On Sept 1 2017, Bitcoin roared to a new all-time high, touching the $5000 mark for the first time in history.
\nAnd then the bottom fell out.
\nWhile Twitterverse crypto enthusiasts called the sudden drop a natural correction, it quickly became clear there was nothing natural about it.
\nOver the course of two weeks, Bitcoin and every other crypto faced a sustained assault of relentless negative press designed to crash the price, spread fear and destroy the trust in decentralized money.
\nAnd it wasn\u2019t random at all.
\nIt was a coordinated attack on crypto.
\nTo understand why you just have to know a little about the history of power in the world.
\nThe Empire Strikes Back
\nDavid Smooke, the king of Hackernoon, called decentralized cryptocurrency \u201cthis decade\u2019s iconic battle of government vs. business.\u201d<\/p>\n
But it\u2019s more than that.
\nIt\u2019s not a battle between business and government. It\u2019s a battle between the centralized empires of the world and a decentralized rebel alliance of every day people, an eternal battle.
\nAnd it\u2019s not just a battle.
\nIt\u2019s a war.
\nIt\u2019s been raging since humans first crawled out of the primordial swamp. It\u2019s a battle of freedom versus control, power to the people versus the power of a select group of elites who\u2019ve kept their jackboot on the face of humanity for thousands of years.
\nEach generation must face the fight anew. Like a pendulum that swings back and forth forever and ever, when the world goes too far in one direction it must swing back in the other.
\nToday, overcentralization is a disease. The pendulum only has one way to go.<\/p>\n
Gollum, the Return of the King, (copyright New Line Cinema.)
\nBut centralized empires don\u2019t give up easily. Like Gollum clutching the dark ring, they\u2019ll do anything to hold onto that precious power at all costs. It\u2019s not even about what\u2019s good or right. It\u2019s about power for the sake of power.
\nAt first the Dark Lords of the world don\u2019t pay much attention to rag-tag bands of rebels. They\u2019re scattered and disconnected. But then they sack a trade ship or take a city and suddenly the Eye of Sauron turns.
\nAnd now the Eye has turned towards cryptos.
\nThe Dark Lord\u2019s playbook is simple but devastatingly effective:
\nCo-opt, coerce, corrupt, outlaw, and kill.
\nAnd many of these were on full display the last few weeks.
\nCorrupt and Coerce
\nIt started with China.
\nFirst they lashed out at ICOs, declaring them illegal fundraising.
\nOf course, many applauded the move. While ICOs represent a revolutionary new way to crowdsource funding, moving beyond the straight-jacket of \u201caccredited investors\u201d and VC money, the space was rampant with scams and questionable projects. While the crypto market initially reacted with a short drop, very quickly the trading public saw the move as positive. Bitcoin bounced right back up. They assumed China would make the freeze only temporary and provide better guidance to protect investors with sensible legislation.
\nBut they were wrong.
\nIt was only the opening shot in a new wave of information warfare.
\nOver the next few weeks, the news became a deliberate and coordinated drip of terrifying information, designed to derange the market and spread panic. Instead of the China regulatory news breaking all at once, like a normal story does, it kept dripping out in \u201cleaks\u201d and press releases and planted stories.
\nSoon a story dropped in the Wall Street Journal, citing only \u201cunnamed sources familiar with the matter\u201d that China planned to shutter all crypto exchanges.
\nNow the panic really set in. The sell-off started in earnest.<\/p>\n
Still, many pro traders were calling for HODL, aka holding your position, and waiting for the price to correct back up. Most traders, including me, took the rational position that China would never ban exchanges because it made no sense for them to do it.
\nWe should have known better.
\nLeaks don\u2019t just happen in authoritarian regimes. The regulatory groups and circles of power meet in secret, in smoke filled rooms, behind closed doors. The people in those circles are chosen carefully for clannishness and absolute loyalty. Real leaks get people killed.
\nThe only leaks are deliberate ones.
\nWhile the rumors swirled, the big three exchanges reacted with caution, saying they had received no official word from the People\u2019s Bank of China (PBOC).<\/p>\n
But the optimism wouldn\u2019t last.
\nDespite the fact that closing down crypto exchanges will only drive trading underground, rob the Chinese government of tax revenue and crater their ability to enforce KYC or \u201cKnow Your Customer\u201d style laws, the PBOC moved swiftly to attack exchanges.
