So, our ongoing effort to keep the code curated and fully operational continues. New updates will be available soon.

In addition, through the recent addition of a major customer, we are now working on a smart phone app development project. Teams of developers have been solicited and many copies of a scope of work have been distributed. At least three qualified and competent teams have provided bids for their work and we anticipate several more soon. These will be evaluated by our team for technical competence issues and by our customer for business and timing issues.

We are very excited to be moving forward with Android development. In addition, our customer anticipates a serious user interface design activity will commence in mid-February which should feed into the Android app. We anticipate iOS app to follow.

There are also several new clients we are working with, including one in the travel and resort transaction processing service industry, and others involved in overcoming the odds. As 2018 progresses, we expect to see a great deal of new business activity.

Is there a war on cash?
Yes, there is a war on cash. It is a direct descendant of the war on gold and silver which played out in developed markets between roughly 1872 and 1971. If you want more information about its antecedents, consider the Coinage Act of 1873 and Nixon's abrogation of the Bretton Woods agreement. Since the Nixon Shock of 1971, even copper has been removed from the American one cent coin. Most money in the world, including the Special Drawing Rights which make up the core currency of global finance, are now computer generated values rather than actual paper or specie.

Partly in reaction to the events of the time, Nobel prize-winning economist FA Hayek wrote in 1976, and revised through a third edition in 1990, a short book "The Denationalisation of Money." You can get a copy from Amazon, ABEbooks, or a free download at Mises. If you want to understand the theory of competing currencies, why central bank monetary policies persistently fail, and why people suffer as a result of bad money being issued by governments, Hayek's book is a good place to go.

For some people, there are still traditional types of money. People in Somalia, for example, continue to herd sheep, goats, cows, and camels. Judges in their traditional culture assess compensation from criminals for victims in fines denominated in cattle. Many people still accept gold and silver coins as payment. Since the 14th Century when the mulberry-bark paper money of China became non-redeemable, people in traditional cultures in India and Southeast Asia have preferred payment in copper, silver, and gold coins, or in links of pure gold chain jewellery. At other times, both ancient and recent, people have used tulips, cigarettes, chocolate, animal skins, hunks of iron, silks, salt, and many other things as money. For a time in the first part of this century people in Argentina used warehouse receipts for wheat as a type of money.

Nor has the world been short of innovators in this field. Ithaca Hours and LETS are two examples of local currency concepts, of which there are an enormous number today. Beginning in 1996 with e-gold and continuing with many other examples, a host of digital gold currencies used to be available. And since 2009 a great many crypto-currencies, most notably Bitcoin, have been created.

Meanwhile, credit cards and debit cards have been developed, so that money sometimes is represented by a hunk of plastic. More recently, smart phones have replaced credit and debit cards, illustrating that a great deal of what we think of as money is actually accounting records stored in computer. If you take a look at how central banks and the most central of all, the Bank for International Settlements, work, you can see computer entries form the basis for nearly all the money in the world.

In addition to digitally representing money, banks and publicly traded markets have developed digital representations for stocks, bonds, and commodities. In the gold bug world, we often speak of the "paper gold" market, but it is really not very much on paper. It is more of a digital promissory note gold market, with the understanding that major commodities exchanges, such as Comex, don't require sellers to be able to deliver physical gold. Trades are often settled in "cash" which means more of those computer data entries. Instead of "paper gold," we think of it more as a "garbage gold" market.

The purpose of central banks has been to centralise monetary policies. Monetary policies include how much money is in circulation and what interest rates are charged by the central bank to the member banks of that country or region (in the case of the European central bank). One of the interesting facts about banking is that you cannot lend money at interest, nor accept deposits from other people, without a special licence, in most countries. Nor can ordinary mortals sell financial instruments such as stocks, bonds, or commodities, without broker and dealer licences. It remains possible to create entirely private exchanges, but these are not advertised for fear of falling afoul of the regulatory agencies that watch over the financial industry.

For a very great many years, since at least Alan Greenspan became chairman of the Federal Reserve in 1987, it has been a policy of that central bank, and others around the globe, to keep interest rates artificially low in order to stimulate both financial markets and, in some respects, the economy generally. Today, as a result of decades of such policies, and the related booms and busts caused by these policies, most countries stand at "the zero bound" where interest rates paid by central banks to member banks are either zero or very nearly zero. And, today, it is clear that zero percent interest is not sufficiently attractive to stimulate economic growth.

In several European countries and very recently in Japan, interest rates have been reduced below zero. Now, what does a negative interest rate mean?

Well, if a central bank pays 1% interest to member banks who are required to hold "excess reserves" at that central bank, and there are a trillion dollars on reserve, then that central bank pays ten billion dollars in interest, per year. Suppose they take interest rates to zero? Then they pay no interest on those reserves. Suppose they take interest rates to negative 1%? Then they charge $10 billion a year on those same reserves.

