What Is Money? (Yes, We’re Talking About Bitcoin)


Authored by Charles Hugh Smith via OfTwoMinds blog,

Good ideas don’t require force. That describes the Internet, mobile telephony and cryptocurrencies.

What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar with is the only possible system of money—until they run across an entirely different system of money.

Then they realize money is a social construct, a confluence of social consensus and political force– what we agree to use as money, and what our government mandates we use as money under threat of punishment.

We assume that our monetary system is much like a Law of Nature: since it’s ubiquitous, it must be the only possible system.

But there are no financial Laws of Nature for money. In the past, notched sticks served as money. In other non-Western cultures, giant stone disks (rai, a traditional form of money on the island of Yap) and even salt served as money.

In our experience, 1) money is issued by a government or central bank (i.e. a currency), and each of these currencies is the sole form of legal money (legal tender) in the nation-state that issues the currency; 2) each of these currencies is available in physical coins and paper bills and digitally as entries in bank and credit card accounts; 3) our currency is borrowed into existence by the central bank or by fractional reserve lending in private banks, and 4) this currency meets all of the utility traditionally required of money:

1. It is divisible into smaller units, i.e. a dollar is divided into quarters, dimes, nickels and pennies, or it is a small unit (for example, the Japanese yen, which is roughly equivalent to a U.S. penny).

2. It is secure, i.e. everyone can’t just print or make their own in unlimited quantities.

3. It is fungible, meaning all the units are interchangeable.

4. It is easily transportable.

5. It has a market value that’s easily discoverable, so buyers and sellers can confidently exchange it for goods and services.

But history informs us that money doesn’t have to be issued by governments, nor does it have to be borrowed into existence by banks, nor does every form of money have to satisfy all five requirements; it’s possible to have multiple forms of money which each serve different purposes.

In other words, our system of money is merely one of many possible systems of money. With the advent of digital cryptocurrencies, the range of monetary systems has expanded greatly.

We tend to look at money as value-neutral and apolitical, but as a social construct, it reflects specific social and political values. As I’ve explained in previous posts, our money is created and distributed at the very top of the wealth-power pyramid.

This feature of our money optimizes the accumulation of wealth and power in the top of the pyramid, and thus our social contract of money guarantees the concentration of wealth and thus rising wealth-power inequality.

To understand why, we need to start with money’s three basic functions.

As a general rule, money is:

1. A store of value (i.e. it serves as a reliable repository of wealth);

2. As means of exchange between buyers and sellers;

3. A tool for recording transactions of credit/debt (i.e. it facilitates recording transactions and keeping track of credits, debts, assets and payments).

Modern-day government-issued currencies perform all three roles. The U.S. dollar, for example, acts as a store of purchasing power, a global means of exchange, and as a tool to keep track of transactions, debts and financial assets.

But in other social constructs, different kinds of money perform different functions. The giant stone disks on Yap (rai) are a store of value, and a means of exchange for high-value items.

But the recording of transactions involving the rai is done in an oral-history ledger: the transfer of ownership of a particular rai is recorded in the community memory, and so the heavy 2-meter-high stone doesn’t have to actually move in physical space to transfer ownership. As a result, a stone rai resting at the bottom of the lagoon is a perfectly functional store of value and means of exchange.

The rai are quarried on another island, and not easily counterfeited. They are not necessarily interchangeable; the value of each one is recorded in the oral record. But since a rai isn’t divisible, or easily transportable, another form of money is used for day-to-day transactions.

The point here is there is no intrinsic reason why the three primary functions of money have to be satisfied by one single currency.

Nor is there any intrinsic reason why one form of money has to be equally tradable for all goods and services. In some cultures, certain forms of money hold symbolic value and are used solely for transactions of symbolic import, for example, as a wedding dowry.

We assume money has been stripped clean of symbolic or moral value, that it has no connection to anything but its current market value. Yet once again, there is no intrinsic reason why money must be stripped of symbolic or moral value. That our money has no symbolic or moral value is entirely a result of our specific social construct.

In cultures with forms of money that aren’t issued by a government, social consensus defines what serves as money and what functions it fulfills.

Which Brings us to Bitcoin

Bitcoin’s limitations are well-known: the blockchain/mining consumes vast quantities of electricity, and bitcoin can’t be scaled to replace all the credit card transactions in the world. But as noted above, every type of money does not need to perform all the functions of money.

Thus some commentators anticipate bitcoin being used for large, infrequent transfers rather than the purchase of consumer goods and services. Other cryptocurrencies may arise to fill that role.

