kottke.org posts about currency
I’ve read a lot of explanations about blockchains and Bitcoin but What Satoshi Did is among the best of them.
This invention works in two parts. Constructing a shared ledger amongst all participants was the first step. By sharing the entire ledger of transactions, all participants could convince themselves that their own transactions were validly entered, that all value derived from an authentic source, and that the entire ledger balanced.
The second part was to agree on the ledger. Using induction, and agreeing on all prior ledger states, Satoshi reduced the problem to agreeing what each new appending block is. The first batch, or genesis block, was created by Satoshi. The next block, and each successive block, included a consensus signature over this block and the previous block, creating a chain of blocks, or the blockchain.
This week on Last Week Tonight, John Oliver rails against the penny. This seems like such an obvious thing, that we should stop using pennies, but I bet if the government ever moved to ban pennies, it would set off a firestorm of protest.
Cities, businesses, and artists are producing small batches of paper currency designed to be spent locally. I love the £20 note from Bristol, England (above)…it’s got Wallace’s head on it!
The local currency, though, is intended not as collectible but to encourage trade at the community businesses where they are accepted, rather than chain stores, where money taken in tends to flow out of town and into the coffers of multinational corporations. (Compare it to the farmers’ market: Homegrown lettuce now has a whole new meaning.)
“If you use a local currency, you keep the money local, and that has a ‘lifts all boats’ vibe to it,” said David Wolman, the author of “The End of Money.”
For her master’s project, Barbara Bernát designed a set of fictional banknotes: the Hungarian Euro.
I am a total sucker for banknote mockups and aside from the simplicity, what caught my eye about Bernát’s project is the one security feature: if you look at the notes under a UV light, you see the skeletons of the animals depicted on the notes:
Wells Tower recently profiled master counterfeiter Frank Bourassa for GQ. Bourassa made $200 million in nearly flawless fake US twenties in a barn in Canada, got caught, and, you get the feeling pretty early on in the piece, didn’t really do any time for the crime.
Drawing on cautionary news reports of failed counterfeiters, Frank sketched out a set of best-practice guidelines for his new concern. First, “don’t ever try to pass the money yourself. You want to be as far away as possible from where the money’s being spent.” Second, “don’t sell your stuff to anyone who’s going to be passing it locally. I knew from the beginning, I needed to sell my bills to Europe or Asia.” Third, resist the temptation to print big bills. “Do twenties. It’s stupid to try to pass hundred-dollar bills anymore. People look at them all day long, hold it up to the light and everything. Nobody looks twice at a twenty.” Fourth, don’t cheap out. Most of the people who try their luck at counterfeiting do so by breathtakingly broke-dick means, with stuff you can buy at Office Depot.
“Can you make bills on a $50 ink-jet? Sure, if you want to get busted right away,” said Frank. “All the security features in a bill are basically there to stop broke fucking-moron assholes who are trying to do their thing on an ink-jet. I knew if I wanted to succeed, my bills had to be as perfect as possible, as close as possible to the way the bills are actually made.”
Don’t miss the video of Bourassa examining one of the new $US100 bills. He doesn’t really come off as someone organized enough to pull something like this off, which was probably advantageous to him in actually (almost) doing so. There’s much more information about Bourassa on his web site.
This is the design that Norway has chosen for their banknotes starting in 2017:
From now on, I’m paying for everything with kroner. (via co.design)
One way or another, Bitcoin is going to be huge. It could be the as big as the Internet, it could transform into something else, or it could be one of tech’s biggest busts. Meanwhile, many of us are still wondering exactly what it is (it’s both a currency and means of transporting that currency). GQ’s Marshall Sella decided to score some of this newfangled dough and “blow it on all the pleasures that Bitcoin can buy.” Sex, Drugs, and Toasters: My Life on Bitcoin.
Within two months, I’d be visiting Charlie Shrem at his parents’ place, where he was wearing an ankle monitor and living under house arrest.
(That sounds like the beginning of every great startup story.)
Chris Ware follows the wanderings of a penny in his latest piece for the NY Times.
