Monthly Archives: June 2017

   To our Podcasts

Civilization withdrawing from the US and what to do about it..

Economics is a theoretical framework that is used to justify  behaviour in banking and government. It has some nasty properties, like for instance its neglect of the finite nature of resources. This has consequences when its rules dominate 100%, because economics only works if there is untapped resources that regenerate themselves somehow.

In the US we see the effects of economic thought in action. In principle there is not so much wrong with economics. Its general principle is that if there is demand it will create supply, and so in the end all problems will be solved as they emerge. However economics in the US has been infected with a parasite, a resource that has injected itself in almost every transaction, which is fossil fuels. You can’t buy anything at the hardware store f.i. without driving there (spending fossil fuels), and the stuff you buy being part plastic, supplied from some far away place, requires fossil fuels to come into existence and arrive where you buy it. This is generally the case with all stuff people need.

Fossil fuels are used in almost every transaction you make, this is a parasitic novelty of the last 70 years or so

According to the rules of economics a citizen/consumer lives in quite a barren environment, where he/she needs a job to afford what he/she buys. A person is not motivated to have more skills, and in many cases he/she doesn’t have any except some that maybe use a lot of fossil fuels, like eating meat and driving a quad or senseless diesel truck. It doesn’t matter if you are a lean hipster in the city that doesn’t sustain itself but for the fossil fuels you use, or a fat redneck in a bungalow. The economy has made it so everything you do has a fossil fuel cost, even your job.

The problem with this is simple : The consumer is not supposed to be smart. The (as we call it) destructive endpoint of fossil fuel generated products, is not supposed to distort the market or compete in it unless this is his/her job. With automation we know we don’t need a lot of smart people or a lot of physical labour (in fact we do, but it has to be at the end of a fossil fuel based logistics chain, which places it outside the US). The economy thus promotes the emergence of bland, uninterested, fatalistic people who will scream to get a big mac. Economics in the US has been too successfull in disempowering individuals and as we speak this success is still growing, as f.i. cash is removed and so economic considerations as promoted by the banks, and their ability to penalize who don’t conform start dominating behaviour completely.

We have two actors in this process as you can see above, one is fossil fuels, the other is the banks. Together they exploit whatever spontaeous talent emerges, and monetize everything to their own benefit, even education, health care etc. Why the banks and fossil fuels, why are banks so important in this process? Because they have almost nothing to wield their power. The only thing banks have is credit, which is nothing but which becomes important because people can use it to buy fossil fuels. Credit is carboncredit. Without it banks could not function one day the way they do today.

A civilization is a large community that can sustain itself

Try to do any transaction with your dollars, but make a rule that nobody can buy fossil fuels with them anymore. You will immediately see that this makes your money all but worthless. This should be a grave worry to you because YOU CAN NOT MAKE FOSSIL FUELS. Sorry for the caps, but reread the last few sentences again and again until you feel there is a problem. All your transactions depend on something you can not make, that your neighbour can not make, that nobody is born with the talent to make.

The above is a slight exaggeration, some may be organic biofuel farmers or have some rare property of land that will generate its own energy, or you may own a wind turbine that has been payed off in full. You exist, but you don’t by far determine what happens to your energy yet, you sell it into the same system that sells fossil fuels, for dollars (in the US). I am writing about the people who do need to drive to a supermarket and buy food, that does not own land. This is the super vast majority of ‘consumers’.

Spanish sold their siesta

The way economics works is that it does its thing (create huge factories, mines etc.), then if too many people suffer they have to revolt. Then if banks realize they can’t have their carboncredit game with all that suffering and revolting, some payoff is made (social safety net) so people will return to their workstations. Then economic forces will start eroding those hardfought rights because individual entrepeneurs find themselves in hell under pressure of banks who supply their credit. This credit makes the market big and adversaries close to equal, because banks will extend credit to all parties. Warning, capslock comming : ALL BANKS COOPERATE IN THIS GAME. IT IS THEIR ONLY GAME.

