Introduction To “The Satoshi Revolution” – New Book by Wendy McElroy Exclusively on Bitcoin.com

A Brief Introduction to “The Satoshi Revolution”.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
— R. Buckminster Fuller

The revolution of 2009 went unnoticed by most people because it was peaceful, orderly and profoundly technological. In 2009, Satoshi Nakamoto released open source software by which peer-to-peer transfers of digital wealth, called bitcoins, flashed over an immutable and transparent ledger, called the blockchain.

A new model challenged the existing reality and peacefully rendered it obsolete. Instead of toppling a government only to have another rise in its place, the new model rendered all governments irrelevant through a new technology and a private currency unlike anything seen before. Bitcoins move seamlessly through a world without states or borders, obeying only the command of individuals who choose to deal with each other. Immune to currency manipulation and inflation, they do not serve the powerful elites at the expense of average people; it is a people’s currency. Transfers are pseudonymous with substantial privacy provided by encryption algorithms and hash functions. The blockchain is immutable and visible to all which makes it immune to corruption.

In an instant, the world changed forever.

Liberty versus Power

Individuals had the long-missing weapon of self-defense that was necessary to win what the Austrian economist Murray Rothbard (1926-1995) called “the great conflict which is eternally waged between Liberty and Power.” Individuals had a viable private currency that allows them to become their own banks, to self-bank. At last, a path led away from the manipulated fiat and corrupt financial institutions that caused a global and devastating financial crisis just two years before – the global financial crisis of 2007-2008. It was a path to financial autonomy.

In his massive work Conceived in Liberty (Volume 2), Rothbard offered a broader view of the importance of the “liberty of the individual.” It is not only “a great moral good in itself” but also “the necessary condition for the flowering of all the other goods that mankind cherishes: moral virtue, civilization, the arts and sciences, economic prosperity.” Without a private currency and banking system – that is, a system controlled by Liberty and not by Power – human potential itself was hobbled.

Until Bitcoin, however, few prerequisites of liberty received as little attention as the need for a private currency and a private banking system that was accessible to every individual. People have marched and died under banners reading “Freedom,” “Truth” and “Justice.” But no banner has read “private money” even though nothing is so important to liberty.

(Note: Money has three traditional uses; it is a medium of exchange, a store of value and a unit of account. Currency refers to money in circulation as a medium of exchange.)

Economic autonomy is the bedrock of freedom without which the exercise of other rights becomes problematic. Freedom of speech is beside the point to a man who is starving to death. Freedom of association rings hollow to a waitress who has to endure customers’ abuse in order to feed her children. Due process is irrelevant to someone who cannot afford the medicine necessary to live another day. The fundamental need of every human being is to provide for themselves. Freedom follows, as do “moral virtue, civilization, the arts, and sciences.”

The political vision of the individual or the team known as Satoshi Nakamoto flew under the general radar for years. Developed by crypto-anarchists and not backed by gold or governments, no authority took notice because they did not take Bitcoin seriously. They do now. Banks and businesses now eagerly adopt and adapt the blockchain because they recognize its incredible power as a tool. Patents are issued in what was once an entirely open-source community. Traders are arrested for not being licensed. An exchange is raided by the Department of Justice for not filing the required paperwork on American citizens. Governments rush to regulate the currency in an attempt to control not only its profits but also the danger Bitcoin poses to them.

Rothbard observed, “liberty has always been threatened by the encroachments of power, power which seeks to suppress, control, cripple, tax, and exploit the fruits of liberty and production.” Power does so because it has always been threatened by the encroachment of liberty.

Satoshi Nakamoto’s vision of individual freedom through financial autonomy is under assault on several fronts. The criticisms include:

  • Cryptocurrencies are merely financial instruments. Calling them weapons of self-defense in a battle between Liberty and Power is anarchist nonsense.
  • Only criminals need this depth of financial privacy. Users of unregulated cryptocurrencies are drug dealers, tax evaders, sex traffickers and the like.
  • Without regulation, massive fraud is inevitable.

Those are among the ‘sticks’ used to discredit cryptocurrencies; none are valid. The most dangerous attack, however, is the ‘carrot’: the promise of respectability.

The cryptocurrency community wants the blockchain and its currencies to be widely accepted. Some want to expand freedom on an individual-by-individual basis until liberty wins the world. Others believe their holdings and investments will soar in value as governments and institutions become users. And respectability is viewed as the key to increasing value.

Unfortunately, “respectability” is becoming a synonym for “state sanctioned” when the two terms should be viewed as antonyms. Bitcoin was needed precisely because governments and their associated institutions were looting the wealth of the average person through currency manipulation, inflation, obstructive regulation, taxes and other financial sleight-of-hand. They shut people out of prosperity through licensing, patents, artificial credit and investment restrictions, monopolies and other self-serving obstacles. Governments are the problem; they are not the solution and they never will be. They are the Power side of “the great conflict which is eternally waged” for Liberty. State sanction should mean “shame” and not “respectability.”

An added insult is the clear implication that freedom is not respectable, that freedom and respectability are in conflict with each other. This is a false dichotomy. The opposite is true. Nothing is more respectable than the sight of human beings dealing peacefully and honestly with other to mutual advantage. What governments contribute is violence or the threat of it.

