7200 CAD to BTC (7200 Canadian Dollar to Bitcoin) Exchange

The Future Of Cryptocurrency in 2019 and Beyond

A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques known as cryptography. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009. While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general and Bitcoin in particular. So, will these alternative currencies eventually supplant conventional currencies and become as ubiquitous as dollars and euros someday? Or are cryptocurrencies a passing fad that will flame out before long? The answer lies with Bitcoin.
The Future of Cryptocurrency
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs is a verified exchange traded fund (ETF). An ETF would definitely make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which some say may not automatically be generated with a fund.
Understanding Bitcoin
Bitcoin is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network. While this decentralization renders Bitcoin free from government manipulation or interference, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers. They are currently created at the rate of 25 Bitcoins every 10 minutes and will be capped at 21 million, a level that is expected to be reached in 2140.
These characteristics make Bitcoin fundamentally different from a fiat currency, which is backed by the full faith and credit of its government. Fiat currency issuance is a highly centralized activity supervised by a nation’s central bank. While the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit to the amount of such currency issuance. In addition, local currency deposits are generally insured against bank failures by a government body. Bitcoin, on the other hand, has no such support mechanisms. The value of a Bitcoin is wholly dependent on what investors are willing to pay for it at a point in time. As well, if a Bitcoin exchange folds up, clients with Bitcoin balances have no recourse to get them back.
Bitcoin Future Outlook
The future outlook for bitcoin is the subject of much debate. While the financial media is proliferated by so-called crypto-evangelists, Harvard University Professor of Economics and Public Policy Kenneth Rogoff suggests that the “overwhelming sentiment” among crypto advocates is that the total “market capitalisation of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”
The historic volatility of the asset class is “no reason to panic,” he says. Still, he tempered his optimism and that of the “crypto evangelist” view of Bitcoin as digital gold, calling it “nutty,” stating its long-term value is “more likely to be $100 than $100,000.”
Rogoff argues that unlike physical gold, Bitcoin’s use is limited to transactions, which makes it more vulnerable to a bubble-like collapse. Additionally, the cryptocurrency’s energy-intensive verification process is “vastly less efficient” than systems that rely on “a trusted central authority like a central bank.”
Increasing Scrutiny
Bitcoin’s main benefits of decentralization and transaction anonymity have also made it a favored currency for a host of illegal activities including money laundering, drug peddling, smuggling and weapons procurement. This has attracted the attention of powerful regulatory and other government agencies such as the Financial Crimes Enforcement Network (FinCEN), the SEC, and even the FBI and Department of Homeland Security (DHS). In March 2013, FinCEN issued rules that defined virtual currency exchanges and administrators as money service businesses, bringing them within the ambit of government regulation. In May that year, the DHS froze an account of Mt. Gox – the largest Bitcoin exchange – that was held at Wells Fargo, alleging that it broke anti-money laundering laws. And in August, New York’s Department of Financial Services issued subpoenas to 22 emerging payment companies, many of which handled Bitcoin, asking about their measures to prevent money laundering and ensure consumer protection.
Alternatives to Bitcoin
Despite its recent issues, Bitcoin’s success and growing visibility since its launch has resulted in a number of companies unveiling alternative cryptocurrencies, such as:
• Litecoin – Litecoin is regarded as Bitcoin's leading rival at present, and it is designed for processing smaller transactions faster. It was founded in October 2011 as "a coin that is silver to Bitcoin’s gold,” according to founder Charles Lee. Unlike the heavy computer horsepower required for Bitcoin mining, Litecoins can be mined by a normal desktop computer. Litecoin’s maximum limit is 84 million – four times Bitcoin’s 21-million limit – and it has a transaction processing time of about 2.5 minutes, about one-fourth that of Bitcoin.
• Ripple – Ripple was launched by OpenCoin, a company founded by technology entrepreneur Chris Larsen in 2012. Like Bitcoin, Ripple is both a currency and a payment system. The currency component is XRP, which has a mathematical foundation like Bitcoin. The payment mechanism enables the transfer of funds in any currency to another user on the Ripple network within seconds, in contrast to Bitcoin transactions, which can take as long as 10 minutes to confirm.
• MintChip – Unlike most cryptocurrencies, MintChip is actually the creation of a government institution, specifically the Royal Canadian Mint. MintChip is a smartcard that holds electronic value and can transfer it securely from one chip to another. Like Bitcoin, MintChip does not need personal identification; unlike Bitcoin, it is backed by a physical currency, the Canadian dollar.
The Future
Some of the limitations that cryptocurrencies presently face – such as the fact that one’s digital fortune can be erased by a computer crash, or that a virtual vault may be ransacked by a hacker – may be overcome in time through technological advances. What will be harder to surmount is the basic paradox that bedevils cryptocurrencies – the more popular they become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence.
While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they have to first gain widespread acceptance among consumers. However, their relative complexity compared to conventional currencies will likely deter most people, except for the technologically adept.
A cryptocurrency that aspires to become part of the mainstream financial system may have to satisfy widely divergent criteria. It would need to be mathematically complex (to avoid fraud and hacker attacks) but easy for consumers to understand; decentralized but with adequate consumer safeguards and protection; and preserve user anonymity without being a conduit for tax evasion, money laundering and other nefarious activities. Since these are formidable criteria to satisfy, is it possible that the most popular cryptocurrency in a few years’ time could have attributes that fall in between heavily-regulated fiat currencies and today’s cryptocurrencies? While that possibility looks remote, there is little doubt that as the leading cryptocurrency at present, Bitcoin’s success (or lack thereof) in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
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Shits HAPPENING!!!!Integration with Kraken: The beginning of Crypterium SX

As the world’s first and biggest cryptobank, Crypterium has a goal of bridging the gap between cryptocurrencies and their use in everyday life. We want to let you shop in the nearest supermarket with your coins and tokens. And we want to make sure that while paying you get the best exchange rate possible. Here’s where our ambitious plans of integrating with the most popular exchanges come from, as well as our brand new Crypterium Smart Exchange technology.
Behind the scenes
Your payments with Crypterium look super easy and take seconds. You come to a shop, you tap your smartphone against the payment terminal or scan a QR code, and that’s it — the payment is done.
But there’s a complex process behind the scene. Just as we’re initiating a fiat transaction from our bank account that’s going to get you the purchase, we’re simultaneously writing off the same amount in cryptocurrency from your wallet, selling it on the exchange and sending the fiat that we get to our bank account.
To maximize the efficiency of those operations, we’ve built a new generation technology — Crypterium SX — that guarantees the best exchange rates for us and our customers.
How we get you the best deal
Crypterium SX ensures the most efficient bid-offer matching across natural peer-to-peer flow, as well as third party crypto-exchanges.
Our algorithms will be analyzing order books of the most popular crypto exchanges in real time predicting how our order could influence the market, and which exchange is optimal in each case for making the transaction.
All historical transactions are stored in a dedicated data-warehouses that continuously analyze data to enhance risk management, identify predictive behaviors, and enable Crypterium to optimize the cryptocurrency exchange process and better educate the customer on possible payment strategies. For example, the app may highlight different payment mixes depending on the current cryptocurrency valuations.
And you will always see in real time not only the amount of cryptocurrency you are going to spend, but also the value of your crypto funds in your preferred fiat currency.
Kraken is in, more is to come
Founded in 2011, San Francisco-based Kraken is consistently rated the best and most secure Bitcoin exchange by independent news media. It is the largest Bitcoin exchange in euro volume and liquidity and also trading Canadian dollars, US dollars, British pounds and Japanese yen.
So we chose Kraken as the first exchange to be integrated with Crypterium SX. The technical part is complete: our servers can already derive the going rates from Kraken, as well as send and receive transaction requests. This is a crucial step towards the creation of a fully-fledged crypto-fiat payment system, and we are absolutely delighted to tell you about it.
Integration with at least 10 more exchanges is planned for the nearest future, so stay tuned.
About Crypterium
Crypterium is one of the most successful ICOs of all time. Over 72,000 tokenholders contributed $51+ million to help us bridge the gap between cryptocurrencies and their use in everyday life.
The CRPT token is traded on HitBTC, one of the Top-10 cryptocurrency exchanges.
All the Crypterium solutions will only be accessible for use if you have CRPT that will be used as ‘gas’ for the transactions. Every time someone makes a payment, a fee equal to 0.5% of the value of the transaction in CRPT is taken from the CRPT token holder’s account and burnt as fuel. This means the number of CRPT tokens will be reducing over time.
Join us now!
submitted by Knauf123 to crypterium_com [link] [comments]

Hut 8 Mining Corp. Announces First Quarter 2018 Financial Results

Hut 8 Mining Corp. Announces First Quarter 2018 Financial Results
All Figures in Canadian Dollars Unless Otherwise Noted
Company raised $70.0 million to fund investment in mining hardware Entered into definitive agreement with the City of Medicine Hat for the supply of 42 MW of electric energy First quarter 2018 revenue of $10,988,949 Strong gross profit margin of 80%, or $8,823,650 (excluding depreciation) Adjusted EBITDA of $7,690,365 828 Bitcoin mined in Q1
TORONTO, May 24, 2018 (GLOBE NEWSWIRE) -- Hut 8 Mining Corp. (TSX-V:HUT) (“Hut 8”, or the “Company”), a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the world’s leading full-service blockchain technology company, the Bitfury Group, is pleased to announce its financial results for the first quarter ended March 31, 2018 (“Q1 2018”). Hut 8 owns Bitcoin mining datacenters called BlockBoxes that are purchased from the Bitfury Group.
Corporate Update
Andrew Kiguel, President and Chief Executive Officer of Hut 8, said: “We are pleased with the progress Hut 8 has made in a very short period of time. Hut 8 began mining on December 22, 2017 with 7 BlockBoxes in Drumheller, Alberta, with power capacity of 7.7 MW, representing 52.5 PH/s. On February 7, 2018, an additional 10 BlockBoxes were added in Drumheller for an aggregate power capacity of 18.7 MW, representing 128 PH/s. Despite the ramp-up period, in Q1 2018 Hut 8 was able to mine a total of 828 Bitcoin. As of May 24, 2018, Hut 8 has mined in excess of 1,300 Bitcoin which we continue to hold.”
“We are excited that our data center build-out in the City of Medicine Hat is well underway. We estimate that full-scale production will commence by September 2018. The City of Medicine Hat site will consist of an additional 40 BlockBoxes. Once operational, Hut 8 will own 57 BlockBoxes, representing a 335% increase from current mining capacity, securing our position as one of the largest publicly traded Bitcoin miners in the world, with a total of 66.7 MW of power capacity and 448 PH/s. With this increase in BlockBoxes from 17 to 57, we expect that our daily mining production will increase significantly. We believe our City of Medicine Hat Facility will represent operational excellence and set a new global benchmark for industrial scale cryptocurrency mining operations,” added Kiguel.
Manufactured by the Bitfury Group, the BlockBoxes are regarded as one of the most powerful and cost-effective Bitcoin mining solutions available on the market. The BlockBoxes are based on cutting-edge hardware and software and are fully configurable and upgradeable to the next generation of silicon technology. The efficient design and low operating cost of the BlockBoxes makes Bitcoin mining more productive and affordable. As previously disclosed, Hut 8 has obtained an exclusive right to all Bitfury Group hardware and software solutions, including the BlockBoxes, for cryptocurrency mining within North America.
Q1 2018 Financial Results
Q1 2018 represented Hut 8’s first full quarter in operations. With a gross profit margin of 80% (excluding depreciation), the Company’s mining cost-per-bitcoin was $2,615 (US$2,028), which compares favorably to the selling price of Bitcoin at the end of Q1 2018, being $8,991.67 (US$6,973.53).
The Company believes that Hut 8 is amongst the lowest cost miners of Bitcoin in the world. Hut 8 anticipates its cost per Bitcoin to remain competitive, based on the increasing difficulty rate, offset by the City of Medicine Hat site that will operate more efficiently, next generation BlockBoxes, and a benefit from an improved energy contract for the price of electricity over the Drumheller site.
Selected Financial Highlights from Q1 2018
Revenues of $10,988,949 Gross profit of $8,823,650 (excluding depreciation) EBITDA1 of $1,824,685 and Adjusted EBITDA1 of $7,690,365 Completion of the Company’s “Qualifying Transaction” Raised $70.0 million of equity capital to fund investments and growth Cash balance of $23.7 million and working capital of $19.3 million Mined 828 Bitcoin in Q1 2018, bringing total mined since commencing operations on December 21, 2017 to over 1,300 On February 7, 2018, added 10 new operating BlockBox Data Centers for a total of 17 in operation, representing 18.7 MW / 128 PH/s Purchased 40 additional BlockBoxes to be operational by Q3 2018 representing additional 48 MW / 320 PH/s Entered into definitive agreements with the city of Medicine Hat for the supply of 42 MW of electric energy and the lease of land
Summary of Q1 2018 Financial Results Revenue $ 10,988,949 Gross Profit $ 3,183,181 Gross Profit % 29% Gross Profit (excluding depreciation) $ 8,823,650 Gross Profit % (excluding depreciation) 80% Operating income $ 218,701 Net Loss $ (3,815,784 ) EBITDA $ 1,824,685 Adjusted EBITDA* $ 7,690,365 Loss per share $ (0.05 ) * EBITDA adjusted for fair value re-measurement of digital assets, listing expense and one time transactional costs.
