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Bobbins.horse for February 13th 2016

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jepler
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"A kind of romantic fork lift truck"
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Platform Cooperatives: Money as a (Public) Service

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In Sweden, a Cash-Free Future Nears - "Few places are tilting toward a cashless future as quickly as Sweden, which has become hooked on the convenience of paying by app and plastic."
Mr. Eriksson, who now heads the Association of Swedish Private Security Companies, a lobbying group for firms providing security for cash transfers, accuses banks and credit card companies of trying to "price cash out of the market" to make way for cards and electronic payments, which generate fee income.
So forget about Bitcoin and blockchains for a moment. Why should private banks and credit card companies get to control payment systems and generate tolls rents fees from them, while central banks provide cash management services and real-time gross settlement for banks nearly free?*

Time for a digital government mint - "E-cash for the people: Phase out cash, phase in official digital money"
Two profound changes are under way in our attitudes towards money, both of which could in short order transform how most of us deal with the banking system, and indeed how the system itself works. The first trend is a growing preference for electronic means of payment over cash. The other is the growing push for central banks themselves to issue electronic money for use by individuals...

Wrapping one's head around the difference between official versus private money is a lot harder than understanding the distinction between physical and electronic money — but it is also essential for making informed judgments about financial and monetary policy (we have previously explained why). Well done, therefore, to Positive Money, which has just published a report arguing how and why official digital currency should be introduced in the UK. The thoughtful and thorough report qualifies as essential reading.

The general idea is for the Bank of England (or other central banks; the ideas are general) to offer deposit accounts directly to the public, or alternatively, for private banks to offer accounts fully backed by central bank reserves. The authors go through the mechanics of how this would work, and address the main objections. We only discuss the most important of these here (but do read the whole report), which is that the system may work too well.

Too well, that is, in that people would convert a very large share of their current bank deposits into official digital money, in effect taking them out of the private banking system. Why might this be a problem? [P]eople may prefer the safety of central bank accounts even in normal times. That would destroy private banks' current deposit-funded model. Is that a bad thing? They would still have a role as direct intermediators between savers and borrowers, by offering investment products sufficiently attractive for people to get out of the safety of e-cash. Meanwhile, the broad money supply would be more directly under the control of the central bank, whereas now it's a product of the vagaries of private lending decisions. The more of the broad money supply that was in the form of official digital cash, the easier it would be, for example, for the central bank to use tools such as negative interest rates or helicopter drops. Both could be indispensable in the years ahead.
Fedcoin—how banks can survive blockchains (via)
If the Fedcoin took off, it would appear to be the death knell for credit card providers and deposit-taking institutions. Banks would have two options to avoid economic obsolescence. The first would be to transition toward a pure investment banking strategy, financed entirely via equity and long-term debt raised from savers aware of the risk they were taking. Indeed, this is the model favoured by neo-classical economists harking back to the ideas of Irving Fisher.

A second option would be to attract Fedcoin deposits by providing services such as verification for know-your-customer and anti-money-laundering rules or secure digital wallets or even just the most user-friendly apps. Banks could compete for Fedcoin deposits by issuing their own blockchains, at par with Fedcoin. Deutsche Bank,[1,2] for example, could issue dbCoin, which customers use to settle transactions with any counterparty, much like a digital chequebook. Banks would guarantee convertibility of their digital currencies into Fedcoin, and central banks offer clearing and settlement facilities.

This brings us full circle back to today's system, but with a couple of important exceptions. For starters, the difference between the monetary base and bank-created, branded money would be considerably clearer. More important, perhaps, the technological obsolescence of deposit-taking institutions engenders greater economic competitiveness. The banking sector would no longer be rewarded for processing payments or managing current accounts. It would have to compete for deposits by offering better services and ultimately greater responsibility for the money it creates.
Are Banks Destined To Become The Next "Dumb Pipes"? (via)
The telcos hate the term "dumb pipes" — and for good reason. They are being relegated to the common conduits through which meaningful communications and commerce take place. But telcos won't go away overnight because there's still a lot of value in the physical network infrastructure and cell towers they built through decades of investment.

