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  • Bitcoin Is Protecting Brazil’s Right to Free Speech

    Posted on by Azrael 1 Comment

    Bitcoin Is Protecting Brazil’s Right to Free Speech

    Dâniel Fraga, a young man living in the city of São Paulo, Brazil began his YouTube channel by recording and commenting on what was going on in the city. Shortly thereafter, Brazil was having its 2010 General Elections and his channel steadily became more political.

    Two years later, during the 2012 local electoral season, Fraga recorded a video criticizing a candidate for São José dos Campos mayor (a city in the state of São Paulo) for going before the judiciary and requesting that negative internet memes about him be removed from Facebook.

    In the video, he also criticizes the judge who accepted the candidate’s arguments and henceforth ordered that all relevant memes be taken down, even establishing a fine for anybody continuing to post and share the “offensive” memes. Since Fraga had continued to post videos discussing the situation, the judge involved sued him requesting compensation for “moral damages”. There began Fraga’s quest for free speech.

    The Right to Criticize 

    Fraga, however, did not back down in spite of the judge’s actions and recorded another video accusing the judge of trying to censor his YouTube content. Fraga also refused to take the original video down. He encouraged his viewers to download and repost the video to all social media outlets in order to raise awareness to his situation. He also made several statements making it clear that he had no intention of giving a dime to the judge seeking damages.  

    After exposing the judge for demanding that Fraga pay 5,000 BLR each time he mentioned the situation on camera, he asked the judge if he was familiar with Bitcoin. His reason for bringing up the topic of crypto assets was to spite the judge’s attempts to take his money by turning all of his Brazilian currency into Bitcoin, where it would be almost untouchable by the government, or anyone else for that matter.  He ends this video by wishing the judge luck in trying to gain access to his Bitcoin wallet.

    The judge, not finding this situation at all humorous, doubled-down on the censorship and asked for “secret of justice” in the case. This essentially acts like a gag order and would mean that Fraga would not be able to say anything publicly about the lawsuit.

    Of course, all these threats did was encourage Fraga to keep making videos. Though Fraga knew that the odds were stacked against him and that he would most likely lose the case, he still refused to capitulate. He continued to expose the corruption within the government’s judicial system, mentioning every name of the people involved and urging viewers concerned with freedom of speech to place calls and send emails to the perpetrators of the censorship campaign against him.

    After all the pressure and exposure, the judge finally gave up and withdrew the lawsuit. A huge victory for both Fraga and freedom of speech.

    The Role of Bitcoin

    Fraga has never committed a crime and was not being threatened with jail time. The judge was trying to use legalized extortion to silence and censor Fraga and here came Bitcoin.

    Seeing Bitcoin as a revolutionary and disruptive technology, Fraga had turned all his assets into Bitcoin. In 2014, Fraga was sued again by a Rio de Janeiro state representative who also wanted to censor his videos and collect damages but he, of course, fought back once again. When the politician tried to censor and extort him, all she received was five dollars that he had left in his checking account.

    On July 11, 2013, the day he uploaded his first video about the lawsuit, Bitcoin’s value was 86.41 USD. Today it is around 2,500 USD. Knowing that he has turned all his properties and assets into Bitcoin, he not only had his rights protected, but he also made a significant amount of money in the process.

    Dâniel Fraga’s story encourages people all over the world and inspires them to fight against tyranny. Additionally, Fraga’s use of Bitcoin shows that revolutionary technology helps fight to protect free speech and limit state abuses.


    Maurício F. Bento

    Mauricio F. Bento is an analyst at Instituto Mercado Popular and a contributor to the HuffPost in Brazil.

    This article was originally published on FEE.org. Read the original article.


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  • How I Paid for My Haircut, and Much More, In Bitcoin

    Posted on by Azrael 1 Comment

    How I Paid for My Haircut, and Much More, In Bitcoin

    In the early days of Bitcoin, by which I mean only a few years ago, people would dismiss the new currency this way, “Can I use it to pay my local sandwich shop? If not, it is not a money.”

    That’s true as stated but trivial. If you don’t have it, or if you have it and can’t find anyone to take it, it is not a money for you. In that same way, I don’t own any Birr, the currency of Ethiopia, and no one I know would take it if I did. Still, it’s a money somewhere.

    In some prisons, mackerel cans serve as money. In others, It’s Ramen noodles. Indeed, anything you acquire not to consume but rather to use in future exchange is technically serving a monetary function (that is, it is used for indirect exchange).

    It’s a Process

    In that same way, Bitcoin has been a money for some people somewhere since October 5, 2009, the date that the first dollar exchange ratio was posted. That it took so long to get to you and me is not a surprise. Carl Menger wrote that this is the way money emerges in a market, gradually, in ever expanding circles based on access and success in doing what money is supposed to do.