As a result of the decrease in the price of Bitcoin in Q1 2018, Hut 8 incurred a $4.1 million non-cash decrease on the re-measurement of the value of Bitcoin in inventory, and consequently, finished the quarter with a net loss of approximately $3.8 million. In future quarters, when revenue is recorded, the Company would expect to see unrealized gains or losses based on the price of Bitcoin on the corresponding reporting date, relative to the price on the day mined.
This earnings release should be read in conjunction with the Company's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for Q1 2018, which have been posted under the Company’s profile on SEDAR at www.sedar.com and are also available on the Company's website at www.hut8mining.com.
ABOUT HUT 8 MINING CORP.
Hut 8 Mining Corp., headquartered in Toronto, Canada is a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the Bitfury Group, the world’s leading full-service blockchain technology company. Through the Bitfury Group, Hut 8 has access to a world-leading proprietary mix of hardware, software and operational expertise to construct, optimize and manage datacenters in low-cost and attractive jurisdictions. Hut 8 is led by a team of industry experts and intends to provide investors with exposure to blockchain processing infrastructure and technology along with underlying cryptocurrency rewards and transaction fees.
Hut 8 provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore and safely store their bitcoins. Hut 8 provides a secure and simple way to invest. For more information, visit www.hut8mining.com.
Key investment highlights and FAQ’s: https://www.hut8mining.com/investors.
Keep up-to-date on Hut 8 events and developments and join our online communities at Facebook, Twitter and LinkedIn.
Hut 8 Media Contact:
Talk Shop Media Natalie Davidson Email: [email protected] Tel: (604) 215-2749
Hut 8 Corporate Contact:
Andrew Kiguel President and Chief Executive Officer Email: [email protected]
FORWARD LOOKING STATEMENTS
Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Hut 8 as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Filing Statement relating to the Qualifying Transaction of Oriana Resources Corporation and Hut 8, which is available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Hut 8 expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 EBITDA and Adjusted EBITDA are non-GAAP measures and consequently, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income and loss presented in accordance with GAAP. The Company uses Adjusted EBITDA as a non-GAAP financial performance measurement. The Company calculates Adjusted EBITDA by adding back to net income (loss): interest, income taxes, depreciation and amortization expense, and impairment charges as further adjusted to add back stock-based compensation expense and non-recurring items. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing the Company’s financial results with other companies in the industry, many of which also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as amortization, depreciation, stock-based compensation and impairment charges, as well as non-operating charges for interest and income taxes, investors can evaluate the Company's operations and its ability to generate cash flows from operations and can compare its results on a more consistent basis to the results of other companies in the industry. Management also uses Adjusted EBITDA to establish internal budgets and goals, and evaluate performance of its business units and management, and evaluate potential acquisitions. The Company considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a useful measure of the Company's historical and prospective operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes interest income and expense and income taxes and non-recurring items such as goodwill impairments, each of which impact the Company's profitability and operating cash flows, as well as depreciation, amortization, impairment charges and stock-based compensation. The Company believes that these limitations are compensated by clearly identifying the difference between the two measures. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures provided by other entities.
submitted by Fiach_Dubh to Bitcoin [link] [comments]

Focus on the vision for Bitcoin, not just its price.

Preamble
The purpose of this post is not to discourage enthusiasm over the recent appreciation of Bitcoin. Everyone here is excited, and rightly so. I’ve put this together because I think people are getting a bit caught up in price mania and losing sight of the bigger picture.
The ideas I’ve pulled together here are pretty condensed as it is, so unfortunately I have no TLDR. I don't claim to have a prophecy to share, or concrete answers to questions about where Bitcoin will go in the future -- nobody does. But that doesn't mean there's nothing to talk about.
I would suggest reading slowly and giving your imagination time to picture or "render" things. There is no other way to grasp Bitcoin.
Final preamble: I know there are people in this sub who are here just for the gains -- they freely admit it, and they laugh at how "true believers" will be left holding the bag when they sell. My hope is that those of you who feel this way will have an open mind. You might see things in a new light, who knows?
Here we go…
The Medium is the Message
In the 1960s, a Canadian professor named Marshall McLuhan became widely known for his thorough analysis of the evolution of communication technologies. His central precept was that communication technologies have dramatic effects on populations regardless of the content they carry at any particular moment. The radio, for example, allowed private microphones to broadcast to widely distributed speakers, which enabled the amplification of private viewpoints on a public scale. This had profound effects on society that played out regardless of what particular messages were carried over particular radio frequencies at particular times.
McLuhan’s famous aphorism, “The Medium is the Message,” is a distillation of this precept. In point form: 1) each new communication technology changes the environment into which it is introduced; and 2) the net effect of a technology over time is both far more interesting and harder to discern than the effect of any particular use of that technology or phase of its development. In other words, it is harder to see the forest for the trees, but seeing the forest is everything.
So: what effect will Bitcoin have on the world over the long run? What is the meaning of Bitcoin?
The Roman Model
To understand where we might be going, we have to first understand how we got to where we are. In the West, our societies are founded on the Classical traditions which were seeded in Ancient Greece and “scaled” so to speak in Ancient Rome. McLuhan had a lot to say about this from a technological point of view:
The development of writing on lightweight media such as papyrus and parchment enabled the externalization of knowledge. Thus, the oral traditions of Ancient Greece were subsumed and replaced by written traditions which were far less lossy and could be refined over time. Writing on lightweight media also enabled the centralized control of vast resources over large distances, which would have been impossible using engraved stone or oral communication. This was perfected by the Romans and thrown into overdrive by Johannes Gutenberg's invention of the printing press around 1450.
In its abstract form, the Roman model takes the form of bureaucracy – hierarchical organization -- and this model has underpinned the structuring of society in the West for the past two thousand years. Look up "org chart" on Google Images if you can't picture one. Our societies are comprised of org charts within org charts within org charts -- try the following searches on Google Images: military org chart, bank org chart, government org chart, university org chart. Everything in our society is centralized, bureaucratized, and nested within the context of the nation state which is run by a central bureaucracy called the government, itself divided into departments within departments, orgs within orgs.
This is not to say that humans didn't organize hierarchically before ancient Rome -- of course they did, as do apes, dogs, chickens, etc. However, in a social hierarchy such as a tribe, there is a scale limit (Dunbar's number, 150) because each member must know his place and his role as well as the places and roles of all other members. The hierarchy lives inside its members' minds and looks more like a swarm than an org chart. Bitcoin is, of course, this type of network, where each node has full knowledge of the state of the network and participates in it voluntarily.
Bureaucracy, on the other hand, is based on the writing down of roles (job descriptions) and makes people interchangeable. There is no limit to scale as long as you map everything out carefully (management). The lifeblood of bureaucracy is the transmission of written forms of information (paper-pushing) from the center to the periphery along defined, linear routes. Each node receives its orders, performs its specialized role, delegates if the role requires it, and then awaits new orders. Privilege and planning are concentrated near the center -- as is risk.
These structures are inherently fragile and collapsible. If you undermine a high-value node as happened in the collapse of Lehman Brothers, the whole edifice collapses. The entire global financial system barely withstood the collapse of a single American bank - it is that fragile.
Each nation's banking system is likewise a matrix of bureaucracies operating as a single, hierarchical supply chain whose product (the national currency) flows outward from a central node (the central bank) through successively less privileged nodes (investment and commercial banks) down to the level of branches and ATMs. At each level of the banking system, additional product is created and loaned out (credit/debt) using the productfrom the level above as a stake (fractional reserve lending). The banking systems are insulated from competition by governments through the decree that taxes must be paid in national currencies. And to keep the currencies moving, everyone is raised from birth to want more and then given the appearance of more through the creation of more by fiat, meaning by arbitrary decree, without any necessary connection to the creation of new wealth. This is inflation: the steady creation of new money to repay debt and keep the show going. It is a Ponzi scheme by design, and it relies the continued "buying-in" of young people in order to survive.
Each national currency has value and utility only by decree and only within that nation's cell in the global mosaic. To move value from one nation to the next requires snaking it through tenuous international pathways, paying entrenched gatekeepers, and exchanging one national currency for another. You have to be somebody to access the banking system. The more somebody you are, the more access you get. It is principally through control of economic access that strong nations bully weaker ones, rich people bully poorer ones. There is tremendous pent up tension in our world as a result. This is where we are.
The Center Cannot Hold
McLuhan predicted that the advent of the electronic age and the emergence of global communication networks would lead to the dissolution of these centralized, bureaucratic structures from the bottom up. He died before the spread of the Internet but described the end result with crystal clarity in his writings. His vision of an interconnected world, which he called the "Global Village," is here now. Every person has the ability to broadcast information to others in their networks over the Internet. If a transmission is perceived as having sufficient value, the receiving people pass it on, and so on. Above a certain threshold of significance, transmissions are repeated by all people to all other people: this is virality and there is nothing that institutions can do to harness or stop it. The Arab Spring for example brought down an array of national governments in a span of months.
Like a rising tide, global communication networks are bringing about an inevitable dissolution of the Roman model all around us: the music industry was upended by Napster; newspapers are being displaced by twitter and blogs; radio stations are being displaced by podcasts; broadcasters are being displaced by Netflix and YouTube; brick-and-mortar stores are being displaced by Amazon and eBay; AirBnb is gobbling up rental supply; traditional transportation services are being displaced by Uber; and now decentralized currencies are coming after centralized ones. Quoting W.B. Yates: “Things fall apart; the center cannot hold; Mere anarchy is loosed upon the world.”
It is important to realize that even though the post-Dot-Com networks like Facebook and eBay were more effective than their institutional predecessors, they are still quite fragile since they are centralized. They can be hacked, compromised, back-doored, subpoenaed, or otherwise shut down. In contrast, a truly decentralized network is perfectly flat and impossible to shut down. The music industry could kill Napster by going after Sean Parker, but it cannot touch BitTorrent. True decentralization, at scale, is one of the principal reasons why Bitcoin is secure: whatever it becomes, it cannot be stopped because there is no center to hold, and nothing to attack.
At this point, I think it makes sense to explain how Bitcoin works, and why it has value. If those questions can't be answered clearly, there's no basis for thinking Bitcoin will disrupt traditional banking. I do, however, think there are very good answers to those questions which I'll try to present below.
Bitcoin and Blockchain
Imagine you live in a pre-historic tribe of ten people. As a group, you need to find a way to keep track of who did what work, and in what quantity. In other words, you need an abstract “work unit” that can be traded for work and held for use in future exchanges. You could use shiny rocks or something else similarly rare, but people would still be able to cheat the system: why do actual work if you can simply go on a hunt in the forest and find new rocks?
One solution is to create a ledger or list that keeps track of how many rocks each person has. If the ledger is the authority on who has what, people would not be able to inflate their balances by introducing new rocks or other work units from outside the system. The problem is, everyone has to trust the keeper of the ledger. If only one entity maintains the ledger, they ultimately control how much money everyone has (banks).
Decentralization is the solution to this problem. You can write down ten copies of the ledger and distribute a copy to each person in the tribe. At the end of the day, everyone could cross-check the transactions that took place with everyone else and a consensus could be formed about who has what without appealing to a central authority.
Eventually, the people might realize that the rocks themselves are unnecessary, and that it is actually the ledger that is important. The rocks, like all currencies, are meant to track work. If a ledger is already doing that, the rocks themselves become extraneous. The actual units of currency are the work units on the ledger. And if everyone agrees to use the same ledger, its work units have value.
The blockchain is that ledger and Bitcoin is its work unit.
Proof of Work
In the illustration above we can see that the utility of a blockchain is that it enables distributed peers to prove to each other that they have done work, and to trade their work units freely without appealing to a trusted intermediary. The obvious next question is: what proof do we have that we can trust the Bitcoin blockchain?
Bitcoin mining is based on a Proof of Work consensus mechanism. To put this as simply as I can, each and every mining node on the network is competing against the rest of the network to generate a small piece of data that proves it has performed an enormous number of computer operations using a batch of new, valid transactions as an input. The amount of work that it takes to successfully mine Bitcoin is dictated by how much computer power has voluntarily joined the mining network - and this is adjusted dynamically as miners enter and leave the network. Each operation requires a tiny bit of electricity since a computer must perform it, so as the difficulty of the Proof of Work operation scales, so too does the cost of generating it.
As of writing, the Bitcoin network is collectively performing about 8,250,000,000,000,000,000 operations per second, and it takes an average of about ten minutes worth of this grind for a single node on the network to successfully produce an acceptable proof of work and add a block of transactions to the blockchain. The winning node is awarded new Bitcoin by including a transaction in its block that credits its own wallet -- now we understand mining.
