Friday, December 15, 2017

Bitcoin and Gold

Economic textbooks say that money has several functions. The two most important are a medium of exchange and a store of value. The reason why a commodity can be used as a store of value is that is widely used as a medium of exchange. People hold it, knowing that they can exchange it for something that they want in the future.

Gold was once a common medium of exchange. Merchants had scales to weigh gold and silver. Small coins were developed to make buying and selling with gold easier. However, gold is no longer widely used as a medium of exchange. If you take a gold ring into Walmart and try to buy a toaster, they will look at you blankly.

Gold is now mostly used as a store of value. People who fear the future hold it, because they fear that other assets will lose value.

Ideally, a store of value will retain its value. However, in practice, people like a store of value that increases in value. However, the problem with a store of value that can increase in value is that speculators often pile in and push up its price. That has happened at times with gold.

Currently, bitcoin is not widely used as a medium of exchange. It is mostly used as a store of value.

Bitcoin has been designed to behave like gold. The amount available grows very slowly as digital miners work to produce it. This is good for its use as a medium of exchange, as it should grow in line with the growth of the economy as the number of transactions increases. The volume of a commodity used as a medium of exchange should not grow too fast, because it could lose its value.

However, scarcity can be a problem when a commodity is being used as a store of value, if more and more people want to use it that way. If an increasing number of people wanted to use gold as a store of value, then the price of gold would rise dramatically. Speculators would be then attracted to buying gold.

This is what is happening with bitcoin. The supply is limited to what is needed for a medium of exchange, but a rapidly growing number of people want to use it as a store of value (or increaser of value). The price has increased rapidly, which has brought in the speculators.
In our modern financial system is that banks have the ability to create credit. This allows them to fund speculation in whatever commodity is growing in popularity as a store (increaser) of value.

The problem with a commodity used as a store of value that can increase in value is that it can also decline in value. This could easily happen to bitcoin if attitudes changed.

We actually need a record of value that does not increase or decrease in value. If it could not change value, speculators would have no interest in holding it.

The best store of value is not a commodity or asset, because they can always become a target for speculation. A better store of value would be a record of value given, not an asset. I describe how this could happen in Money.

Thursday, December 14, 2017

Blockchain and the Finance Sector

Jeff Brown attended a conference focused on blockchain technology and cryptocurrencies and what they mean for financial institutions.

It was fascinating to speak with and listen to traditional financial professionals. Most of them are struggling to get their heads around blockchain technology. Financial services incumbents like traditional banks, institutional funds, and hedge funds are all trying to determine their role in this exploding industry.

One thing was very clear to me: The blockchain industry development has happened right under their noses… and they are all scrambling to catch up. They are also trying to take the same industry structure and business practices and force them onto the blockchain industry.

And it won’t work...

It’s like trying to fit a square peg into a round hole. The big financial institutions are trying to insert middlemen, increase friction, and position themselves as rent seekers just like they have been doing for centuries.

I can tell you, the blockchain industry won’t have any of it.

These are precisely the things that blockchain and distributed ledger technology were designed to fix. And early blockchain companies have proven that it works. They’ve proven that the utility of these protocols makes the transfer of assets faster, cheaper, and entirely secure, all at a fraction of the cost of the way things work now.

Wednesday, December 13, 2017

Woman on a Beast

The liberal media in the United States seems to be obsessed with the idea of Russian collusion in the US presidential election, without any evidence, or a clear explanation of how Russian could hack the election of the most technically advanced nation in the world.

They are ignoring a far greater collusion and intervention that has influenced elections and foreign policy in the US for many years. The Israel lobby is a dominating political force in the United States. A presidential candidate who rejected the demands of AIPAC will have difficulty being elected. Getting elected to congress is difficult without the support of lobby groups like AIPAC.

Israel has massive influence on US foreign policy and military planning. Most members of congress and many senior military leaders have been given a free trip to Israel, where they are told what they need to know. The consequence of this influence is that many members of congress are willing to place the security of the United States at risk in order to advance the policies of the Israeli government. This strange power situation is perfectly described by a woman (Israel) sitting on a beast (United States).

In the book of Revelation, John had a vision of a woman riding on the beast.

I saw a woman sitting on a scarlet beast that was covered with blasphemous names and had seven heads and ten horns. The woman was dressed in purple and scarlet, and was glittering with gold, precious stones and pearls (Rev 17:3-5).
John was surprised by the vision
Then the angel said to me: “Why are you astonished (Rev 17:7).
John knew all about beasts. His world had been dominated by many great empires, and was currently controlled by the most powerful beast of all: the Roman Empire. What was strange about the vision was the woman sitting on the beast. Sitting symbolizes control, so this terrible beast with seven heads and ten horns was being controlled by a woman.

