Category: #Self-Education

Learn about Inflation Folks!

What Is Inflation?

Inflation definition

Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.

The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time.

The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.

Inflation can be contrasted with deflation, which occurs when prices decline and purchasing power increases.

KEY TAKEAWAYS

  • Inflation is the rate at which prices for goods and services rise.
  • Inflation is sometimes classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation.
  • The most commonly used inflation indexes are the Consumer Price Index and the Wholesale Price Index.
  • Inflation can be viewed positively or negatively depending on the individual viewpoint and rate of change.
  • Those with tangible assets, like property or stocked commodities, may like to see some inflation as that raises the value of their assets.

Understanding Inflation

While it is easy to measure the price changes of individual products over time, human needs extend beyond just one or two products.

Individuals need a big and diversified set of products as well as a host of services for living a comfortable life.

They include commodities like food grains, metal, fuel, utilities like electricity and transportation, and services like healthcare, entertainment, and labor.

Inflation aims to measure the overall impact of price changes for a diversified set of products and services. It allows for a single value representation of the increase in the price level of goods and services in an economy over a period of time.

Causes of Inflation

An increase in the supply of money is the root of inflation, though this can play out through different mechanisms in the economy.

A country’s money supply can be increased by the monetary authorities by:

  • Printing and giving away more money to citizens
  • Legally devaluing (reducing the value of) the legal tender currency
  • Loaning new money into existence as reserve account credits through the banking system by purchasing government bonds from banks on the secondary market (the most common method)

In all of these cases, the money ends up losing its purchasing power. The mechanisms of how this drives inflation can be classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation

Here is an interesting collection of books about inflation:

https://www.infobooks.org/free-pdf-books/business/inflation/

“According to Cantillon, the beneficiaries from the expansion of the money supply are the first recipients of the new money, who are able to spend it before it has caused prices to rise.

Whoever receives it from them is then able to spend it facing a small increase in the price level.

As the money is spent more, the price level rises, until the later recipients suffer a reduction in their real purchasing power.

This is the best explanation for why inflation hurts the poorest and helps the richest in the modern economy.”

Saifedean Ammous, “The Bitcoin Standard: The Decentralized Alternative to Central Banking”

“It is much more difficult to see how it will ever be possible to abandon a system of provision for the aged under which each generation, by paying for the needs of the preceding one, acquires a similar claim to support by the next.

It would almost seem as if such a system, once introduced, would have to be continued in perpetuity or allowed to collapse entirely.

The introduction of such a system therefore puts a strait jacket on evolution and places on society a steadily growing burden from which it will in all probability again and again attempt to extricate itself by inflation.”

Friedrich A. Hayek, “The Constitution of Liberty”

What with the doctrines that are now widely accepted and the policies accordingly expected from the monetary authorities, there can be little doubt that current union policies must lead to continuous and progressive infl ation.

The chief reason for this is that the dominant “fullemployment” doctrines explicitly relieve the unions of the responsibility for any unemployment and place the duty of preserving full employment on the monetary and fiscal authorities.

The only way in which the latter can prevent union policy from producing unemployment is, however, to counter through inflation whatever excessive rises in real wages unions tend to cause.”

Friedrich A. Hayek, “The Constitution of Liberty”

“Inflation destroys the value of your savings while Bitcoin protects them.”

Olawale Daniel

“To accumulate any wealth, you must invest at a growth rate higher than inflation.”

Naved Abdali

“An ounce of gold will always be an ounce of gold regardless of the length of possession.

The short-term value will go up or down, but gold prices will follow the general inflation rate in the long run.”

Naved Abdali

“… The Banks, as we now all too well know, must be rescued no matter what.

‘The value of commodities is thus sacrificed in order to ensure the fantastic and autonomous existence of this value in money.

In any event, a money value is only guaranteed as long as money itself is guaranteed.’

Inflation, as we also know, must be kept under control at all costs.

‘This is why many millions’ worth of commodities have to be sacrificed for a few millions in money.

This is unavoidable in capitalist production and forms one of its particular charms.’

Use values are sacrificed and destroyed no matter what is the social need.

How insane is that?”

David Harvey, “Marx, Capital and the Madness of Economic Reason”

“For one thing, this steady devaluation of the dollar is a new practice, relatively speaking.

For most of our country’s history, the dollar gained value.

The dollar was worth 75 percent more in 1912 than it was worth in 1800.

You know those stories your parents or grandparents tell about how they used to buy a sandwich and a fountain soda for a dime?

How everything was so much cheaper back in the day?

