Monthly Archives: September 2017

Op-Eds

Jamie Dimon is Right to Fear Cryptocurrency

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Bitcoin (stock photo from http://maxpixel.freegreatpicture.com, CC0 license)
Bitcoin (stock photo from http://maxpixel.freegreatpicture.com, CC0 license)

When JPMorgan Chase CEO Jamie Dimon called Bitcoin a “fraud,” what ensued looked a lot like a “poop and scoop”  con: The practice of driving down a thing’s price by saying bad things about it, then buying up a bunch of it before the price bounces back. After Dimon’s comments, JPMorgan briefly became one of the cryptocurrency’s biggest buyers. The company claims it was purchasing Bitcoin on behalf of clients, not as corporate policy, but it looked bad.

Now Dimon is badmouthing cryptocurrency again. And, as before, he clearly either has no idea what he’s talking about or has sinister motives.

“It’s creating something out of nothing that to me is worth nothing,” Dimon told CNBC. “It will end badly.” He also warned that as cryptocurrencies become more popular, government crackdowns will drive them into the black market (that’s happening in China right now).

The key words in Dimon’s “to me [it’s] worth nothing” are “to me.” Value is subjective. What’s a thing worth? Whatever it’s worth to you, or to me, or to Jamie Dimon. Each of us may find that thing more valuable, or less, than do the other two.

Dimon considers cryptocurrency “worth nothing” for one reason only: Because his company — the largest bank in the United States and among the largest in the world — doesn’t control it. And that’s one of several reasons why others find it very valuable indeed.

Cryptocurrencies run on blockchains, “distributed ledgers” without central authorities. Dimon prefers fiat currencies, which are created by governments, managed by central banks, and funneled through institutions like his, legally privileged choke points taking generous rake-offs from wealth created by others but forced to pass through them.

Neither crypto nor fiat currencies are backed by physical commodities like gold or silver, but the resemblance ends there. Crypto is backed by the work of maintaining its ledgers, called by the imaginative name “mining.” Fiat currency is backed only by your trust in the governments (and the Jamie Dimons) of the world.

“Creating money out of thin air without government backing is very different from money with government backing,” he says. He’s right. Money with government backing pays Jamie Dimon. Cryptocurrency threatens his business, his paycheck and his way of life.

His prediction of government crackdowns isn’t just a prediction, it’s a fervent wish. He’s desperate to see cryptocurrency crushed, unless he can find a way to force it through the JPMorgan toll booth.

Dimon should be careful what he wishes for. If cryptocurrency is forced entirely into the “black market,” that market will, sooner or later, bury his. His only chance is to co-opt blockchain and cryptocurrency methods into the fiat system. Here’s hoping he fails.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

Op-Eds

W3C Turns the Clock Back on an Open Web

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A man protests Digital Rights Management in Bo...
A man protests Digital Rights Management in Boston, USA as part of the DefectiveByDesign.org campaign of the Free Software Foundation. (Photo credit: Wikipedia)

On September 18, Ars Technica reports, the World Wide Web Consortium (W3C) published a new specification recommendation, Encrypted Media Extensions. The recommendation, which natively implements a “Digital Rights Management” scheme in web browsers, marks a giant step backward for user freedom and an “open” World Wide Web.

W3C is the Web’s  “international standards organization.” Simply put, its recommendations are the reason you can load almost any web page in almost any browser and expect to see the same things on your screen. When W3C recommends something, it’s a lead pipe cinch that all the major browser creators will incorporate that recommendation in their products ASAP.

In this case, W3C’s recommendation is the equivalent of a printing standards body deciding that henceforth printing presses should only emboss cuneiform characters in clay tablets. That is, it calls for universal adoption of an obsolete — to the point of silliness — way of doing things.

The purpose of Digital Rights Management is to allow creators to control the use of, and prevent the copying of, “intellectual property” — in the form of copyrighted informational works or proprietary hardware creations — after its original sale.