People had assumed that the name of the secretive creator of Bitcoin, Satoshi Nakamoto, was a pseudonym designed to protect his anonymity. Newsweek’s Leah McGrath Goodman tracked down a man who could be the Bitcoin founder and discovered that his real name is…Satoshi Nakamoto.
Two police officers from the Temple City, Calif., sheriff’s department flank him, looking puzzled. “So, what is it you want to ask this man about?” one of them asks me. “He thinks if he talks to you he’s going to get into trouble.”
“I don’t think he’s in any trouble,” I say. “I would like to ask him about Bitcoin. This man is Satoshi Nakamoto.”
“What?” The police officer balks. “This is the guy who created Bitcoin? It looks like he’s living a pretty humble life.”
I’d come here to try to find out more about Nakamoto and his humble life. It seemed ludicrous that the man credited with inventing Bitcoin - the world’s most wildly successful digital currency, with transactions of nearly $500 million a day at its peak - would retreat to Los Angeles’s San Bernardino foothills, hole up in the family home and leave his estimated $400 million of Bitcoin riches untouched. It seemed similarly implausible that Nakamoto’s first response to my knocking at his door would be to call the cops. Now face to face, with two police officers as witnesses, Nakamoto’s responses to my questions about Bitcoin were careful but revealing.
Tacitly acknowledging his role in the Bitcoin project, he looks down, staring at the pavement and categorically refuses to answer questions.
“I am no longer involved in that and I cannot discuss it,” he says, dismissing all further queries with a swat of his left hand. “It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”
Nice bit of sleuthing by Goodman. But given the interest around Bitcoin, it’s amazing that it took this long, even with Nakamoto’s first name change.
Update: The subject of Newsweek’s story now denies he was the creator of Bitcoin.
Bitcoin is a digital currency that has increased in value in US$ by 900% over the past six months. Jason Kuznicki says Bitcoin is definitely a speculative bubble and has three graphs to illustrate his point. I found this one particularly interesting…it plots transactions vs. total Bitcoin market cap:
This chart shows a dramatic reduction in the total number of transactions, irrespective of size, per dollar of bitcoin’s market cap, from December 2012 — December 2013. In absolute terms, market cap has generally gone up, and the number of transactions has mostly just bounced around a lot. The total value of bitcoin is going up, but it’s mostly getting parked rather than being put to work. Apparently there just aren’t a lot of appealing ways to spend bitcoin, anecdotal news stories to the contrary notwithstanding.
Instead, an increasing amount of bitcoin’s putative value (as measured in USD) is being squirreled away by larger and larger miner-investors. It’s not fueling a diversifying, all-bitcoin economy: if it were, transactions would be keeping up with or even outpacing market cap, particularly if bitcoiners came to rely increasingly on bitcoins and decreasingly on dollars for day-to-day purchases. That’s very clearly not happening.
The Wire’s Omar Little once said to Marlo Stanfield, “Man, money ain’t got no owners, only spenders.” Bitcoin seems to have the opposite problem. (via mr)
Mark Wagner constructs intricate works of collage out of pieces of US $1 bills.
I love that last one. No Photoshop…he cuts and assembles the pieces by hand:
File this under “markets in everything”: people will pay big money for US currency notes with interesting serial numbers.
In addition to the “low numbers,” which stop at 100, there are “ladders,” which have numbers in sequence, such as 12345678 or 54321098. These sell for as much as $1,300. A “radar” (selling for $20 to $40) is a palindrome, such as 35299253, and “repeaters” are notes with two blocks of the same four digits, like 41884188. Undis observes subcategories of each of these, such as “super radars” ($75 to $100) that have all internal digits the same, like 46666664.
And here I thought I was being pretty eagle-eyed by fishing a $2 bill out of the tip jar at the bagel place this morning. (via digg)
Some countries, the cool ones, put physicists and other scientists on their money. Here’s Niels Bohr on the Danish 500 kroner note:
Even the US sneaks onto the cool list with Ben Franklin on the $100.
US currency is already embarrassing and this new design for the $100 bill is not helping.
This may be worse than the horrible US passport.
For a project called The Fundamental Units, Martin John Callanan used a very powerful 3D microscope to take 400-megapixel images of the lowest denomination coin from each of the world’s 166 active currencies. This is the 1 stotinki coin from Bulgaria:
And this is a small part of that same coin at tremendous zoom:
More information is available here.
