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Why Bitcoin is revolutionary?

Many ideas circulate about the reason behind the success of Bitcoin. As many people think only the blockchain technology is enough to boost the successes of Bitcoin. Transactions around the globe are registered within moments and validated within minutes.

In addition there is the consensus principle combined with the Proof of Work – mechanism. The Bitoinnetwork can be active on many servers building a loose network, that continues to work as long as one single server is online, what makes it very resilient. The proof of work helps the network to set the latest transactions within the network.

Last but not least there is the “deflationary” (in fact it has a decreasing inflation) currency Bitcoin. But the specialty behind it is that Bitcoin is defined by a hundred percent transparent set of rules that everyone can participate in to improve.

Looking at this raw description it is maybe understandable what makes bitcoin so special from a technical point of view. But to understand the “success” of Bitcoin, we have too look at the status-quo before 2009.

Before Bitcoin private money already existed. Bigger firms often had their own currencies that were mostly vouchers to buy goods and services at their own store. Private money that was used by more economic participants were mostly regional currencies that were only valid in small areas.

Here an intrinsic principle for money is shown. Only if a ledger (paper, digital or virtual) can accumulate enough trust it is used in a broader space. In other words: only when the people have trust that they get something back for their part of the ledger, the ledger will accepted. Another possibility to make a currency accepted is to define it as the currency a tax has to be payed in. These currencies are in competition to the private money, as both are only getting their worth out of the actual usage.

But how has Bitcoin accumulated so much trust in the last years?

One important factor is the open structure described earlier. But the more important reason is the crisis from 2007/2008 which was a pure financial crisis. This crisis of 2008 was inevitable as inflationary money always blow up bubbles that will burst during rather spontaneous events. The Central Banks had pumped massive amounts of money in the economy that build up extreme bubbles. As they burst the fiat money that is build upon the same principle inside every country worldwide, suffered a huge trust loss. Supporting right wing parties all over the world.

Although history since 2009 had shown that Bitcoin also has the tendency to build up bubbles it still has a big support. The usage as money is actually much closer to the state predicted by skeptics. This is most likely due to its rather deflationary character. Money that increases in worth over time is hoarded and not used to exchange it for goods and services.

So, Bitcoin has many facets that helped to make it trending but why is it revolutionary?

The idea here is that we as a society are suffering under the selfish and short-term fiscal policy of the central banks. Most likely they just do not know better and are so far away from the everyday lives of the affected citizens, that they see their selfish interest as the base that holds the society at the brink to chaos. In fact only a few realize that the level of debt was unsustainable from the first banknote on that was brought into the world as debt with interest.

While the fiat system is not threatened by forces that only see the central banks as the cause of the problem it is very well threatened by private money.

And this is where Bitcoin – and especially its derivatives the Altcoins – comes into play. They have the potential and the trust to include many people that are cut of from money supply by the rigid fiscal policy of the central banks that even accept wars to keep up the status-quo.

Now we have the technology, we have the knowledge, we have the key. Will we have enough trust in ourselves to open up the lock and free ourselves from the repression of inflationary fiat money?

Bitcoin in simple words

The underlying software for Bitcoin is the bitcointechnology. Most people only have rudimentary knowledge about the blockchain what is the core of it all. Here i try to cover the important basics.

In principle there are Numbers that can only be changed according to certain rules, that are defined within the Bitcoin software. Changing the numbers depends on private keys that are only accessible for the owners of the keys.

These rules describe a very basic (money) transaction system. You can “own” money by holding the private key to the numbers, because you are the only one that can send those numbers (also called Bitcoins) to a different private key of potentially another owner.

Private keys always have a visible part that works like a bank account number: You can send a transaction to it but you also need the password (In Bitcoin it equals the private key). So when you lose your private key the coins that are connected to that address can’t be accessed anymore.

This sending of Bitcoins describe a transaction, that also has to follow certain rules. To make bitcointransactions simple, the Bitcoin wallet program compose the important details and one just has to fill in the address and the amount one want to send.

The transactions of all users are then collected and put into a data unit that is called “block”. As every block after the first has a parent and one follower this is a chain – called blockchain.

There are several advances over the conventional monetary system as everybody can take part that has the Bitcoin program installed and the owner of the coins is unknown by default. Another important feature is the deflationary nature. Like gold there is a definite amount. So it is a contrast to the fiat money system.

The only problem with Bitcoin is: It has no social component, so it is mostly owned by big investors and early adopters. And it looks like this will not change in the future. According to our thinking a “social” currency (www.winc-ev.org) should be distributed under the people wide and as uniformly as possible. What is also not true for our fiat money.

Dr. Hendrik Richter,
CEO WINC e.V.

Growth, an addiction

Growth – Politicians, Bankers, Manager and scientific Economists speak of it, but what does it mean?

Some people think growth just means an increase of the pure size of a company/organization. But when leaders speak about it they most often mean the pure increase in revenue over time. Often it is just to cover the costs of a company or country, but sometimes it is intended to increase profit to attract more investors to a firm/investment.

So in principle it is understood why some have to grow for a certain time, but what about the economy? Why do we as a society need the growth of our economy to secure wealth?

To answer this question we have to look at the basics of every organization/company/state/organism: What you can spend depends on the income-spending ratio. If this ratio becomes negative you have to start to disassemble the organization/company/state/organism.

Looking at Greece one can see that the state disassembles itself by decreasing social spending more and more. So the question is: Why is there a systemic pressure (on the whole economy) to grow?

At first in our modern monetary system you have to pay interest on dept. In contrast to most peoples opinion there is no compelling argument for that. As dept payments increase the income/spending ratio gets negative.

Second, paper money can be printed without any limit. This leads to inflation most of the time. But although costs are rising it is hard for companies to increase the price of their products at the same rate. What follows is a negative income/spending ratio. Now there are only 2 ways to continue: increase income or decrease spending. In companies this most often means to dismiss employees (cut loans) or increase their productivity (sell new more expensive products).

Added together it always means more work for the single employee what equals a wage cut or increasing productivity. What leads to a lower demand – less income – and the need for more growth.

The whole system is devils circus that defines a downward spiral, so how to solve the problem?

The main profiteer in this system are the owner of the big companies that succeed in increasing productivity or dumping wages. So one way could be to set up extreme taxes on corporate earnings. But this needs a high consensus within the governments as the big companies already operate internationally since decades. Another possible solution is the principle of natural growth, where the growth rate flattens over time:

Demurrage – a new concept for money.

Basic income , worldwide

The idea of basic income is an idea known for decades. It is like a pension and tries to safe the poor from falling into social condemnation. And protect them from stigmas – like people without jobs are lazy.

In basic income every human being has a right to receive his personal income free of restrictions. This is very important, because children are most likely affected by poverty and are the ones least capable of protecting them self. This often leads to a downward spiral drawing generations into poverty.

The WINC e.V. has therefore implemented a basic income for everyone, worldwide. Just register at verify.winc-ec.com and set your personal Address to receive an unconditional income of 1 WLC each month. To get your personal Address you have to set up the WLC client program for your operating system. Please download the windows version from winc-ev.com or install on Linux from the sourcecode.

Bounties for Solidar

WINC e.V. will give you bounties in SDR for these actions:

  • A blockexplorer for Solidar – 500 nxt, 50 sdr
  • Include Solidar in Coinomi-android wallet – 50 sdr (presummable).
  • Compiled version of a Solidar wallet for Mac – 20 sdr.
  • Run the Solidar forum – 50 sdr/year.
  • Redraw the coin logo – 20 sdr.
  • Translate content in another language – contact info@winc-ev.org prior to work.

Demurrage, a new concept for money

Demurrage – A concept by Silvio Gesell.

Money is one of the oldest inventions of mankind. Broken down to the core money is a unit of account. In the purest form it is just numbers. So it can easily be transferred from one owner to another. This could be imagined as a small conversation:

Person A to Person B: How much do you owe me?
Person B to Person A: 5 units.
Person A to Person B: Please give it to Person C i owe him 5 units.

The money is transferred within seconds without any physical interaction. So it is a very easy and powerful concept. Obviously the idea to ban money, like it is thought in some alternative communities, seems ridiculous at that point.

Following the idea of David Graeber in “Debt – the first 5000 years”, money was created to count debt. And in fact, our modern money creates an equal amount of dept when it is generated. So modern money is debt. But what does that mean and is it the cause of the problems we observe in the financial crises in countries world-wide?

All countries that went broke are not able to pay back their debt. What can sometimes lead to catastrophic social deficits. But debt is only a measurement for an income-spending ratio. Looking at the low outgoing in social sectors due to austerity in many countries the problem presumably is not that governments are spending too much but that not enough income is generated.

Although short-term income can be generated by selling state-owned property, a sustainable increase in income can only be secured through taxes. Given the assumption that outgoing are already low, the problem is that not enough revenue is generated.

Looking at the middle-class worldwide the taxation is already high for low-income households, meaning the upper income households are paying not enough taxes. Concluding the governments are not able to establish a sustainable taxation system.

There are several possible solutions to solve the problem and decrease inequality. One is to tax the higher incomes more. One is to drastically increase the legacy tax. One is to systemically introduce debt cuts. One is to spread new central Bank money. And one is to tax money itself.

All solutions are possible at any given time. Obviously they only were executed efficiently several times throughout history – most likely because the government is automatically part of the upper income class. The first three options already existed but were gradually decreased over time. The debt cuts that are also proposed by David Graeber also existed but are problematic, because there needs to be some artificial point to trigger a cut. This is hard to measure and induce deflationary effects before the cuts (money is worth more after the cut what induces speculations).

Demurrage – Another smarter solution is to tax money itself. With modern digital technology tax evasion can be made impossible. And the income can then be spent to social activities (e. g. a basic income like in our digital currency – Worldleadcurrency). More to that, like the Woergl Freigeld showed investment rates go up and unemployment rates go down, even within a global recession. The idea was developed by Silvio Gesell and described in the “the natural economic order” from 1918.

Hendrik Richter,
CEO WINC e. V.

“Floating” Money

While Freigeld (Free money) is the rather technical description the more philosophical point of view on demurrage currencies is summarized with the term “floating money”.

Floating money is referring to the property of Freigeld that it is increased in velocity. Velocity in a monetary sense is defined by how many times a unit of account is changing its owner. Looking at gold or Bitcoin for example, the velocity is low (The velocity and dormancy of bitcoin).

On first sight it seems good for bondholders. The worth of the asset is higher than it would be when more units were available. Through price differences those assets can be easily concentrated by trading. This even increases the worth of the asset and give the bondholders an extreme superior position over the newcomers.

What makes sense in an economical way is catastrophic for a society when people are dependent on this asset (like housing, food or money). The upper income class is now able to dictate nearly everything in the life of the midd and low income class. This increases inequality further and ends up in a vicious cycle that ends in a war in the worst case.

While food can only be hoarded to a certain degree (food will rott if stored for a longer period) housing can more easily be “hoarded” by buying houses and put on vacancy. Money is the even easier to hoard (gold and bitcoin are best because of their definite supply and they are not “rotting”).

Now it maybe gets clearer why a gold-backed currency can not be a solution to social problems. But how can we get to a more social society, in terms of securing the basic needs?

To spread money within the society a basic income is one of the most convienient possibilities. But the problem of hoarding would still exist. Here the idea of floating money comes into play where the velocity of money is increased. In money terms there would a demurrage fee on hoarded money. With modern digital currencies this fee could be calculated easy and fair.

If a fee would be put on money. Bondholders are forced to invest their money what could result in zero or negative interest loans. Economy could invest then more easily what increases overall wealth. Like the blood that flows through a body and supplies the different organs.

