Jim Taylor's Columns - 'Soft Edges' and 'Sharp Edges'

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Published on Sunday, March 10, 2019

Imaginary games with imaginary money

It just vanished -- $190 million. But was it ever there?

            The $190 million was in crypto-currency, controlled by a Canadian firm called QuadrigaCX. The best known crypto-currency is probably Bitcoin -- an imaginary currency invented, appropriately, by an imaginary person who used the name Satoshi Nakamoto,just ten years ago.

            QuadrigaCX, once Canada’s largest crypto-currency exchange, was founded by Gerald Cotten, a resident of Nova Scotia. According to a death certificate issued by the Fortis Escorts Hospitalin India, 30-year-old Cotten died on December 9 of multiple heart attacks. He was admitted suffering from septic shock, perforation peritonitis, and intestinal obstruction,brought on by chronic Crohn’s disease.

            Only Cotten knew the encrypted passwords required to access the company’s digit assets.

            As I understand crypto-currencies -- and I don’t -- they’re supposed to be an unhackable way to store wealth. It can’t be touched by governments, banks, or internet thieves, because its security depends on a “block chain” of computers, all of which have to be convinced that a transaction is legitimate before it can go ahead.

            To unlock the block chain, you have to have a key -- a random collection of data bits, generated by an algorithm to ensure that your key is unique, untraceable, and uncrackable.

            And encrypted too. Encrypting garbles the original computer code by replacing real characters with other characters, defined by a formula. You need to know that formula to convert the garbled code back. (Which makes the 80 or so passwords for my software, my subscriptions, my bank accounts, and my memberships look like child’s play.)

 

Digital cash conundrum

            David Gerard, author of a book on blockchain technology, says that the biggest problem with asking outside regulators to solve the 'digital cash conundrum' is that almost no one is qualified to do it. As the crypto-currency newsletter Chepicap asked, “How can we trust a judge to understand the hopelessly complicated world of crypto-currency, if he doesn't even know what a subreddit is?”

            When Cotten died, his crypto-keys died with him. Hmmm…Maybe you can take it with you?

            Since then, accounting giant Ernst and Young has been trying to crack the supposedly uncrackable encryption, to get at QuadrigaCX’s crypto-assets for crypto-creditors allegedly owed around $260 million.

            So far, they’ve found nine so-called “cold wallets,” used to store digital assets offline. But all the wallets were empty.

            Which makes we wonder if there was ever anything in them.

            Wikipedia estimates that 20 per cent of Bitcoins, worth about $20 billion in conventional currencies, have been lost. Forever. Plus another $7 billion stolen.

            Nakamoto himself, whoever he was,  created Bitcoin out of nothing, essentially. By applying his own algorithms, he earned a million or so Bitcoins for himself.

 

Aesop lives!

            The whole business makes me think of an anonymous parable circulating on the internet a decade ago:

            It’s a slow day in a small town. Times are tough. Everybody is in debt.

            A tourist passing through town stops at the motel. He asks to check out the rental cabins. He leaves a $100-bill on the desk as security.

            As soon as he goes out to examine the cabins, the motel owner grabs the $100-bill and runs next door to pay his debt to the butcher. The butcher takes the $100 down the street to pay the pig farmer. The pig farmer pays off his bill at the feed store. The feed store guy runs to pay his debt to the local prostitute, who has had to offer her services on credit because her clients have no money. The hooker rushes to the hotel and pays off her room bill. The motel owner puts the $100-bill back on the counter.

            When the traveler comes back, he declares that the cabins are not satisfactory, takes back his $100 bill, and leaves.

            No one produced anything. No one earned anything. But the whole town is now out of debt.

            Of course, today there would be no real cash involved. The transactions would all take place on-line. Just digital data flying back and forth.

 

Mutually agreed fiction

            Long ago, a silver dollar was worth a dollar of real silver. But today’s $100-bill cost the Canadian Mint no more than a $10 bill. And each probably cost less to make than a single $1 coin.

            Our whole monetary system seems based on a mutually agreed fiction that something worth nothing is actually worth something.

            So why not extend the fiction to imaginary currency? Like Bitcoin. And QuadrigaCX.

            If it’s all imaginary, what makes us think there was anything there to find?

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Copyright © 2019 by Jim Taylor. Non-profit use in congregations and study groups encouraged; links from other blogs welcomed; all other rights reserved.

                       To send comments, to subscribe, or to unsubscribe, write jimt@quixotic.ca

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YOUR TURN

 

Generally, you agreed that symbolic gestures – like wearing a pink shirt for Anti-Bullying Day -- are important. 

