Why I’m against Ukraine joining the EU and you should be too

Cross post from romaninukraine.com:

Ukraine-EU-Protests-EU-flag To me, the story of Ukraine is the story of vanquished aristocracy. Twice in Ukraine’s history, first by the Mongols then by the Bolsheviks, the most capable Ukrainians, the successful, the talented, the leadership were obliterated — vanquished, killed or deported — a potentially ruinous blow for any society and testimony to the resilience of Ukrainians. Between these catastrophes, we have tremendous assimilation pressure from Russian- or Polish-imposed feudalism and its violent resistance by our kozaks.

These warriors kept the Ukrainian idea alive and for this we owe them a debt of gratitude, but for all their legendary self-reliance and ferocity, the kozaks failed to create a society prosperous enough to endure among hostile neighbors. An agrarian morality is insufficient for prosperity.

And the Ukrainian soul, if judged by the poets, is an agrarian soul — a peasant soul, if you’ll forgive the term — longing for the return of its ancient kings and glory.

Tonight, Ukrainians are in the streets. They say they want to join the European Union. I don’t believe them. I don’t want to believe them. I prefer to believe that they want three things: property rights, economic opportunity, the ability to travel.

I prefer to believe this because when I consider the other possibility, I see serfs begging for better masters. I see people who want all the benefits of a free society and none of its responsibilities.

No one has ever begged their way to freedom. Property rights which are true and lasting cannot be given, they must be earned. In the words of Lord Byron, “He who would be free must strike the first blow.”

http://romaninukraine.com/why-im-against-ukraine-joining-the-eu-and-you-should-be-too/

Clearing Up The Bitcoin Versus Gold Debate

A lot of otherwise useful analysis of Bitcoin versus gold misses an important point. This analysis only considers physical gold, and points out its obvious disadvantages. Mainly, physical gold can’t be transported almost effortlessly, and almost instantly to anyone with an internet connection. Gold is also more difficult to divide and to verify. This analysis is accurate, but through the ingenuity of entrepreneurs, gold can behave like Bitcoin. In fact, it used to.

(Read more)

The Rise and Fall of my Bitcoin Book-security, W4A-BOOK

I’ve completed a buyback of the asset I issued, W4A-BOOK, on btct.co. I’m posting here for the sake of openness and transparency.

BACKGROUND:

The asset W4A-BOOK was a new idea in crowdfunding. Rather than relying on philanthropy or advanced sales of my next book, I wanted to try selling shares of it. This would allow philanthropists to share in my success, should I find it.

The book is a memoir about getting recalled for a third combat tour (to Afghanistan) while becoming a radical libertarian.

I already have credentials as a writers:
– http://opinionator.blogs.nytimes.com/author/roman-skaskiw/
– http://www.amazon.com/The-Tea-Party-Explained-Ideas/dp/0812698312

Anyway, after some conversations with btct.co’s Ethan Burnside (a great gentleman), I applied to have securities issued. My application was approved on August 9th. A few days later, I attempted (and succeeded) in selling 100 of the 400 shares I issued for .24 BTC each. The 100 shares represented 10% ownership of the book and a 10% claim on all proceeds I might earn.

The reason I only sold 100 shares was because I was more interested in proving a concept than in raising money.

Step one seemed like a success. With 24 bitcoins in my paper wallet, I’m began writing (and attending bitcoin & libertarian conferences).

Then came the bad news that Btct.co was closing. See their website (https://btct.co/) for the announcement or bitcointalk.org (https://bitcointalk.org/index.php?topic=125629.msg3214807#msg3214807) for the discussion.

THREE OPTIONS:

I considered the following:

1. Transfer of shares to another exchange.

2. Continued ownership of shares in private.

3. A buy-back of all shares.

COMMENTARY:

I didn’t like #1 for several reasons:
– It takes time and effort to issue shares and since we still don’t know the details behind BTCT’s closure, I fear other Bitcoin stock exchanges might meet the same fate.
– The fee for issuing a security is usually 2 to 5 BTC. That’s a non-trivial amount when you’re only planning to raise 20-something BTC.

