Well played, both of you!

On my end we need at least a capital budget for the first operating year (at least) as well as a budgeted balance sheet and income statement. These hinge on consensus on what accurate estimates are. Then there's equipment, software, etc. to setup. So who knows how long it will take?

I'll help you with this. I'm taking a quick break from work at the moment, but this evening I'll organize a capital budget template, budgeted income statement template and budgeted balance sheet template. Do you have a google account or windows live account? If so we can use Google Documents or Office Live to share spreadsheets.

OK, I just saw the thing about the miner being a client and the server on a "vps." I take this to mean that the bitcoin software is not being run off the rigs that are doing the computing? This makes it easier for internal controls on the cash. The treasurer could have the money go directly to the account under his control and others could monitor.

Noagenda contacted me about financial advise for this startup.

From an accounting standpoint, my intial thoughts are to have a minimum of three officers/employees:

1. Hardware operator - physically controls rig and, with prior approval of other officers, spends money on assets and expenses. Also makes regular "deposits" to the Treasurer.
2. Treasure - controls the dispersal of funds for expenses, investment in assets (hardware) and payments to shareholders. Dispenses funds only upon approval of other officers. Approves funds dispersals with a public key signature.
3. Accountant - maintains the entity's books, produces monthly, quarterly, and annual financial statements. Reviews back up documentation for expenses and fund dispersals. Approves funds dispersals with a public key signature.

This division of authority and responsibility makes it more difficult for fraud to occur, and will give potential investors ease of mind. My understanding is that blockchainexplorer allows for verification of where funds are located. This can be used by the officers and shareholders to verify the existence of the BTC. The weaknesses in the control of funds are: the Treasurer making off with the money or the operator submitting fake expenses that then go into his pocket. The accountant does not control the funds or the spending of money, so is less likely to commit fraud unless he is involved with one of the other two in covering it up.

Initially I think what is needed is:

• A Capital Budget - expected cash outflows (when and how much and for what) and expected cash inflows (when and from where and how much, most likely will be mining revenue and investment capital.) The capital budget tells us when we will need to have cash to pay our bills
• Budgeted Financial Statements - What will the balance sheet likely look like on day one? Expected revenue over the year? Etc.
• Charter laying out directors, officers to be hired, etc. Where incorporation is occurring (if at all?)

I'd love to fulfill the role of the Accountant. To get a better idea of what I would do this work for, I'd like to know the expected number of transactions per month. In other words, paying the electric bill will happen at least once a month. Revenue will be "swept" into the account controlled by the Treasurer on a regular basis. Hardware will be purchased on a less regular basis. Etc. etc. Off the top of my head I don't imagine a $10,000 net worth operation taking up too much of my time. Oh yeah.... I work for bitcoins

Another quick question:

The cafe I'm talking to is very interested, but wants to know what the hardware will cost. The same person who runs the cafe also runs a food buyers club where orders are processed online. They currently use paypal or check to process payments. Would this retail payment system jive with an online system? Could people ordering bulk food online pay with their smartphone?

This is fucking awesome! My ultimate goal is to issue a local currency pegged to BTC! I'll be watching closely!

Question: what will the hardware for the POS be comprised of and how much will it cost? Will it easily integrate with current cash register systems?

We just need to develop a resource intensive checkers game.... wait. WTF were we talking about?

I am willing to buy your immoral BTC at a discount. Say.... 5% below market price?

Let the bidding commence!

I've read either this document or another like it. From what I understand just from what I've read is that many regions of Somalia are doing far better under a stable clan system than African Nations ruled by a dictator. I'd expect a long and bloody struggle in any country where the philosophical frame work that makes any form of anarchism possible collides with statism. Much like when the ideas of individual liberty clashed with the concept of the divine right of monarchs as rulers in the west.

That sounds good. Where would the BTC come from?

I like the idea of building a loop into your game. You can earn bitcoins by playing, and spend them in the game as well. A version of an incomplete loop where the users (players) make money is Picture This which is being developed by John Robb over at Global Guerrillas. It's not actually a game, and is instead aimed at gathering photos of businesses and neighborhoods and rewarding people who contribute.