The EU has had more local autonomy as countries in it competed, than the US. Therefore banks have had less grip on it and the social safetynet has been stronger. That and we don’t like to make people desperate in the EU. Still we face the same threat of economics.

It used to be different. People would be more sovereign, farmers would own their land, governments would own thier countries, but all has fallen under the control of the carbon/credit system, banks extending credit which is used to buy fossil fuels. Even the fossil fuel companies! This has lead to a less resilience on a local scale, less expertise and less inspiration in a large part of society. Whole generations are taught that if you only perform and behave interestingly you have done your job, and you are a winner if you make others follow your example (place products on your instagram).

Banks oppose renewables (even though they tell you they don’t) because they make banks obsolete and lower cost of everything in society

Now the above should make it easy to understand that as some in society feel entitled to more than others, the credit that is going around in the economy will accrue with some that are more skillfull in persuading you to share unequally (which is a natural thing). Melania Trump is beautifull, therefore many are motivated to share with her without getting anything back. Just the privilige is enough. Of course this is exactly what kept her ancestors alive and beautifyll. It’s a lucky draw this aspect of beauty, and normally it would not hurt to let beauty lead. Ivanka is a better example than Melania, because Melania doesn’t seem to sell anything, which is she doesn’t seem to create much opportunity for this unequal exchange. Ivanka does. She sells with her appearance and presentation. It doesn’t do much harm really, but it is how the economy robs so  many every day, by renting some face to create unequal exchanges. This makes society unequal.

Beauty leads. Make sure  you find the right things beautifull

A pretty face is like a monopoly, our mind works with ideals, it finds the ideal thing of any category beautifull because it doesn’t have to spend a lot of energy to percieve it. In nature that would mean that if our brain adjust to it (which takes a few weeks, even though our brian has evolved to do so), we will find nature beautifull. The more you get explosed to something, the more beautifull you think it is, because your brain knows it, it is easy to process. Your brain being naieve will think “This happens a lot, better like it” because in a natural environment that would not hurt you, or you would not be around! In our economy with its marketing processes, it can mean you get hurt for sure. Just today California declared Roundup (Glyphosate) a carcinogen. Monsanto sold it to millions of people to use in their garden. It is in much of US drinking water. It gets blown into the air, it persists and kills insects, birds, cats, mouses, lizards and now also : people. This is because Monsanto operates in the carboncredit economy, and you have been taught through repetition (and lies) that this is a thing to accept.

Cruelty is a result of uneven distribution of skills and power in society

Sometimes people need to cooperat to match the skills and power of a cruel agent

Now if you don’t like this because for instance you are aware of the global heat accumulation happening (climate change) and are scared for your children or grandchildren, you may want to do something to change this. The people in the big companies, and many employees, won’t. They fully believe they do a great job, have a great life, work very hard. Even though they all use fossil fuels they can’t produce themselves. You, who wants to change things can do only one thing : Reduce transactions that involve fossil fuels. Eliminate them. You will be going against the strongest force in the economy, that to push fossil fuels in every transaction.

A great way to santize our economic models is by taking out all the banking system numbers. They make no contribution to the GDP, only creation of value by manufacturers.

Most people on the planet live without any fossil fuels in their lives. But they are usually poor (and the World Bank is trying to ‘help’ them). Today this is no longer necessary. You can go off grid, have organic food, use equipment to farm it which you run on electricity or biofuels (if necessary). You can have a closed system in which most people work some of the time to keep everyone happy. It requires education and development of local skills, but the institutes that own and develop skills can be coowned by you (instead of being a debt cash cow for banks). The only thing you have to do is to see the things that are bad for you as ugly, and those that are actually good for you as beautifull. This requires you to learn and expose yourself to them.

Detach from beauty you don’t control, learn to find the right things beautifull

You reading this may be able to choose your experiences, and know there is veracity in the above. Then you need to start to move to places where you can see nature as it is, where you can organize and learn to have access to skills and services that you need. I’m not saying at all that you need to move into a straw hut, but just that you have to give what is yours, your life and effort and resources, to those that are trying to make an equitable exchange. To those that you know will not try to capture you and dumb your down. To those that are close so they can be held accountable.