So you want to be a Bitcoin miner? Let's say you have a powerful gaming computer that can perform about 100,000 Bitcoin computer operations per second (a realistic amount by the way). It would have roughly a 1 in 82.5 quintillion chance of mining a block if you were to enter it into the mining race today. If you had a stack of 1000 of these gaming computers your odds of mining a block would improve to roughly 1 in 82.5 quadrillion. A million of them? 1 in 82.5 billion. Etc. Miners use specialize hardware to perform the computer operations, but the point still stands: it takes a staggering amount of computer power and thus a staggering amount of electricity to "get a word in" on the Bitcoin blockchain.
But let's say you get lucky and are able to generate a proof of work. That proof of work will be tied inexorably to whatever batch of transactions you are trying to add to the blockchain since those transactions were part of the input of the computer operation. Your transactions must be valid or else the rest of the network would reject your work. You wouldn’t be able to double-spend, create Bitcoin by fiat, or spend from balances that you don’t have the keys for. The network would reject your block.
The larger and more distributed the mining network is, the more cost-prohibitive it is to compromise it. In other words: the more people you have checking the ledger from different nations and backgrounds, the harder it is to override the distributed, international consensus. And that is why the Bitcoin blockchain can be trusted. It is audited by the largest computer network ever assembled and requires that an attacker control at least 51% of the network on a sustained basis.
The Open Blockchain
As more and more people use a blockchain, its units (e.g. Bitcoin) become more valuable. As the price of the base unit increases, it becomes more profitable to mine them at the prevailing level of difficulty, so more miners join the network. As more miners join the network, the level of difficulty increases and thus the robustness and security of the network increases. As the robustness of the network increases, it becomes more secure against attackers, so more users and investors are drawn to it. And so the price of the base unit increases. Which draws in more miners. Etc.
The adoption of a blockchain, like the adoption of any currency, is a virtuous circle -- one that Bitcoin has been nurturing successfully for nine years without any existential catastrophes. Bitcoin's heartbeat, the mining of a new block every ten minutes, has not skipped a single beat in nine years. There has not been a successful double-spend in nine years. There has not been a single accounting error in nine years. No balance has been mysteriously wiped off the blockchain in nine years. This track record has been established despite the fact that the blockchain is not protected by a firewall, or an institution, or shielded in a vault. It is not buried underground, or protected by obfuscation. It is out there in the wild of cyberspace for all to see and attack, secured purely by Proof of Work and sheer scale.
Bitcoin itself is valuable because it is the only work unit that can be included in a block of this particular, special blockchain: the open, global, transnational, borderless, censorship-resistant, permissionless, leaderless, most well-known, longest-running, and most-well-capitalized blockchain (credit to andreasma for this and many other insights). Because work units on this blockchain are scarce (per the 21-million cap), having the ability to sign for transfers of Bitcoin on the blockchain is a form of real control over scarce resources.
This is the pivotal point: to the degree that people around the world adopt and learn to trust the Bitcoin blockchain, its work units will have value. And it is Bitcoin's openness in particular that makes it the prime candidate for filling this role. Any computer on the planet can join the mining swarm at any time, just as anyone can join the network as a user, at any time, from any location. Even the Bitcoin development community is open-source and open to new developers provided they can prove their merits.
This is what is meant by The Open Blockchain: the Bitcoin blockchain is accessible everywhere and is open to anyone. It is welcoming. It enables people from different cells in the global mosaic to transact point-to-point, without snaking value through complicated interbank networks, without paying entrenched gatekeepers and intermediaries, and without having to convert from one currency to the next. If a country experiences a currency crisis, Bitcoin is a very real option because it enables people to transfer value out of hot spots and convert it into other currencies. The international monetary system is no match for this technology. Private blockchains are no match either.
Bitcoin’s Monetary Policy
Bitcoin is commonly referred to as "digital gold" since it is designed to function like a precious metal. The creation of new units follows something like the extraction curve of a natural resource. The issuance of new coins was steep at first but will taper off over time through successive “halvings” of the reward that miners receive for creating new blocks. Eventually, the issuance of new coins will approach an asymptotic limit of 21 million coins.
At each "halving", the rate of inflation is effectively cut in half, though it decreases ever so slightly with each new block. The current rate of inflation is about 4%. At the next halving in 2020, the inflation rate will be about 2%. In 2024, 1%. Etc.
The world has never before had access to a truly deflationary asset. Even currencies considered deflationary such as the Japanese Yen are not truly deflationary: the government can print an infinite amount even though deflation in Japan has inertia. Gold is not deflationary: new gold is mined every year. Bitcoin will eventually become truly deflationary, meaning the supply of available Bitcoins will contract year over year consistently. How is this possible, if there is no provision to destroy coins in the protocol?
There is guaranteed to be a year sometime in the future where more coins are lost due to people losing their keys than new coins are created. It will happen. As the miner reward decreases, years like this will become more common. In the distant future, decades will go by where every year is deflationary, and eventually it will be practically impossible for the supply of Bitcoin to not decrease in a given year.
Here is Bitcoin’s golden proposition: because it the first truly deflationary asset, it does not require interest payments or a never-ending influx of greater fools in order to provide a “yield” over the very long run. In the distant future, Bitcoin will have a low but predictable intrinsic expected return approximating its rate of deflation, as long as it remains secure.
When you combine Bitcoin's monetary policy with its robustness through distributed Proof of Work on a planetary scale, you end up with the basis for a global reserve asset more effective than anything else humans have ever had a chance to work with, including gold. Gold is modestly inflationary, it cannot be transmitted over a network, and it must be centrally secured and accounted for. Bitcoin has already obsolesced gold as a reserve technology, let alone Ponzi currencies like the dollar - most just don't know it yet. As people come to really understand Bitcoin’s monetary policy, they will flock to it as a safe haven, especially in troubled economies. If we have another 2008, Bitcoin will be very much in play.
Bitcoin as Money
People argue that Bitcoin's deflationary policy, high fees, and volatility make it ineffective as a medium of exchange. If you can expect a Bitcoin to be more valuable next year, why spend it this year? If it costs $20 in fees to buy a $3 coffee, who will use or accept it? If its value can double in a day, who will set prices in terms of Bitcoin exclusively? The truth is, Bitcoin is not yet ready for mass adoption as a day to day currency or unit of account. Anyone who tells you otherwise is getting ahead of the technology -- but this is temporary.
Just as the early Internet could only handle the transfer of simple text-based content but eventually scaled to allow everyone to stream 4k at the same time, so too Bitcoin will scale. The Lightning Network shows promise in this regard. It will enable and incentivize users to stake their Bitcoin on a second layer where payments are negotiated in a trustless manner between parties, instantly, and merely settled periodically on the blockchain. But even with today’s block congestion and high fees, Bitcoin is already cheaper and more efficient for large transfers of value than the banking system, especially internationally. People transfer hundreds of millions of dollars on the blockchain, securely, today.
Regarding volatility, we are still in the very early phases of adoption. Something like 10-20 million people own Bitcoin worldwide. Because the supply of Bitcoin cannot inflate to accommodate increased adoption, prices will continue to escalate in logarithmic fits and starts as adoption ramps up exponentially. Look up "adoption curve" on Google. We are still in the very early phases of the ramp-up, but eventually the curve will taper off and approach something like stability. We do not know how this will play out or how long it will take, and there will be serious volatility along the way; but if Bitcoin scales into a robust transnational currency trading on thousands or tens of thousands of exchanges worldwide, it will likely become more stable than most national currencies if not all.
Regarding deflation: over time, we will likely see new innovative uses of Bitcoin as a reserve for credit creation. People are clearly willing to operate in systems that use reserve-based lending, and they can work wonderfully: look at what humans accomplished in the 20th century! It is conceivable that Bitcoin could be used as a reserve for distributed, trustless, bank-like networks that issue their own tokens. We may end up using a modestly-inflationary cryptocurrency for day-to-day transactions and investment. There’s no way to know what people will come up with, but they will come up with things. And that is why Bitcoin must stay laser-focused on its role as the de facto reserve currency in the crypto-economy.
A Vision Statement for Bitcoin
Tying everything together: over the course of thousands of years, we have built our societies around the use of hierarchical principles of organization. These structures centralize control and privilege, but also risk. They are fragile. Too big to fail.
The invention and proliferation of the Internet paved the way for the dissolution of these structures, and over the past twenty years we have seen countless examples of entrenched institutions being wiped out by flatter, more effective networks.
Now we are seeing the early evolution of global, distributed, cryptographic value storage and transfer networks which will slowly displace traditional banking systems by offering faster, cheaper, more reliable routes, with better systemic risk profiles, infinitely better security, no access controls, and no entrenched monopolistic privileges over money creation.
Bitcoin was the first mover in this space and remains the incumbent. It is a global, secure, consensus-based currency that was bootstrapped from the ground up by ordinary people volunteering to participate in its development, mining, and use. It has grown exponentially in size since its inception, to the point where it is now upheld by the largest dedicated computer network in the world. Because it is secured principally by its unmatched scale, it is therefore the most secure accounting system in the world, which in turn makes the entries in its ledger the most trustworthy on the planet. If you can sign for a Bitcoin in the network’s eyes, you own it -- and nobody can stop you from owning it or signing for it.
Bitcoin is here, now. It is in the air all around us, accessible over wifi and cellular networks around the globe -- anywhere the Internet touches. The next time you walk down the street, look at the people around you. As they move through the air, displacing it with their bodies, recognize that they are literally wading through the Bitcoin network -- they just don't know it yet.
Suggestions for New People
1) Focus first and foremost on the vision and take an interest in the technology. I have a friend who is talking about putting $20k into Bitcoin, yet only a few nights ago he didn't know that Bitcoin isn't a company, or that a block isn't a single transaction. I have another friend who owns a whole Bitcoin but has never initiated a transaction. A co-worker of mine just bought $100 worth of Bitcoin but doesn't know that a wallet is key management software.
2) Bitcoin is an experiment with no precedent. Nobody knows if it will survive, what it will evolve into, or how it will be used. Even with its long-running track record, nobody can say with prophetic certainty that it won't suffer a catastrophic failure of some kind, so put only as much money into Bitcoin as you can afford to lose. I would offer the following as a good rule of thumb: if you have a negative net worth (meaning your debts exceed your assets) be very cautious with Bitcoin, and at the very least do not increase your debt to buy Bitcoin. If you have a positive net worth, do not go negative to buy Bitcoin. Having said all this, do keep in mind that any currency can suffer a catastrophic failure, including the US Dollar. Remember 2008. Don’t fall for illusions of security. We are all sailing in little boats on a big sea. Diversify.
3) If you believe in Bitcoin, try not to obsess over the value of Bitcoin in fiat terms, as tempting as it is. Try to conceptualize its value on the basis of its potential utility in emerging decentralized networks and look for ways to use it in these new emerging ecosystems. Look up OpenBazaar for example - it could be the new eBay without an eBay acting as an intermediary. I strongly believe that owning Bitcoin is exciting because it sets you up to have a stake in this emerging ecosystem. If your aim is to eventually get your value out of Bitcoin in the form of fiat, you’ll be giving up that stake. If you don't care about having a stake and are here just for the gains, that's perfectly fine too.
4) Learn how to take possession of your private keys. If you don't know what that means or how to do it, learn what it means and how to do it. Until you can say with confidence "I alone own my private keys", you do not actually own Bitcoin and you do not have a stake. Someone else owns it for you. It took me two years of owning Bitcoin before I actually clued in and took control of my own, and that is what forced me to take on the Bitcoin learning curve. The good news is, you can too.
(Edit: formatting)
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Hut 8 Mining Corp. Announces First Quarter 2018 Financial Results

Back , Hut 8 Mining Corp. Announces First Quarter 2018 Financial Results
All Figures in Canadian Dollars Unless Otherwise Noted
Company raised $70.0 million to fund investment in mining hardware Entered into definitive agreement with the City of Medicine Hat for the supply of 42 MW of electric energy First quarter 2018 revenue of $10,988,949 Strong gross profit margin of 80%, or $8,823,650 (excluding depreciation) Adjusted EBITDA of $7,690,365 828 Bitcoin mined in Q1
TORONTO, May 24, 2018 (GLOBE NEWSWIRE) -- Hut 8 Mining Corp. (TSX-V:HUT) (“Hut 8”, or the “Company”), a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the world’s leading full-service blockchain technology company, the Bitfury Group, is pleased to announce its financial results for the first quarter ended March 31, 2018 (“Q1 2018”). Hut 8 owns Bitcoin mining datacenters called BlockBoxes that are purchased from the Bitfury Group.
Corporate Update
Andrew Kiguel, President and Chief Executive Officer of Hut 8, said: “We are pleased with the progress Hut 8 has made in a very short period of time. Hut 8 began mining on December 22, 2017 with 7 BlockBoxes in Drumheller, Alberta, with power capacity of 7.7 MW, representing 52.5 PH/s. On February 7, 2018, an additional 10 BlockBoxes were added in Drumheller for an aggregate power capacity of 18.7 MW, representing 128 PH/s. Despite the ramp-up period, in Q1 2018 Hut 8 was able to mine a total of 828 Bitcoin. As of May 24, 2018, Hut 8 has mined in excess of 1,300 Bitcoin which we continue to hold.”