Which means that instead of receiving a benefit for holding onto money, the banks are punished for having money on hand. Of course, the central banks still *require* the banks to have reserves on hand, but with negative interest rates, are motivating banks to go out and lend more, or, at least, that's the theory that is promoted by some in the banking cartel. Of course, since holding capital has a higher cost, the banks are motivated to increase fees, charge interest on deposits, and make up for these losses by lending at higher rates.

Those facts mean that banks will lend to other banks in a different way, and smaller banks that have fewer resources within the system will continue to place money on deposit with larger banks so they can arrange wire transfers and other services for their customers. The same is true for credit unions - and eliminating smaller banks and many credit unions may be an objective of those in the banking sector who wish to further consolidate the industry. People with savings accounts and certificates of deposit are likely to see penalties and fees for having money in the banks. With negative interest rates, the more negative, the worse things get. Everyone with money is penalised for having money.

Aha! You can see there are some loopholes. Obviously, if you have $45,000 in your savings account, and your bank tells you it is going to start charging you interest, you can take your money out of the bank. And maybe you do so, and put it with a stock broker, who, because of his bank's policies, has to charge you interest. So you buy stocks, maybe. Or you buy gold or silver. Or, maybe, you simply go get cash from the bank.

There are, however, already a number of laws in nearly every country that make this attempt to save yourself from punitive negative interest rates very difficult. Banks can, in many countries, refuse to provide you with cash. They can require that you only receive a few thousand dollars at a time, so you would have to go to the bank again and again. Banks have charged fees for taking money at an automatic teller machine (ATM) and as negative interest rates become the way of the world, expect ATM fees to skyrocket.

Into this situation comes the war on cash. Larry Summers, one of the nastiest little rich kids ever in our view, recently proposed, in an editorial eagerly accepted by Jeff Bezos and the Washington Post, that the $100 bill be removed from circulation. Others, in Europe, have called for the elimination of the 500 euro note. In Japan, the stores that sell home safes and vaults have sold out, in recent weeks, and there is a huge demand for the largest bank notes available in Japan. (Part of this situation in Japan relates to recent announcements of negative interest rates; part of it relates to the implementation of the "My Number" policy which forces everyone in Japan to use a slave identity number like the social security number in the USA.) In Cyprus, as recently as 2013, troubled banks were allowed by their government to confiscate deposits from people generally in order to meet some of their obligations during a time when ATMs were shut down and people were not allowed to withdraw all of their funds.

Please don't take our word for it. Go look at around for additional details. The war on cash, which is part of the war on freedom, has been going on for decades. It is coming to a head, because if people and companies can remove their deposits, bankers won't be able to extract money from depositors whenever monetary policies are changed. And, although a great many people are going to be harmed, including elderly people who have been relying on the interest they earn from their savings in banks, the bankers don't care.

The harm to other corporations, especially smaller banks and credit unions, will be enormous. You should expect to see smaller banks going out of business in record numbers allowing for even further consolidation of the banking industry. Alternatives like credit unions may also be eliminated through these negative interest rate policies.

So, what can you do? Actually, there are a lot of good choices, today, that you don't have to try to invent something new or hunt in distant countries, or on other planets, for answers.

One thing that I've seen since 2011 is a small laminated card with a silver dime or silver quarter inside. Any coin store in the United States can provide you with "junk silver" meaning the 90% silver coins of the United States minted prior to and including the year 1964. There are still many millions of these coins available, and while they are still usable in general circulation, they are worth many times their face value because of their silver content. Dime cards and a related invention from 2009, Ron Helwig's Shire Silver and gold wire in a laminated card, represent a reasonable alternative to other forms of cash. If you go to a farmer's market in a smaller community, you can generally find farmers who are quite eager to accept gold and silver as money.

At roughly the same time, 2009 or so, Bitcoin was being developed as a software protocol by Satoshi Nakamoto and others. It was initially disregarded by most people, and only after several years of development did its price increase to the highly attractive $1200+ per bitcoin in December 2013. Because Bitcoin is simply a software protocol, though one that requires considerable "proof of work" to mine into existence, it was immediately possible for other software on similar lines to be developed. For example, where Bitcoin has an upper limit of 21 million Bitcoins, ever, Litecoin has an upper limit of 84 million coins.

Today there are over 630 different "crypto-currencies" and you can go to coinmarketcap.com to learn quite a lot about them. The most widely used is still Bitcoin, which has the largest market cap, the most total transactions, and the largest dollar volume of transactions. You can go to blockchain.info for further details on Bitcoin.