One of the important things the above detachment from the carboncredit economy requires is going bankrupt. This seems to be a terrifying thing, but it happens all the time. Why? Because if most of the debt you have is caused by fossil fuels, and you can not make fossil fuels, then you can not repay it. Ever. Don’t talk about earning the money to buy the fuels and thus repaying it, because you know those are different fossil fuels. New ones, made available by new credit to capture new activity in a debt trap. If you worked for a farmer and got bread from him as pay, and you ate it, then yes, you would have to work again to eat again. But guess what : banks don’t work for the fuel, fossil fuel companies don’t work for the fuel (yes a super marginal bit ok). You can make grain grow to make your bread, but you can’t make fossil fuels no matter how hard you try. The debt, if it keeps you from freeing you from the economy, is not meaningfull to you. People should support each other as they go bankrupt if they must.

Removing yourself from the ‘economy’ can also take the form of going off-grid. This seems to be a possible trend in the future.

A world is possible to reach that does not have the perverse incentive to burn fossil fuels in every transaction. But banks can not help us to get there because they are the ones that so desperately want us to need fossil fuels, because they live of transactions (you get that without caps I hope). So to extract ourselves from the carboncredit economy and its destructive and repressive forces we need to orient towards the things that are truely beautifull, the natural, the sovereign, the free. This will mean we educate ourselves, we find problems are more complex than we think, and that complexity will start to look beautifull as we do.

We don’t have to be autarkic (totally self reliant) at all to get to this place at all. Cooperation is one of the remaining free resources, one the economy will try to undermine by making us suspicious of each other. Black/white, man/woman Christian/Muslim every soccer, football and baseball team. It would be fine if those teams where the best players of your local community, but they are not, they are a thing of beauty that has been coopted by the banks to divide you and entertain you as you find you have no freedoms in your life.

Make a national pharmacueutical company, one that only uses renewables, only sources sustainably and as close to the factories as possible. One that ships by electric transport and one that supplies energy to the grid to power those means. One fully owned by the patients, who are trained to make the medicine and process the constituents. It will be nearly free. Even just being able to make medicine locally can cut cost dramantically (as a dutch pharmacy in a poor neighborhood of my city is proving). Just an example. You can make up many.

To be continued..














   To our Podcasts

Drone Based Ecorestauration, Demi-Lune bombing and the Roboeconomy is developing..

This is it, a couple of optimizations, a seedpod that can be fired from the air to penetrate the ground, a drone that can follow a set pattern and preprocessing that can optimize the planting pattern. This system can plant 100.000 trees per day. It will only work in areas with suitable soil, and it won’t protect the young growth from bark eating animals. But it is definitely the way to go.

Seedbombs are Thailands idea of reforestation, trees are very resilient and strong when germinating, so you really only need to plant them for many of them to take root. Try it with an apple some time, most apple seed in your apple will become tiny stems.

Droneseed is a company that aims to automate treeplanting after wildfires. This is a growing problem as temperatures increase.

There are huge tree planting operations underway (like this one in Australia), but we need to plant much more. We don’t know the marginal cost of running a tree planting operation, so that it becomes extraeconomical, meaning it sustains itself without any interaction (or sale of wood) to the wider economy.

Demi-Lune Bombing

One of the successfull strategies to revitalize degrated land in practice since the 80’s are so called Demi-Lunes, which is french for half-moons. This simple solution is to dig a half circle with the straight side towards the top of the slope of the land, so that rainwater collects into the pit and sinks into the ground, this is a technique similar to countour trenching  (see Peter Westerveld). The principle problem in general is that the top soil compacts and water doesn’t permeate. It takes quite a lot of energy to break it up again. Demi-Lunes that collect water are a lot like bomb craters, except they hare half circular. It is imaginable that with a certain bombing pattern it is possible to create them quicker and in larger numbers than with human labour. If a machine can be developed that is solar powered which only moves around the land creating demi-lune after demi-lune, this would be a great investment.