\nRight on schedule with the stream of negative news, the PBOC released a statement attacking the exchanges for running without a license. Now suddenly those exchanges that ran for years without issues need a made-up license to operate.
\nYou see, Chinese law doesn\u2019t work like western law. Although the Chinese Constitution provides legal, executive and judicial powers, they\u2019re all subject to the whim of the Communist Party. The Party is supreme. Courts and regulatory bodies don\u2019t need to follow any of those frameworks in deciding cases.
\nChina runs by rule of man (r\u00e9n zh\u00ec \u4eba\u6cbb), not rule of law (f\u01cezh\u00ec \u6cd5\u6cbb).
\nEssentially, it means that regulators can change the rules whenever they feel like and that\u2019s exactly what they did here. In classic rule of man style, the statement was overly broad, vague and subject to interpretation any way they saw fit, a staple of bad law making (just drop it into Google Translate to see).
\nNow the panic really set in as traders dumped faster and faster. Classic trader memes flowed fast and furious from top crypto Twitter accounts.<\/p>\n
A few days later the first of the major exchanges, BTCC, announced it would suspend trading.<\/p>\n
A day later, the other two, OkCoin and Huboi, said they would meet with regulators. The day after that, they announced their own suspensions by the end of October.
\nAll hell broke loose.<\/p>\n
Bitcoin posted the largest one day red candle in history, as traders everywhere sold everything as fast as they could in a stampede of panic.
\nAnd if it was just China news driving the market, that wouldn\u2019t be enough to call it a coordinated attack on crypto. The Chinese government has flirted with cracking down on Bitcoin in the past and even closed exchanges.
\nBut this time was different.
\nHot on the heels of the Chinese story, a storm of negative press flooded the interwebs.
\nOut of nowhere, the CEO of JP Morgan, a company known for investing in blockchain technology, called Bitcoin a \u201cfraud\u201d that\u2019s \u201cworse than tulips.\u201d
\nA few days later, JP Morgan\u2019s lead quant backed the attack calling cryptocurrencies \u201cpyramid schemes\u201d.
\nSoon after, CNBC was trotting out economist Mohamed El-Erian to say \u201cBitcoin should be worth half\u201d what it was trading at, and that it would never achieve \u201cmainstream adoption\u201d, essentially the same argument they used against the Internet, video games, eBooks and digital cameras.
\nBitcoin is \u2018disruptive technology\u2019 but pricing assumes massive adoption: Mohamed El-Erian<\/p>\n
I think it is going to exist because it is a peer-to-peer currency, says Mohamed El-Erian, Allianz chief economic\u2026
\nwww.cnbc.com
\nNow the price of every single crypto was circling the drain, driven down by the relentless assault of information warfare.
\nInnovative Chinese platforms, like NEO, took some of the biggest beatings.
\nBut why now?
\nOn the surface none of this makes sense.
\nThe blockchain space has been booming. Investor money is flooding in. While there are certainly a number of useless projects out there, the space is filled with startups who will revolutionize everything from neighbors trading solar energy among themselves to supply chain management, with heavy hitters like IBM and the Apache Foundation backing the technology.
\nBut when looked at through the lens of the eternal war between centralization and decentralization, it becomes much clearer.
\nGuerilla Warfare
\nFor years cryptocurrencies have ripped along, mostly under the radar.<\/p>\n
Classic Communist propaganda poster.
\nEarly verbal assaults on coins were weak and didn\u2019t do much to dampen enthusiasm among adherents to the crypto creed. Back in 2013, when the first attacks started, the market cap of Bitcoin was tiny, a mere spec of the global economic pie. It traded at around $10\u2013$20. Not much for a centralized empire to worry about at all.
\nThose attacks were simple and straightforward, such as saying that only drug dealers and criminals used Bitcoin, usually by calling attention to Silk Road. Big government boot-licking economist Paul Krugman posted a now infamous missive in the New York Times called \u201cBitcoin is Evil\u201d describing it as a weapon \u201cintended to damage central banking and money issuing banks.\u201d
\nBut the attacks didn\u2019t stick. Bitcoin\u2019s price continued to rise, despite laughable obituaries getting written almost weekly.<\/p>\n
The biggest heist before Mt Gox, as portrayed in the movie Goodfellas.
