The Satoshi Revolution – Chapter 4: Kiss a Computer Engineer Today (Part 4)

Kiss a Computer Engineer Today

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 4: When Privacy is Criminalized, Only Criminals will be Private
by Wendy McElroy

Kiss a Computer Engineer Today (Chapter 4, Part 4)

If you care about liberty, the nonaggression principle, or economic freedom in general you should do everything you can to use Bitcoin as often as possible in your daily life.”

— Roger Ver

Every time I turn on a light switch, I want to kiss an engineer. I cannot make light in the darkness, but they can. I can do so at the flick of a switch only because they have created the FM that makes it happen without my needing to know how. (FM = F***ing Magic, which is what much of technology seems to me). Fortunately, I married an electrical engineer and computer zealot, so I am able to express a lot of gratitude on a regular basis.

What does the foregoing commentary have to do with cryptocurrency? Everything. The coders who drive crypto technology are like the engineers who make light happen. Their hands are on the engine of the most powerful freedom force of our time: the blockchain and the crypto that flows through it. I am a passenger on this wild ride; I don’t pretend to be anything else. Or, rather, I do have something to contribute. Some of those who are technologically-steeped are blind to the social implications of what they’ve created. That’s a shame, because more lights have been switched on than they realize.

The first crypto creators were anarchists who understood the social, political FM of it all. Satoshi Nakamoto was an anarchist visionary who knew its revolutionary potential, and he wanted to develop it slowly so Bitcoin could accommodate changing circumstances. When Wikileaks adopted Bitcoin, the careful development was swamped by a sudden popularity that had a path of its own.  With every new ICO offered, with exchanges that report its every breath to the government, with every step into the mainstream swirl, crypto forgets its roots. It risks losing them altogether.

Returning to the Roots

The transformation of society caused by cryptocurrency is vast and complex, which makes it difficult to sketch. It can be glimpsed in microcosm, however, by looking at a small slice. Consider one issue: authentication. It sounds like a dry and almost sterile topic, but its implications are vast.

Authentication is the process of verifying something or someone to be true, genuine, or valid. It is the backbone of modern finance -– credit checks, background information, references, government credentials — institutions want to vet people within an inch of existence before opening an account or transferring a dollar from one hand to the other. The reason is clear. Government demands a complete accounting of who everyone is and of every cent they own. Government approval and authentication of identity is the modern form of financial reputation. Without government authentication in the form of documents and bureaucratic approval, few things are (or were) financially possible.

The opposite of the authentication of identity used to be true in economic exchanges. In days of barter, or direct trade, the question of identity was not important; character was not necessarily important. A chicken was a chicken was a chicken. It did not matter whether the seller was a devil or a saint, as long as chicken was healthy and fat. A buyer examined chickens, looked at horses’ teeth, and squeezed tomatoes. The authentication focused on the good being traded rather than upon the people involved. There was no need to confirm identity – only to confirm the quality of goods. At a swap meet, what does it matter if the person selling you cheap vegetables is a ex-con, a priest, or is sex worker on the side? You examine the vegetables. You authenticate the commodity, not the seller. Thus, barter offered anonymity.

Modern life requires more sophistication than barter can supply. It is not possible to send money overseas, to cash a paycheck, to acquire a home loan, or to conduct most financial necessities without going through institutions that focus on authenticating identity, rather than authenticating the good being transferred – namely, money. And it is relentless. The banking system endlessly invades privacy for its convenience and advantage, at the expense of customers.

Cryptocurrency reverses the authentication process. It takes authentication back to the barter stage of verifying goods while, at the same time, providing the sophistication of modern finance. Users of the blockchain can be anonymous or pseudonymous, which is the opposite of being authenticated. The focus is all on the “good” involved: that is, the crypto. If the blockchain accepts or authenticates the crypto, then no real identities need to be involved. A bitcoin is a bitcoin is a bitcoin. The people don’t matter.

All the anonymity advantages of barter are present in crypto, along with the incredible power of modern finance. The blockchain offers the same sophistication as central banking. Money speeds across borders; it purchases real estate; it allows investment, and all without demanding authentication of identity. In other words, and to be repetitive, cryptocurrency preserves the enormous anonymity of barter while providing the sophistication of complex finance.

The “trusted third party” problem was always code for “the central banking problem.” Satoshi rejected it because banks are the choke-point at which authentication switches from goods to people. To acquire necessary financial services, people must be documented, registered, and reported to government. But the blockchain substitutes for central banks. It becomes an automatic clearinghouse that requires no authentication of identity. It is an exchange of value – that is, crypto – with no privacy violation.

One of the keys to financial freedom is where the authentication is vested. Is it vested in the individual or in the good itself.

Of course, government is trying to reverse the authentication process in order to make it all about identity rather than about goods; or, rather, it wants to document both aspects of financial exchanges. The push to regulate exchanges is an example. It converts them from expressions of the free market into arms of the government, which function in the same manner as banks. The enrollment process for exchanges like Coinbase, for example, are now as grueling and invasive as any bank. That’s the future governments want for cryptocurrency: the extensive authentication of identity and of transactions.

Everyone should kiss a computer engineer today. Until Satoshi Nakamoto and the anarchist ilk with whom he ran, no one imagined there would be a sleek, compartmentalized method to financially empower the individual. It is the blockchain. It is an elegant solution to the third party problem that allows people to be anonymous, or close to it, while conducting financially sophisticated transactions.

As someone who has spent a lifetime in the humanities, especially in history, it took me by surprise that human freedom would not come from a mass of people taking to the streets under banners reading “Truth, Justice, Freedom.” It would come from computer radicals and cryptographers who code.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

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South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks

The South Korean government has officially released two sets of previously promised guidelines that specify cryptocurrency regulatory measures. In addition to details of the new real-name system to end anonymous trading of cryptocurrencies, the government also published its anti-money laundering guidelines for banks providing services to cryptocurrency exchanges.

Also read: Cryptocurrency Activities Will Be Legal and Tax Free in Belarus Starting in March

Implementation of Crypto Measures

On Tuesday, the South Korean government officially released a document containing the guidelines for cryptocurrency regulations it previously promised. The announcement was made by Vice Chairman of the Financial Services Commission (FSC), Kim Yong-bum.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks
The meeting where Kim Yong-bum announced cryptocurrency regulatory measures.

This document details the government’s Special Measures for the Elimination of Virtual Currency Speculation which was first announced on December 28. In addition, the government also announced on Tuesday its anti-money laundering (AML) guidelines, prepared by the Korean Financial Intelligence Unit (FIU), an FSC division, for all banks dealing with cryptocurrency accounts to follow.

Converting to Real-Name System

A large part of the government’s special measures concern the new government-mandated real-name account system. This system will replace banks’ current practice of virtual account issuance. Virtual accounts are issued by banks for cryptocurrency exchanges’ customers to use to deposit and withdraw money.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and BanksOn January 30, the real-name system will be live for deposit and withdrawal services to cryptocurrency accounts. Existing virtual accounts will be converted to real-name ones at that time. Six major banks will implement the new system including Shinhan Bank, Nonghyup Bank, Kookmin Bank, Hana Bank, and Gwangju Bank.

Customers need to open an account at the bank providing virtual account services to the exchange they are using. “New members should be added after strict identification procedures,” Kim was quoted by Joongang Ilbo. According to the document:

Users who do not have an account at the same bank as the virtual bank will not be able to make additional payments to the virtual bank [account], but they can withdraw money…Foreigner and minors under the Civil Law cannot use real name confirmation deposit and withdrawal account service.

AML and Suspicious Transaction Reporting

Earlier this month, the FIU and the Financial Supervisory Service (FSS) conducted on-site inspections of the country’s 6 major banks to ensure they have fulfilled their anti-money laundering obligations. The FIU subsequently created a set of anti-money laundering guidelines which was released on Tuesday.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and BanksCrypto exchanges usually separate their funds from users’ funds. However, the government’s inspections revealed that “some exchanges were found to have collected funds from users through general corporate accounts opened at banks,” the Kyunghyang Shinmun reported.

