Snippings

I don’t have the exact figures to hand, but as I understand it the Bitcoin coinbase breaks down roughly into thirds…

 A third of them are lost (well, last year 23% but I think it will get worse as more people forget their passwords). This is because (like me) someone wiped their old phone wallet away and forgot to transfer it over to their new phone wallet first or because they accidentally threw away the old hard disk with all the Bitcoins on them or because the dog ate the Bicoin cold wallet or because they died or whatever. As Jonathan Levin of Chainalysis, who I regard as the “go to guy” for tracing Bitcoins, told NPR in January: “For the people that have lost their bitcoins, I say tough luck”.

(These lost Bitcoins, as my good friend Steve Bowbrick rather eloquently observed, are like treasure in sunken galleons waiting to be discovered by an intrepid explorer in the very latest kind of submarine. Which, in this instance, would be a quantum computer. It’s not only Bitcoin tucked away in these sunken galleons, by the way. There’s half a billion dollars in Ethereum stuck in just one Ethereum address: it’s the address “0”, essentially. In July 2016 someone accidentally sent ETH 1,493, currently worth more than a million dollars to that address. And thanks to the magic of the cryptography, it will stay there until the quantum submarine can uncover it.)

Another third of the Bitcoins are in the hands of the .0001%, the cryptoscenti. Bloomberg estimated that a few hundred people at most own these Bitcoins, but I’ve heard estimates that fewer than 50 people have the lion’s share. These are the people who have every interest in driving the value of Bitcoin higher so that they can cash out at a steady rate. If they dump their coins, that will drive the price down (a row has just been going on about the sale of the Mt. Gox assets for this very reason), so they need a rising market where they can convert Bitcoin to one Lambourghini at a time.

Meanwhile the other millions of Bitcoin peasants scrabble for their share of the remaining third. This distribution makes Trump’s America look like a kibbutz in comparison and stands testimony to the deranged nature of utopian projections around this “digital gold” for the masses. So, to get to the question that I was asked on Sky News a few weeks ago, what does the Bitcoin market tell us about the future of money?

Nothing.

I’m not sure that the state of Bitcoin, or indeed the history of Bitcoin, tells us very much about the future of Bitcoin or money. It’s not anonymous enough for criminal enterprise on a large scale (and there is every evidence that criminals are turning to crypto alternatives) and it’s not functional enough to be a mass-market medium of exchange. If it is to remain a store of value beyond speculation then it must be useful for something and I’m at a loss as to what that something might be, although I’m perfectly prepared to believe that it’s because I grew up in an era of chip and PIN cards and ApplePay.

Does that mean that we should ignore it? No, of course not. There are many different ways to look at Bitcoin and it deserves study as a much as a social and political phenomenon as it does as a technological and economic one. What’s more, it tell us something about the future. In today’s Financial Times, Benoît Cœuré and Jacqueline Loh from the Bank for International Settlements (BIS) say that “while bitcoin and its cousins are something of a mirage, they might be an early sign of change, just as Palm Pilots paved the way for today’s smartphones“.

I agree.

So what can we guess about the future of money, given what we have learned so far? Well, as I said in my presentation to Seamless Payments in Australia, what we may have learned is that the token economy is a more accurate pointer toward the future of money than the underlying cryptocurrencies are, because the tokens link the values managed on shared ledgers to the “real world”. There’s a logic to this model of “the blockchain” as the security infrastructure for a token economy and really enjoyed engaging with the good people of Sydney on this view of the emerging cryptoeconomy.

Whilst on the topic of Islamic banking, I can’t help but note that the Grand Mufti of Egypt has issued a fatwa banning trading in Bitcoin and other cryptocurrencies.

 

The combination of OAuth 2.o and OpenID Connet is a good way to balance the demands of open banking and GDPR.

As was explained to me on a trip to Shanghai in 2017, Alipay built bilateral relationships with individual banks, in effect becoming a clearing centre. Other “third party” systems followed so the Chinese central bank required them to create a single central clearing system. So now there is Unionpay for debit and the “Internet Association” for mobile payments.

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“It’s possible we use just simple Merkle trees and hash chains, but we call them Blockchain”

From “Blockchain and Voting | Benlog”.

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“ICOs need a competent legal framework and until governments allocate resources to modernize outmoded laws, ICO teams will follow the path of least resistance and raise funds in the most friction-free manner possible.”

