Before you begin...
Electronic money, or e-money, is to normal money as email is to normal (snail) mail: it’s simply an electronic form of value exchange, but with a key advantage in that most types of e-money are not linked to any particular country or government. Electronic money has made big strides in social acceptance in the last decade. Dutch bank ABN Amro’s CEO recently said that the technology behind electronic money is the next big thing in global banking.
The king of e-money today is Bitcoin, created in 2009, shortly after the global economic and banking system shocks known now as the Great Recession. Bitcoin was the brain baby of a mysterious person known as Satoshi Nakamoto, who posted the 2009 Bitcoin white paper on a well-known cryptocurrency forum. His paper described the architecture and function of the new type of e-money that he had invented. Shortly thereafter he offered an open source software package that implemented the white paper’s ideas, and, with the mining of the first “block” of Bitcoin by Satoshi himself in 2009, Bitcoin was born.
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Shortly after, Bitcoin’s first commercial use was to buy some pizza for a guy who had a bunch of bitcoin to spare. In 2013, just four years after its creation, Bitcoin was worth as much as $12 billion. That value has since fallen to about $4 billion.
Why would anyone use e-money? Well, the Great Recession is itself a big part of that answer. Normal money like the U.S. dollar is known as a “fiat currency” because it is offered by fiat by the central government and its value is backed simply by the power of the state issuing it, and the confidence that such power creates. Its value also comes from its ability to be used to pay taxes to the state. Until 1971, the U.S. government used gold to back the value of money it issued, but Nixon took the U.S. off the “gold standard” in favor of a new floating system of value in which the value of the dollar is determined mostly by market forces. The market that determines the dollar’s value in relation to other currencies is the international trading system, of both goods and services, which are denominated in dollars (mostly) but also the trading of dollars themselves for other currencies.
For example, China now holds about $1.5 trillion of dollars in reserve in order to pay for goods and services denominated in dollars and as a store of value for a rainy day, out of a $3.5 trillion in total currency reserves. China keeps such a large amount of dollars because the dollar is the primary reserve currency in the world today and has been for some time.
Other reserve currencies include the British pound, the euro, the Japanese yen, and, if China has its way, before too long the Chinese yuan will also be considered a reserve currency. One commentator has recently suggested that the yuan is headed toward replacing the dollar as the global reserve currency before too long. That would be a momentous shift if it does indeed happen.
The dollar became the primary reserve currency because of our central role in the global economy, which was won by a combination of our large size (more than 1/4th of the global economy after World War II) and our military might that came from being on the right side in World War II, and from our continued military dominance in the wake of the collapse of the Soviet Union in 1991. Today, fully 60% of the globe operates in this “dollar zone.” But as the Economist article linked to above describes, there are growing cracks in the dollar’s global dominance.
Since the U.S. went off the gold standard in 1971 the value of our currency has been determined entirely by social and economic acceptance around the world. In other words, the value of the U.S. dollar is based entirely on confidence in the U.S. government and its economy, and on the trust that such confidence instills in the ability of the dollar to retain its value and its use as an exchange currency.
But the 2008-2009 Great Recession shook a lot of people into the realization that nothing is written in stone, no economic foundation is entirely firm, and even the dollar can of course lose value. When the U.S. government agreed to the $700 billion (with a “b”) bailout of major U.S. banks in 2009, plus the Federal Reserves’ $trillions in additional support, it became quite obvious that our economic and currency system had some major flaws. This was not, of course, the only economic crisis we’ve suffered. Rather, it was simply the latest and most severe since the Great Depression.
Satoshi’s new form of e-money, Bitcoin, arrived in 2009 at an opportune time and a lot of hobbyists, libertarians, and tinkerers leapt at the chance to experiment with a new type of currency that didn’t rely on any central bank or any central authority whatever for its value or its operation.