If you were around in 1900, for instance, the old folk didn’t tell those sorts of stories.

What cost a dime in 1900 probably cost fifteen cents in 1875, and twenty cents in 1800.

Of course, since 1912, the dollar has lost more than 95 percent of its value….

You will remember what happened in 1913: the Fed was created.”

Peter Schiff, “The Real Crash”

“We have gold because we cannot trust governments”

Herbert Hoover

“Inflation is taxation without legislation.”

Milton Friedman

“Inflation is always and everywhere a monetary phenomenon.”

Milton Friedman, “Money Mischief: Episodes in Monetary History”

“The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature.

The inflation tax has a fantastic ability to simply consume capital.

It makes no difference to a widow with her saving in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation.

Either way, she is ‘taxed’ in a manner that leave her no real income whatsoever.

Any money she spends comes right out of capital.

She would find outrageous a 120 percent income tax, but doesn’t seem to notice that 5 percent inflation is the economic equivalent.”

Warren Buffett

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

Ronald Reagan

“The natural tendency of the state is inflation.”

Murray Rothbard

“The first panacea for a mismanaged nation is inflation of the currency; the second is war.

Both bring a temporary prosperity; both bring a permanent ruin.

But both are the refuge of political and economic opportunists.”

Ernest Hemingway

“Whoever controls the volume of money in our country is absolute master of all industry and commerce…when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”

James A. Garfield

“Continued inflation inevitably leads to catastrophe.”

Ludwig von Mises

“The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.”

Ludwig von Mises

“Continued inflation inevitably leads to catastrophe.”

Ludwig von Mises

“When a business or an individual spends more than it makes, it goes bankrupt.

When government does it, it sends you the bill.

And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation.

Make no mistake about it, inflation is a tax and not by accident.”

Ronald Reagan

“Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending.

No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.”

Ayn Rand

“Monetary inflation not only raises prices and destroys the value of the currency unit; it also acts as a giant system of expropriation.”

Murray Rothbard

“Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel.

These once unthinkable dosages will almost certainly bring on unwelcome after-effects.

Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.”

Warren Buffett

“I believe that banking institutions are more dangerous to our liberties than standing armies.”

Thomas Jefferson

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.

There is no safe store of value.

Deficit spending is simply a scheme for the hidden confiscation of wealth.

Gold stands in the way of this insidious process. It stands as a protector of property rights.

If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Alan Greenspan

“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.”

Friedrich August von Hayek

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency.

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.”

John Maynard Keynes

“Printing money creates inflation, which weakens an economy.

Unfortunately, this kind of common-sense thinking never seems to penetrate academic circles.”

Peter Schiff

“It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less.

[I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.’

The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.”

Paul Volcker

“Most people will see declining returns [due to inflation].

One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life – you don’t need a lot of material goods.”

Charlie Munger

“Inflation is the true opium of the people and it is administered to them by anticapitalist governments and parties.”

Ludwig von Mises

“There are two main drivers of asset class returns – inflation and growth.”

Ray Dalio

“It’s hard to build models of inflation that don’t lead to a multiverse.

It’s not impossible, so I think there’s still certainly research that needs to be done.

But most models of inflation do lead to a multiverse, and evidence for inflation will be pushing us in the direction of taking [the idea of a] multiverse seriously.”

Alan Guth

“If the governments devalue the currency in order to betray all creditors, you politely call this procedure ‘Inflation‘.”

George Bernard Shaw

“The illusiveness of this concept of national income is to be seen in its dependence on changes in the purchasing power of the monetary unit.

The more inflation progresses, the higher rises the national income.”

Ludwig von Mises

“The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.”

Ludwig von Mises

“The idea that when people see prices falling they will stop buying those cheaper goods or cheaper food does not make much sense.

And aiming for 2 percent inflation every year means that after a decade prices are more than 25 percent higher and the price level doubles every generation.

That is not price stability, yet they call it price stability.

I just do not understand central banks wanting a little inflation.”

Paul Volcker

“Inflation is the fiscal complement of statism and arbitrary government.

It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism.”

Ludwig von Mises

“To reverse the trend and reduce the role of government in our lives, and thus alleviate the government deficit and inflation pressures, is a giant educational task.

The social and economic ideas that gave birth to the transfer system must be discredited and replaced with old values of individual independence and self-reliance.

The social philosophy of individual freedom and unhampered private property must again be our guiding light.”

Hans F. Sennholz

“What I’m trying to say is that for the average investor, what I would encourage them to do is to understand there’s inflation and growth – it can go higher and lower – and to have four different portfolios essentially that make up your total portfolio that gets you balanced.”