Similarly, "unbundled" banks won't go away overnight; there's still a lot of value in the intra-bank money transfer networks and the depository role that banks are uniquely allowed to play in the U.S. economy. However, over time, traditional banks that fail to dramatically reinvent themselves for modern consumers will find themselves playing the role of a simple inbox for depository funds and pipes that move the money to other financial services providers who will increasingly influence consumers' financial lives.
Fiatcoin, redefining Banks and Banking (via)
What of cross border transactions? Would various central banks use the same consensus technology stack with same or similar features (consensus algorithm, network topology, monetary policy scripting) thereby ensuring optimal interoperability? Would central banks introduce a tiered approach with a shared metafiatcoin only available and transacted amongst themselves (hello IMF and SDRs) linked to country or country unions' specific fiatcoins (fedcoin, eurocoin...)

Until fiatcoin would be made available to the public - and I am also convinced this will happen sooner than we think - how would financial institutions intermediate between fiatcoin and physical currencies (physical or digital cash)?
also btw...
-The Digitization of Finance[1,2,3]
-The Future of Money
-Digital money, negative rates as Gosplan 2.0
-RTGS, and the story of batches instead of blocks
-RTGS, and the story of collateralised risk instead of credit risk
-Fintech: Search for a super-algo[1,2]
-Fintech paradoxes, blacklist edition[*]
-Scaling, and why unicorns can't survive without it
-On unicorn imperialism
-On the hypothetical eventuality of no more free internet
-The Rise of the Platform Economy
-Putting powerful platforms under cooperative control: "People gathered to talk about the problems of an online economy reliant on monopoly, extraction, and surveillance—and discuss how to build a cooperative Internet, built of platforms owned and governed by the people who rely on them." (This house proposes that we nationalise Uber)

So now onto (more hype about) Bitcoin/blockchains:
  • The Plan to Unite Bitcoin With All Other Online Currencies - "The idea is to create a single worldwide network that can not only unite all digital currencies, but all companies and individuals who use those currencies."
  • The hope is that the protocol will increase the adoption of online money and, more broadly, let us more efficiently send money from place to place. That's the goal of many existing projects. Ripple and Stellar, for instance, are designed so that you can send any currency and have it arrive as any other currency. You can send bitcoin and have them arrive as litecoin. You can send good ol' US dollars and have them arrive as dogecoin. The rub is that the community of businesses and developers who use these ledgers is limited—and you can't send money from one network to another. The interledger protocol aims to change that. In a way, the project is the apotheosis of a decades-long effort to create what you might call "an Internet for money." Back in the early '90s, people like Marc Andreessen, the creator of the Netscape web browser, hoped to create an standard way of sending money across the web. The original hypertext transfer protocol—http, the standard that defined the underpinnings of the web—actually included a code for payments. Though this was never used, many outfits in recent years have tried at least to create a de facto standard for online money...
  • Linux Foundation Unites Industry Leaders to Advance Blockchain Technology - "The project will develop an enterprise grade, open source distributed ledger framework and free developers to focus on building robust, industry-specific applications, platforms and hardware systems to support business transactions." (via)
  • The three pillars of a crypto-law ecosystem: Identity, Assets, Data - "Just as the GNU portion of GNU/Linux provides important pieces of software 'infrastructure' for a functional operating system (such as a C library and shell tools), the Ethereum platform, at present, needs this infrastructure before it can be properly exploited. This article is about mapping out and exploring the interrelationships between those pieces and doing so in terms of defining and (re)combining simple primitives."
  • Blockchain Technology Predictions - "So while Ethereum — which is presently capable of 25 transaction per second (TPS) — is not in danger of bumping up against difficult scaling issues soon, it will be able to handle many TPS with Ethereum version 2.0, levels commensurate with what the Visa and American Express networks." (via)
  • Blockchain hype storms Davos - "Banks know that forging a cartel as strong as that eliminates all possibility of out competing with each other in terms of risk, screening and security. As far as they're concerned, they become one bank (with all the non-diversity risk that comes with monopoly systems). It also means erroneous transactions become nigh impossible to reverse, money supply becomes a constant and scaling is compromised completely. Hence the rage for private blockchains with the promise to provide banks with override options within their special trusted network."
---
*Fedwire was free for members until 1981, effectively subsidizing commercial interests; that is, banks get all these services for next to nothing (at cost, but still at taxpayer expense), presumably to 'grease the wheels of capitalism', but if any of these services were offered to the public -- in the public interest (postal banking anyone?) -- it would be deemed 'socialist'. What does it say about capitalist institutions then that practice 'socialism for me, but not for thee'?

