Day Two, afternoon session

First we have Juraj Bednár, a bubbly Slovak anarchist speaker. His topic: free markets, e-money and cryptocurrency. He rightly recognizes that our current socioeconomic system is not capitalist. Money in itself is not wealth, because we don't become richer simply by printing money. Printing money (counterfeiting) is fraud. Bednár points out the moral superiority of voluntary exchanges in lieu of government violence. The current model (statism) erects major barriers to entry for small private business and thus favours larger corporations, who in many cases have lobbied successfully for more regulations that they can afford to comply with but which force smaller competitors out of the market. Free markets are not just about reducing taxes but reducing regulatory burdens generally. Then there's one more reassertion of the sanctity of the non-aggression principle.

Next up we have Frank Braun, IT security consultant and self-described “privacy extremist”, wearing a fully-fledged face mask, not to protect himself from swine flu (haha) but state surveillance (CCTV). Why is Bitcoin an important step towards a free society? A free society needs a free market and a free market needs sound money. Bitcoin is such money.

“No state, no banks, no OTC”: in the Bitcoin community we should not focus on interoperability with the old state/bank/over-the-counter trifecta. Braun's firm anarcho-voluntarist-revolutionary roots are clearly displayed in his use of such colloquialisms as banksters and sheeple.

A key point is that Braun believes Bitcoin will fail if it remains too dependent on exchange with the legacy banking system. The Bitcoin economy needs to flourish in its own right, perhaps with underground face-to-face exchanges to physical monies, bypassing the state-monitored banking system. He's making the entire world feel like the former East Germany! I had the audacity to pose this notion as a question and he replied that in some ways he thinks today's surveillance state is worse than the apparatus of the former east German régime! This is a seriously sobering thought.

The sound-money theme continues with a talk by Charles Vollum comparing bitcoins with real gold. Gold is precious but bitcoins share similar properties as sound money. Both are limited-supply, unforgeable, durable, divisible, free-market currencies. However, bitcoins are much more versatile as means of payment; Vollum points out you could wire bitcoins to Mars in a quarter of an hour!

One weakness of Bitcoin is its poor liquidity, resulting from a small economy at present and no easy instant means to exchange large volumes of legacy monies into bitcoins. Vollum does, however, believe that Bitcoin offers huge potential to develop into a store of value possibly superior to physical gold. The future of Bitcoin is obviously still uncertain (but it is that very uncertainty that opens up opportunities).

Vollum produces a few graphs quoting price changes in gold grams as well as US$, showing how the bankers have robbed everybody blind via inflation, debasement of the paper currency. Yale tuition, for example, priced on a gold basis, has experienced a few peaks and troughs, but today is almost exactly the same price as in 1900! In dollar terms it costs over $55k annually today compared with $700 in 1900. “Free your mind from fiat currencies” - Vollum.

A brief interlude brings on the BFL auction, the main highlight of which is their current FPGA rig, with a retail price of US$15000 or so. Josh is auctioning off one such system (with a faulty display!) and it finally sells for BTC 1070.

4pm sharp, and finally! It's the famous/notorious (delete as appropriate) Max Keiser! Yes, the guy on RT! He's a huge supporter of, and believer in, the bitcoin currency and is representing himself at this conference for no pay.

Keiser opens by pointing out that barter is once again all the rage in this new age, as the fiat banking system breaks down. Communities trade with detergent or even chewing gum. Think what Bitcoin could achieve. As Keiser points out, finance has become more abstract and elastic since the globally dominant US$ detached from the theoretical gold standard in 1971. The fiat system is no longer fractional reserve but fictional (zero) reserve. Keiser has repeated all this well-known fact on his RT show many times already.

In under an hour's talking time, Keiser's given us a showdown of a lot of the malfeasance the global banking élite constantly get up to. They're robbing the lot of us blind, and sooner rather than later the house of cards known as fiat money and the global banking system is bound to come tumbling down. This sounds catastrophic but it will open up a big opportunity and finally relieve the world of the bankers' fraud. Max Keiser never pulls a punch, he calls a spade a spade and so he also calls fraud what it is: fraud. He claims London, as a major banking centre, is the fraud capital of the universe. He tells us a little story of a Chinese woman sentenced to death for bilking about $57 million in assets from her investors. “Now that's a deterrent!” he says almost gleefully.

