Scotcoin is moving to a new blockchain system. We’ve recently published a series of video setup guides to get ready for the new Scotcoin V3 token > https://www.youtube.com/c/scotcoinproject
For reasons somewhat beyond me, a friend recently hailed me as “Hello Ferengi!”
You may have forgotten but the Ferengi of Star Trek fame, apart from having misshapen heads, were, shall we say, a little tricky as far as business goes. They had a whole host of rules, promulgated throughout the entire innumerable episodes and films, some of which make you cringe.
Personally, I particularly like “You can’t free a fish from water” and “No good deed goes unpunished.”
In amongst these Rules are such gems as “ Never be afraid to mislabel a product”, “Free advice is seldom cheap,” and “The bigger the smile the sharper the knife.” A little study of the Rules would repay you in many ways – not least recognising people you know, and bringing into focus what you really think of them. I’ve always said everyone knows stuff – but sometimes it needs codified.
Some years ago, when business books were all the rage, I bought:
Now you may think how sad is that, but as in cowboy films, a set of principles are required to win through. The code of the West was derived from common sense and the Bible, and I’m grateful to cowboyethics.org (who knew??) for the following:
- Live each day with courage.
- Take pride in your work.
- Always finish what you start.
- Do what has to be done.
- Be tough, but fair.
- When you make a promise, keep it.
- Ride for the brand.
- Talk less and say more.
- Remember that some things aren’t for sale.
- Know where to draw the line.
There is also, of course:
- When approaching someone from behind, give a loud greeting before you get within shooting range.
- Never try on another man’s hat.
- And most important of all, Ya never hit a lady
That last has led to more cowpokes being gunned down than any other. Giving recalcitrant ladies a spanking seems to have been OK though. John Wayne managed it several times and lived to tell the tale. Not to mention getting the gal.
Star Trek, Cowboys and Blockchain
Where am I going with all this? In both outer space and in the Wild West, people had to rely on themselves and no one else. This is particularly true at the moment. So what does Blockchain have to do with that?
The whole point is that the blockchain is demonstrably correct, fair, immutable – and everyone can rely on it absolutely.
I have a feeling the Ferengi would not have liked blockchains. Their rules also state “When there isn’t a rule, make one up” and “A Contract is a contract is a contract – but only between Ferengi”.
Robert McDowell is a long time supporter both personally and through Summerhall of Scotcoin. He is currently chairman of that renowned venue in Edinburgh, and a long time top level financier and economist. He has written a couple of pieces for us, this first one on the macro position we find ourselves in and the true scale of the credit crunch that is here now. The second piece is specifically on cryptos and will appear in a few days time.
Georgiova (IMF managing director) was recently quoted as saying “what we want is to guarantee that people are not going to die just because of lack of money“. How absurd can it get? Obviously not a Keynesian but a Monetarist supply sider.
It reminds me of the long since passed Airey Neave (who was Thatcher’s puppet-master until the IRA car-bombed his Jaguar in the House of Commons). He was an admirable person in many ways except he ordered HMT never to report to Cabinet the difference between public spending before & after tax rake-backs, a foolish neo-con rule insanely followed ever since. He was, decades earlier in WW2, nearly caught having escaped from Colditz (an officer class PoW castle) in Germany, heading for Switzerland. He was spotted in a railway station eating a chocolate bar (a Swiss Red Cross supplied one) when chocolate was something ordinary Germans could only dream of enjoying in 1941.
Chocolate then, money now. Lack of money? Lack of air or water? Maybe the IMF think money should be a natural resource (‘public good’) whenever there’s plenty of it? But what the crisis teaches us is that it is not quantity but velocity or circulation of money that gives it value. I shouldn’t wonder too if countless people die prematurely sometimes because they actually have too much money. But, today, asset values like cash are in free-fall and we cannot see any reasons yet for recovery!
