Babylon's Bankers

CRYPTO-CORRUPTION

The more I hear about crypto-currencies, the more I don't like them. In fact, I tend to get very cautious when it becomes more and more evident that a certain crowd of banking Vipers from Venice start pushing how wonderful it all is. This after all is the same group that won't say how much gold (or for that matter, tungsten) there is, which didn't want to come clean on what they were going to do with all that bailout money, and now which look to be pushing crypto-currencies at the same time they're pushing for a constitutional convention. If that doesn't tell you something, I don't know what will, because, yes, I think the two are deeply connected.

I think of them only as occasions for an already run-amok financial oligarchy in the City and on Wall Street to take the final plunge into absolute theft, the perfection of their perfect possession by the great demon fiat pecuniam debitum, the last gasp of crony finance crapitalism.

Why? Well, all along I've been warning about the notorious insecurity of cyber-systems, and crypto-currencies always struck me rather like putting one's money in a bank where the vault was simply an ordinary wooden door to a clock, with an ordinary turnkey lock. One might was well put a sign on the closet that reads "free money here. All welcome."

Well, it was bound to happen sooner or later, and it finally did, according to this story shared by Mr. D.E.:

$300 Million In Crypto Currency Lost FOREVER Thanks To A Bug In A Digital Wallet

Now, get this: this lost $300 million occurred by accident:

$300 million worth of the cryptocurrency Ethereum has been almost definitely lost forever.  The losing of the currency was accidental and due to a bug in a digital wallet.

The Ethereum cryptocurrency has been lost after a series of bugs in a popular digital wallet service led one curious developer accidentally taking control of and then locking up the funds, according to reports.

The user, “devops199”, triggered the flaw completely accidentally. When they realized that they had taken control of the ether of other, they attempted to undo the damage by deleting the code which had transferred ownership of the funds. Rather than returning the money, however, the program simply locked all the funds in those multisignature wallets permanently, with no way to access them. “This means that currently no funds can be moved out of the multi-sig wallets,” Parity says in a security advisory.

Unlike most cryptocurrency hacks, however, the money wasn’t deliberately taken: it was effectively destroyed by accident. According to the Daily Mail, the lost money was in the form of Ether, the tradable currency that fuels the Ethereum distributed app platform, and was kept in digital multi-signature wallets built by a developer called Parity. These wallets require more than one user to enter their key before funds can be transferred.

Now, I actually can buy the accident story here, but imagine showing up at your bank one day and being told "Due to a computer error, we lost your money, and you can never have it back." In fact, a convenient way to steal money would be to simply "lose it by accident" and then destroy all records of it.

But that can't happen, this is blockchain, it has a distributed ledger, all sorts of safeguards. And besides, this was etherium, bitcoin is a lot safer.

Well, maybe not...

Meet the Man Who Will Hack Your Long-Lost Bitcoin Wallet for Money

Of course, "Dave Bitcoin" is providing a service to bitcoin customers who've lost their passwords. But one can imagine a nice big shiny bank hiring its own version of such a service. Get enough people involved, and then, when the pile of virtual money is big enough...

Now why am I bothering you with all of this?

Well, for one thing, it's because the idea of a "distributed ledger" isn't new at all. It's mediaeval; think "Templars" here folks (and thanks to Mr. H.B. for sharing this article):

How blockchain technology has medieval roots

Now, what's interesting about this article is that it manages to point out all sorts of examples of mediaeval analogue versions of blackchain, without once mentioning that the biggest user (and abuser) of the whole idea of "tokens" as representations of objects was precisely the Templar order. And I find this omission of mention of the order in an article not only to be intensely "curious," but perhaps deliberate, and it's that "possibly deliberate" and curious omission that forms the heart of my high octane speculation today. We'll get back to that.

But first, exactly how was the Templar order using a crude analogue form of blockchain and distributed ledgers? Very simply: deposits made at one Temple could be extracted at another Temple hundreds, if not thousands of miles, away.  Deposit in England, extract in Jerusalem, or vice versa. How? Because the Templars used essentially an encoded token, a physical "chit" indicating the deposit had been made and that there was a liability demand on the books at any Templar preceptory. The ledger is thus distributed, and an analogue "security" system, based on encoded chits to ensure authenticity of the claim when presented, is in play. One can see what happens: soon the chit becomes its own medium of exchange along with the gold and silver coins it represents. And it's when that happens that the opportunities for fraud multiply like rabbits.