But, as the team here at SilentVault has known and written about for many years, there are difficulties. First, Bitcoin and many other crypto-currencies have a public block chain, so your transactions are not private. Second, that block chain has gigabytes of data, and more every day. Third, many companies that buy and sell Bitcoin attempt to comply with the anti-money-laundering and know-your-customer laws that effectively prevent you from having any economic privacy unless you take a great number of careful steps. And, because of the nature of the mathematics involved, there are upper limits on how many transactions Bitcoin, Litecoin, or the others like them, can actually manage to transact in one hour.

Happily, there are good alternatives. SilentVault allows you to move your Bitcoin, Litecoin, silver, or gold into our SVSpark wallet technology. Our wallets are not new, they have been around for years. The technology is not only designed, it is fully implemented, stress tested, and in active use. SVSpark wallet users don't connect over HTTP, but over a different protocol, XMPP. Strong cryptography and strong log-in techniques protect your wallet contents. Nobody tracks your use, your transactions are not recorded on any central server, there are no records to demand, there is no way to link your IP address to your particular activities, so you have considerable economic privacy.

Transactions in SVSpark are immediate. You don't have to await confirmations after your funds are in your wallet. Payments are irrevocable, once the receiving wallet picks them up. If someone loses control of a wallet, there is no lost payment, since those payments that are not picked up within seven days are returned to the sender. There is a built-in exchange system so people can buy and sell vouchers for gold, silver, Bitcoin, and Litecoin. That exchange, built for the SilentVault enterprise and, thus, called SVX or SilentVault Exchange, has a built-in escrow capability. Similarly, there is a marketplaces aspect of the wallet where businesses can establish store-fronts to offer goods, services, games, or information. SilentVault team members are in contact with prospective currency issuers, merchants, and users and expect to expand the number and types of currencies available.

We believe that because the different types of money available in SilentVault wallets have similar properties of anonymity, immediacy of use, and privacy of ownership, that it is accurate to describe them as cash. So, in the war on cash, we are very much on your side and against the oligarchs, central banks, Keynesians, and government agencies seeking to destroy your wealth.

Just as talk of gun control seems to inspire ever larger numbers of Americans to go out and buy more guns (reaching a new record, as far as those having instant background checks, on "Black Friday" this year), talk of invasions of privacy inspire me to protect my privacy.

Here's an article that you should read. As William Grigg reports, drone pilots who spoke out against the slaughter of civilians by American military drone operators, including themselves, have had their bank accounts and credit cards frozen. Now, if you think that speaking out was bad for Chelsea Manning, and I believe she has suffered egregious consequences for speaking out about US government behaviour, do keep in mind that at least there was a military tribunal before sentence was passed. In the case of these drone operators, they are being punished even before being tried.

How should you go about protecting yourself from such outrages? Flee to Moscow, as Edward Snowden has done? That might work out, but I suspect that it is not congenial to everyone.

I suggest that if you are concerned about violent crime, including terrorism, including violent actions by your own government, you should buy guns, body armour, and other tools for self-defence, and learn how to use them. Then keep them, bear them, and as needed, use them. Be aware of your situation. Understand threats and know how to see them coming. Don't walk down the street, unarmed, staring into your smart phone. Do keep a phone with you (take out its battery if you think you might say something you don't want monitored) so you can summon additional assistance as needed.

Similarly, if you are wandering around the Internet, do so intelligently. Don't expose your IP address and other information if you can avoid it. Use a virtual privacy network. View the secure connection for every site that allows it. Don't browse web sites without safeguarding your web browser using NoScript and a good Ad Block Plus software. Use a security certificate patrol plug-in to examine the security certs your browser is presented with and avoid man-in-the-middle attacks. If a site presents many security certs, don't accept them. Don't trust secure connections unless you can be sure they are actually secure. Evaluate the digital signatures of the security certs you are presented.

There are a great many tools and techniques for privacy. One of the advisers of the Digital Cash Alliance, Jim Davidson, has been teaching a comprehensive class in some of these privacy tools through the Individual Sovereign University. Another of our advisers, Paul Rosenberg, built the Cryptohippie VPN service. And our most recent adviser, Bruno Delpeuc'h (one says "dell puck") has been working with Digital Cash Alliance founder Kevin Wilkerson to build ElanVPN, to provide virtual private network services integrated with audio-video VoIP, Tor, and other features. ElanVPN is building a system to interface encrypted VoIP with international direct dialing through their IndieGoGo campaign.

Finally, if you are concerned that you may have your economic privacy attacked, as the whistleblowing drone operators have had, then you should use a secure system for digital cash. We recommend the SVSpark and Digital Cash Spark wallet systems. They offer end-to-end encrypted chat, secure conference rooms, and XMPP-based data flow. They keep no records of your transactions, all of which occur in the wallet - where you are free to keep receipts or not have them stored.