A similar idea in the context of World of the Living Dead (WotLD, mentioned in my earlier post) would be a user create player's guide. A crucial part of the game is knowing where safe areas are with fewer zombies, but the fog of war restricts your view on the map. A 3rd party player's guide could pay players with BTC for providing intel on where hot zones and safe zones are. Then micro bounties can be used to reveal this intel on a map on a neighborhood by neighborhood basis. So if I were planning on moving my characters through an area, I could chip in a few BTC on a 20BTC bounty to reveal the intel for that area.

I've been playing World of the Living Dead lately (it's currently in beta.) It's a free to play browser based MMOTBSG. The developers sell credits to players which can be used to buy items (using paypal) in the game. Imagine if such a game accepted bitcoins! Actually, I seem to remember a thread about such a game in development

One more thought regarding velocity. Bitcoin, with some point of sale development, could become the standard medium of transaction displacing credit/debit cards and perhaps cash. This doesn't mean that BTC will be the ideal store of value. That may very well lay in some other form. So while the "till" and your "wallet" will hold BTC, the shop keepers safe and your bank account could hold gold, digital or physical, or it could hold some other store of wealth. Currency specialization of this sort could allow a much lower value for 1 BTC.

Mmmmm..... My wife is white and I'm browner than shit.... how does that make you feel?

Re: Che t-shirts everywhere; its a classic move. The radical left was either co-opted into the empire (the civil rights movement) or destroyed (the black panther party.) Now all we have is a supposed radical left making the case for expansion of the state via totalitarian humanism; human rights like the right to not be offended or have ones feelings hurt, especially if your a woman or a minority. Points if you're a female, gay minority. This type reaches out to my people all the time. A white kid once told me I wasn't a minority but a part of the "global third world majority" and that he couldn't wait until dark skin people ran the world with their kind, gentle hearts and love of nature..... wtf?

You might start seeing the real radical left re-emerging, but they won't be wearing Che shirts and they won't be white. They'll be black or brown and from the inner city. And they'll chase the liberals out of urban areas while the radical right chases the police-state-loving neo-cons out of America's heart land. Too bad I'll be too old when this all goes down.

But before we reach this point we will have competing digital currencies, BTC backed currencies, BTC pegged currencies, currencies pegged to other digital currencies. Maybe the currency that wins will be one that is pegged to a basked of currencies, with BTC in the basket. Maybe BTC becomes useful for particular markets but not for others. Maybe BTCs velocity goes so high that Amazon could earn US $31 billion worth of BTC with BTC valued at only $10/BTC.

I suppose you could call it that. I envision an issuer as making the market for the currency, rather than accepting deposits and issuing bearer certificates. Perhaps its just semantics, but in making the market for a pegged currency for an honest, razor thin spread, an issuer would demonstrate a consistent commitment to maintain its trade value at face value.

This is an uphill battle, too. The fundamentals of bitcoin are that its value lies in its widespread adoption as a medium of exchange. It beats credit cards and paypal hands down as far as cost of transaction. But its value as a medium of exchange also depends on its widespread adoption and use. Its facing a heavily entrenched adversary that already has that, which is more than half the battle. In my opinion, it needs solid development (already happening) plus a lot of luck. Sometimes the better product doesn't always beat out an inferior one that is established and entrenched. Sometimes the new product has to go through a few failed generations before it finally wins out.

Maybe parity will occur sooner, simply because the target I'm looking at (a stable price after widespread acceptance) is actually when 1 BTC is valued at $10 USD.

This is a challenge, but not an insurmountable one. Witness.... my wife and I are considering going in on some rural property near the Olympic Peninsula in Washington State with 5 to 10 other families. It consists of 55 acres (11 individual 5 acre lots combined into one,) with county zoning defining land use as rural/agricultural/forestry. It's density is 1 home per acre and the minimum yard buffer is waved if you can build a sewage disposal system that doesn't pollute the water source of your neighbors. So we could build a dense, urban village of 11 homes. We already have 5 families very interested, 4 of which have a head of household who works from home. The land, plus a house, costs $250,000. So half of the families have a salaried job working from home, the rest farm or commute to the nearby small town for work. If we work together we can keep our costs down (share a central heating system, adjacent home walls, put together wholesale orders for groceries, etc.) If we prove successful then we buy land adjacent to us to double our acreage and add 11 more homes. The county in mind will love the tax revenue, and the community we are planning will designed to be resource light in its very design (so the county won't have to extend and maintain utilities infrastructure to us.) If this model proves successful then we build a second community 5 miles down the road, kinda like the Amish. Eventually, one of these communities turns into commercial hub; then *we* tell the county what to do.