Countries can largely shut down to ensure social isolation & social distancing, but it will become harder over time to guarantee basic necessities & essential services. The problem is that while clampdowns, prohibitions and the like, can be announced & enforced, the conditions for lifting restrictions & announcing a return to normal are deceptive & uncertain without a firm date (or time limit). Getting Brexit done clung fiercely to dates by when a make or break deal must be struck. No such iconoclasm is in evidence r.e. Covid-19 & the present anxiety/panic is deeply entrenched. It is so deep that there could be permanent changes in the patterns that have pertained of modern human social behaviour. There will be hard-to-calculate economic (& well-being) consequences.
It is funny how prepared everyone appears to be to be seen to tackle this pandemic with a cavalier disregard for the costs of unintended or unwanted consequences. The economic dislocation that currently appears unbounded appears unending, with arbitrary dates being bandied about. Suddenly, for example, the whole private sector is bleating for government support. These pleas come from those who normally condemn state interference or “tax & spend” almost unreservedly.
All places where crowds might congregate including pubs & cafes plus all live arts & sport are shutting or mothballing or reducing to a skeleton operation. Supermarkets or big shopping stores are not yet shutting, but they are subject to stockpiling, and panic-buying. Many are involuntarily closing. All non-essential travel for months will stop in an effort to try to postpone the spiking of the covid-19 virus.
It’s like thinking that prolonging a recession gets everyone cut back to essentially good & necessary fundamentals and behaviour – a puritanism in fact. It can backfire just like austerity. Those who railed against government austerity policy ain’t seen nothing like the austerity now coming fast down every one of our main streets.
A pandemic – like any defined thing of business – is assumed to be like a game where we are game-players. But games have agreed rules. Players all start with an equality – two factors almost totally missing in real world or real life events yet are demanded in a general crisis. Government must defend all equally, all businesses & all people. Fairness & equality ought to rule, though of course everything has unintended consequences. No good deed goes unpunished.
The pandemic is often likened to a lottery (even if only one of many such lotteries, many of which are much bigger) i.e. everyone has a remotely even chance of getting caught by it. My father often seriously joked there is good luck, bad luck, & luck out! (to be spoken in an Ulster brogue).
Funny how all presume equality of rights (first principle of citizenry) & everything connected thereto. Many of these same people extol inequality & dramatic change as creative destruction or simply good entrepreneurial spirit. But not any longer because they feel it is all someone else’s fault anyway or like the weather, if not the climate, inevitable. Human hypocrisy is now philosophical rationalism. It is limitless in its self-justifying sense of personal & or group entitlement.
The pandemic may be a lottery, but it has classes insofar as inequalities about who gets the worst & highest percentage risk of dying. I’m in the high risk category (retirement age & vulnerable upper respiratory tract). You too probably -no more pub visits!
Summerhall is closing down in events (e.g. 6 weddings in April-June) performances & catering (our main revenue). We will therefore have to reduce staffing to a skeleton crew at immense cost & may even find August festivals cancelled . That is a third of annual revenue! Various government compensations are mooted & insurance claims, but the fact is probably we will probably be unable to access any of these.
Jobs are being temporarily or permanently lost across all sectors given there are so many knock-on effects – a negative vortex. Leading bleaters craving government financial aid (didn’t work for FLYBE) are airlines, airports, and hotel groups. Credit demand on banks is increasing with depleting security for loans, probably with many new margin calls & higher risk rates. Cash & Gold are suddenly King as they frequently are!
Transport & tourism in particular, but general retail too, have all been massively hit. Worldwide, 50 million jobs in tourism/travel industry alone are expected to go i.e. 23%. Global unemployment was 205 millions (c.3 billions with jobs). We now foresee, even if temporarily in the short term (6 months- or more?), at least tripling of joblessness to over 15% of the global aggregate, & possibly another 10-20% may follow if the crisis persists for a year or more. No one knows.
The virus is triggering a major recession globally. Some felt a recession was imminent anyway, waiting only for the excuse to start, but this? Well, we know a normal recession squeezes everyone’s finances & wipes out (nominally in theory) at least 75% of banks’ reserves! Consumer culture is debt-fuelled, so the slowing of the velocity of money makes assets fall in value as well.