We're not at the end of the story, however, because, of course, the Templars were allied to Venice (which I suspect is the hidden story behind the real origins of double-entry accounting, usually credited to the Venetians), the master bullion manipulators of the Middle Ages (and yes, I strongly suspect that alliance is not coincidental and I argued this case in The Financial Vipers of Venice).  When  King Philippe le Bel of France struck his famous coordinated blow at the Templars in order to confiscate their treasure - that, at least, is the public narrative, though as I've pointed out in my books, there are problems with it - he found... nothing. The preceptories were empty, and the Templar fleet at La Rochelle had "mysteriously and coincidentally" sailed for... somewhere.

And with that, the first analogue blockchain system, along with its controlling financial oligarchs, "disappeared" into the woodwork of European history along with all its fabled treasure. So what's my high octane speculation of the day? It's simply this: you're looking at the recreation of the mediaeval banking orders, which were, incidentally, also private, "corporate" military industrial complexes and crusading orders...

See you on the flip side...

 

24 thoughts on “CRYPTO-CORRUPTION”

  1. There is no such thing as a “secure” digital system. Everything is in such systems represented by codes of 1 and 0s with no context relating to actual reality, and any file which can be made, can be copied, corrupted, or faked. Anything humans create, they can corrupt. Period.

    The degree of difficulty of faking is directly proportional to the degree of difficulty in protecting the system.

    In order to be reliable, such a system must also be open to analysis and tracking. But, if it is open to analysis and tracking, it is also open to invasion and corruption. It is an ever increasing spiral.

    Even biometrics are easily hacked, because once the data is in a digital form, it can be replicated, corrupted, and/or replaced as easily as any digital file, without any trace of the activity (and yes, there are systems that log all changes, but those logs themselves are digital files, and are subject to the exact same safety issues as the original files – I’m sure there are programs which can copy and fake file hashes, especially in this day of AI and extremely powerful computers available to virtually everyone).

    The best, most safe system, is one which is decentralized, with limited physical access to hardware and multiple backups with multiple safeguards at multiple locations. Change logs, hashes, and other such safeguards must also be stored on write once, read only media (such as optical disc), which are as resistant as possible to corruption, with multiple copies in different physical locations. The request file safety measure must be sent into such a system, but data other than accept/reject, must never go out. Any such relatively secure system would still have holes and vulnerabilities. Still, any file of any kind, when transported for verification, will be subject to corruption and copying in transit.

    Even if one could create the perfectly protected system, any system will always be vulnerable to human corruption, although one can make it difficult for any but the most extensive, well-funded operations to penetrate (which is already common today).

    The only truly rational exchange medium is energy itself, which is nearly impossible to fake. What is required is a decent mechanism of storage and transfer (and creation?). Even that would be subject to physical theft, errors/fraud in reading the energy amounts, and any system registering such “accounts” would be subject to all the above mentioned problems.

    Although, given the content of another post this weekend, we may be seeing the beginning of the end of commerce a we know it, making much of this a moot point in the long run.

    If one can access the field of consciousness itself, there is no hiding, secrecy, or fraud. Everything will leave indelible traces in the fabric of the Universe itself, and be subject to little, if any, possible fraud.

    And, if one can access this field, one might also access the template engines of physical matter itself, and create whatever one wants. Problem solved (and more new problems created).

    The race to access that level of existence is on.

  2. I guess everyone takes power being on for granted…never hear that brought up in this discussion…ever…seriously? Ok…

    Better point – what value does this process provide to any human? its artificial, its MORE artificial than anything we’ve pulled out of the ground in the last few thousand years, which is still around, just consolidated b/c a blood curse was placed upon it, or i suppose no one pays attention to the wizards telling the tales from school…

    All computer mining is an artificial constructed reality, period – it adds zero value to the economy in that its ditch digging and refilling the hole ie solving math problems…thats the value im sure some will say…

    Its literally just a number in a black mirror and greed has everyone entranced with “getting theirs” – its just another pyramid scheme writ large…

    I trust in nature and the issue with Wo/Man is distrusting our nature and that nature found in the other living mirrors ie, Wo/Man…putting it into an artificial constructed digital reality is not the answer but it will be a step back to nature as we suffer through this mass myopia…

    ps i studied money since childhood…and i walked away from finance/banking in college when i discovered what money really was…

    1. I love your wo/man interjection. Although I call myself “just a whoaman” (I ride horses, too), it is sad that we all can distinguish ourselves simply as human and go on from there. It is likely that this whole change in our financial reality means that we are being set up for accepting the end of “humanity as we know it” for the digital doppelgänger?