The 30-odd year history of DRM is one of consumer dissatisfaction and sequential failure. Every DRM scheme is broken sooner or later (usually sooner), after playing hob with purchasers’ ability to actually make use of the products they’ve bought. Lately, in addition to trying to improve DRM, Big Content and Big Manufacturing have begun asking politicians to criminalize cracking of DRM. That’s not going to work either. The only winners in the DRM saga will be the companies which drop the whole idea and come up with revenue models that don’t require them to screw their customers in the name of preventing copying and modification. The false hope of EME puts off that day.

Until the Encrypted Media Extensions scheme is broken in some fundamental way (a way that can’t be fixed with browser updates to the EME code itself), Internet users are going to increasingly find themselves frustrated in copying material they own between their devices, making archival copies, or grabbing snippets under the “fair use” provisions of copyright law.

EME has also already produced a gigantic breach in trust within W3C itself. As Cory Doctorow of the Electronic Frontier Foundation points out (in an open letter announcing EFF’s resignation from the body), “W3C is a body that ostensibly operates on consensus,” yet EME was imposed on behalf of Big Content and over many objections by the body’s director, Tim Berners-Lee,  and adopted by a vote of less than 60%. Berners-Lee and the proponents of DRM may well have permanently wrecked W3C’s reputation as a trustworthy creator and evaluator of standards for the Web.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Harvard Disgraces Itself to Appease CIA Crybullies

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By Bradley Manning Support Network [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
 

The Washington Post reports that Harvard University’s Kennedy School of Government has rescinded its offer of a visiting fellowship to whistle-blower Chelsea Manning.

Following tantrums from Central Intelligence Agency director Mike Pompeo (who withdrew from a planned speech) and Michael Morell, a former CIA deputy director (who resigned his own fellowship at the school), Dean Douglas W. Elmendorf issued a statement calling the invitation a “mistake” and denying any intent to “honor [Manning] in any way or to endorse any of her words or deeds.”

Harvard is a private university (to the extent possible in a mixed economy featuring various sorts of government funding for students, researchers, etc.). Its leaders are entitled to discriminate as they wish regarding faculty and curriculum. But the Kennedy School’s action and Elmendorf’s statement are a stain on the nearly 400-year-old university’s honor.

A ping on the ol’ irony meter:

Among those who contend that the assassination of JFK was not the act of a lone gunman, the CIA tends to move to center stage as the likely center of a conspiracy to kill the president. While Kennedy’s intent to thwart the military-industrial complex in general and the CIA in particular may be exaggerated, he nonetheless enjoys a posthumous reputation for attempting to rein the agency in.

Now, more than half a century later, the school that bears his name kowtows to that same CIA over what Julian Assange of WikiLeaks accurately deems a “cry-bully complaint” from Pompeo and Morell. It’s sickening.

Chelsea Manning is an American hero who, after an illegally long pre-trial detention and a show trial lacking even the pretense of due process, was sentenced to 35 years in prison for exposing the crimes committed by numerous actors within the US government. Former president Barack Obama deserves plaudits for his decision to commute her sentence, and condemnation for not going further with a full pardon, lavish financial compensation for the wrongs done her, and an apology and thanks for services rendered on behalf of of a grateful nation.

The Kennedy School’s motto is “ask what you can do,” presumably as excerpted from JFK’s inaugural address: “And so, my fellow Americans: ask not what your country can do for you — ask what you can do for your country. My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.”

Chelsea Manning asked herself what she could do for her country and for the freedom of man. She then proceeded to act — at great personal cost to herself — on the answers she found to that question. No person on the Kennedy School’s current list of visiting fellows is even close to as qualified as Manning to teach the mission implied by the school’s motto. Douglas W. Elmendorf’s denial of intent to honor Manning or endorse her deeds is a confession that appeasing reprobates like Pompeo and Morell comes before doing the right thing for his students.

Shame on Harvard.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY