The Value of Bitcoin

I've seen it said one or two places that the value of bitcoin is in its anonymity, or its lack of corruption due to the lack of centralized banking. I don't believe this to be the case. Dollar transactions can be anonymous, too, and gold has no central bank, but the value of bitcoin is different than the value of gold or dollars. I think the value of bitcoin has to do with the nature of the tangible thing which is coined.

Dollars are pieces of paper with art printed on it. The art is printed in such a way that it is difficult to forge. The value of the dollar is enforced by the United States government, and the open market. It can go up or down, depending on the quality of things bought with it. When a thing is put into circulation in the open market, the value of the dollar is affected by the amount people are willing to pay for the thing. If the thing contributes to the value of the economy, then the value of the dollar goes up.

The value of the dollar bill itself that you carry in your pocket depends on its availability for use in transactions. This depends on the armored vehicles, bank vaults, printing centers, and so forth which manage and create dollar bills. As a physical thing, it is very difficult to create and very difficult to transport when compared to bitcoins. Bitcoins are easy to create and to transport. But they are comparatively more difficult to transfer. It is more difficult to pull a bitcoin out of your wallet and hand it to someone else than it is to pull a dollar out of your pocket and hand it to someone else.

The overhead of transportation and creation of bitcoins is very low, while the overhead of transferrence is very high. This indicates a couple things for the value of bitcoins. For one, complex, long-distance infrastructure of transactions are easy to maintain, provided the "buy it now" attitude is not too highly stressed. I believe this means that bitcoins are good for small, independent businesses that deal primarily in quality of service and quality of product, while dollars are good for more simple, standardized businesses like franchises that deal in immediate products where the quality and service doesn't carry too high a premium. Dollars are good where things remain the same, as with MacDonalds. Bitcoins are good for where things are different, as with Main St. Pawn.

What is needed currently for the value of bitcoin to be optimized, I think, is a decentralized banking infrastructure. This banking infrastructure would provide backing for the businesses that choose to use the bitcoin, so that they are all benefitted by the growth of the bitcoin economy. What I'm talking about is a radically decentralized system of investment banking that anyone can use but that promotes wise investment. Something that connects investors in a way that does not require a "stock market" or any other kind of limiting institution which tries to rule out companies to invest in. This would have to simultaneously fulfill the needs of an investment community of small, diverse businesses, and also prevent "boom/bust" cycles in the bitcoin economy. If such a system were developed, bitcoin would be a great boon to the artisans and small business owners that make up the middle class.

Clarification of Psychiatry: What It Is and What to Do About It

Psychiatry is the following two-fold act:

Part 1: Inventing discrimination.
Step 1: The psychiatrist picks out people he doesn't like based on their behaviors.
Step 2: Everything the psychiatrist doesn't like is labelled part of an illness.
Step 3: Every side-effect caused by the medications prescribed is labelled part of the illness.
Step 4: Pretend, with no evidence, that all things labelled part of the illness are a chronic, incurable, biological, genetic disease, and that the only treatment is medications which, in fact, cause all the behaviors described as part of the illness.

Part 2: Brainwashing.
Step 1: Isolate someone from their friends and family. Give them no contact to the outside world. Take away their posessions. Treat them as inferiors.
Step 2: Reprogram them to convince them all pleasure is bad and all pain is good.
Step 3: Hurt them over and over again.
Step 4: Release them into the world, finally, when they have given up on life.

It is my belief that all psychiatrists must be professionally disabled, and disallowed from doing their profession. There are a list of concrete rules, directed at psychiatrists, which would prevent them from doing their discriminatory and harmful jobs and which are based on pure common sense. Here are some:

1. Everyone in a mental hospital must have the same rights as people in a physical hospital. E.g. cell phones, Bible study, hugging, computers, exchanging notes, publishing written material for distribution, etc. are to be allowed.
2. You are not allowed to punish anyone for legal activities. You are only allowed to punish people through recourse to the law, for illegal activities.
3. You are not allowed to claim something is "scientific" or "known" unless it has been shown to be experimentally valid through scientific experiments. Science is in the business of determining causation, not engaging in wild, baseless speculation. Consequently, none of the data in psychiatric journals as of this writing is to be drawn from, because they all postulate biological and genetic causation for behaviors when no causal link has been established.
4. You are not allowed to prescribe medication chronically as the sole treatment for mental behaviors which probably have psychological causes. You are not allowed to cause brain damage just because you don't like someone's behavior.