oh and fwiw, a quick detour/primer on 'what is money?':
  • What makes money special, the lawyer's edition - "Economists like to say that money is unique because it is a medium of exchange, store of value, and unit of account. Lawyers and judges have a different story to tell about money's uniqueness. Unlike goods, money can't be 'followed.' "[1,2,3,4,5]
  • Money as a social construct and public good - "As long as we remain ignorant of how monetary systems operate, for so long will the public good that is money be captured to serve only the interests of the tiny, greedy minority in possession of private wealth."
  • [T]hose who control our money system escape close scrutiny. As a result too, there is widespread public ignorance of how the system for both creating and pricing money is effectively controlled not by central banks, but by the commercial banking system and by private, global capital markets. Despite all the hype around central bank decision-making, the public authorities have little impact on the management of the global financial system. Perhaps one of the most disturbing aspects of academic neglect of money and monetary systems is the public's failure to appreciate that the monetary systems of advanced economies evolved as a result of great struggles between private wealth and wider, democratic society. The success of these historic struggles meant that monetary systems in advanced economies evolved to become a great public good serving wider interests. However, periodically monetary systems are recaptured by the "robber barons" of private wealth, and then controlled and manipulated to serve their own rapacious greed.
  • Ideal Money and Asymptotically Ideal Money - "[I]f we view money as of importance in connection with transfers of utility, we can see that money itself is a sort of 'utility', using the word in another sense, comparable to supplies of water, electric energy or telecommunications. And then, if we think about it, we can consider the quality of money as comparable to the quality of some 'public utility' like the supply of electric energy or of water."
and how it's created/backed from a MMT (modern monetary theory) perspective:
  • Where MMT Gets Its Accounting Wrong — And Right - "Start by thinking in terms of Household Net Worth. This measure has the virtue of encapsulating and telescoping all private-sector net worth, because households ultimately own firms, at zero or more removes, but firms don't own households (yet...)."
  • United States' Net Wealth (Part 2) - "What does all this mean? Hmm. Not to easy to answer, except saying that familiarity with the system of measurement helps in understanding how the economy works."
  • Translating 'net financial assets' - "I think the economy includes people who are already overinsured by their stock of net financial assets, and those people tend disproportionately to accumulate new issues. So we should think more about how we can accommodate private sector entities' need for some degree of insurance by redistributing existing net financial assets rather than creating new ones."
  • Accounting as religion: Buffett, Derrida, and MMT - "The ability to pay taxes is a feature of money issued by sovereigns – a very important feature and part of how the government establishes its monopoly in the creation of money, but just because the government accepts money in payment for taxes (what else would they accept?) does not make the money they issue their 'liability.' "
  • What's the obligation behind the Fed's 'liabilities'? - "[W]e accept paper money as payment/store of wealth because it is redeemable against our tax obligation as citizens."
  • Market Macro Myths: Debts, Deficits, and Delusions - "In the context of the role that debts and deficits play in overall economic policy, in this paper I focus on the philosophy known as 'sound finance', which includes adherents who believe that governments should seek to balance their budgets. I, however, take a different view, and believe that the role of government when dealing with budget deficits should be one of 'functional finance', which ensures that the policies implemented help to reach the overarching goals of macroeconomic policy (generally held to be full employment and price stability)."
  • Myth 1: Governments are like households; Myth 2: Printing money to finance budget deficits is inflationary; Myth 3: Budget deficits/high debt lead to high interest rates; Myth 4: Budget deficits are unsustainable; Myth 5: Debt is a burden on future generations
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jepler
1 day ago
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megapost alert
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This generation has far too many ‘Ezras’ already, thanks

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Charismanews editor and sex-with-demons beat reporter Jennifer LeClaire endorses Ted Cruz for president, saying “The Lord wants to raise up Cruz, 45, as an Ezra in this generation.”

The reference there is actually somewhat apt. The biblical figure of Ezra was also a callous, racist prick. The conclusion of the book of Ezra, and the culmination of Ezra’s own story, is a nationwide mass-divorce and mass-deportation of foreigners: “to send away all these wives and their children.” No alimony, no child support — just cast them out like Hagar and Ishmael.

Ezra’s male followers deported so many women and children — their own children — that the process took days to carry out.

