ISIS IS US

Hunting conjures up war-like imagery: guns, knives, arrows, booby traps and of course camouflage. Hunting is necessarily an overtly violent affair. Farming on the other hand invokes a more pastoral and peaceful mindset. Sure, intellectually we know killing must occur on a farm, but it is clean and clinical, so that makes it civilized. But dead is dead. The means may be different, but the ends are the same.

No, this is not some vegan polemic. The point is that we too live on a farm otherwise known as the state. Our ancestors and we have inhabited the farm for so long we have contrived the comfortable illusion that orderly and civilized violence isn’t really violence at all. We have convinced ourselves that because we are a nation of laws, of rules and order, and that we engage in the very civilized process of democratic elections to collectively decide the rules of society, then that makes us better than barbaric invaders who hunt their surroundings and take what they want. But whether one is robbed at gunpoint or by way of a Form 1040 one is just as impoverished by the process (and resistance to the latter will end just as violently). This idea of democratic self-determination is nothing more than an illusion. It is a Potemkin village that we have unwittingly built that mollifies our passions and so permits our owners, the state bureaucracies, to extract from us the fruits of our labor in order to parasitically advance themselves.

 

violence is the fertilizer that ensures strong roots for the state

 

In recent weeks we have witnessed the birth of a new state: ISIS. ISIS is still in the “hunter” stage of state formation. They have not yet collected enough “citizens” to form a proper, modern, farming state like we have in the US (and other countries). Once the farm-state is established the overt violence fades from the foreground while intimidation and threats rise in the background. This hunter-state formation is a bloody, violent, disgusting affair no doubt. But it is one that all states pass through, as violence is the fertilizer that ensures strong roots for the state.

Although the hunting and farming state differ in form, their substance is identical. Consider the following: the US says to foreigners, “Do what we say or we will have no choice but to kill you.” Inevitably the US sends drones, missiles, planes, troops, mines, and bombs – all agents of death. Similarly, ISIS tells people “Do what we say or we will kill you.” Those that do not comply are beheaded or shot. But dead is dead. Does it matter if done by the sword or the drone? Or would it be uncontroversial if ISIS killed by lethal injection?

Now consider the people ISIS did not kill – those who capitulated to their demands. They chose to comply with “the law” rather than suffer the consequences. This preference for submission over death is the same glue that maintains order here as well. We have “laws” that are just as arbitrary as Sharia “law.” A law that pertains to anything other than murder, rape or theft is no law at all. It is a mere edict that masquerades as law because some believe the ends justify the means. And why are such pseudo-laws obeyed? Violence. Non-compliance with pseudo-laws here results in the same outcome resisters of ISIS encounter there: death. Consider what would happen if pseudo-law A were ignored (insert any law you find absurd). The individual doing so might be fined first. If they ignored the fine, they might then be prosecuted in a court of the state. If they ignored that illegitimate process the state would send its agents (police) to confiscate property or arrest the individual. If the individual passively resisted and did not comply with “lawful orders” to willingly submit to being jailed then the encounter would eventually escalate to drawn weapons. Further passive resistance ensures this would eventually escalate to an “officer involved” shooting of the non-compliant citizen.

If you ignore the “authority” of the state, if you refuse to believe it has no more authority over your life than does your neighbor, well, the state doesn’t take kindly to that. If we all were to engage in non-violent non-submission to authority, the true nature of the state would quickly become apparent and all would see it is the US pot that calls the ISIS kettle black.

P.S. And no, I don’t “hate America” – I hate bullies that initiate aggression or threats of aggression to get their way.

September 29 / 2014

Scottish Secession: Politics as Usual

Scotland made history last week. They held a referendum election to decide whether or not they should become an independent nation or remain part of the United Kingdom. The measure was narrowly defeated (45% for independence) although strong support among the younger generations ensures this question will resurface in the not too distant future.

However what is interesting about this event is not such much the result but rather that it took place at all. Historically the general trend has been toward greater consolidation of power under a central authority. It is a rare event to find wide popular support in the other direction. Why would this be? Fear and uncertainty. Humans, like sheep, follow a herding instinct. Biologically this makes sense; there is safety in numbers. But there is a point of diminishing returns when group size changes from hundreds to thousands to millions. When the numbers scale into the millions, our hunter-gatherer mathematically challenged brains cannot make sense of such enormous numbers; we fail to realize the gains relative to the tradeoffs are negligible and so we are easily fooled by anyone promoting confederation. We are easily herded by our so-called leaders who capitalize on our fears. But confederations only last if all parties are treated fairly. Democracy itself is inimical to fair outcomes as democracy inherently marginalizes the desires of (political) minorities. Democratic countries are born in the heat and fire of common cause. But, like glass, these democracies will suffer fractures under the pressure from the repeated blows of each election cycle. As disagreements fester, the structure weakens, until eventually the confederation will shatter like so many pieces of battered glass.