“We are excited that our data center build-out in the City of Medicine Hat is well underway. We estimate that full-scale production will commence by September 2018. The City of Medicine Hat site will consist of an additional 40 BlockBoxes. Once operational, Hut 8 will own 57 BlockBoxes, representing a 335% increase from current mining capacity, securing our position as one of the largest publicly traded Bitcoin miners in the world, with a total of 66.7 MW of power capacity and 448 PH/s. With this increase in BlockBoxes from 17 to 57, we expect that our daily mining production will increase significantly. We believe our City of Medicine Hat Facility will represent operational excellence and set a new global benchmark for industrial scale cryptocurrency mining operations,” added Kiguel.
Manufactured by the Bitfury Group, the BlockBoxes are regarded as one of the most powerful and cost-effective Bitcoin mining solutions available on the market. The BlockBoxes are based on cutting-edge hardware and software and are fully configurable and upgradeable to the next generation of silicon technology. The efficient design and low operating cost of the BlockBoxes makes Bitcoin mining more productive and affordable. As previously disclosed, Hut 8 has obtained an exclusive right to all Bitfury Group hardware and software solutions, including the BlockBoxes, for cryptocurrency mining within North America.
Q1 2018 Financial Results
Q1 2018 represented Hut 8’s first full quarter in operations. With a gross profit margin of 80% (excluding depreciation), the Company’s mining cost-per-bitcoin was $2,615 (US$2,028), which compares favorably to the selling price of Bitcoin at the end of Q1 2018, being $8,991.67 (US$6,973.53).
The Company believes that Hut 8 is amongst the lowest cost miners of Bitcoin in the world. Hut 8 anticipates its cost per Bitcoin to remain competitive, based on the increasing difficulty rate, offset by the City of Medicine Hat site that will operate more efficiently, next generation BlockBoxes, and a benefit from an improved energy contract for the price of electricity over the Drumheller site.
Selected Financial Highlights from Q1 2018
Revenues of $10,988,949 Gross profit of $8,823,650 (excluding depreciation) EBITDA1 of $1,824,685 and Adjusted EBITDA1 of $7,690,365 Completion of the Company’s “Qualifying Transaction” Raised $70.0 million of equity capital to fund investments and growth Cash balance of $23.7 million and working capital of $19.3 million Mined 828 Bitcoin in Q1 2018, bringing total mined since commencing operations on December 21, 2017 to over 1,300 On February 7, 2018, added 10 new operating BlockBox Data Centers for a total of 17 in operation, representing 18.7 MW / 128 PH/s Purchased 40 additional BlockBoxes to be operational by Q3 2018 representing additional 48 MW / 320 PH/s Entered into definitive agreements with the city of Medicine Hat for the supply of 42 MW of electric energy and the lease of land
Summary of Q1 2018 Financial Results Revenue $ 10,988,949 Gross Profit $ 3,183,181 Gross Profit % 29% Gross Profit (excluding depreciation) $ 8,823,650 Gross Profit % (excluding depreciation) 80% Operating income $ 218,701 Net Loss $ (3,815,784 ) EBITDA $ 1,824,685 Adjusted EBITDA* $ 7,690,365 Loss per share $ (0.05 ) * EBITDA adjusted for fair value re-measurement of digital assets, listing expense and one time transactional costs.
As a result of the decrease in the price of Bitcoin in Q1 2018, Hut 8 incurred a $4.1 million non-cash decrease on the re-measurement of the value of Bitcoin in inventory, and consequently, finished the quarter with a net loss of approximately $3.8 million. In future quarters, when revenue is recorded, the Company would expect to see unrealized gains or losses based on the price of Bitcoin on the corresponding reporting date, relative to the price on the day mined.
This earnings release should be read in conjunction with the Company's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for Q1 2018, which have been posted under the Company’s profile on SEDAR at www.sedar.com and are also available on the Company's website at www.hut8mining.com.
ABOUT HUT 8 MINING CORP.
Hut 8 Mining Corp., headquartered in Toronto, Canada is a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the Bitfury Group, the world’s leading full-service blockchain technology company. Through the Bitfury Group, Hut 8 has access to a world-leading proprietary mix of hardware, software and operational expertise to construct, optimize and manage datacenters in low-cost and attractive jurisdictions. Hut 8 is led by a team of industry experts and intends to provide investors with exposure to blockchain processing infrastructure and technology along with underlying cryptocurrency rewards and transaction fees.
Hut 8 provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore and safely store their bitcoins. Hut 8 provides a secure and simple way to invest. For more information, visit www.hut8mining.com.
Key investment highlights and FAQ’s: https://www.hut8mining.com/investors.
Keep up-to-date on Hut 8 events and developments and join our online communities at Facebook, Twitter and LinkedIn.
Hut 8 Media Contact:
Talk Shop Media Natalie Davidson Email: [email protected] Tel: (604) 215-2749
Hut 8 Corporate Contact:
Andrew Kiguel President and Chief Executive Officer Email: [email protected]
FORWARD LOOKING STATEMENTS
Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Hut 8 as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Filing Statement relating to the Qualifying Transaction of Oriana Resources Corporation and Hut 8, which is available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Hut 8 expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 EBITDA and Adjusted EBITDA are non-GAAP measures and consequently, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income and loss presented in accordance with GAAP. The Company uses Adjusted EBITDA as a non-GAAP financial performance measurement. The Company calculates Adjusted EBITDA by adding back to net income (loss): interest, income taxes, depreciation and amortization expense, and impairment charges as further adjusted to add back stock-based compensation expense and non-recurring items. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing the Company’s financial results with other companies in the industry, many of which also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as amortization, depreciation, stock-based compensation and impairment charges, as well as non-operating charges for interest and income taxes, investors can evaluate the Company's operations and its ability to generate cash flows from operations and can compare its results on a more consistent basis to the results of other companies in the industry. Management also uses Adjusted EBITDA to establish internal budgets and goals, and evaluate performance of its business units and management, and evaluate potential acquisitions. The Company considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a useful measure of the Company's historical and prospective operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes interest income and expense and income taxes and non-recurring items such as goodwill impairments, each of which impact the Company's profitability and operating cash flows, as well as depreciation, amortization, impairment charges and stock-based compensation. The Company believes that these limitations are compensated by clearly identifying the difference between the two measures. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures provided by other entities.
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Weekly Roundup

News roundup for the previous week.
In International news
  1. Xi backs building of #polar Silk Road: Since the world's efforts in developing Arctic shipping routes are at an initial stage, China and Russia are showing long-term vision in developing the Silk Road on the ice
  2. 40 Chinese tourists robbed by men with tear gas in Paris.
  3. China Disputes Trump's Claims of Fentanyl "Flood" into U.S.
  4. 3,317 fugitives abroad captured in China's "Fox Hunt": from over 120 countries and regions in the past five years. Inter-agency cooperation and the use of new technology boosted the efficiency in tracking those who have changed identities or gone through cosmetic surgery
  5. #Vancouver city council approves apology to Chinese community: The city will also push for a UNESCO heritage designation for Chinatown. Historical legislation, policies reflecting discrimination were compiled. "Many of those kinds of bylaws, I think Vancouverites and most Canadians don't know about"
  6. Japan, U.S. confirm intention to cooperate with China, Russia on North Korea problem
  7. Communist parties of Russia, China publish new book on #Lenin to mark centenary of October Revolution: "The Wind of October," a memoir with rare photographs. Gennady Zyuganov, first secretary of the CPRF, said the book includes a historical narrative on the main events of Russia's 1917 revolution
  8. Do math, the Shanghai way: The imported series is titled "Real Shanghai #Mathematics," which will be published by the end of this November. Those textbooks will land on UK classrooms starting from January of 2018
  9. What Message South Korea, China Are Sending the US Regarding North Korea
  10. China to launch 34th Antarctic expedition
  11. #Russia Rating Agency to Cooperate With Leading Chinese Research Firm: "This will be the world’s largest bilateral rating partnership in terms of coverage, market size, and the size of the agencies involved," ACRA CEO Ekaterina Trofimova said
  12. China helps Nepali farmers increase rice production
  13. Taiwan to Trump: Don't mention us to China
  14. Three UCLA men's basketball players -- including LiAngelo Ball -- arrested in China for shoplifting
  15. Proposed electricity super grid can bring real connectivity to Asian economies
  16. Trump shows Xi and Peng video clips of his granddaughter singing Chinese songs
  17. Russia's Role in Securing Asia's Prosperity by Vladimir Putin
  18. No such thing as containing China: US on quadrilateral alliance involving India
  19. Chinese, Japanese experts explore oceanic cooperation
  20. President Trump Meets the World’s Most Powerful Man in Beijing (lol)
  21. Trump lauds China for 'taking advantage' of 'unfair' trade deals
  22. China's Feng shoots 68 to win #LPGA Japan Classic: Feng Shanshan defended her Japan Classic crown and take her eighth LPGA title. It was Feng's second win of the season after the Volvik Championship in Michigan in May
  23. China media praises tone, outcome of Trump-Xi summit
  24. Unlike previous stops in Japan and South Korea -- where Trump boasted of US military strength, instructed the country's leaders how many weapons they were to buy, and received ebullient praise from them in return -- the China trip was much more a meeting of equals (lol CNN on Asian "allies")
  25. Students hurt in French car 'attack' near Toulouse
  26. Trump and Xi push their own world trade orders at Apec
  27. Xi calls Russia 'strategic partner of genuine mutual trust'
  28. The risk we take when we panic about China's rise: fastest supercomputer since 2010. Launched the world's first quantum satellite. Any general notion that China might be seeking to infiltrate our universities to steal technology is laughable and stems from either ignorance or cultural arrogance
  29. Melania Trump: First lady visits Great Wall of China
  30. China's #LatinAmerica ambitions highlight 'silver way' strategy: For the first time in living memory, a non-American power has the potential for a substantive footprint in Latin America
  31. Why China’s deals with #SaudiArabia could be the beginning of a profitable new relationship: excellent time for China to pursue opportunities in the Middle East. Cooperation with China seen in a very positive light. After so many years of chaos, many Middle Eastern allies are losing faith in the US
  32. #Alaska Signs Deal to Advance Pipeline with Help from China: agreement Alaska Gov. Bill Walker signed with Sinopec. Estimates have put proven gas reserves on the North Slope overall at 35 trillion cubic feet. Alaska could provide a generation's worth of liquefied natural gas to China
  33. #CentralAsia could be entryway for Israel to join OBOR initiative: Israeli ambassador to Kazakhstan said “Israel is interested in getting involved in the ‘One Belt One Road’ Initiative.” BRI has close relations with Central Asian countries and can provide a unique opportunity for Israeli companies
  34. Abe, Xi hail 'fresh start' to Japan-China relations
In Domestic news
  1. China's #C919 jet completes third test flight: flying for 3 hours and 48 minutes, data from plane tracking website Flightradar 24 showed the aircraft flew at an altitude of about 10,000 feet (3,048 m) for most of the time it circled above Shanghai
  2. The Caucasian beggars hitting Hong Kong with a vengeance while police turn a blind eye
  3. ‘Magic island-maker’: China unveils Asia’s largest cutting-edge dredger amid territorial rows. 'Tiankun' can dredge up to 6,000 cubic meters (around two and half Olympic swimming pools) an hour from a depth of up to 35 meters
  4. Alipay wants to cut out lines at Hospitals
  5. Major Chinese vocational school offers #esports course: Lanxiang offers courses in electronic sports, riding the boom of video gaming in Asia
  6. How China and #Environmentalists Became Unlikely Bedfellows: China is moving to shape how to rein in greenhouse gases. “China has increased its leadership. That’s a matter of fact,” said Nicholas Stern, former World Bank chief economist who has advised U.K. and European govts on climate
  7. Xi and Trump look friendly, but anti-US feeling stirs in China
  8. China Reinvents Literature (Profitably) - Online serials have become a new art form -- and business model.
  9. China's sulfur dioxide emissions fell significantly while India's grew over last decade
  10. China Experiences Sharp Drop in Coal-Related Emissions, Study Says
  11. China is building 30 ‘sponge cities’ that aim to soak up floodwater and prevent disaster
In SciTech news
  1. China's #BeiDou navigation goes global as twin satellites launched: The self-developed system has been providing navigation services in the Asia-Pacific region since 2012, and is now going global
  2. Beijing -- Not Silicon Valley -- Is The World's Top Tech Hub, Report Says
  3. Chinese scientists create new type of magnetic #nanorobot: It can even distinguish between cancer cells and normal red blood cells, which opens new possibilities in designing remotely actuated nanorobots for biomedical operation at the nanoscale
  4. China Doubles Down on the Double Helix: From sleepless startups to huge sequencing centers, #genomics is booming in China. Chinese government plans to pour $9 billion a national precision medicine initiative. About 30% of the world’s sequencing machines were in China as of 2015
  5. China Just Created a Smart Suit That Tracks a Person’s #Health Status: sensors made of woven material, capable of detecting blood pressure, chemical balance and other health indicators. Possible by triboelectric nanogenerator, which harvests mechanical energy and transforms it into electric signals
  6. Better rubidium clocks increase BeiDou satellite accuracy
  7. Baidu, Alibaba and Tencent will help China narrow AI gap with US
  8. NC deputies use drone (DJI Phantom 4 customized) to find missing elderly woman in cornfield
  9. #Cancer cells destroyed with dense metal found in asteroids: according to new research University of Warwick and Sun Yat-Sen University. Iridium can be used to kill cancer cells by filling them with deadly version of oxygen, without harming healthy tissue
  10. China scours the globe for talent to transform into world leader in #artificialintelligence and big data: already the world’s largest market for automatons, e-commerce and smartphones, is also the job market for artificial intelligence, big data analytics and robotics
  11. Make Magazine founder apologizes after accusing Chinese maker Naomi Wu of being ‘not a real person’
  12. Researchers Uncover Genetic Basis of Natural Variation in Aging Rate; Dr. CAI Shiqing’s lab at the Institute of Neuroscience of the Chinese Academy of Sciences has uncovered a genetic basis for natural variation in aging rates. The study was published in Nature.