Richard Smith is hosting the Dollar Redesign Project, which is starting to attract some interesting redesigns of American paper currency.
Ministry of Type has some further analysis, including a comparison to European bills.
Matthew Dent’s new coinage for the UK was pretty great, but this Dutch commemorative coin is a fully contemporary chunk of wow.
On the front, the names of famous Dutch architects form an image of the queen while some Dutch architecture books on the back form an outline of The Netherlands. The design was done using free software running on Ubuntu/Debian. (via design observer)
Earlier this evening, I needed to take some coins that had been piling up to the Coinstar machine. Before I left, I uploaded a photo of the coin bags to Flickr and queried the masses: how much money in the bags?
How did the crowd do? Certainly not as well as the villagers at the 1906 livestock fair visited by Francis Galton.
In 1906 Galton visited a livestock fair and stumbled upon an intriguing contest. An ox was on display, and the villagers were invited to guess the animal’s weight after it was slaughtered and dressed. Nearly 800 gave it a go and, not surprisingly, not one hit the exact mark: 1,198 pounds. Astonishingly, however, the median of those 800 guesses came close — very close indeed. It was 1,208 pounds.
Nate Silver I am not, but after some rudimentary statistical analysis on the coin guesses, it was clear that the mean ($193.88) and median ($171.73) were both way off from the actual value ($426.55). That scatterplot is brutal…there are only a handful of guesses in the right area. But the best guess by a single individual was just 76 cents off.
To be fair, the crowd was likely misinformed. It’s difficult to tell from that photo how fat those bags were — they were bulging — and how many quarters there were.
Interview with Matthew Dent, the chap who designed the fantastic new UK coinage.
There were plenty of technical issues I had to come to terms with in conjunction with the distribution of metal across the coin and the high-speed striking process. At one point I considered suggesting that half the 20 pence’s border — where it met the shield — be removed. It would have still been a rounded heptagon, only its border wouldn’t completely surround the coin. There were potential issues with this; I learnt that the distribution of metal wouldn’t be balanced, thereby possibly affecting the striking of the coins and the acceptance of them by cash machines. Oh well… this competition was a learning curve. And as someone who was unfamiliar with the technical aspects of coin manufacture - you have to ask don’t you?
The new design for UK coinage is fantastic.
As you can see in the image to the right, the Shield of the Royal Arms has been given a contemporary treatment and its whole has been cleverly split among all six denominations from the 1p to the 50p, with the £1 coin displaying the heraldic element in its entirety. This is the first time that a single design has been used across a range of United Kingdom coins.
This is my favorite bit of design so far this year. (via we made this)
Update: Jonathan Hoefler compares the new UK coins, designed by a first-time currency designer, to the new US five dollar bill.
Below, the new five dollar bill, introduced last month by the United States Department of the Treasury. The new design, which features a big purple Helvetica five, is the work of a 147-year-old government agency called the United States Bureau of Engraving and Printing. It employs 2,500 people, and has an annual budget of $525,000,000.
It looks like Purple Modernistan is invading the US from the southeast.
Jay-Z as economic indicator? In his new video for Blue Magic, the rapper flashes Euros, not US dollars.
When I start seeing rap stars flashing euros instead of U.S. dollars, I know our economy is in trouble.
Relatedly, supermodel Gisele Bundchen wants to be paid for her modeling and sponsorship gigs in euros, not dollars. (Or maybe not.)
During the depths of the dot com bust, Julian Dibbell looked online for a job and found one as a commodities trader in the Ultima Online virtual world. During one particularly productive month, he made almost US$4000. Dibbell has a book coming out about the experience, Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot. In addition to being available at bookstores in meatspace, Play Money will also be on sale in the virtual world of Second Life in the currency of that world (Linden dollars). From the press release:
In-game versions of Play Money designed by Second Life coder/publisher Falk Bergman are available for L$750. These copies can be signed by Dibbell at his in-Second Life interview with journalist Wagner James Au on July 27th. For the Second Life resident who needs something a bit more tactile, L$6250 buys a real-life copy of Play Money, shipped with care to the buyer’s real life address, in addition to the standard in-game version.