The magic ingredient in Bitcoin is the distribution of trust (sometimes described as “trustless” transactions) in a vast network that moots the need for the “centralization of trust” that is the function of central banks like the Federal Reserve. The distribution of trust in the Bitcoin ecosystem is made possible with Satoshi’s invention of the “blockchain.” The blockchain is an electronic record of all Bitcoin transactions that is stored on every node of the ever-increasing network of the Bitcoin ecosystem. Because it is completely distributed and constantly updated in real time, the blockchain, which is the ledger of all Bitcoin transactions, can never be shut down by any outside force and it becomes practically immune from hackers.
(Centralized businesses that are part of the Bitcoin ecosystem can still be hacked, and there have been prominent examples of such hacking, such as Mt. Gox before it folded in 2013, but these incidents do not reflect on the security of the blockchain itself.)
In other words, the Bitcoin ecosystem is a way for anybody using it to avoid the centralized power of central banks and of national governments entirely, in terms of these entities’ ability to affect the value and use of the Bitcoin currency. ABN Amro bank chief said it well in August this year: “What the Internet has done for information and the way we communicate, the blockchain will do for value and the way we look at trust. The financial world is going to flip upside-down.”
Obviously, the decentralized nature and independence from government influence has appealed to libertarians and techno-optimists since Bitcoin’s creation. Bitcoin-enabled commerce holds the promise of reducing national borders, and the power of central governments, significantly.
Bitcoin in World Affairs
Okay, now that that introduction to e-money is out of the way, let me shift gears to talk about foreign affairs and where our global system is headed. It is well-known that China’s economy is growing rapidly and at the current pace of growth is set to exceed the size of the U.S. economy in 5-20 years (depending on various factors). Whether this happens in 5, 10, or 20 years doesn’t really matter for present purposes because my point is simply that China is on the verge of taking the top spot from the U.S. in terms of economic power on the global stage.
Recent events have cast some doubts on the sustainability of China’s economic expansion but my feeling is that the current issues facing China are temporary and that it will before too long continue to grow at a steady pace over time.
China is already flexing its new-found muscle in various ways, including with its recent creation of the Asian Infrastructure Investment Bank (AIIB), a regional replacement in many ways for the World Bank. The World Bank is a major part of the Bretton Woods economic system that has governed world affairs in many ways since its creation in 1944 at the close of the Second World War. The World Bank chief is traditionally an American and its sister institution’s chief at the International Monetary Fund (IMF) is traditionally a European.
The U.S. and the UK were the primary architects of the Bretton Woods system and many would agree that these same powers, along with Europe and the western world more generally, have benefited greatly from this system through improved trade relations and improved stability within and between nations.
China’s creation of the AIIB is a direct challenge to the long-standing Bretton Woods system largely because it is the first institution of its kind to gain buy-in from European and other western powers, including the UK, France, Australia, and many others—over the loud objections of the U.S.
China has also worked extensively with Russia in recent years on major infrastructure projects, like a planned rail link between Moscow and Beijing, but also and more importantly in terms of using the yuan as a replacement for the dollar in economic transactions between Russia and China.
In sum, China is already in many ways pushing for a world in which U.S. power and economic strength is much reduced. And while I would agree with many critics regarding the misuse of U.S. power over the last couple of decades, in particular, I fear that China, or a China/Russia axis, would, as the replacement superpower (or “hyperpower” as some have described the U.S. today), be worse than the U.S. has been. And possibly far worse. This is because, among other reasons, China lacks a democratic tradition, is highly nationalistic and ethnicist, and is home to a growing bellicosity and assertiveness that doesn’t bode well for peace as China continues to rise and increasingly butts up against U.S. power in Asia and around the world, as well as with regional rivals like Japan. I fear increasing conflict between China, its regional neighbours, and the U.S., but also a world in which China could theoretically replace the U.S. as top dog at some point down the road.
However, I see the rise of Bitcoin as a powerful tool in helping to prevent this from happening. How? Well, the key to this dynamic is the potential for Bitcoin to replace the yuan as the currency of choice in China. Bitcoin is already being used on a minimal basis in China and China has cracked down on early Bitcoin entrepreneurs and cracked down on Bitcoin in other ways. But even with China’s crackdown on Bitcoin normal Chinese can and do conduct a significant amount of economic transactions in Bitcoin. And China is home to the most Bitcoin mining (creating Bitcoin through massive computing power) of any country, by far, controlling over 50% of all mining in 2015.