The stakes are high for both Liberty and Power. Bitcoin offers individuals a chance to privatize their own wealth, which amounts to nothing less than privatizing their own lives. In doing so, Bitcoin announces to governments and financial institutions that they could lose their monopoly on wealth, without which they are impotent.

Power’s attempt to centralize and dominate digital currencies may be doomed to fail because of the technology’s inherent decentralization, but a great deal of harm can be inflicted along the way. The technology cannot be stopped but individuals using it can be imprisoned and ruined. The surest protection against the damage is to champion anew Satoshi Nakamoto’s original vision of Bitcoin. Those who share it will be lucky enough to relive the revolution.

The Bloodless Revolution

It is the quintessential image of political revolution. Starving peasants storm the Bastille because oppression has driven them beyond the limits of human endurance. But what if that image is wrong? Or woefully incomplete? What if the most revolutionary force in the world is not hunger and despair but hope and opportunity?

The phenomenon that captures Satoshi’s vision is called “the revolution of rising expectations.” The term became popular after World War II had destabilized governments across the globe; especially in the Third World, people came to believe that change for the better was possible. The “revolution of rising expectations” refers to a situation in which an increase in prosperity or freedom makes people believe they can create a better life for themselves and for their families. And, so, they demand it.

It is a truth that Power has long known. Downtrodden people obey because they believe there is no other option; no other action is likely to better their lives. Greyness, conformity, and fear empower totalitarian regimes that quash any sparkles of nonconformity or creativity because they express individual choice and cannot be controlled. The same is true of hope. Hopeful people reach out to control their own lives because they glimpse freedom or greater prosperity which are two sides of one coin. This explains an observation made by the nineteenth-century sociologist Alexis de Tocqueville (1805-1859); namely, the French Revolution was strongest in those areas where the standard of living had been steadily improving.

The concept of “rising expectations” may also explain why social revolt often brews in places of opportunity rather than ones of oppression. For example, revolutions flow from privileged university students who believe change is possible and within their grasp. Revolutionary leaders notoriously come from the upper or middle classes and do not share the victimhood of the truly oppressed whom they claim to represent. In fact, the downtrodden often refuse to work for social change. Marx called them the “lumpenproletariat” and scorned this category of society for not understanding its own class interest well enough to rise up.

The main problem with most revolutions is that they end badly. The rebellion starts out or turns violent and is commandeered by forces no less tyrannical than the ones being toppled.

The Satoshi revolution does not run this risk. It is entirely peaceful. Bitcoin does not directly confront governments or corrupt institutions; it sidesteps and obsoletes them. By improving the lives of individuals, Bitcoin is profoundly revolutionary. The mere act of producing goods and services increases freedom because it also produces choices and makes people long to expand them. The Satoshi revolution is one of rising expectations. It is one of hope and opportunity.

What is Satoshi Nakamoto’s vision?

Peer-to-Peer

Bitcoin solved the “trusted third party” problem.

Satoshi Nakamoto’s original white paper, “Bitcoin: A Peer-to-Peer Cash System” (October 2008), explained, “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”  The proper role of a trusted third party is to enable transactions between two participants by authenticating them and providing other services like escrow.

Trusted third parties present problems. One is inherent. The word “trusted” implies that it is not always possible for the participants to verify if the third party operates on behalf of itself or on behalf of them. If verification were always possible, then the need for trust would not arise.

Trusting another human being with your wealth is a risky business even if you know the other person well. When the third party is a huge impersonal institution, such as a government or a bank, the risk soars. Institutions function according to their own self-interest and preservation. In the free market, the self-interest of businesses, like Fedex, is to serve their customers in order to avoid losing them to the competition. Government and other monopolies, like the banking system, have no similar constraint because people are forced to deal with them; there is no real competition. If a ‘customer’ needs a bank account or a credit card, he is trapped into accepting terms of service that benefit the monopoly, not him.

Agents of the third party do not need to be openly dishonest or vicious because their intentions do not matter. Politicians, civil servants, and bankers may truly believe they provide a valuable service that promotes the public good. They may smile pleasantly and attempt to be helpful. This does not influence the content of what they produce. The situation is akin to a man who works at a tuna cannery and announces one day that he intends to make candy bars instead. As long as he follows the cannery’s rules and uses its machinery, he will produce a can of tuna and not a chocolate bar. As long as monopolies follow their own rules, the resulting product will deny freedom and fairness to their ‘customers’.

The intentions are rarely honorable, however. Trusted third-party monopolies are notoriously corrupt and avaricious or else they would not become monopolies that kill choice and competition. And, yet, how can people function in commerce and international finance without an intermediary?

Satoshi Nakamoto solved the problem with simple elegance. Bitcoin allows individuals to deal directly with each other on a peer-to-peer basis that requires no third party; the transfers cannot be arbitrarily reversed and so the two parties need not trust or know each other. Bitcoin is a “trustless” currency in the best sense of that word because trust becomes irrelevant. Since everyone can maintain their own wallets, the need to use a ‘reliable’ storage facility (that is, a bank) is also eliminated. Each user becomes a self-banker with wallets being secured by private keys that prevent prying eyes and prying fingers.