While good manufacturers can stockpile & hope to catch up in the eventual recovery rebound, trade lost to services tends to stay lost! A lot of financial firms are bound to go under for their inability to handle withdrawals & foreclosures.
There is a palpable Keynesian response (or at least a strong whiff of it) among governments in their budgetary jet streams. Whatever is blowing in & across central bankers’ rate-setting counters & balance sheet re-jigging has the same smell to it. Hence, the naff IMF statement we started with – much like politicians saying ‘we’ll do whatever it takes’ is necessary implying also “whatever the consequences” while having no idea what these might be.
UK budget deficit borrowing is mooted to hit 25% ofGDP i.e. a war-economy footing. Half of the government budget will be debt financed. That’s probably only sensible. But, off balance sheet or off-budget financial relief may, as in the 2007-9 GFC, prove even more effective.
An amusing aspect is the conspiracy theory that banks & the non bank finncial sector are capriciously unfettered in how they create new money out of loans. Now these same conspiracists must face the opposite – in other words asset value crashes. Generally markets have fallen in price by about a third so far but not yet touched bottom.
Worldwide stock market value was about $70 trillions in total. That’s now had a c.30% fall. Property ownership is reputedly about 60% of world assets or about $217 trillions (Savills Research 2016, of which $162tn is residential). In all likelihood, there is a 20% or higher fall there as well. The $217tn figure includes $145tn not available to be traded or not secured for debt. Hence, the active market amount is c.$70tn.
Commercial property – c. $53tn including land (according to Savills 50% of the world total is in USA, 28% Europe, 5% Latin America, ME & Africa, leaving only 17% in E, S, & SE Asia, which seems a bit implausible despite what we know of market pricing) What can such figures mean? If all ‘assets’ are c. 4 x world GDP & have fallen in price by 1 x world GDP so far this year, that is by about $1,000 per person in the world – man woman and child. Of course the loss of wealth is mostly concentrated in the world’s richest 25%.
That means about $60 trillions of wealth seems to have disappeared. Another $6 trillions of households’ & personal incomes may follow & at least half as much again in lower company profits & actual losses. The UK appears now exposed. Sterling fell this week sharply against both the USD & Euro (considered a safe haven for capital flight alongside CHF (Swiss Franc)). In March up to today, CHF/GBP went from 0.78 to 0.86 i.e. CHF up 10%. GBP/Euro went from 1.206 to 1.097 i.e. GBP down 9.9%. Those are big movements! They will have profound long term effects, not least fewer assets to support future development. Indeed, banks may need to ignore all the existing rules and conventions about loans
Officially the UK continues to enjoy a positive inflow of private foreign capital sufficient to finance the trade deficit without resource to extra government Gilts issues. But, underlying this since 2016 has been somewhere between £1 & £2 trillions of foreign disinvestment & UK capital flight. This is officially recorded in the UK’s net external balance (over £500 billion negative) i.e. about 20 years’ worth of net inflows recorded elsewhere by ONS in the balance of payments accounts.
There is something irreconcilable in these two data sets as there is also in the UK’s self-belief that financial services generate sizeable annual trade surpluses, when the UK’s top ten trading partners in financial services record surpluses against the UK. In truth it may not really matter. Why? Because in the UK, especially London & The City & their surrounding regions are simply far “too big to fail”! It remains to be seen whether we can take comfort in that statement.
Robert will be sharing his views on blockchain and crypto in the next article. We very much hope he will become a regular contributor to our project.
CoinTelegraph had a very interesting article on this very thing – see here:
You probably won’t remember but this is something I spoke about and highlighted some considerable time ago as being a perfect use for crypto in disaster situations. UNICEF has now embraced the idea. In the interview their Program Funding Manager Sunita Grote has given, other unique and extremely important facts are mentioned, notably – and I quote:
- It lets us tap into a new resource base for UNICEF and expand our network to receive contributions
- Blockchain can improve efficiency and transparency by tracking the flow of resources and transactions in a more transparent way. Blockchain makes us more accountable and has the potential to reduce the amount of resources we need to do our work. We’re a $7 billion global organization that conducts a lot of transactions between various parts of our organization, so we are looking to see how blockchain can help us manage and track these in a more efficient way.
