Basics Of Cryptocurrency For The Technologically Challenged

Bitcoin just hit new highs in price. It has been used by hackers as ransom payment to release stolen data. Ethereum is one of the leading ways to raise capitol for digital startups. Blockchain technology is helping people remember to take their medicine, and rewarding them for doing so on schedule. Estonia is creating its own national cryptocurrency. Smart contracts allow total strangers to utilize the same market, without ever meeting and transact with total trust in the product and payment.

You’ve probably heard of Bitcoin, cryptocurrency or blockchain, but many of you may not know what it means, but it is important. As cryptocurrencies grow in popularity, it becomes necessary to understand them as we move into a new economy. By reading this, you will learn more about what cryptocurrencies are, in laymen’s terms, and the implications they will have on economics and politics.

What does all this mean?

Blockchain technology is basically a ledger of records and transactions that is constantly growing in “blocks” that is secured using cryptography. It is often decentralized, especially in the world of cryptocurrency. Each bit of information is grouped into a certain size “block,” maybe 1 MB or 1 GB, then is added to the chain. Hence, the name blockchain.

Cryptocurrencies are digital money that use this technology to verify transactions. Each user has a wallet that has unique and random means of identification. In other words, it doesn’t require a name, address and email to take part, although some platforms might ask for this. These currencies are independent of governments, and often impervious to regulation due to their decentralized nature.

Smart contracts are a means of verifying a transaction. Both the customer and seller put a stake into a transaction through a smart contract software. Once the task is completed and the customer is satisfied, the seller receives their stake in the transaction back and payment, and the customer receives their stake as well. Then, both receive some sort of token verifying they completed the transaction to attest to their citizenship in the software. Uber uses technology like this. The driver isn’t paid until the ride is completed and both parties rate each other for future reference. The difference is, smart contracts can be done anonymously.

Crypto is just a short-handed term for cryptocurrencies. It will be used in the article interchangibly, but it is not specific to one currency, rather it encompasses all digital currencies utilizing blockchain technology.



The economic implications will be enormous. With money as the basis of an economy, changing the monetary system will alter the way an economy functions. The uprooting of monetary systems is not new. America has gone from every bank creating its own currencies, to a gold and silver standard, to the gold standard, to the fiat system currently in place. The one thing it has not had in over 200 years is a decentralized form of money.

The decentralization and digitization of money is what will upend the current system. Like early America, the decentralized currencies will be competing for “customers” or “users” which will provide them value. The value of the money will rely on what benefits they offer those who use the money. The difference is that now there will be an ability to verify the money. When this money system was tried last, the major problem was bank notes being issued in Maine were hard to spend in Georgia because they could not be proved to be real, but blockchain and smart contracts eliminate that risk.

Crypto will also grow the grey market. Instead of paying cash or with PayPal to buy an old couch off of a buddy, people can use crypto and not worry about the implications of the transaction. This will make it hard to centralize the economy as it allows strangers to transact the same as through Ebay or Craigslist, but without record of the transaction. The decentralization will allow people to transact freely in the grey market, and not worry because they will blend into the large amounts of data on the web.


As of now, governments all around the world use monetary systems to implement their policies. By leveraging the power of central banks, governments have been able to control economic levers that allow them to maintain power. Cryptocurrencies will reduce this power.

As discussed in the economics portion, the grey market will grow. This means that taxes will be harder to collect, just like it already is for people in cash businesses or who receive cash tips. The inability to attach transactions to certain identities will make it hard for government to know when money is changing hands and quantify incomes, thus making it nearly impossible to tax income. This has already been a challenge as governments have been unable to tax income and “capital gains” made through rising valuations of cryptocurrencies that are held on personal wallets.

Crypto will make it tougher for governments to regulate as well. As of now, the regulations are enforced through a monopoly on force and a control of the economy. By disrupting the economy and politics, crypto will make it hard to say what can be regulated. For instance, raw milk is illegal to sell in many places throughout the U.S., but with cash it is able to be sold. Crypto can replace cash in this instance in a plethora of transactions that have legal, but not moral, consequences.

Last words

There is a new economic revolution beginning. This one is not unlike the Industrial Revolution. People will be displaced. Change will come. The world will look completely different. There will be growing pains and problems along the way, but the world on the other end of the tunnel is much better. This will not bring a utopia or anything like that, but it will change the way people live for the better.

