When did you last carry cash enough to pay for groceries, fill your vehicle with gas and pick up the dry cleaning on the way home? Nowadays, we tap a terminal transferring digits from a bank account routinely replenished with digits from your broker, boss or business. Nary a nickel passes over your palm and there are no serial numbers attached to those digits. Nonetheless, we perceive and treat these digits as equal to dollars. But really, it’s a digital shuffle. Occasionally, you may happen across a cheque, but even that gets digitized with your smarter-than-you phone and voila! Digitally deposited! It seems the only thing we use along the lines of cash are coins for the shopping cart at Superstore. (Plug unintended.)
If you're not holding a paper dollar or metal coin in your hand, what gives those integers any value? Confidence? Trust? Faith? They are a representation or pledge of value. Make no mistake. These days, money is digits. Or, as Sean Worthington (inventor of CloudCoin) puts it, “Money is data.”
One shouldn’t be surprised to learn digital currency has been around for over 40 years. Banks have been using digital currency every day for as long as the modern world has been using computers. As a result of the computer age, there are some things you should be keenly aware of, if you're not already. Here are a few critical insights for you to ponder.
ONE: It may appear bank ledgers are only a record of real money, but pull back the curtain and you'll see the greatest counterfeiting scam in all of history. If banks need more money, they add more digits. They don't have to print it and they don't need anything to back it up. The best explanation of that counterfeiting ring is Mike Maloney's Hidden Secrets of Money Episode 4. (I hope giving you this link wasn't a mistake. Please come back and finish reading this article. Actually, finish reading the article, then watch Mike's video.)
TWO: Banks, governments, and corporations have an unclouded window into your personal and private business and they want that window left wide open. They’ve become accustomed to having access to your innermost secrets.
Everything digital in your financial life runs through a central banking system which can be seen not only by you, regardless of your "only the angels know" password, but by banks as they verify and confirm all your transactions, by merchants who record every detail of your business, and by the government if they suspect you might have cheated them out of their fair share of your digits. Nothing you have or do in your modern day bank account is a secret. Ask any hacker, many of whom routinely help themselves to generous portions of our data every day.
Let's not be too quick to skip over the government. Stats Canada is demanding banks hand over all your information, including balances and spending patterns. Here's a segment out of a Global News report on that very thing.
Statistics Canada is asking banks across the country for financial transaction data and personal information of 500,000 Canadians without their knowledge, Global News has learned. Documents obtained by Global News show the national statistical agency plans to collect “individual-level financial transactions data” and sensitive information, like social insurance numbers (SIN), from Canadian financial institutions to develop a “new institutional personal information bank.
Watch this brilliant report from THEREBEL.MEDIA about the Canadian Government's attack on our privacy. Once you lose your privacy, your freedom isn't far behind.
What's more annoying than hackers and the government? Banks that restrict access to your own money by putting limitations on how much you can spend, send or withdraw on a daily basis. They want your money and in turn, they get to tell you what you can and can’t do with it. Here's a fairy tale your children won't believe. Once upon a time, banks would pay you for the privilege of using your money. Shattered dreams. Now, they charge you for using your money. Banking fees far exceed the interest you once got for banking! More about that, in a moment.
This is a common disclaimer found on every online banking site. Notice the "Authorized access only." and "Usage may be monitored." items.
© 2018 ATB Financial | All Rights Reserved. TM Trademark of Alberta Treasury Branches.
Authorized access only. Usage may be monitored. Please visit our website at www.atb.com.
Interac e-Transfer is a registered trade-mark of Interac Inc. Used under licence.
In so many ways, banks and governments and corporations know more about you than you know about you. They analyze what you do so they can influence what you do. With that knowledge, they endeavor to monitor, manipulate, regulate and control everything you see, say, eat and do.
In the old days, a person carrying cash could buy a pair of shoes, a book, or a record player and there was no way to see what they purchased, how much they paid, where they bought it, or if it was new or used. Now, everything you buy is digitally recorded in the most minute detail, analyzed and parsed a thousand ways.