What is the take home message of any secession movement? That perhaps we might all live more peacefully if we are allowed to go our separate ways rather than be forced into unions based solely on the opinions of those living nearby. If the Methodist is not required to be a citizen of the Baptist State, even when that Methodist is a minority amongst his Baptist neighbors, then why should anyone be compelled to be part of a group they have no desire to be a part of? Why are religious convictions the only thoughts worthy of such respect?

Another interesting aspect surrounding this attempted secession is that it was done so non-violently. Historically, secession attempts often trigger an overwhelmingly violent response from the “parent” who refuses to let the “child” go its own way. Americans have long lost the ability to rationally discuss the concept of secession given the Pavlovian association it has in this country with slavery. But perhaps Scotland can finally get Americans to view secession in a new light. It is possible for secession to be about something other than racism.

Secession is a fundamental right, namely the right of association, which conversely implies the right to not associate. Secession is the only tool that minority groups have in a political union insofar as the very threat of it may be sufficient to alter the behavior of the majority. For example, Scotland achieved many concessions from the UK. Sadly most of those concession had to do with granting Scotland greater power to tax its citizens, so Scotland is certainly no poster child for some sort of Randian free-market utopia.

In reality this whole process has been nothing more than political parties jockeying for power. Their goal is not a noble quest to unburden their citizens from the oppressive yoke of a foreign regime. No, their goal is to be the ones with their hands on the reins of that yoke. However Scotland is not unique in this respect. Every act of secession has been about shifting power from one group to another. The only benefit secession confers is that as power is divided, it becomes progressively weaker and hence less of a threat. One can only hope that such attrition of power will one day consume today’s “superpowers” leaving behind a collection of small, peaceful and prosperous communities that are too busy and too weak to provoke conflict in foreign lands.

September 23 / 2014
Author Greg Morin
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The Voting Games

We are now less than two months from Election Day and the usual furor over voting has moved from low simmer to boil. Wisconsin’s voter ID law was reinstated last week setting off the usual liberal chorus about limiting votes. And in our own back yard, Georgia Republicans are chiming in to their own refrain about too much voting. It seems Dekalb County will now have Sunday voting. The Republicans have taken a perplexingly tone-deaf stance on this issue. Their oppositional argument amounts to: Sunday voting enables more minorities to vote, minorities don’t vote Republican, so this is bad. If the Republicans had any kind of political savvy they would come out in full support of Sunday voting and in fact should one-up the Democrats by supporting Saturday voting as well. It may come as a shock to some, but most people work on Tuesday (the traditional voting day). Perhaps, just perhaps, voting should occur on the day (or days) that maximizes the availability of the majority of the population. If Republicans truly are the friend of business they purport to be, then they would support weekend voting since weekday voting is invariably disruptive to business operations.

On one thing though the Republicans have a point (although not the one they intended nor the one they are being skewered for). Georgia Senator Fran Millar stated “I would prefer more educated voters than a greater increase in the number of voters.” He is of course using the term “educated” in the sense of specific knowledge about the candidates or issues even though his opponents would like to frame his comment to imply minorities voters are simply “uneducated” in a broader sense.

I agree with Senator Millar – the voters should know whom they are voting for and why – and toward that end I propose that in order to be compliant with state law regarding campaigning near a polling place, that all notations of party affiliation be stricken from the ballot during a general election. That means no more “D” or “R” or even “I” (incumbent) next to names. These notations are a form of campaigning insofar as it achieves the same effect that campaigning would: the transmission of information to the voter about a candidate, even if in broad terms. If a voter cannot be bothered to know the name of their candidate, then they truly have no business voting. Such voters are muddling the process with noise and diminishing the voice of those that did take the time to become educated. Imagine the outcome of a vote on the best baseball player if 70% of the people voting know absolutely nothing about baseball? How valid do you imagine those results would be?