Ray Dalio

“If government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will.

As a result, this ‘inflation’ of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy.”

Murray Rothbard

“We are now speeding down the road of wasteful spending and debt, and unless we can escape we will be smashed in inflation.”

Herbert Hoover

“Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary.

For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.”

Friedrich August von Hayek

“Big business is not dangerous because it is big, but because its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy.”

Woodrow Wilson

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth.

Gold stands in the way of this insidious process.

It stands as a protector of property rights.”

Alan Greenspan

“Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking.

For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation.

Why are we doing this to ourselves?”

Peter Thiel

Having examined the nature of fractional reserve and of central banking, and having seen how the questionable blessings of Central Banking were fastened upon America, it is time to see precisely how the Fed, as presently constituted, carries out its systemic inflation and its control of the American monetary system.

Murray Rothbard

“Inflation, being a fraudulent invasion of property, could not take place on the free market.”

Murray Rothbard

“No central banker would disagree with the proposition that inflation is primarily a monetary phenomenon.

Not one of them will disagree that every inflation has been accompanied by a rapid increase in the quantity of money and every deflation by a decline in the quantity of money.”

Milton Friedman

“The drum-fire of propaganda that the Fed is manning the ramparts against the menace of inflation brought about by others is nothing less than a deceptive shell game.

The culprit solely responsible for inflation, the Federal Reserve, is continually engaged in raising a hue-and-cry about ‘Inflation,’ for which virtually everyone else in society seems to be responsible.

What we are seeing is the old ploy by the robber who starts shouting ‘Stop, thief!’ and runs down the street pointing ahead at others.”

Murray Rothbard

“I think democracies are prone to inflation because politicians will naturally spend [excessively] – they have the power to print money and will use money to get votes.

If you look at inflation under the Roman Empire, with absolute rulers, they had much greater inflation, so we don’t set the record.

It happens over the long-term under any form of government.”

Charlie Munger

“Government policies try to prevent the emergence of serious unemployment by credit expansion, i.e., Inflation.

The outcome was rising prices, renewed demands for higher wages and reiterated credit expansion; in short, Protracted Inflation.”

Ludwig von Mises

“Inflation is essentially antidemocratic.”

Ludwig von Mises

“Inflation has always been an important resource of policies of war and revolution and why we also find it in the service of socialism.”

Ludwig von Mises

With 🧡

What is Bretton Woods ?!?

Mount Washington Hotel in Bretton Woods, New Hampshire, where the 1944 postwar U.N. Monetary and Financial Conference established an international commercial and financial system.

The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United States (July 1–22, 1944) to regulate the international monetary and financial order after the conclusion of World War II.

Bretton Woods Conference
July 1 to 22, 1944

The conference was attended by experts noncommittally representing 44 states or governments, including the Soviet Union.

It drew up a project for the International Bank for Reconstruction and Development (IBRD) to make long-term capital available to states urgently needing such foreign aid, and a project for the International Monetary Fund (IMF) to finance short-term imbalances in international payments in order to stabilize exchange rates.

Although the conference recognized that exchange control and discriminatory tariffs would probably be necessary for some time after the war, it prescribed that such measures should be ended as soon as possible.

After governmental ratifications the IBRD was constituted late in 1945 and the IMF in 1946, to become operative, respectively, in the two following years.

This led to what was called the Bretton Woods system for international commercial and financial relations.

The Bretton Woods System

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement.

The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states.

The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollar, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar).

It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with balance of payments deficits.

The Price of Gold, as denominated in dollars, was steady until the collapse of the Bretton Woods system in the mid-1970s.

The delegates deliberated from 1 to 22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the IMF and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.

The United States, which controlled two-thirds of the world’s gold, insisted that the Bretton Woods system rest on both gold and the US dollar.

Soviet representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were “branches of Wall Street”.

These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement. According to Barry Eichengreen, the Bretton Woods system operated successfully due to three factors: “low international capital mobility, tight financial regulation, and the dominant economic and financial position of the United States and the dollar.”

On 15 August 1971, the United States terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a Fiat currency.

Shortly thereafter, many fixed currencies (such as the pound sterling) also became free-floating, and the subsequent era has been characterized by floating exchange rates.

The end of Bretton Woods was formally ratified by the Jamaica Accords in 1976.