- We are exploring how blockchain can disrupt and improve systems that deliver programs for children. Blockchain may allow us to make payments in a new way and improve how cash transfers are made.
The other point she made was that they were not going to just take in crypto and resell it. She specifically rules this out, and also simply handing the crypto to governments in affected areas. The digital currencies, she says, are specifically going to be used as currency within affected areas.
That is an enormous step forward and a real life use of crypto that transcends anything it has been used for before.
There has been a tweet doing the rounds by a chap called Adam Cochran @adamScochran which starts off:
“You may have heard a crazy claim that “no one really builds on Ethereum” and that “all the products being built on Ethereum are paid for by the Ethereum Foundation or ConSensys”
It goes on to list them:
Ubisoft,Amazon,American Express,Uber,BBVA USA,Oracle,Tencent Global,MetLife,Ford, Intesa Sao Paolo,Bank of Montreal,Ontario Teachers Pension Fund. Goldman Sachs
And another 346 corporations large and small who have paid for their own Ethereum blockchain set up.
Without a shadow of a doubt, Ethereum tokens and their smart contracts are leading the world in terms of usage, and we at Scotcoin will be joining them soon.
See amazing series of tweets here:
Author: Danette Wallace
When we transition to digital currencies and blockchain applications we will need to collectively grow up.
In western culture, we are accustomed to depending on external organizations to take care of our assets. Banks take care of our money, trusts take care of our properties, stock brokers take care of our investments. If we have an issue with any of these areas, there is a backup system in place. These external organizations are responsible for backing up our information because essentially we don’t own the data, they do.
The irony is that there is a sense of freedom that comes when your information is captured (much like there is a sense of freedom for children who don’t have to worry about paying for rent or food because their parents take care of it). As a society, we’re like children. We’re free of the worry of being 100% responsible for our information because centralized organizations take care of it, problem is, they also own it. With blockchain, all of that will change.
A SHIFT OF RESPONSIBILITY
With the move to digital currencies and blockchain applications, the safety of our assets and our sensitive information will become our individual responsibility. Currently, this is not the case. If we lose a valuable document, we can recover it from the organization that is responsible for keeping a record of it. There is often a record of what we own somewhere in the bureaucratic universe.
Because of this backup system, our minds tend to think of digital assets as “copies” of something that exists in the cloud somewhere. With decentralized blockchains, however, the original data exists on individual nodes only. In other words, the original data will often exist only in our phones. That’s what makes blockchain so different from other technologies. It allows for the digital asset to be the “original,” just like cash. But also like cash, if you lose it, you lose it.
TIME TO GROW UP
This may be a difficult transition for some. We all have that friend who seems to misplace their keys every other week or the family member who can’t find their eyeglasses even when the glasses are sitting on top of their head. These are the individuals who may have the hardest time with this new responsibility.
A number of people have lost millions of dollars worth of Bitcoin from being careless with their personal passwords to their Bitcoin accounts. Since the password doesn’t exist on a central database, if the person loses their password, there’s no way to recover it and the Bitcoin sits on the blockchain with no way to access it. As of July, 2018, a total of $44 billion worth of Bitcoin (6M Bitcoin) are left inaccessible and permanently lost on the Bitcoin blockchain. If you don’t want to lose access to your cryptocurrency, do whatever you can to keep your passwords safe.
Andreas Antonopoulos, one of the foremost Bitcoin experts, prints out his passwords and key phrases and puts the paper copies in bank safety deposit boxes. This is ironic given that Antonopoulos thinks banks will go by the wayside when cryptocurrency enters mainstream. I tend to agree with him. I have always said that banks should consider transitioning from monetary banks to information banks. That way they will continue to remain relevant.
DO YOUR HOMEWORK, KNOW WHO/WHAT TO TRUST
With the transition to blockchain, we will need to shift our trust from the banking system and government organizations to trusting the blockchain protocol. Blockchain is a unique technology because it’s able to hold records of people’s assets in a decentralized framework. Blockchain is often referred to as a trust-less system which means, with blockchain, we don’t need to trust people or institutions. The trust resides in the technology itself.