  13. 6 Reasons Why China Will Lead In #AI: Brains, Data, Useful Innovation, Competitive Experience, Government support, Venturesome spirit. Chinese contributions to best 100 AI journals rose as a % of total from 23.2% in 2006 to 42.8% in 2015. Chinese gov. is pro-tech, pro-experimentation, and pro-speed
  14. Hypocrisy Exposed: The FBI Blindly Hacked Computers In Russia, China And Iran | Zero Hedge
In Economic news
  1. Are the Chinese falling out of love with McDonald’s? Once an exotic taste of foreign climes and symbol of rapid modernisation, the American fast-food giant is no longer flavour of the month
  2. Huawei, Xiaomi lead growth among Chinese smartphone brands
  3. Boeing committed to forging closer partnership with China for common development
  4. Chinese consumers to trace food through Blockchain
  5. Shenzhen is China’s most innovative city, says HSBC
  6. Chinese entrepreneurs bring jobs to US heartland
  7. 35 Chinese Cities With Economies as Big as Countries
  8. China and the United States have created a “miracle” as companies from the world’s two largest economies signed deals worth some $253.4 billion over the past two days
  9. China’s central bank is developing its own #digitalcurrency, even as it bans bitcoin and private cryptos. Digital legal tender can help bring down transaction costs, extend financial services to rural areas and increase the efficiency of monetary policies, Yao Qian, who leads the research at PBOC
  10. Goldman Sachs CEO: China's economy will surpass the US, and by one measure it already has
  11. Here’s what people don’t say about the US trade deficit with China
  12. How China Is Opening Up to Foreign Finance Firms - Bloomberg
  13. Alibaba Singles' Day Sales Hit $8.6 Billion in First Hour
  14. China Aircraft Exports Cleared for Takeoff Under #FAA Deal: the Federal Aviation Administration has signed an airworthiness certification deal that effectively opens the door to Chinese sales of airplanes to the U.S. and other countries
  15. China and #Russia: Digging the US Dollar’s Grave. "The world financial system needs more balance," said Russian Prime Minister Dmitry Medvedev. He revealed that the two countries will issue a joint payment system in the future
  16. Chinese consumers spend billions in 'Singles Day' shopping binge
  17. 'Singles Day' China shopping festival smashes record with $25 billion haul
  18. China’s Technology Ambitions Could Upset the Global #Trade Order: “If Made in China 2025 achieves its goals, the U.S. and other countries would likely become just commodity exporters to China — selling oil, gas, beef and soybeans.” - Waterman, president of the China Center at US Chamber of Commerce
In Military news
  1. Can China Beat the #U.S. Without a Fight? U.S. military officials warn that China's goal is to become dominant by slowly making changes to the international order. "China is on a path to win without a fight," "We are ready" for NK. But the peer-level fight with China "is the real challenge."
  2. Beijing Quietly Building Naval Ports, Aircraft Bases in Disputed South China Sea: according to recent satellite images. New Chinese facilities discovered in Paracel such as Tree Island. In Spratly, China has been building runways, leading to accusations they intend to turn the islands into airbases
  3. China testing new 6×6 amphibious armoured vehicles
  4. The Sneaky Way China Could Win a Naval War Against America
  5. America Is No Match for China's New Space Drones
  6. China Reveals Images of New Hypersonic Strike Aircraft
  7. China's aircraft carriers to get new propulsion system: could equip conventionally powered warship with the world's most advanced jet launch system along with newer weapons. PLA's Naval branch has run "hundreds of tests" using the EMALS with China's J-15 fighter jets Yin Zhuo told CCTV
  8. Air Force general says China is advancing in space five times as quickly as the US
  9. Chinese naval escort ship arrives at #Djibouti for replenishment
  10. China's New Surveillance Technology May Expose U.S. Warships: To build the first-rate surveillance system, Rainbow UAV is described as an “excellent choice.” New UAVs will work with new satellites, long-range aircraft, undersea sensors, as well as Skywave radars that can see out thousands of miles
Other Notables
  1. Chinese #Heroine Mu Guiying: distinguished figure in the Generals of the Yang Family legends. With her command of the imperial army, Mu eased the rivalry between Song and its neighboring Liao, calmed rebellion in the southern area with her husband and acknowledged the allegiance to the Western Xia
  2. Tianjin Binhai Library / MVRDV + Tianjin Urban Planning and Design Institute
  3. Chinese Audiences Move Away From Hollywood Pictures. Mainland moviegoers are starting to embrace foreign films from countries other than the U.S.
  4. Setback Education: The Parenting Fad Harming China’s Kids
  5. Hunt for Ming dynasty admiral Zheng He’s lost treasure ship heats up. Study off coast of Sri Lanka, where massive vessel that was part of Chinese adventurer’s fleet sank 600 years ago, has delivered ‘positive results’
  6. The Pearl River: Mouth to Source (Episode 1: Zhuhai)
  7. Twin sisters Sun Yumeng and Sun Yutong buzzing again on social media for landing jobs at CCTV
  8. Xinhua Backgrounder: Deadly U.S. mass shootings in recent years (very informative, hope enlightening info is distributed domestically)
  9. Globaltimes: Mass shootings worsen US human rights. If the mass shootings in the US cannot be addressed in the long term, and the government takes no effective action, the UN Human Rights Council needs to denounce Washington's inaction at some point, exerting external pressure on the country. (LOL)
  10. China's Early Building Conservationist Whose Words Went Unheeded
  11. The rise and rise of China
  12. America’s decline is China’s opportunity
  13. Baby Pandas Playing in Snow at Chinese Kindergarten School
  14. 100 couples have their weddings in the hot balloons in 2017 World Fly-in Expo of the World Air Sports Federation in Wuhan, Hubei province, on Monday. It sets up a new Guiness world record for the number of the participated couples exchanging vows in the air.
  15. Transforming Pingyao's historic courtyard homes
  16. Jack Ma: I understand America more than some of the American themselves
  17. Richard Blumenthal concerned Trump may be colluding with China
  18. Nike China Tells Zhou Qi: Don't Come Back
  19. [Traditional Instrument Music]
  20. American girl becomes cultural 'chief' for a week at Guizhou resort: 23-year-old Jong May, a Chinese born American, was selected as a cultural ambassador at the Wanda tourist resort in Danzhai county, in Guizhou
  21. Western fascination with Hutongs is colonial poverty porn
  22. Taiwanese Guy Goes To Russia for Vacation Tour through Mainland, uses PRC's "Single-use passport" (Russia doesn't recognize ROC passport), posts about it on FB, ROC government cancels all his ROC ID's (LMAO over this draconian sh*t)
  23. The Dalai Lama Says Donald Trump's MAGA Catchphrase 'Isn't Relevant' (lol)
  24. Tillerson’s Trip & the new Great Game (FB Ali)
  25. China Spreads Propaganda to U.S. on Facebook, a Platform it Bans at Home
  26. Trump is the first foreign leader to dine in the Forbidden City since the founding of the PRC
  27. CHINESE STAMPS - (CHINESE ANTHEM)
  28. Comedy film "Never Say Die" wins box office success after "Wolf Warriors II": brought in an impressive $326m worldwide to date. #1 Highest Grossing Comedy in a Single Market. Also earned its entry into "Top Ten All Time International Box Office for Comedy Movies."
  29. What Happens If China Makes First Contact? As America has turned away from searching for extraterrestrial intelligence, China has built the world’s largest radio dish for precisely that purpose.
  30. 首度與台媒見面 劉結一:"鬥爭"台獨勢力 20171108
  31. China at War – The Story of Teng Chan
  32. Chinese President Xi holds welcome ceremony for Trump
  33. Kung Fu Superstar Jet Li: How I’ll Bring Tai Chi to the Olympics
  34. Chinese investment gives wheelpower to small U.S. town 中企在海外:小镇故事
  35. Politics, China, and Taiwan’s Youth Identity
  36. China’s Cultural Revivalists: More Than Just Quirky Throwbacks. For many fugu aficionados, traditional culture is something that merges with modern life instead of resisting it. Since 2014, the government has released a slew of edicts designed to build up social support behind traditional culture
  37. TIL: China poured more cement between 2011 and 2013 than the US used in the entire 20th century
  38. China eases foreign limits in finance as Trump leaves
  39. CCTV Headquarters
  40. The plight and hope of Chinese animation
  41. 2,000-year-old luxury #baths discovered in NE China: "The shape, structure and size of the baths were very similar to the baths in the imperial palace of Xianyang, capital during the Qin Dynasty," Liu said. "These baths could be the earliest baths discovered in China."
  42. GAI - 爱如潮水 (蒙面唱將猜猜猜第二季)
  43. 骄傲的少年
  44. Trump Asia tour: The president is winning. Too bad it's Chinese President Xi Jinping. America is smashing its geopolitical might on the anvil of its own foolishness. China and Russia are gleefully picking up the pieces (lol)
  45. Ji Shaoting founded Future Affairs Administration as a loose group of #scifi aficionados in 2013. To become the idea generator for Chinese science fiction is the goal for Ji and her company. They have organized tours for writers to watch rocket launches, visit laboratories, and talk with scientists
  46. Is China the next global leader? - Inside Story
  47. 《武动乾坤》 "Martial Universe" drama trailer
  48. PLA Air Force promotional video gone viral in China
  49. South Korea shifts towards China
  50. UK remembers Chinese Labor Corps first time in history
  51. Soros, NED, USAID Ruining Myanmar's Stability to Hinder China's Rise
submitted by AutoModerator to Sino [link] [comments]

[Table] I am Antony Davies, associate professor of Economics at Duquesne University, columnist, and sometime tech entrepreneur. AMA!

Verified? (This bot cannot verify AMAs just yet)
Date: 2013-05-22
Link to submission (Has self-text)
Link to my post
Questions Answers
What say you about the Austrian School of Economics? As an econometrics guy, you don't seem to have that in common, but you have seemingly come to largely the same conclusions, i.e. free markets, free trade, etc. I am new to Austrian economics. I got all the way through undergraduate and PhD work and had never heard of Hayek, Mises, or Rand. When I finally heard the Austrian perspective, I was amazed -- using philosophical tools, the Austrians reach the same conclusions that I reached using econometric tools. I believe economics should be taught, at the undergraduate level, from an Austrian perspective. The graphs and equations that populate the standard undergraduate texts speak only to small subset of students. The Austrian approach, however, speaks to a broad audience and provides a solid intuitive understanding of economics that is very difficult to get from a picture.
What specific public policy change in the US do you think would most benefit society in the short and long term? What the US needs to do is something like the following (I've run the numbers, so what I'm about to say is approximately correct)...
(1) Cut federal spending by 10%. If you want to avoid cutting something (e.g., Social Security), then cut something else by more, but the total must come out to a 10% cut. (2) Hold spending constant (no adjustments for inflation) for four years. (3) At the end of year 5, we'll have a balanced budget. From that point forward, the growth in government spending must not exceed the growth in real GDP.
Why would getting a balanced budget help us in the short term? The problem is the debt. As it continues to grow, we approach a point at which the interest payments eat so much of our tax revenue that there is little money left to do the things government needs to do.
Balancing the budget would cause the debt to stop growing.
The CBO estimates that in the next decade, interest payments as a percent of GDP will be no higher than it was during the Bush years. Tell me again why getting a balanced budget will help us in the short term? I've done an analysis of historical CBO forecasts. Of the available 170+ times they have forecasted, they overestimate tax revenues 75% of the time, underestimate spending 80% of the time, and underestimate the debt 90% of the time.
Thank you for all the work you do over at Learn Liberty and for doing this AMA. I don't agree. Sometimes, the economy is like a tube of toothpaste. The government can push down on one end and all that happens is that the other end bulges. In this case, there is no question that the bailout saved jobs in Detroit and saved us the immediate pain of car companies and their suppliers and finaciers going bankrupt.
Today, the conventional wisdom seems to be that the financial and automotive industry bailouts bailouts averted an even worse crisis and saved us from an awful depression. However, what the bailout ultimately did was to keep a large chunk of our scarce resources tied up in industries that have demonstrated their inability to use those resources in the best possible way. So, a decade or two or three from now, we're going to be right back to the dealing with the same problem because we didn't address the disease. We addressed the symptom.
What is your position on the bailouts? And what do you believe would have happened if they had not been implemented? Think of it as a law of conservation of economic pain. The government can't make the pain of wasted resources go away -- it can only shift the pain to the future.