I recently paid translators in South America with bitcoin. The transaction fee was about $4.50. Clearly, bitcoin functions as a means of exchange.

I made a few dollars of profit using bitcoin for transactions like this last year and I paid income taxes on those modest gains. Clearly, bitcoin is a legal financial instrument that the federal government accepts as the source of taxable capital gains.

For those who don’t know the situation in Venezuela, its government has destroyed the value of the nation’s currency, the bolivar, which traded at roughly 10 to 1 US dollar as recently as late 2012, when bitcoin was roughly $10.

The black market exchange is now over 98,000 bolivars to the US dollar, and one bitcoin is now worth over 1 billion bolivars. Clearly, bitcoin has acted as a store of value. The resident of Venezuela who traded 100 bolivars for $10 and traded the $10 for one bitcoin how has 1 billion bolivars or $13,000 US dollars.

Clearly, bitcoin is a means of exchange, a legal form of capital that accrues taxable capital gains and it’s a store of value. So by the conventional definition of money, bitcoin is money. It’s our right to think it a nonsensical form of money, just as it’s our right to mock the stone rai, and deride the packages of ramen noodles that serve as money in prisons. But our mockery doesn’t change the functionality of these forms of money.

No doubt the conventional wisdom in Venezuela dismissed the functionality of bitcoin in late 2012, just as the conventional wisdom continues to dismiss bitcoin’s functionality as money. So who was right, and who was wrong? The believer in the status quo who held onto his 100 bolivars as a means of exchange and store of value , or the independent who traded bolivars for bitcoin?

Good ideas don’t require force. That describes the Internet, mobile telephony and cryptocurrencies.

Bad ideas require force: that describes the Venezuelan government’s management of its currency, and the central bank/central state form of money that dominates the global economy.

*  *  *

This essay was drawn from my new book, Money and Work Unchained, which I’m offering to my readers at a 25% discount ($7.45 for the Kindle ebook and $15 for the print edition) through Saturday, December 9, after which the price goes up to retail ($9.95 and $20).

Read the first section for free in PDF format.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

from Zero Hedge http://bit.ly/2AXd5EX

The most gorgeous and terrifying photos of the natural world captured in 2017


lava reunion volcano piton de la fournaise

2017 was a year of destruction. Wildfires raged, volcanoes erupted and pollution swarmed entire cities in a fog of smoggy air.

But the beauty of the natural world didn’t escape unnoticed. Here are some of the most gorgeous photos of what happened to the Earth this year, as captured by Reuters photographers.

SEE ALSO: This winter may bring extra snow to some parts of the US and mild temperatures to others — here’s the forecast where you live

It was a record-setting year for climbers.

In the photo above, a solo climber journeys up a wall of ice in a northern pocket of the Czech Republic.

Other impressive accomplishments this year included a new record for the speediest climb: two men in Yosemite climbed 2,900 feet up "the Nose" in 2 hours and 19 minutes.

And daredevil free-solo climber Alex Honnold scrambled up "El Capitain" in the same park without any ropes or protective equipment, becoming the first person to complete the climb that way.

In Norway, a Czech climber finished the hardest single-rope-length climb in 20 exhilarating minutes, The Guardian reported. 


In August, the sun, the moon, and the Earth all lined up for a rare celestial show.

People across the United States cheered and peered skyward as a total solar eclipse swept across the continent.

In September, charged particles from the sun hitting the Earth’s magnetic field produced quite a show in Finland.

The Northern Lights happen when high-energy particles shooting out from the sun come into contact with the Earth’s magnetic field and drift towards the poles. 

See the rest of the story at Business Insider

from SAI http://read.bi/2AFqtem

Never miss a beat with this mic


There is nothing more frustrating than trying to record something meaningful with your smartphone, only to realize that you should have just done the sensible thing and bought a mic. I can’t say that I’ve had the fortune of researching the world of mics too frequently, but the Mikme is easily the most fun mic out there at the minute. Mikme is the world’s first Wireless Microphone & Audio Recorder. Recording studio-quality sound at the touch of a button. What’s even better is the Mikme accompanying app – capture a video with your smartphone and audio will be automatically synced with your video. Albeit the Mikme does have a cool design, ergonomically this product is questionable. Holding it in hand appears to be awkward but placed on a table it is seemingly gorgeous. It does look very durable and something of a great need for anyone getting started with audio and visual recording. Calling all musicians, vloggers, journalists and all those who demand exceptional audio on the go, Mikme will make your life a lot easier.