Yes, it is a frightening world out there. There are crazy people in charge of major governments who believe that they should enslave you, saddle you, and ride you, while whipping you mercilessly. But you don't have to put up with it.

Choose freedom. Choose digital cash. Choose digital privacy. You'll be glad you did.

Here is that article:
https://ihb.io/2014-11-06/news/libertarian-rosenberg-bitcoin-13240

In it, Paul says, among other things, "SilentVault is a completely private network that lets you send and receive bitcoin and litecoin completely off the blockchain, while maintaing that ability to reconcile back to it later. Bitcoin transactions are ‘silenced’ within private servers with no public-facing IPs."

Recently, Paul joined the team at Digital Cash Alliance as an adviser. You can find more about the work of the Alliance by visiting their site.

The goals of the Digital Cash Alliance are to bring freedom to the world through competing currencies while supporting freedom for the individual by providing digital cash which has the anonymity and privacy available to users of physical cash. Silentvault has long supported the privacy and anonymity of our users by working with the Voucher Safe technology to silence the blockchain for both Bitcoin and Litecoin circulating within our system.

You can learn more about the Alliance at their web site. In order to visit their secure site you'll need to accept their self-signed security certificate. Their non-secure page includes links to the Electronic Frontier Foudation and other sites which explain why security certificate authorities are neither secure nor authoritative.

The Digital Cash Alliance currently has two advisers, Jim Davidson and Paul Rosenberg. Mr. Davidson has already written an essay on their behalf which explains some of the philosophy behind the Alliance. You can find copies of it here and here. Mr. Rosenberg's company, Cryptohippie, is responsible for the Virtual Privacy Network product offerred by the Alliance.

If you believe in individual freedom, economic freedom, free markets, and the individual's power to issue money, you should take a good long look at the Digital Cash Alliance. You'll find me there, as I am now working for the Alliance full time.

Today, something on the close order of 93 million Americans are out of work. Although the “official” government figure claims that unemployment is less than 6%, that figure deliberately ignores the long-term discouraged who aren't giving the government evidence of looking for work. A far more accurate picture, using the government's statistics as organised by the algorithm used back in 1980, shows unemployment running well above 23%.

Clearly the Federal Reserve act's goal of “maximum employment” has not been obtained. A very great deal is very wrong with the work of the Federal Reserve system. Consider, for example, the concentration of wealth. Although politicians like Barack Obama talk frequently about the idea of reducing the concentration of wealth amongst the top one-tenth of one percent, the reality of their political policies is very different. Since 1971, when the USA dollar broke its last connection to gold, wealth concentration has been dramatically exacerbated.

Tyler Durden, clearly a pseudonym, over at Zerohedge.com, has commented thoroughly and on several occasions about how the gold standard not only allowed lower income Americans to gain wealth, but also seems to have limited the prosperity of the upper echelon of income earners. I suspect that the timing of the rise in wealth of the latter group coincides with the Reagan era cuts in the top tax rates, since it clearly begins well after his election in 1980.

However, his chart on the economic results of eliminating the gold cover clause in 1971 is quite dramatic. As you can see, the 90% of earners from the bottom through the middle-class, saw their income growth stagnate after the change in the convertibility of the dollar to gold in 1971.

You can also see that neither that change, nor the shift in income tax burdens was bad for the top 1% of earners. It seems that rather than providing stable value, the Federal Reserve has done just the opposite. Or perhaps we were all “misinformed” about its actual purpose from inception.

One of the people who made a thoroughly documented case about the war on gold and its connection to the statist authoritarian shenanigans of Wall Street banking executives was Antony Sutton. People who falsely believe that the leading bankers of the United States have always, or ever, been pillars of support for free markets and individual liberty would do well to read, or at least read reviews of Sutton's books Wall Street and the Bolshevik Revolution (1974, 1999) (Online version) and Wall Street and the Rise of Hitler (1976, 1999) (Online version). It seems clear that many financiers, notably Jacob Schiff and Prescott Bush, and industrial tycoons such as Armand Hammer had close ties and great affinity with mass murdering psychopaths like Adolph Hitler and Josef Stalin.

But if you ask me, Tony Sutton's masterpiece is The War on Gold: How to Profit from the Gold Crisis (1977). It is a quite excellent history of gold and silver as money going back to ancient times. He notes the origins of paper money in 13th Century China where Marco Polo served as a governor for Kublai Khan, extracting gold, silver, precious gems, and pearls from merchants and forcing them to accept mulberry-bark paper with “official” vermillion ink markings as money. Naturally, the upshot of that particular deal was that, over the next decades, redemptions of the paper money for gold and other materials became less and less frequent, then stopped altogether. Undoubtedly, the peasant populations of Asia have long remembered these events and preferred metal money.

