exploring Bitcoin

JDH services jaydeeaich at gmail.com
Mon Mar 14 21:07:50 EDT 2011

Sorry about moving the bottom of your mail to the not.

I suffer from bad case of Cluttering (also called tachyphemia), a
communication disorder characterized by speech that is difficult for
listeners to understand due to rapid speaking rate, erratic rhythm,
poor syntax or grammar, and words or groups of words unrelated to the

Serialization(cf. computer science) of thoughts is a difficult problem.

On Mon, Mar 14, 2011 at 2:52 AM, Wolfgang Spraul <wolfgang at sharism.cc> wrote:
> Also keep in mind Qi is a copyleft hardware project, so discussion
> of payment options is only on-topic to a certain degree. For in-depth

"It should be technically feasible to make a fairly secure Bitcoin
wallet with a smart card."

sounds like hardware project to me.

As a side note my wakan-uDTN started out as a copyleft
hardware/software clone of PayPal(The original PayPal. Confinity's
Alternative currency not X.com's interest-free bank) on the PalmIII.

We had a chicken and egg problem.
People need to have a compatible E-wallet hardware for our E-currency
to have any appeal.
but with out an E-currency to put in the E-wallet who would want to
buy a $100-150USD E-wallet?

Then we realized the you could use the same DTN and E-wallet IDs send
cryptographically secure emails. so it wouldn't just be a E-currency
system but a social networking system.

Basically facebook+paypal system where your public key is your User ID
and your password is replaced with a cryptographic handshaking
procedure .

> I still like bitcoins, and will look into how I can sell the stuff
> I make in exchange for some bitcoins :-)

Finding people willing PAY for stuff with Alternative currency isn't
the problem.  Finding people willing to SELL their stuff for the
Alternative currency is the problem


Now back to the top....

On Mon, Mar 14, 2011 at 2:52 AM, Wolfgang Spraul <wolfgang at sharism.cc> wrote:
> Panthera,
> thanks for sharing your thoughts.
> ...
>> B.K. Marcus is a freelance writer in Charlottesville, Virginia. His
>> website is www.bkmarcus.com.
> I'd say please let's not copy/paste large amounts of text, say more
> than 1-2 paragraphs, from other websites/blogs. Use a URL instead,
> and only quote/copy the most significant parts for convenience.
> People who want to read the full article can click on the URL.

Hay! David Kuehling, did you read "The Monetary Economics of Thurston
Howell III" that a C&Ped into my Email?
How about go reading  http://www.utopie.it/pubblicazioni/gesell.htm ?

On Mon, Mar 14, 2011 at 10:34 AM, Dunce Kuehling <dvdkhlng at gmx.de> wrote:
> How is that different to mining for gold, when using gold-backed
> currency (like the dollar has been, a few years back)?

What exactly or the following did you(Kuehling) not understand?
If the inscriptions on coins are supposed to furnish information about
the nature of money, it must be admitted that the information is
scanty. The inscriptions run "10 Marks", "10 Francs" or "10 Roubles",
and if we fail to deduce the nature of money from these words, the
marginal comment "Mit Gott" or "Liberté, Egalité, Fraternité" will
hardly bring us enlightenment.

If we compare the present German coins with the old Prussian thalers
it is noticeable that the inscription no longer states the quantity of
fine metal contained in the coins. As the indication of weight was
often a convenience (* The coin became a legally certified weight with
which anyone could check a shopkeeper's weights. The number of coins
in a sum of money could be determined by weighing, and conversely the
weight of a given number of coins in a sum of money could be
determined by counting) , its omission must have been intentional. Why
was it omitted ? Perhaps because the indication of weight as inscribed
on the Prussian thalers, suggested problems that could not be solved
by the monetary theories then prevalent theories that still hold the
field today. By suppressing the indication of weight on the new coins,
the monetary authorities at least avoided the danger of becoming
involved in contradictions.

If "XXX Thalers are a pound of fine silver" (* "XXX ein Pfund Fein"
the inscription on the old Prussian thaler) then a pound of fine
silver is XXX thalers, and the conception "thaler" becomes by this
inscription, by this inscription, simply a unit of weight reserved for
silver, just as in England special units of weight are used for
certain commodities. (Diamonds, for instance, are weighed by carats.
In Neuchâtel a "mesure" of apples or potatoes contains 20 litres and a
"mesure " of grain 16 litres).