In other words: cryptocurrency and blockchain technology are as big as the wheel, steam engine and printing press. It will change the way the world works, from macro to micro, yearly to daily, politically to economically until it is nearly unrecognizable. However, it will put power back into the people’s hands to make decisions for themselves, without a government bureaucrat standing over their shoulder, and give people opportunity to create new solutions and new institutions.

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3 Reasons Why The Fair Tax Should Replace The Income Tax

In the libertarian world, there is little room to argue in favor of a better tax system. This is mostly due to the fact that, like Socialists, many Libertarians have an uncompromising Utopian view. There is little room for compromise with this group, only pure liberty, no government, right now.

The problem with this is that it neglects reality and the fact that to preserve liberty, the institutions that do so must be preserved. The control of these institutions could be transferred from government to the people, but they must be preserved. By destroying the institutions of charity, marriage, infrastructure and all the others that enable citizens to maintain and multiply their liberty, liberty is greatly threatened.

This idea is evident in the founding of America. Rather than pulling the rug out from under the feet of the citizens, the founding fathers created a system that would allow people more power over their government and to prevent tyranny. They did not destroy all of the institutions of tyranny and power in one moment; instead, they created a framework that would multiply liberty and destroy tyranny piece by piece. In order to preserve the opportunity to truly end tyranny, they had to allow slavery and oppression of women to create the foundation for the termination of these institutions of tyranny.

The same must be done with the Income Tax.

In order to move toward pure freedom and no taxes, America must take steps in the right direction. The Fair Tax is the best way in today’s world to move the country towards more freedom and no taxes.

The three main reasons are:

#1: More Liberty

The Fair Tax is a tax on consumption, rather than income. This means that the people will be saying that the government may take a share of commerce between parties because they do protect the ability to have free exchange in the American Market, but that it cannot take a share of income, which is the result of an individual’s productivity. The Income Tax is a message from the government that they are entitled to the results of productivity of its people, thus claiming partial ownership of each person.

People will also not be able to be swayed in their purchase decisions by deductions. Rather than giving to charity as a write-off, people can do it out of their own free will because they will be pocketing all of their paycheck. Instead of complicated 401k programs, college savings funds, and other tax-exempt savings funds, people can choose the best way to invest their money. The combination of freer choice of buying and saving will produce freer markets, and will spur growth and innovation.

#2: More Wealth

There will be an increase in wealth among all people. Because the government will not be taking the taxes out of peoples’ paychecks before it hits their bank account, people will have more wealth to work with each paycheck. Being able to choose when to create a taxable exchange would allow people to navigate the market and reduce these to maximize their wealth.

They can also save and pass on their wealth without Capital Gains Taxes, Death Taxes or Gift Taxes. Under the Fair Tax, if one wishes to save money, instead of it being taxed twice, it is taxed only once: when its spent. This means that if someone works hard, saves money and lives their whole life with discipline, they will not be penalized with more taxes by the government. It will also allow for the poor to build wealth, rather than remain poor because it hurts them to try moving into the middle class due to reductions in government assistance.

Most importantly, the message goes from government attacking production to consumption. Everyone knows its a lot easier to spend money than to make money. That is why people are not working as hard as they should for what they want and taking on debt to fund their consumption. This tax system would allow people to keep what they earn, incentivize saving and investing, as well as curb debt spending and over consumption. What happens when Americans are creating more wealth and decreasing debt? They become wealthier.

#3: No IRS

Everyone hates dealing with the IRS. They use their power and reach to meddle in the lives of law abiding citizens over a mistake on an endless form. Then, they hide behind bureaucracy and claim ignorance of their unnavigable series of extra processes on top of the world’s worst tax code.I have an anecdote for you on this. This year when filing taxes, I made a mistake on my form. When correcting it, my dad and I put both of our tax forms, with a letter explaining the issue, in our envelope together and sent them a check to pay off the extra taxes that I would owe after the correction. The IRS sent me a letter a month later saying that I owe them that amount plus interest. Upon further investigation, over many phone calls and different representatives, we found out that they had credited my dad’s account instead of mine. I then had to pay them that money plus interest and wait for their return to hit my dad’s account before he could give me my money back. That is simply wrong, and citizens should not have the burden of complying with a tax code. The government should have the burden of ensuring that they steal the money that they want to steal.