The video shows that the land between the demi-lunes is still dry and barren, it should be a follow up action to create connecting trenches, simply to break the top soil. When trees are planted in this way they will thrive, and the higher the tree, the more wind they break and shade they provide.

In general it keeps popping up that our Earth doesn’t by spontaneous process become ideal for plants to thrive, even though all chemical constituents are present (at least some of the time).

   To our Podcasts

Elon Musk SpaceX and the Roboeconomy

SpaceX with chief engineer Elon Musk is making rapid progress towards its goals, to make humanity a space faring civilisation. The idea is to populate Mars in the next decade, and green it by terraforming after that, so that humanity has a lifeboat when disaster strikes (as it is doing slowely but surely as heat is accumulating also known as climate change).

We see a process of relentless imagination and application of alternatives that have not been given room or been imagined before. Of course 3D printing and CAD and compuatational fluid dynamics as well as tiny computers didn’t exist in the Appollo era. When applied in other fields, not to serve personal ego or greed, but the driving ideal of a world without imminent threats which is sustainable into the far future, this approach can usher in a new enlightened period of advancing technology.

One of our topics is called the Roboeconomy, which is the now nascent economy based on robots producing nearly everything, and robots restoring the ecology using renewable energy. Human jobs will be a marginal factor in the survival of our species, Energy will be abundant (hunders of times more than our current total annual budget) and the whole planet will be within reach to hydrate and restore life to, including our oceans.

robotic excavators

To do this we need ways to deploy systems around earth. We need systems that will either bring water to places where it is too dry for trees to grow, or we need to pull it out of the air there, or we need to desalinate it (which is much easier and low energy if you use new technologies like ionic desal we wrote about). We need to shape the land so it retains the rain that falls and absorbs carbon through plant growth, which as Peter Westerveld showed will itself cause more clouds and rain.

The problem with all this are many. One is how to ensure the initiative in a world that is disorganized by the fossil interest (who like chaos with an elite on top and are creating it in the US as we speak) in a world with to few experts, in one in which road usually only lead to places where natural resources can be taken away. In some cases, like the North of France what you have is super fertile land, but the economic factors (using clearcut rainforest land and subsidizing the logistics) make the production on these lands so inefficient nobody can make a living! Also the effort needs to be global, reach reagions with very few people and be fast and sustained. How to do all that?

We think Elon Musk is developing the technology we can use. He is after all making rockets that can land themselves. They are capable of pushing themselves and a payload of more fuel and satelites in to (at least) low earth orbit, then return and land on a flat surface of about 10 by 10 meter. Because they spend time in orbit they can travel enormous distances (going really fast, which is the key to being in orbit). We figure such a rocket could also deliver ecorestauration payload to regions where nobody lives, from a station that nobody can get to (so out of reach of the possible chaos due to climate change).

Make barren Earth your terraforming experiment

We see that we are making a small mistake her, nl that the returning stage was expensive, so one time uses are not economically attractive. But if you combine the idea with a few others you can make the value worth it, after all in the roboeconomy making things only costs the effort of a one time purchase of the energy source (f.i. solar panels that will be free very soon) and robotics who’s cost is also dropping. Now it still seems drones and robots are expensive, but that will change soon as toys like hoverboards are making the price of electric wheels drop f.i. We can also just decide we need to make massive amounts of ionic desalinators, which is a stack of charged membranes and some pumps and reservoirs (no high pressure), just like it was decided we need huge battery factories. It makes sense to organize the above chaotic thought process into a plan.

Nobody has taken the land shaping for water retention question to is maximum efficiency

Autonomous cars are also a perfect delivery system for water, seeds, materials to remote places. They are roadrobots. We already proposed to start a tree plantation in Mauritania close to a mine project, just becaus there is a long sunbaked road towards it (universities, please dont fucking steal this idea and tell the world you thought of it first in five years time, as you do with ideas all the time). A desal plant at the coast of Africa, driving water inland, irrigating trees where nobody lives seems a non-economic plan, and this is exactly what it is. It is called extraeconomics.

