The Bitcoin Rat

. Only #Bitcoin and Cheese can save Mankind

Monthly Archives: January 2014

If you still think Bitcoin is a Bubble ……

Then that’s your opinion, which you are entitled to hold   …  Recently, the idea that ‘Bitcoin is a bubble’ has become very popular, although many more people were jumping on the ‘just a bubble’ fallacy in late November/early December of 2013 when Bitcoin’s growth pattern appeared to mimic the classic “bubble curve” – even distinguished economists (who should have known better) were rubbing their hands and saying, ‘I told you so.

But the “crash” never happened

Bitcoin-two-months-difference2

The fallacy of the “Bitcoin is a just Bubble” position is that it fundamentally misunderstands that Bitcoin is not just “coinage” ( of whatever “monetary value” you might like to speculate that it is, or is not ) but a unique mathematical protocol, open-sourced,  and verifiable – built on the blockchain and driven by its peer-to-peer networking effect. Bitcoin “lives” within the nodes of the internet itself, unable to be influenced by outside counterfeiting, or printing more paper money as Governments have recently been doing, and is thus a perfect store of long-term value in its own right .  If you already understand this, all this media talk of “bubbles” are easily dismissed.

However – to the doubters , who still want to believe Bitcoin is a Bubble   – here’s some advice for you

The “Bitcoin Bubble” hasnt “popped” … but if you still want to hang onto the thought that it will .. look at the graph below. There have been a series of well publicized  “bad news events” recently ( Central Banks ‘warnings’, accounts of stolen wallets ; and the latest – the arrest of the head of a leading exchange on criminal charges of money laundering – as if HSBC hasnt been doing this for years for the big drug cartels in Latin American ) But the price has held up solidly. The bitcoin community is very resilient, speculators may panic sell – but bitcoiners know its not a bubble ! and that it will only continue to grow and grow as more and more people understand its true nature and Bitcoins adoption into the mainstream economy is inevitable.

For a bubble to develop now, Bitcoin will need to mirror the classic bubble curve profile once again. This would mean the need for another exponential rise in the price.  let’s say this ‘bubble effect’ starts next  month.  By the time the ‘crashing point’ of the classic bubble curve will have been reached ( taking as precedent the growth of bitcoin over the past year ) a very ‘conservative’ estimate would have Bitcoin trading at from $4,500 to $5,500.

Bitcoin-1oct-2013-1feb_2014

So – even if you are still convinced Bitcoin is “just a speculative bubble”  – please don’t bother to worry about it until nearer Next Christmas . You’ve plenty of time to invest a little cash now,  and it will buy all your Christmas Presents ! !

Bye the Way – it’s not going to burst then either ! ! –   Trust the @BitcoinRat

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Why people no longer need The Banks .. but don’t yet realize it.

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Let’s face it , ask any passer-by what they think about Bankers and you are guaranteed a juicy four-letter word type response. Never in the history of our Modern Times have the leaders of our financial institutions been held in such contempt and deep mistrust by the population. ( Sir Fred Goodwin at RBS,  Henry Lehman and Richard Fuld at Lehman Brothers, the Rev Flowers at Coop Bank etc .. etc.. etc )

And it’s not only the ‘Fat Cats’ at the top that are getting this treatment. Recent incidents such as the Cyprus banking shut-down, and subsequent confiscation of deposits,  the policy of HSBC in the UK of limiting cash withdrawals, and the repeated incidents of ATM and POS systems failures ( either computer crashes or hackings ?)  have hit hard at the General Public’s patience with the whole banking system as a whole.

So why aren’t they withdrawing their money in droves ? 

There are two main reasons why this isn’t happening – Yet.  Firstly, whatever one’s view of Banks most people feel that they can not do without them. A Bank allows them a depository for their immediate ‘store of income’  ( whether this be monthly salaries, state benefits or forms of unearned income etc)  So in effect they never see any ‘cash’, as its just a “numbers transfer” into their bank account. This has a certain convenience in not having to carry vulnerable large amounts of cash on their person.  So, this seems a ‘value’ in safety terms in handing over control of their money.  In return for this, it is perceived as another ‘value’ that their Bank then grants them the means to transfer their money – via cheques, credit cards, inter-bank transfers etc. to carry on their everyday life.  But as pointed out previously, the ‘system’ can easily break down leaving people with no accesses to their own resources. But as these breakdowns, at present, are not all that frequent most people have not given any thought as to whether there may be any alternative.