From “ICOs: The Beauty, the Beast and JFK – CoinDesk”.

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“As well as the changes to the verification requirements, the new rules, which come into force on April 1, stipulate that all companies providing bar code-based payment services must obtain both an online payment licence and a bank card receipt business licence, and that all cross-bank transactions involving bar codes must be channelled through the PBOC’s or other approved clearing system.”

From “China’s central bank tightens security in US$5.5 trillion QR code payment services | South China Morning Post”.

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Back in 2014, Tom Noyes (who I always take very seriously on this kind of thing) put it another way. He said…

“Yes it would be completely wierd to launch a consumer brand called AppleIdenityBroker.. But ApplePay doesn’t quite capture the #1 retailer challenge: knowing WHO their consumers are”

From “Brokering Identity – Part 1 – Noyes Payments Blog”.

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“‘Personally, I think zk-SNARKs are a hugely important, absolutely game-changing technology,’ Buterin tells Fortune. ‘They are the single most under-hyped thing in cryptography right now.’”

From “Zcash: Meet Zooko Wilcox, the Man Building a Better Bitcoin | Fortune”.

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Dunkirk. Whenever I see something on TV or read something about Dunkirk, it makes me think about my grandad. He was there. Not only was he there, he was awarded the Distinguished Conduct Medal (DCM) for his bravery. Here is the citation from the British Army record: 

WO2 (RQMS) Acting WO1 Supt Clerk Walter William Page DCM, Royal Signals

This WO is Superintending Clerk to SO in C. He was sent from Premesques late on 26th May in charge of 10 other ranks to report to an officer at Dunkirk. For various means the rendezvous miscarried and RSM Page tried to reach the Signal office in Dunkirk. Being prevented by burning buildings in this object, he went to the docks in search of an officer. There he found an officer of the Merchantile Marine in command of a supply ship to be unloaded. He collected about 150 men of various arms and departments in the dock area and kept them at work unloading through the 27th under heavy bombing attacks, until an ammunition ship alongside was bombed and set on fire about 2200hrs. He showed resource, initiative and determination to a high degree.

Gazetted 11.7.40

That’s my Mum’s Dad, Walter William “Pip” Page. He’s why I have a middle name of “William”. I can remember sitting next to him on chair in his house and reading his copies of “Solider” magazine without ever really thinking what it must have been like for him, as for my father, to have been one.

Not only was he a solider, he was a brave one. There were around eight million British and Commonwealth soldiers who served in World War II and between them they won 1900 DCMs, so he was part of a pretty select group. It was a medal awarded to non-commissioned officers (NCOs) and other ranks for “distinguished, gallant and good conduct in the field”.

The Distinguished Conduct Medal was instituted by Royal Warrant on 4 December 1854, during the Crimean War, as an award to Warrant Officers, Non-Commissioned Officers and men. For all ranks below commissioned officers, it was the second highest award for gallantry in action after the Victoria Cross, and the other ranks’ equivalent of the Distinguished Service Order, which was awarded to commissioned officers for bravery. Prior to the institution of this decoration, there had been no medal awarded by the British government in recognition of individual acts of gallantry in the Army

When I was a kid, staying at my grandparents house for the summer in the 1960s, VE Day was only 20 years back. That’s as far back from now as the death of Princess Diana and I can remember that. It never occurred to me when I was little that my parents and grandparents could actually remember what it was like during an actual war. We used to go along to watch my grandfather (second right below) take part in the DCM holders march. I can’t imagine that as a small boy I could have had any comprehension of what it really meant.

At that age, I devoured Victor (my favourite comic at the time) and ploughed through the Commando. I don’t remember ever thinking that for my grandad these were not distant events but events that we still fresh in the mind and with undoubtedly horrible memories.

Now that I’m old and realise all of this, I was in two minds about whether to go and see the movie or not, because I didn’t want to disrespectful to my grandfather’s memory by enjoying the film (if you see what I mean). After all, Dunkirk must have been terrible for the people like him who were actually there. On the other hand, the film tells the story of him and people like him and reminds us of their sacrifices.

Anyway, in the end we went and I’m glad we did. Dunkirk is a good movie. It’s not a great movie, but it is a good movie and I didn’t resent paying to go and see it on the big screen which is more than I can say for quite a few others.