The origins of contemporary banking are traced by Sutton, and by fiction writers such as Neal Stephenson, to the closing of the Exchequer by Charles II in 1672. Rather notoriously, King Charles II encouraged the “goldsmiths” of London to invest their depositors' gold in government debt. The king then wasted that money on luxuries for him and wars for his country, losing so much money that he eventually prevented redemptions of government debt for government gold and silver, all of which had gone overseas to pay for various expenses. To “fix” or at least ameliorate this situation, a Bank of England was later established. Almost immediately, it began creating inflation, which resulted in the “South Sea Bubble.”

Another author who also went to considerable pains to document his research is G. Edward Griffin. His book The Creature from Jekyll Island is an excellent resource for people who want to understand why bankers and state power enthusiasts wanted to end the use of gold and silver as money. After all, only deficit spending allows for really big wars, and only after the gold standard was sacked were World Wars One and Two possible, along with the enduring Cold War, and the new and never-ending “War on Terror.” People don't like to pay taxes, but as long as some talking heads inform them that “the national debt is only money we owe ourselves” they seem to be willing to accept enormous government deficits and the endless wars that debt alone can finance.

Misery Continues

The argument that government control over interest rates, or the ill-conceived notion that central bankers may be trusted to manipulate interest rates on an official basis, should generate prosperity for everyone is interesting, but clearly has not proven valid. Instead, misery continues to escalate, with poverty becoming worse for tens of millions in the USA and hundreds of millions worldwide. If the central bankers could have gotten us out of the mess of the global financial crisis, they certainly would have done so by now.

Here is considerable evidence that the economy has not recovered in meaningful ways, such as poverty among children. David Stockman has accumulated a detailed argument strongly indicating that central bankers cannot do anything more with their zero interest rate policies to “stimulate” a dead, or living dead zombie, economy.

Since the 1913 Federal Reserve act, central banking has become very popular worldwide. Many of the major nations have central bank institutions, there is a Bank for International Settlements, an International Monetary Fund, and, since 2000, a European Central Bank. National central banks and these other international groups attempt to manage interest rates, help national governments finance enormous military expenditures, and, at times, force national governments to make debt re-payment concessions.

We've seen in recent weeks that Greek debt has become unmanageable. Rather than accept their losses, the commercial banks which lent much money to Greece years ago arranged to get their loans nationalised and super-nationalised by the governments of Germany, the European Union, the International Monetary Fund. Naturally, those powers seem determined to force Greece to capitulate, whether or not they destroy Greek lives, motivate insurrection, or bring down the current government. If anarchy were to replace the existing government of Greece, I wouldn't mind a bit, but I suspect the powers that be in Germany and the EU would insist on a different, more fascist or at least more authoritarian outcome.

One of the clearest arguments against the market manipulations of the interest-rate-setting Federal Reserve is the evident exacerbation of volatility in stock markets. Rather than creating stable prices and sustained growth, the Federal Reserve has forced the world onto a wild roller-coaster of booms and busts. Here is a simple chart showing the Dow Jones Industrials priced in gold.

As you can see, things were actually better, in terms of the stock market boom-bust cycles prior to the creation of the Federal Reserve. But, wait, you say. You thought that events like the Panic of 1907 motivated politicians like senator Nelson Aldrich (father-in-law of John D. Rockefeller, Jr.) to examine the boom-bust cycle and implement solutions like the Federal Reserve. You were told that the Federal Reserve was meant to reduce the volatility of the boom-bust cycle, not exacerbate it. Perhaps you were...misinformed.

What Central Banks Actually Do

If central banks do not make people generally more prosperous, do not stabilise prices, do not maximise employment, do not reduce the extremes of the boom-bust business cycles, do not and cannot create stable money, then what do they actually do?

They clearly interfere with international markets, since interest rate changes are an excellent predictor of price changes in commodities, stocks, and bonds – but only central bankers can know what interest rates are about to do. In the particular case of gold, the central bankers, the regulators of financial markets, and certain enormous banks seem to be effective at creating paper gold and manipulating the price of gold at least, and probably silver and other precious metals.

But, what they seem to be best at, what bankers seem to get out of the central banking infestation, is consolidation of the banking industry. In 1913, there were 27,285 banks in the United States, serving a population of 97,225,000. Today, a population over three times as large, about 325 million, is served by fewer than 7,000 banks.

According to the annual report of the Dallas Federal Reserve in 2011, the banking industry had already been consolidated to about 12,600 banks in 1970. At that point in time, the five largest banks in the United States held only 17% of the total financial assets in the country, with a healthy third of assets held by 95 medium-sized banks and almost half of financial assets held by the 12,500 smaller banks. By 2010, the five largest banks controlled about 52% of financial assets, medium-sized banks held about a third, and only 16% of assets were divided among some 5,700 other banks.