As previously stated, there’s nothing new about digital currency. There is something new about the backlash to the loss of privacy and the constant increases in banking fees. Setting aside the taxes, if you paid $15 cash for a book, then that’s all the book cost. Using centralized digital banking services, there's a fee attached to every purchase. Transaction fees, processor fees, ACH fees, EFT fees, ATM fees, network fees, endless list of fees, etc. VISA and MasterCard have become the sultans of fees. Originally organized collectively by banks to provide mutually exclusive benefits, credit card companies have squeezed their way into nearly every transaction on the planet, skimming off enormous amounts of our hard earned income. Whereas banks once told VISA and MasterCard what to do and what was expected, VISA and MasterCard now tell the banks what to do. The slaves have become the masters. The inmates have taken over the asylum. There are very few transactions conducted in the world where VISA and MasterCard aren’t standing in every line your in — with their hands stretched out. Who has a regular debit card anymore? We all have VISA debit cards.
THREE: In an international world of trade, cluttered by a myriad of fiat currencies, around 180 by UN calculations, it would be very convenient if a standard global currency could be used without having to pay fees to exchange Rupees for Rupiahs, Korunas for Kronas, or Euros for Yens. A single international currency would be stable. It would clearly identify where a loaf of bread is worth a single coin in one country but two coins in another. Competition would be distinctly identifiable along with a host of other benefits; philosophically speaking, the major benefit being — raising third world countries out of poverty through the access of a standard and visible store of value. Nothing hidden. No more secrets or sleight of hand; banks and governments no longer able to manipulate entire economies, printing at will whatever amount they thought were needed to buy votes and crush personal initiatives, enslaving entire populations.
FOUR: Centralized banking, with its age old ledgers, also keeps pretty good tabs on your whereabouts. Using electronic plastic, they can see you were at Walmart at 4:30pm and stopped for a haircut at 5:15pm and picked up takeout at 5:55pm. Do they need to know that? No. Did they plan for that? No. Surprisingly, access to your whereabouts and entire life’s spending habits and patterns of behaviour and what you like and don’t like are an unintentional by-product of the digital age. They got lucky. You lost your privacy.
Thus, the hunt for an anonymous way to conduct our financial affairs; privately, without overlords and free from fees and restrictions.
Enter the Blockchain
The digital currency getting the greatest attention is a cryptocurrency called Bitcoin. (Crypto because it involves an encryption process.) In 2010 or thereabouts, someone or a group of someones figured out how to solve two very crucial drawbacks to decentralizing digital currency; drawbacks every digital currency has; digital integrity and double spending. In other words, how do you ensure a digital file which represents a store of value can’t be duplicated and double spent? Serious issues, considering a family photo can be copied and sent to every aunt and uncle, cousin or friend under the sun. If you duplicate an image there’s no way to tell if it’s an original.
FACT: No duplicate is an original and digital duplicates are virtually impossible to distinguish from its original. If someone sends you a digital dollar in payment for a service or a product, what’s its true value since copies can be sent to anyone? Each duplicate becomes a counterfeit. If you can’t assure someone they have the one and only un-duplicatable original, you’ve sent them a counterfeit.
More specifically, if I hand you a paper dollar with a serial number on it and I have a copy of that dollar with the same serial number in my pocket, one of them has to be a counterfeit.
Bitcoin was the first to solve the problem of counterfeiting or double spending with what is called a decentralized ledger. Meaning? Every transaction is recorded on what is call a blockchain. It’s an exceptionally complex check and balance system where everyone with a Bitcoin gets a copy of a public ledger assuring the users it’s authentic and has changed hands. With a public ledger, the highly coveted anonymity issue is only pseudonymous. All Bitcoin transactions are trackable and hackable. The blockchain or public ledger is available for anyone, especially government agencies looking into your private affairs, where they can uncover and expose all your dealings. Way to complicated to discuss here.
People with special software and dedicated computers, called miners, get paid for verifying Bitcoin transactions to keep previous owners from trying to spend the same Bitcoin more than once. Subsequent or duplicate transactions gets blocked. That solves the integrity and double spending problems. But, miners are not charities. New Bitcoins are created out of thin air and awarded to the first miner to verify the transaction. In case of a tie, the coin is split. Creating coins out of thin air is tantamount to counterfeiting, much like the banks and governments do when they need more money but can’t acquire it through fees and taxation. When every Bitcoin is dispersed and there are none left to be mined, miners will either stop mining or begin charging FEES! They have to. The cost of mining is extremely expensive. Electricity costs for operating and cooling computers is seriously costly. That’s a whole other article.