Sources:

https://www.britannica.com/
https://www.investopedia.com/
https://www.wikipedia.com/
With 🧡

Smart Contracts by Nick Szabo-1994

Nick Szabo

A smart contract is a computerized transaction protocol that executes the terms of a contract. The general objectives of smart contract design are to satisfy common contractual conditions (such as payment terms, liens, confidentiality, and even enforcement), minimize exceptions both malicious and accidental, and minimize the need for trusted intermediaries. Related economic goals include lowering fraud loss, arbitration and enforcement costs, and other transaction costs[1].

Some technologies that exist today can be considered as crude smart contracts, for example POS terminals and cards, EDI, and agoric allocation of public network bandwidth.

Digital cash protocols[2,3] are fine examples of smart contracts. They enable online payment while honoring the characteristics desired of paper cash: unforgeability, confidentiality, and divisibility.

When we take a second glance at digital cash protocols, considering them in the wider context of smart contract design, we see that these protocols can be used to implement a wide variety of electronic bearer securities, not just cash.

We also see that to implement a full customer-vendor transaction, we need more than just the digital cash protocol; we need a protocol that guarantees that product will be delivered if payment is made, and vice versa.

Current commercial systems use a wide variety of techniques to accomplish this, such as certified mail, face to face exchange, reliance on credit history and collection agencies to extend credit, etc.

Smart contracts have the potential to greatly reduce the fraud and enforcement costs of many commercial transactions. Digital cash protocols use several of the rich new building blocks coming out of the fields of cryptography and computer science.

Most of these components have not yet been widely exploited to facilitate contractual arrangements, but the potential is vast. These subprotocols include Byzantine agreement, symmetric and asymmetric encryption, digital signatures, blind signatures, cut & choose, bit commitment, multiparty secure computations, secret sharing, oblivious transfer, and multiparty secure computation. All of these except the first are described in [2,3].

The consequences of smart contract design on contract law and economics, and on strategic contract drafting, (and vice versa), have been little explored. As well, I suspect the possibilities for greatly reducing the transaction costs of executing some kinds of contracts, and the opportunities for creating new kinds of businesses and social institutions based on smart contracts, are vast but little explored.

The “cypherpunks”[4] have explored the political impact of some of the new protocol building blocks. The field of Electronic Data Interchange (EDI), in which elements of traditional business transactions (invoices, receipts, etc.) are exchanged electronically, sometimes including encryption and digital signature capabilities, can be viewed as a primitive forerunner to smart contracts. Indeed those business forms can provide good starting points and channel markers for smart contract designers.

One important task of smart contracts, that has been largely overlooked by traditional EDI, is communicating the semantics of the transaction to the parties involved.

There is ample opportunity in smart contracts for “smart fine print”: actions taken by the software hidden from a party to the transaction.

For example, grocery store POS machines don’t tell customers whether or not their names are being linked to their purchases in a database. The clerks don’t even know, and they’ve processed thousands of such transactions under their noses.

Thus, via hidden action of the software, the customer is giving away information they might consider valuable or confidential, but the contract has been drafted, and transaction has been designed, in such a way as to hide those important parts of that transaction from the customer.

To communicate transaction semantics well, we need good visual metaphors for the elements of the contract. These would hide the details of the protocol without surrendering control over the knowledge and execution of contract terms.

A primitive but good example is provided by the SecureMosiac software from CommerceNet. Encryption is shown by putting the document in an envelope, and a digital signature by affixing a seal onto the document or envelope. On the other hand, Mosaic servers log connections, and sometimes even transactions, without warning users — classic hidden actions.

Another area that might be considered in smart contract terms is synthetic assets[5]. These new securities are formed by combining securities (such as bonds) and derivatives (options and futures) in a wide variety of ways.

Very complex term structures for payments (ie, what payments get made when, the rate of interest, etc.) can now be built into standardized contracts and traded with low transaction costs, due to computerized analysis of these complex term structures.

Synthetic assets allow us to arbitrage the different term structures desired by different customers, and they allow us to construct contracts that mimic other contracts, minus certain liabilities.

As an example of the latter, synthetic assets have been constructed that mimic the returns of stocks in German companies, without requiring payment of the tax foreigners must pay to the German government for capital gains in German stocks.

It’s important to note that these synthetics do _not_ confer voting rights as do the originals. It might be possible to add smart contract protocols to transfer voting rights to the synthetic.

Of course, these protocols might have to be quite secure to withstand attacks from the third party jurisdiction, whose transaction cost (the tax) is being arbitraged away by the synthetic asset.

Finally, we can extend the concept of smart contracts to property. Smart property might be created by embedding smart contracts in physical objects. These embedded protocols would automatically give control of the keys for operating the property to the agent who rightfully owns that property, based on the terms of the contract.