This is the second reason why current account banking is so intransigent to change. The perceived lack of any alternative. Again, stop any passer-by and they will say to you ‘ all banks are the same, there isn’t much point in switching my money” ( interesting that they still say ‘my money’  even though it passed straight from the “Employer” to the “Bank’  without ever passing through their hands)

Effectively people have handed-over the personal responsibility for their own money  – to a third party –  The Banks – that, lets face it, mainly serves their own institutional interests and more times than not actually exploit the account holder, with exorbitant penalties and handling charges ,  that can amount to a very high percentage taken from the “money” of that individual.

So, given all this distrust, annoyance and frustration among the General Public, we have a situation here that is crying out for a radical reform.

We need a concerted public-awareness campaign , that sets out in clear terms – without ‘political’ or ‘ideological’ over-layers  – why the development of the Blockchain and the Ethereum scripting protocol will enable ordinary people to take back control of their own money by embracing Bitcoin .

Your Personal “bank account” will lie in your hands – and the blockchain and all the applications that are being built daily on top of that, will enable YOU to perform yourself all the functions that your bank used to do.  We are not quite there yet , but the hundreds of coders and cryptographers that are working day and night across the globe, cooperating together to grow the protocol,  will deliver that ‘golden egg’ very very soon.

This is dynamite to the Bankers ( and they know it !) –  so expect a lot of ‘fight back’ , dirty-tricks, and sabotage attempts –  but with the right advocates and ‘bitcoin apostles’ interfacing directly with the public at large, and spreading the word,  we can get the message out.

#justsaying  #The Future

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THE BIGGEST RAT of WALL STREET – nomination N°1

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Dear Oscar Nominations Panel,   May I nominate  my cousin Jamie Dimon

Jamie Dimon       Don’t let the Rat get away !! …. after him Guys.

here’s the evidence –

From the Los Angeles Times

“Dimon hasn’t merely presided over this law-breaking;  he’s done almost nothing about it. No shakeup of management. Almost no changes in JPM’s board.”

Read Full Article Here – oct 11 2013

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from the The Huffington Post

The JPMorgan Chase story is the story behind the financial crisis that has thrown millions of people out of work. It’s the story behind our ever-growing wealth inequity. It’s the story behind Washington’s inability to prosecute criminal bankers, regulate reckless ones, and propose the economic solutions the rest of us urgently need.”

Read Full Article Here – HUF – May 14 2012

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micro-bits – Future uses ? – N°1- voting ?

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Okay – here’s a thing.  By using pre-scripted tiny micro-bits of the Blockchain it will be possible to allow people to express their democratic preferences, on any issue, seamlessly, and in real-time at virtually no cost ( compare that to the current cost of collecting a ‘public vote’  )

This opens up far more possibilities than just a simple “Vote for Joe” election to public office.

Imagine you are already an elected official, and you want to get an up-to-date “feel” for what your electorate are thinking about an issue that you are in the process of debating in the legislative chamber. Whilst being there in the chamber you will be able to instigate a ‘micro-bit vote’  allowing millions of your electorate to send the ‘token bit’ via a Blockchain App to a either a “Yes” wallet address or a “No” wallet.  Giving real-time information on the Public Mood.

This concept could equally apply to a Blue Chip Companies CEO asking for share-holder endorsement of new corporate policy , or an activist organisation asking for next ‘target’ ( as it doesnt have to be a “Yes or “No” proposition … pre-scripted bits could give infinite options, and allow  messages  for instance being attached to the #hashchain suggesting whatever issues the sending wants to add  )

there are many, many other fields where this concept would add Real Democracy  to decision making

@BitcoinRat     #futureofBitcoin      #justsaying

contribute to the discussion on reddit here

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“Bitcoin Piggy-Backing ”

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Why anyone involved in Corporate Marketing needs to wake up to idea of “Bitcoin Piggy-Backing ”

Here’s the key thought that should be in every CEO’s head as we head anxiously into 2014

“How do we better communicate our Brand in a world where traditional advertising mediums are giving smaller and smaller returns on our investment?”