Ultimately, the very thing which made Bitcoin so viable will also be its undoing. The Public Ledger is growing. It will continue to grow. It can’t be pared back or purged. That would defeat its essence. It will soon become so unwieldily that few will have room on their home computers to store the massive file, without the extra cost of larger storage. As the file grows the transactions slow down. Already it’s taking anywhere from ten minutes to an hour to days for a transaction to be verified and complete. Who can stand around for an hour for a transaction to complete when you only wanted to buy a bottle of water for the ridiculous fraction of .0000000005th of a Bitcoin? Bitcoin has become to unwieldy for it to be a common currency, as folks had once hoped.
It's excruciating for the brain to analyze just how complex the Blockchain process really is.
Despite any drawbacks the blockchain is facing, there are certainly excellent arguments to be made for its adaption to enterprise level use. Corporations can keep their own ledger for their own purposes. If the ledger ever gets too large, they are free to begin another one. Since it’s all in-house, there’s no reason to worry about outsiders peering in to see their personal business. But, there is a better way.
Enter the RAIDA
RAIDA is an acronym which stands for: Redundant Array of Independent Detection Agents, a technology designed to authenticate original digital properties and verify ownership, exposing forgeries. It can be used to transport any digital property, such as: legal documents, images, movies, music, land titles, data, etc. RAIDA is another technology that solves the issue of physical integrity and double spending, as it applies to digits.
NOTE: RAIDA is not a Blockchain technology. RAIDA does not use a public ledger. The RAIDA system merely authenticates a digital property. No transactions are recorded.
How RAIDA works
Tiny 400 byte files are embedded into a digital property. These tiny files contain both a serial number and a password. Each time a digital property changes ownership, the file is passed through a verification app called a bank, which reaches out to a network of 25 disparate RAIDA terminals, known as Sentinels, situated in secret locations all over the world. Each Sentinel assesses the embedded file, checks against previous activity, and returns a confirmation or denial, telling the owner whether or not they have an original or a counterfeit. That beats trying to guess whether or not someone passed you a paper counterfeit, because you have no tools to test for fakes.
In the event a RAIDA terminal goes down, whether by fire, flood, earthquake, power outage, or even hackers, etc., a replacement RAIDA terminal can be implemented anywhere in the world, where the data is restored from the remaining terminals, without losing any data in the same way a mirror RAID system works.
Here’s a secret. Every dollar bill has a serial number on it. If you see two bills with the same serial number on it, you know it’s counterfeit. Someone has just been scammed. What you believe are dollars in your bank account do not bear serial numbers. Banks cannot produce or replicate real serial numbers for electronic money. Log into your account, choose a dollar, any dollar, and see if you can find a serial number. Without serial numbers or any other way to identify a dollar electronically, banks can double spend till the cows come home. By the way, cows never come home!
A remarkable twist on digital currency has emerged allowing totally anonymous transactions across the globe, in milliseconds.
If I have a file called a CloudCoin, I can import it into my own personal desktop or smartphone bank where it will reach out to the RAIDA to authenticate that file. If my CloudCoin Note is an original file registered with the RAIDA, it will create a password that locks that file until I export it to be sent or spent.
It’s brilliant. Transactions are not recorded. Only authenticated! No one sees to charge you fees. You can exchange CloudCoins for goods and services worldwide without having to pay exchange fees into another country’s currency. You don’t need to pay monthly fees for storing your money in a bank account, when your bank is on your phone or on your computer. You can store your money off line, as well. Keep your CloudCoins on a USB drive or a separate hard drive or in the Cloud! Print it off and keep it in a file. Put it in a real wallet. Wait! What?
Yes. You can print CloudCoins onto paper using a bar code. That bar code can be scanned into a POS terminal or deposited into an ATM. It’s REAL MONEY!