In Ezra’s mind, this was the only way for his people to return to obedience:

We have forsaken your commandments, which you commanded by your servants the prophets, saying, ‘The land that you are entering to possess is a land unclean with the pollutions of the peoples of the lands, with their abominations. They have filled it from end to end with their uncleanness. Therefore do not give your daughters to their sons, neither take their daughters for your sons, and never seek their peace or prosperity.”

You won’t find a footnote cross-referencing that citation of nameless “prophets” back to an actual passage in one of the books of the prophets. And if you actually read those actual prophets, you won’t have a hard time finding lots and lots of passages where those actual prophets contradict what Ezra is attributing to them there. Jeremiah, for instance, told the people of Israel to “seek the welfare of the city where I have sent you into exile, and pray to the Lordon its behalf, for in its welfare you will find your welfare.” And Isaiah has whole strings of chapters anticipating the glorious day when people of all nations — the icky, unclean, pollution-people Ezra can’t stand — will come to worship in Jerusalem.

BTE

Click for link.

Ezra’s story doesn’t get discussed as much as it should. When “pro-family” preachers turn to the Bible to collect proof-texts on divorce, they always seem to forget the “clear biblical teaching” of the final chapters of Ezra. For Ezra, divorce is not merely permitted — it’s mandatory. Divorce is commanded by God. And so is the abandonment of racially impure children.

Like I said, Ezra was a prick. He was such an abusive, wrong-headed jerk that whole chunks elsewhere in scripture go out of their way to repudiate his ideology and behavior. That’s why Ruth is in the canon. It’s why Ruth is in every story of David and why Ruth is in the genealogies of Jesus in the Gospels. Oh, and pretty much everything the Gospels and Acts have to say about Samaritans.

I realize that for many of my evangelical friends this — Ruth vs. Ezra — is a terrifying, headsploding matter. They can’t look at it — can’t allow themselves even to peek at it. But you can’t read both the book of Ruth and the book of Ezra and not see that what you’ve got there is a direct, explicit, intentional conflict. It’s Ruth vs. Ezra. Pick one side or the other, you can’t have both.

And, by the way, there’s a right answer and a wrong answer here. I mean, you can sign up for Team Ezra if you really want to insist that David and Jesus are polluted and tainted by the uncleanness of a Moabite garbage-person, but the idea that the anointed king’s great-grandmother should have been deported and his grandfather abandoned as an infant isn’t something you’re going to find much support for in the rest of the canon.

But, yeah, OK, Ted Cruz as Ezra. Scapegoat foreign women, insist that the solution to all our problems is just getting rid of the wrong kinds of people, and never give a second thought to what this means for any of those women and children because you don’t think of them as real people. Kind of fits.

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jepler
2 days ago
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"But, yeah, OK, Ted Cruz as Ezra. Scapegoat foreign women, insist that the solution to all our problems is just getting rid of the wrong kinds of people, and never give a second thought to what this means for any of those women and children because you don’t think of them as real people. Kind of fits."
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ProbablyWrong
2 days ago
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the-future-now: These are amazing and shockingly accurate....

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the-future-now:

These are amazing — and shockingly accurate. Did you know there’s a “Bechdel test” for female scientist biographies?

Follow @the-future-now

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jepler
2 days ago
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"Sassy and carefree Feynmann..."
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bibliogrrl
3 days ago
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Chicago!
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The Tale of Nellie the Nephron.

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They know about this in Poland. They’ve known it for over a month now.  So it seems only fair that I bring the rest of you up to speed on the latest: now: my imminent retirement from the field of science fiction.

Genre SF has been in decline for a number of years. My own work has been declining even faster. They say Young Adult is where the action is, but I suspect in time even that fad will run its course. YA is but one step on a staircase heading down into the basement. As humanity grows ever-dumber, readers will inevitably gravitate towards simpler tales that don’t tax the intellect and which never stray from familiar, predictable paths (anyone who’s read the Harry Potter books will know what I mean).

When readers reach the bottom of that incline, I intend to be waiting for them there. Henceforth I will be writing only storybooks for children aged four through eight. I have already begun. (Although given the sudden dismaying popularity of— I kid you not— Coloring Books for Adults, you have to wonder if even writing for preschoolers is aiming low enough.)

Admittedly, we're still looking for an artist...