    Men have been led, with increasing knowledge of their individual interests, each by his own economic interests, without convention, without legal compulsion, nay, even without any regard to the common interest, to exchange goods destined for exchange (their “wares”) for other goods equally destined for exchange, but more saleable.

    In other words, there is not some switch in the sky that transforms a non-money into a money. Discovering what goods are saleable is a matter of discovery. There is no obvious and immediate answer, and the answer is always changing. It’s a process that gradually unfolds, as human ingenuity comes up with solutions to practical problems.

    It’s been this way with Bitcoin. It was a curiosity. Then an investment. Then a solution for the technically inclined. Then a thing to push harder for wider acceptance. More and more people got involved, and merchants began to accept it. Then the demand grew and grew. Some have proven that you can live off Bitcoin if you are enterprising enough.

    Now, keep in mind that cryptocurrency’s main use is not in fact using it at the local sandwich shop. You can do that with dollars, which is probably why it has taken so long for the physical-world market to become friendly to it. There are rarified places that accept it (I have far less trouble spending this stuff abroad) but most places do not.You can get nearly anything with Bitcoin but you may not be able to use it as payment with everyone from whom you want to buy.

    Innovation in Money

    I’ve not known entirely what to make of these various objections to Bitcoin I’ve heard for years. Are they tossed out as a problem to be solved or as a suggestive proof that there is no such thing as computer-created money that is not based on an existing approved currency? If the point is to debunk it fundamentally, I’m confident that the incredulity will gradually die off.

    If the point is to raise an existing limitation (“wallets are not user friendly” etc.), that only speaks to the early point in this period of history in which we find ourselves. The whole point of innovation is to solve problems, and, as we know from the block-size debate, Bitcoin is far from complete.

    Let’s consider one problem in particular: allegedly, you can’t use it for a sandwich. Actually, that problem has been solved.

    There are many vendors out there but I chose to experiment with BitPay’s Visa card. It’s relatively new and not in broad circulation. Only 24,000 have been issued in the US and foreign nations.

    Still, I have to say that it is wonderful. It can do anything that a regular debit card can do. You can buy groceries. You can get a drink at a bar. You can pay for a haircut. You can buy fast food. You can use it to shop online, buying anything from Amazon or eBay. I’ve used it to do all these things without a hitch.

    But why bother with this circuitous method when any old credit card will do? Here’s a story to explain. I was at the UPS store to mail a letter and used it. The clerk became really excited when he saw it. It turns out that he loves mining new coins with strange names in hopes that one of them will be a hit. We struck up a wonderful conversation and we both experienced a sense of camaraderie that otherwise would never have existed.

    There’s another factor to it also: the sheer fun of it. My goodness, I’m paying for stuff with a money invented by a handful of code monkeys that only a few people on planet earth even believed was possible a decade ago. That factor – downplay it if you want to – is truly underappreciated.

    How It Works

    How does this thing work? You sign up and get your card and go to the website to fill it up with Bitcoin. That immediately transfers to your use. Now you can carry around spendable Bitcoin.

    Now, astute readers will be asking the question: what happens when the value of Bitcoin changes. Does the purchasing power of the debit card change with it? The answer is no. Your dollar value is locked in the moment you pump crypto into the card. Technically, what happens is that you are transferring Bitcoin to BitPay in exchange for which you have dollars to spend at whatever the prevailing rate is. BitPay accepts the downside risk while the user loses the upside benefit. So, yes, technically, you are not exactly spending Bitcoin when you use it. You are spending dollars.

    If you prefer to sell Bitcoin at the time of the spending, there are other options such as the Shift card. If you are clever, you can use one card to protect against a falling price and another card to capture a rising price. 

    It’s also true that by using such a third-party intermediary, you are giving up a key feature of Bitcoin, which is its peer-to-peer network that allows instant trading between individuals. But don’t blame Bitcoin for this. Government regulations have made it extremely difficult to move between different monetary ecosystems. None of this would be happening if the US Treasury had permitted a free market in monetary exchange instead of imposing egregious regulations.

    The beauty of this service is that it makes navigating between dollars and Bitcoin extremely easy and secure. For all the limitations, that alone makes it all worth it for me. Plus, as I mention, it is fun.

    From the very beginning of public awareness of this new technology, there has been this expectation that it should be perfect in every way or else it is not valuable. That’s ridiculous. That didn’t happen with railroads, electricity, flight, or the world wide web. Everything has to go through a process of improvement through user feedback and entrepreneurial innovation.

    Bitcoin is already money, just not yet a universal money. But you can feel it every day: the promise is there. It is just a matter of time and effort.


    Jeffrey A. Tucker

    Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

    This article was originally published on FEE.org. Read the original article.