In some cases, customers’ funds were transferred to the bank accounts of the exchanges’ representatives. One exchange “collected funds from users through four bank accounts” into the company’s account “and spent 58.6 billion won” from it, the news outlet added. The financial authorities noted that this can lead to fraud and embezzlement.

The Hankook-Ilbo elaborated that banks are required to “monitor the exchanges [they service] for unusual transactions in accordance with the guidelines and, if suspected of money laundering, further confirm the transaction purpose and funding source,” adding that:

If the transaction amount is more than KRW 10 million per day, more than KRW 20 million for 7 days, or frequent transactions occur in a short time, it should be reported to the FIU, the money laundering monitoring authority. If the exchange has a high risk of money laundering or requires information, the bank may terminate the transaction.

What do you think of South Korea’s cryptocurrency guidelines? Let us know in the comments section below.


Images courtesy of Shutterstock and the Korean government.


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PR: Essentia.one Launch Set to Revolutionize the Way We Access the Web with Decentralization

Essentia Launch Set to Revolutionize the Way We Access Decentralization

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Essentia.one launch set to revolutionize the way we access decentralization.

That’s right, this new product will change the way we access, manage and operate the new web. It was designed to simplify the complexity that was turning people away from decentralized technologies.

Starting as an underground project a long time ago, Essentia founders Matteo Gianpietro Zago, Mirco Mongiardino, Vladimir Holubovych shared the same vision. As early Bitcoin adopters, they knew about the strengths of decentralization but realized its weakness in usability. Now, after years of extensive research and development, a polished and perfected Essentia is ready for its launch.

What sets Essentia.one ahead of the league is its ability to provide a single access point to the entire decentralized web. How? Through the seed. Every Essentia user creates a unique seed which grants access to the whole Essentia framework.

The framework allows safe storage and access to a complete collection of DApps, wallets, assets data and identities, all in one place. It also fronts itself with a super easy to nativage user interface.

But it really is more than that, it has a bucket load of useful applications for businesses and individuals. Here’s a closer look at some of its key features:

Logins:
Essentia.one removes the pain of remembering and re-entering passwords every single day. The seed grants instant access to all personal and business logins for both decentralized and centralized accounts.

Identities:
This is a big one, Essentia provides the ability to store identities with custom profile settings making it possible to control the amount of personal information shared with third parties. Users can choose between anonymous, pseudo-anonymous or KYC compliance for specific use-cases.

Multiple wallets and multi-currency:
In one place? Yup, no need to bounce between multiple wallets. Essentia has integrated with the big cryptocurrencies like Bitcoin, Ethereum, ERC20 Tokens, IOTA, Litecoin, and Ripple. The framework provides the ability to also monitor assets in cold storage.

Storage:
Essentia has integrated powerful decentralized storage systems to the framework. The big names such as Swarm, Ipfs, Storj, provide access to the new backbone of digital storage where data is encrypted, persistent and censorship-resistant.

Exchanges:
The partnership and integration with Ether Delta and Flyp.Me has empowered decentralized prosperity. Access to multi-chain minimizes downtime and secures assets across safe, decentralized networks.

Any platform. Any device.
Your entire digital life is accessible at your fingertips with Essentia, it’s made easy on any platform, be it via a browser, desktop app, mobile app, or command line interface

Integration
Native integration has been confirmed with Ethereum, Bitcoin, IOTA, Status.im, EtherDelta, IPFS, Swarm, Storj, Flyp.me and Aragon. With many more partnerships to be announced within the coming weeks.

It appears Essentia is set to become a big name in the crypto industry. With unparalleled expertise in blockchain development, the team has made it possible for everyone to harness the power of decentralization.

Token sale details will be announced very soon at Essentia.one

Connect or Contribute
Twitter: https://twitter.com/Essentia_one
Telegram: https://t.me/essentia_one/
Website: https://essentia.one/ Whitepaper:https://essentia.one/whitepaper.pdf

Contact Email Address
matteo@essentia.one
Supporting Link
www.essentia.one

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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