Last Words

There are not many statistics or numerical arguments in this blog as you may have noticed. That is because this is a philosophical argument in favor of a tax that does not allowed government to claim ownership of its people or use the tax code to dictate their behaviors. This is not saying that the Fair Tax is a final solution, but I step in the right direction for liberty minded people. This would give people more opportunity, pull them off the dependency of the government, and truly reward innovation and productivity.

This could be an answer for pulling back the growth of the American government by not letting you pull the lever’s of the tax system to hide its growth. It would give citizens the chance to experience what freedom really is because they would not be making decisions based on how the IRS would view it. It is not perfect, but it is the best way to maintain the institutions that are currently protecting freedom while still taking back liberty on the political stage.

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Warning: Debt, Deficit and Unfunded Liabilities Could Destroy Your Retirement Plans

If your retirement plan relied on government pensions or social security, and you thought Medicare and Medicaid would be there to support you, then you’re in for a rude awakening. Since FDR, the federal government has been making promises that it know it cannot fulfill or sustain, but soon the repercussions of our government’s fiscal irresponsibility will be come to fruition. The way the federal government is handling debt is an obvious indicator that these programs are on life support.

There are 3 aspects to the debt. There is the deficit, national debt, and unfunded liabilities. Each of these needs to be understood in its own before one can understand how they connect. Once you have the whole picture, it will be obvious that this is not a sustainable economic system.

Don’t want to read this whole thing, here’s a video about the same idea on the Conversation of Our Generation YouTube Channel

Budget deficit

The current deficit is $440 billion for FY2018. That means that the government is spending $440 billion dollars more than it receives in tax revenue this year, despite another record-breaking year of tax revenues. The “raising the debt ceiling” that Congress is so fond of is simply Congress giving itself permission to assume more debt.

How significant is this $440 billion in debt the government is taking on? Well, it is estimated that the federal government will receive $3.654 trillion in revenue but spend $4.094 trillion on whatever the hell they spend that money on. That means that Congress is spending an extra 12% on top of every single penny it takes in as revenue.

National debt

The total debt that America has accumulated in the 240 years since its founding is $20 trillion. This is a tremendous sum of money which has cost us $268 billion in interest this year, but at least Congress can raise the debt ceiling and take on more debt to pay on the interest we owe. A lot of the debt the U.S. owes is being paid in perpetuities, so we will just be making payments as long as we are a country on those debts and they will never be paid off.

The national debt is not just the problem. The issue here is that despite all this debt, Congress continues to spend recklessly and assume more debt. It’s like a normal person driving himself into debt, so he opens a new credit line to pay off the last and does this over and over again. Eventually someone will catch on and not want to assume the risk and he will go bankrupt.

Unfunded liabilities

The biggest issue with all this debt is the things that the government has promised its people, but it has no plan as to how it will pay it. This is the unfunded liabilities which total about $127 trillion (roughly $1.1 million per taxpayer). This is Social Security, Medicare, Medicaid, Pensions, and outstanding interest. Our government is spending every penny it receives and 12% more, yet it still expects to pay these future liabilities.

People will not accept these things being taken away from them because taxpayers have put in their fair share. However, there is no “Social Security Fund” like private pensions have to make that create returns which are paid out later. Rather it is a Ponzi Scheme being performed by the government and it will not hold.

The Collapse

How does this all fail? When Social Security was founded, there were 16 people paying in for every one collecting on it and the average life span was much shorter. Due to having fewer children and unemployment issues among younger people, the scheme is much less bottom heavy than it was and now only about 3 people are paying for each one collecting. Pairing that with the amount of promises being added each year the country is in a debt spiral.

The Solution

So, is their impending doom and collapse of the U.S.? The answer: maybe. But, while this may not be fixable, there is a chance. Congress has to stop spending so much, and definitely must stop spending more than it receives. The U.S. must start paying down the debt and turning services over to the private sector. Lastly, it needs to find solutions for the entitlement programs and wean people off of relying on them. This will take educating the American people about financial responsibility and economics at length and ensuring that people have the tools necessary to make good fiscal decisions.

The whole thing really is simple, though: Spend less than you make and save and invest the rest.


If would like to join me in the Conversation of Our Genereation, you can find me on YouTube Conversation of Our Generation YouTube Channel

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