Very unusual video this week. But it kind of demonstrates that my enormous talents as a young exciting titty blond video talking she-head may not be quite as overwhelming as I imagine, and perhaps my more proven skills as a writer should probably be the proper tool for the job of discussing a bit of a complex topic – and one that it appears a good bit of the population is more than a little bit poorly led. Money. What it is. Why you need it. And more pointedly, why you need it online.
The video garnered some 60 comments in its first 2k views – about three times the comment rate we normally enjoy. Much of it was condescending, patronizing, and astonishing in how very woefully ignorant of the basics they exhibit. What has become of our educational system. We certainly paid enough taxes to have a fantastic system the envy of the world. But increasingly, it appears not even the very basics are passed on to the next generation.
The central theme of the many “corrections” I received from this misbegotten tribe of the unschooled was that Bitcoin was already here and Amazon could not be trusted.
To back up a bit, many of you know that from 1985 until 1999 I was “editor rotundas” of what started as a raggedly little newsletter and grew to a 168 page per month four color printed magazine titled Boardwatch Magazine. This was not part of a publishing empire, nor funded by angels. It started as a photocopied list of computer bulletin boards in the Denver area. It was grown entirely organically with no debt of any kind ever. And I sold it in 1999 to MecklerMedia and later Meckler AND Boardwatch to a new publishing rollup – Penton Media – netting some $40 million in the process.
It was not originally entirely about the Internet – but about personal computers as communication devices. Personal Computers were widely viewed as limited to three basic applications at that time – Word Processing, Spreadsheets, and Database applications. I very early saw them as ultimately the communications device of the world. And we discussed how to transfer files from one computer to another via a MODulator/DEMmodulator or MODEM over normal telephone lines. But also electronic bulletin boards, online services such as CompuServe, GENie, and AOL, and at some point around 1986, the NSFNET largely because NCAR and NIST were both resident in Boulder Colorado at the time and were 2 of the 6 SuperComputer sites linked via leased 56kbps data lines on the NSFNET the new version of ARPANET.
Bulletin boards or BBSs were much more popular at that time. But by the mid 1990’s most of our publication was about the network of networks or “Internet” branching off the NSFNET backbone. In a stroke of luck I’ve always been deeply suspicious of, I happened to be ON an internet site on the University of Champagne Urbana at the MOMENT Mark Andreeson uploaded the first browser for Windows. The file actually popped up in the directory I was in using FTP. November 30, 1993 as I recall. Our January 1994 issue was already completed and scheduled to go to the printer the next day and I literally had a “stop the presses” moment. As a result we were the first publication to publish a story about accessing a graphical version of the World Wide Web from a PC.
Actually XWINDOWS had a browser the previous summer which Mitch Kapore of Lotus 123 had demonstrated for me on a Linux machine in Cambridge Massachusettes. Which is why I knew what Mozilla was the moment I saw it. But Linux was not widely used in the PC community yet at that time. Indeed Windoze was kind of a new thing to PCs in late 1993.
I later did a 16-page tutorial on installing Trumpet Winsock on a PC that became the most ripped off piece of copyrighted material probably ever, as about 7000 Internet Service Providers provided it to their customers so they too good get on the World Wide Web. Actually with my blessing of course.
Along the way, I gave voice to a common theme online. It goes a bit like this. “There are so many people online now, that if I wrote a poem and posted it online, and everyone who liked it sent me a penny, I would have a shitpot full of money in almost zero time.”
I had actually encountered this exact example online of course. But also saw it expressed with regards to hamburger recipes, and dozens of other things.
The problem was, there was no way to send anyone a penny online. Indeed at that time no one could really send anything in anyway at all.
In the Interim, there have been numerous proposals. Today, eCommerce is almost entirely powered by credit cards. But it’s kind of a one way deal. Merchants can get accounts allowing them to receive credit card payments. But the unwashed online have no way to accept them. They can only pay.
Worse, the recent account of Patreon deplatforming Carl Benjamin, online personna Sargon of Akkad, points to something far deeper.
Patreon has become sort of a one-off payment system for YouTube much as PayPal did for eBay. YouTube has cunningly structured their ad revenue model such that about 25 people make a million dollars a year on the service from advertising revenue. The other billion get about $40 per month. So many YouTubers open a Patreon account allowing their supporters to send them money by credit card directly – bypassing the whole YouTube gig.