For example, a car might be rendered inoperable unless the proper challenge-response protocol is completed with its rightful owner, preventing theft. If a loan was taken out to buy that car, and the owner failed to make payments, the smart contract could automatically invoke a lien, which returns control of the car keys to the bank. This smart lien might be much cheaper and more effective than a repo man.

Also needed is a protocol to provably remove the lien when the loan has been paid off, as well as hardship and operational exceptions. For example, it would be rude to revoke operation of the car while it’s doing 75 down the freeway.

Smart property may be a ways off, but digital cash and synthetic assets are here today, and more smart contract mechanisms are being designed. So far the design criteria important for automating contract execution have come from disparate fields like economics and cryptography, with little cross-communication: little awareness of the technology on the one hand, and little awareness of its best business uses other.

The idea of smart contracts is to recognize that these efforts are striving after common objectives, which converge on the concept of smart contracts.

Copyright (c) 1994 by Nick Szabo
permission to redistribute without alteration hereby granted

Redistributed with respect & admiration from:

https://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/smart.contracts.html

Nick Szabo is so deeply ingrained in the modern digital currency landscape that 1/1000000000000th of an Ether is called a “szabo”.

20 Security Rules for bitcoin

Questions & Answers Chapter

20 Rules for Security in bitcoin

Here’s a short list of common sense Rules, to use and implement for a better Security while using bitcoin and other cryptocurrencies.

In the hopes that they are quite self-explanatory Rules, please do try for your own good and your assets, to follow them…

If you have any questions, please do not hesitate to ask in the comments.

  1. Keep your private keys safe and secure, and never share them with anyone.
  2. Use a hardware wallet to store your bitcoins offline and away from potential hackers.
  3. Use a strong and unique password for your wallet and any exchange account.
  4. Be wary of phishing attempts and never click on links from unknown sources.
  5. Use multi-factor authentication (MFA) whenever possible to secure your accounts.
  6. Use a different password for each account and change them frequently.
  7. Avoid using public Wi-Fi networks for sensitive transactions.
  8. Keep your computer and mobile devices secure with updated antivirus and anti-malware software.
  9. Use a separate address for each transaction, and avoid reusing addresses.
  10. Verify the authenticity of any website or service you use for Bitcoin transactions.
  11. Use a reputable and secure Bitcoin exchange or wallet service.
  12. Use a hardware token or other secure means of 2FA, avoid using SMS.
  13. Be mindful of social engineering and do not reveal personal information to unknown parties
  14. Use a unique email address and phone number for every exchange account.
  15. Keep a copy of your private key, Seed Phrase or wallet recovery phrase in a safe place.
  16. Be skeptical of unsolicited offers, promotions or services.
  17. Learn about the security features of your wallet and use them.
  18. Do not leave your funds on exchange for long time.
  19. Educate yourself about the risks of using Bitcoin and other cryptocurrencies.
  20. Regularly monitor your accounts and transactions for suspicious activity.
With 🧡

Running bitcoin – Hal Finney

Wonder In Peace Bright Mind

Join Honorary Chair Fran Finney and the Running Bitcoin Challenge Committee as we honor legendary cypher punk, Hal Finney.

This is THE EVENT that combines Hal Finney’s love of running and Bitcoin and is raising funds and awareness to help defeat ALS, which ultimately claimed his life in 2014.

You are challenged to run (or walk, roll, or hike) the equivalent of a half marathon — cumulatively or all at once — by the end of January 10, 2023.

From wherever you are, spread the word about Bitcoin, participate in a healthy activity, feel good about doing your part to defeat ALS, and start the year off right

Hal Finney, one of the earliest bitcoin contributors, died eight years ago from complications of nervous system disease amyotrophic lateral sclerosis (ALS).

His spouse, Fran Finney, is now organizing a half marathon to raise funds for ALS research via bitcoin.

The “Running Bitcoin Challenge” is set to take place between Jan. 1 and Jan. 10. The timing of the occasion leads up to the anniversary of Hal Finney’s “Running bitcoin” tweet, in which Finney famously disclosed he was deploying a Bitcoin node.

There is no set location — participants can choose to join anywhere they wish. Players are encouraged to either run, walk, roll or hike the equivalent of a half marathon (Hal’s favorite distance) either in one go or over the entire 10-day period.

Donors contributing at least $100 will receive an official shirt with the half marathon’s logo, while the event’s top 25 fundraisers will get a Hal Finney collectible signed by his wife.

As of Wednesday morning, the event has already managed to secure nearly $10,000 in bitcoin donations.