\nIn fact, the only thing that brought the mighty money badger\u2019s rise to a grinding halt was an actual crime, the hacking of Mt. Gox, the most well known early exchange. Hackers made off with 850,000 Bitcoins, more than $450 million dollars at the time, making it one of the most audacious heists in history. Even with Bitcoin\u2019s recent price slide, those coins are now worth upwards of $3.1 billion dollars.
\nThat\u2019s a lot of money.
\nAnd it was a serious blow. If exchanges can\u2019t keep money secure, they\u2019re unusable. That attack brought about the \u201ccrypto winter\u201d and the prices of every major coin remained depressed for over a year.
\nBut they\u2019ve been on a tear ever since rising from under $300 in the aftermath of Mt Gox to $5000 at its peak this year.
\nNew cryptocurrencies, like Ethereum, sprang onto the scene. They looked to address the shortcomings of the original crypto king, by providing Turing complete programming languages, smart contracts and more.
\nThis year, ICOs raised more than $1.5 billion dollars, outpacing VC money as the number one way to raise cash but doing it all from small investors like Kickstarter on steroids. Projects designed to do everything from decentralized DNS, to identity management and distributed storage started making waves, promising to upend the way we do just about everything in technology.
\nEven the companies and governments that initially laughed at the ideas behind Bitcoin started to understand the breakthrough power of the technology behind it: the blockchain.
\nNo longer would you need to go to one of three central companies to get a web certificate or register a domain name, you could go to a decentralized web of trust that no one group controlled.<\/p>\n
Along the way, Chinese miners came to dominate Bitcoin. Today they make up half of the mining power on Earth. Their entrepreneurs built the fastest ASIC chips, designed to mine coins at astonishing rates, and filled up huge data centers to run them.
\nAt the Consensus Summit this year, an industry trade show, the halls were covered with familiar logos like IBM, and Deloitte Touche and JP Morgan.
\nWait, what? JP Morgan?
\nAren\u2019t those the same guys that were ripping Bitcoin a few weeks ago?
\nThat\u2019s right.<\/p>\n
While CEO Jaime Dimon was pissing on Bitcoin, his office was hosting crypto venture capitalists and crypto investors in San Francisco. And his analysts were lauding the technology in their own papers calling blockchain \u201cthe real deal\u201d:
\n\u201cWhile the notion of blockchain may seem novel, the underlying technology is not new. It is the combination of proven, existing technologies: peer-to-peer networking, asymmetric cryptography and cryptographic hashing (see: In plain English). Bitcoin was the innovation that combined these technologies, offering the ability to transfer value, while preventing double- spend in a trustless, pseudonymous, publicly accessible system.\u201d
\nOh yeah, and at Consensus, JP Morgan announced they would integrate the anonymity technology behind Zcash, another crypocurrency, into their own blockchain technology.
\n\u201cMonday, the company behind Zcash, the Zerocoin Electric Coin Company (ZECC) announces a partnership with JPMorgan Chase to add Zcash\u2019s privacy technology to Quorum, an enterprise blockchain platform JPMorgan built on Ethereum, a network similar to bitcoin\u2019s but focused on smart contracts.\u201d
\nWait, JP Morgan has their own blockchain too?<\/p>\n
You bet\u2019cha.
\nSo what the hell is going on here?
\nHow is it that China\u2019s regime turned its back on a technology that its entrepreneurs dominate, while big banks like JP Morgan tout the power of the blockchain and the innovation of Bitcoin, only to try to destroy the technology that created it?
\nSimple.
\nIt\u2019s about power and control.
\nBarbarians at the Gate
\nFor the first time the powers that be have started to realize that cryptocurrencies aren\u2019t just a toy. As the Russian Minister said they\u2019re now \u201cimpossible to ignore\u201d.
\nThey\u2019re also impossible for any one group or nation to control.
\nAnd that\u2019s just what the banks and authoritarian regimes of the world fear.<\/p>\n
J.P. Morgan himself, the original \u201cfat cat\u201d of big finance.
\nYou see, companies like JP Morgan have dominated finance for more than a hundred years. They\u2019ve acted as the intermediary between us and our money. They\u2019re so powerful that J.P. Morgan once bailed out the U.S. Treasury.
\nThat\u2019s right, one company bailed out the entire U.S. Government.
\nAnd when you act as the choke point that everyone has to go through to get to the most precious resource in the modern world, that\u2019s not a power you let go of lightly.
\nIn fact, you\u2019d do anything to keep that power.