But if a pound of fine silver is thirty thalers, if, as the
inscription and the theory of the thalers assert, the coin is
identical with a certain weight of silver, how can silver be
demonetised ? How can the thirtieth part of a pound of silver be
separated from a thaler ? Is it possible from one conception to make
two, namely "silver" and "thaler" ? Before the year 1872 XXX were one
pound of fine silver, but after that date no longer so. If the latter
statement is possible (and it is a fact), the first statement can
never have been true, and the inscription on the coins represented to
us as one conception what had always been two conceptions - the
thaler, and the material of which the thaler was made. Only the weight
of the thaler was equal to the thirtieth part of a pound of fine
silver, one pound of silver was necessary to make thirty thalers, just
as one pound of iron is necessary to make a horseshoe. A thaler was no
more a certain quantity of silver than a house is a pile of bricks, or
a pair of shoes is a yard of leather. The thaler was a product
manufactured by the German mint and quite distinct from silver. And,
in spite of its inscription, it was that as much before as after the
demonetisation of silver.

The inscription made the thaler and its material one and the same
conception; the demonetisation of silver proved the existence of two
conceptions in the thaler. The withdrawal of the right of free coinage
of silver made the thaler transparent, so that through the silver we
saw its inner nature. We had believed that a thaler was merely silver,
but now we were forced to recognise that it had also been money. We
had denied the thaler a soul until, at its death, a soul left its body
before our eyes. Up to the withdrawal of the right of free coinage the
subjects of Prussia had seen only silver; now for the first time was
revealed to them, in the conjunction of silver and a law of the State,
the existence of a peculiar manufactured product, namely money.

Before the closure of the mints to silver, the explanation of money
given by theorists, both monometallists and bimetallists, passed
without contradiction; but the demonetisation of silver showed that
although coins are struck from metal bars, metal bars are not for that
reason coins.

"Coins are bars of metal the weight and fineness of which are attested
by the stamp."

(Chevalier, La Monnaie, p.39)

"Our German mark is simply the name for 1/1395 of a pound of gold."

Otto Arendt.

No one saw that the free coinage of silver, which in practice, of
course, converted coins into bars of metal and bars of metal into
coins, was a law, a law made by the State and dependent upon the will
of legislators. No one saw that the thaler was a manufactured article,
a product of legislation, the silver being but the arbitrarily chosen
raw material of the thaler. The law made the thaler; the law umnade
it; and what is here stated of the thaler applies, of course, also to
its successor, the German mark. The right of free coinage of gold,
which today in practice identifies coins with gold. is the work of our
legislators. The means which called this right into existence may
withdraw it. The right may be challenged at any time if the opinion
prevails that much which was taken for granted at the adoption of the
gold standard cannot stand the test of criticism. But if this happens,
if the mints are closed to gold - and the recognition of the notes of
the Reichsbank as legal tender is a first step in this direction -
what is then the relation of gold to our money ? Merely that, like
copper, silver, nickel and paper, it is used as a material in the
manufacture of money; that is to say, the relation that obtains
between stone and house, leather and boots, iron and plough. All trace
of identity between money and the material of money would disappear,
and the distinction between gold and the mark would be as apparent as
the distinction between silver and the thaler, or between hats and

(* The theory of the gold standard is at present in such confusion
that it would be difficult to formulate it in words. During the
discussions which preceded the adoption of the gold standard in
Germany, the bullion theory in its crudest form still held the field.
"The value of money is the value it gives itself" said Bamberger; "and
gold forces itself forward as money by virtue of its properties as
How can we reconcile with this assertion the fact that a few years
later there appeared in Germany "A Society for the Protection of the
German Gold Standard" ? Did gold no longer force itself forward as
money by virtue of its properties as metal ? And how did they come to
speak of a "German" gold-standard ? If, as the theory proclaims, the
German mark is simply a certain weight of gold, it is no more German
than French, Russian or Japanese. Or does the mine or melting-pot
produce German gold, and how is this gold distinguished chemically
from other gold ? The title of this society, like the leaflets it
publishes, contains almost as many contradictions as words.
As an example of the state of monetary theory in Germany as lately as
ten years ago, it may be mentioned that the appeal for membership of
this society was signed by persons absolutely without professional
experience in monetary matters. Mommsen and Virchow gave their names
as indifferently as they would have given them for the foundation of a
society of goat-keepers. To them the monetary standard was a trifle, a
minor controversy to be decided offhand.)

We must therefore make a sharp distinction between money and its raw
material, between the German mark and gold. Money and its material can
never be considered one, for between them lies the law which today
unites, but tomorrow may separate them.

This distinction between money and its raw material has always
existed. It existed in a concealed form during the free coinage of
silver, and it exists in a concealed form with the gold standard. But
the distinction was revealed to everyone by the withdrawal, the legal
arbitrary withdrawal, of the right of free coinage of silver. The
distinction is equally apparent at the present day to those who have
learnt from the history of silver that the privileges of money are not
inherent in any metal, but can be transferred by law from one material
to another.

But what do our legislators now think when the currency question
arises, when, for example, they take up a German mark and ask
themselves what it is ? Are they conscious that the German mark has
never been legally defined, that none of the current monetary theories
is compatible with the German monetary standard; that the promotion of
the German banknote to legal tender deprives the orthodox theory of
the gold standard of its last support; that the inscription upon our
banknotes has become nonsense ?