The idea of Extraeconomics is to add resources instead of having a net zero resource gain (which is almost never possible if you use fossil fuels) as is usual for any economic project. Extraeconomics strives to create closed regions where resources are added that are to forever remain out of reach of the wider economy. See here. The best way to do extraeconomics is to tell nobody about it. A bit like mines operate, shooting anyone that comes close, or loggers, killing tree activists by the dozens. We don’t advocate killing, but we do advocate secrecy.

Many trees produce molecules that help condens water and form clouds

You have many dry zones close to oceans, they can be irrigated with desalinated water. Using aquifers only makes sense if it can last indefinitely. One can also simply spray salt water into the air as the winds are land inwards, for instance in Tunesia and Lybia. Sure there will be a salt spray zone that will be impossible to farm on, but the water will be transported into the desert where it needs to be havested, or when there is enough will form clouds and rain down. Such fountains can be solar powered, cost nothing and actually create a healthy flow of some volume in the mediterranian.

But back to SpaceX reusable rockets. It is also a good test case for mars, although it seems Elon likes people not to wander to much and work on the exact goal they are trying to achieve. We believe you can build with sand by melting it in place. The main problem of extraeconomic activities is that there is no economic case for the logistics, or it would be economically viable. So getting stuff where you need it is the key, even if the stuff doesn’t cost that much. Of course people are a major challenge, and then you have to show them the world they create is immediately better than the ones on their screens.

It would be interesting to develop plans to do this. There’s an initiative we want to visit in Spain which is about ecorestoring the barren lands. The trick is to restore hydrology (so make the land retain water) and plant some trees. Peter Westerveld already showed this was the case in Kenya and we wrote about him here. Elon Musk can perhaps by spinning off some of his technology do more than populate mars, but also revive barren places on Earth, to do as we think is the principal goal : Maximize life.




   To our Podcasts

Mega Stables Poisoning the Enviroment

Brabant wil meer bescherming tegen megastallen

Holland as the inventor of intensive farming, is trying to deal with attempts to follow the model as it has swung out of control in the US. There you have calfs in fields of plastic boxes parked like cars being fed form birth to slaughter, some never feeling the soft grass or breathing fresh air in their short life.

In Holland forces are trying to push the same model where the animal is minimally considered, and the nr of them per m2 is maximized. We call them ‘megastallen’ or megastables. They exist for pigs and hogs. They generally cause air pollution in the vicinity which is, after causing irritation with the local people, is now also killing birds and plants.

We think this industry is insane, it is done purely for the money, and more fundamentally to drive fossil fuel consumption and to create economic dependencies for which there is a need for well payed lazy intermediary jobs (like banks, shipping companies). The economy is, however you may dispute this, designed to maximize fossil fuel utilization, not wealth creation. These tortured animals in Holland are fed with Soy grown in Brazil, in a region until recently run by a big soy planter (who didn’t mind cutting down virgin rainforest to make way for his business).

4 NH3 + 3 O2 =>  2 N2 + 6 H2O + Heat

But for us there’s another angle. This is about the stuff that is causing the irritation, the so called ‘Nitrogen’. Of course it is not nitrogen (N2) which makes up most of the air, but volatile nitrogen compounds, the most noticable being NH3, or ammonia. It stinks, it burns, it can knock you out. But there’s a thing. Ammonia is plant food, plant energy. Hogs and chicken make it and plants have learned to use it (nobody knows what came first). NH3 really is fuel though, and we should learn to look at it that way. NH3 in pure form is a diesel like fuel, it can run diesel engines with next to no adjustments. It burns CO2 free, because there is no carbon (C) in the stuff!

2 NH3 => 2 N2 + 3 H2 => Fuel cell => Electricity

Our economy designed products for maximum economic benefit, and in the case of fertilizer (ammonia), which turns into food for hogs, which turns into ammonia (and a lot of other stuff, for sure), it would not be ‘economic’ to recover the ammonia, even though the sugar in the manure is recovered and turned into methane of which one can once again make fertilizer. The point with NH3 is that it is also a good farm fuel, it is also possible to make it with a wind turbine, its use would cascade changes that would make farmers energy independent. Meanwhile a whole industry build around dealing with the ‘nitrogen problem’ would become obsolete.