\nOn the other side of the world, the Chinese government holds even more power than the big banks here. The Great Firewall maintains strict control over what their people can see and hear. Currency controls keep their rapidly growing middle class from taking too much money out of the country. The government employs more than two million censors to crush dissent online across social media. If you want to protest the millions of people who\u2019ve disappeared with no trial into black jails, the censors will make sure you can\u2019t say a word.
\nAnd lately, they\u2019ve cracked down even harder.
\nThey recently banned the use of VPNs that tech savvy Chinese citizens have always used to get around the ridiculous limits of the Great Firewall. All this is coming because China typically brings the hammer down on all dissent before its big five year meeting of top communist party leaders. They don\u2019t want anyone protesting the rules they make for them without their consent.
\nBut this feels different than past years.
\nThis feels like fear.
\nOne of the most powerful companies in America and the most dominant force in all of Asia see cryptocurrencies as a major threat. They see them as a powerful, swiftly gathering storm that can level the playing field against their absolute stranglehold on every aspect of our lives.
\nSo they\u2019ve gone on the attack.
\nThe Blueprint of Fear<\/p>\n
Both attacks fall squarely into the playbook of co-opt, coerce, corrupt, outlaw and kill.
\nLet\u2019s start with JP Morgan.
\nTheir attack is trivially simple. It\u2019s a confidence game.
\nThey want to destroy faith in decentralized money to reaffirm faith in centralized money.
\nAnd since money isn\u2019t backed by anything but our faith in it, that\u2019s a very powerful attack indeed and it\u2019s been working for the last two weeks, driving down the price.
\nJP Morgan CEO Jamie Dimon went on his epic rant after his own daughter dared to buy Bitcoin. It\u2019s because he knows his job is obsolete. His company has acted as the middleman for a century. And now the jig is up. Clearly his daughter knows more about the future of money than he does right now. Good for her.
\nAnd of course, the unbelievable arrogance of him calling Bitcoin a \u201cfraud\u201d boggles the mind considering that the number of times his company has been convicted of actual fraud is astonishing, amounting to billions and billions of dollars in settlements.<\/p>\n
The Big Short
\nLets also remember that his firm and their quants helped orchestrate the greatest and most devastating fraud in modern history, the Collateralized Debt Obligation scam, that brought the housing market to a screeching halt, destroyed millions of American lives, crashed the world economy and slammed us face first into the Great Recession.
\nThe scam was simple. Take a bunch of triple A rated mortgages, lump them together with some garbage mortgages and then sell them all as a derivative that is still rated triple A.
\nMaybe you\u2019re still under the impression that it wasn\u2019t a scam at all, that it was just a natural cycle of boom to bust. Housing prices go up and housing prices go down. But let\u2019s take a closer look to understand why that\u2019s just not the case.<\/p>\n
You can check out the delightful Margot Robbie in The Big Short movie explaining it all in two minutes or less, but I\u2019ve whipped up my own little analogy to help as well.
\nImagine that you have a box of deluxe chocolates. You could charge a premium for those candies, right? Put a pretty bow on the box and mark up the price.
\nThose premium candies are like triple A rated mortgages because the people who took out that money to buy a house can pay the money back. You make money as an investor by buying up that debt ahead of time at a lower price, and then you can collect the mortgage money over many years at a higher price and come out way ahead.
\nNow imagine that someone takes half the chocolates out of the box and plunks down dog shit in there instead. After that they paint up the turds with black ink to make them look like deluxe truffles. Then they charge you same price as the premium box.
\nStill sound like a good deal?
\nThose painted shit bags are the mortgages that will never get paid, because they were sold to people who couldn\u2019t afford it, rolled in with the premium mortgages and sold at the same price as the deluxe box of chocolates, as if nothing had changed at all.
\nIf that sounds like fraud, it\u2019s because it is. Actual, literal fraud.
\nAnd they got away it.
\nNot a single person went to jail for it.
\nIn fact, we gave them more money to make sure they didn\u2019t go bankrupt for perpetrating this mass rip-off on the world. The tax payers, aka you and me, gave them $12 billion additional dollars for cheating us, crashing the economy and ratcheting up debt world wide to utterly unsustainable levels.<\/p>\n
Zero Hedge reports that global debt now stands at a record high $217 trillion dollars, more than 327% of GDP. Yes, that is trillion with a capital T. That\u2019s a lot of unpaid bills and a lot of cans kicked down the road.