#2 was a possibility, though my main objective was proving a concept and perhaps generating a little publicity. If the stock exchange aspect was all handled privately, my goals wouldn’t really be met. There’d be no market for shares of the book.

My preference was #3, buying back all shares at the original issuing price — 0.24 BTC each. Since trading volume for this asset was extremely low, such a buy-back would cause most parties to break even or come close. #3 had another advantage: simplicity.

ACTION

I communicated with shareholders via email. Those who responded represented over 90% of the outstanding shares. They agreed with #3. One of them, the largest shareholder, initially preferred #2, continuing our agreement in private. I was prepared to do that, but he deferred to my preference (which I described as a “slight preference” in our correspondence).

He gave me lots of encouragement for this project, and is another example of the good faith and integrity that always impresses me in the Bitcoin community.

Today, I completed the buyback. BTCT.CO had a system for actually buying back shares through their website, but they also had a warning that customers should withdraw their funds. I didn’t want to send money to a website which may be in regulatory trouble, so I shut off trading and executed the buyback by simply sending BTC to the public keys of all the shareholders. I emailed each of them a transaction ID.

============

I invite you all to purchase an advanced copy of the memoir: https://bitcoinstarter.com/projects/182 The new working title is “The Way Back”.

***

Originally posted on bitcointalk.org: https://bitcointalk.org/index.php?topic=307484.new#new

Comparing Monetary Supplies, Crypto Currencies and Trust

INTRODUCTION

I was surprised to discover no readily available list of worldwide monetary supplies denominated in a common unit like dollars or ounces of gold but such a list is easily calculable from publically available data. Here, I use M2 data from the World Bank and the United Nations’ list of exchange rates. I repeated the calculation using M1 data from the Trading Economics data service.

A spreadsheet containing this analysis is available here.

So what do the numbers reveal and how do crypto currencies compare?

MOST VALUABLE M2 MONETARY SUPPLIES (in trillions of dollars)

1. All Euros $21.69 Trillion
2. China 15.89
3. United States 14.10
4. Japan 11.68
5. Germany 6.13
6. France 4.25
7. United Kingdom 3.87
8. Italy 3.43
9. Spain 2.65
10. Canada (2008 data) 1.97
11. Netherlands 1.90
12. Korea, Rep. 1.65
13. Brazil 1.56
14. Australia 1.38
15. India 1.26
16. Switzerland 1.20
17. Russian Fed. 0.98
18. Hong Kong SAR 0.88
19. Austria 0.72
20. Belgium 0.68

 
 

MOST VALUABLE M1 MONETARY SUPPLES

1. Euro Total $7.03 Trillion
2. Japan 5.73
3. China 5.07
4. United States 2.55
5. United Kingdom 1.86
6. Germany 1.84
7. France 1.07
8. Italy 1.04
9. Spain 0.70
10. Canada 0.68
11. Switzerland 0.59
12. Netherlands 0.46
13. Korea, Rep. 0.44
14. Russian Fed. 0.42
15. India 0.32
16. Saudi Arabia 0.26
17. Australia 0.25
18. Luxembourg 0.21
19. Austria 0.19
20. Hong Kong SAR 0.18

 
 
One surprise (for my American mentality) is that dollars are not the biggest, nor second biggest monetary supply in terms of value. They are third or fourth biggest depending on whether one considers M2 or M1.

Please note, the data is imperfect: the M1 data is newer than the M2 data, but the difference in M2 versus M1 ranking also speaks to great differences in banking structure and practices in various countries.

The main difference between M2 and M1 is that M2 includes savings and money market accounts. The proportion of M2 to M1 varies widely between countries. Though the ratios may be off because some data is older than other data, in the United States, M2 is more than five times bigger than M1. In Luxembourg, it’s only 1.3 times bigger. In Saudi Arabia, it’s 1.5 times bigger.

