UU20170602

‘Virtual money’ is the second issue in this sub-theme of P5GO. This 4th Industrial Revolution has already started and cause changes to man, machine and societies. We learned a lot about the previous’ outcomes and should respond more sensible this time. ‘Virtual Money’ is a Game Changer, because it alters its very own properties, from being a material to be immaterial. In this fragile state of transcending, money will be abused in attempts for CCD, CdE and even WW, - like the financial crises in America and Europe prior to WW2. Still, inexpensive, decentralized and secure financial systems can easily be implement in time by sound use of IR4 technocracy, bureaucracy and democracy. Most interesting, though, is that major barriers to the monetary IR4 seems rather to be mental than technical. In order to argue all this, this blog provides a rather profound reference to the theoretical arguments, after an introduction and before some concluding remarks.

It might seem strange - these visions of changes that the virtualization and democratization of money will cause. It might help though, to recall the changes caused by the digitalization and virtualization of material products during the previous IR3. Virtual money will also cause some short and long terms changes in the IR4 – rather different though. Still, during the IR3, supplies of material products were also altered to selfservice of immaterial products, - like ordering things via the internet. Some actors in the markets were not willing or able to fit in to the new realities in time, - regretfully.

It is like money transcends its properties from matter to energy, which makes some untraditional points of view for the financial sectors. Some properties of Virtual Money are comparable to energy that is potential (stored) or kinetic (transferred). Also, current electricity has the speed of light in the opposite direction of the flow of (material) electrons. In fact, neither information nor money has any size, weight or mass, even though material container and carriers might. Also, money has no value, cost or resistance in itself. Promoting exchange of products and services is the objective, money is simply a mean to make it done. Therefore, money should not be material, it should transcend to energy, in order to flow unhindered.

Now, in this time of IR4, a trustworthy democratization of the banking and financing systems is enabled by ‘block-chain’ technology. It is like a financial Linux systems, - free for anyone, free from oligarchic middlemen and free from central bank systems. True democratic monetary systems can be made for anyone for free. In fact, it is so easy to make that even I personally can make it in 1 hour fully operational at the cost of 100 euro/month. Such a Ethereum Blockchain system is hosted at Azure cloud services and consists of 3 Linux servers, 2 storages, network, etc. It is free for anyone to use with a free add-in application on a Google browser. More advanced features can be added and might cost extra.

Still, trade of products and services is as fundamental as communication. There have always been trade between any humans too, - long before any money existed. The introduction of material money certainly leveled up trade and society, though. Here are some related descriptions from Wikipedia:

“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.” “Fiat money, like any check or note of debt, is without use value as a physical commodity. It derives its value by being declared by a government to be payment within the boundaries of the country.” “The money supply of a country consists of currency (banknotes and coins) and bank money records. Bank money forms by far the largest part of broad money in developed countries.”
Also: “The major desirable properties that money should have include;(1) a numeraire (i.e. valued); (2) a means of exchange; (3) a store of value and; (4) a source of liquidity. Furthermore, money should be easy to transport, identify, durable, easily divisible, hard to counterfeit and easy to store.” (ref. freeeconhelp.com)
“Virtual currency (virtual money) is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. Moreover “… not by public authority, but is accepted by natural or legal persons” (the European Banking Authority). “A medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency with no legal tender status in any jurisdiction” (The Financial Crimes Enforcement Network (FinCEN)).
“Blockchains are secure by design and are an example of a distributed computing system with high fault tolerance. Decentralized consensus makes blockchains suitable for (trade and basic income as well as other) recording of events, medical records, and other records management activities, identity management, transaction processing, and documenting provenance. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retro-actively without the alteration of all subsequent blocks and the collusion of the network. Functionally, a blockchain can serve as ‘an open, distributed register that can record transactions between two parties efficiently and in a verifiable and permanent way. The invention of the Blockchain for Bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.”
“Bitcoin is the first decentralized digital currency. Trust in the currency is based on the ‘transaction register which is cryptographically verified, and jointly maintained by the currency's users’. The Bitcoin Foundation claims that bitcoin was ‘designed to be fully decentralized with miners operating in all countries, and no individual having control over the network’, and that bitcoin is ‘as virtual as the credit cards and online banking networks people use every day’.” “According to a Forbes journalist, ‘bitcoin mining has become increasingly centralized’, and a group of European cryptologic researchers have questioned, if bitcoin is indeed a decentralized currency. To improve bitcoin's decentralization, they suggest to encourage fully decentralized mining pools, allow only 1 vote per bitcoin client, and to increase transparency in decision making.”

The blockchain technology is as important for the democratization of money as the internet websites is for common knowledge. However, quite alarming aspects of abuse of IT are talked through in UU 2017.mai.12.