Silvio Gesell supposed such a fee also for housing (land property), what for sure makes sense but is a lesser problem than money hoarding.

WLC posts archive


10 Mar 16 Buy, sell and connect with #Worldleadcurrency  @MoBUinet.com. Set up your account to start your own shop or to buy fancy things with digital money. Have fun.


WLC – SFA

03 Mar 16 We have a new activity. WLC – SFA – support your favorite artist. We list your favorite Band/ Initiative or Artist to receive donations in WLC.


Simple Proof Of Stake.

09 Feb 16 Scince the hashrate crashed at the beginning of the year, we are looking into a possibility to secure the Worldleadcurrency by another method – known as proof of stake.


WLC verify is online!

WLC verify the WINC portal to verify your personal id via passport is online. If you like to join please visit verify.winc-ev.com The payout to the partner organizations is halted and the new method will now be the standard to join. As mentioned the verification need to be renewed every 2 years.


Youtube channel

23 Oct 15 The WINC association has a youtube channel now where german/english wallet and backgrundinformations will be published.


Partner organization #2

23 Oct 15 The basic income initiative from Cologne/Germany is our second partner Organization for testing WLC-donation system.


verify@winc-ev.org

20 Oct 15 The WINC association is planning to take over the distribution of WLCs in Rhein-Sieg Kreis/Germany introducing a Database where everyone can get verified and manage its WLC address where the basic income will float to. Everybody will get a verificationnumber that is by chance a unique identifier and is a checksum of the personal number on the identification card. This guarantees that no personal data needs to be stored in clear text. Every 2 years the verification process (personal or by videochat hast to renewed).


New Mining Pool

24 Sep 15 For all Bitcoin miners out there, a new bitcoin mining pool for #WLC is online at: http://superninjapool.tk/


WorldLeadCurrency won voting

24 Sep 15 WorldLeadCurrency has won the voting period on c-cex.com. If you do not have an account at c-cex create one, its easy and customer friendly.


First partner

22 Sep 15 The basic income initiative from Bonn/Germany is our first partner Organization for testing WLC-donation system. Interested in Bonn citizens that want to establish a basic income.


WLC on c-cex.com

07 Sep 15 Hello World,

#Worldleadcurrency is now available for voting on C-Cex.com. Every voice counts, thank you!


Android Wallet

31 Aug 15 Now there is a Wallet available for Android phones. Feel free to check it out. Owner of older phones please consider the App is memory intensive and can not be used if your phone has low memory availability (F. e. Jolla Phone or Samsung Galaxy S2). Were on it to fix the issue so please stay tuned.


Different Monetary Systems


Block explorer online

03 Jul 15 Thanks to pollforall from the bitcointalk.org forum a block explorer for WLC is now online.

PLEASE CONSIDER:

1. The balances are calculated without demurrage – that means they are lower than shown.

2. The decimal point is not correct. It should be 8 digits to the left.

Both issues are intended be fixed.


Solikon 2015

19 Jun 15 In september there will be a big confence in berlin for solidly economy (www.solikon2015.org). We will try to organize a workshop for beginners there to introduce WLC and the bitcoin technology to the solidly community.

– Update: the host was not able to give us a room, so there was no participation from WINC – maybe next year?


This version is obsolete

12 Jun 15 Hello world, the warning above occurs some times when using the “getinfo” argument for the Deamon. The warning has no consequences for your client. We are about to fix it. This block entry will be updated when finished.

– Update: Problem fixed in sourcecode and wallet.


Connection issue

11 May 15 A new DNS-seeder has been added. So for everybody that experienced connection problems pease download the fixed wallet and install it.


Registration of WINC e. V.

26 Mar 15 After a restart of the WLC-Chain introducing lower security costs, the long awaited conformation has arrived with the post that Winc e.V. is now a registered association. The assocciation is taking over the administration and coordinates the marketing, the #WLC payout and the future sourcecode updates.

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