Admittedly, we’re still looking for an artist…

I am collaborating on my next work with my wife, on a book called The Tale of Nellie the Nephron. It’s the story of a kidney cell who gets tired of filtering urine all the time and sets out to see the world. Her restlessness wanderlust is fed by the red blood cells, dumb but amiable beings who stoke Nellie’s wanderlust as they bumble past in their capillary beds. The other nephrons never deign to talk to the RBCs because they’re a vulgar lot who don’t even have nuclei, but their oft-repeated salutation “Heart is where the home is!” makes Nellie long for other organs to explore, other cell types to be. (The thumping of the heart can of course be heard down in the kidneys, but it is a distant sound, an endless and unquestioned bit of background noise as far as Nellie’s fellow nephrons are concerned.)

All the other nephrons warn Nellie that leaving the kidney means certain death; every now and then some sick or dying cell gets swept away down the ureter and is never heard from again. But Nellie is resolute. One day, screwing up her courage, she filters one last aliquot of urine, pulls free of the cortex, and heads off down the ureter.

She nearly dies right then, caught up in a torrential cascade of urine squeezed from the bladder into a blinding cold world of bright light and terrifying open spaces. It is only the merest luck that she finds herself saved by some great celestial hand that catches her and wipes her back onto a vast open plain (the “Plains of Perineum” as she later learns). Hanging on desperately by her Loop of Henle, Nellie manages to find a dark puckered crack in the landscape and finds her way back into the welcome darkness of her world.

Now her journey truly begins. She climbs through the rectum and the colon, and there— amongst the great sluggish boulders of developing feces— she meets Tony the Tapeworm, the parasite with a thousand faces. She meets the cells of the intestinal epithelium, and encounters the diffuse lurking evil of the Gut Brain, plotting its insurrection against the hated Brain in the Head. Up on the Pancreatic Front she encounters White Blood Cells, the Navy SEALs of the body’s immune system, and nearly dies helping them fight off an infection. She visits their training camp in the bone marrow, where new recruits are grown. She befriends the cardiac communist collective known as Percy the Pacemaker, and finally shoots the rapids of the Carotid Artery all the way up to the legendary Head Brain.

At every step in her journey, Nellie asks: should I be a gut cell? Should I be a liver cell? A cardiac cell, maybe even a, a— a brain cell?

And so Nellie the Nephron tries to become Nellie the Neuron— but of course she’s no better at this than she is at all the other roles she’s tried on. All she’s really built for, after all, is the filtering of urine. Her attempts to contribute to the brain’s decision-making process go horribly awry when the body starts voting Conservative and develops a fetish for golden showers.

Eventually, the other cell types help Nellie see the error of her ways and return her to the kidney where she belongs, letting the smarter brain cells make all the important decisions. (She even rats out the insurrectionist Gut Brain for extra brownie points!) And the moral she learns— the moral of the whole book— is threefold:

  1. Know Your Place;
  2. Do What You’re Told; and
  3. Don’t Rock the Boat.

We thought that Nellie could be a big seller here in Canada. It fit so neatly into the ideology of the former Harper government that we could see the Harperites ordering multiple copies for every school library, passing legislation to mandate its inclusion in primary-school curricula across the nation. (Hell, someone might even do an adult coloring-book edition.) Unfortunately, Canada finally awoke from its long slumber and booted those asshole out of office, so we’re looking for another market. Maybe south of the border. If we can just figure out some way for a sapient nephron to learn that extrajudicial drone strikes on civilians are a good thing, we might have a big seller in the US.

At the very least, it’s got to make more money than science fiction.

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jepler
3 days ago
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ummm do they have april 1 on a different day in canada?
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glenn
2 days ago
Ha! -- "Her attempts to contribute to the brain’s decision-making process go horribly awry when the body starts voting Conservative and develops a fetish for golden showers."
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Identity Thieves Obtain 100,000 Electronic Filing PINs From IRS System

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itwbennett writes: In January attackers targeted an IRS Web application in an attempt to obtain E-file PINs corresponding to 464,000 previously stolen social security numbers (SSNs) and other taxpayer data. The automated bot was blocked by the IRS after obtaining 100,000 PINs. The IRS said in a statement Tuesday that the SSNs were not stolen from the agency and that the agency would be notifying affected taxpayers.
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jepler
3 days ago
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Thieves obtained all 100,000 5-bit PINs from the IRS.
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bibliogrrl
3 days ago
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Chicago!
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