Designer: Mikme







from Yanko Design http://bit.ly/2jqgsdx

Bitcoin soars more than $3,000 in under 3 hours on Coinbase — then the site went down


Screen Shot 2017 12 07 at 11.40.04 AM

  • Bitcoin soared from $16,000 a coin on Coinbase’s GDAX exchange to more than $19,500 in less than three hours Thursday.
  • Coinbase said its site was down for some users because of record-high traffic.
  • Bitcoin was trading at $15,398 a coin at 11:59 a.m. ET, according to Markets Insider data.  


Bitcoin soared above $19,500 a coin on Coinbase’s GDAX exchange around 11 a.m. ET Thursday, just three hours after it blew past $16,000 on the exchange. 

The massive tear upwards seems to have put pressure on Coinbase. The exchange’s site was down just before the time of print. The company said on twitter at 8:07 a.m. PT that users were experiencing issues logging into their accounts because of record traffic. Here’s the tweet:

Screen Shot 2017 12 07 at 12.05.05 PM


The company, which is the largest platform for buying and selling cryptocurrencies in the US, has experienced a number of outages as the price of bitcoin has skyrocketed to new highs. The cryptocurrency exchange was down last Friday for about an hour, two days after a major system outage kept many users from accessing their bitcoin wallets.

Cryptocurrency exchanges, which don’t have the industrial infrastructure of traditional exchanges such as the New York Stock Exchange or Nasdaq, are under pressure to handle record trading volumes.

24-hour trading volumes reached a record high above $28 billion on Thursday, according to crypto data site CoinMarketCap. To put that in context, that is more than half of the $50 billion worth of securities that trade on the New York Stock Exchange during an average trading session. 

Screen Shot 2017 12 07 at 12.21.20 PM

Story is developing. Check back for updates.

SEE ALSO: Bitcoin just hit an all-time high — here’s how you buy and sell it

Join the conversation about this story »

NOW WATCH: The CIO of a crypto hedge fund explains the value in cryptocurrency — and why the market will explode over the next 2 years

from SAI http://read.bi/2ADUknj

Finally, there’s a vibrator that plays Christmas carols


Are you longing to bring the holiday spirit to your most private parts?

Now you can, thanks to the folks at MysteryVibe

Today they’re releasing a new set of vibrations for their Crescendo device that play along with all your favorite Christmas carols. This will give a whole new meaning to Jingle Bells. 

If you already have a Crescendo, you’ll get the update automatically. If not, there’s still time to buy the toy — which features six separate motors and can bend into many different shapes — and get the most out of your holiday season. 

So why on Earth would you need to celebrate in this particular fashion? Stephanie Alys, MysteryVibe’s co-founder and their Chief Pleasure Officer, said in a statement, “Love them or hate them, Christmas songs ignite a sense of excitement and joy in us all. So we thought, imagine if we coupled that with the feeling of an intense orgasm?!”

Christmas is coming, indeed.

from Mashable! http://on.mash.to/2BVrm2H

Sia responds on Twitter to article questioning the ethics of putting child dancer in the limelight


Sia responds on Twitter to article questioning the ethics of putting child dancer in the limelight

Sia (left) performs with dancer Maddie Ziegler (right).
Sia (left) performs with dancer Maddie Ziegler (right).

Image: John Salangsang/Invision/AP/REX/Shutterstock

The singer Sia is now known for her iconic face-covering wig to evade the trappings of fame. So if she is so adverse to the limelight, should she expose a child to it?

Today Sia addressed an article by Guardian columnist Bonnie Malkin, in which she discussed the ethics of Sia’s collaboration with child dancer Maddie Ziegler.

In the article Malkin argues that although Sia deliberately eschews fame because she views it as damaging, she puts a minor in the spotlight in her place.

“The grown-up who has seen what fame can do and fears it has, perhaps unwittingly, handed it over to the child instead,” writes Malkin.

Today Sia responded to the article with a series of tweets.

Another Guardian journalist was pleased to have seen such a measured exchange of opinions.