Decentralization

Economists scrutinize the characteristics that constitute a good currency such as widespread acceptance, durability, and fungibility. But the most important characteristic is often ignored; namely, who controls it? Who decides what is a valid currency and the rules by which it circulates? On the extremes, there are two alternatives. The currency is under the centralized control of an authority or it is under the decentralized control of the individual.

In a primitive society where shells are the medium of exchange, the matter would probably be determined by the people trading or by a general consensus. The overall dynamic may resemble conventional centralization because a large number of people would act similarly and abide by the same rules. But it is actually an expression of decentralization because every individual is a decision maker who can withdraw his consent at any time. That’s the defining feature of decentralization; the individual can withdraw consent and switch to another currency without being punished.

Modern society is said to need an entirely different paradigm because its complexity requires coordination. Advanced societies, it is argued, need coerced centralization through which decision-making is monopolized by governments who create the currency, eliminate competition, define how it circulates and use it to control society through practices such as inflation. Scofflaws are severely punished because coerced centralization is based on violence rather than consent.

Besides the immorality of using violence against peaceful individuals, there are at least two other objections to coerced centralization. The first was sketched earlier. Government and allied institutions act in their own self-interest for their own enrichment and preservation, not in the interest of individuals.

The second objection is empirical and utilitarian. In his 1974 Nobel Memorial Lecture “The Pretence of Knowledge”, the classical liberal economist Friedrich Hayek (1899-1992) explained, “The recognition of the insuperable limits to his knowledge ought…to teach the student of society a lesson in humility which should guard him against becoming an accomplice in men’s fatal striving to control society — a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.”

No one has enough information about the millions and millions of daily transactions to effectively centralize or control them. Even if it were possible to do so, human beings and circumstances are unpredictable; what was true yesterday will not be true today. In short, Hayek believed social engineering destroyed rather than created society because it imposed ignorance instead of allowing individuals who know their own self-interest to act accordingly. A healthy society is the result of human action but not of human design.

One argument for centralization is inevitably heard. If every individual pursues his own self-interest, then chaos will ensue. The opposite is true. The English philosopher Herbert Spencer (1820-1903) argued persuasively against the notion that social order was manufactured by coordination through law. Instead, order sprang naturally from “the spontaneous cooperations of men pursuing their private ends.”

Spencer contrasted two forms of order: soldiers marching in military tandem; and, spontaneous order. The latter can resemble chaos. Consider a large department store during the Christmas rush. A person looking down on the scene with a God-like perspective would see people rushing about in different directions and sometimes bumping into each other. He would see shoppers pick up an item only to put it down again; they would unfold clothing only to leave it in a clumsy heap on top of a stack. Store clerks would race back and forth to answer questions or cash people out. The scene appears anarchistic in the bad sense.

But the observer is actually witnessing a sophisticated version of spontaneous order by which all parties peacefully achieve their own goals without co-ordination. The store wants to sell its goods; the employees want to keep their jobs; the customers want gifts. What appears to be the scurrying of an ant hill is the conscious and goal-oriented behavior of individuals who unintentionally benefit each other. Without Christmas shoppers, the store might go bankrupt; the store clerks would lose their jobs; the shoppers would have fewer options. The ‘chaos’ viewed from above is the free-market working to satisfy the needs of people without central planning, without coordination.

Bitcoin is a similar dynamic. Its free-market decentralization depends upon a consensus from which everyone is free to withdraw without punishment. The participants do not require knowledge of transactions other than their own and they come at the blockchain from all directions. What may seem like chaos is a sophisticated form of order that works to everyone’s advantage.

Privacy

Bitcoin’s privacy is imperfect. It provides pseudo-anonymity rather than total anonymity but it does offer a strong layer of protection against abusive governments and other threats. And there are tools to increase this protection.

Privacy and freedom are intimately connected. Imagine a world in which income is not reported; how could taxes be collected or bank accounts frozen if the government doesn’t know what you have or where you have it? If the registration of life events like birth or school attendance were optional, how could the military draft your children or even know they exist? If no permission were required to open a business, how could it be regulated? The machinery of government is paralyzed without information about who you are and what you do. That’s why the government’s appetite for data is voracious. Knowledge is power.

Today, most people’s employment, financial, medical, military, educational, housing, marital, telephone, travel, Internet, automobile and family records are either stored by governments or easily accessed by them. Bitcoin offers a privacy haven based on algorithms. When one wallet sends payment to another, the public-private key is decoded by the public-private key of the recipient. The encryption shields the transaction from meddling or theft.

This is Satoshi Nakamoto’s vision: a peer-to-peer, decentralized and pseudonymous system of commerce and self-banking that enables the individual to avoid the corruption of the current system. It allows individuals to privatize their own lives. Few things short of Gutenberg’s printing press have offered such freedom and opportunity to the individual. This will remain true, however, only if the vision is sustained and not compromised by those who seek respectability through state sanction.

Conclusion

The introduction has focused on “the individual” but Bitcoin’s contribution to civil society is also immense. No one captured the dynamic of how uncoordinated self-interest benefits society better than the French Enlightenment philosopher Francois Marie Arouet de Voltaire (1694-1778).