Bitcoin is appealing to the Chinese for different reasons, but its main appeal, it seems, is the ability it gives them to send money anywhere in the world with the push of a button, with no fees or very limited fees. China imposes strong capital controls on its citizens, including an annual limit of $50,000 (approximately) in Chinese money being sent out of the country, along with new daily limits on ATM withdrawals in foreign countries. These limits are imposed as a way to maintain the Chinese government’s ability to control the value of its currency, which has been pegged at a specific value to the dollar since 1993.
Bitcoin, however, allows any Chinese national to send as much money abroad as they want to because Bitcoin transactions are generally untraceable to any particular individual. This privacy is made possible because the blockchain ledger of Bitcoin transactions doesn’t contain any personal information. It only contains the Bitcoin transactions themselves.
This feature alone may lead the Chinese to expand their use of Bitcoin, continuing a very clear trend since Bitcoin was created. If this trend does continue, then Bitcoin may become, before too long, a widespread currency in China alongside the yuan, either overtly or more likely covertly.
If Bitcoin continues to be used widely, and if the yuan continues to be devalued through floating exchange rates or through government manipulation of its value, Bitcoin may well become the preferred currency and store of value for large numbers of Chinese.
This evolutionary process could lead to the yuan becoming further devalued through disuse, particularly if other countries start to reject the yuan as a reserve currency, in favor of Bitcoin or other more established currencies, which could lead to a downward spiral of declining value for the yuan. This would improve the competitiveness of Chinese exports, which would boost the Chinese economy, all else equal, but a downward spiral in the value of a national currency is never a good thing in the long-term.
Bitcoin would be well-situated in such a scenario to eventually replace the yuan as the currency of choice for the majority of Chinese people. And if that happens, the central government loses its ability to set economic policy. And if that happens, China may be stopped in its tracks from becoming a superpower capable of rivaling the U.S. If a country can’t control its own currency, or even have its own currency, it cannot be a superpower in any normal sense of the word.
This is all highly speculative, of course, but my aim is to present a plausible scenario in which China loses its ability to control the currency of choice for a majority of its citizens. We’re far too early in the development of Bitcoin to make any predictions about this unfolding dynamic but it will certainly be an interesting ride.
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Fact Checkers & Big Tech Censorship Are Tearing Apart Society
Before you begin...
Journalist Laurie Clarke published an article in the British Medical Journal examining hundreds of millions of pieces of content that Facebook has removed in an attempt to stop ‘covid misinformation.’ As a result of censorship, we are seeing a breakdown of important dialogue. Here is our deeper written analysis of her piece.
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The Quantum Eraser Experiment: What Happens In The Present Can Change The Past
- The Facts:
At the quantum scale, what we do in the present can impact what happens in the past. This is shown through what's known as the quantum delayed choice choice, or quantum eraser experiment.
- Reflect On:
Why are factors associated with consciousness directly intertwined with physical material matter at the quantum scale? What does this mean when it comes to our physical material world in relation to our thoughts, perceptions, feelings and emotions?
Before you begin...
One of the founding fathers of quantum theory, Max Planck, who is often credited with originating quantum theory – a feat that won him the Physics Nobel Prize in 1918 – once stated: “I regard consciousness as fundamental. I regard matter as derivative from consciousness. We cannot get behind consciousness. Everything that we talk about, everything that we regard as exiting, postulates consciousness.”
Fast forward to today and there are a number of experiments in multiple fields showing that Planck was right. Consciousness is fundamental and it is directly intertwined with what we call physical material matter. You cannot explain consciousness in terms of the existing fundamentals like space, time, mass, and charge. As a result, the logical thing to do is postulate whether consciousness itself is something fundamental to the existence of reality.