I'm trying to get this going in some of the tribal communities I'm connected to. Tribal governments have royally fucked up their communities, in general. I'm talking shoddily built shacks that resemble suburban housing developments built in the middle of fucking nowhere.... like 50 miles from the nearest grocery store. Keep in mind these are housing "developments" designed to provide homes for poor people who can't afford cars.

Defense against the mob.... I follow John Robb at Global Guerrillas. He proposes the concept of a resilient community, that is, a community that exists at the smallest possible level (from a neighborhood to a town to a city state) that can provide its own energy, security, food and transportation in an event of a disconnect from the global economy. If you build enough of these and network them with defense pacts then there's no way the mob can take down all of them. The design can be adapted as a for profit venture with clearly defined private property with covenants and contracts in place to maintain resiliency, or it can take the form of a 100% socialist commune. Take your pick! Basically, if and when this happens we will have a healthy pan-secession from the empire by default, and anarcho-pluralism will dominate the continent in the form of political units so small that no one could ever hope to over power another, and the full rainbow spectrum of political and cultural life will be represented. God damn I can't wait for that to happen. More on this topic (and synthesizing a movement with the radical right and urban lumpen-proletariat as warriors against the empire) at http://attackthesystem.com.

Oil prices will only matter until they surpass the next cheapest energy source. That's not to say damage won't be done. So let's think at the margin here. What are the incentives built into our current energy paradigm?

The average American household spends nearly $17,000 (34% of total average expenditures) per year on their over sized, piece of shit house in the middle of nowhere (the suburbs. I live in the 'burbs, too, so don't get offended.) $3,500 of that is spent on utilities to heat and cool that empty space created by vaulted ceilings, power the flat screen TV, etc.

A function of our city design (the suburbs) makes it impossible to live your middle class American life without at least one car. I've tried going without, and unless your in a select few neighborhoods in a select few cities, you'll spend half your day trying to get to where you need to go. It sucks. So the average American household spends $8,700 (17.6% of total average expenditures) per year on transportation.

Source: http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/

What does that tell you about the economy of the US? It tells you that a large portion of the economy exists to build and maintain the suburbs (over 50% of our household expenditures go toward this!!!) So, when the price of gas goes up to $10/gallon and electricity costs $1/kilowatt, I'm sure everyone will happily give up food, healthcare, entertainment, etc. to continue supporting their extravagant suburban lifestyle, eh? No! Instead, we'll abandon the suburbs, sell our cars, and hopefully start building traditional cities. That is, beautiful, dense, urban environments surrounded by wilderness or farmland with no suburbs in between. Instead of keeping the heat on all winter and the A/C on all summer, maybe we will start building homes suited to the environment in which they're built, with plenty of insulation and strategically placed windows. Instead of going to the bahamas for vacation maybe we'll just go to see more plays or more movies. Maybe we'll spend more time socializing with friends. Instead of lighting our homes with incandescents, maybe we'll switch to LED's. Maybe not, maybe that's worth the extra price. More of our money will go toward food, and less will go toward shitty plastic imports. More of our money will stay local, I imagine, as shipping prices will go up. Thankfully we have modern technology that can easily be adapted to serve local markets rather than global ones.

Our consumption patterns will shift toward energy efficiency, and a localized service based economy. We'll pay more for food, but I bet it'll taste better. We'll stop driving cars, but when we build beautiful, car free urban environments, walking will be a pleasure. We'll give up a huge house for a smaller one, with less stuff and instead spend our money on more "experiences" like going out to eat with friends or watching a show or taking in a concert; entertainment that doesn't rely on oil! I don't know..... I'm sure the transition will be a bit painful, but the end result doesn't sound too bad to me!

Further reading:

The Problem of Scarcity 3: Resource Scarcity
Let's Kick Around Those "Sustainability" Types
Life Without Cars
What a Real Train System Looks Like


Oh no! No cars! What will we do!