In his Letters Concerning the English Nation, Voltaire explored why there was extreme religious toleration in the streets of London as compared to the streets of Paris. It was not due to laws or history. British laws strongly favored the Church of England and past persecution had prompted the Pilgrims to embark on a treacherous voyage to the New World. The key difference between England and France, Voltaire concluded, was the relatively free and respected commerce in which people dealt with each other solely for financial self-interest.

He declared, “Go into the Exchange in London, that place more venerable than many a court, and you will see representatives of all the nations assembled there for the profit of mankind. There the Jew, the Mahometan, and the Christian deal with one another as if they were of the same religion and reserve the name of infidel for those who go bankrupt. There the Presbyterian trusts the Anabaptist, and the Church of England man accepts the promise of the Quaker. On leaving these peaceable and free assemblies, some go to the synagogue, others in search of a drink; this man is on the way to be baptized in a great tub in the name of the Father, by the Son, to the Holy Ghost; that man is having the foreskin of his son cut off, and a Hebraic formula mumbled over the child that he himself can make nothing of; these others are going to their church to await the inspiration of God with their hats on; and all are satisfied.”

By enabling the free flow of commerce and wealth, Bitcoin enriches not only individuals but also civil society because financial freedom is both a cornerstone and a building block of tolerance. Some Bitcoin users choose anonymity while others openly advertise their identities. Some are rugged individualists while others are socialists. Differences of ideology, religion, race or lifestyle are irrelevant to the transactions and the continuing development of cryptocurrencies. People come together for their own profit whether they define profit in monetary terms or in terms of independence, freedom.

And all are satisfied.

Reprints of this article should credit bitcoin.com and include a link back to the original.


Wendy McElroy has agreed to ”live-publish” her new book exclusively with Bitcoin.com.

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The global economy isn’t working for women. Here’s what world leaders must do

The World Bank has counted 104 countries that have laws that prevent women from working certain jobs, such as in manufacturing and construction. Image: REUTERS/Francis Mascarenhas

Winnie Byanyima, Executive Director, Oxfam International


These are restless, exciting and frightening times to be a woman. Every day brings a rousing success or a crushing setback in our fight for equal rights.

In May, after decades of women’s rights activism, Ireland voted by a landslideto repeal the country’s ban on abortions. Meanwhile, a recent crackdown in Saudi Arabia on women’s rights activists resulted in several arrests. The campaigners’ whereabouts and the charges against them are still unknown.

There are many fronts in this fight. One on which I have focused my efforts is the global economic model that is rigged against women. Let’s look at the facts.

Firstly, by some conservative estimates, women contribute around $10 trillion — yes, trillion — to the economy in unpaid care and domestic work. For free. Our economies would crash without it, yet we rarely see it discussed by policymakers.

Secondly, the World Bank counted 104 countries that have laws preventing women from working certain jobs, such as in manufacturing and construction, because of outdated, paternalistic ideas of what a woman can and should do.

Thirdly, at Oxfam’s last check, there were around 2,043 billionairesworldwide. Nine out of 10 were men. At current rates of change, it will take 217 years to close the gap in pay and employment opportunities between women and men. Economic inequality between women and men translates into power inequality. How can we expect an equal world for women when the purse strings are so clearly held by men?

In other words, economic inequality is absolutely a feminist issue.

The prosperity of our global economy relies on the ground-up exploitation of women and girls — and we all keep the system in place as long as we uphold its discriminatory norms.

What’s the result? Girls are left to fetch water and firewood as their brothers go to school. Women cleaning hotel rooms are subjected to sexual harassment. This is closer to home than we think: the women farmers growing the food we eat don’t have enough food for their own families, and the women stitching the clothes we wear work in hot, crowded garment factories, earning poverty-level wages with scant rights.

And the vast majority of the wealth they create are going to a few super-rich men.

Have you read?

The G7 leaders are meeting this week in Quebec. I’m sure we’ll hear plenty more flattering rhetoric about women’s equality. But I won’t be satisfied until I see some action.

I welcome the Canadian government’s initiative to create the first-ever Gender Equality Advisory Council for the G7, which I was honoured to be invited to join. They dared us to push for change. We have proposed a set of concrete solutions to them.

I refuse to accept the idea that we can simply shoehorn women into a global economy that is exploiting them, and then celebrate it as women’s economic empowerment. The G7, as a gathering of most of the world’s richest nations, must now responsibly redesign their economies to work for women, and support a far broader shift in the global economy.

Consider jobs. Rather than helping to make more billionaires richer, the G7 should be working together to ensure decent and safe jobs for all by setting a living wage, so people can live a decent life. Most of the world’s women workers need jobs like these.

Take paid parental leave, and investing in universal, public, free and quality early childhood education and care services. The G7 could supercharge a broader shift to recognize, reduce, and redistribute the unpaid care work with which women and girls are bogged down.

Or take progressive taxation and spending. Making rich individuals and corporations pay their fair share, and using those revenues to boost public schools, healthcare and other social services is a powerful one-two punch against inequality and for women’s rights. When women and girls can access quality education, and healthcare including sexual and reproductive health services, they have greater freedom and choices over their own lives.

This may seem obvious. But we also know which areas require far greater attention. While there is global momentum to change sexist laws, the business of changing ideas and attitudes — the informal laws that dictate what women can and can’t do, like having to care in the home or being unable to own land — is far harder. We must accelerate change here.