      Mass myopia. Absolutely.

      Great comment.

  3. JPF: “…the Templar fleet at La Rochelle had ‘mysteriously and coincidentally’ sailed for… somewhere.”

    I’m pretty sure they sailed for the Orkney Islands, north of Scotland. Back in the mid-90s, I made a couple of trips to the Orkneys. On the main island, there is a small village/town that functions as the local ‘capital’. It was a tiny fishing village, basically, in the 1300s. In the center of that village, at around that time, was constructed a stone-built Cathedral, probably one-third Notre Dame scale. Impossibly out-of-scale for a small fishing village of that time, but reasonable for a ‘transplanted’ Templar Order with plenty of funding and personnel. With a good, out-of-the-way harbor…

    I went inside that Cathedral. Huge and impressive. Along the sides and sidewalls, there are innumerable old ‘gravestones’, nearly all festooned with Templar/Masonic symbols. In a small fishing village in the middle of ‘nowhere’. Curious.

    Again, I’m pretty sure where the Templar fleet previously at La Rochelle subsequently anchored…

    (On the crypto-currencies, these are obviously rigged with backdoors from the outset, either to ‘track’ users and/or to ‘void’ them whenever wanted. Probably by a coalition between alphabet agencies and banksters. Caveat emptor…)

  4. Integrity? that is an invisible ..you try to quantify this stuff ? if you think you can only cut a cake vertically you got a problem…throwing sand in the eyes of the observer is one hell of a thing..so complex? it can’t be known? what a control paradigm that is?

      1. Robert Barricklow

        So, just like “they”
        manipulate the price discovery of precious metals/gold

        “they’re”trying to do the same w/bitcoin.

  5. This loss took place on an online wallet service. No one has ever advocated that one should keep substantial holdings online (except perhaps the creators of the online service). In this case, the irony was that the loss only affected those who had opted for additional security (2FA? I read about it couple days ago and don’t recall). I think the Parity Wallet had problems previously as well.

  6. Jake has made quite a good summary, though it’s hard to say if or to what extent the alphabet agencies had a hand in promoting blockchain for monetary purposes (in the two functions of payments transfer and store of value). But perhaps this is not so relevant, and for years a considerable part of the planet’s “developed societies” have been using digital currencies provided by your friendly bankster; and blockchain seems to have greater transparency and above all lower costs than ANY central banking scheme. And zero interest.
    The mention of the middle ages is interesting, though – barring the existence of “ancient technology” like some precursor of radio or telegraph (or even scrying?), any reconciling of ledger entries, with the carrying of coded messages between distant places, involved long intervals of time. And then those early “distributed ledgers” were de facto secret, and not open to tens of thousands of people who know how to or learn to read the codes, and debate openly about the security of such codes, as is possible today. This slow communication and secrecy fostered the creation of the so-called reserve banking system of the Templars with its extremely high interest rates.

    1. Not just bankster but the big four auditors too. I’d warrant they are if not more parasitical than the banksters.

  7. Agenda 2030, cashless economies, and constitutional conventions are all about the ultimate control of the entire planets resources and the elimination of your rights; particularly your rights to free speech, to bear arms, the sovereign right to print debt free money, and where you are allowed to live and travel. The goal is to own it all by hook or crook.

  8. Ok, I just had to register to address your concerns in crypto-currencies.
    Firstly, start with the Bitcoin whitepaper that explains the mathematical principles governing the mechanics (so to speak) of that (particular) blockchain. https://bitcoin.org/bitcoin.pdf
    This paper outlines the method to build a ‘trust-less’ (my words), secure, distributed, consensus driven, peer to peer system for the transfer of value (information to the pedants), in which the sender can prove their identity and the receiver can be assured that the transaction is what it purports to be, as well as solving the so called ‘double-spend’ issue. Oh, and it is open source. Very good, but what does that all mean?
    Let me address the terms listed above:
    -Secure: The cryptography standards used by Bitcoin mean that you would need an awesome amount of computer power to brute force hack in to a single wallet. Given that many of the ‘live’ ones are expected to be empty or of very low values, this kind of computer use on a mass scale makes no sense whatsoever. But, lets assume someone with NSA level computers and no sense does want to hack wallets, well they will probably bust your wallet open in a few days to a few weeks, given estimates on the strength of SHA-256. An important distinction to make at this time is that this is end point security, not the network, which they can’t alter because of its
    -Distributed (nature): The blockchain is a single ledger…let that seep in…that is replicated on the thousands of computers, called nodes, that make up the network (blockchain). When you make a transaction, you broadcast out to the network, where a random lucky miner, will check that you have the bitcoin you say you have, and that the recipient address matches the one given, then write the transaction to the current block with a timestamp. Which brings us to -Consensus: The ‘solved’ block is broadcast simultaneously to multiple nodes, which periodically synchronise, ensuring that each copy on the node (database of transactions) is identical. So to hack the blockchain, you would need to have enough resources to modify the blocks on the majority of nodes before the synchronisation occurs (every 10 minutes for Bitcoin). Good luck with that.
    -Distributed: Anyone can run a node on their home computer, and some wallets do by default, which anyone across the world can connect to regardless of national firewalls making the network also resilient. If you could control a majority of nodes, you could force changes to the database, but this would likely result in a ‘fork’ which is a split in the network such as happened recently to Bitcoin Core and Bitcoin Cash, resulting in the creation of a new and distinct crypto-currency. Perhaps more realistically, you could attempt to go for control via monopolisation of the miners, which are really the servers that power the network, and again you need tons of resources as this activity is going on all around the planet (certainly you need the Chinese in the plan). The result would be the same in that it would cause a fork, unless the ‘community’ (developers and miners) agrees as a whole to make a suggested change. The ‘community’ never intentionally takes decisions likely to reduce the value of their blockchain. Again that consensus thing.
    -Peer to peer: This one should be obvious. I can send my bitcoin to anyone (or thing for that matter) whose public key (address) I know. There are no middlemen, no central bankers, no customs, no road tolls, just value exchanged directly between two parties. This also helps address the accusation that the bitcoin network energy wasteful, well just how much energy let alone value could be saved by eliminating these ‘men in the middle’ on a global basis?
    -Open source: This one is very important, because not all blockchains are open source. Being open source, I can download the code and inspect it back doors. Sure, there might still be errors in the code (Parity example), common to all software products, but it is not that difficult to skim through code to see what the functions called/executed accomplish. I can also be assured that those with higher coding skills than me are also looking at the same code and are not shouting out warnings from the roof tops.
    -Trust-less: The above explains (I hope) how Bitcoin overcomes many of the trust issues we have with the ‘legacy’ financial system. I can trust the community built/maintained system more than I can trust my bank’s which is opaque. I can trust distributed enforced auditing of the records more than I can whatever goes on behind any bank’s doors. I can trust that the blockchain is orders of magnitude more resistant to tampering than any banking IT structure (and don’t go all quantum computer on me here, which are analogue by design). I can trust the network will always serve me when I have an internet connection. Ultimately, I can trust the math that underpins the whole system, more than I could any third party.
    Ok, there are loads more benefits too (maybe another time) and there are some legitimate concerns too (also another time), but following in JPs tradition, I’ll tell you what I think is right out on the end of my twig:
    The NSA were party to the creation of Bitcoin, and probably some elements of the cabal too. Everyone has known for a long time that fiat is dying, and the people would only accept a new system that enforced trust: Bitcoin was conceived as the ‘perfect’ currency, so good in fact that nothing else would ever be needed. At least this is how I think it was presented to TPTB. But how would they maintain control? The correct question is where is the million Bitcoin Satoshi supposedly keeps? That kind of advantage would maintain a lot of control.
    The designers of Bitcoin understood the real potential of the technology, because they were expert computer system designers. Those authorising the deployment did not, because they were not. You all here are my proof that having some of the best minds around is not a guarantee of understanding a system or its potential.
    Well, if you liked that post, I’ll come back some other time and explain just how cool for humanity this technology is going to be.