With respect to Voter ID laws I have never understood the controversy. In every other organization that uses voting as a means of decision making (clubs, unions, corporations, etc) no one would ever think of allowing someone to vote without first validating that they are indeed a member of said group. Why does this generally accepted principal vanish when it comes to voting in elections of the state? If you are a “member” (i.e. citizen) of the state, then show your membership card (this by the way is the only legitimate place a state can ask its citizens for ID). Why are some so concerned with the rights of others that those others apparently hold in low regard (seeing as how they can’t be bothered to exert even the minimal effort needed to obtain a voter ID card)?

Some argue that little evidence exists of voter fraud involving non-citizens or double voting so why bother checking ID. That argument is specious; it’s parallel would be the operation of a business with unlocked doors and no cashiers because that business determined its shoplifting problem exists only to the extent they occasionally happen to witness someone shoplifting. As the Russians say, “trust, but verify.”

So maybe we can reach consensus here, if we can agree that only citizens should vote, then it follows that once proving one’s citizenship, the form, manner, timing or location of said vote casting is immaterial.

September 15 / 2014
Author Greg Morin
Comments No Comments

What is a photocopier?

Ok, I forgot about this, this is really funny… if you enjoy legal humor…

 

 

September 10 / 2014
Author Greg Morin
Category Fun
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Where’s the harm?

If you’re anything like me you’ve likely always had a strange sense when buying a car that something wasn’t quite right, a sort of tingly spidey-sense that that you were the punch line to an inside joke. New car dealerships are a fraternity unto themselves. But unlike college fraternities, they work hard to keep newcomers from joining their ranks. The Internet has done much to reveal what the exclusive walls of membership formerly protected. It is not just information that has been freed, but also new modes of doing business. But last week we learned the lengths that these old school fraternities will go to in order to fight change and retain the power structure of their very unique cartel (cartel – get it?). The Georgia Auto Dealers Association filed a complaint last week  with the Georgia Department of Revenue claiming that Tesla Motors (a manufacturer of high performance, all electric cars) should be barred from selling any of their vehicles in Georgia because Tesla apparently violated some byzantine state statute that limited manufacturer owned auto outlets from selling more than 150 cars in a year. Tesla sold 173. Yes, I know, what monsters. Off with their heads.

Whether or not Tesla actually sold more than 150 is immaterial. The fact that such a law exists brings into shocking relief the ends to which automobile dealers in the state of Georgia (and indeed many other states, Georgia is sadly not alone) will go to in order to protect their own financial self-interests. Of course protectionist fervor is not how the dealers spin this. They claim they are only trying to protect the public (what selfless servants they are). Without independent dealers, manufacturers would be able to set strict non-negotiable prices, ignore warranties, and otherwise cause the marketplace to collapse into a top-down manufacturer driven oligopoly (according to a bit of NADA propaganda). So clearly in order to protect competition we must limit competition.

What these manufacturers fail to realize is that were these fascist, depression-era laws repealed it would not result in the overnight demise of the independent dealers. Rather it would mean dealers would have to compete with manufacturer outlets on price, service, or quality. Likewise the manufacturers would have to compete in precisely the same manner. At the end of the day the manufacturers don’t really care how their cars are sold, they just want them sold. If independent dealers can offer a manufacturer the ability to sell its cars more efficiently than that manufacturer can sell them (dealerships are a large capital investment after all), then they’re going to choose the cheaper, and thus more profitable route.

In short, the dealers are afraid of competition. And I don’t necessarily blame them. Who wouldn’t love to have one’s ability to earn a living protected by state sanctioned violence? Who wouldn’t love a system that created an artificially high barrier to market entry in order to keep out newcomers with new ideas that might otherwise eat into your 1940’s business model. But cartels, syndicates and state protected oligopolies are not consistent with the principals of liberty; namely that unless I’m using violence or the threat of violence to influence your actions, then you have no right to interfere in my actions irrespective of whether or not you believe it may “harm” you in the future. All competition “harms” another (whether it be economic, social or sport). But the “harm” of competition has a beneficial silver lining. It compels one to work harder, to do better and thus benefit the consumer and themselves in the long run. But if possible “harm” to someone becomes the litmus test for state intervention then I dare say we all belong in jail.

September 09 / 2014

Tax It Your Way

The recent announcement that Burger King will merge with a Canadian food chain (Tim Hortons) and shift its corporate headquarters from the US to Canada has predictably tripped the frothing at the mouth reflex of tax-hungry statists. Why? Because such a merger and move (known in tax lingo as “inversion”) means that Burger King no longer need pay the 35% US corporate tax rate (one of the highest in the world and despite popular media propaganda that focuses on a sliver of corporations avoiding it, it is in fact paid by 99.5% of US corporations) on income earned outside the US (they will still pay 35% on their US income). They instead will pay the much lower Canadian rate of 15%.