Where to start? Women’s rights organizations and movements are already on the frontlines doing this bold work. We must support them and learn from them. The G7 controls a huge portion of aid dollars. By adopting a feminist approach to aid, and by injecting resources into women’s organizations — as Canada is committing to do — it could make breakthroughs in the lives of poor women around the world.

I present to you the blueprint of an economy that works for women. This type of thinking is supported by hard evidence — what’s known as “gender budgeting” at the heart of public policy. Countries from Rwanda to Sweden to Canada are taking strong steps forward. In February, Canada delivered a budget focused on advancing women’s equality. The G7 countries must follow its example, and lock in gender analysis through legislation.

We can build a future that’s far fairer to our daughters and granddaughters. Let’s not just say we’re feminists, but commit to living those principles.


Originally published at www.weforum.org.

Money (Part 2 ) The Satoshi Revolution: A Revolution of Rising Expectations.

The Satoshi Revolution – Chapter 1: How and Why Government Outlawed Private

Section One: The Trusted Third Party Problem
Chapter 1: Listening to the Past
by Wendy McElroy

How and Why Government Outlawed Private Money (Chapter 1, Part 2)

How did ratification of the United States Constitution in 1788 affect private money?

People assume the United States Constitution grants Congress a monopoly ‘right’ to issue money. The assumption comes from Article 1, Section 8, Clause 5 of the Constitution which delegates to Congress the power “[t]o coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.” People are incorrect.

In his pamphlet, “Unconstitutionality of the Laws of Congress Prohibiting Private Mails” (1844), the legal scholar and private money advocate Lysander Spooner (1808-1887) explained,

“[T]he powers of Congress…’to coin money’, are in reality exclusive, only as against the State governments….The constitutional prohibition upon individuals, to coin money, extends no farther than to prohibitions upon ‘counterfeiting the securities and current coin of the United States’. Provided individuals do not ‘counterfeit’ or imitate ‘the securities or current coin of the United States’, they have a perfect right, and Congress has no power to prohibit them, to weigh and assay pieces of gold and silver, mark upon them their weight and fineness, and sell them for whatever they will bring, in competition with the coin of the United States.”

The Constitution addresses the regulation of “foreign coin” because another coin demonstrates why private issue remained so popular in early America: the Bechtler.

The 19th century saw a wave of gold rushes. In the late 1820s, both Georgia and North Carolina experienced a huge gold rush and an accompanying dilemma. There were no government mints in the area. Shipping gold to the main mint in Philadelphia was problematic because it cost a great deal to ship and insure the gold which risked being stolen. A local paper explained the miner’s plight:

“Since the State Bank has limited her issues and is drawing into her vaults the notes which have been loaned to our citizens, in the settlement of her outstanding accounts, great inconvenience has been let in business transactions with the Bank, and also for the common purposes of commerce. How far this scheme [having a private mint] will succeed in effecting these objects, we have yet to learn. The risk and expense of sending gold to the [Philadelphia] mint is such that the owners of the mines often find it difficult to dispose of the products of the mines at a fair value, as things now are. The urgent petition to Congress for the establishment of a branch of the US Mint in the ‘gold region’ having failed, and the gold produced being in a fair way to entirely disappear from the country and fall into the rusting hoards of Europe, this scheme has been resorted to…”

Gold miners approached the well-respected watchmaker and goldsmith Christopher Bechtler Sr. (1782-1843) for a private solution. Because he was also a metallurgist and an honest man, Bechtler was a perfect candidate to strike coins. The first Bechtler gold coin issued in 1831, followed by advertisements declaring that Bechtler would mint any miner’s gold for 2 ½ percent of the bullion.

Government’s reaction to competition can be gauged by the fact that the United States Treasury lost little time in testing the new coins, probably in the hope of discrediting them. Alas, for the Treasury, the Bechtlers were purer than government issue. Indeed, the Federal Mint bought $294,000 worth of Bechtlers and used them to pay debts and for trade with Europe. Suddenly, the government was motivated to open its own Federal mint in Charlotte, North Carolina which was about 80 miles from the Bechtler one; it began to produce gold coins in 1838.

Considerably more than one million Bechtlers circulated widely, especially in the southeast. When the Bechtler Sr. died, however, the relatives who assumed the business were less than conscientious or perhaps dishonest. Consistency and purity declined and the market responded. The mint closed a few years later.

But the original Bechtlers continued to circulate. They were so popular that, during the American Civil War (1861-1865), the monetary obligations of the Confederacy were specified as being payable in Bechtler gold, not Confederate or any other government-issued currency.

The Bechtler coin is both an inspiring and a cautionary tale. It speaks to the consequences of integrity and of debasement, both of which are non-issues with bitcoin because it is trustless and cannot be altered. The Bechtler story also demonstrates how the free market outperforms government in terms of moving swiftly into an empty niche and in the quality of goods and services it delivers. Just as today, free-market currencies outcompete government issue, especially with current inflation; if they cease to do so, the currency fails. Just as today, the government uses the currency while trying to undercut the competition it represents.

