally confident, because with every attack, breach, and arrest, Bitcoin is getting stronger and proving to consumers and businesses it is not going away.

Here is what is not being said about Bitcoin that should be.

Open networks keep growing even if individual participants fail.

It is critical to understand just how different an open payment network is from the proprietary payment networks that exist today. To illustrate this differently, let’s look at another open protocol: email.

Email is a good example of an open network with a standardized protocol; and this standardization is one reason why email is fast, free, and works just about anywhere in the world. There is no single company or country who controls the email protocol (just like Bitcoin), so thousands of different clients and implementations have been created all over the world giving it great reach and driving down prices for consumers who have many email options to choose from. You may have noticed you can successfully send emails between different service providers (such as Gmail to Outlook). This is also due to the open nature of the protocol.

If an individual email provider has a security breach, or loses the integrity of its customers, this doesn’t reflect on the concept of email generally — it merely reflects on the integrity of the individual provider. Further, the beauty of open networks is that they provide a low barrier to entry for competing services to come in and vie for your business as a consumer. Bad actors are quickly weeded out of open networks because consumers have choice — the choice of many new entrants coming on the market to vie for their business. Open networks do a great job of keeping incumbent companies honest, because if they make a mistake and lose their customers’ trust, their customers will be gone in a flash.

Unlike Bitcoin or email, our financial institutions and payment systems today are proprietary. This limits the ability for consumers to easily switch between payment providers and creates less competition for services. If the provider of a proprietary payment network isn’t serving its customers’ needs, where else will their customers turn? There is only one company you can use to access a proprietary payment network — the company that owns it. This higher switching cost has a few side effects: less competition in the market, higher fees, limited geographic reach of any individual network, and less innovation around things like speed of transactions.

continue reading

from A Lightning War for Liberty http://ift.tt/1fwTivg
via IFTTT

How Facebook Exploits Underage Girls in its Quest for Ad Revenue

Sophie Bean, 14, of Sequim, Wash., said she was thought she was “liking” a Facebook ad related to fashion modeling. Instead, it promoted a Facebook page that recruited adult webcam models.

“I just thought it was for modeling, and I’m interested in that, and I thought it would help me out,” Sophie said.

Sophie wasn’t the only teen connecting with the page, which Facebook statistics show is most popular with users 13 to 17. Clicking on it didn’t pull the teens into nude webcam modeling, but did mean they would receive the page’s updates and could be mentioned in future versions of the ad.

– From the Wall Street Journal’s recent article: Nude Webcams and Diet Drugs: the Facebook Ads Teens Aren’t Supposed to See

This post is my third in recent weeks exploring what exactly is going on with the Facebook business model. The company reported stellar results in its latest earnings report, which has led to many questions as to exactly how they are making all this advertising money. Well the pieces are finally starting to come together, and the answer is not pretty.

For some context, I suggest you first read the previous articles I posted:

How Much of Facebook’s Ad Revenue is From Click Fraud?

This Man’s $600,000 Facebook Disaster is a Warning For All Small Businesses

With all that in mind, let’s move on to the third piece of the puzzle. The routine exploitation of the weakness and most gullible members of society, teenage girls.

The crazy thing here is not that some random selection of underage girls are being led to click on ads that direct them to adult video cam sites and dangerous dietary supplements, but that they represent the primary demographic clicking on these ads.

This story from the Wall Street Journal is sure to make your blood boil no matter who you are, but particularly if you are a parent with young children.

From the WSJ:

“Who do you like?” asked recent ads on Facebook, featuring young women in alluring poses.

Some of the ads were configured to reach young teens, who were invited to join an app called Ilikeq that let others rate their attractiveness, comment on their photos and say if they would like to date them.

That’s how 14-year-old Erica Lowder’s picture ended up on display to adult men online. Users of Ilikeq, one of Facebook’s fastest-growing “lifestyle” apps, were able to click through to the Indianapolis girl’s Facebook page. 

The case offers a glimpse into how young Facebook users are sometimes exposed to ads inappropriate for them. A 14-year-old girl in Washington state said she “liked” an ad that led to the Facebook page of a nude webcam-modeling site.
Facebook said it approved the ads for young teens because it hadn’t categorized Ilikeq as a dating site. It said it has now done so and has disabled Ilikeq ads for those below its minimum age for dating-site ads, 18. 

Advertisers on Facebook can set their ads to reach all users or narrow the focus. Facebook’s website says it can help advertisers target consumers based on an array of user information it collects, such as age, gender, relationship status, politics and type of phone owned.

“We take the quality of ads on Facebook very seriously,” Facebook said in a statement. 

Really? You could’ve fooled me.

Facebook used to limit ads to users 18 and older by default. An advertiser who wanted to reach younger people had to change the setting.

In 2011, it eliminated this restriction for some advertisers, so their ads could be shown to all unless specified. That change was extended to all advertisers in 2012, around the time of Facebook’s initial public offering.

Just a coincidence I’m sure…

continue reading

from A Lightning War for Liberty http://ift.tt/1ewgj07
via IFTTT

Yes the Government is Spying on You Through Your Webcam – Another “Conspiracy Theory” Proven True

I still remember many years ago in response to becoming aware of the possibility that my computer webcam could be accessed remotely I decided to put a piece of duct tape over the camera. I also remember the look on some of my friends’ faces upon seeing this. They thought I was nuts. It wasn’t even a conversation I was comfortable having since the idea that the government or NSA could or would peep on innocent Americans through their webcams was beyond preposterous for the vast majority of people

This topic is not exactly new, and I addressed it last April in my piece: A Look into the Malware the FBI Uses to Spy Through Webcams.

Now, thanks to Edward Snowden, we know more. Much, much more.

From the Guardian:

Britain’s surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal.

GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not.

In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.

continue reading

from A Lightning War for Liberty http://ift.tt/N8F5ZB
via IFTTT

Video of the Day – Hitler Responds to Bitcoin Surviving the Mt. Gox Collapse

Here’s the latest in a long running series of creative Hitler video spoofs, which cover various contemporary topics of interest. This latest one takes on the recent chaos happening in the Bitcoin world, specifically related to the collapse of Mt. Gox (read my thoughts on this topic here).

This video covers a lot of ground, taking shots a Apple, Pay Pal, Jaime Dimon and much, much more. A very entertaining four minutes. Enjoy!

 

Like this post?
Donate bitcoins: 1LefuVV2eCnW9VKjJGJzgZWa9vHg7Rc3r1

 Follow me on Twitter.

Video of the Day – Hitler Responds to Bitcoin Surviving the Mt. Gox Collapse originally appeared on A Lightning War for Liberty on February 27, 2014.

continue reading

from A Lightning War for Liberty http://ift.tt/1pySybY
via IFTTT

U.S. Senator Wants to Ban Bitcoin – To be Followed by Book Burning Ceremonies and Witch Hunts

Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.

– Senator Joe Manchin, in his letter calling for a ban on Bitcoin

Whenever you hear a politician say he or she wants to do something to “protect hard-working Americans,” you know this person is so full of shit that whatever proposal being peddled should be treated with extreme skepticism. It’s incredible to me that this sort of infantile and transparently superficial language actually still works on people, but apparently it does.

Seemingly frustrated that the cessation of actives at Mt. Gox hasn’t destroyed Bitcoin, Senator Joe Manchin III is taking matters into his own hands. You know, for your own good. His solution is to “ban” Bitcoin, and he outlined his rationale (if we can call it that) in a fear ridden, garbled letter to a diverse group of power players in D.C., which include Treasury Secretary Jack Lew and Federal Reserve Chairwoman Janet Yellen.

Let’s examine some of the low points in this incredibly desperate and pathetic letter. Mr. Manchin III writes:

By way of background, Bitcoin is a crypto-currency that has gained notoriety in recent months due to its rising exchange value and relation to illegal transactions.  

Um, no not really. It has gained notoriety recently for being accepted at major retailers such as Overstock.com and the fact that its largest exchange has collapsed.

Lie number 1.

Secondly, no currency is more utilized for money laundering than the U.S. dollar and our banking system that actively supports it. If the government was really so concerned about such behavior why did HSBC get off the hook for laundering billions on behalf of Mexican drug cartels with a mere slap on the wrist?

Lie number 2.

That is why more than a handful of countries, and their banking systems, have cautioned against the use of Bitcoin.  Indeed, it has been banned in two different countries—Thailand and China—and South Korea stated that it will not recognize Bitcoin as a legitimate currency.  

Since when are we taking cues from Thailand (a country where you get thrown in jail for insulting the king), or China, a country that censors huge swaths of the internet?

Plus China didn’t ban Bitcoin, and South Korea was making significant BTC investments last I checked.

Lie number 3.

I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.

Well many Americans, including people I know, have likely lost significant BTC at Mt. Gox. Not a single one is calling for a ban on Bitcoin. So perhaps we should listen to the individuals actually affected, rather than some self-righteous political hack.

Lie number 4.

Look we all know what is actually happening here. You are doing your best to protect the parasitic legacy financial system that has done more harm to the U.S. economy than Bitcoin ever could. You are just the latest in a long list of historical opportunists looking to scapegoat ideas that don’t fit into a corrupt status quo you depend on.

Advocating the ban of revolutionary technology is no different from Nazis burning books. We all know what happens next.

His full letter can be found here.

In Liberty,
Michael Krieger

Like this post?
Donate bitcoins: 1LefuVV2eCnW9VKjJGJzgZWa9vHg7Rc3r1

 Follow me on Twitter.

U.S. Senator Wants to Ban Bitcoin – To be Followed by Book Burning Ceremonies and Witch Hunts originally appeared on A Lightning War for Liberty on February 26, 2014.

continue reading

from A Lightning War for Liberty http://ift.tt/1c9BF4o
via IFTTT

Fabrice “Fabulous Fab” Tourre to Teach Economics Class at University of Chicago

Just in case you thought for a second that the sorry discipline we call economics couldn’t stoop any further into the gutter of academic idiocy and irrelevance, think again. It’s now being reported that ex-Goldman Sachs trader Fabrice “Fabulous Fab” Tourre (recently convicted on six counts of securities fraud) will be teaching an honors economics class at the “prestigious” University of Chicago.

There’s nothing like an esteemed University setting the already culturally accepted example that ethics are for suckers. Stealing, cheating and corruption are the values most exalted in today’s world. It doesn’t matter how you achieve your wealth, as long as you attain it. After all, it’s not as if you’ll ever get in trouble for it as long as you work for a “Too Big to Jail” bank.

From the UK’s Independent:

Fabrice Tourre, the former Goldman Sachs trader convicted on six counts of securities fraud six months ago, will teach an honours class in economics at the University of Chicago this spring.

Mr Tourre’s weekly Thursday afternoon seminar, called “Elements of Economic Analysis”, is part of his studies for a PhD in economics, after he completed a masters in operations research at Stanford University.

continue reading

from A Lightning War for Liberty http://ift.tt/1c8vEVC
via IFTTT

This Man’s $600,000 Facebook Disaster is a Warning For All Small Businesses

It continues to amaze me how people are completely ignoring what appears to be an incredible amount of shadiness inherent in Facebook’s business model. Whether or not this is intentional click fraud, it is clear that advertisers are not getting what they think they are getting. They won’t be fooled forever, and once they wake up to the money being wasted on fake “likes” and “clicks,” I’m curious to see what happens to their revenue.

The following article from SF Gate is a perfect followup to my post from a couple weeks ago: How Much of Facebook’s Ad Revenue is From Click Fraud?

Perhaps the most shocking passage from the entire article is the following:

Naturally, Brar began disputing his bill with Facebook. He wanted his clicks audited by a third party, to see how many were genuine. Then he discovered that Facebook’s terms of service forbid third-party verification of its clicks. That’s something all advertisers should be aware of before they spend a penny on Facebook.