 

Tom Watson got the idea: “There's a quote that goes ‘It's better to light a candle than to curse the darkness.’ Doing one small thing such as wearing pink may seem futile, but it's the candle that's lit in the darkness of bullying. There are other forms of darkness, and people in positions of power seem intent on deepening the darkness, so here's to the candle lighters of the world.”

 

Bob Rollwagen agreed: “Glad you wore pink. I remembered being bullied as a kid. I have run into bullies all through my career. I got better dealing with them. I cannot tell you where they are today and what effect those experiences had on me, but they did.

            “Micheal Enright, talking about journalists today, reported that left-leaning journalists outnumber right-leaning ones approx 2 to 1. While I have no [comparable] research, all the bullies I know appear to be very right leaning, or at least dispute any progressive social policies. At one time I supported the Progressive Conservative movement, but that group has gone to the right and lost its Progressive focus. 

            “It is not unusual for like-minded groups to gather. Self-interest is a growing trend as illustrated in U.S. politics and the way minority groups like bullies gather strength.”

 

James Russell took the bullying issue into current politics: “A very à propos subject, especially given the situation re our former Justice Minister.  If no one talks about bullying, it just keeps on.

            By the way, one of the most frequent taunts against Jody Wilson-Raybould is that she ‘just isn’t a team player’.  Gee, I thought she joined a team united about election reform, a clean environment, equal justice for all, fair treatment for women and aboriginals, transparent election financing, and making the rich pay at least as the poor must pay.  Seems to me she’s still on that team.  But what team is the current cabinet playing for?”

 

Isabel Gibson wrote, “Yes to purely symbolic gestures. And yes to even small acts of kindness.”

 

Frank Martens applied the symbolic gesture principle to promote one of his pet causes: “If pink shirts actually reduce bullying, then perhaps we can do the same with other forms of dress.

            “If we can accept that Israelis are bullying Palestinians, I suggest that we chose a particular day that is significant to Jews, such as Yom Kippur, a day of atonement, and wear a keffiyeh, a typical Arab headdress that can also be worn by women as a scarf.  Unfortunately, Yom Kippur is not celebrated on a particular date every year – Oct 9 in 2019 and in Sept 2020, etc.  However with enough advance warning to participants, it could work.  These scarves are available made by Palestinians for about 16 euros on line.”

 

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TECHNICAL STUFF

 

If you want to comment on something, write me at jimt@quixotic.ca. Or just hit the ‘Reply’ button.

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                       You can now access current columns and seven years of archives at http://quixotic.ca

                       I write a second column each Wednesday, called Soft Edges, which deals somewhat more gently with issues of life and faith. To sign up for Soft Edges, write to me directly at the address above, or send a blank e-mail to softedges-subscribe@lists.quixotic.ca

                       And for those of you who like poetry, I’ve started a webpage http://quixotic.ca/My-Poetrywhere I post (occasionally, when I feel inspired) poems that I have written. If you’d like to receive notifications about new poems, write me at jimt@quixotic.ca, or subscribe yourself to the list by sending a blankemail (no message) to poetry-subscribe@lists.quixotic.ca(If it doesn’t work, please let me know.)

 

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PROMOTION STUFF…

To use the links in this section, you’ll have to insert the necessary symbols. (This is to circumvent filters that think too many links constitute spam.)

                       Ralph Milton’s latest project is a kind of Festival of Faith, a retelling of key biblical stories by skilled storytellers like Linnea Good and Donald Schmidt, designed to get people talking about their own faith experience. It’s a series of videos available on Youtube. I suggest you start with his introductory section: https://www.youtube.com/watch?v=7u6qRclYAa8

                       Ralph’s “Sing Hallelujah” -- the world’s first video hymnal -- is still available. It consists of 100 popular hymns, both new and old, on five DVDs that can be played using a standard DVD player and TV screen, for use in congregations who lack skilled musicians to play piano or organ. More details at wwwDOTsinghallelujahDOTca

                       Wayne Irwin's “Churchweb Canada,” an inexpensive service for any congregation wanting to develop a web presence, with free consultation. <http://wwwDOTchurchwebcanadaDOTca>

                       I recommend Isabel Gibson’s thoughtful and well-written blog, wwwDOTtraditionaliconoclastDOTcom

                       Alva Wood’s satiric stories about incompetent bureaucrats and prejudiced attitudes in a small town -- not particularly religious, but fun; alvawoodATgmailDOTcom to get onto her mailing list.

                       Tom Watson writes a weekly blog called “The View from Grandpa Tom’s Balcony” -- ruminations on various subjects, and feedback from Tom’s readers. Write him at tomwatsoATgmailDOTcom or twatsonATsentexDOTnet

 

 

 

 

 

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