If we as a society followed even just one of these rules, psychiatry would be completely defanged and psychiatrists wouldn't be able to find a job, because their profession would be rendered obsolete.

Thoughts about Anonymous's Project V

This is a clarification of Anonymous's new project, "Project V." This came on the heels of their "Operation V," the goal of which was apparently to take over the United States government.

I've noticed, just looking around at society today, that there are thugs involved in my government and perhaps corporations and so forth, taking things over and not really doing positive actions or behaving in an awake manner. So I'm not at all surprised that there is a movement to try to take over the government, or to protest the government. I support a lot of what these people do.

The reason I support many of the people who fight government and corporations and so forth is because of the thuggishness I've seen. The thuggishness itself is the first part. The second part is the fact that thuggishness is not merely the natural, human sort — an understandable sort which you can expect to be some part of any society — but something which is slowly becoming law. We cannot have "thug law." Thug law, in this case, involves people in office, and running corporations, who don't care about listening to other people, especially the people they affect. Thug law involves things being created for their own purpose, to multiply like viruses, such as cash or even money, or such as government regulations, or psychiatric harm.

A commodity is produced in a factory not for its own sake, but in order to be sold to someone else. However, it seems an awful lot like many of the people running these corporations would be satisfied if the product is produced for its own sake. In other words, the attitude is that it's about the product itself, and promoting the product itself, rather than about listening to what the consumer wants.

This doesn't happen everywhere, but it does happen in the case of food, for instance. Food today is produced for the purpose of food being produced and sold, not for the purpose of feeding people. There is an important difference between the two, and we need to start rethinking the way we do things to promote feeding people instead of producing and selling food. Similarly, transportation seems to be about producing and selling gasoline, not about transporting people. Energy production seems to be about producing and selling raw materials, not making energy. Our corporations are sick.

Now that I've talked a bit about what I agree with about Anonymous, I'd like to share what I disagree with.

Consider the idea of a revolution. What is a revolution? The idea is that you're getting rid of a society, and replacing it with a new one. But if you examine it closely, the idea becomes less and less clear. What do you want to revolutionize? Just the executive government? We do that every eight or so years. What about the law? Are we trying to change the law? Well, perhaps we are, but we can change the law in a couple of ways: by changing the letter of the law, or changing how it's enforced. If we change the letter of the law, then we get into the problem of semantics, which means we may have changed nothing unless we change how it's enforced. If we change how it's enforced, though, we have a problem there, too. Who enforces? Who enforces law against the enforcers? In a sense, the people enforcing the law are embodiments of the law. But are we changing just the people themselves? How do we control against merely switching out one corrupt judge or peace officer for another? Either we have to use the law to control this, in which case we're going in circles again, or we have to change the underlying society which educates and produces the judges.

But how do we change society? Are we changing the actual minds of the people themselves? Are we giving them more education? Education of what? What do they already know? What don't they know? Is it really about what they think they know, or how they behave? How do we change the way people behave? And are we changing a group of people, or changing people one-on-one? And where do we stop? Should we just switch out everyone we don't like and throw the old people in jail? If so, what makes us any better than the oppressors? Or should we let everyone be as they are and work out their own problems? If it is this, how is our movement a revolution?

I don't think we need a revolution. I think we need loyal opposition parties, and we need perhaps a simplification of our culture. But you can't have a loyal opposition party and a revolution at the same time. And a simplification of something doesn't involve the introduction of new elements. That's what you do when you want to make things more complex. What we need is to go back to our roots, and instead of wildly thrashing about and making more new ideas and stuff, we need to be satisfied with a simple understanding of how things work. Instead of choosing more stuff, choose the right stuff. This sounds like an economic idea, but really it applies to government as well. We should be more conservative about how we run our government. We should be conservative about how we run our churches as well. The only thing we shouldn't be conservative about is helping other people. But remember: help doesn't come in the form of money. I am not a socialist. As soon as you start thinking that help comes in the form of money, you begin producing money for the sake of producing money, which is exactly the kind of problem which I see today that needs to change. We need to help people live. In every sector of our society. That's what we need to do. And a lot of what the resistance people in our society are doing is just that. But I don't think they see it that way, and they really should.