NH3 burns like Diesel, most engines need next to no adjustment to become CO2 free!

So we are against megastables, but as they stand we also are against freely venting the nitrogen in the surroundings, they are a valuable fuel that can be used to heat the stables, burn lights (it can be split in to H2 and N2 and then go through a fuel cell) and be recovered from manure easily (we know how ask us). If this was done nobody would see nitrogen spilled on fields anymore, no stench, no polluted ground water. Industry really is an unguided nuclear missile most of the times : Only if it kills enough people to influence politics, it will respond.

Use of Ammonia is discouraged with the argument that it is unsafe, but research showed it is not less safe, indeed safer than diesel and gasoline. It burns less easy, it is highly noticable, but if you get a dose that knocks you out, you can fully recover. The name has to be made more precise, because real Nitrogen is also used to clean tanks etc. and there it regularly and tragically kills people who are tasked to clean those tanks (probably not in Holland anymore but elsewhere). The ‘nitrogen’ farmers spray is a mix of NH3 and other Nitrogen compounds, but not N2 which is the common compound associated with the name Nitrogen. We have mentioned this many times, we are polluting our land and water with something that is valuable and usefull to our farmers and which can replace dirty heavy fuels in our trucks and tractors.


   To our Podcasts

Cryptoinflation and the Roboeconomy (Renewables based economy)

In recent weeks cryptocurrencies like Bitcoin and Litecoin have risen in value considerably. Bitcoin’s dollar price reached $2600 from around $1000. There are several possible causes, one of which is the adoption and acceptance of Bitcoin as a currency (in Japan), the other it is the currency for the randsom payment of WannaCry, another is pump and dump buying and selling behaviour.

Cryptocurrencies are for all intends and purposes comparable to a tangible asset of limited supply. Unlike Dollars and Euro’s that can easily be created agains a loan with the (Central) bank, you can not bring cryptocurrencies in existence as they are needed or usefull. Bitcoin have to be mined, something that is still becoming increasingly hard. When bitcoin started many hackers could mine it, but now it requires such hardware and energy investment that it is out of reach of the common man. If you want to believe banks handle a limited amount of credit then a cryptocurrency is a currency system in which there are many banks. The reason being that some accounts will hold a gigantic amount of bitcoin, but selling those coins is only possible at the rate of the demand, and selling it under the going price will do little buy crash the value. This makes virtual currencies different from Euro’s and Dollars.

BlockChain : A serially encrypted string of data blocks containing transaction records for bitcoins, because the encryption is nested older blocks can not be changed (so transactions corrupted) without it having an immediate effect on the validity of current blocks.

When a currency trader wants to sell Dollars and buy Euro’s, there is usually a market for that transaction, meaning there’s a place where one can observe prices of other similar transactions. However these markets are run for profit, and they (because they are run by banks) can create money to close a transaction even if there is nobody buying. This is called ‘market making’. You arrive with 1000 USD, the market buys it at the going price, holds it until someone comes along that wants them. This is done with all kinds of tradable goods, from stocks to commodities like wheat and oil. The oil is sold by someone that doesn’t have it, who hopes to buy the oil before you come to collect it.

The above market making has two effects : 1. It allows quick entry and exit from a currency position. 2. It creates fake prices, because at times the price of a currency will be zero, when nobody is interested in buying any. At other times it should be infinite, when demand is greater than can be met by those that offer to sell. We don’t see that price behaviour exactly because the owners of the market like to create trust in the currencies, they like to profit unobserved from the ‘spread’ (the difference in the price they pay to buy and of what they pay to sell their reserves). There are high speed trading algorithms that can use the ability to sell and buy without reserves to control the price, think the computer telling the market “I offer $4.000.000”, so a seller thinks “Wow! there’s already $4.000.000 for sale, I better drop the price”, and then the computer retracting the offer.