For some, trusting blockchain protocols may be difficult at first. This is often due to their misunderstanding of where to appropriately place their trust. The trust-less aspect of blockchain comes into play when the technology is used as it was intended…as a decentralized consensus platform. Trust should not be placed in centralized databases, even if they say they are using a blockchain. If they are using a centralized blockchain, then they are not using blockchain as it was intended. The user should be mature in their pursuit of knowledge and in their decision making and they should know who to trust.
For example, those that have done their homework know that the Bitcoin protocol has proven its trustworthiness. In the nine years that Bitcoin has been around, there has not been a successful theft from the protocol yet. This does not mean that people don’t try. Hackers are constantly trying to hack into Bitcoin. The reason they’re unsuccessful is because of the decentralized nature of the protocol. To successfully compromise the system, a hacker would need to gain consensus from the community to implement their changes but hackers are never able to gain that consensus. This is why a decentralized blockchain is safer than a centralized one. Regulations and laws do not prevent hackers from hacking into Bitcoin, the decentralized community does.
When data is kept in a centralized exchange, it’s more susceptible to theft and corruption. This is why it’s important to 1) know the difference between a centralized blockchain and a decentralized blockchain and 2) put our trust in the appropriate decentralized blockchains.
For proof of the safety of decentralized frameworks, all you have to do is look at the evidence.
- Amount of Bitcoin stolen from the decentralized Bitcoin protocol — $0
- Amount of Bitcoin stolen from centralized exchanges — $15 Billion
When there is a shift in trust from centralized organizations to decentralized blockchains and we gain an aptitude to know the difference, we will take on a new responsibility for the safety of our assets. That’s when we will collectively grow from blockchain infants to blockchain adolescents and have our big boy / big girl pants on.
“Blockchain Will Force Us To Put Our Big Boy / Big Girl Pants On”
Author: Danette Wallace
Blockchain has moved on since we started this journey. If Bitcoin was first generation Blockchain, Hyperledger was second generation. We are now into THIRD generation, which is described as permissioned decentralized blockchain.
Libra, Facebook’s offering in the digital currency space is exactly that, and Microsoft is clearly committed to blockchain technology. That being the case, you can bet Amazon and Google are not far behind.
In many ways Scotcoin is lucky that solutions which less than a year ago appeared final and long term, have in fact proven to be less than robust. But we at Scotcoin have remained committed to research and partnerships with credible players in the industry.
We have refined our approach to define 5 pillars on which any solution must stand.
- 1. An efficient and cost effective migration process. We have some 3500 holders of Scotcoin we need to migrate safely and securely
- 2. A robust blockchain solution
- 3. Un-issued surplus coin creation (for reward and future distribution)
- 4. Access to an efficient secondary market or markets and
- 5. Crucially, a reliable and durable delivery partner with likely longevity. Present management both of Scotcoin and providers of blockchains will unfortunately not live forever. That means the company we choose to go with must be extremely well capitalised and look to have longevity.
In terms of progress, for 1/2/3 and 5 we have solid ticks. 4 is the crucial one and is the most difficult for all altcoins.
It is however one we have to make sure works for all our holders. In essence it is the provision of liquidity to all Scotcoin users and this has to be guaranteed.
As ever, America is 6 to 9 months ahead of the UK and Europe in this regard, but that does mean we are able to look at solutions being offered and choose the best features. As usual, everything reverts to the mean and what a few months ago was thin on the ground is becoming almost commonplace today.
We have been through the classic hype cycle of euphoria followed by crash and burn, then slow revival and quiet confidence.
It looks very much as if we are now in this latter stage, with positive developments and progress on the provision of blockchain technology and you can be assured the Scotcoin team is across this.
We at Scotcoin as I say are very much in the penultimate stages of choosing the long term provider we need, and look forward to announcing our collaboration with them in the near future, which we aim to secure the future of your Scotcoin predicated on our five pillars.