Government resistance to competition did not begin or end with the Bechtlers. In his essay “Hard Money in the Voluntaryist Tradition,”  historian Carl Watner traced the course of a mint in San Francisco during the California gold rush: Moffat & Co. Watner wrote, “Moffat & Co. was apparently the most responsible of the private concerns minting money,” for when, “the businesses of San Francisco placed an embargo on all private gold coinage except issues by Moffat. The remainder of the private issues were soon sent to the U. S. Assay Office to be melted down or else were passed only for their bullion content in trade.”

Initially, the firm issued gold ingots in direct competition with the U.S. Assay Office; no state Assay Office then existed. According to the reference site Coinfacts, “The official government assay of these ingots proved them to be worth more than the amount stamped on them.” In other words, Moffat outcompeted the government.

The ingots’ denomination was too large for normal trade, however, and merchants demanded smaller coins. Moffat & Co., which contracted with the U.S Assay Office, asked for the authority to strike coins as well. When permission was not forthcoming, Moffat began minting coins under its own mark and authority in 1849. The firm’s high reputation and its policy of redeeming coins at face value allowed their issue to become a norm in circulating currency.

Government obstruction did not stop with a refusal to authorize coinage. On April 20, 1850, the State Assayer, Melter, and Refiner of Gold of California was established by law. A companion bill was passed at the same time with the goal of reining in private minters. Along with an earlier measure on April 8th, the bill represented a compromise. Coinfacts explained the original position the government had taken toward minters such as Moffat. “It was during the first part of 1850 that there was serious agitation against private coinage. The California Legislature considered a bill… which would have branded private coiners as counterfeiters, and which urged subjecting ‘the makers or passers of such coin to the penalty imposed upon coiners and counterfeiters’. The bill would also have forced the private mints to redeem their coins in ‘lawful money’. The Alta California printed the proposed bill along with a supportive editorial. The editor further pointed out the inability to use private coins in payment of customs.”

The next day, the Alta California ran an open letter from Moffat through which he appealed to the people of San Francisco. He acknowledged that the state could not legally issue coins due to Constitutional restrictions, but private individuals had no similar constraint. He pointed to the Bechtler mint which continued to strike coins even though the business was only 80 miles from the federal government’s Charlotte branch. Moffat powerfully reminded San Francisco that no one had ever been defrauded by purchasing or accepting his coins.

The first compromise bill of early April prohibited the private issuance of gold pieces weighing less than four troy ounces. This was an awkward size for normal commerce and almost guaranteed a limited circulation. By contrast, the state Assay Office was allowed to cast gold ingots of two troy ounces. Coinfacts observed, “The State Assay Office of California was a unique institution in our nation’s history. It was the only mint to operate in this country under the authority of a state, after 1789. Its issues (though never challenged in the courts) may have been illegal under the United States Constitution, which forbade any state to issue coins or currency.” The state used the sleight-of-hand of striking ingots which were not mentioned in the Constitution but which circulated as the equivalent of coins.

The April 20th companion bill further hobbled private minters by requiring them to redeem their coins at face value for government issue upon demand.

A complicated back-and-forth between Moffat and both the state and federal assay offices ensued. Moffat received a coining contract with the state and sought federal permission to strike smaller coins, which was denied. Eventually, Moffat resumed issuing its own coins in smaller denominations whereupon the government granted permission to issue official $10 and $20 coins for the Assay Office.

The federal government changed tactics in 1852 when the U.S. Customs House suddenly refused to accept Moffat’s $50 ingots even though they had been issued under the direct authority of the U.S. Assay OfficePaying customs was a primary use of the ingots, but federal law now required duties to be paid in coins of 900/1000 fineness rather than the California standard of 884/ to 887/1000. The Treasury Department took the remarkable step of refusing to accept coins issued by its own Assay Office, thereby invalidating its own coinage.

The history of Moffat & Co. lays bare the government’s resolve to eliminate competition in currency and the basic tactics it uses to do so. One strategy is to prohibit the currency by criminalizing it as the California legislature attempted to do through the accusation of counterfeiting. Another is to absorb and control the competition as the Assay Office did by contracting with Moffat. A third strategy is to place huge obstacles in the path of free market currencies which amounts to a de facto ban or, at least, a decided advantage handed to government money.

It worked. Watner explained, “By October 1856, the Federal mint was apparently able to meet all demands for coins in domestic circulation and for export, so that private issues of gold coin quietly passed out of existence. There is no record of any further private minting in California after this time.”

The history of private minting in early America is deep, pervasive and intimately tied to the nation’s economic success. Fraud was certain present but so, too, was meticulous honesty. The mints with high reputations and good business sense not only succeeded but also outperformed their government counterparts, which were reduced to using force in the form of law to gain the upper hand. Government did not act on behalf of the public. If it had, it would not have attacked honest firms that provided desperately need services to miners, merchants and purchasers. Government acts on its own behalf to line its pockets and strengthen its power.

On June 8, 1864, Congress passed An Act to punish and prevent the Counterfeiting of Coin of the United States. It read, in whole, “That if any person or persons, except now authorized by law, shall hereafter make, or cause to be made, or shall utter or pass, or attempt to utter or pass, any coins of gold or silver, or other metals or alloys of metal, intended for the use and purpose of current money, whether in the resemblance of the coin of the United States or foreign countries, or of original design, every person so offending shall, on conviction thereof, be punished by fine not exceeding three thousand dollars, or by imprisonment for a term not exceeding five years, or both, at the discretion of the court, according to the aggravation of the offence.”