I've seen some of your videos concerning the national debt/budget deficits. What's your prediction on the outcome? Will we see any policy changes before it's 'too late'? And what does it look like when it is, in fact, 'too late'? High inflation? Hyperinflation/currency crisis? A major change in the way government works? I'll give you my personal prediction, though I'm not yet comfortable enough in it to write about it in the press.
I predict the following sequence of events: (1) The economy begins to pick up and the Fed, fearing inflation, starts to let interest rates rise; (2) The federal government -- the largest borrower in the U.S. -- can't afford higher interest payments, so it puts pressure on the Fed to hold interest rates low; (3) Some compromise is reached and the result is a mix of some increase in interest rates and some inflation; (4) Let simmer for a while; (5) Government spending reaches a point that there is no option left by monetizing the deficit (i.e., the Fed prints money to fund deficit spending); (6) The dollar ceases to be the global reserve currency; (7) We start to talk about replacing the dollar with a New Dollar.
As a liberal type of guy I often look at talk of hyperinflation and debt crises in general as a lot of hot air. However, I also understand theoretically how extreme debt can cause a number of problematic issues, including high levels of inflation. What are some real world examples of Western/Industrialized economies that succumbed (or almost succumbed) to hyperinflation in the post-WWII era? Think of borrowing and saving as moving consumption and income across time. When I borrow, what I am really doing is consuming now money I will earn in the future. When I save, what I am really doing is consuming later money I earn now.
When a country does this, it is transferring the consumption and income of the taxpayers across time. So, by accumulating $16 trillion in debt, what the US has really done is to take $16 trillion of consumption away from future taxpayers and give it to today's taxpayers. IMHO, that's an extreme example of taxation without representation.
How would you look at the returns on that $16 trillion dollar consumption? Like surely our military spending, infrastructure or any spending now, has a return for the citizens down the road. You are correct, sometimes it is better to borrow and buy things now because the benefit we get from having the things now outweighs the cost of paying for them later. For an individual, college loans are a good example. For a country, military spending is probably a good example. There are probably others.
There is a serious difference, however, between the decision the individual faces and the decision the country faces. The individual compares the benefit of consuming now to the cost of paying later and judges whether to borrow or to save. At a country level, we can't do the same thing because the people who borrow are not the people who are paying back. It would be like your neighbor deciding whether he should borrow to buy a new car, knowing that he would be able to use the force of law to require you to pay back the money he borrowed.
Professor Davies, Thanks for taking time to do this AMA! What do you think current Federal monetary policy & financial law says about citizenship in America today? Duties? Expectations? Allowed Behavior? It seems to me that the duty of an American citizen is to respect other people's property rights (I use the term "property" broadly to include not just people's objects but their lives and well-beings). To that end, anyone who is willing to come here and so live should be considered a citizen.
If you could automatically remove one United states policy what would it be and why? Also if you could make one United states policy what would it be and why? As a homerun, I would remove the Commerce Clause and the Necessary and Proper Clause. As a second best, I'd repeal the 17th Amendment so that Senators would be appointed by the state legislatures. A third idea I've been wondering about recently is how things would be different if the states appointed the Supreme Court Justices -- e.g., election by the fifty state governors.
A freshman econ major here, just so you know. I've noticed in some of your articles you've been critical of Obama's economic policies, notably his stimulus package. However, it seems you fail to address some of the benefits of the stimulus, such as its investment in human capital and the effect it had on aggregate demand and consequently the recession as a whole. Taking these into account, doesn't it lend some merit to Obama's decision? Furthermore, do you believe that the economy would be better off now if Obama had gone with austerity instead? The question is never does a policy have positive effects (which is the way politicians describe policies), but rather, do the positive effects of a policy outweigh the negative effects of that policy. I tell my students that economists don't care about individuals. What I mean by that is, economic policy is not designed for individuals but for the economy as a whole. So, when an economist thinks about policy, he has to think about the effect on the economy as a whole.
If people measured one's preferred form of governance on a scale of 0 to 100 (0= anarchy, 100= dictatorship), what would be your number? My preference is 0, though I could live comfortably with the 1 to 10 range.
On a scale of one to ten, how dumb are you? On a scale of one to ten, how badly do you need me to pay your phone bill this month?
Do you think that financial crisis like the fall of the banks is an intrinsic part of a growth based economy, or was that just a hiccup that we can fix? And if we can fix it, what steps should we take to make sure that doesn't happen again? The financial crisis was very much the result of government intervention. Since the 1970s, Congress has been pressuring banks to extend loans to low-income and risky borrowers. The banks (because they had to bear the cost of failed loans) largely resisted. That all changed when Congress ordered Fannie Mae and Freddie Mac to ramp-up.
The way it is supposed to work is that banks have a profit motive to loan money and a loss motive to avoid loaning money to people who won't pay it back.
Here's how it did work. Banks would lend money to people. FM and FM would immediately buy the mortgages from the banks. End result: The banks had still had a profit motive to loan money to people, but they no longer had the loss motive to avoid loaning money to risky people. By purchasing the loans, FM and FM took the risk away from the banks. Since FM and FM were backed by the US government, that risk got foisted on taxpayers.
The end result was predictable. Notice that the problem wasn't greed. Banks were greedy before. The problem was that the government removed the penalty for greed (loan defaults) so as to encourage banks to make loans that they otherwise would not have made.
What do you think about the role of "Bitcoin" in society? Bitcoin is absolutely the right idea. It is an easily stored and exchanged currency that can't be inflated. It also has the astoundingly beautiful property of being untraceable. If bitcoin (or something like it) takes hold, it will be a huge blow to government controls everywhere.
As far as I know, it isn't strictly untraceable. Also, the exchange rates can still wildly fluctuate, as we have recently seen with the popping of a bitcoin bubble. How do we know that it is the value of the bitcoin that is wildly fluctuating or the value of the dollar? :)
Do you view taxation as a necessary evil? Wow. That's a hard question. Any tax that pays for something that could otherwise be provided by the private sector is probably an evil tax. So, school taxes are evil. Transportation taxes are probably evil.
So, I suppose the question boils down to, "is there anything the government does that could otherwise be provided by the private sector?" I don't know. I think of myself as a "soft anarchist." By that, I mean, while I'm not ready to say that we can survive without government, I haven't yet heard a compelling argument as to why we do need government.
Do you count the national defense as something that could otherwise be provided by the private sector? Private companies already can fulfill many if not most functions of our military. Probably not. However, the "we need government because we need national defense" argument ends up being circular. (1) I need government because I need an army. (2) But, I only need an army to protect me from your army. (3) You are able to have an army because you have a government. Conclusion: The purpose of government is to protect you from government.
What would you say is the book that everyone should read to understand economics? I always recommend The Armchair Economist (Landsburg, Freedom Press) and Eat the Rich (O'Rourke). The former can be read as individual chapters; the latter is a narrative. Both are excellent.
Will the dollar collapse? And if so, when and why? Also, what are your thoughts on the origin of natural rights?? Most explanations I've read from people like Locke tend to explain it through God which seems like a cop out to me. There are good arguments for the origin of natural rights that don't invoke God. Being a theist, I find the ones that do invoke God more satisfying. I find the philosophical discussion fascinating, but I'm not adept enough to be able to reproduce it.
1) Do you think Keynesian multipliers ever exceed 1? I haven't done the calculations myself, but I've seen estimates in studies that range all the way down to less than one. I'm not a fan of the multiplier, but in its defense, it has been abused by politicians. Politicians quote Keynes' prescription for increasing government spending so as to spur economic growth. But they don't quote Keynes' next statement which is, after the economy picks up, return government spending to its original level.
2) What are your thoughts on the Chicago School vs. the Austrian School? I dislike the idea of "schools." It gives the impression of mutually exclusive sets. There's a lot in the "Chicago school" that is good, so too in the "Austrian school." There's also error in both. My tendency is to approach economics from the Austrian school because the Austrians begin with a first principle (people own themselves), and then construct subsequent principles by applying logic to the first principle. I like that approach.
3) There is quite a bit of derision in the /Economics sub about the Austrian school as being outdated and not quantifiable. What would you say in response to that criticism? I disagree. My training is in econometrics and I find a wealth of quantifiable stuff in Austrian economics.
Do you think cutting entitlement spending could ever be politically viable? There seems to be entire blocks of voters who base their entire vote on 'don't touch my medicare'. The interesting thing here is that whether it becomes politically viable is moot. We are going to reach a point (my guess is not sooner than 5 years nor later than 20) at which it becomes mathematically impossible to continue entitlement spending as it is now. At that point, it won't matter whether there is a political will to cut spending any more than it matters whether there is a political will for gravity to pull downward.
What single math principle would you want all politicians to understand? I believe the problem isn't understanding but communication. I would want no politician to offer something to voters without clearly defining the costs. For example, to ask, "Do you want the government to provide you with health insurance?" is (to many people) a no-brainer. But the question doesn't capture the reality of what's being asked. What's really being asked is, "Do you want the government to provide you with health insurance in exchange for lower quality health care and increased unemployment?"
What got you into economics? My mother. She told me to study it. Always listen to your mothers.
What is the most mind-blowing economic fact/theory that you know? Link to www.antolin-davies.com
Have any post WWII Western/post-industrial economies collapsed as a result of debt or inflation? Not to my knowledge, though Cyprus and Greece might become the first examples.
Hello Dr. Davies, what are your thoughts on the Gold Standard? Any system that holds the supply of money relatively constant is good. It doesn't have to be gold. A water standard or a land standard might work just as well. Many advocates of the gold standard go awry when they claim that we need a gold standard because gold is inherently valuable and we need something with inherent value to back the dollar.
This is incorrect. The reason a gold-backed dollar has value isn't because it is backed by gold. It has value because you can hand it to a bartender and he'll give you a beer.
Would prosecuting the ring leaders of the biggest banks, or breaking the too big to fail banks up have a significant impact on the economy? Or is Holder just lying...again? The ring leaders were Congress and the Federal Reserve. Absolutely, banks were acting like corner drug pushers. But it was Congress and the Fed that were the drug cartel.
Do you think the national debt can be repaid without heavy inflation to reduce its effective size? No. For the moment, it is political impossible. In about five or ten years, it will become mathematically impossible.
Which economic school do you lean towards more? Chicago? Austrian? Austrian -- no question.
Whose your favorite George Mason Economic Professor and why? Rob Raffety. He adjuncts in the law school and was a student of mine as an undergrad.
What do you like best about your job? Variety. It's most of the joy of being self-employed without the risk. Probably only half of the educating I do now is done in the classroom. The rest is via videos, opeds, invited lectures, and venues like this. It's gotten even more interesting in the past couple of years as people seem to be waking up to classical liberal thought.
Regarding public policy, what is your stance on immigration? What is your utopia with respect to immigration, and then what kinds of reforms should Congress seek that are practical with today's government and/or society? Peaceful people should be allowed to cross boarders freely. Immigration is really a violation of your economic freedom. Suppose I own a house and a person from Mexico wants to buy it. Were it not for immigration law, we could come to an agreement and freely transact the exchange. When the government prevents the person from coming into the country, it has the same effect as telling me to whom I can and cannot sell my property.
If you had the chance to scrap our tax system, would you? what system would you go to? Absolutely. I'd replace it with an 18% consumption tax -- no exceptions. I'd also accompany it with a Constitutional amendment requiring a balanced budget. Historically, regardless of tax rates, the government collects total revenue equal to about 18% of GDP. So this tax would generate the same revenue as the government has now. The balanced budget amendment would force politicians to make tradeoffs among spending rather than tradeoffs between spending and tax increases.
What is your response to criticisms of the Austrian School of economics? Also, should children be a part of the free market? Do infants have self-ownership? I would also like to know if you have any responses to this or this. To my knowledge, no philosophical system has yet been able to deal with the "children" question. A philosopher friend of mine once said that parents don't own children, they own the right to parent the children. The way I explain it to my own children is that I make for them the decisions I believe they would make for themselves if they had my knowledge and experience.
Professor I have a question for you. I'm Braziliand and we have a conditional assistance program. We don't give welfare to everyone, in fact the only welfare people get is through work, but we do have free healthcare. Technically, you don't have free healthcare. Rather than paying hospitals for healthcare, you pay the government and the government pays the hospitals.
Anyway we have a program that distributes between 20-80 dollars per family below the poverty line, which is substantial for many of them, and costs a bit more than our outrageous senate. I'm usually skeptical of inequality concerns though not of poverty concerns. No one every died of inequality, but far too many people die of poverty.
Link to en.wikipedia.org. I believe that every person has a moral obligation to care for the poor. But to coerce action is to remove the moral component. If a government forces its people to care for the poor, then you have indeed fed the poor, but the feeding is not a moral act since moral actions require free will.
As it turns out these people spend this money in their local environment, local stores, local markets, in the poorer neighborhoods. So, while I can think of several effective ways the government could use its coercive power to fight poverty, I could not say that any of them are legitmate.