“Unpatriotic” is the word President Obama has used in the past to describe such tax inversions (which are completely legal) and his retinue are now all too eager to join that chorus – uncritically parroting the approved talking points put out by the administration. This sentiment of “economic patriotism” demands that one’s love of country directly correlate with one’s willingness to hand over whatever the state demands.

Obama has also said tax minimization may be legal but it’s “wrong.” Really? This is a rather warped interpretation of right and wrong. Traditionally “wrong” is reserved for those actions that violate one’s natural rights (theft, murder, rape). If Mr. Obama’s use of this term is technically correct then it betrays a scary proposition: individual ownership can not exist because all is owned by the collective, otherwise how else could it be wrong to keep one’s property, unless it was never yours to begin with.

This sentiment is shared by both the left and the right insofar as both are statist at their core. While they may differ in degree, they stand in solidarity on substance: the role of the individual in society is to serve the interests of the state. A vehement disagreement over whether 35% or 25% is a “fair” tax rate is much sound and fury signifying no disagreement. Shall the master allow his slaves one hour or four hours of rest? Clearly those in favor of one hour are godly and moral men while those supporting four are raving lunatics. But truly insane is the man who says slavery itself is immoral. Pay no heed to him, what he proposes would never “work” in the real world. So you see dear citizen, the profits earned by Burger King (or any company or person) are not really theirs. It belongs to us all, to the state, to the Homeland. How dare you attempt, even legally, to reduce by one red cent your contributive fair share to the communal pot?

The usual sort of justifications for unbounded taxation is that because a company receives benefits from the state (courts, policing, military, roads, research, education, etc.) this therefore establishes an obligate contractual relationship necessitating payment (of a unilaterally determined magnitude) for such benefits. If that is indeed true, then mobster-extorted protection money is equally legitimate.

Ignored in this false choice analysis is the possibility that these supposed benefits of the state would exist in the absence of the state. Naturally they would exist except in the minds of those bereft of an entrepreneurial spirit. The only difference is that privately produced “public” goods would be of higher quality and lower cost. If you’re unconvinced of this fact, just insert the word “public” in front of any good and consider which you would prefer in relation to the privately provided alternative (e.g. toilet, school, transit, food, clothing, car, healthcare, etc.) The difference in costs and quality between tax supported goods and market provided goods is the true dead weight tax cost and represents a net loss to society no different than if the government paid a million men to dig holes and fill them in.

It seems the tax-hungry-economic-patriot can’t decide what they want. If you protest the system they claim you’re unpatriotic and hate America and should leave. But when you take their advice and do leave you are then targeted with the vilest of epithets. But that sort of inconsistency should be expected; the ethics of the statist is consistently inconsistent insofar as they owe their allegiance to the mantra “the ends justify the means.”

September 01 / 2014
Author Greg Morin
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If you have the right to work…

What is hypocrisy? Hypocrisy is a chain smoker that proselytizes on the dangers of smoking. Hypocrisy is an outraged thief discovering he’s been robbed. Hypocrisy is the state taking away our rights and then warning us to be vigilant against those that would deny us our rights. Or perhaps that is irony – I’m never really sure on that one. This past week my family and I stopped into an Arby’s for a quick dinner. Hanging on the wall adjacent to the registers was the most patriotic looking DHS labor rights poster you will ever see (red, white and blue with an overt flag theme to top it off). It was one of those silly “workers rights” posters that the government forces employers to post in effort to ensure that employees everywhere are aware that without the helpful fist of the state they’d all be earning 5¢ an hour on 16 hour shifts. Over the years these posters have grown in size from a mere 8.5×11 sheet to blockbuster movie poster sizes. I don’t know if this particular Arbys posted it where the customer’s could read it because they wanted their clientele to know they are doing their patriotic duty to keep them ‘ferners from stealing our jobs or if they simply ran out of wall space in the back.

In any event, what caught my eye was the prominent byline, “IF YOU HAVE THE RIGHT TO WORK, Don’t let anyone take it away.” That most people absorb this without comprehending the underlying violation of their rights is a masterful stroke of state propaganda. It first takes root within our public school system and is then nourished over a lifetime of exposure to popular media state-apologist indoctrination. People now blindly accept that our rights come from government. Most have the Bill of Rights backwards; it did not establish our rights, it simply delineated what was already ours to begin with. This enumeration was done in order to keep at bay those who believe that all that is not permitted is outlawed (a view clearly contradicted by the 10th amendment).