The exchange is indeed respectful, but Sia doesn’t fully explain what she means, for example when she says “fame affected her differently than how it affected me” she doesn’t elaborate how the experience has been different for Ziegler. Moreover it’s good that she “feels very protective” of the dancer, but she doesn’t explain how that protectiveness takes form other than checking in with Ziegler. Then again it is Twitter, so given the format it’s about as fulsome as you could expect. 

from Mashable! http://on.mash.to/2AYT3d3

Instagram Revealed The 10 Most Followed Models Of 2017, But Only Six Also Made The Highest Paid List


Instagram Most Followed Models 2017

Getty Image

Another day in December, another end of the year list. We already checked out the best places to work, the most viral videos, Google Play and Spotify’s many lists, the most re-tweeted tweets, and the most-liked Instagram posts of 2017. Speaking of Instagram, apparently it’s their turn again as today we present the top 10 most followed models of 2017.

As we have learned, it pays – very, very well – to have a lot of followers on Instagram. It also requires a carefully cultivated plan, lots of time, and, let’s be honest, it doesn’t hurt if you also happen to be drop-dead gorgeous. Luckily, for these models that last item is the least of their worries.

However, at least according to Forbes, just because you have the most Instagram followers doesn’t automatically make you the highest paid. Not that any of the women on this list are struggling to put food on the table, but only six of them made both the most followed list as well as the highest paid list.

Here were the top 10 highest paid models in 2017. (An asterisk next to their name means they made both lists.)

10. Ashley Graham, $5.5 million
9. Bella Hadid, $6 million*
8. Liu Wen, $6.5 million
7. Karlie Kloss, $9 million
6. Rosie Huntington-Whiteley, $9.5 million
5. Gigi Hadid, $9.5 million*
4. Adriana Lima, $10.5 million*
3. Chrissy Teigen, $13.5 million*
2. Gisele Bundchen, $17.5 million*
1. Kendall Jenner, $22 million*

And here are the models with the most followers on Instagram for 2017. (Where they finished on the highest paid list is in parenthesis.)

10. Adriana Lima, 11.4 million followers (4)
Instagram Photo

9. Candice Swanepoel, 11.6 million followers (–)
Instagram Photo

8. Miranda Kerr, 11.6 million followers (–)
Instagram Photo

7. Gisele Bundchen, 13.6 million followers (2)
Instagram Photo

6. Chrissy Teigen, 15.1 million followers (3)
Instagram Photo

5. Emily Ratajkowski, 15.7 million followers (–)
Instagram Photo

4. Bella Hadid, 16 million followers (9)
Instagram Photo

3. Gigi Hadid, 37 million followers (5)
Instagram Photo

2. Cara Delevingne, 40.5 million followers (–)
Instagram Photo

1. Kendall Jenner, 85 million followers (1)
Instagram Photo

H/T Maxim

from BroBible.com http://bit.ly/2zXs91s

Why You Should Give Your Kids a Budget for Gift-Giving 

Photo by VTT Studio via Shutterstock

The holidays cause some anxiety in my house: My husband and I are both somewhat undisciplined in our spending, and previous Januaries have arrived with credit-card bills so disturbingly large that I’ve wondered if we were in the grip of some kind of eggnog-induced mania. This holiday season is different, however: Last January I vowed to get my financial life in order and teach my kids about sensible money management, and it’s gone pretty well. For the first time, this Christmas we’ve actually budgeted a sensible amount for gifts and festivities.

And as my son is now seven and handling his allowance (divided into spend, save, and give jars) pretty well, I think it’s time he can manage a small budget for the holiday gifts he’d like to give. He’s got nine people on his list, so we calculated a percentage of our own holiday budget that’s his to direct. He now has $45 in an envelope marked “gifts”; I also stuck a piece of paper in there so he can make notes as he prices out possible presents.

Talk Values Before Numbers

A holiday budget for kids is a fine plan, says Ron Lieber, the author of The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Moneyand not just because it gives kids practice with arithmetic and resource management. “As with any spending exercise or discussion, this is an opportunity to reinforce your family’s values,” says Lieber. If you’re a family that rejects consumerism and wants to encourage creativity, he suggests setting the value of the budget according to the type of gift. “You can say ‘You’ll get the $45 if you want to buy gifts from the store, or we can give you $90 for materials for homemade gifts,’” he says. You’re teaching your kids the nuts and bolts of managing money, sure, but the lesson comes with a certain dose of didacticism as well: In our family, we value the things we produce more than the things we consume.


Or if you want to encourage philanthropy over any kind of traditional gift-giving, Lieber recommends setting the number even higher: “‘If you want to donate to a cause the recipient might approve of, we’ll give you three times as much money [for the holiday budget]. The time you would have spent going to the store you can now use to think about the causes the recipient might support.’”