The private minting of currency ceased in America.

The Act was undoubtedly sold as necessary to protect the public from fraud. There is no question that fraud in the form of ‘light’ coins was a constant worry with both private and government mints; without excusing the fraud or suggesting it not be punished, caveat emptor applies. An entire category of business should not be criminalized because some participants are dishonest.

The claim of preventing fraud is disingenuous on its face. It does not explain why the government went after coins and companies it knew to be reputable, like Moffat & Co. And why did the government itself preferred to use private coins on occasion? Nor does the Act acknowledge that many private miners went into business at the behest of a public whose needs were ignored by the Treasury Department. Only one explanation makes sense; the government wanted to eliminate the competition not because it was fraudulent but because it could win.

Mark Twain reputedly said, “History does not repeat itself, but it rhymes.” To some, private coinage in early America may seem to have little in common with cryptocurrencies but there is a common theme. Government is threatened and wants monopoly. Cryptocurrencies and their advocates can expect the same treatment from governments around the world: a mixture of banning, obstacles, absorption and punishment. History is beginning to rhyme loudly.

African migration: what the numbers really tell us

Contrary to much media coverage, the majority of African migrants do not leave the continent. Image: REUTERS/Amir Cohen

Marie McAuliffe, Head of Migration Policy Research Division, International Organization for Migration

Adrian Kitimbo, Research Associate, Gordon Institute of Business Science, University of Pretoria


Africa is often depicted in the media as a continent of mass exodus. Images of desperate Africans on overcrowded boats bound for Europe, or those of stranded migrants in transit countries such as Libya, are plastered across our television and computer screens. The often sensational and one-dimensional reporting on African international migrants has played a role in invoking fears of the so-called ‘flood’ of migrants to Europe’s shores.

These images, quite rightly, have drawn our collective attention to serious human rights abuses, as well as highlighting the dangerous situations that migrants can face when undertaking irregular migration. However, these images are increasingly at risk of being viewed as the norm. A more balanced examination of African migration is a pressing priority. The latest statistical estimates of international migrants produced by the UN can help.

One of the most striking aspects about international migrants in Africa is that most move within the region. Contrary to much media coverage, the majority of Africans do not leave the continent. They largely move to neighbouring countries.

Between 2015 and 2017, for example, the number of African international migrants living within the region jumped from 16 million to around 19 million. Within the same period, there was only a moderate increase in the number of Africans moving outside the continent, from around 16 million to 17 million.

Image: IOM’s World Migration Report Update (2018)

The number of African migrants who have left the continent is not negligible and has increased since 1990. However, intra-regional migration continues to outpace extra-regional migration. A number of key factors help to explain this phenomenon.

Firstly, the surge in international migration within Africa is due, in part, to efforts by African states to enhance regional integration. Regional Economic Communities such as the Economic Community of West African States (ECOWAS) and the East African Community (EAC) have made the free movement of persons a key tenet of their drive towards greater integration.

In addition to launching regional passports, both ECOWAS and EAC have in recent years abolished visa requirements for citizens of member states. ECOWAS has gone even further, by abolishing residence permits for its citizens. In March 2018, the African Union adopted a continent-wide protocol on free movement, which, if signed and brought into force by all member states, will significantly enhance intra-regional migration.

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But the influence of free mobility is just part of the story. For many people in Africa, moving to a country within the region is the only viable option. The prospect of relocating to countries such as those in Europe or Northern America is often quickly tempered by the reality of gruelling, cumbersome and highly restrictive visa requirements.

Unlike citizens of more developed regions, many Africans, by virtue of the passports they carry, have limited options in terms of the number of countries they can access. The table below summarizes global indices of human development, fragility and visa access of selected countries.

According to the 2018 Henley and Partners Passport Index, which ranks passports by the number of countries their holders can access without a visa, only three African countries — Seychelles, Mauritius and South Africa — are among the world’s 100 most mobile passports. The ability of people to access countries visa-free broadly reflects their country’s development status, as well as how fragile, stable, safe and prosperous it is in relation to other countries. The reality is that travel and migration for people from developing countries and more fragile states is much more difficult.

Human development, fragility and passport rankings, selected countries. Image: World Migration Report 2018 based on United Nations Development Programme, 2016; The Fund for Peace, 2018; Henley & Partners, 2018

In this context, free mobility arrangements within Africa are particularly important for migrants. A country such as South Africa, for example, with one of the most sophisticated economies in the region, is often the alternative for many people on the continent, providing opportunities but also placing pressure on effective migration management. As the figure below illustrates, South Africa was home to around four million international migrants in 2017, the most in the region.

Top 20 African migrant countries in 2017. Image: IOM’s World Migration Report Update (2018)

With one of the fastest growing populations in the world, and as more African countries continue to review and revise entry requirements for the region’s citizens, the number of international migrants in Africa shows no sign of slowing. With intra-regional migration enabling talent, labour and entrepreneurial youth to remain in the region, future policymakers may well be asking how to attract migrants from Africa.