The chart is quite clear. Consolidation has been happening, for decades, for the benefit of the very largest banks. Which means that the bank executives who manage those top five banks get enormous salaries, bonuses, and other compensation. In 2013, CEO compensation at the four largest banks rose by 16.7%, for example, compared to 2012. So, for example, in 2013, Citigroup's CEO made $13 million and the CEO of Wells Fargo $22.87 million.

In a free market, where industry consolidation is not government policy, where open competition exists, an executive being paid $22 million a year would be unremarkable – it would simply indicate that the company highly valued that person and that the profits of the company were excellent. But in a managed industry, as heavily regulated and government-controlled as any industry in the world, executive compensation is a result of public policy. So, the consolidation of the financial industry for the direct financial benefit of those who own and operate the largest banks is current public policy. One may naturally ask whether or not it is good public policy.

Whither the World Economy?

It appears clear that the world economy is heading back into a major downturn. Copper, China, and world trade all point in the same direction. Crude oil prices appear to be dropping, again. Companies with substantial exposure to emerging markets are closing at 13-year lows. The sovereign debt crisis, which brought attention in 2009 and 2010 to unsustainable debt levels in Greece, Portugal, Italy, Ireland, and Spain is clearly not over, yet. Many other countries also have unsustainable levels of national debt, and personal and corporate debts are significant issues.

In other words, the global recession that began in late 2008 has not been resolved. The structural issues that were revealed, the housing bubble (and its recent echo), the new student loan bubble, and other financial market shenanigans (credit default swaps, e.g.) paint a picture of dire economic consequences from public and financial industry policy. These are the kinds of situations that have, in the past, resulted in global wars, genocides, and tyranny.

At the same time, there are a number of extremely hopeful developments. People continue to innovate against the powers that seek to centralise, pillage, and destroy people. Technologies continue to be developed that make it possible to generate new industries, new ways of living, new methods for privacy, economic freedom, and individual freedoms of every kind.

One of these new technologies celebrates its seventh birthday this Hallowe'en. In 2008, Satoshi Nakamoto, almost certainly a pseudonym, published "Bitcoin: A Peer-to-Peer Electronic Cash system." Although bitcoin clearly has many difficulties, including an enormous blockchain (now approaching 40 gigabytes), it also performs something on the order of $22 billion a year in transactions, based on the $60 million a day in transaction volume of recent weeks. Bitcoin's limitations in the areas of user privacy and freedom from government regulation are being addressed by other innovators.

Since April 2014, I've been working with the technology team at SilentVault.com. I continue to believe that SilentVault provides privacy, anonymity, and a secure communications platform, for users of Bitcoin, Litecoin, and silver. People deserve to have money that is free from censorship.

What You Can Do

Free markets are inherently cooperative systems. That may sound strange, since we are told, repeatedly, that free markets depend upon competition. It is competitive pressures that reduce prices, spur innovation, and encourage the development of alternatives. However, every free market must do one thing in order to be a free market: it must find market clearing prices.

If people are free to find market clearing prices, they are able to produce, sell, and buy, without oversight or control. Tyranny, as Hayek noted in The Road to Serfdom, always begins with interventions to attempt to control market prices. The central control over interest rates is a clear example of incipient tyranny. And how are market clearing prices found? Through the cooperation of buyers and sellers to discover prices.

To be free you need understanding. Vigilance is excellent, if you know what to look for. So, to be more free, you may wish to learn more.

You know, for example, that you are being watched. Domestic surveillance systems, even ones never authorised by the USAPATRIOT act, have been deployed to monitor essentially all of your communications. Therefore, you should learn how to protect your privacy.

Learn, for example, about open source computer software and operating systems like Linux. Open source means that you can know what your software is doing, and so can people who are expert in writing software. Open source software allows you to protect your data, your privacy, and, therefore, your freedom, better than proprietary software which does whatever someone else wants it to do, whether you think that's wise or not.

Learn about cryptography. You don't have to be able to find the prime number factors in a large number to be able to use encryption for your data. You simply have to know how to work with people who have already developed encrypted root hard drives, e-mail encryption, and alternative communications technologies like XMPP (eXtensible Messaging and Presence Protocol). In general, you only need to know what to look for, what to ask for, and what to install in order to have excellent results. You'll want to spend quite a bit of time looking at the weaknesses in The Onion Router (TOR) and the advantages of a private virtual privacy network (VPN) approach to online activities.

You may also wish to reduce your footprint. You might not be well off telling everyone about every thing you are doing every day. For example, every post you make to Facebook, or to Twitter, or wherever, is a record, almost certainly a permanent record, of what you are saying about what you think, what you do, what you want. Given that your friends and family are not the only ones watching, reading, and storing this information, you might choose not to create a Facebook account or choose not to log in very often, or not at all.