There are several kinds for virtualized money and financing. Most are attached to national authorities, even though the currency might not be national (e.g. the confederal Euro).

“Mastercard is an American multinational financial services corporation, that process payments between the merchants’ banks or other banks and credit unions. It is owned by the more than 25000 financial institutions that issue its branded cards.”
“VISA is an American multinational financial service that facilitates electronic funds transfers throughout by credit cards and debit cards. Visa does not issue cards, extend credit or set rates and fees for consumers; but provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid and cash-access programs to their customers.”
“China UnionPay (CUP) is a financial services corporation in association for China's banking card industry, operating under the approval of the People's Bank of China. CUP provides bank card services and a major card scheme in mainland China. It is also the only interbank network in China that links all the ATMs of all banks throughout the country. It is also an EFTPOS network, the largest card payment organization in the world, based on payment transactions, schemes and number of cards issued. It also offers mobile and online payments.”
“Nets is a Nordic-based provider of payments, cards and information services. The customers are banks, businesses, merchants and the public sector. They offer secured front-end and back-end solutions for banks and non-banks in northern Europe. Teller handles the acquiring of national and international payment cards, primarily in the Nordic market, such as Dankort, Visa, MasterCard, American Express, JCB and China UnionPay.” (Dane banks shortcut Nets for mobile payments.)
“PayPal is one of the world's largest Internet payment companies. It is a payment processor for online vendors, auction sites and other commercial users. It became a wholly owned by eBay in 2002. PayPal moves over $228 billion in 30 currencies across more than 190 nations, generating a total revenue of $8 billion.” (Elon Musk was a co-founder, but sold out to finance Tesla and SpaceX.)
“Crowdfunding is an alternative finance by of funding a project or venture by raising monetary contributions from many people. More than 34 billion $ was raised this way Globally in 2015. Although the concept can also be executed through mail-order subscriptions, benefit events, and other methods, it is now often performed via Internet-mediated registries. This modern crowdfunding model is generally based on three types of actors: the project initiator who proposes the idea and/or project to be funded, individuals or groups who support the idea, and a moderating organization (the "platform") that brings the parties together to launch the idea.”

The free movement of money in EU’s Internal Market is based on the TEU (Treaty of the European Union). The removal of barriers to trade does not need to be expensive, but very benefitable. The technology is here already, yet hindered by dominant market actors. 2% of GDP is made by such oligarchic middlemen. That is much too much. Anyways, here are some brief description of the EU monetary systems, mostly from Wikipedia.

“The Eurozone is a monetary union of 19 of the 28 of the EU member states that have adopted the euro (€) as their common currency and sole legal tender. The other 9 members use national currencies, but most are going to join in. The Eurosystem is the monetary authority of the Eurozone. The ECB is governed by a president and a board of the heads of national central banks. The ECB sets the monetary policy of the zone.”
“The Euro (€) is the official currency of the Eurozone and officially used by the EU institutions, some EU nations and other European countries. About 550 million people in Europe and worldwide uses Euro daily. It is the second largest reserve currency and the second most traded currency in the world with more than €1.109 billion in circulation. Physical Euro coins and banknotes entered into circulation on 2002 replaced some former national currencies.”
“The primary objective of the ECB (European Central Bank) is to maintain price stability within the Eurozone (TEU article 127). The ECB has only one primary objective for price stability (inflation of under 2%), but this objective has never been defined in statutory law. The HICP target can be termed ad-hoc. The ECB administers the monetary policy of the Eurozone and one of the seven institutions listed in the TEU. The capital stock of the bank is owned by the central banks of all the 28 EU member states. The ECB has a capital is €11 billion held by the national central banks of the member states as shareholders. Its basic tasks, are to set and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to take care of the foreign reserves of the European System of Central Banks and operation of the financial market infrastructure under the TARGET2 payments system.”
“The SEPA (Single Euro Payments Area) is a payment-integration initiative of the EU for simplification of bank transfers denominated in Euro. SEPA consists of the member states EU and EFTA. The SEPA is a self-regulatory initiative by the European banking sector represented in the European Payments Council, which defines the harmonization of payment products, infrastructures and technical standards. The PSD provides the legal framework within all payment service providers must operate. SEPA guarantees that euro payments are received within a guaranteed time, and banks are not allowed to make any deductions of the amount transferred, introduced by a regulation in year 2001. This is relevant for countries which do not use the Euro too.“
“Since late 2009, the Euro has been immersed in the European sovereign-debt crisis which has led to the creation of the European Financial Stability Facility. concerns raised over Greek debt and Spain's troubled banking sector.”