Small Wins, Marginal Gains: That’s How You Change Behavior in The Long Term

Photo by David Mao on Unsplash

Habit is persistence in practice.” — Octavia Butler

Few repeated actions, done everyday, so discreet that they could easily go unnoticed.

A micro-habit is a small, simple action that doesn’t require much motivation, but will help you build up to a larger goal habit.

That’s how long-term habits are formed.

That’s how you change behaviour.

Not radicial pursuit of good habits.

If you improve every area of your life in small steps, you will become unstoppable.

The one percent margin for improvement in everything you do is one of the best ways to build new habits.

It’s so easy to overestimate the importance of one defining moment and underestimate the value of making small gains on a daily basis.

Everything meaningful takes time.

Overnight success is a myth.

You can’t achieve extraordinary results without putting in the work consistently.

Almost every habit that you have built over the years — good or bad — is the result of many small decisions you have made over time.

Improving by just 1 percent isn’t noticeable but it makes the most difference.

Jim Rohn once said “Success is a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day. ​There is power in small wins and slow gains.”

The differences between expert performers, creatives, and normal professionals reflect a life-long persistence of deliberate, purposeful effort to improve performance.

Tiger Woods started when he was 2 years old.

Serena Williams started playing at 3, Venus Williams at 4.

They committed to deep, sustained immersion in purposeful practice.

Small gains every day.

Commander Hadfield, the astronaut, improved his skills every day for 20 years before getting into space.

Kurt Vonnegut wrote every day for 25 years before he had a major bestseller.

Mozart had clocked up 3500 hours by the time he was 6 and had studied his chosen profession for 18 years before he wrote his Piano concerto No 9 at the age of 21.

Einstein spent almost all his productive life working on the theory of relativity.

Nobody wins in huge bursts.

“Landing on your butt twenty thousand times is where great performance comes from”says Geoff Calvin.

One mistake people make over and over when they want to get more do or achieve a goal is trying to do too much all at once.

Productivity is a process, not an achievement.

The most productive people you know or have read about do not rely on huge bursts and then stop working.

They grow constantly in tiny, almost invisible increments.

This is the Japanese process of kaizen, or continuous, gradual progress.

Kaizen can be used to build new habits or change bad ones.

The same process applies to starting a business or learning something new.

It is better to make an imperfect, incomplete start with a new app or project and become 1% more efficient tomorrow than to wait until you have fully researched your options or understand the industry to take action

Instead of trying to do everything within the shortest time, focus on 1% increments.

Habits don’t change in a day.

But 1% a day makes every habit work. Every.

If you relax and give yourself permission to only improve a little each day, then a good habit works.

​Practice makes habits.​

If you insist the habit changes within the shortest possible time, you are bound to fail.

​Pick the easiest change, improve it each day by 1% and don’t stop until it’s routine. That’s how change happens. ​

Do not underestimate the power of micro-improvements.

Improving by 1 percent every day or week is achievable — regardless of your circumstances.

If you’re currently encountering resistance with your goals, remember the words of Karen Lamb: “A year from now, you will have wished you’d started today”.

Want to set a micro-pattern?

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You can’t achieve big goals without breaking them down. Seek improvement one day at a time. I will be launching a new simple course to help you master the Kaizen principles for making good habits last for good. All the micro life and work habits you need to live a better, smarter, and more fulfilling life. Sign up to be notified when it launches.

Governor of Connecticut Signs Blockchain Working Group Bill Into Law

Governor of Connecticut Signs Blockchain Working Group Bill Into Law

Connecticut governor Dannel Malloy signed SB 443 into law, which establishes a blockchainworking group to study the technology, according to public documents June 6. The working group is also tasked with shaping a plan to “[foster] the expansion of the blockchain industry in the state.”

The bill accordingly passed both legislative houses last month in a unanimous vote. In order to to make Connecticut “a leader in blockchain technology,” the group is instructed to:

“(1) Identify the economic growth and development opportunities presented by blockchain technology; (2) assess the existing blockchain industry in the state; (3) review workforce needs and academic programs required to build blockchain expertise across all relevant industries; and (4) make legislative recommendations that will help promote innovation and economic growth by reducing barriers to and expediting the expansion of the state’s blockchain industry.”

The bill says that the working group shall include no less than five members who obtain knowledge and experience in blockchain or representatives of industries that could “benefit from blockchain technology,” and no less than two members of the academic community. The Commissioner of Economic and Community Development, or the commissioner’s designee, will serve as an ex-officio member of the group.

By no later than January 1, 2019, the group must submit a study and recommendations to the joint standing committees of the General Assembly, taking into consideration matters relating to commerce, banking and finance, as well as revenue and bonding.

In May, the New York state legislature progressed a similar bill to create a blockchain task force. If created, the New York task force would prepare a report for the governor, the temporary president of the state senate, and the speaker of the assembly by December 2019.

Various states in the US have taken the initiative to form their own legislation and regulations on blockchain technology and cryptocurrencies. Last month, the Colorado state senate passed a billthat regulates using blockchain technology for government record keeping and cyber security. The bill also encourages institutions of higher education to include blockchain technologies within their curricula and research activities.

In March, the governor of Tennessee signed a bill that legally recognizes blockchain technology and smart contracts for electronic transactions. The bill also makes a provision that, “protects ownership rights of certain information secured by blockchain technology.”

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