An advocate of cryptography and digital privacy, Finney was the recipient of the first-ever bitcoin transfer from the network’s pseudonymous creator Satoshi Nakamoto.

The bitcoin community often suspected Finney was Nakamoto, a claim he consistently denied. He reportedly found out about his condition in 2009 and decided to move away from the project.

Hal’s name is high in the Bitcoin pantheon as one of the first people to voice support for Satoshi Nakamoto’s invention and for being the first person to receive a Bitcoin transaction from Satoshi.

He was, for a time, considered one of the top contenders on the list of potential Satoshis himself (many in blockchain who reject Dr. Craig Wright’s statements still falsely believe Finney to be Bitcoin’s real creator).

Hal, who referred to himself as a “cypherpunk,” was a cryptographic activist who went from developing video games to working on the Pretty Good Privacy (PGP) project in the 1990s. He described his PGP work as “dedicated to the goal of making Big Brother obsolete.”

PGP creator Phil Zimmerman hired Hal as his first employee when PGP became PGP Corporation in the early 2000s. He described Hal as a “gregarious man” who loved skiing and long-distance running.

Despite gradual paralysis that eventually forced him to stop working, Hal continued to code software and follow the Bitcoin project.

Almost as famous as his 2009 tweet is his “Bitcoin and me” post on BitcoinTalk.org in March 2013, the last he’d ever make.

It’s a long post, and Hal was “essentially paralyzed” at the time, using an eye tracker to type. Forum stats show the post has been read over 278,000 times.

“When Satoshi announced the first release of the software, I grabbed it right away,” he wrote. “I think I was the first person besides Satoshi to run bitcoin. I mined block 70-something, and I was the recipient of the first bitcoin transaction when Satoshi sent ten coins to me as a test.

I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them.”

Hal himself always denied being Satoshi Nakamoto, adding later that he’d sold most of the Bitcoins he mined (at pre-2014 prices) to pay for his treatments. He also mentioned putting some in a safe deposit box for his children.

“And, of course, the price gyrations of bitcoins are entertaining to me.

I have skin in the game.

But I came by my bitcoins through luck, with little credit to me.

I lived through the crash of 2011.

So I’ve seen it before.

Easy come, easy go.”

Hal Finney
www.runningbitcoin.us
Admiration and great Respect
With 🧡

Happy New Year 2023

Only One Wish for 2023

Beware of Scams !!!

Beware !!!

Just as the crypto industry is expanding and getting local adoption from individuals, co-operations, organisations and few countries  the same rate at which we have crypto enthusiast increasing in number which i see so worrisome and also a call for major concern.

Reason been that as more people get involved in the crypto business the more scammers are likely to increase their technique and the more scammers get recruited.

To avoid walking on scammers path, requires to be well informed of every new technique they can ever deploy against their potential victim.

To stay off scammers path users must:

  • Avoid phishing links.
  • Make sure to pay attention to the spelling of the website, as well as their URL as this can reveal whether it is a phishing site or not.
  • Never invest in a project without a well structured community
  • Pay close attention to the engagement within the community for suspicious activities
  • Ensure you assets are off CEX
  • Be more smart and less greedy
  • Don’t jump into a project/coin only based on the hype from advertisers (especially twitter)
  • Avoid any “too good to be true” investment
  • Avoid send me 1$ and I’ll send back 2$ scams, no matter how reputable is the account calling for that
  • Protect your coins (keep your coins on your wallet, use hardware wallet where possible, never give out wallet’s seed, keep backup seed offline)
  • Don’t be greedy and/or illiterate.
  • Be sure to feed yourself with necessary knowledge, if you want to invest.
  • Knowledge from experience is good but you can also take legitimate one from other people.
  • Not everything that is being offered to you is true. Do not be deceived.
  • Be careful who you are trusting.
  • Always be skeptical !!!
  • Enable Two-factor authentication for all your accounts.
  • Using of firewalls.
  • Installing an up to date anti virus software.
  • Use strong passwords and yet easily accessible ones for your convenience.
  • Stay away from malicious links or attachments you come across on the web.
  • Make sure your private keys are well stored and in hard wallet
  • Make sure your passwords are not vulnerable online to attacks i.e don’t store passwords online or any website
  • Whenever a stranger message you first for a business or an investment, it is a Red flag.
  • Someone who doesn’t know you would want you to make big money, another Red flag.
  • Whenever they introduce a” business opportunity” to you and then hasten you in order make you take a hasty decision it’s not  genuine, they are trying their best to make you take a fast decision without telling your loved ones and friends who will discourage you.
  • It is safer to  assume anyone you don’t know, communicating with you is a scammer until it is proven otherwise.
  • Read the whitepaper and research well of the company where you are going to invest because many scams are done by this method.
  • Check whether it is genuine or fake.
  • Scammers are constantly upgrading their scam methods and anyone can be the next target.
  • Loss doesn’t just happen due to an internal or intentional mistake, and when it does happen everyone has a similar sense of remorse and risks that are absolute consequences.
  • You’ll be fooled many times by those scammers that have maintained a well structured fake community.
  • They can hire those PRs and people talking inside their community to make it look like they’re a legit community.
  • As for their workers, they’ll just tell that they need engagement but the purpose of it, they’re not talking about it because that’s what the main purpose it.
  • And that’s to make it look genuine that they have real people inside the community. But in reality, it’s all fake people that they’ve hired just to make discussions all over their place.
  • It’s safe to say as well that it’s not just the crypto industry that is not safe for newbies, everything that talks about money is not safe for everyone.
  • Crypto is the latest thing and in the last 5 years it become so successful that scammers make this as their paradise as there are a lot of naive investors in the market.
  • Do your investigations, and don’t listen to influencers and believe them.
  • Think that this is your hard earn money so you need to be careful where you are going to invest it.
  • Don’t be Greedy.
  • Don’t jump on it like a hungry cow.
  • Don’t trust the sweet words they offer you. Most of them are too good to be true but they will always sound inviting to invest with.
  • Make a wall to not fully support them unless they have proven themselves worthy of that kind of respect.
  • Always be in doubt. That will be the shield that will protect you from being scammed.
  • Must simply assume that our coins are never really safe despite our best efforts, so it is important to always be on alert and protect our coins to the best of our ability.
  • Improve the security of your coins by an important margin by buying a hardware wallet, since they are very secure devices and they are relatively cheap, instead of risking storing our coins in our computers or at an exchange.
  • Always good to know how to make technical and fundamental analysis so that you can get specific information what is the situation of the projects you want to invest
  • Many projects are delivering a good testament, but they always ended into a scam , so we need to be smart enough and have a lot of preparation before investing or trading

Seven common mistakes crypto investors and traders make

Cryptocurrency markets are volatile enough without making simple, easily avoidable mistakes.

Investing in cryptocurrencies and digital assets is now easier than ever before. Online brokers, centralized exchanges and even decentralized exchanges give investors the flexibility to buy and sell tokens without going through a traditional financial institution and the hefty fees and commissions that come along with them.

Cryptocurrencies were designed to operate in a decentralized manner. This means that while they’re an innovative avenue for global peer-to-peer value transfers, there are no trusted authorities involved that can guarantee the security of your assets. Your losses are your responsibility once you take your digital assets into custody.

Here we’ll explore some of the more common mistakes that cryptocurrency investors and traders make and how you can protect yourself from unnecessary losses.

Losing your keys

Cryptocurrencies are built on blockchain technology, a form of distributed ledger technology that offers high levels of security for digital assets without the need for a centralized custodian. However, this puts the onus of protection on asset holders, and storing the cryptographic keys to your digital asset wallet safely is an integral part of this.

On the blockchain, digital transactions are created and signed using private keys, which act as a unique identifier to prevent unauthorized access to your cryptocurrency wallet. Unlike a password or a PIN, you cannot reset or recover your keys if you lose them. This makes it extremely important to keep your keys safe and secure, as losing them would mean losing access to all digital assets stored in that wallet.

Lost keys are among the most common mistakes that crypto investors make. According to a report from Chainalysis, of the 18.5 million Bitcoin (BTC) mined so far, over 20% has been lost to forgotten or misplaced keys.

Storing coins in online wallets

Centralized cryptocurrency exchanges are probably the easiest way for investors to get their hands on some cryptocurrencies. However, these exchanges do not give you access to the wallets holding the tokens, instead offering you a service similar to banks. While the user technically owns the coins stored on the platform, they are still held by the exchange, leaving them vulnerable to attacks on the platform and putting them at risk.

There have been many documented attacks on high-profile cryptocurrency exchanges that have led to millions of dollars worth of cryptocurrency stolen from these platforms. The most secure option to protect your assets against such risk is to store your cryptocurrencies offline, withdrawing assets to either a software or hardware wallet after purchase.

Not keeping a hard copy of your seed phrase

To generate a private key for your crypto wallet, you will be prompted to write down a seed phrase consisting of up to 24 randomly generated words in a specific order. If you ever lose access to your wallet, this seed phrase can be used to generate your private keys and access your cryptocurrencies.