"The Reichsbank promises to pay bearer at sight 100 Marks German
Standard" - so runs the inscription, and monetary theory declared that
the banknotes can circulate only because of this promise to pay. But
the inscription has been implicitly cancelled by the declaration that
the notes themselves are legal tender. Yet the notes continue to
circulate. How is this possible ? The German peasant, for example,
consented formerly to sell his cow for 1000 silver marks which, if
melted, would yield only 400 marks worth of silver, and he is now
willing to give his best horse in exchange for a banknote which, both
from a material and a theoretical point of view, he must regard as a
scrap of paper!

The inscription on the notes should be brought into harmony with
facts. Upon the notes as upon the gold and silver coins should be
written simply 10 - 20 - 100 marks. The rest of the inscription,
especially the word "pay", should be cancelled. This word is used in
promises to pay (promissory notes, bills of exchange and so forth);
and banknotes are not promises to pay. With promises to pay,
especially those of the State, the holder receives interest; but with
banknotes the opposite is true, the drawer, that is, the State,
receives interest.*

(*With the present note-issue of 10 billion marks, the State draws 500
million marks interest annually.)

The drawer or issuer of banknotes, the State, is really the creditor,
and the holder of the banknote is the debtor. "The Reichsbank promises
to pay the holder..." should be changed to "This is 100 Marks."
Banknotes in spite of their inscriptions, can never be promises to
pay. Credit paper without interest is, under present conditions,
inconceivable. But where, except in the inscriptions on banknotes, do
we find credit paper which costs the holder (creditor) interest and
brings in interest to the issuer (debtor), and at the same time stands
at par with real interest-bearing paper ? The German Imperial Loans,
which bring the holders 3 % interest annually, stand to-day (1911) at
84.5; the German banknote, which costs the holder annually 4, 5, 6,
8.5 % interest, stands at par. (*The Reichsbank discounts commercial
paper indifferently with its notes or with gold. It receives the same
interest for both. Yet it counts the gold as part of its capital and
the notes as part of its debts !) The law and present-day monetary
theory treat both kinds of paper alike, regarding each of them as
promises to pay, promises to pay made by the same debtor !

Legislation and pseudo-scientific theory so full of contradiction must
be swept away.

The cellulose of the banknotes, like copper, nickel, silver or gold,
is raw material for the manufacture of money. All these different
forms of money have an equal share in the privileges of money and are
interchangeable. They are all subject to the same effective control of
the State. Nobody buys paper-money with metal money of the same State;
one is simply changed for the other. The promise of payment on
banknotes should therefore be cancelled and the new inscription should
run: "This is ten, one hundred, one thousand marks German standard."

A banknote circulates at par with metal money not because of, but in
spite of, its inscription.

(* When paper falls below par, the metal money, in accordance with
Gresham's law, flows out of the country. The paper-money then
circulates alone.)

What forces, we now ask, make the issuer of a banknote an
interest-receiving creditor, and the holder an interest-paying debtor
? Undoubtedly the miracle is due to the fact that the note has the
privilege of being money. We must therefore examine more closely the
nature of this privilege.

We owe it to the division of labour that we produce more than we
consume. Liberated thus from the compulsion of immediate needs, we can
devote time, provisions and work to the perfection and multiplication
of our means of production. Without the division of labour we could
never have accumulated our present wealth of means of production, and
without these means of production our labour could not have attained
the hundredth part of its present fertility. The greater part of the
population therefore owes its existence directly to the division of
labour. Sixty millions of the sixty-five millions in Germany exist
solely through the division of labour.

The products of divided labour are not goods for immediate consumption
by the producer, but wares, things useful to the producer only as
means of exchange. A cobbler, a carpenter, a general. a teacher or a
day-labourer cannot consume the immediate product of his own labour.
Even a farmer can do so only to a very limited degree. They must all
sell what they produce. The cobbler and carpenter sell their products
to their customers; the teacher and general sell their services to the
State; the day-labourer sells his services to his employer.

For most products the compulsion to sell is absolute; for industrial
products this is a rule without exceptions. For this reason work is at
once interrupted if a disturbance occurs in the sale of the products.
Will a tailor continue to make clothes for which he cannot find
customers ?

But sales, mutual exchanges of products, are effected through the
medium of money. Without the intervention of money no wares can reach
the consumer.

It is indeed not altogether impossible to dispose of the products of
the division of labour by barter, but barter is so cumbersome and
requires so many complicated preparatory arrangements, that producers
generally cease work rather than have recourse to it.
Wolfgang I don't C&P large chunks of text for the "People who WANT to
read the full article"(emphasis mine).

I could use a short quote and the URL to 'TELL  the article TO them',
but the large chunks are for the people that want me to 'FEEL the
article AT them'.(cf.

Panthera Tigris Altaica

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