What the future will actually look like, I don't think anyone currently knows. But it seems very logical to suppose that the experiment in gigantic governments with unlimited powers, dictatorial tendencies, controlled by mass murdering psychopaths which was emphasised in the 19th Century through the work, wars, and policies of nationalist socialists like Lincoln and Bismark, in the 20th Century by internationalist socialists like Lenin, Stalin, Mao, and Pol Pot, and in the 21st Century by “kinder gentler” socialists like Bush and Obama has come to its inevitable conclusions. Central bankers no longer have the power to sustain the kleptocracy.

Whatever it brings, you and I will see the future, and in some measure, choose to shape it. I believe you should seek to keep in touch with other people in the freedom community. I think Liberty.me is one of the very finest sites for that purpose. And, to update people on the work that I've begun with some of my closest friends, I've started a Twitter account called @digitalcashally.

I would love to hear more about what you think. Together, I believe we can bring about a renaissance of freedom, innovation, and human achievement.

A given user with Silent Bitcoin in their wallet could prove their ownership of Silent Bitcoin using their signed vouchers, of course. But, if the SilentVault servers are down, those signed vouchers would be inaccessible.

So, you have a group of anonymous persons with no way to prove what they owned and probably no one to whom to prove it, anyway.

The same situation pertains to voucher issuers. Although we are careful about who gets to issue vouchers, and do our best to be diligent in this regard, it is a fact that any issuer could abscond with everybody's money at any time. That's true because the issuers have physical control of the assets, whether they are bitcoins, gold, bank money, cash dollars, or whatever. It remains possible that an issuer could be caught and punished after the fact if they did so, though there are limitations to that possibility, too.

In being asked to prove that one cannot steal value from our users, we
are asked to prove a negative. It is not possible to prove a negative;
that's a law of logic.

Of course, the way to approach such questions is to counter with the question, "How is this situation different from any other case where value is not in the personal custody of the owner?"

For example, bank safety deposit boxes were entered by government agents after the Franklin Roosevelt administration declared individual ownership of gold by Americans to be illegal in the 1930s. Bank accounts are routinely seized through Internal Revenue Service "bank levy" of accounts. Real estate and other physical assets are seized through civil asset forfeiture processes every day. People have no control over these situations, yet they are clearly comfortable placing valuable items and documents in bank safety deposit boxes, they are clearly comfortable keeping money in bank accounts, they are clearly comfortable having real estate and other assets registered with the state.

The SilentVault system allows individual users to hold and exchange assets under conditions of much greater privacy. Greater privacy does not eliminate risks of dishonesty. It does dramatically reduce risks related to force majeure. We use the best technology available to make it hard to find the servers that operate our wallet technology, and to make it difficult to brute force attack the access to those wallets.

It is possible for a person to eliminate all risks of dishonesty by others by simply holding their assets in their own hands, but then they have the risk of being robbed. And, it is much more impractical to engage in trade and commerce if you are holding onto physical assets for everything. Any system of trade and commerce implies that there are parties who have to be trusted, whether those parties are in government agencies, banking enterprises with state licences, or other organisations. Even in the case of holding all your assets in physical form in your own possession requires that you trust that you have the ability to defend those assets against whatever group comes to take them
away. Trust is involved, no matter what you do.

While it is impossible to eliminate all risks, it is possible to look at the economic advantages and incentives that motivate SilentVault and Issuers to serve users of our system according to the terms of use agreements on our site. SilentVault and the Issuers stand to make a great deal more money by serving users effectively and honestly over time because doing so causes more economic activity to take place in our system and with the issued currencies. At any given moment, the amount to be gained by absconding with all the funds is less than the net present value of all future economic activity that is due and payable from transaction processing fees in the event that users are treated honestly.

Risks related to tracking the user's identity are mitigated by anonymity measures. Risks related to trusting the vendor are not. There is a price to be paid for meaningful anonymity, and that price is reflected in the transaction fees as well as in the risk the user takes in keeping assets in an anonymous system.

We do have multiple issuers to compartmentalise the risks for a given currency issuer. We do make an effort to know the issuer organisation in each case so we have some idea of who is issuing the currency and whether they are trustworthy. We also have security measures that help protect our users from loss due to technical failure, hacking, phishing, or other attacks.

However, if a user doesn't want to trust the Silent Bitcoin Trust, they do not have to do so. At any moment, a given user can transfer all their Silent Bitcoin out of the system and into Bitcoin wallet addressesof their choice. So, users who are sceptical are free to keep zero balances in their wallets.

No system can be free from all forms of risk. If you are going to get anything done, you end up trusting someone else. You can control which types of risk you take, how much value you embed in each system, you can spread risks, insure against them, and mitigate them in various ways. But risk is real. It is part of the world.