So at the very first word, “IF,” we find evidence of an egregious violation of a basic human right: the right to work. There can be no “if”; all humans, everywhere and always have the right to work. To work is to provide for oneself (or those in your care) with those things that make life possible (food, clothing, shelter). To deny this right is tantamount to murder. Of course by “right” I mean that in the negative, not positive, sense. No one may interfere with my right to work, however no one is obligated to provide me with a job either. If no one will (willingly, free of state interference) employee me then I am free to work for myself.

The sentiment expressed on this poster transmutes this negative right into a positive one through mere fiat, that is, the right to work becomes the privilege to work, a privilege that may only be granted by the state. So naturally once the state has given you something valuable, they want to foster a sense of dependency and gratitude by warning you to remain vigilant against those who might try to do the very thing (deny work) the state is doing through their E-verify program.

This is where the hypocrisy gets really rich. The big concern about all of these “illegal” immigrants is that they are coming here and acting as a burden on our social safety net. But, if they had jobs they would not be a burden. So naturally the response is to make it impossible for them to obtain jobs by filtering all potential employees through the E-verify net thus thrusting them into the open arms of state social support. Brilliant. E-verify does not change behavior; it merely removes the least bad option and replaces it with an even worse option.

Even if you are in the “keep them out” anti-immigration crowd, do you really desire to see America become a neo-fascist utopia where employers are mere puppets of the state? Where providing for oneself depends on the integrity of a US government database that is assumed to never produce false negatives? Where we have become so xenophobic that we willingly turn our borders into prison walls and slowly transform America into a permission based society, where all is forbidden except that which is blessed by the state? Is that price not too high?

August 26 / 2014

Stop mining!

Yes, I am a big dumb idiot. I, like many others, fell prey to the bitcoin frenzy last fall as the price continued to climb, and climb and climb, and just when I thought it couldn’t go any higher, it did. Although I had managed to purchase a small amount of bitcoin (0.16 BTC)  at the Cryptocurrency conference in Atlanta (October 2013) for the now-unbelievable price of $120/BTC (using a bitcoin ATM they had there), I felt I had for the most part missed the boat on this whole bitcoin thing. But better late than never. I looked into mining equipment. Too expensive and too complicated (I’m an old school Mac guy, I’m not into compiling my own code in Ubuntu just to get some command line miner to work – I want point and click). But this cloud mining thing looked interesting. I knew just enough about Austrian economics to dupe myself into believing the business model of cloud mining companies made sense (“they are simply renting out time on their hardware to make an additional return on it” I thought). I read stories on line about how mining is for suckers, that the difficulty changes too quickly to make anything, but I dismissed those in my fervor to get some bitcoins at a really good price. I did some back of the napkin calculations that showed I could indeed make my investment back and then some. I was convinced! As it turns out, lazy, back of the napkin calculations don’t work. You actually need to do the fully detailed calculations… which I did not do until several months into it at which point it hit me like a ton of bricks, “YOU’RE AN IDIOT!” – it is mathematically impossible to make money in cryptocurrency mining. But so many people are doing it you say? That’s because they are wishful thinkers like I was or simply have not done the math yet.

From a strictly basic economics approach it should have been obvious to me that this business model made no sense. Why would you spend money on a piece of hardware and then you yourself not use it but rather rent it out at a rate of say $100/period even though if you used it yourself you could make $150/period? That’s the premise behind cloud mining: make more than you spent, otherwise what is the point. Intuitively it seems to make sense since we invest in all kinds of assets that produce returns (stocks, bonds, depreciable capital equipment, etc). The key difference here though is that if a stock produces a 2% dividend for me the stock itself still has value (assuming no insane market crashes). I can sell that stock at some later date for as much if not more than what I paid, and even if I sell for less, as long as the loss there does not exceed the dividends produced during that period, I still have realized a profit. But, with crypto currency mining the asset your are purchasing is simply time. As soon as it is used it is gone and worthless. When a mining contract is over there is no underlying asset for you to sell. In other words, for crypto mining to work you have to expect an investment return that approaches Ponzi-esque levels: a minimum 100% return during the holding period (of the contract). Even if we assume the crypto price in terms of fiat is increasing, the numbers still do not work. Why? Because you could have simply bought the crypto on the same day you started the mining contract and would have realized the same gain due to fiat inflation.