(At the time of this press release, Linden dollars are trading at approximately L$300.00 to the US$1.00. Adjusted to US dollars, an online copy costs US$2.50, and the price of a real-life copy bought in-game is around US$20.85.)
Dibbell will be signing his virtual books in Second Life on July 27th. Caterina read Play Money and has some thoughts on its relation to her work/play at Ludicorp. And here’s a preview of Chinese Gold Farmers, a documentary on gold farming sweatshops in China.
The Del Monte Note is a $20 bill with a Del Monte banana sticker that was affixed to it during the printing process so that the serial number and Treasury seal are partially printed on the sticker. “In the summer of 2004 a college student in Ohio received it as part of an ATM withdrawal and shortly there after posted it on eBay where it sold to the highest of 12 bids.”
New Swiss banknotes, the result of a design competition, feature an embryo, the AIDS virus, and a skull. “Considering the history of Swiss banking, one cannot help but make the connection between the gold bar on the 1000-Franc bill (the gold of African dictators hidden in Swiss vaults) and the skull on the same bill (that of their victims).”
We’ve been eating a lot off the street here in Bangkok. On our morning and afternoon walks to and from the Skytrain, there are one-person food carts each serving up a particular little snack for 5-10 baht apiece. It’s a good grazing situation; lunch yesterday lasted about five hours and consisted of some orange juice, a thai iced coffee, pork balls on a stick, grilled chicken on a stick, some sort of sweet coconut custard thing, chrysanthemum juice, some noodles that very much tasted like ramen (with pork), more sweet coconut custard things, some peanut crepes…
[1.5 hour interlude for a foot and thai massage that I quite enjoyed and Meg quite didn’t]
…fried dough balls, pork and pineapple on a stick, a bag of orange soda, pork crepes with tiny egg, and dessert tacos. Altogether it was maybe US$6 for the two of us (and my dad ate some too).
I love eating this way and it was something that was sorely missing in HK.
 From street vendors, not literally off the street.
 Auto traffic is awful here…traffic jams everywhere. So we’ve been using the Metro (subway), Skytrain (the elevated train), and the river taxis to get around. They get us to most places we need to go. There are motorcycle taxis available, but we’d rather not split up on the journey. Two/three-person motorcycle-powered rickshaws called tuk tuks are also available, but we’ve heard conflicting reports of the usefulness/sketchiness that we’ve opted out of them altogether.
 It’s about 40 baht to a US dollar. A meal at a small restaurant with tables on the street cost us around US$5 for the two of us, including gigantic beer.
 We started out at Aw Kaw Taw market, walked over to Chatuchak market, and then to the area around Sala Daeng.
 The massage was around US$7 per person. I want one every day.
 Onto each crepe, the cook cracked a tiny egg. He made up about 10 for the woman ahead of us and cracked 10 tiny eggs, one for each crepe.
 To those who say they can’t afford to travel, I say to you: stop making excuses. If you’ve got the income and leisure time to be spending time reading this blog, are sufficiently motivated, and make it a priority in your life, you can certainly afford it. The most costly item is the plane ticket, but if you watch for deals and are flexible in where you want to visit (maybe you go to Brazil instead of Thailand), you can get over here for less than you might think. And once you’re here, you can get by on $20 a day, including lodging. Travel is cheaper here as well, buses and trains are always an option, and there are several low-cost airlines that serve the region. It requires a little effort and intrepidity, but low-cost international travel can be done.
 This is the big sticking point for most people, I think. If you choose to have a family or focus on your career or pursue a costly photography hobby, you might not have the money or flexibility to travel this way. But that’s a choice you’ve made (on some level)…and I would argue that if you’re 30 years old, you can arrange to make an overseas trip once every 3-5 years, and that’s about 7-8 trips by the time you’re 60.
OPENSTUDIO was announced at the conference today by John Maeda. Keith sez about the project: “described as an experiment in creativity, collaboration, and capitalism, Open Studio is designed to simplify tools for the creative process and provide a pseudo-currency model for tool use and sharing.” Gotta go check this one out in the Media Lab space here.