\nThe people who caused this looming humanitarian disaster are the same people who are telling you that Bitcoin is a \u201cfraud\u201d. The sheer audacity of it is utterly incredible.
\nI guess you can admire their cojones though, right? I mean if you\u2019re going to lie, just go all in with it.
\nOh and while they\u2019re speaking with forked tongues about fraud, they\u2019re also investing in the technology, which brings us to their second attack:
\nCo-opt and corrupt.
\nThey\u2019re building their own blockchains and their own coins. It doesn\u2019t matter that a single company controlling an entire blockchain is utterly worthless. That\u2019s not a blockchain, that\u2019s a database. It provides absolutely no additional value whatsoever but they\u2019re doing it anyway.
\nAs Navil Ravikant, founder of Angel List, says:<\/p>\n
Why is it nonsense?
\nBecause the true power of the blockchain comes from distributing trust across an entire ecosystem. Contrary to popular belief, trust is not a fixed concept.
\nTrust is a moving concept.
\nIf we entrust all of the power to a single entity and that entity goes bad, we\u2019re screwed. Just check out our good friends at Equifax, who couldn\u2019t keep our data safe and managed to leak the personal information of half of the United States. Oh yeah and Equifax provides root certificates on the web as well.
\nThat\u2019s why blockchains use a twist on the \u201cweb of trust\u201d concept. They spread out trust so that untrustworthy central entities don\u2019t get to keep our trust after repeatedly violating it again and again. They\u2019re a check and balance on everyone in the chain, so that no one group can gain complete control over everyone else.
\nIf the bank, its shareholders, its regulators and all of its deposit holders hold the keys to the blockchain, then you have a true distribution of power. Only the rules that everyone can agree on will get passed. That\u2019s the essence of democracy in action. Checks and balances.
\nBut a bank coin is owned by just the bank.
\nThat\u2019s the same old broken trust model we\u2019ve always had up until now.
\nSo why are they doing it?
\nBecause if a bank owns all the keys, they can do what they always do, change the game on a whim, defraud the public as they see fit and make you foot the bill for it, while laughing at you.
\nThey want centrally controlled \u201cblockchains\u201d because they can go on rigging the rules in their favor forever.
\nAnd the Chinese government wants the exact same so let\u2019s turn our attention across the sea for a few moments.
\nThe Chinese Dynasty Redux<\/p>\n
The very first emperor of China outlawed local currencies and made one coin to rule them all. He did that to make sure that nobody else could stand against him.
\nChina still uses a dynastic system, whether they call it that or not. A rose by any other name is still a rose. The dynasties of China never went away. They just transformed. The PRC is nothing but an extension of the same system that\u2019s ruled China for the last five thousand years. One emperor or one party makes no difference. It\u2019s the same. Either one guy makes all the rules or a thousand guys do.
\nAnd its methods are the same too.
\nWhile both China and JP Morgan\u2019s assaults amount to an attack on confidence, designed to destroy faith in cryptocurrency, China takes it one step further.
\nTheir rulers just lept head first into using the law as a weapon.
\nIt started with banning ICOs under the guise of protecting the public, then banning the exchanges for being \u201cunlicensed\u201d even though no such license exists.
\nThat works because some people see the law as good no matter what. If the law says everyone has to jump off a bridge tomorrow, that\u2019s the law and the law is good. Everyone better start jumping or else.
\nBut a law is only as good as the people who wield it. In a just society, the laws are just. In an unjust society, the laws are unjust too. That\u2019s why every major atrocity in the history of man from the mass slaughter of Native Americans to the Holocaust was \u201clegal\u201d.
\nJihan Wu, owner of the biggest Bitcoin mine on the planet, jumped in to say that exchanges should retroactively require that made up license.<\/p>\n
I guess he better hope the government doesn\u2019t decide to invent a license to run a Bitcoin mine too and then seize all his profits!
\nFirst they came for the Bitcoin traders but I didn\u2019t speak up because I wasn\u2019t a trader. Then they came for the Bitcoin users but I didn\u2019t speak up because I wasn\u2019t really a user either. Then they came for the miners and there was nobody left to speak up for me.
\nChina\u2019s regime clearly recognize the disruptive power of the blockchain and they want to capture that power like lightning in a bottle. They want to make sure they don\u2019t lose control of the money supply, because money is power. In other words, they want to make sure they don\u2019t get disrupted too.