A classic experiment used to examine the role of consciousness and its relationship to matter is the quantum double slit experiment. In this experiment, tiny bits of matter (photons, electrons, or any atomic-sized object) are shot toward a screen that has two slits in it. When there is no measuring device placed at the screen, the tiny bits of matter act as a “wave” and creates an “interference” pattern on the other side where a wall is placed to catch the pattern. Because there was no measuring or observation device used to see what slit the matter went through, we cannot know what path it took. When the pattern on the wall is examined to see what path it took, it represents a wave of possibilities, meaning the matter (particle) went through both slits, and one slit, and interfered with itself, which should be physically impossible. Welcome to the wacky world of quantum physics – anything and everything is possible.
The kicker is, when an observation device is set up to observe what slit the particles go through, the particle then only goes through one, thus collapsing the wave pattern and forming a pattern that is representative of the particle only going through one slit. In other words, the behaviour of the matter changes when we decide to measure or observe it, the particles act as they are aware they are being watched. 50 percent of the time the particle will go through one slit, and the other 50 percent of the time it will go through the other and form a two slit pattern, just as if they were balls lobbed through one slit or the other.
Observations not only disturb what has to be measured, they produce it…We compel (the electron) to assume a definite position…We ourselves produce the results of the measurement. (M. Mermin, Boojums All the Way Through: Communicating Science ina Prosaic Age (Cambridge University Press, Cambridge, UK, 1990, referenced by Dr. Dean Radin, From A paper published in the peer-reviewed journal Physics Essays explaining how this experiment has been used multiple times to explore the role of consciousness in shaping the nature of physical reality
If this isn’t already mind-altering enough for you, one physicist, John Archibald Wheeler, pondered what would happen if we don’t interfere with the photons on their way through the slits? What would happen if we didn’t set up a measuring device to observe what slit the matter went through, and instead, what if behind the back wall there were detectors? One detector is focused on each slit, and just before the particle lands on the screen after it has passed through the slit device, the detectors are pulled away. When no one could detect which slit the photon had gone through, there was a wave pattern, but when the detectors were in place, there was no wave pattern. Similar to observing the particles before they went through the slit. No observation produced an interference pattern, and observation formed a one line, one slit pattern.
If they collapse to a state of particles from a wave at the moment of detection, after they have gone past the slit device, this means that even though they went through the slit unobserved and should produce a wave (interference) pattern, the very act of observing, still, instantly transforms them into particles and collapses the wave function.
This begs the question, how could these detectors interfere with something that had already happened? It would mean that what happened in the present changed the past. The very act of detecting the particles after they go through the slit determines how they went through the slit, either as a wave or as particles. How is this possible?
Like the quantum double slit experiment, the delayed choice/quantum eraser has been demonstrated and repeated multiple times. For example, physicists at the Australian National University (ANU) have conducted John Wheeler’s delayed-choice thought experiment, and the findings were recently published in the journal Nature Physics.
In 2007 (Science 315, 966, 2007), scientists in France shot photons into an apparatus and showed that their actions could retroactively change something that had already happened.
“If we attempt to attribute an objective meaning to the quantum state of a single system, curious paradoxes appear: quantum effects mimic not only instantaneous action-at-a-distance, but also, as seen here, influence of future actions on past events, even after these events have been irrevocably recorded.” (source)
To make the experiment easier to understand, Wheeler used a cosmic scale explanation. Imagine a star emitting a photon billions of years ago, heading in the direction of planet Earth. In between, there is a galaxy. As a result of what’s known as “gravitational lensing,” the light will have to bend around the galaxy in order to reach Earth, so it has to take one of two paths, going left or going right. Billions of years later, if one decides to set up an apparatus to “catch” the photon, the resulting pattern would be an interference pattern, as explained above in the double slit experiment. This demonstrates that the photon took one way, and it took the other way. A “wave” of possibilities, but the way it took has not been defined.
One could also choose to “peek” at the incoming photon, setting up a telescope on each side of the galaxy to determine which side the photon passed to reach Earth. The very act of measuring or “watching” which way the photon comes in means it can only come in from one side. The pattern will no longer be an interference pattern representing multiple possibilities, but a single clump pattern showing “one” way.
What does this mean? It means how we choose to measure “now” affects what direction the photon took billions of years ago. Our choice in the present moment affected what had already happened in the past.