Facebook is different from the rest of the online ad industry, which follows a standard of allowing click audits by third parties like the IAB, the Media Ratings Council or Ernst & Young.

Um, ok then…

Now more from the SF Gate:

Raaj Kapur Brar runs a small but successful empire of online fashion magazines from his base just outside Toronto. Some of his titles are huge online brands, such as Fashion & Style Magazine, which has 1.6 million Facebook fans.

That’s more fans than Elle magazine has.

Recently, however, Brar has fallen out of love with Facebook. He discovered — as Business Insider reported recently — that his Facebook fanbase was becoming polluted with thousands of fake likes from bogus accounts. He can no longer tell the difference between his real fans and the fake ones. Many appear fake because the users have so few friends, are based in developing countries, or have generic profile pictures.

At one point, he had a budget of more than $600,000 for Facebook ad campaigns, he tells us. Now he believes those ads were a waste of time.

Facebook declined multiple requests for comment on this story.

Brar’s take is a cautionary one because Facebook has 25 million small businesses using its platform for one marketing purpose or another. Many of them are not sophisticated advertisers — they are simply plugging a credit card number into the system and hoping for the best. This is what can happen if you don’t pay careful attention to contract language, or the live, real-time results your campaigns on Facebook are having.

Here’s how Brar believes it went down: He became interested in advertising on Facebook in 2012, and he took it seriously. He went to Facebook’s local Toronto office where he was trained to use the advertising interface. They set up the campaign, and ran a small “beta” test. Then, in late October Brar pulled the trigger on a massive push through Facebook’s Ads Manager. He used Bitly and Google Analytics to measure the number of clicks his campaign was generating.

The results were disastrous, Brar says.

Facebook’s analytics said the campaign sent him five times the number of clicks he was seeing arrive on his sites, which Brar was monitoring with Bitly, Google Analytics, and his own web site’s WordPress dashboard. There was a reasonable discrepancy between the Bitly and Google numbers, Brar says, but not the five-fold margin between Google’s and Facebook’s click counts.

from A Lightning War for Liberty http://ift.tt/1fnku9P
via IFTTT

The Inside Bitcoins Conference is Coming to NYC – April 7-8

Last summer, I attended my very first Bitcoin conference. It was the Media Bistro sponsored “Inside Bitcoins” Conference and it was an incredible experience for me on many levels. To read my summary of the conference check out my post: Inside Bitcoins: Welcome to Satoshi Square.

Conference organizers describe the upcoming event as follows:

After thousands gathered at Inside Bitcoins in Las Vegas this past winter, this innovative Bitcoin event is returning to New York City on April 7-8 at the Javits Convention Center. 

At Inside Bitcoins industry experts, business visionaries, and virtual currency veterans converge to analyze the first digital, decentralized, peer-to-peer based global currency. These thought leaders will also share their insights and knowledge on the implications of Bitcoin, along with predictions on what lies ahead.

The conference will take a glimpse into Bitcoin’s future with sessions such as Best Practices for Using and Securing Bitcoins, Moving Bitcoin Forward: Bringing Trust, Legitimacy and Transparency to the Market, Media & Legal Challenges for Cryptocurrency Advocates, and Wall Street’s View of Fair Value for Bitcoin.

NEW to the event is the addition of a special space called the Bitcoins Trading Café. A comfortable café setting in the middle of the bustling trade show floor, this space will allow attendees to meet, buy, and sell Bitcoins throughout the duration of the conference. In addition to trading, this space will allow Bitcoin enthusiasts to network, relax, and discuss the cryptocurrency.  

We’re pleased to announce that Liberty Blitzkrieg is partnering with Inside Bitcoins to offer all readers 10% OFF a full conference pass.  Enter code LIBERTY at checkout to redeem your discount. Register Now!

Mediabistro has scheduled additional dates for the conference both in the US and internationally, including an event in Hong Kong on June 24-25. Click here for the full world tour schedule. 

I’m really excited that this excellent event is coming back to my city of birth and I will once again be attending. I look forward to meeting members of the Bitcoin community, and those who are just curious. See you in April.