Cryptocurrencies are different in the sense that you can’t fake them. The blockchain (which keeps check of everyones crypto balance) IS the currency, the correct administration of positions is its core. If you fake Bitcoin in the Bitcoin blockchain, all peers will reject your block, the blockchain is fundamentally a mechanism to correct errors and disallow fraud, which is why Bitcoin is usefull as a currency.

After the 2008 crash many banks spend months ‘reconciling their positions’, meaning their clients traded in shares, stocks, while the bank didn’t own any of them for real. They now had to go look for them.

If a bitcoin owner wants to sell Bitcoin for Litecoin or Dollar, he has to wait in line, usually in a bitcoin marketplace. Not until someone pops up that wants to buy your Bitcoin (at a price you accept) can you sell them. If trading volume is high this may be instant, if it is low you will have to wait. A market can still accept your Bitcoin, but it takes a serious risk. It can not sell you any Bitcoin it doesn’t have. As a result prices are more volatile, and for some cryptocurrencies there may be no price at times. A sale of Bitcoin starts as an attempt to transact, and the Bitcoin mechanism has to run for some time (on all global peers) until you can see your transaction reflected in the Blockchain.

A flash crash in Ethereum actually happened (after this was written) due to a ‘multi million dollar sell order’

This ‘sensitivity’ also creates some opportunities. If I sell 100 Bitcoin for 1000 dollar the value of the coin could be considered 10 dollar. The price of the Bitcoin then becomes 10 dollar. But if I sell 1 Bitcoin for 10 Dollar the effect is the same. Also if I sell 0.001 Bitcoin for 0.0001 Dollar. This means I can create a price by making a number of losing trades. If I agree to do 1000 transactions in which the ‘price’ of the Bitcoin is 10 dollar, It can be that I only ‘spend’ 0.1 Bitcoin to create that illusion. The next trader doesn’t know, so he sees the new price in the market. This is exactly what happens in the real banking system, but in Cryptocurrencies it is usually fully transparent.

Cryptocurrency prices can be manipulated, but their blockchains will show it immediately

But Bitcoin has in recent years become an established crypto currency, even though the underlying code has flaws and has been improved on in other currencies like Lisk or Ethereum, Bytecoin etc. The use case for Bitcoin is varied. The basic property is that you can trust the numbers add up.

  • Replace Euro, Dollar, Yen in your internal accounting with bitcoin (at a fraction of the value equivalent, say 1/100th). This is usefull for big companies or conglomerates.
  • Use it to transact with low banking fees, buy Bitcoin, send them, let the other side cash locally. This does cause problems (for others) which will be discussed below.
  • Use it as currency. This is only possible if all your suppliers accept it. Usually the gas station or energy company do not accept bitcoin as they are the reason we have the Euro, Dollar etc.
  • Speculate on its value. So buy low, wait, cash in. This is a reason for people to create price illusions. To sell you have to be close to a buyer, some owners of cryptocurrencies are closer than others.
  • To save. In the case of Bitcoin some people really made a fortune, even thoug cashing in can be a slow process.
  • A professional community, or a specific functionality is offered only in return for a specific cryptocurrency, therefore creating solid demand for it. Ethereum is an example, if you want to use the ether smart contracts you have to pay for transactions in Ether. Equivalently all PHP coders can decide they need to be payed in PHPcoin only, and so the demand for that coin follows the demand for PHP coders.

The job of our current financial system is to manage and facilitate the consumption of resources, primarily fossil fuels. Therefore no crypto currency is likely to be accepted to buy fossil fuels, unless its price can be controlled by the fossil banking system (through the fact they own a lot) and the trade is closely tied with the existing currencies. This is more or less what happened to Bitcoin. Not all cryptocurrencies will be given this opportunity, and banks have no problem creating their own.

The cryptofinancial system however can enable renewables based local economies, and there are many examples where the need to get ‘real’ currencies to administrate exchanges of products and services is a big restriction. So a local village can organize work by asking and paying f.i. Ether (the currency of the Ethereum mechanism), and all those involved can be sure they do not work for nothing. The more local the resources are the more fit for a local currency a market is. As renewables and the local economic resilliance (against fossil fuel price volatility, including entire countries ‘economies’) grows, the adoption of crypto currencies will also grow. We have written about the Euro, the Auro and the Joule also because alternative currency systems are the best solution to managing an economy with heterogenous value creation mechanisms.