\nThat\u2019s why they\u2019re working with private companies like Deloitte Touche to build their own \u201cstate sponsored\u201d cryptocurrency. If that sounds ominous, that\u2019s because it is ominous, even though Deloitte put that on their website without a trace of irony.<\/p>\n
The Chairman knows how to cripple an economy and starve 45 million people! Trust him with making the next \u201cstate sponsored\u201d crypto! What could go wrong?
\nJust like American companies helped China build the Great Firewall, Deloitte\u2019s consultants are helping China create a crypto with a backdoor into every transaction, which will help them monitor and control every aspect of their people\u2019s lives.
\nIt will grant them the power to remotely turn off your money like turning out a light.
\nAnd that would actually be a brand new power for China\u2019s dynasties.
\nThere is an old Chinese proverb:
\n\u5929\u9ad8\u7687\u5e1d\u8fdc
\n\u201cHeaven is high and the Emperor is far away.\u201d
\nIt means that the country is too vast and its people too scattered for the emperor to keep an eye on everything. Despite the iron fist of the Party and the other emperors before them, the Middle Kingdom is actually incredibly decentralized in many ways.
\nThe only way that the regime can keep a hold on their citizens is through a show of force. They can\u2019t stop everything they hate, so they might pick a random group of people and punish them with a vicious show trial. They\u2019ve mastered this charade in places like Tibet, where they put a professor in jail for life when they couldn\u2019t get a handle on the constant wave of uprising in the far western Xinjiang province at the edge of the world.
\nIt\u2019s a classic use of the violence hack, the one hack to rule them all. Pick a random person, kill or imprison him and you let everyone know it could happen to you too.
\nControlling all digital money would amount to an unprecedented new power in the hands of the PRC. If they\u2019re successful, they\u2019ll have a crippled, centrally controlled money system that spreads the power of the emperor across the land, putting the Eye of Sauron into every single pocket and smart phone, giving them a two-way lens into every aspect of their people\u2019s lives.
\nThink of it as Panopticon money.<\/p>\n
Eye of Sauron as depicted in the film version of LOTR. \u00a9 New Line Cinema
\nInglorious Bastards
\nIf all of that sounds like a bunch of folks who don\u2019t deserve a lick of trust trying to jam a false narrative down your throat, that\u2019s because it is a bunch of untrustworthy bastards trying to jam a false narrative down your throat.
\nHere\u2019s the thing though:
\nIn the long run, none of these attacks will work.
\nFirst off, nobody trusts the big banks not to lie to us. We\u2019ve been burned too many times. They can crow all they want about fraud, but everyone knows the Emperor has no clothes. The collateralized debt obligation scam was their last get out of jail free card.
\nThe debt bubble is building again but it\u2019s bigger than it was in 2008 by an order of magnitude. And when it pops this time, none of them are getting a bailout or escaping a cell.
\nCryptocurrencies are built to survive chaos.
\nThat\u2019s why they thrive in failed states like Venezuela, where the people are starving and their money is worthless because of idiotic socialist rulers who failed them.<\/p>\n
In the last few years, billions and billions in smart money has poured into thousands and thousands of blockchain projects. Someone is out there right now, working on the killer app, the one that will make cryptocurrencies take off like a rocketship. And when we hit that Mozilla moment, traditional companies will rush to embrace it and to defend the powerful new marketplace of ideas because now they have something to lose if it goes away.
\nAnd the countries that stand against the blockchain will have that mistake blow back on them with terrible fury.
\nIf China crushes the exchanges for good and cuts off mining, their historical enemies, like Japan, will simply embrace it with glee, as they already have today. Their citizens will only go underground with it and they\u2019ll lose any hope they have of enforcing KYC and stopping massive capital flight, especially as their house of cards economy crumbles.
\nThe Chinese are masterful at faking GDP growth. They\u2019ve taken \u201cshovel and pour\u201d contracts to an epic level. Each local party boss is tasked with a target growth rate every year, usually an insanely impossible 7% or more. There is simply no way to achieve it legitimately.
\nWhat do you do when you don\u2019t have enough entrepreneurial spirit to grow at a faster clip than Internet companies in the 1990\u2019s bubble? Build a bunch of useless crap. China used more cement in the last three years than the US did in the last century.
\nThey build entire cities where nobody lives. They\u2019re called Ghost Cities.