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  • From Bitcoin to Ether: Today’s Blockchain Basics

    Posted on by Azrael 1 Comment

    From Bitcoin to Ether: Today’s Blockchain Basics

    Bitcoin and its underlying technology blockchain are game-changing technologies that are reshaping and revolutionizing the world economy. (1)

    Often hidden behind the headlines of Bitcoin’s meteoric rise in market value and blockchain’s technological promise is a basic understanding of what these two technologies are and where they come from.

    This brief article examines the digital currencies Bitcoin and Ethereum and introduces Blockchain, the technology that facilitates the digital transfer of value and much more.

    Bitcoin: The Beginning?

    “I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash.” — Milton Friedman, ‘99’

    In 2008, a person or group of people acting under the pseudonym Satoshi Nakamoto published a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. The paper introduced a solution to two puzzling issues.

    The first was our inability to transfer money digitally between willing participants without the need of a trusted third party. The second was that a function was needed to transfer money digitally with the ability to establish the order of transactions to avoid double spending.

    Nakamoto proposed two solutions:

    1. A peer-to-peer currency capable of maintaining its value without a central authority.
    2. A decentralized digital ledger capable of establishing the order of transactions.

    The ledger would operate much the same as any other, except that the recorded transactions would be distributed to computers around the world.

    In 2009 the ability to transfer value digitally was born in what is widely known as Bitcoin. However, it is the second capacity, now known as blockchain that is proving to be of far greater significance.

    Although blockchain has scarcely found its way into mainstream thinking and discourse, it is, as mentioned, revolutionizing the world economy.

    Bitcoin and Ethereum

    Since inception, Bitcoin has captured the attention of an ever-growing, and yet relatively small, number of investors, enthusiasts, companies, and others around the globe.

    As it has grown, it has served the dual function of acting as proof of concept for a “peer-to-peer version of electronic cash” and simultaneously giving rise to thousands of other digital currencies.

    The most well known of these currencies by market value are Bitcoin and Ethereum. Bitcoin’s current market value is $37 Billion USD, while Ethereum’s is $16 Billion USD.

    Any attempt however to compare the two cannot be accurately described as an apples-to-apples comparison. More about this later. First, let’s look at what Bitcoin actually is.

    Bitcoin

    Bitcoin is a decentralized peer to peer electronic version of cash that maintains its value without backing or inherent value. It allows the transference of money digitally without going through a trusted third party such as a bank or credit card. (3)

    The first standardized value of Bitcoin was set on October 5th, 2009 at $.0008, calculated using $1USD equals 1309.03 Bitcoin (BTC). It presently trades at more than $2300 USD. This represents 2.9 million x its initial value. (4)

    According to the Washington Post, if you had purchased $100 in Bitcoin seven years ago, those coins would be worth more than $73 million USD today. To put this into perspective, if you had invested $100 into Amazon.com when it went public in 1997, your investment would be worth just under $64,000. It is worth noting, however, that digital currencies are significantly more speculative than stocks like Amazon. (5) (6)

    As the price of Bitcoin goes higher, one question that naturally comes to mind is, Where do Bitcoins come from?

    Mining

    Where do Bitcoins come from if by definition they are not backed by any central authority? Bitcoins are actually “mined” into existence by Bitcoin miners.

    The easiest way to think about this is to consider gold miners. Gold miners work to mine gold from the earth. As it is mined, it then enters the economy. Conceptually, Bitcoin is the same.

    New Bitcoins are generated through a competitive process called mining. Miners are given Bitcoins as rewards for their services processing transactions and securing the network using highly specialized hardware. (7)

    Investopedia offers a more in-depth explanation of the process of mining.

    How Are Bitcoins Used?

    After Bitcoins are mined into existence, how are they used and what are they used for?

    Bitcoins are traded on exchanges like stocks, bonds, and currencies, and are also used as currency in the exchange of goods and services.

    The number of vendors and merchants accepting Bitcoins for the exchange of goods and services is expected to grow from the 1000’s to the 100,000’s now that Japan is accepting Bitcoins as currency.

    Japan is the first nation to officially accept Bitcoin for payments. More than 300,000 merchants will begin accepting Bitcoin payments in that country alone. (8)

    Here is a list of 100 major US-based retailers currently accepting Bitcoin.

    Bitcoin, however, is not the only digital currency growing in value and capturing global attention. Ethereum shares many of these characteristics with Bitcoin while also possessing several unique qualities.

    Ethereum

    “I would say Ethereum boasts features and opportunities to things Bitcoin doesn’t. It’s like saying a telephone can beat an orange.” — Vitalik Buterin, 2014 (9)

    While Bitcoin was first to market and has drawn most of the media attention, many believe that the Ethereum blockchain, and its currency Ether, is a much more powerful tool.

    In 2013, then-19-year old Vitalik Buterin proposed Ethereum in a white paper titled “Ethereum White Paper: A Next Generation Smart Contract and Decentralized Application Platform.”