Isn't this a legitimate tool for social mobility and a mini-stimulus package which does wonders for the people? I am quite fond of Hayek's theories but in my country we have such an absurd social inequality that initiatives like these make perfect sense to me. One effective way is a negative tax. That is, everyone pays a fixed percentage of their income and everyone receives a fixed check from the government. For example, suppose we all paid 10% of our incomes in tax and received $10,000 from the government. A person with no job would pay $0 in taxes and receive a $10,000 check. A person who earned $200,000 would pay $20,000 and receive a $10,000 check.
econometrics? I've just started a job in econometric modeling so I would love a good reference! The gold-standard is Econometrics by William Greene, but it is extremely heavy mathematically. You need a solid background in linear algebra to get through it.
What do you think of the transaction tax? specifically Link to thetransactiontax.org. One great danger with a tax like this is that if we don't amend the Constitution to get rid of the income tax at the same time that we enact a transactions tax, we will end up with both.
A potential problem is that a transactions tax (as opposed to a sales tax) might require the government to monitor transactions as opposed to sales. I'm not overly comfortable with that.
So let's say we must cut government spending. IMO we should cut off federal funding for states that vote against spending, since they want smaller government. This would probably start with farm subsidies to mid-western states like OK. The free market will provide America with enough food right? What would you cut first? If you're concerned that we won't have enough food because we aren't subsidizing farmers, fear not. We are already paying a lot for our food, but we pay in two forms. One is payment to the farmers when we buy stuff. The other is payment to the government so it can subsidize farmers. Without the subsidies, farmers would get less money from the government and so might have to charge us more. But we would not be paying the government to pay farmers and so our total cost might not be that different. IOW, removing subsidies is less about how. Much we pay farmers than how we pay farmers.
Glad to catch ya mr. davies! Just quick question: If America were to legalize every drug and regulate said drugs, how do you think this would effect the economy? Putting aside drugs that are instantly addictive (they are a problem because they call into question whether the person has freedom of choice), the government would spend a lot less because we wouldn't have a huge portion of our society locked up. Those people who are locked up for drug offenses would then be free to work -- that would be a huge increase in a valuable resource. All told, I believe that economic growth would accelerate.
What are your thoughts on Distributism? I don't know much about it. I understand that it derives from Catholic social thought. CST is often (IMHO) abused by statists. For example, the directive that we have a responsibility to care for the poor is usually interpretted as a call to government intervention. But the Church doesn't say the government has a responsibilty to care for the poor. It says we have a responsibility to care for the poor.
One way to find common ground between Catholic social thought and classical liberal thought is to think of CST not as recipe for how to fix society but as a description of how a fixed society would look.
As someone who just graduated with a bachelors in Economics/ Int'l Business, what do feel is the current atmosphere for new hires? Any specific sector standing out to you? I have an interview with a company in ATL this coming August. I tell my students that employers don't need you to know how to do things. They'll teach you what you need to do. Employers need you to know how to think clearly and communicate concisely. To that end, emphasize your skills in mathematics, statistics, logic, speaking, and writing, and you'll find employers across a broad range of industries will be interested in you.
Where are the checks and balances on deregulated capitalism? At what point does the free market and the desire to maximize profit influence unethical behavior that may impede on the personal liberties of others (i.e. prison profiteering, military contractors, disaster capitalism)? "Deregulated" is a misnomer. All industries are regulated. The question is whether they are regulated by consumers freely choosing to hand over their dollars for the things the industry produces, or regulated by bureaucrats and politicians.
Is it true that this year’s deficit is greater than the total taxable income of Americans earning more than $100,000? Not greater than their taxable income, but about equal to the amount of taxes they paid. This year's numbers are still in flux. I believe that last year's deficit was around $1.1 trillion. The latest breakdown of federal tax receipts by income group was for 2009. In that year, everyone earning $100,000 and up paid a combined (approximately) $1.2 trillion in federal income, payroll, capital gains, estate, etc. taxes.
I'm confused by your philosophy on too big to fail. You seem to think congress is to blame for our current economic crisis. But I see congress as more of a symptom of institutions being to big to fail. Congress is paralyzed because the institutions have become so powerful that they control congress. If the institutions were smaller they would not have as much clout over congress. Can you comment on this? I believe you have the causality backward. The problem isn't that institutions are so large that they can control Congress. The problem is that Congress has become so powerful that it is worth controlling.
What's your opinion on the Rogoff/Reinhart situation, and did it cause you to change your philosophy? I haven't read the paper. My understanding is that it was a calculation error that changed the results quantitatively but not qualitatively.
Who do you think was the most handsome economist in history? Lord Acton had a rockin beard. Jeffrey Tucker has a rockin tie.
Y...you think that it's a good idea to repeal the 17th amendment? The point (prior to the 17th) was to encourage separation of power between the federal government and the states by making the Senate answerable to the states.
Hello Mr.Davies, As someone who knows nothing about economics and business (I am a welder), what is the best way to break into such fields of work? Education is a must I assume, but are certain universities more valued? Which degrees or majors are more in demand? Are there specific things to learn, do, or specialize in to stand out? How do mentor ships work? How can I meet a mentor and build a relationship with them? Normally, you'd need a bachelors degree in economics at the least. Typically jobs that carry the title "economist" (as opposed to "analyst") require a minimum of a masters degree. If you want to try and break in without getting the formal degrees, you'd need to be extremely good at higher level statistics (e.g., I'd recommend two semesters of stats, one of econometrics, one of advanced econometrics), mathematics (e.g., minimum calculus II), and basic economic theory (e.g., intermediate micro, intermediate macro). Your writing skills would also have to be top notch. Without the degree, you'd also need a goodly piece of luck because it will be hard to convince an employer to take a chance.
Dr. Davies: Given the the United States has previously held a price floor on wages slightly higher than 30% of GDP/hour worked with no significant disemployment effects, (late 1960s) and Canadian minimum wages are currently in the 20-23% range, and yet manages a higher 16-64 employment rate than that of the United States, can you tell me if you believe that an increase in the minimum wage from 12% to 15%, as the President proposed, would have significant disemployment effects, and if so why? I don't know what "no significant disemployment effects" means. The right way to measure the effect of the minimum wage is to compare the unemployment rate at various points in time with the relative minimum wage (i.e., the minimum wage as a ratio of the average hourly wage) at those points in time.
You can see that comparison here: Link to www.antolin-davies.com
Why do you feel comparing the minimum wage to the average hourly wage is correct? Won't that make attempts to suppress wages generally appear as though the minimum wage is higher in real terms than it would otherwise be? It's the correct measure because what is important is the degree to which the minimum wage is distorting the price of labor. For example, if the average free market wage is $10 an hour, I would expect that a minimum wage of $11 an hour won't have much effect. However, if the average free market wage is $5 an hour, I would expect that a minimum wage of $11 an hour would have a huge effect. Conclusion: What matters is the ratio of the minimum wage to the average wage.
Why would you refer to the labour market, a market characterized by weak monopsony and employer-enforced information asymmetry, as a free market? You are correct. I am using the average market wage as a proxy for the free market wage. It's not perfect, but for our purposes isn't a bad proxy.
Is it pronounced "Du-shane" or "Dju-kane"? Du-Kane.
Is Grove City College a good school? I have no first hand knowledge of the college. I know some of their students and faculty and none has ever failed to impress me as good and intelligent.
I think he's saying that there is still an inflection point where debt/GDP ratio causes negative growth. It might not be at 90%, but it will certainly still exist at some point. You are correct.
Last updated: 2013-05-26 17:05 UTC
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[Table] IAmA: I am Bryan Caplan, economist and professor at George Mason University and advocate of free immigration and free trade. AMA!

Verified? (This bot cannot verify AMAs just yet)
Date: 2014-02-05
Link to submission (Has self-text)
Questions Answers
What would happen if we began trading with Cuba again? They'd quickly get a lot richer, and we'd get some very nice vacations. In the longer run, the chance that Communism in Cuba would collapse or collapse into mere rhetoric is high.
Would you endorse something like a BIG? As a replacement for the status quo, maybe. As an addition, no.
Why do you think the idea is so appealing to both libertarians and socialists? Should proponents in each group be worried that the idea appeals to their ideological opponents? Libertarians like it because they think it will be a replacement. Socialists like it because they think it will be an addition.
I'm a regular reader of Econlog and love watching your debates. Myth of the Rational Voter influenced me tremendously. I've been waiting patiently for your magnum opus that will put you in the realm of Rothbard and Friedman regarding anarcho capitalist literature (no pressure). David Friedman is working on his 3rd edition of Machinery, and you're busy writing about having kids. What gives? ;) What is your position on the legitimacy of IP laws? Are 'digital copies of songs' or 'general ideas for software' or 'specifications for a toaster with a window', etc. property? For the typical left-anarchist, I'd just start with, "Who will take out the garbage?" Or more generally, "What about people who don't want to go along with the collective?"
I see no problem with contracts that forbid sharing. Laws against independent discoverers do seem wrong, though.
Bryan, What do you think about the viability of Bitcoin as money? If Bitcoin, or some crypto-currency, gets widely adopted as money what do you see as the most important economic ramifications? It's done 10x better than I expected, but I still don't expect it to be more than a niche financial instrument. It's long been noted that people around the world continue using their national currencies even in the face of 20 or 30% inflation because national currencies are more convenient and focal. Also, I expect regulators to crack down if Bitcoin becomes much of a threat.
But hopefully I'm wrong!
Economists' consensus estimate is that open borders would roughly double world GDP, enough to virtually eliminate global poverty (Clemens 2011). What I can't understand is indifference to the mind-boggling potential benefits of immigration. The knowledge that we're sitting on an ocean of talent should haunt great minds day and night. They should pace around their offices telling themselves, "There's got to be a way to unlock these wasted trillions of dollars of human potential. There's just got to be a way." My question is: Are there other libertarian policies that would result in similarly-massive benefits as open borders if implemented? If so, what are they? After open borders, the biggest policy change would be for Third World countries to fully open their doors to international investment. Work by van Reenen and many others shows that multinational corps in the 3rd World are vastly better-run than local firms. If multinationals could freely compete, they would quickly raise productivity. Back of the envelope calculate is that if all firms on earth were managed at multinational levels, global GDP would go up by 25-50%. Most of the benefit, of course, would be in the Third World.
Guess you should have asked "and if so, why?"!! ;) When countries produce cheap stuff to sell us, it is good for us. And rich countries are very rarely militarily aggressive, at least once they've been rich for a full generation.
rich countries are very rarely militarily aggressive. Is the US a counterexample? Not really. Most dominant powers throughout history have been far more aggressive. The U.S. today is scared to lose a few thousand soldiers. Why? Because rich people value their livess. Thankfully!
Hi Dr. Caplan. I think that many of your EconLog entries are very insightful. If you had to pick your favorite ones (say, top 5), which ones would they be? "The Magic of Education," "Tough Luck," "The Common-Sense Case for Pacifism," "The Tiger Mother versus Cost-Benefit Analysis," and "Tell Me the Difference Between Jim Crow and Immigration Restrictions."
Hey Bryan, great admirer of yours! You once wrote me back on an email, which meant a lot. Thanks. Cambodia. I'd love to see a great capitalist success overshadow the Communist horrors of the Killing Fields. Vegetarianism. He's sold, I'm not. I think I'd ask Noam to spell out what qualifies as "private tyranny." I think he tends to lump together everything from the conquistadors' mass murder to WalMart selling cheap stuff.
Which under-developed country would you like to see a charter city begin? - What do you Michael Huemer quarrel over? - How would you rebuttal Noam Chomsky’s statement on libertarianism forming unaccountable private tyranny?
Dr. Caplan - what do you think of the usual way welfare economics is taught? That is, do you think that Consumer and Producer surplus calculations for various regulations and policies are legitimate tools to compare policies? Do they rely on interpersonal utility comparisons, or can they successfully aggregate benefits across people? Welfare economics is usually talk very poorly: constant equivocation between the Pareto standard and the cost-benefit (or Kaldor-Hicks) standards.
I see nothing wrong with looking at Consumer or Producer surplus, as long as you realize that this is just one of many metrics.
I have no problem with doing interpersonal welfare comparisons. I compare people's well-being every day. And if you can't compare one person's happiness to another's, why can you compare your own happiness today to your own happiness yesterday?
Many libertarians use welfare economics to try to short-circuit utilitarianism. I'd rather just criticize utilitarianism.
Does the signaling model of education ever depress you while you're prepping your classes? Not at all. Students' apathy is a little depressing, but I always focus on the students who are happy to be in class.
What books have influenced you and your career? Atlas Shrugged, For a New Liberty, Economic Sophisms, The Armchair Economist, The Bell Curve, The Myth of Democratic Failure, The Nurture Assumption, and Modern Times. Mike Huemer's been a massive influence on me, but mostly his articles, especially "Moral Objectivism."
Do you feel that the rise of China is beneficial to the interests of the United States? YES!
With the drought in Southern California is it possible the state is over populated? Meaning we have to halt immigration into the south west? No. Just raise the price of water!
Hey Bryan. Suppose your robust, non-reductive form of moral realism turned out to be false. What do you think is next most plausible metaethical position? Mackie's view: That moral statements are genuine assertions, but they're all false because there are no moral facts.