Keeping a hard copy record, such as a printed document or a piece of paper with the seed phrase written on it, can help prevent needless losses from damaged hardware wallets, faulty digital storage systems, and more. Just like losing your private keys, traders have lost many a coin to crashed computers and corrupted hard drives.

Fat-finger error

A fat-finger error is when an investor accidentally enters a trade order that isn’t what they intended. One misplaced zero can lead to significant losses, and mistyping even a single decimal place can have considerable ramifications.

One instance of this fat-finger error was when the DeversiFi platform erroneously paid out a $24-million fee. Another unforgettable tale was when a highly sought-after Bored Ape nonfungible token was accidentally sold for $3,000 instead of $300,000.

Sending to the wrong address

Investors should take extreme care while sending digital assets to another person or wallet, as there is no way to retrieve them if they are sent to the wrong address. This mistake often happens when the sender isn’t paying attention while entering the wallet address. Transactions on the blockchain are irreversible, and unlike a bank, there are no customer support lines to help with the situation.

This kind of error can be fatal to an investment portfolio. Still, in a positive turn of events, Tether, the firm behind the world’s most popular stablecoin, recovered and returned $1 million worth of Tether (USDT) to a group of crypto traders who sent the funds to the wrong decentralized finance platform in 2020. However, this story is a drop in the ocean of examples where things don’t work out so well. Hodlers should be careful while dealing with digital asset transactions and take time to enter the details. Once you make a mistake, there’s no going back.

Over diversification

Diversification is crucial to building a resilient cryptocurrency portfolio, especially with the high volatility levels in the space. However, with the sheer number of options out there and the predominant thirst for outsized gains, cryptocurrency investors often end up over-diversifying their portfolios, which can have immense consequences.

Over-diversification can lead to an investor holding a large number of heavily underperforming assets, leading to significant losses. It’s vital to only diversify into cryptocurrencies where the fundamental value is clear and to have a strong understanding of the different types of assets and how they will likely perform in various market conditions.

Not setting up a stop-loss arrangement

A stop-loss is an order type that enables investors to sell a security only when the market reaches a specific price. Investors use this to prevent losing more money than they are willing to, ensuring they at least make back their initial investment.

In several cases, investors have experienced huge losses because of incorrectly setting up their stop losses before asset prices dropped. However, it’s also important to remember that stop-loss orders aren’t perfect and can sometimes fail to trigger a sale in the event of a large, sudden crash.

That being said, the importance of setting up stop losses to protect investments cannot be understated and can significantly help mitigate losses during a market downturn.

Crypto investing and trading is a risky business with no guarantees of success. Like any other form of trading, patience, caution and understanding can go a long way. Blockchain places the responsibility on the investor, so it’s crucial to take the time to figure out the various aspects of the market and learn from past mistakes before putting your money at risk.

Controlled Supply

Bitcoin

“A fixed money supply, or a supply altered only in accord with objective and calculable criteria, is a necessary condition to a meaningful just price of money.”

Fr. Bernard W. Dempsey, S.J. (1903-1960)

In a centralized economy, currency is issued by a central bank at a rate that is supposed to match the growth of the amount of goods that are exchanged so that these goods can be traded with stable prices. The monetary base is controlled by a central bank. In the United States, the Fed increases the monetary base by issuing currency, increasing the amount banks have on reserve or by a process called Quantitative Easing.

In a fully decentralized monetary system, there is no central authority that regulates the monetary base. Instead, currency is created by the nodes of a peer-to-peer network.

The Bitcoin generation algorithm defines, in advance, how currency will be created and at what rate. Any currency that is generated by a malicious user that does not follow the rules will be rejected by the network and thus is worthless.

Currency with Finite Supply

Block reward halving
Controlled supply

Bitcoins are created each time a user discovers a new block. The rate of block creation is adjusted every 2016 blocks to aim for a constant two week adjustment period (equivalent to 6 per hour.)

The number of bitcoins generated per block is set to decrease geometrically, with a 50% reduction every 210,000 blocks, or approximately four years. The result is that the number of bitcoins in existence will not exceed slightly less than 21 million.

Speculated justifications for the unintuitive value “21 million” are that it matches a 4-year reward halving schedule; or the ultimate total number of Satoshis that will be mined is close to the maximum capacity of a 64-bit floating point number. Satoshi has never really justified or explained many of these constants.

Cumulated bitcoin supply

This decreasing-supply algorithm was chosen because it approximates the rate at which commodities like gold are mined. Users who use their computers to perform calculations to try and discover a block are thus called Miners.