This beast is described earlier in the book of Revelation. It is a terrible empire that crushes and controls the world. If this vision is to be fulfilled in our own time, the beast being dominate must the United States of America. It is the most powerful empire the world has ever known, with the strongest economy and military bases all over the world. Many nations are dominated by its power, and no other nation can challenge its role as superpower.

The key to confirming this understanding of the vision is identifying the woman. She is called Babylon the Great, but that does not help much, as this was not the real city with. That name Babylon is used to symbolize immorality, witchcraft, adultery, power and control. According to the prophets, Israel becomes a harlot when it trusts in military power and political empires, rather than relying on God.

John was told the identity of the woman at the end of the vision.

The woman you saw is the great city that rules over the kings of the earth. (Rev 17:18).
The woman is the “great city” that controls the kings of the earth. This city had been described in the vision of the two prophets earlier in Rev 11:8.
Their bodies will lie in the public square of the great city—which is figuratively called Sodom and Egypt—where also their Lord was crucified.
This city is called Egypt and Sodom and Babylon to indicate that it is opposed to the purposes of God, but it is actually the city where Jesus was crucified. Everyone knows where Jesus was crucified. The great city is Jerusalem. This means that the woman controlling the beast is the city of Jerusalem and the nation of Israel.

This identity of the woman is confirmed in Rev 12:1,5.

A great sign appeared in heaven: a woman clothed with the sun, with the moon under her feet and a crown of twelve stars on her head... She gave birth to a son, a male child
The woman with a crown of stars is Israel. She gave birth to Jesus, who is the child who will rule the nations. This woman controlling the beast was covered with glittering jewels, so she is Israel.

This is why John was astonished by the woman on the Beast. He had seen this vision of the woman being attacked by the dragon and being scattered amongst the nations (Rev 12:14-16). So he is amazed when he sees this same woman sitting on a terrible beast and controlling it. It was hard to believe that Israel could control an empire built in the image of the Roman Empire.

The vision of the woman on the Beast describes a season when the nation of Israel will control the most powerful empire the world has known. Very few American Christians understand that.

Tuesday, December 12, 2017

Wealth Transfer

The popular teaching that God will bring a great “wealth transfer” to the richest church that has ever existed is a joke.

I suspect that he will do a “wealth transfer” away from the western church, so that his people will learn to trust him, rather than relying on its wealth.

The Kingdom of God does not need more wealth, it just needs more faithfulness.


The incarnation of Jesus was the greatest even in the history of the world. Yet many evangelical Christians struggle to describe its wonder, without getting stuck on the baby, or jumping to the cross.

Tuesday, December 05, 2017

Church History

I have been reading The Story of Christianity by Justo L Gonzalez. It is about 40 years since I studied Church History formally, so I am enjoying the refresher.

I am currently up to the Arian Controversy that dominated much of the 4th century. I remembered this as a dispute about the divinity of Jesus, but Gonzalez brings out some interesting aspects of the issue.

The state soon began to use its power to force theological agreement upon Christians. Many of the dissident views that were thus crushed may indeed have threatened the grey core of the Christian message. Had it not been for imperial intervention, the issues would probably have been settled, as in earlier times, through long debate, and a consensus would eventually have been reached. But there were many rulers who did not wish to see such prolonged and indecisive controversies in the church, and who therefore be simply decided, on imperial authority, who was right and who should be silenced. As a result, many of those involved in controversy, rather than seeking to convince their opponents or the rest of the church sought to convince the emperors. Eventually, theological debate was eclipsed by political intrigue (p.182).
Unfortunately, because successive emperors took different sides, the Arian controversy dragged on through of the century.

Gonzalez also explains that the controversy was partly a social/political class issue.

For fifty years, most of the emperors were embraced the Arian position... What was at stake was much more than idle speculation. Ultimately the issue was, can Gold truly be present in a carpenter executed by the empire as a criminal, or is God more like the emperor on his throne? One should not wonder, then, that so many emperors preferred the Arian view. Eventually a compromise was reached whereby the carpenter was declared to be truly divine, but was now represented much more often by the exalted Pantokrator—the exalted emperor sitting on a throne and ruling the entire world—than as a carpenter (p.217).
I was intrigued that the thinkers who pushed the church towards the truth often came from the edge of the church, mostly from within the monastic movement. Most were made bishops, but it was against their will. They were often persecuted and had to flee the centres of religious power for safety.

Friday, December 01, 2017

Political Theology

The Torah did not give Israel a taxpayer-funded military or taxpayer-funded executive branch. It did not provide a group of professional politicians to make laws, because God had already given perfect laws. Judges could give verdicts, but there were no taxpayer-funded police to enforce them.

These gaps rip the guts out of most modern political theologies. When reading the scriptures, we need to take off our political glasses and stop assuming all our political junk is there. We would be amazed at what God had in mind.