The clever work of Blythe Masters and the crew at JP Morgan Chase to package risks and issue credit default swaps to sovereign central banks in Europe in the late 1990s didn't eliminate those risks; all that cleverness simply shifted risks, brought about a sovereign debt crisis, and imploded in 2008-9 with the global financial crisis that seems to have required banks like JP Morgan Chase to be bailed out with taxpayer resources. In other words, even extraordinarily clever people using the generosities of multiple government agencies cannot eliminate risk from the world of trade and commerce. Attempting to do so can have dramatic results, cost trillions of dollars, and ruin tens of millions of lives, but it cannot eliminate risk.

What you do not want is to have your private information escape from your control. And, criminal hackers do want that private info.

So, you should never, ever click on any link that is sent to you in e-mail by an unknown person. You should probably use AdBlocker and other software to limit how many links you see on browsing the web. You should not click on everything you see on the web, either. If you cannot see the destination URL, or if it looks strange, or if it looks like it would take you somewhere unrelated to the graphic or text of the link, don't click on it. Perhaps copy it to your clipboard and paste it into a search window to see what you can find out about it.

But, you may not be the only person in your home. Guests, children, people across the way, and in an office situation any number of people, vendors, customers, interns, or visitors may be using your wireless router to connect their devices to the Internet. Tell them all you want about not clicking on links they get in e-mail, or weird links on the web, and they will still click. Either they are oblivious to the dangers, or they don't care, or the allure of the graphic or text of the link is so great they cannot resist.

Ok, so what happens if one of these links gets clicked? In a recent situation reported at Krebs on Security, the destination page executes some scripts that hack the wireless routers available to the device (laptop, tablet, cell phone) reaching the site from the clicked link. Those scripts use the known factory default settings for username and password to force the wireless router to set the criminal hackers in charge of domain name service (DNS).

They use their DNS server for secure links to sites they know would ask for your credit card info or other private data. The criminals know enough to set Google's DNS server to feed your device all other traffic, so you don't become suspicious, or report your troubles to a competent computer tech.

Using their DNS server and their web servers, the criminal hackers send your secure traffic not to the actual sites you want to buy from, but to look-alike sites which then harvest all the credit card or other data. And then you get a huge credit card bill, and your howls of lament are heard all over your neighbourhood.

In my essay "Central Security" you'll find a number of tips about ways to disable scripts, block ads, and protect yourself from cookies and other stuff used to compromise your privacy. Obviously, if you are blocking scripts, and only allowing those scripts from sites and services you trust, you are doing what you can to limit even the bad results that obtain if you click on a link sent to you in e-mail by an unknown person.

But, if your wireless router is open to other users, you cannot prevent them from leaving their web browser open to running scripts. And you cannot really prevent them from clicking on links, either. So, although the attack in question seems to have originated in and been isolated to Brazil, there is no reason to suppose it won't show up elsewhere.

That should mean, to the very careful user, that hotels and restaurants with open or easy-to-access (just ask your waiter or the front desk clerk for the info) wireless routers may become vulnerable. If you are tech-in-charge of such a site, you should safeguard the router by changing the default access username and password, of course. And don't privilege the random usernames that you'll be giving out to customers. But if you aren't the tech in charge, you should be very careful about trusting open wireless networks.

The privacy you protect may be your own.

SilentVault

One of the biggest concerns with Bitcoin is that it has serious privacy issues. Bitcoin is the most transparent currency ever created. If you don’t take steps to protect your privacy when using Bitcoin, anyone anywhere can view your entire transaction history. SilentVault offers a solution to the Bitcoin privacy issue. It also facilitates trade in other currencies, including gold and silver.

SilentVault is a wallet application that allows users to bring in cryptocurrencies (currently Bitcoin and Litecoin), then to spend them “silently,” or “off chain” (not recorded on the transparent ledger/blockchain).

What you hold and trade with your SilentVault wallet are vouchers representing assets, not the assets themselves. While this is obvious for gold or silver, which are not digital assets, the distinction is important for Bitcoin. The wallet contains vouchers, which are cryptographically signed, digital bearer certificates that are analogous to coins.

These vouchers can be traded and exchanged with other SilentVault wallet users privately, securely, and in a peer-to-peer fashion. The system can also be used as an exchange, as you can trade vouchers backed by different assets (bitcoin, gold, silver, etc.) with fellow users.

SilentVault systems are built using privacy and security-focused software. All communications are made within private servers with no public-facing IP addresses. End-to-end encryption is used so that even SilentVault can’t monitor chats or view the contents of users’ wallets.

SilentVault is available for use today.

A Free-Man’s Take is written by adventure capitalist, author, and freedom advocate Paul Rosenberg. You can get much more from Paul in his unique monthly newsletter, Free-Man’s Perspective.