And so a growing army of political commentators are able to generate tens of thousands of dollars from those hungry for alternative news outside of the main media sources which have just reached ridiculous heights in misinformation promoting alt left libtard political positions. And from their point of view, something must be done about this info leakage.
And so they are pressuring Patreon to deplatform these commentators. Oddly, the commentators see the outcome quite clearly and are already bailing on this, so the media are going after the credit card companies and what they propose is astonishing. They are DEMANDING that credit card companies monitor spending and speech so they can financially cutoff anyone not carrying the part line. Sam Harris, David Rubin, Jordan Peterson and others have already bailed on the system.
But it points up a glaring omission in the development of the Internet. We never DID address Penny a Poem. So while we need to address this egregious assault on free speech it’s true, I have my eye on bigger fish. We need a secure, frictionless, and anonymous means of exchange on the Internet. Gold and cash are simply obsolete. And credit cards always were a miserable solution.
Along the way PayPal was the most promising. It was launched by Elon Musk oddly enough and Peter Thiel. But they raised quite a bit of venture capital to get it off the ground. It had actually enabled eBay to grow in ways it just never could without it and so they eventually bought it. Elon didn’t actually want to sell it by the majority of the ownership of the company did. I can’t help think we would be much further along if Musk had stayed and managed it. But I guess I wouldn’t be driving a Tesla today if he had.
Paypal has become a mess in the interim. We don’t even accept it any more at EVTV and no longer have an account. No, I wasn’t deplatformed. I fired them for incompetence and malfeasance years ago.
Some promising ventures currently include ApplePay and Amazon Payments. But they haven’t really taken root very well. And they are basically a credit card proxy – although you can send payments to friends who do not have credit card merchant accounts.
Most of the comments on this video are from religious proponents of Bitcoin and they assume I guess that I just have never heard of it. I had Bitcoin within weeks of its introduction. I broadly do understand blockchain and the encryption and worldwide verification of it, though I’ve never been a miner myself. I rather early realized Bitcoin wasn’t going to make it and would never fulfill it’s intended promise. (Full article: trading bitcoin online)
From my point of view, it had about two years to reach what I call viable mass – slightly more accurate than the term “critical” mass. It failed to do so, and with every passing day since, the odds of it EVER reaching viable mass has declined exponentially. At this point it has zero chance to become a global currency. Understand I am saying ZERO chance. And the 125 also-rans aping its motif share that dismal outlook and for not only the same reasons, but they inherit the Bitcoin curse. The more Bitcoin DOESN’T make it, the more they won’t make it either because they are perceived as just like Bitcoin.
So why is it still around? It’s a ponzi scheme. The central attraction to Bitcoin is you can buy a five dollar bill and sell it for $5000 later because there will be even MORE people who will want it then and it is limited in total coins. You just can’t lose. And as it climbed the lofty heights to $20,000 that did appear to be the case. And as it fell step by step from $20,000, many lost a lot.
But maybe it will come back. I hope so. I still have some Dutch Tulip bulbss around here somewhere and maybe they will be worth a LOT of Bitcoin someday soon.
So lets talk a bit about what Money is. For those who know, please forgive me but astonishingly there are apparently a lot of viewers who just have no idea.
Money is a proxy for goods – wealth. Resources. Labor. Food. Shelter. Clothing. Electronic gadgets. And it is kind of a one-off. It represents those things and allows us to trade for them indirectly – in one-off fashion. It is a promise that you can have that stuff later. And for it to work, you have to be willing to accept the promise. It is at its heart a belief system. If you give your bushel of wheat and trade it for money, you BELIEVE that the symbolic you receive can be exchanged for a bushel of corn later.
This is very handy in that it is PORTABLE, not only geographically, but also across time. Wheat is harvested at a different time than corn. And so I can sell my bushel of wheat now, and use the money to buy corn, which I don’t even grow, LATER. Or next year.
But it IS a belief system. I am amused at all the people who rail that US Dollars are a “fiat currency”. It is not true value or wealth like silver or gold. What nonsense.
Silver or gold have very little “value” in and of themselves. Gold has some curious aspects that caused it to be mined and held beginning about 6 thousand years ago.
1. It is quite rare. All the gold in history that has been mined and is now above ground can be contained in a cube 21 meters on a side.
2. It is shiny. Like all primates, we are fascinated by any shiny bauble. Reasonably pure gold simply does not combine with oxygen directly at any temperature. And for this reason, it does not tarnish like copper, silver, iron, or any similar allow of other metals. You polish gold and it stays shiny. And so it came to be useful for shiny baubles – jewelry.