Max Keiser's lecture has brought the conference to a timely end, and I “sneakily” film a few snippets of him and his now fiancée, Stacy Herbert, together answering a few questions in the hotel lobby. Skip forward a few hours after I had a nice dinner on Tottenham Court Road with my uncle, and I find myself here in the dingy environs of the Star of Kings pub in north London, a few blocks north of Kings Cross rail station. It is a slightly odd anticlimax to a slightly hectic weekend. I've enjoyed myself reasonably well on what has been, after all, a semi-serious business trip. Maybe I deserve a day or two to mess around London seeing a few sights, but there'll always be a chance for that in future.

From the conference's end, it's over and out. Amir certainly did a good job on the organizational side of things. Me, I shall try to keep blogging on Bitcoin-related material. Don't take this as online panhandling, but extra money flowing toward my “donations” address (q.v.) will certainly help in keeping the blog taps flowing! However, money or no, I will make my best effort to post something of note here periodically, especially at future Bitcoin-related events.

Satoshi!

Day one, afternoon session

Birgitta Jónsdóttir MP

This Icelandic heroine gives a speech about the importance of online privacy. At the start of this lecture, conference organizer Amir Taaki mentioned the excellent point that today's politics are not so much about left versus right, as liberty versus tyranny. Last year, Iceland was ranked as the country with the best press freedom on earth. (China, Singapore and North Korea are among the worst. These are differing degrees of totalitarian régimes.)

Birgitta explains that Internet privacy is so important it drove her into politics. It is therefore a little ironic, by her own admission, that she hitherto considered herself pretty much an anarchist (as far as I'm concerned, there's not much wrong with that). She says that if we allow tyranny and censorship to blossom online, it will adversely affect our lives offline too. Many countries are at the very minimum authoritarian states that have already passed laws requiring people unlock their private-encryption keys on request by the authorities so as to prove innocence. Birgitta believes we in the Bitcoin community need to forge our own paths and write and establish our own basic rules of operation before our currency really becomes entrenched.

Now, new speaker “jaromil” speaks on the challenges for Bitcoin to become a fully-fledged mature economy in its own right. The bankers currently shaft as many people as they can, and the poorest get shafted the most. He says the biggest challenge is to get the bitcoins circulating (this seems obvious but sometimes that needs to be stated).

After a brief intermission I move rooms to hear economist/programmer Peter Šurda and what do we have here? He's reiterating elements of Economics 101 – but that's ok! What is money? Why does money become money? People base their decisions on what to use for money on transaction costs. But don't confuse transaction costs with specific transaction fees. A key feature of money is elimination of the double coïncidence of wants. What are the merits of inflation versus deflation? Transaction costs/opportunity costs are influenced by state/cartelized price fixing, barriers to entry, capital controls, regulations, etc. Most significant in the context of Bitcoin: “Economic development tends to reduce [economic sacrifices], with the result that even between the mosts distant lands more and more economic exchanges become possible which previously could not have taken place.” (Menger, 1871) Bitcoin can improve liquidity through more trade and value-added services.

I award bonus points to Šurda for quoting the great Ludwig von Mises in regard to commodity money (sound money!) vis-à-vis the intrinsic monopolistic tendencies (via the state directly or state backing of private central banks) of fiat currency. I consider Bitcoin to be an electronic version of sound money, and for me and presumably a large portion of the Bitcoin community this is essential. Here's a debate on the Bitcoin forums about the value of bitcoins: https://bitcointalk.org/index.php?topic=109746.0

Šurda maintains that a moderate long-term deflation of the money supply will not turn consumers into misers. A real-life encapsulation of this is seen in Moore's Law of computing power (and especially computer power per unit of currency). People aren't dissuaded from purchasing computers because there'll be better computers offering three times as much value for money a couple of years down the line. So it is thus that deflation does not automatically induce major hoarding of currency.