If you are a chocoholic like me, you just might know that Belgium has been involved with the manufacture and sale of chocolate for nearly 400 years. Yes, 400 years. It has more than 2000 chocolate shops selling just – chocolate. They manufacture over 170,000 tons a year. It’s a big business. And it’s been growing for 400 years.
And that is actually the point here. It’s been growing for 400 years. What was it like after say…. 10 years? Around 1645……
Well, I’m not pretending I know exactly how much they produced, but I do know (from historical records) there were less than ten chocolate shops. So let’s just think what that means. In the last 373 years, the number of shops has grown from 10 to 2000. It represents an increase of just over 5 chocolate shops per year, every year, from then until now. That may not sound like much but look where it has ended up.
Now go back just say… 10 years from today. And hey, there’s this new thing called blockchain. And it does something called Bitcoin. And hey, usage, knowledge, and acceptance is growing.
My point is this blockchain business is absolutely in its infancy. It’s probably less accepted than chocolate was in Belgium after 10 years. From my point of view there is no contest between chocolate and the blockchain, but suppose blockchain grows as we all think it will.
All our present institutions and technology has had years to mature. Banks, as we know them, are 300 plus years old. The UK Parliament has been growing and evolving for more than 700 years.
So as regulators and central banks try to frame responses to where we are with blockchain and crypto currencies, let’s just reflect on how young this all is.
Let it grow. Let it evolve. Let it mature. And let it enrich – exactly has chocolate has done.
The news that US regulators are investigating crypto currency exchanges for illegal rigging activities should come as no surprise to anyone.
When you are in the Wild West, anything goes, and can go on for as long as no one pulls the plug on it.
But this particular move is all part of the worldwide efforts by regulators and central banks to bring some oversight and order to the crypto world. Think of the Wild West and how law and order came to it over a period once the abuses became so much that Washington got involved. The same is now happening with blockchain and crypto currencies – not a surprise to us at Scotcoin. We have been preaching about how regulation was coming and how this was a good thing for over two years now. Our new permissioned blockchain will handle all these requirements as a prerequisite.
What this also emphasises is how right we were to be happy to remove from Bittrex. The total speculation and pump and dump culture had no part in what we have been building.
There are still people who view cryptos as get rich quick schemes. Indeed I was looking at some exchanges on our Twitter (which please follow!) where someone was looking to buy something he could rapidly sell at a profit. That is actually counterproductive in terms of the evolution of digital currencies. If people are to have trust in them, they have to be sure of the value at any given point. Arguably, the worst offender is Bitcoin – A year ago $1000, Christmas $20,000, now $6500. How on earth can any business plan its forward sales and cash flows dealing with that?
Ideally you want a very slow and steady increase in price over time. Most people will by now have forgotten the German “Wirtschaftswunder” (Economic Miracle) of the 1950s ,60s and 70s. It is a given nowadays that Germany is one of the pre-eminent economies in the world. Not so after WW2 and into the early 60’s. Ludwig Erhard – the then German Economics Minister, equivalent to our Chancellor of the Exchequer – believed there was a way to guarantee economic growth. It wasn’t quantitative easing on a grand scale (as people seem to believe erroneously nowadays). He believed that what gave business the confidence to invest and grow was certainty. So he said categorically that the money supply would grow at 2% pa for the foreseeable future – no more and no less. And he stuck to that religiously for 20 odd years. He was so successful he ended up as German Chancellor.
We at Scotcoin have the same philosophy. We don’t want ups and downs destroying trade. We want trade to grow and grow with confidence, in the way that the German economy grew mightily from the 1950’s onward. If we could replicate that in Scotland we would, as the saying goes, be quids in.
Former White House financial regulator and Goldman Sachs partner, Gary Gensler, today called for better blockchain regulation. He suggests that both Ether and Ripple may well have issues surrounding American securities regulations because of the way they have been traded. Bitcoin remains unaffected but it opens up the debate on more regulation within the cryptocurrency world.
Mr Gensler joins the world famous M.I.T. lab as a lecturer and has no virtual currency investments himself, said he was not tied to any coin’s winning the race. But he does think changes are necessary before blockchains can go mainstream.