3. It is very malleable. You can hammer gold so thin you can seen through it and it will retain some integrity. It is a very soft metal with no real structural characteristics.
And as it was sought as much as 6000 years ago. But it has a perceived “value” mostly because it is “rare”. And that is the key – perceived value. And so it came to be used for money because everyone AGREED it was valuable due to its rarity and usefulness.. In reality, more so the former as the actual uses were pretty paltry – but I suppose important. It could get you laid. Because chics like shiny baubles. Even among the lower primates.
But today, about 50% of all gold is in jewelry, 40% is held as investment, and only about 10% is used commercially. I would argue again that the 50% in jewelry is MOSTLY because it is an investment, and we would have not nearly the amount of gold jewelry if it were not such a good value investment.
And so it all goes to our BELIEF system in gold as having value, with the exception of tiny bits of it that are used because it is also a very very good conductor of electricity. And so gold plated connector pins just work better for some high frequency applications.
So if the belief system holds up for the U.S. Dollar, it is just as good an exchange proxy as gold. There is one difference. Gold is inherently limited to a certain amount, and we can print dollars if we are a government – debasing it. Would you believe that MUCH gold was minted as coinage debased with other metals as well? So as a practical matter, it is difficult to truly differentiate them even on this point.
So Bitcoin had to be adopted and accepted as a belief system. And if it didn’t do so rather shortly after introduction, it probably never would because it carries the stigma that many don’t buy into the belief system. That it has many admirable traits in that it is reasonably secure, reasonably anonymous, and very easy to transmit online is a good start. But if no one accepts it as payment, it fails – quite utterly.
And on introduction, if millions of merchants and millions of buyers had perceived the very real advantages of block chain and adopted it – in other words “went viral”, it would have been a GREAT innovation in the history of money.
But it didn’t. And that time has passed since introduction, the implication is that people have not accepted it, and so everyone becomes MORE reluctant to accept it. A death spiral based on time. At this point, with the many losses by those who were BUYERS at the $20,000 level, I would say that any innovation in this area in the future is DOOMED TO FAIL if it even begins with the letter B. It is not only marked for death, but it BECOMES the mark for death of a currency.
So for you Bitcoin religious zealots, understand that I am not PREDICTING the death of Bitcoin, I’m pointing out that it is already dead and has been for some time. You are part of a herd of ignorant savages who haven’t got the word yet.
And I tend to think of the failure as a lack of viable mass. Not enough people with STUFF were willing to trade it for bitcoin. So you were held captive by your ability to exchange it for more fungible currencies like US dollars that DID have an established belief system. And that exchange point was the aha moment regulators and defenders of status quo needed to essentially kill it.
I will ignore for the moment that the cause of death could have anything to do with the almost universal propensity for all open source projects to form a circular firing squad and immediately appeal to anyone who will listen for more ammunition. Bitcoin did indeed succumb to internecine warfare quite some time ago.
No the problem was a dearth of places to spend bitcoin. Most of the merchants accepting Bitcoin were selling Ethereum. And versa vice. I was astonished to watch a ready market emerge exchanging some 125 different blockchain crypto currencies. The trading market of the dead. And all of them sharing the Bitcoin death spiral. It’s like watching someone shoot themselves in the head and 124 others wanting to get in on the action by copying their strategy. So they form a club?
I actually had one viewer very condescendingly offer to speak to me about this so he could get me educated on it and all straightened out.
But the tiny few merchants who went out on a limb and accepted it were slaughtered by technical issues and the inability to make it fungible. And so even the progressive online merchants who drank the koolaid soon simply would not accept it.
So why do I want Amazon. com to join in this madness? A secret plot to kill Amazon? Well that hardly works for me as I had invested in Amazon in the late 1990s at about $8 per share. The ONLY thing they sold at that time was books. But I buy a lot of books.
So why do I propose that Amazon get into a blockchain cryptocurrency – I’m calling it Amazon CrypScrip. Well, first, because uniquely THEY CAN and I really don’t think anyone else can. And secondly, because WE NEED IT. The future of online commerce kind of hinges on it.
As I said, a currency is a belief system, and Amazon.com is uniquely positioned to make that belief system real all by themselves. Amazon is well on the way to being “the store” in the way that Taco Bell became the RESTAURANT in the scifi movie Demolition Man.