For example if it is $1/BTC on day 1 and you spend $1000 to mine for a year, you could have just bought 1000 BTC instead. So let’s say you mine for a year and only mine 500 BTC, but the price has gone to $10/BTC. You think you made out well because you spent $1,000 but now have $5,000… but you must recognize that you could have just bought 1000 BTC on day 1 and would now have $10,000. The loss must be accounted in the crypto currency you are mining relative to what you could have bought at the market price on the date the contract started.

I actually also dabbled in some Litecoin mining as well and bought one of those pre-built rigs off of Ebay. It was mostly plug and play… but it was extremely LOUD and HOT. As I considered where I could relocate this rig in my house I decided to run some detailed calculations to determine when I would turn a profit. And that is when I discovered I would never get my money out of what I paid for the rig, let alone all the electricity use as well. So I made the smartest move one can make when mining; I sold the rig. Because I sold it a mere 3 weeks after I had bought it the difficulty level had not changed appreciably and the market rate for the rig was the same. I sold it for exactly what I paid for it and managed to pocket the litecoins produced. So in all I netted about $100. So it is possible to make money mining but you must (a) buy the actual equipment so you have something to sell when done and (b) mine for under a month so difficulty increases do not depreciate your equipment by an amount exceedeing what you made in mining (as denominated in the currency being mined). Of course that is not really practical, but it is possible. The only other way to make money is if you just happen to already own the hardware needed to mine and can build a rig yourself (and live where electricity rates are low). Of course you must factor in the opportunity cost of any other endeavors you could have participated in that could have made more of a return. It wouldn’t make much sense for a neurosurgeon to waste his time building a rig, although for someone in high school or college it might (if they are not employed) in terms of opportunity costs.

So to help people out I have put together a spreadsheet using Google docs where you can estimate mining returns. It is set up for BTC but one could do the same for any crypto currency, the principle is the same. The document shows an example of the currently most expensive Cloudhashing.com mining contract (1 TH for $2999) using the Global Hash rate of 8/19/2014 as the starting point and an average change in difficulty of 20%. With those numbers you can see you lose 75% of what is spent. The only way to make a return is if difficulty changes were 1% or less (or they could cut their price by a factor of 4). The spreadsheet is Read Only on the web but you can download it and then make changes to it offline. Trust me, no matter what mining contract you see, plug it in here and you’ll see it’s a loser. And if it is a winner then you can be sure it is a “pre-order” contract. Don’t do it, trust me. I fell for the pre-order Butterfly Labs mining contract last December. Had they delivered that product on the day I purchased it, I would have made a return. But they knew it would be months before it was delivered so they could price it aggressively such that it appeared to be a money maker. Six months later after no delivery on the contract I luckily qualified for a 100% refund (which I had to wait another 45 days to get). But to their credit they did finally refund all of my money. I made out far better getting my money back than if they had delivered the contract in the February time frame originally promised. Their reputation for taking money and not delivering for months (if ever) suggests to me they are simply using their customers as a source of 0% financing. They collect pre-order money from suckers like me, then hold our money for 7 months, and then finally return it with 0% interest. But like a Ponzi-scheme, this will only work as long as they continue to entice new suckers into doing the same. I will give them the benefit of the doubt and assume it is not a pure Ponzi scheme, but rather that they are using the “loaned” funds to invest in their business and grow it. I’m just glad I got out when I did.

Cloudhashing.com is a bit different from Butteflylabs.com. Cloudhashing actually delivers their contracts when you buy them, it’s just that given their pricing it is not possible to ever make a return. They have a “revenue reinvestment” scheme which sounds like it makes sense; reinvest your mined returns in order to stay ahead of the difficulty changes. But all you’re doing is running to stand still if you participate in the RRP. But in theory and in practice it can’t work as it falls prey to the same problem of mining itself; you’re better off just buying the BTC. Ultimately I think they and all other mining companies operate on the same principal. Instead of investors they have customers who freely give them their money, they use that money (risking none of their own) to buy the equipment, they then charge the customers 10% of their return (and may very well be mining on the side using the equipment paid for by their customers). A parallel would be this: I sell the ability to receive a dividend from some penny stocks. You give me $100, I use that $100 to buy shares of penny stocks. Those stocks pay a $2 dividend per month. I give you $1.80 and I keep $0.20. After 1 year you’ll be lucky to have made $20 (thus an $80 loss), I’ll have $2, and then the “contract” is over. I’m making $2 per account/per year risk free by using your money to buy the stock. After a year the penny stocks are worthless so there is no way to recoup that initial investment. Now all I need to do is scale up to a massive level and make a pretty decent amount of money risk free.