\nThat\u2019s not real growth, that\u2019s fake growth.
\nAnd the worst irony is that if they go after their own miners, they\u2019ll only end up crippling their most innovative real entrepreneurs. The biggest Bitcoin miner in China recently turned their chip designers loose on the power of AI, creating a deep learning ASIC. AI is a technology China wants to dominate in the coming years. If the government seizes their Bitcoin mines and cuts off their primary source of funding, that chip will never come to market and they\u2019ll lose their chance to shape the future of all technology. Once again, an American firm or a European one will dominate chip making for decades.
\nThe Aftermath
\nYou may think this is the death knell for decentralized money.
\nThink again.
\nCryptocurrencies are amazingly resilient.<\/p>\n
Already, the markets are shaking off the attacks. Bitcoin and other cryptocurrencies are bouncing back up fast. They move at video game speed. If a traditional market takes three years to recover, Bitcoin takes three months or a few weeks.
\nThat\u2019s because bitcoin and cryptos are bigger than any one country or company. If someone doesn\u2019t want to play nice, they won\u2019t get to play in the sandbox at all.
\nAnd if countries drive their citizens away from legitimate avenues to participate, they\u2019ll only adopt illicit ones until that country realizes the terrible error of its ways.
\nIn the wake of the ongoing attack on crypto, privacy focused currencies like Monero, PIVX, Dash, and Zcash are looking hotter than ever. Lightweight mobile wallets will make them even better. Even Ethereum is looking to roll in the privacy tech behind Zcash, starting with their rapidly approaching Metropolis hard fork. Expect them to deliver a big return in the coming months if the wave of misinformation continues.
\nThe highly respected International Business Times just ran a story about the power of Monero to stop mega-data breaches like Equifax\u2019s disastrous breakdown, which will cost Americans billions of dollars as hackers gleefully open credit cards in our names. If you\u2019ve worked in computers for more than ten minutes you know the truth:
\nNo central company or country can keep our data secure.
\nThey have to play perfect defense and the hackers just need to score once.
\nThere is only one way to keep our data safe. Don\u2019t keep that data at all.
\nPrivacy isn\u2019t just a nice-to-have in a stable and secure society, it\u2019s an absolute necessity. That\u2019s why the Founding Fathers of the United States gave us the Fourth Amendment:
\n\u201c The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.\u201d
\nIf they were writing it today, they\u2019d have included the right to be secure in our digital devices and papers too. That\u2019s because they grew up in a totalitarian society, where the empire could make laws without their consent, put up soldiers in people\u2019s houses and make them foot the bill and charge people in secret courts.
\nDecentralized cryptocurrencies give people back privacy and control over their lives, while balancing the need for law and order. Every healthy society needs both. The only people who don\u2019t get that are the same people who have never gotten it because they don\u2019t care about anyone but themselves.
\nThe banks can keep their crappy shitcoins. Nobody will buy them. We\u2019re not fooled.
\nAnd countries like Venezuela can keep their hyperinflated money and socialist power mongers too.<\/p>\n
Today the banks and central powers have all our money, all our gold records and all our former hits. But we don\u2019t need it anymore.
\nThey can go ahead and keep all that shit.
\nLike Dr Dre, we\u2019re moving on to bigger and better things.
\nWe\u2019re taking back our lives and our money.
\nThe empire may have struck back.
\nBut the aftermath has only begun.<\/p>\n","protected":false},"excerpt":{"rendered":"
On Sept 1 2017, Bitcoin roared to a new all-time high, touching the $5000 mark for the first time in history.
\r\nAnd then the bottom fell out.
\r\nWhile Twitterverse crypto enthusiasts called the sudden drop a natural correction, it quickly became clear there was nothing natural about it.
\r\nOver the course of two weeks, Bitcoin and every other crypto faced a sustained assault of relentless negative press designed to crash the price, spread fear and destroy the trust in decentralized money.
\r\nAnd it wasn\u2019t random at all.
\r\nIt was a coordinated attack on crypto.
\r\nTo understand why you just have to know a little about the history of power in the world.
\r\nThe Empire Strikes Back
\r\nDavid Smooke, the king of Hackernoon, called decentralized cryptocurrency \u201cthis decade\u2019s iconic battle of government vs. business.\u201d<\/p>\r\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[216],"tags":[],"acf":[],"yoast_head":"\n