    1. Please excuse the 2 or 3 ommited and added words that make no sense. I thought I had re-read and corrected them out before posting

    2. Jake, thank you for your insights. You craft a fine set of details that help frame the technology for us all.

      There are still those of us who are in the software industry writing code who see your concerns clearly–yet we also know the vulnerabilities of digital systems in general. I see the same potential for fraud and abuse in this system as in any other–but with far more vulnerabilities. While in NYC on 9/11 I saw what happened to BCBS of NY when the towers collapsed. In spite of one of the best IT backup strategies money can buy, their ability to operate was impaired enough to create some major concern. I recently had a telecommunications snaffu with my landline and cellular voice communications lines that has yet to be admitted publicly by the company. Digital systems aren’t without their flaws, and there is genuine historical precedence here. We’re not talking paranoia that is unreasonable for the technology. Stuff happens. Some of us are fully aware of the advantages of the technology but are not naive to dismiss it’s shortcomings. I’m old enough to have seen today’s miracles become tomorrow’s blunders–with a parade of people touting it’s praises lying prostrate in failure’s wake.

      1. Thanks. I am having quite a lot of fun with this at the moment.
        I met my old university professor this week and one of her PhD students for a couple of hours and a coffee to talk about how blockchain could help with food safety. Watching the barely disguised bordem transform to avid attention after 30 minutes was pretty cool.
        In a similar vein, my PhD cousin, who works in a global IT company designing large scale systems at a conceptual scale, and has some blockchain experience, still cannot see utility for the blockchain other than solving ‘double spend’.
        I am not saying blockchain is a panacea for every problem, it is not. However, I have a question for anyone who thinks we should run a mile from it…do you have a better idea before fiat crashes and we are left with noting but Mad Max? I’d love to hear about it!

        1. Unfortunately, I do not. Even if I did and patented the idea it would be stolen from me.

          I am still not sure how Blockchain can help solve the problem of fiat currecy either. In fact it smells like fiat currency par excellence. The current fiat currency was once backed iby tangible assets and look what happened. I have come to believe the problem is hidden within the financial system itself.

    3. Just want to throw my own two cents in. I generally have problems with your analyses of Internet issues, Doctor, because I believe the cost of entry for disruptive behaviors is lower than you seem to. Certainly TPTB can behave as badly as they are often said to, but the real issue for me can be shown by a comparison to underground media.

      There is a very long list of progressive voices. However much you disagree with them people like Oscar Brand, Phil Ochs, Woody Guthrie, the Weavers and yes, Burl Ives, have been very influential. In comics in the sixties (again, still in the underground) you had R. Crumb, Gilbert Shelton, Bobby London who helped make National Lampoon, Gene Deitch’s son Kim and Trina Robbins, who remade Wonder Woman into the feminist icon she is today.

      Yes a lot of this stuff is being not talked about -while other stuff has been appropriated by the “mainstream” and changed – but the Simpsons and futurama by Matt Groening – a student and descendent of these artists – have at times been genuinely subversive. In other words the alternative is real.

      What those of us with a background in both see in technology is a culture and counterculture. Yes TPTB are as bad as you say – but they have a long history of being forced to parasitic measures. Take China. There was that Chinese director who explained that to do his job he needed access to materials which censorship forced him to use piracy to get. And they used to complain about the Linux kernel being developed by a small group of European American and Canadian developers. When a Chinese became an authorized developer he was lured home — where he had to announce he was giving it up because he couldn’t fit the Open Source work model into the one back home.

      Yeah there isn’t MUCH of a future in this sort of thing but people are being born all the time and so are the ideas.

      That is why block chain is different from ebooks (where I agree with you, Doctor). People are doing what you say they are doing. Can they succeed? Only to the point that they do let others run blockchains in the wild – because there is NOT a way to sustain controlled blockchains and there won’t be for a while. Again, the subversion is parasitic and to the extent it strangles the host without allowing for replacement, it destroys value, actively, rather than appropriating it.

    4. While I’m at it, let’s revisit the Y2K problem. I was starting my programming career then. Every system I designed addressed the issue correctly–but many legacy systems did not. There was a lot of hyperbole about that event that clearly was of bovine excrement variety. Most systems had fixes or work-arounds. Those that didn’t required upgrades. A few had to be totally replaced. I am reminded of those people, like myself, who fully believed these problems would be addressed competently and soberly. Still, some people lost money. Some of it was due to systems that DID fail. A large portion of the money was spent not in the technology and manpower to correct it. Your arguments do remind of the Y2K people whose opinions were totally optimistic–and found themselves occasionally having to apologize for monies lost when things didn’t go as well as planned. I was fortunate, whereas others were not.

  9. The Money Lenders just want to leave no stone unturned. If there’s money to be made — or stolen or otherwise finagled– they’re in like Flynn … or more appropriately, Weinstein.

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