COMPARING M2 WITH CYPTO CURRENCIES

As of the time of this writing (September 7th, 2013), all the Bitcoins in the world are worth about $1.39 Billion. That makes their supply slightly less valuable than the M2 monetary supplies of Chad, Guyana, Montenegro, but slightly more valuable than the M2 monetary supplies of Mauritania, the Maldives, Belize, El Salvador, Malawi and Tajikistan. Bitcoins are on the map!

All the Litecoins in the world are worth about $59 million dollars, which is a little better than half the value of the smallest M2 monetary supply reported by the World Bank, that of Sao Tome and Principe.

MEASURING VALUE PER NOTE

The methodology behind this last analysis is speculative, but interesting nonetheless. What if we measured the value-per-note of all mediums of exchange? What if we counted all the notes in the world (Dollars, Euros, Litecoins, Vietnamese Dongs, Yen, Rubles, Lira, etc), and then counted the value of all the notes. For any currency, we could then compare their percentage of world-wide notes to their percentage of value of all the monies.

For example, imagine a world in which only two mediums of exchange were used: Roman’s Rubles and Mises’s Marks. Imagine that a million of each circulated, but Mises’s Marks were three times as valuable as the Rubles.

It’s easy to quantify the difference. Mises’s Marks represent three quarters of the value and only half of the notes. This can be described by a factor of 1.5. Roman’s Rubles also represent half the notes, but only one quarter of the value. They can be given a factor of 0.5.

A real-world example would be comparing Vietnam’s money, the Dong to the Euro. Taken note for note, the Dong represents a quarter of all the money in circulation, but only 0.15% of the value (when considering M2). The Euro is almost the exact converse. Euros represent 0.15% of the notes, but a quarter of value of all mediums of exchange in this analysis.

What conclusions be gleaned from this data? Most interestingly, is this factor (percent of value divided by percent of notes) in any way measure trust?

Several methodological concerns come to mind:

1) Aggregating all mediums of exchange, including Tide, gold and pig tusks (used as a medium of exchange on Pentecost Island in Vanuatu) seems like the best approach. In this analysis, only M2 data and the two most valuable crypto currencies, Bitcoin and Litecoin, are considered.

2) How would gold be incorporated into this analysis, since there is no single obvious unit to represent a note? People trade in grams, ounces, bars, tonnes.

3) Should crypto currencies be compared with M2, M1, or not at all? The ranking of trust factors was similar for M2 data and M1 data.

4) Can value per note be a meaningful measure of trust or anything else? Perhaps monetary discipline? What correlations can be found with this ratio?

With these concerns in mind, here is a list of the most and least trust monies using M2 data:

MOST TRUSTED

1. Bitcoin 15,589
2. Kuwaiti Dinar 456
3. Litecoin 370
4. Bahraini Dinar 345
5. Oman Rial 337
6. Latvian Lats 245
7. U.K. Pound 198
8. Jordanian Dinar 183
9. Euro 172
10. Azerbaijan Manat 166
11. Swiss Franc 140
12. US Dollar/Bahamian Dollar/Panama Balboa 130
13. Australian Dollar 118
14. New Zealand Dollar 104
15. Singapore/Brunei Dollar/Libyan Dinar 102

 
China’s Renminbi: 21.2
Japanese Yen: 1.3

CLOSEST TO PROPORTIONAL TRUST

(% money supply = % value of money supply)

Sri Lankan Rupee 0.987
Icelandic Krona 1.090

LEAST TRUSTED

1. Iran 0.0052
2. Vietnam 0.0061
3. Sao Tome Principe 0.0070
4. Indonesia 0.013
5. Belarus 0.015
6. Laos 0.017
7. Paraguay 0.029
8. Sierra Leone 0.030
9. Cambodia 0.032
10. Uganda 0.050

 

CONCLUSION

Though the Bitcoin economy may still be small, the fact of it being larger than many national monetary supplies — after only five years, no less — makes its dismissal by lingering critics downright silly. (Not that the “honey badger of money” cares much about its critics.) The value-per-note analysis is even more surprising. If indeed the relative trust of various currencies can be measured by comparing value-per-note, then Bitcoin is already the champion (precious metals not considered), and Litecoin is threatening to take second place.