Every CEO and CMO knows that we have seen a paradigm shift in the functioning of advertising in the last few years.  Chanel spent over $30 on one high-gloss, movie-scope Ad featuring Nicole Kidman, which received over 2 million hits on YouTube but had a barely noticeable effect on sales. Pepsi on the other hand decided to take 20 million Dollars out of its advertising budget and promote the “$20 million Refresh Project” on social media,  and it worked – with massive sales boosts and Brand awareness.

As Christina Warren , Mashable’s senior tech analyst, wrote

“Like other social media campaigns, execution is key. If Pepsi can effectively orchestrate the Pepsi Refresh Project, the company can build brand awareness while also helping out communities across the world”

The reasons why the ‘High Gloss Billboard’ Advertising Campaign of Chanel failed to engage with potential customers is firstly a result of a changing perception among the public to the messages portrayed by Advertisers . There is far more cynicism, and resistance to ‘fall under the spell’ of a life-style portrayal – the all-time classic of which was the ‘Marlboro Man effect’ series in the 1950’s . The Marlboro Man campaign had an astonishing effect on sales. In 1955 when the Marlboro Man campaign was started, sales were at $5 billion. By 1957, sales reached $20 billion, representing a 300% increase within two years. ( Wikipedia )

However, CMO’s have slowly come to the realization that effectively the whole platform on which Brands have traditionally advertised has changed forever.  When the internet and public social media arrived, most CEO’s believed that all they had to do to continue their Brand Awareness was to use these new platforms basically just “pin on” their existing “billboard” advertising strategies. Initially Facebook placing and social media campaigns based on this principle seemed to be working – and for the early adopters it certainly has !

However, almost all Marketing Departments now have their dedicated social-media teams, so the initial competitive advantage has now been diluted by the crowd of the market-place.  Returns being gained by Traditional Advertising Spend have diminished rapidly.

So, returning to the sub-title of this piece –

“How do we better communicate our Brand in a world where traditional advertising mediums are giving smaller and smaller returns on our investment?”

How much does Richard Branson spend on advertising Virgin Airlines?  well approximately one tenth of the advertising budget of American Airlines , yet as a “Brand”, Virgin is miles ahead in the public’s perception of a caring friendly go-ahead Company.  And what did Branson do only a month or so ago?  He announced that Virgin Galactic would be accepting Bitcoins ! – Instantly he gained massive Press Headlines, and free publicity worth millions.

If you are an ambitious CEO or CMO , you need to start looking hard at what Bitcoin REALLY is.  So, forget the idea of Bitcoin as a Speculative Currency, or even a currency at all. ( although for a whole myriad of reasons I would argue that it is now actually a “currency” in any rational definition of the meaning of that word.)  What’s important is that you “get” the mechanism of the underlying protocol of the Blockchain, and why this is going to change the way we do everything in the future.

Think of The Blockchain as a super-efficient commercial and social ledger – of infinite size – in which everything is recorded, in real time, and all transaction are visible, irreversible and offer proof that an event, or a contract has occurred between two or more parties. The “Hand” writing in, and thus verifying, those contracts in the ledger isn’t an aged Dickensian clerk, ( of the Industrial Revolution Age  and upon which all the financial and trading accounts of today’s companies are still based – although now siting in their own banks of computers. )  No, the mechanism that verifies all this activity lies in the Mathematical Algorithm of the Blockchain Protocol , that sits within the connecting nodes of the internet itself. It is part of the inner structure of the internet , running continually, linking endlessly, 24/7.  Forget that these “hash chains” have whatever monetary value they have been allocated, think of the fact that they have also defined the “action” itself, and assigned notes and meanings to the string of characters, that are publically visible for all to see. ( for example, once the Bitcoin Community had identified the Bitcoins that the FBI had confiscated from the Silk Road Website , they began sending minute amounts of bitcoins ( ie at no measurable cost ) to that Bitcoin Wallet, with added text comments ( most un-repeatable here ) and these comments will remain “locked together” with those coins forever.

Just think for a moment about what that means ?  It means that any application that “piggy-backs” on the Blockchain offers endless possibilities of Marketing to any savvy company. Let me just “throw out” an idea.