In this future scenario, competition had caused all restaurants to be absorbed into one giant industry consolidation – Taco Bell. So when you went out to eat, you went to Taco Bell.
I am not advocating for or against, I’m just reporting. Shopping malls across America are transitioning into enormous fitness centers and tattoo parlors. Some kiddy play zones involved. One thing they are NOT going to be in the future is retail store locations. That apparently didn’t work. And Amazon seems to be the cause.
As to whether that’s a good thing or a bad thing rather depends on how much Amazon stock you own. If you don’t own any, here’s a stock tip. Buy it. With both hands.
I’m personally addicted to Amazon. As mentioned, I started with books but I’m actually getting into groceries at this point. Why?
I trust them. They’ve made every dicked up transaction “right” for me in the last 20 years. I’ve actually had some doozies. It happens. But they make it right.
Secondly, I actually have the perception that I have ordered stuff at the computer and gone downstairs to find it incredibly sitting on the porch. SOME time must have passed, but I’m a little unclear how or why.
At this point if it were for sale down the street and CHEAPER, I would probably still buy it from Amazon. Why should I go down the street and hump that stuff up to my house myself? Let UPS bring it up. At this point, I’m a good enough UPS customer several different ways, that if I ask the kid to hump something heavy up the stairs to my bedroom, he’ll actually do it and entertain me with tales of the antics of his girlfriends dog while he’s doing it.
So Bitcoin was the right idea, but they simply failed to implement. They never could achieve viable mass. But what is the attraction? It addressed several elements of what a 21st century online currency would have. What are they?
- IT IS REASONABLY SECURE. One of the abject failures encountered in trying to put lipstick on a pig in using existing credit card companies as online currency is the horrendous level of fraud involved. I know you think that the REASON they are going to 19% with no grace period in a world of 3% interest rate money is because they are greedy blood suckers. Actually they need all that to cover the HORRENDOUS losses they are encountering through online credit card fraud. It is very deeply in their interest for you NOT to know very much about this. So you don’t. But their losses are terrifying. And that’s where the money goes.Blockchain cryptocurrencies are not totally secure. But they are clever. And they could dramatically decrease this level of fraud, and so level of cost. Every transaction is appended to the chain and the entire thing re-encrypted. That takes a lot of processing power and ultimately bandwidth. But we truly live in an age where processing power and bandwidth are so low cost, you can essentially ignore it. Well I can. Jeff Bezos maybe needs to pay attention to it. But I don’t.
- IT IS REASONABLY ANONYMOUS. And careful use could make it more so. In this respect it is a bit like cash.
- IT IS NEARLY FRICTIONLESS. Meaning you can transmit it any place in the world, to anyone, at any time, at basically no cost.
I typically pay $45 to send a wire transfer to China. They pay about that on their end just to receive it. That doesn’t support penny a poem.
Credit cards are little better, the good deal is 1.25% of the transaction plus 25 cents. How do you transfer a penny if it takes 25 cents to make the transaction???
So I absolutely LOVE these characteristics of blockchain cryptocurrencies. They are endlessly divisible. You can already easily transfer 1/1000 or 1/10000 of a Bitcoin. And the merchant or the purchaser basically pays nothing. So it literally enables you to throw a penny into the wishing well online, or at the alligator to see if it will wake him up and make him move.
So how do you achieve viable mass? You can’ t get a large number of merchants to take it until you get a large number of people online to have it to spend. And you can’t do that now because there is no place to spend it that takes it.
Chicken and egg problems are so common in the development of the Internet that I normally don’t spend much time on them. Let the lightweights handle it. They will.
But in this case, maybe it needs a nudge from someone older and wiser. Or at least older. Or at least fatter.
A large number of merchants would be ideal. But second best would be one really really LARGE merchant with many individual items you could spend money on.
The original concept of Amazon when founded in 1994 was actually quite simple and truly it was a brilliant connection for Bezos to make. He noticed that there were about 1.5 million books currently in publication, and book stores typically carried 150,000 of them in any one store. Taking the bricks and mortar out, he could list MOST of the 1.5 million and offer them online for sale. That was the original thinking. And it was inescapably correct and it worked very well. I want a book. And driving from one bookstore to the next trying to find it just isn’t in my plan. So Amazon filled an immediate need, apparently not so very obvious.
- Amazon revenue for the twelve months ending September 30, 2018 was $220.957B, a 37.11% increase year-over-year.
- Amazon has 158 million U.S. members and 100 million are PRIME subscribers as of April 2018
- Over 300 million shoppers worldwide.