Another parameter: Let’s say you’d like to encourage the giving of experiences rather than things. Lieber points out that you, the parent, can make any rules you want: “If one of the lessons you’re trying to reinforce is the value of doing things rather than buying things, maybe you could make a rule in your house that every physical object you give has to come with a promise to that person that you’re going to do something special together. Or you can make a rule that there will be no trinkets at all—every gift will be an ‘experience’ gift and not a product.” Kids have to really think about the recipient’s interests: What will be fun for us to do together? What will this person really appreciate doing with me?

Help Them Price Things and Prioritize

I wish had talked to Lieber before I gave my son his budget, because he is indeed thinking in terms of trinkets rather than the handmade crafts he’s made in the past. But nonetheless, watching him puzzle through his decisions has been kind of sweet: When pricing out a wristwatch for his father, he said, “It’s either good, but expensive, or bad, but cheap. Kind of like what you said to the guy [the contractor] about the kitchen cabinets.”

And when faced with the possibility of the wristwatch for Daddy and handmade for everyone else, he revised his priorities, putting his brother, his cousin, and two little pals at the front of the budget line: He’s getting Shopkins for his friend Sophie, because he’s noticed those are her favorite toys, and a Transformer for his brother, who sends up a howl for “Heat Wave” every time we pass the toy store. His cousin is getting a pirate-ship bath toy; I refrained from pointing out that 20-year-old college sophomores don’t really use bath toys anymore. His friend Ike is getting a spy kit so they can play secret agents.


Those four things, he noted mournfully, have already taken up $30 of his budget, with five more people to go. Break out the crafts, I told him. Recycle the hand turkey from Thanksgiving. This is, after all, an opportunity to reinforce our family’s values—namely, that we don’t go over budget. Not even when we’re in an eggnog-induced mania.

from Lifehacker http://bit.ly/2j3DGcu

How to Store Your Bitcoin as Securely as Possible


It seems like every few months we hear what’s basically the same story about someone who bought a bunch of bitcoin but lost access to it once the cryptocurrency became really valuable. The latest, from Engadget, tells the tale of a reporter who managed to salvage $200,000 in bitcoin after traveling to Hong Kong and getting extremely lucky.

So if you’re just getting into bitcoin, you’re probably worried about making sure it’s safe and secure, and if you’ve been holding onto some bitcoin for years you may want to upgrade your storage setup. Here are the best ways to keep your bitcoin secure—or at least as secure as possible.

How do Bitcoin Wallets Work?

The key thing to understand is that no matter what you do, you won’t actually be storing the bitcoin itself. That’s because a bitcoin isn’t an object, it’s an encrypted address on the blockchain. What you own is a unique key that unlocks a specific bitcoin location, and that’s what you need to be protecting at all times by storing it in a wallet.


With that covered, there are a few different ways to store your bitcoin depending on how secure you want to be and how much you plan to use it on a regular basis.

Why You Should Use a Hardware Wallet

The easier way to store your bitcoin and other cryptocurrency is in a digital wallet online, or locally on your smartphone or computer. But leaving your bitcoin in public view can open you up to attacks from hackers and phishing scams. That’s why the best option is a hardware wallet that stores your bitcoin offline.


Most hardware wallets look like USB drives and can be easily connected to a computer. They use a PIN number for security, along with a secondary password called a “seed” in case you forget the PIN. If you forget both passwords you’re pretty much screwed, so it might be worth writing the seed down somewhere safe offline.

The other biggest drawback to a hardware wallet is that if you lose it you can’t recover the bitcoin. So make sure to create at least one backup on another encrypted storage device.

As for the specific model, there are plenty of solid options for under $100. Wired recommends Trezor or the Ledger Nano S, and you can find a more detailed comparison of the current top models here.

Other Options

A paper wallet/Wikipedia

Another issue with hardware wallets is that they can make the process of actually spending your bitcoin a lot more difficult. The best solution is to keep a small amount of bitcoin in a digital wallet like Mycelium Wallet, that’s designed to work well with offline storage devices.


Finally, if you want to keep your bitcoin offline but don’t want to deal with a hardware wallet, you might want to consider a paper wallet instead. This is really just a piece of paper with your public and private keys printed on it, which can be used to access your bitcoin.

If you don’t plan on touching your bitcoin for a while then a paper wallet is a good option. Just make sure you put your paper wallet somewhere very safe—and then don’t forget where it is.

from Lifehacker http://bit.ly/2ABwZVa