Chanel N° 5  – stop wasting  $30 million on another mega-cinematic extravaganza. Start a ‘tech-hot’ social media campaign – budget cost say $1 million –  that gives out to each “subscriber”  a purpose- generated bitcoin voucher  ( not only printed with your ‘real world’ logo etc, on the outside packaging but also has your companies unique digital signature ‘locked onto’ the code of that blockchain string inside ) . make the voucher the equivalent of say $5 – expressed in Bitcoins . Tell your subscribers that they can either exchange it ( un-opened ) for 5% discount off a purchase of your product ( thus giving you recycled promotional material to continue the campaign )  or they may open it to keep the bitcoins, or send the amount, via a Bitcoin Donation Address to a Charity you have specified !   That’s a Win, Win, Win situation.  And remember, each of those bitcoin chains could have the words ‘Chanel is happy we have made a difference to XXXXXX Charity in 2014’  permanently attached , and visible forever in the public blockchain. An advertisement that truly stands the test of time.

One final comment – if you were to do this Chanel, before your competitors did, you’d scoop publicity worth Millions ! ! ( just ask Branson )

Get the idea ?    Remember you heard it from the @BitcoinRat !

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Many, Many people are working in The Shadows !

Some of the Bitcoin Heroes you should be following on twitter

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Some thoughts on Bitcoin

Its quite disappointing how so many ‘intelligent’ commentators completely miss the reality that its not “Bitcoin” as a currency that offers us the “Golden Egg” to the next generation of the internet.

Attacking the “value” or durability/volatility of Bitcoin as “not real money” is akin to trying to persuade an early Polynesian tribesman looking at a pile of Dollar Bills, burning on a fire next to his families trading pile of Shell “money”, that your “money” is of any value.  As someone who would have spent his whole life trading in “real things” – ie shells – as currency for all his needs , he would say to you  “how can your paper money be of any value, I’ve just burnt it , its gone, its not “real”

I don’t intend to go through all the arguments you could have used to try and “persuade” that tribesman that your “paper currency” was indeed valuable. ( But it would have been far easier to convince him of that before Central Banks uncoupled money printing from the physical backing of Gold Reserves )

However, over time, as the variety of uses that this strange concept of “valuable pieces of paper” would bring to the trading life of that tribesman and his community would mean that subsequent adopters of paper money in the jungle community would have no trouble accepting it. The Network of Transactions, insurances, ( he can claim for his burnt Bills ) ownership of goods and production innovations, credit for trade etc that this brought to their society would confirm to them the value of this “funny money” (as it would undoubtedly have been called when it first arrived in their society)

So, just as all those ‘tangible’ things that we accept lie behind the concept of paper money as its real value, Its the Network of the Blockchain protocol, its verification and “proof of existence” of ANY transaction that makes Bitcoin the most valuable innovation since the creation of the Internet itself . When the internet first arrived what it did was allow existing human inter-action, whether it be financial or social, to occur at incredible speed ( the power of the chip ) However, In our economic and financial world the internet was used, primarily, to reinforce the existing book ledger accounting methods that has been in existence for hundreds of years. Agreed it made it immensely quicker to undertake commercial activity, allowed the computation of complex transactions and led to the growth of the “consumer society” But Bitcoin and the Blockchain Protocol is a completely new method of interacting that is going to revolutionize how the World develops in the next decade.

Think of The Blockchain as a super commercial and social ledger – of infinite size – in which everything is recorded, in real time, and all transaction are visible, irreversible and offer proof that a contract has occurred between two or more parties. The “Hand” writing in, and thus verifying, those contracts in the ledger isn’t an aged Dickensian clerk, ( of the Industrial Revolution Age ) or the legislative and financial policies of Governments, Politicians or Central Banks (as in our current Sovereign States Age ).

The mechanism that verifies all this activity lies in the Mathematical Algorithm of the Blockchain Protocol , that sits within the connecting nodes of the internet itself. It is part of the inner structure of the internet , running continually, linking endlessly, 24/7. Without any Third Party ( dictatorial governments, repressive states, etc ) being able to dictate how this protocol works, who can benefit from it, or influence transactions that are built onto the Blockchain. Its development therefore will truly be “Democratic” – in the purest sense of the word – by peer-to-peer acceptance of all transaction methods, and mass adoption of the useful applications built on the Blockchain , and rejection of the less so.

The Democratic Nature of Bitcoin and its infrastructure as it develops will define how “work” will be rewarded in the future, ordinary people, wherever they live in the World will have a real choice and control over the fruits of their labours, without any interference from corrupt third parties.

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