A Few Thoughts on Bitcoin

Bitcoin is a very interesting and complex phenomenon. It is having trouble gaining ground, but that is not because of problems inherent in the system, but rather because money is a complex and difficult subject which is hard to understand. I am a firm believer in the value of bitcoins, and am very excited about the phenomenon. I can't wait to get involved, and I intend to get involved. But the main obstacle to people getting involved in bitcoin is that people don't see its value because they don't understand it. This is because money itself is hard to understand.

Money is not a medium of exchange. It's more complex than that. Imagine a circle. The circle represents value. You can cut the circle up like a pie, and each section of the pie represents some kind of value. The angle of the cuts represents the current measure of which we value that value at the moment, and the points on the circumference of the circle represent the actual commodity which we value. The circle is a perfect circle, undistorted. The circle is what I would call a coin. If you have a circle of a large size, it means that you can fit more points on the circumference, and therefore buy more things. If it's smaller, you can buy less things. This is the definition of money.

Notice that it is a unit of value, in all the complexity of the term. It is not, and I repeat, it is NOT a medium of exchange. Here is what a medium of exchange is. Suppose I pick a few pieces from the circumference of the circle — things that I value. But I don't value them as much as someone else might. And I happen to know of a person who does value these things, but this person has a certain set of things on the circumference of the circle which he doesn't value as much as I do. My circle is currently oblong, with a little bump on one end, and so is his. It just so happens that if we trade these inconvenient items we don't really want for each other, we will have more of what we want and less of what we don't want. Then the bumps on the circle will be more evened out and the situation more fair. This is a trade.

The coin itself is not a medium of exchange. If you really think about it, you'll notice that the coin is simply a measurement of the value of our society at the moment, including all the various things that we value. The coin, in the case of the example above, has lost a little bit of value because of the overabundance of things we don't want in the cases of two parties. The exchange itself has the function of increasing the value of all things involved, including the coin. It is the exchange, therefore, that gives value to the coin, not the coin that gives value to the exchange. In other words, the coin doesn't mediate the exchange, cutting costs and increasing value. If the coin did that, it would increase the value of the exchange, and be a true medium for the exchange. But instead, the coin is one of the things benefited by the exchange. Therefore it cannot mediate the exchange.

The reason why people say the coin is a medium of exchange is because dollars and coins are nice ad-hoc ways of mediating exchange. We can say, thing X is worth $10 per item, while thing Y is worth $5 per item, therefore it would be fair and even if you gave me two of Y for my one of X. But you don't need money to regulate an exchange like this. All you need is some placeholder to measure value. The placeholder measures the relative angles of the two pieces of pie cut into the coin for both things X and Y, but it is not the whole coin itself. It is closely related to the coin, because without the coin you wouldn't be able to cut pieces into it, but it is not the coin itself.

So what is the actual medium of exchange? It is all the things which allow a line to be drawn between one slice in the pie and another. The New York Stock Exchange as an institution is a medium of exchange. It mediates the exchange between things of value. That complex and difficult concept we call the "open market" or the "free market" is a medium of exchange. But neither of these things are actual money, though they do indeed have value.

What this all has to do with the bitcoin is this. The bitcoin is actual money, not a security or anything else, as some people claim. Bitcoin is currency. You can imagine a coin similar to the one I envisioned above representing the coin in relation to the bitcoin economy, with little pieces of the pie cut up for things that bitcoin holders / users value. And, the coin itself has value, just like money. So why should we use bitcoins instead of dollars? The answer is fairly simple, though I will explain in the next post. The actual thing coined into physical currency that we are using as money is different. Dollars are made of paper. Gold coins are made of gold. Bitcoins are made of data and algorithms.

These physical / pseudophysical substances have inherent differences, which mean each one is better at certain things and worse at certain things in relation to each other. Bitcoin is better at certain things than the dollar is, and worse than certain things than the dollar is. Similar things can be said for every kind of thing that is used as currency. The reason why certain kinds of people should start using bitcoins is because the constellation of value relationships of the coinage itself for bitcoin happens to be inherently better suited to skilled artisans, shopkeepers, small business owners, etc. which make up the real substance of the middle class, whereas the constellation of value relationships of the coinage for the dollar is better suited for the upper and lower classes. I will outline what I believe to be the main differences in the following post.