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, morning session

On this heady morning we begin gently in the cheekily named Satoshi conference room (in honour of Bitcoin's still-unidentified creator) at the Royal National Hotel, with a little lecture from Eli Sklar about the possible future of a moneyless society with almost limitless basic resources. Hopefully this isn't going to end up in ideas extracted from The Communist Manifesto, but I don't think so. He discusses economic changes over time and the shift away from traditional labor toward an information economy, borderless both physically and financially. He sees Bitcoin as a key cog in this, of course, because it eliminates financial borders.

On the overhead projector comes a mini history lesson depicting the advancement of our economy from an agrarian, intensive-manual-labor-based society 200+ years ago, through mechanization and industrialization in the late 19^th century, through modern infotech and agribusiness nowadays. The headline is “Increased Productivity”. The production of food has risen almost 250% in less than sixty years. “Not only do we produce a lot more with the same amount of work as we needed to do sixty years ago, but we produce more than we actually need.” - Eli Sklar.

In the absence of monetary incentives (because, presumably, the cost of living is so low), Sklar says we can extract value from social interactions and convert gaming activities into productivity. But the moneyless society will be an evolution rather than an overnight revolution. This is for me still an idealistic vision but in principle we should have the tools to move in this general direction; we just have to believe in the future and shape it accordingly?

Next it's Caleb James DeLisle, on for a discussion about “the sociopolitical effects of network protocols”, i.e. the Internet, security issues, service providers, intellectual property philosophies, and so on. Now he fires up the Internet on his Linux-equipped (kudos) laptop and gives a brief demonstration of IPv6. I guess this truly is the future: eat your heart out, Marty McFly! :)

Then we are blessed with Mike Hearn for a lecture specifically recommended by the organizer (it's thus one of “Amir's Picks”). Mike is discussing practical applications and improvements of Bitcoin to improve the efficiency and security of transactions, ideas he says are implementable now by sufficiently determined and capable programmers, not hypothetically n years ahead. A lot of this focuses on escrow and trust between parties, which is critical because regular two-party bitcoin transactions are cash-like and irreversible.

A particularly interesting idea is “smart property”, in which physical items can be computer-linked to Bitcoin thus permitting loans and some level of electronic recourse by the lessor in the event of default. Also, there's the idea of creating a Bitcoin bond market. It sounds all eminently doable... eventually.

Now, people are asking questions to the speakers and soon it's time for lunch and hopefully some coffee. The afternoon lecture No Privacy – No Freedom by Icelandic MP (?) Birgitta Jónsdóttir sounds slightly mouthwatering.

Preamble

In the run up to the richly-packed 2012 Bitcoin Conference in London, organizer Amir Taaki (the video game programming guru) said he was amassing and writing his thoughts. And concerning this revolutionary new electronic currency there have to be many.

With monopolistic central banks worldwide embarking on “quantitative easing” - a euphemism for printing lots of money to help bail out stricken banks that have wobbled since the 2008 financial crisis and ensuing depression – sparking perfectly rational and justified fears of destructive hyperinflation, investors have rushed to the safe havens of gold and silver (de facto commodity money), and to a lesser extent, Swiss francs, Norwegian kroner, Canadian and Australian dollars, and so on. Gold and silver are brilliant and always to be recommended, but become rather cumbersome if you want to move them anywhere or actually pay someone with them, especially over long distances.

Electronic money is hardly a new concept, but its earlier failed incarnations such as Mondex were nothing more than attempts at reinventing the wheel. The funds became electronically transferable but it was the same old fiat money, the same old monopolistic central bank and the same middle-man banks charging steep commissions to make an electronic note of a nominal financial transfer. With the advent of common Internet banking facilities and other commonly accessible EFT methods via bank cards, electronic money transfers are now already a firm reality. So what comes next?

Bitcoin goes the whole hog and fundamentally combines the merits of commodity money and worldwide EFTs. It is a “cryptocurrency”, a virtual money in its own right backed up (and produced) essentially by cryptographic strength, reinforcing a network “block chain” of all transactions made since the currency's inception (2009). Bitcoins cannot be counterfeited or printed out of thin air. There is no central Bitcoin corporation, no management, no bank, just peer-to-peer EFTs with virtual sound money. To quote Judge Napolitano and also my mother, “it sounds like something out of science fiction”. And here it is, growing into a reality...

...almost. Only a small number of retailers around the world accept bitcoins for payment, although of course from a development perspective, a small number is infinitely better than none. Bitcoin is still very much in its infancy, although having survived a couple of major bubbles already, looks surprisingly well settled. Its soundness proves itself without recourse to hyperbole or deceit. For the time being, Bitcoin traders have to accept the need to exchange to regular fiat currencies at some point or other, and are therefore susceptible to the whims of the exchange rate (the online Bitcoin exchanges are kind of a cross between a bureau de change and stock exchange or auction house). If the Bitcoin economy explodes, as we hope it will, this will be far less of an issue, just as short-term fluctuations in gold prices do not really concern long-term investors viewing gold as a secure store of value rather than something to speculate on. Businesses have every reason to embrace Bitcoin as it cuts out the middle man, i.e. the bank or credit-card company, thereby saving business untold amounts in commissions and bank fees. Bitcoin payments function like cash, in other words, there is no chargeback facility that you find on credit cards. Just as with a cash transaction, therefore, a high level of trust between trading parties is crucial. A key advantage of Bitcoin, though, is buyers really have no need to prove their identity (thus cutting out identity theft risks associated with named and numbered payment cards). Payments are quasi-anonymous and Bitcoin transactions do not need to be verified by a central authority or clearing house. It is an ingenious application of [a complex variant on] public-key cryptography.

It has occasionally been brought up in the mainstream media, on those rare occasions when Bitcoin has reached the mainstream media, that the currency is already being used for illicit activities. This is true. It is money, and sometimes people do illegal trades with money. This applies to all cash currencies, not just Bitcoin!

Once people are accustomed to the idea of electronic financial wires using sound money with no bank (!), just as with many aspects of the Internet, there'll be no turning back. Incidentally, how did we manage to live without the Internet?