Below is a great video of Wheeler explaining.
My mind is blown just writing this article, I can’t stop thinking about it and what it could possibly mean, and how factors associated with consciousness are, in more ways than one, intertwined with what we perceive to be our physical reality. I recently published an article regarding consciousness and how it might be fundamental to the creation of our physical material world. You can read that here if interested.
“The day science begins to study non-physical phenomena, it will make more progress in one decade than in all the previous centuries of its existence.” ― Nikola Tesla
Why does all of this matter? Because it’s one of multiple experiments showing a strong connection between consciousness and physical matter. What does this mean at the classic physics scale? What does it mean with regards to the way we think, feel, perceive? What does it mean when we are talking about solutions to problems we are facing on our planet? If human consciousness could be so fundamental with regards to the ‘creation of our reality’, why aren’t we talking about it more? What impact would changing the way we look at our world have on the human experience? What would happen if we started to see things in a different light?
We tend to believe in our culture that we are beings where everything in our world is happening to us, as opposed to us being intimately connected to everything in our world. How might that knowing change the nature of our choices?
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Study Finds That Humans Would Be Quite “Upbeat” About The Discovery of Extraterrestrial Life
Before you begin...
As the possibilities of a non-human intellect being present on Earth increase on a daily basis, one critical question must be addressed: How will we deal with it if we make contact? Will we be terrified if we feel threatened? Will we accept it? Will we be able to comprehend it? Or will we dismiss it as just another item to cope with in our increasingly fast-paced world?
Researchers from Arizona State University performed a study to try to find out the answer, and the article is titled “How Will We React to the Discovery of Extraterrestrial Life?”
The researchers looked at how language was used in media coverage of previous announcements of this kind, with an emphasis on alien microbial life (Pilot Study). A large online sample was asked to write about their own and humanity’s reaction to a hypothetical announcement of such a discovery, and another large online sample was asked to read and respond to a news article about the discovery of fossilised extraterrestrial microbial life in a Martian meteorite.
“If we came face to face with life outside of Earth, we would actually be pretty upbeat about it,” said Arizona State University Assistant Professor of Psychology Michael Varnum.
Varnum presented the study’s findings on February 16 at the American Association for the Advancement of Science annual meeting in Austin, Texas.
The pilot study’s articles focused on the 1996 discovery of possibly fossilised extraterrestrial Martian microbes, the 2015 discovery of periodic dimming around Tabby’s Star, thought to indicate the presence of an artificially constructed “Dyson sphere,” and the 2017 discovery of Earth-like exoplanets in a star’s habitable zone.
The pilot study discovered that the language used to depict these events elicited much more positive than negative feelings.
In a second study, the researchers invited over 500 people to write about their potential reactions to the discovery of alien microbial life, as well as humanity’s possible reaction. When considering their individual sentiments as well as those of mankind as a whole, participants’ replies revealed substantially more positive than negative emotions.
“I’d be a little excited about the news,” one participant remarked. “Even if it existed in a rudimentary form, it would be fascinating.”
Varnum’s group then gave an additional sample of over 500 people with historical news coverage of scientific breakthroughs and asked them to write about their emotions in another research. Participants were split into two groups. Participants in one group read a previous article from The New York Times on probable evidence of ancient microbial life on a Mars meteorite. The second set of participants wrote a report from the New York Times about the alleged development of synthetic human-made life in a lab.
The scientists discovered evidence of considerably happier than negative emotions in responses to the alleged finding of alien life, and this impact was larger in response to reading about extraterrestrial life than in response to human-made synthetic life.
“This discovery demonstrates that other planets can support life,” one participant stated. “It’s an intriguing and fascinating discovery that might be only the beginning.”
Varnum examined recent media coverage of the potential that the interstellar Oumuamua asteroid is actually a spacecraft in unpublished data given at the conference. Here, too, he discovered evidence of more positive than negative emotions, implying that humans may react favourably to news of the finding of sentient life elsewhere in the cosmos.
According to Varnum, “taken together, this implies that if we find out we’re not alone, we’ll take the news rather well”
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