    The development of the protocol was crowd-sold in 2014, raising over $150 million USD. The system itself was finally launched on July 30, 2015.

    Ethereum is an open source blockchain platform and its fundamental contention is this, that blockchains can be used for more than just the transfer of money.

    Additional use cases include currencies, financial instruments, property, domain names, along with more sophisticated cases like exchanges, derivatives, peer to peer gambling, and identity and reputation systems. (10)

    Smart Contracts

    “Smart contracts” are one of Ethereum’s most important contributions to the rapidly expanding universe of digital currencies and blockchains.

    They can be thought of as a digital means of facilitating the exchange of anything of value in a way that is transparent and removes middlemen such as lawyers, notaries, and others. Smart contracts perform this function by carrying out the terms of the digital contract itself. (11)

    Another of Ethereum’s unique characteristics is its digital currency Ether.

    Ether

    Ethereum, like Bitcoin is a digital currency. However, unlike Bitcoin, it is also a blockchain platform. Ethereum’s currency, Ether is used primarily to access the Ethereum network.

    The Ethereum Foundation defines Ether as a fuel or a form of payment that is used by clients of the Ethereum platform to pay for the machines that are executing the requested operations. (12)

    Unlike Bitcoin, Ethereum has two digital currencies trading in the market. The first is Ethereum which trades under the symbol — ETH. While the other, known as Ether Classic, trades under the symbol ETC.

    In June 2016 a large scandal rocked the Ethereum community. A still-unknown hacker attempted to steal more than $50 million dollars due to a software bug. The end result was the creation of a second Ether trading currency.

    If it is of greater interest here are two articles that explain the hack in more detail Article 1 & Article 2. For a more technical explanation read this article by Maria Paola Gelvez Gomez, former head of Coinbase in Latin America.

    Where Does Ether Come From and What Is It Used For?

    Similar to Bitcoin, Ethereum is also mined. Groups of “miners” work to validate and store the transactions taking place on the Ethereum platform. The Huffington Post presented a clear and coherent article on Ethereum mining.

    While Bitcoin and other digital currencies can be used to purchase goods and services, as mentioned, Ether is primarily used for transactions associated with accessing the Ethereum network and trading.

    What is most important to remember about Ethereum is that it is not only a digital currency, it is also blockchain based platform with smart contracts, and it allows for the building of apps, of which digital currencies are but one expression.

    Blockchain

    “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don and Alex Tapscott (13)

    What is a Blockchain?

    Nakamoto Satoshi’s initial description of the framework needed to facilitate the movement of online payments between two willing participants without an intermediary has become known as blockchain.

    In its most simple form blockchain is a decentralized ledger. The implications of blockchain however, are far greater than the simplicity its name implies.

    Blockchain facilitates the digital transference of value itself. Sally Rivers, Financial Times technology writer describes the relationship between blockchain and digital currencies like Bitcoin: “[Blockchain] is to Bitcoin, what the internet is to email.”

    In the same way the internet facilitates the digital transfer of information, blockchain facilitates the digital transfer of value.

    Industries in which blockchain technology is being rapidly explored and deployed include the capital markets, financial services, payments and remittances, derivatives, identity and reputation management, governance, sharing economy, supply chain, auditing, stock trading, internet of things, insurance, healthcare, and others.

    A Few Takeaways

    Digital currencies and Blockchain technology are truly reshaping the world economy. We may, however, be too close to their inception to accurately assess their importance or ultimate impact.

    A few key thoughts from this post:

    • Bitcoin was founded in 2008 and launched in 2009. Bringing with it digital currencies and the underlying technology, blockchain.
    • There are thousands of new digital currencies of which Bitcoin ($30bil) and Ethereum ($16bil) are the largest in terms of market value.
    • These currencies are created through a process of digital mining akin to mining for gold.
    • Many of these currencies are traded on exchanges like stocks, and used for the purchase of good and services.
    • Ethereum recognized blockchains can be used for more than digital currencies, and introduced smart contracts.
    • Blockchain is to Bitcoin, as the internet is to email.

    One of the best and most insightful presentations on Blockchain is a 30-minute video created by Farzam Ehsani, Blockchain Lead at the Rand Merchant Bank in South Africa. I highly recommend it to everyone.

    Referring to the unfoldment of this new technological development, in a polite and slightly prophetic tone Mr. Ehsani shared in his closing statement, “We are on that journey, and there’s no turning back.”

    It is indeed true. We are on a new digital journey, and no, there is no turning back!

    If you have any comments or suggestions about interesting topics related to blockchain technology, reach out to me on Twitter!

    Reprinted from Tradecraft.


    Billy Silva

    Billy Silva works in business and development and sales at Tradecraft.

    This article was originally published on FEE.org. Read the original article.


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