Russian and Venezuelan officials are hoping virtual currencies can help their countries make an end run around American sanctions.
Both governments, with ambitions to create state-sponsored cryptocurrencies, are looking to take advantage of the promise that Bitcoin introduced to the world financial system: a new kind of money and financial infrastructure, outside the control of any central authority, particularly the United States.
.. “When it comes to state-sensitive types of activities, this instrument suits us very well,” one of Mr. Putin’s aides, Sergei Glazyev, said last month in a conversation about the crypto ruble, according to several Russian news outlets. “We can settle payments with our business partners all over the world regardless of sanctions.”
Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin
Few mainstream investors have bought large sums of bitcoin, scared off by concerns about cybersecurity and liquidity
Founders bought around $15 million to $20 million in bitcoin, and it has told investors the firm’s haul is now worth hundreds of millions of dollars after the digital currency’s ripping rise in the past year.
.. He previously ran a multibillion-dollar hedge fund focused on global macroeconomic trends, and had some success navigating the financial crisis before racking up investment losses by investing in safe havens and missing out on the subsequent rebound.
.. Founders has more than $3 billion under management and has taken stakes in more-than 100 companies, including Facebook, Airbnb Inc., SpaceX and Lyft. More recent investments include the crypto-focused hedge funds Metastable Capital and Polychain Capital, which puts money into blockchain companies.
To Stop North Korea, Act Like Israel
So far, these crime bosses have been masterful at circumventing the sanctions that have primarily hurt the enslaved North Korean population.
That’s why the United States and its allies ought to take a page from an Israeli playbook and wage financial warfare against Mr. Kim and his cabal.
.. The notion behind using money as a weapon against terrorism belonged to Meir Dagan, a legendary soldier and spymaster who developed the idea in the nascent days of Israel’s fight against Hamas and terror groups supported by Yasir Arafat’s Palestinian Authority.
Mr. Dagan rightly believed that money was the oxygen that fueled the groups’ suicide bombing campaign against Israel. If Israeli security services could suffocate the funds that paid for the bloodshed, the attacks would stop.
.. Harpoon targeted the banks that held accounts belonging to Palestinian terrorist commanders, and the unit encouraged lawyers — including me — to launch suits in United States federal court seeking monetary damages for victims of state sponsors of terror
.. Harpoon went after Hezbollah’s cocaine business in Venezuela and in Lebanon, as well as its money-laundering activities in West Africa and America.
.. And when the Hezbollah hierarchy was cash strapped, Harpoon targeted the financial institutions that allowed the terrorists to move their cash across continents, ultimately shutting down the Lebanese Canadian Bank
.. Most military commanders acknowledge that there are very few, if any, feasible solutions to today’s standoff with Pyongyang. The only effective path is to unleash an offensive press against Kim’s inner circle.
.. This effort ought to include a full-court press of dirty tricks, coercion, heavy-handed threats and even direct action, all covert and deniable, against Kim’s financial wizards who handle the finances, dispense the narcotics and hijack Bitcoins.
.. Only when the money dries up will the loyalty of the men in Kim’s inner circle be compromised and cut away. The North Korean dictator will then be under enormous pressure to do whatever he can to alleviate the effects of the spies tapping into his cash and control.
Why decentralized social services fail
>The “why” is not technical.
This is one of thr few essays about decentralization that understands that the problem isn’t technical.
However, I’d go further than his explanations of incentives and say that the fundamental problem is that decentralized technical protocols do not solve the centralization of how money is spent.
Examples of that misunderstanding:
– SMTP the protocol is decentralized (technical) and yet we have giant email providers GMail/Hotmail/Yahoo which is centralized (money). The big providers spent $$$ on 1 gigabyte mail storage + backups + convenience. SMTP specifies how fields are laid out but it doesn’t put money in everyone’s bank account so they can run residential SMTP servers so the email ecosystem stays decentralized.
– Git the protocol is decentralized (technical) but Github the service is centralized (money). Why? Because Git the technical protocol is not a bank fund that gives every programmer a free $10 VPS account to host their own git repo. The centralization of money spent (Github invests in a datacenter but individual programmers do not) results in centralization.
– Bitcoin protocol is decentralized (technical) and yet the phenomenon of giant China “mining pools” emerges which is centralization (money). The ability to spend money on liquid cooled ASIC chips in a datacenter located near the Artic Circle is “centralized” to the entities that can spend that vast amount of money. The exceeds the ability for the home enthusiasts to compute hashes on a spare computer in their bedroom.
The common theme: technical protocols can be decentralized but the real-world implementation of those protocols end up centralized because physical things like cpus, harddrives, network bandwidth, etc cost money.
This pattern of decentralized technical protocols vs centralized economic behavior is ignored by virtually all decentralization enthusiasts.
So the real puzzle to decentralization is, “How do we _decentralize economic behavior_ when everybody doesn’t have the same amount of money to spend?” Nobody I’ve read about so far has figured that out . That includes Sandstorm/IPFS/Filecoin/Mastadon/Diaspora/Ethereum etc.
People use gmail and hotmail, not just because they don’t want to pay for the computer, it’s because they trust these companies will do it properly and reliably.
Github isn’t the best example either. It didn’t spring up because of the economics of running a git server. It got big largely because of its social features, and also because it was a pretty trustworthy git repository. I feel far more confident pushing to a git repo than to some physical server somewhere. There’s a trust aspect.
I’ll skip Bitcoin and got to another mostly decentralized system: paper currency. Exchanging paper currency is largely decentralized, but most people deposit it in a bank, in part due to interest, but largely due to the trust the bank provides.
The common theme to centralized services isn’t the cost of computing hardware, but rather raising trust/reliability in the service, outsourcing expertise, and risk mitigation. Big central service providers are good at exactly this.