Virtual money has most certainly become a powerful mean related to this P5GO theme (5th Pyramid Game Over). It is already abused in plutocratic warfare towards ‘the West’. The multi-national confederation is attacked by means of virtual money in several ways, - especially towards the Eurozone in order to cause dysfunctionality and thereby CCD (colony collapse disorder), CdE (Coup d’ Etats) and even WW (world wars). Serious mistakes are done instead of defense - and it does not seem to be fixed yet. In order to fix those corrupted systems, the whole inter-governmental Executive Parliamentary powers have to act coordinated and in accordance to the valid legislations of TEU, - not just talk and write about it. Europe, ‘the cradle of democracy’ needs to be more functional – not dysfunctional.

No matter the politics and constitutions, the IR4 escalates new means like the virtual money, crowdfunding and democratic payments for trade. Quite alarming is that some ‘dark markets’ adapt and abuse the systems much faster than national and confederal constitutions are willing or able to do. Some corrupted servants even promote such dysfunctionalities.

Will the Euro become central, de-central or democratic? The answer is yes to all, because the Euro is transcending to virtuality too. It is centralized with the ECB, yet confederal decentralized with the national banks. There are high qualitative data-encryptions involved, so block-chain is not required. It might be useful in a hybrid banking system though. Such a combination of Euro and block-chain currency will be the solution to quickly implement and realize solutions for Basic Income. (See UU 2017.mai.26.) In brief, the Euro is, - and will transcendence further towards being an international hyper-currency. This will be elaborated in the next UU blog.

Music:
“Pet Shop Boys are an English electronic pop duo, from London. They have sold more than 50 million records worldwide and are listed as the most successful duo in UK music history by The Guinness Book of Records. Three-time Brit Award winners and six-time Grammy nominees, since 1985 they have achieved 42 Top 30 singles and 22 Top 10 hits in the UK Singles Chart, including the song Opportunities (Let's Make Lots of Money)". The association for the song to this blog is somewhat similar to the explanation of the quotes about the lyrics: “The song ‘Opportunities (Let's Make Lots of Money)’ is written from the perspective of a man who describes himself as being intellectual and educated. The lyrics are addressed towards another character, identified as having ‘looks’ and brawn’, and who is invited to join the song's protagonist in a scheme to ‘make lots of money’. Tennant has made it clear, however, that the schemes are doomed to failure. The punchline of the ‘joke’ of the song, he says, is that ‘the people in it are not going to make any money’. The band have attributed the cynicism of the song, in part, to the punk rock attitudes of the period. The meaning of the lyric is taken at face value by some listeners, and this subsequent interpretation of the song as a materialistic anthem receives mixed reactions.” However, the ironical critics are kind of backfiring if replacing the word ‘money’ with the more relevant word ‘music’. The duo most certainly took the opportunity in the industrial revolution of music, where skillful musicians suffered unnecessarily by some predatorian music industry. (The band was also presented in UU 2014.nov.28.)
Pet Shop Boys - Opportunities (Let's Make Lots of Money) (studio, disco, lyrics)
https://www.youtube.com/watch?v=PyeWRd7ZEBs
https://www.youtube.com/watch?v=Z_m2Jmi7kXc
http://www.azlyrics.com/lyrics/petshopboys/opportunitiesletsmakelotsofmoney.html

Extra UU – BlockChain Virtual Money

The invention of the Blockchain for Bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server. Blockchains are secure by design and a distributed computing system with high fault tolerance. Decentralized consensus makes blockchains suitable for trade and basic income as well as other recording of events, medical records, and other records management activities, identity management, transaction processing, and documenting provenance. Here are some videos about it – and there is much more on the internet to see.

How the blockchain is changing money and business | Don Tapscott https://www.youtube.com/watch?v=Pl8OlkkwRpc
So ein Ding- mobilbetaling
https://www.dr.dk/tv/se/so-ein-ding/so-ein-ding-tv/so-ein-ding-56#!/00:03
So ein Ding: Bitcoin & Blockchain
https://www.youtube.com/watch?v=nYi1itXLKsM
How Bitcoin Works in 5 Minutes (Technical)
https://www.youtube.com/watch?v=l9jOJk30eQs
MilkenInstitute: The Blockchain: A Revolution You Need to Understand
https://www.youtube.com/watch?v=nQZUi24TrdI The Blockchain and Us (2017)
https://www.youtube.com/watch?v=2iF73cybTBs
Blockchain: Real World Use Cases
https://www.youtube.com/watch?v=cHe_ow9v094
BILL GATES - NOBODY CAN STOP BITCOIN | Bitcoin Is Unstoppable https://www.youtube.com/watch?v=k0HmrSfJwhU
Building Ethereum Blockchain-as-a-Service on Microsoft Azure + Chrome Metamask Extension
https://www.youtube.com/watch?v=hXfc7tdC2_M

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