So, this whole essay begs the question, “If it always make more sense to buy than to mine, shouldn’t it be impossible for any crypto currency to get off the ground?” Yes, quite literally that is true. But, fortunately, turning a profit is not the sole motivation behind everyone’s actions. I’m certainly not saying turning a profit is bad, simply that people do things for reasons other than profit. A painter might paint his whole life for pleasure and never realize a profit from that endeavor. Then when he dies his painting shoot up in value and then people are buying and selling them for profit. In a sense that his how crypto mining operates. The miners don’t make anything, but the traders who buy their product do.

Mine because it is fun. Mine because you want to help grow the market. Mine because you want to be a part of history. Mine for any number of reasons, just don’t mine because you want to make a profit. You won’t. The only people that make a profit in the crypto currency game are those that are (a) very lucky and found good deals on hardware or (b) people selling mining equipment or mining contracts. If you just want to make money then just buy what you can afford to lose. It is a purely speculative market so the only profit you’ll see is if the crypto you buy gains value relative to other goods.

So there you have it, the perspective of a former miner and cloud miner on why neither makes any sense if your sole intention is to make a profit. I hope this information gets out there and helps others to avoid buying mining contracts that are a total loss from Day 1. I was a victim of my own lack of due diligence and placement of trust in companies that I expected to deliver what was implied (net gain) by the nature of the product. That’s the free market, if you aren’t careful you can get hurt. Well now I’m here as part of that market to warn others away from participating in these “products”. Eventually there will be enough of us warning everyone else that these companies will simply go away, but sadly not without having made off with a lot of money. Caveat emptor.

August 23 / 2014
Author Greg Morin
Category Uncategorized
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Ferguson is the New Black

I was shocked and saddened, as most were, to read about the shooting death of Michael Brown in Ferguson, Missouri last week. What I was not, unfortunately, was surprised. Stories of police overreaction to the most innocuous of infractions (or none at all) are seemingly no longer the exception in a society where mere behavior, words, or possessions are sufficient evidence of criminality that is too frequently repelled with lethal force. The trivial nature of Brown’s misdeed (walking in the street) coupled with the rapidity and disproportionate response of the officer involved (6 bullets, including 2 to the head!) was illustrative of the small amount of daylight between life inside and outside the prison system.

I (fortunately) lack any direct experience with the prison system; however, what I have read is a realistic portrayal of that system can be found in the television series “Orange is the New Black” (warning: definitely not family friendly). In this series the main character is incarcerated (as are many others) for being involved in one of the many victimless crimes related to the “war on drugs.” The prison depicted is a federal, minimum-security women’s prison. But even under this lightest of all prison environments, life is clearly a stressful and miserable experience, in no small part due to the capricious and vindicate nature of the guards coupled with the lack of autonomy over ones life.

Naturally this is what one would expect; we all know prison is not supposed to be a vacation. It is supposed to be miserable so that it may act as a deterrent. And even when it is not a deterrent then we the public can still rest satisfied in knowing the “bad” people are being appropriately punished. But as it becomes clear that the vast majority of these prisoners are party to “crimes” with no victim, it makes the US prison system less like Dostoyevsky’s Crime and Punishment and more like Stalin’s Gulags. But I digress.

The most frightening aspect of the TV series is not its portrayal of life within prison but rather the realization that we ourselves live in a much larger prison known as the State. This prison has no escape, no furlough and no time off for good behavior. Consider: in prison perceived disrespect toward a guard or failing to immediately and mindlessly follow their directives is met with an immediate and violent response. The same fate is not uncommon for any of us who might fail to immediately comply with the “lawful order of a police officer.” In prison the guards can search the prisoners or their living space at any time for any reason. This is likewise true in many parts of the country under “stop-and-frisk” laws or with the now infamous no-knock-raids. In prison the mail correspondence and voice conversations are closely monitored. Outside prison we have the NSA to take care of that task. In prison the inmates must plead to their intermediaries (the administrative staff) for permission to engage in heretofore-unapproved activities. Outside prison we must plead with our intermediaries (elected officials) for permission (licensing) to engage in an activity so that we can avoid violent reprisals from the state. In prison the belongings of any inmate can be confiscated at any time for any reason. Outside prison our property may be confiscated (civil asset forfeiture) for nothing more than baseless whims of suspicion.The dream of the statist is to push society toward being more, not less, prison like. The statist wants nothing more than to have the power to force all to conform to their vision of the ideal society: behave this way that, not that, eat this, not that, run your business this way, not that, express yourself artistically this way, not that, smoke and drink this, but not that. Where else but in a prison are such visions of the ideal society possible through strict enforcement?