In Liberty,
Michael Krieger

Like this post?
Donate bitcoins: 1LefuVV2eCnW9VKjJGJzgZWa9vHg7Rc3r1

 Follow me on Twitter.

The Inside Bitcoins Conference is Coming to NYC – April 7-8 originally appeared on A Lightning War for Liberty on February 25, 2014.

continue reading

from A Lightning War for Liberty http://ift.tt/1hb6DIM
via IFTTT

Apple’s Massive Security Flaw: NSA Exploit or an Honest Mistake?

If you use Apple products you need to be aware of a very serious bug affecting the operating systems running on their devices. I was first made aware of this on Friday when John Hopkins cryptography professor Matthew Green tweeted the following:

Since I was away for the weekend, I wasn’t able to do any research into this until today. Fortunately, I came across an excellent article from Gizmodo. In a nutshell, it appears that Apple has released fixes for mobile devices (iPhones and iPads), but you need to go ahead and perform a software update to iOS 7.0.6. Unfortunately, there is no fix yet for Macs. This means if you are operating a Mac computer and using public wifi you should not use Safari as your browser. It is suggested you use Firefox or Chrome.

Even more terrifying is that although this flaw only became widely known about in the past several days, it has been there since September 2012. This has resulted in some claims of conspiracy. As Gigazom notes:

continue reading

from A Lightning War for Liberty http://ift.tt/1fjjcMZ
via IFTTT

South Carolina City Implements Law that Requires a $120 Permit to Feed Homeless People

Gandhi famously noted that:

The greatness of a society and its moral progress can be judged by the way it treats its animals.

I would agree with that, as well as the obvious observation that a society’s greatness can also be judged by how it treats its most vulnerable members. This isn’t to romanticize homelessness or to condemn it. It is merely to note that the homeless are fellow human beings going through their own struggles and difficulties. You may not want to provide them food, but some people do, and there should never be an infringement upon such a basic human right as sharing food with someone who needs it.

Civil rights are often lost in societies by politicians scapegoating unpopular minorities. This happened with jews, gypsies, etc in Nazi Germany and we must be very careful the same does not happen here. One human being should be able to voluntarily give food to another in all cases, without exception. The concept of a permit needed that costs $120 per week is fascist, anti-human and downright evil.

From the Examiner:

Feeding the homeless is about to get harder as a new policy is set to begin this Saturday, Feb. 15, in Columbia, SC. Charities and non-profits well be required to pay a fee and obtain a permit 15 days in advance in order to feed the homeless in parks.

One impacted charity that was interviewed by theFree Times, Food Not Bombs, has been serving food to the homeless in Finlay Park every Sunday for 12 years. The group’s organizer, Judith Turnipseed, noted that the group has an impeccable track record and always tidies up after the meal. But with the new crackdown, Food Not Bombs will have to pay at least $120 per week for the right to feed the homeless.

Since the Columbia City Council approved its exile plan in August, the city has been trying to herd its homeless people to a shelter on the outskirts of town and keep them away from downtown. If charities continue to provide food in downtown parks, the thinking goes, it will allow homeless people to continue to live downtown, rather than being forced to leave.

Remember the famous warning:

First they came for the Socialists, and I did not speak out– Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out– Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out– Because I was not a Jew.

Then they came for me–and there was no one left to speak for me.

Martin Niemöller (1892–1984)

This is how it always starts. It reminds me of the fact that debtors’ prisons are making a huge comeback in the U.S. It’s always easiest to pick on the weakest members of society, which is why we shouldn’t.

Full article here.

In Liberty,
Michael Krieger

Like this post?
Donate bitcoins: 1LefuVV2eCnW9VKjJGJzgZWa9vHg7Rc3r1

 Follow me on Twitter.

South Carolina City Implements Law that Requires a $120 Permit to Feed Homeless People originally appeared on A Lightning War for Liberty on February 24, 2014.

continue reading

from A Lightning War for Liberty http://ift.tt/1fxYY6I
via IFTTT