Now let’s say all bakers decide they will only accept bakercoin, and all farmers that supply them with eggs and wheat and biogass to bake will also accept that coin, and sell it to all the people who need bread. A small economic island forms that doesn’t need Euros or Dollars. Those Euro’s and Dollars stay in circulation however and thus cause inflation of anything bought with them. Banks will see a reduced need to extend credit, and so a reduced control, for sure they don’t control what the bakers and the farmers do anymore.

[Cryptocurrencies already cause problems because a person that buys currency in the US and uses it to buy something in China replaces a Dollar cashflow that would be available in China to buy fossil fuels from the world market, thus starving China from it’s ability to produce.]

Extend the above thought and every time people adopt cryptocurrencies for one of the reasons listed above banks see more money in circulation than they anticipate, and inflation will occur. All Euro’s Dollars etc will eventually be absorbed by debts and energy cost, but even this process will slow because of the adoption of more renewables which lower the price of energy. Thus the introduction of cryptocurrencies can cause ‘traditional’ currency inflation.

Renewables are a key to the full functionality of cryptocurrencies as was intended, as an alternative to banking. This is because the fossil fuel sector has a deal with banks on which currency to sell their assets in, at least per power block. We used to have the petrodollar all around the globe, now oil is sold in other currencies, but only when the government that issues the currency also owns the fossil fuel wells. Where markets are denominated in Dollars the US basically owns them. Our currency systems are ‘carbon-credit’ systems, or energy credit systems, where the primary purpose of the currency is to distribute and allocate fossil resources, from the fuel powering the chainsaw in the forrest of Kalimantan to the gasoline in Trumps limosine to the oil used to make plastic or gas used to make fertilizer.

Because these days humans create most value with the help of some machine or chemical process, the driver for that process has to be attainable with the currency. If we can’t buy gas with Euro’s we can’t bake bread and sell them for Euro’s.  Renewables will be the driver that will bring value to cryptocurrencies, and which can allow spawning arbitrary numbers of local cryptcurrencies that are used in local renewables driven production chains. The wind turbine owner sells Windcoins, so the baker can buy wind electricity to bake in his electric oven. The solar thermal heat storage service sells SolarthermalCoin, which is used to heat greenhouses or homes, in which case the occupants of those homes will have to work or do something to earn the SolarthermalCoin, or maybe they work for PHP coin which the issuer of SolarthermalCoin will gladly trade his coins for, knowing demand is reliable (for now).

#cryptoinflation is inflation of value of traditional currencies because economic activities are conducted increasingly using cryptocurrencies.

in this ‘Roboeconomic’ system the role of banks is once again to store real assets and to apply them when there is an opportunity to increase the wealth creation capacity. Right now they are basically shopwindows for fossil fuel access, where the metric is the amount of fossil cashflow generated (which determins the banks fees and salaries), not the amount of wealth. Banks will lose this privileged ‘niche’ to owners of renewable energy sources. The process will cause a surplus and miscalculation in the requirement of traditional currencies, which is one of the reasons banks want to see smartmeters in every home, so they can accurately price renewables to protect their business (sometimes pricing it negatively!).

The role of politics, our role is to prevent any obstruction to truely free trade amongst local and regional communities. We also need to prevent regulation of the crypto currencies, the more recent ones have in build decision making mechanisms that ensures that any change that may affect the value (for instance making it easier to create new coins) is made with the consent of a majority of currency holders. This opens a perspective of truely democratic management of local value chains, as opposed to current ‘flash cash’ sensitive markets. Governments are making local banking systems and businesses more resilient against a sudden influx of (foreign) cash, cryptocurrencies can certainly assist with that.

One thing is sure, the Roboeconomy (where robots running on renewables create most of the wealth and restore the ecology) will do away with fossil credit banks, financial markets as we know them and it will be a vast improvement.