Many might say “hogwash” to all this. They’ll insist they don’t feel like prisoners, they can do whatever they want, whenever they want. That may be true, for some actions, but even prisoners may do things without asking permission or running afoul of a guard; but that does not make them free. They are simply the pinball that has not yet hit the wall. Inside prison the walls are narrow, outside prison the walls are wide – but both have walls. If you remain unconvinced and still need proof that you are but a mere serf living on the master’s (that is, the state’s) land then consider the truth found within an instinctual and visceral emotional response. What do you feel in that moment when you see flashing blue lights in your rearview mirror?

August 18 / 2014

Moneyball

A US District Court judge recently ruled that the NCAA can not prohibit student athletes from receiving remuneration that goes beyond scholarships and related costs. The ruling was based on the argument that the NCAA was violating antitrust laws (trust = a small group of individuals conspiring to limit options of its customers or members). That such antitrust pronouncements emanated from a federal court (itself a monopoly) is no less ludicrous than if the KKK were to condemn the racism of the Aryan Brotherhood. Perhaps the people should file an antitrust lawsuit against the Federal Government. The executive, judicial, and legislative branches regularly conspire in trust-like behavior in order to deprive us of our rights. If we were permitted to choose from whom we will rely on for governance (without imaginary border constraints), then, and only then, could we live freely.

Apropos voluntary governance; the NCAA is a non-geographically constrained, self-governing, voluntary organization whose existence is based on the concept that those with common goals and interests can better achieve those goals through cooperation. In many respects the NCAA operates like any government. It has a legislative body that passes “laws” that its members must adhere to, it has a dispute resolution process (judiciary), and it has a chief executive (president). There is, however, one crucial difference; it relies on voluntary membership and voluntary dues payments. It cannot force schools to join merely because other member colleges happen to be nearby. All schools voluntarily join and in so doing agree to abide by its rules. Also, unlike state governments, it has competition (NAIA, NCCAA, USCAA, etc) in its metaphorical backyard. But unlike state governments, they cannot and do not use violence to inhibit such competition. Somehow this crazy, anarchical voluntary system has worked for over one hundred years! Imagine that, anarchy does work!

Or rather it works until the top gang (the Federal Government) decides it has a say concerning what the serfs do on its “turf”. You see the Crips, err, I mean the Feds decided monopolies/trusts are bad and must be stopped (even though monopolies cannot exist in a free market – only in one that suffers state interference). In order to stop them they pass “laws” that they interpret to arrive at whatever outcome supports their ideological stance du jour. Today’s seems to be “fairness.” It is only “fair” after all to allow student players to be paid. Only a troglodyte would oppose fairness. The substance of this conflict is the usual sort of economic interventionism (e.g. minimum wage, worker’s “rights”, etc) one can expect of the state. The actors may change but the narrative is always the same: Party A and Party B came to a mutually agreeable relationship, however Party C thinks that Party B is too stupid or weak to know what is best for them.

Whether students should be paid or not is irrelevant. This is not a moral issue; there is no right or wrong answer because there is no rights violation. All relationships are voluntary (NCAA, schools, students). The only ones that get to decide what is best are the students and the schools. If a school wants to pay an athlete, then they must weigh the costs and benefits of leaving the NCAA. If enough students demanded pay, then the rules would change. The fact that the rules have not changed (other than this recent external one) suggests that the vast majority values the free education and experience more than they value the other things they could be doing. In other words, if someone offers you $10 for something that you value only at $5, then it is ill advised to demand $50.

Although this issue is often cast under an egalitarian light, this ruling will result in a rather perversely inegalitarian outcome. The 1% (of athletes) will attract the lion’s share of money to themselves leaving that much less for others. On the margins fewer athletic scholarships will be given, thus harming those most in need. To paraphrase H.L. Menken, “[the student athletes] know what they want, and deserve to get it good and hard.”

August 11 / 2014
Author Greg Morin
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