- Over 2 million “sellers” or merchants on Amazon.
Amazon has over 3 BILLION products in 11 market places worldwide as of January 2018 with a total of 562,382,292 products in the U.S. market alone.
And so we can see that Amazon actually IS a viable mass of merchants (2 million) and products (3 billion) and shoppers (300 million).
They essentially ARE the viable mass necessary to establish an online currency. They can do it in 10 minutes. Not two years.
So if Amazon issued their own blockchain cryptocurrency, it’s over.
But wait, Bezos owns the Washington Post. Isn’t he kind of a leftist anyway?
I’m more than a little uncomfortable representing his politics. For the feeble minded, it is probably handy to reference a party line to know what you believe.
For the more gifted, things are little muddy and vary from topic to topic and even within the same topic on any given day. But the really encouraging thing here is IT DOESN’T MATTER.
Let’s simplify this a bit conceptually to see why CrypScrip might work.
Picture a gift card. An Amazon gift card. Now I suppose the head of Amazon can control who they will sell the gift cards too, but that has some legal problems as every wedding cake decorator will readily attest. But once Amazon sells a gift card, they rather lose control entirely over who the gift card is given to. And they rather have to honor the gift card if it appears to be a validly issued gift card. They have little control over who they sell the gift cards to, and no control over what happens to it after. It could be passed on from person to person to birthday to Christmas forever, unless it has an expiration date, before finding its way back to Amazon. So “deplatforming people is going to be very difficult using Amazon CrypScrip.
Why would you want such a gift card? Well with the right software, you can buy a single gift card of $1000, and send $40 to each grandkid. Or a penny each to LOTS of grandkids.
Note that there IS a bit of cost for Amazon to accept the $1000. But it is a one time thing and all transactions after that are limited in cost to the processing power and bandwidth to record the transaction in the blockchain. Here’s a very big AND. And Amazon gets to hold the US dollars for the period between when the gift card is issued and when the gift card is redeemed. They would do best with NO expiration, because a large percentage will NEVER be redeemed. They will just travel from person to person, merchant to merchant, and of course to the grandkids, forever without EVER being redeemed. They are as good as money, because at any point they CAN be redeemed for any one of 3 billion items.
This is precisely the same effect the US Dollar enjoys as the petrodollar. Hundreds of billions of US Dollars are held overseas as reserves to purchase oil. They will never be presented in the US to buy things. America’s “gift card” used to buy oil. And we all benefit from “the float.”
And to some degree even the original credit card transaction can be eliminated. Few know it, but Amazon already has an Amazon CASH service where you can walk in and pay cash for Amazon credits. This is actually a very EXTENSIVE network of physical locations. In our little town of 35,000 here in Cape Girardeau Missouri, there are currently TWO locations, Freds on South Sprigg street and the CVS pharmacy at William and Kingshighway. They are a bit cagey about just how many locations there are, but available in 300 cities. Actually 7-11 is in on the deal and GameStop as well.
So a bit under the radar, Amazon is already dabbling in being a bank. And they have a huge relationship with banking giant JP Morgan. https://www.wsj.com/articles/jeff-bezos-and-jamie-dimon-best-of-frenemies-11546664451
But the bottom line is that between Amazon CASH and Amazon GIFT CARDS, all the machinery is already in place to actually be an online currency. It would take some work on software basically to roll this mashup into an online currency and allow exchanges between individuals in gift card fashion and division into variable transfer amounts. But it is no great heroic advance to fulfill the CrypScrip vision.
I’m obsessed on Amazon as a solution because it leverages their existing status of viable mass to ESTABLISH the belief system that the currency has value because it can be exchanged for any of so much on such a large scale already. What precludes Bitcoin et al from ever becoming viable, is already extant in Amazon.
It would be a tiny step for Amazon to add the advantages of bitcoin. It is impossible for Bitcoin to add the steps to become an Amazon. And it really is that simple.
Will it happen? Unfortunately no. Personal courage is simply not in fashion these days. Jeff Bezos has the intellect and has the means. I have to believe if he had the personal courage to make this dramatic stroke, it would have already been taken. And I assume this discussion has already been had internally at Amazon.
But if this post has titillated the neurons, please send a penny. If everyone on the Internet would do so, I’d have $40 million from one blog entry. After all, what’s a penny in the grand scheme of things? Is it too much to ask?
A penny for your thoughts? Or I suppose with inflation, your two cents worth?