But other topics - wasteful signaling in education, that good parenting takes less time than widely believed - can have effects on the margin. But open immigration won't happen until the median voter is okay with it, i.e. never, so working on it seems less fruitful than other topics. Open borders seems like one of the many nice things the world can't have, because it'll never be politically feasible. Do you think open immigration might actually happen, or is your work on the topic just driven by an intellectual impulse to defend a good, under-appreciated policy? Open borders will come eventually - but only after the gains become small because national incomes aren't too far apart. Writing about parenting is nice because I really do see concrete improvements in the world. Several people tell me their children exist because I convinced them. I can't help think, "My words create LIFE!" For any public public issue - immigration, education, minimum wage, whatever, I see the odds of substantially changing policy as miniscule. But I think there's a small chance I ever-so-slightly tip policy in a better direction. Not satisfying, but it's all I've got.
Anyway, my question for you is this: Of the many issues brought up against immigration, you have given convincing counterarguments indicating that they, if not wrong, can at least be more humanely addressed than simply closing the border. One argument I hear often, but have not (to date) heard your thoughts on, is that immigrants commit more crime and thus should be kept out to keep crime from spiraling out of control. Is this true, and if it is, is there a more humane way to address it than simply keeping people out? PS: Any idea when your book on (or should I say against) education will be out? Standard social science is that immigrants have LOWER crime rates than natives. Link to econlog.econlib.org There are some concerns about 2nd-generation Hispanic crime, but even that is only modestly above the native rate (by 20-40% or so). Bonding. You have to post some money to immigrate, to ensure that you can compensate any victims if you happen to commit a crime. Vouching. Only letting in people if someone here will vouch for their good character (and make themselves liable for your bad behavior, if any).
How do you write so much?? Do you have a regular routine in addition to all the work you do for George Mason? I save a lot of time by blogging stuff I'm already thinking about or talking about at lunch.
If given the chance, is there anything you'd do differently if you could re-do the immigration IQ2 debate you were a part of last year? Yes. I would have asked the host to pre-emptively admonish the audience NOT to vote yes unless they favor unlimited immigration from low-income countries like Haiti. That would have sharply depressed our initial Yes vote, allowing us to beat the point spread.
Also, in all honesty, I should have requested a different partner because Vivek didn't actually agree with the resolution. I don't blame him for losing, but it was distressing.
Do you believe that philosophy plays an important role in economics? For instance, you have promoted Michael Huemer's The Problem of Political Authority. Do the ethical arguments put forward by Huemer have any bearing on your work in or your views regarding economics? Every economist who gives policy advise is implicitly relying on philosophy. Unfortunately, most economists want to rely on philosophy without really reflecting on it, so they're usually just crude utilitarians (with a heavy bias toward the status quo and democratic fundamentalism).
For my own part, I start with a strong presumption of liberty, but admit that we should override this presumption when the benefits of violating liberty heavily outweigh the costs. (See Link to econlog.econlib.org So economics ends up being a vital servant of political philosophy, but nothing more.
How do you reconcile anarcho-capitalism with the fact that successful market outcomes are almost always proceeded by a successful government enforcement of property rights? But why does successful government enforcement come first? Largely because government is a monopoly. Whether it does a good or a bad job, it still bans competition. So the only places that have solid property rights have government-enforced rights.
So if it were possible to preserve that information and recreate a brain (whether made of cells as we know them, or some other substrate), wouldn't that preserve you? Similar to when you're unconscious, and some of the matter in your brain changes, but you're still you when you wake up? An exact replica would be just that - a replica. I'd love to meet him, but he wouldn't be me.
Dr. Caplan, in MotRV, there were parts that came across as very critical of public choice. Did I misunderstand, or is there even a dichotomy between the questions of whether voters get what they want, or politicians and regulators get what they want? I am very critical. Many public choice economists just aren't curious about public opinion. They'd rather just assume that voters want what they'd advise, then blame special interests for defying the will of the people. Not good science.
Hi Bryan. I listened to a lecture you gave at ISFLC last year and had a great time. I've referenced many of your essays whenever I've found myself in a political discussion with someone. I wanted to ask you something unrelated to politics, though :) What are some of your favorite bands? At heart I'm a 18th & 19th-century German opera guy. Wagner's my #1, Bach's my #2. But by the normal definition of "bands," I'd say Bad Religion, Tsunami Bomb, tATu, P!nk, and No Doubt. I'm also a big fan of world music, especially the Rough Guide series.
Professor Caplan, do you feel that the libertarian movement's love affair with Austrian economics is doing a disservice to the goals it fights for? That is, that since the Austrian school is viewed with derision in mainstream circles, Libertarianism's other philosophical arguments are tainted by association? Maybe. But Austrianism also inspires a lot of enthusiasm from the base, so it's hard to say. My main argument against Austrianism is that it's false, not that it's bad publicity.
Big fan here! A personal question: from your experience, how to make the best of a phD? What are the most important skills developed in your phD that turn out to be essential? I'm doing a master in economics and planning for a phD.Thank you!!! Coursework is greatly overrated. Instead, focus on (a) finding research topics you're passionate about, and (b) meeting and impressing researchers who share your passion. Robin Hanson advises students to read to journals, then pick their favorite one or two topics. It's kind of like hanging out at the medical school, then marrying for love.
Stephen Earl Bennett and Jeffrey have critiqued your rational irrationality theory. They claim that in order for your theory to be more than just ignorance, you assume voters must know at some level that they are wrong. ...one cannot believe that a policy that one considers good on sociotropic grounds (and thus favors) is, in fact, sociotropically bad (such that one considers it to be an irrational “indulgence”). They accuse you of projecting your own irrationality on to voters. The critique is many pages and has many other criticisms. I find the criticism to be harsh and not very convincing. Have you responded to them? Not that I recall. But since writing MRV, I've discovered more psychological work that makes my story even more intuitive. E.g. here: Link to econlog.econlib.org
Hey Mr. Caplan, Do you think Israel should open their borders? Yes. But I wouldn't strongly object if they excluded people with violent criminal records or denied new-comers the vote. (Same goes for countries other than Israel, too).
Why did you decide to do an AMA during the Ham/Nye creationism debate when everyone's attention is on the insanity in Kentucky? Probable path: As country's incomes converse, free migration will gradually cease to seem like a big deal. See the EU. Once two country's per capita GDP's are in the 2:1 zone, opening borders lead to little permanent migration but a lot of convenience. That can and has been sold to voters.
OK, that isn't my question. My question is do you see any possible path to a world with open borders? If so, what path? Economically, this is a big let-down, because the biggest gains come when country's incomes are highly UNequal. But late is better than never.
How can free trade be beneficial to a countries job market? Free trade has historically fucked the Canadian job market. How is it different in the US? Canadian unemployment has been low for a long time. It's been rich for a long time. Why is it so clear that free trade has been anything but good for Canada?
What arguments would you give against cynically manipulating the political system rather than trying to reform or undermine it? In many cases, I think cynical manipulation is moral and wise. If you're filling out your income tax, I'd advise you to just game the system to pay as little as possible.
But when cynical manipulation involves treating other people unjustly, I advise against it. The argument? Nothing better than "You shouldn't act unjustly, this is unjust, so don't do it."
Do you have an idea what portion of economists are friendly towards immigration? (even if not total open borders) whats a good source for it? And who's the anti George Borjas? (besides you) The vast majority of economists favor liberalization of immigration. See e.g. MRV for some numbers. Michael Clemens is the anti Borjas: Link to www.cgdev.org
Will you be at the ISFLC this year? Do you believe Bitcoin will stabilize and become a legitimate currency anytime soon? While it has the perceived value necessary of a currency, it's fluctuations prevent it from storing value, something necessary of a unit of exchange. I will be at ISFLC on Sat. On Bitcoin, see prior question.
Is there still a viable argument for the minimum wage? To the best of my understand, Card and Kreuger has been thoroughly refuted by Neumark and Wascher; in fact, practically every one of the major papers that purports to show a zero or small positive effect of a higher min. wage has been replicated and refued by Neumark and Wascher. There is the work by Dube, Lester, and Reich. What do you think of that? I have heard it is relatively poor and easily refued. What do you think of the allegations of publication bias favoring "interesting" and consequently anti-status quo, pro-minimum wage papers? Link to econlog.econlib.org
What advice would you give to parents, especially new ones? For new parents: Ferberize your baby! Don't turn yourself into a zombie for two years because you won't let your baby cry for ten minutes. Also, safety-proof your home to the point where you don't have to watch your baby constantly.
General advice: Relax and ignore peer pressure.
Was the American Civil War mostly about slavery? Yes, but in a weird way. Moderate Southerners correctly believed that slavery was safer in the Union that out. Southern secessionists, in contrast, falsely believe that Republicans had a serious intention to end slavery. In fact, Republicans were only willing to pay a modest cost to end slavery in a timely manner. (Lincoln even offered to support an amendment protecting slavery in perpetuity). By the time the South fell, the cost of ending slavery was temporarily very low, so Republicans seized the chance.
Hi Bryan, given your principled opposition to war, I was wondering if you consider the Falklands war to be a justified one? No. I assume some innocent people were killed (or at least recklessly endangered) by the British response, and I don't see why British rule over the Falklands is vastly better than Argentine rule.
Thanks for joining us Dr. Caplan, great to see a fellow libertarian on here. You're an inspiration to us all. As a person with a loved family member who has high functioning Aspergers, I was curious where you identified on the autism spectrum? I asked all my FB friends. About half say I'm not autistic at all, and half say I'm moderate. I'd split the difference.
Are you a vegan? Have you written or read anything persuasive either way on the subject of speciesism or animal rights? No, I'm not a vegan. Veganism seems to imply that even stepping on bugs is wrong, and that seems crazy to me. Claims about which animals do/don't feel pain mostly strike me as wishful thinking.
Why aren’t you the world leading economist yet? Part of the answer is that I'm not smart or hard-working enough. But the bigger reason is that the hoops you have to jump through to be the world's leading economist repel me. Most work in top journals just bores me. And even the good work usually makes me say, "I'm glad someone other than me is doing this research."
Why are open borders helpful for high wage natives? High-wage natives have already borne the brunt of a lot of foreign competition. But truly open borders would bring in a lot of lower-skilled workers who produce the goods that high-wage natives consume.
What is your opinion on the calculation problem and the socialist calculation debate? Do large organizations become less effective at decision making because they don’t have market prices to provide needed information? Pure socialist economies can't calculate. But I doubt this has been a big reason why socialist economies have historically done poorly. The main problem they've had is collectivization-spurred famines, which are all about incentives. See Link to econfaculty.gmu.edu at the subsequent exchanges in Critical Review.
What is the best practical (individual level, not public policy) way to promote pro-natalism? Aside from buying people your book, of course. (Hail from /natalism!) Be the change you want to see in the world. Have fun with your kids, treat them with kindness and respect, and don't haze prospective parents with lurid tales of doom and gloom.
You've written that you're a moral intuitionist. Given that people have different intuitions, doesn't this collapse into relativism? If you have libertarian intuitions and someone else doesn't, what can you say to convince him if he bites the bullet and says that beating people up is acceptable if it's done to (for example) reduce inequality? People have different intuitions about non-moral topics, too. E.g. the age of the universe. Does that mean there is no fact of the matter about how old the universe really is?
On any issue, moral or non-moral, the right response to conflicting intuitions is to repeatedly back up to less controversial questions until you find some common ground.
Do you have a written version of the arguments from your Rethinking the Night Watchman State lecture? More or less: Link to econfaculty.gmu.edu
Why do you suppose the fine folks at An Anarchist FAQ have made such a concerted effort to rebut your Anarchist Theory FAQ? Do you think there will ever be a ceasefire among left- and right-anarchists? I ceasefired a long time ago. Arguments between radically different viewpoints are usually fruitless. I'd rather talk to moderates than my polar opposites.
Given that we do not live in a pure service economy, do you think the conclusions from "Distributive Justice in A Pure Service Economy" are applicable to distributive justice in our world? Many moral theories can lead to gruesome conclusions in fantastical settings, is that a good reason to reject them? Not exactly "applicable." But definitely illustrative. The point of the hypothetical is to show that the taxation=slavery view is more plausible than most people want to admit.
Do you have plans for adding to the Museum of Communism? Probably not. At this stage in my career, I could imagine writing a book on Communism. But a web museum is more of a grad student project.
If a worthy student wanted to take up the project, I'd be happy to discuss it.
Relating to Selfish Reasons to Have More Kids, what is your view on peer effects? Peer effects are probably over-rated, too. Sacerdote's Korean adoption study found, for example, that average income in adoptee's childhood zip code had little effect on their outcomes, too.
What have you changed your mind about recently? Most recently, I've changed my mind about the probable consequences of fully legalizing IQ tests. I used to think the law was a huge barrier to strong pent-up demand. Now I think the law is mostly a paper tiger. Few firms want to hire on IQ, despite its demonstrable advantages. Even countries where IQ tests are fully legal barely use them for hiring.
What RPG games would you recommend to someone without any previous exposure to RPG games? What's the best group dynamic for a beginner to start? I've tempted to say Pandemonium. It's very rules light, and has a great mechanic - past lives - for getting people to truly role-play.
I'm also of course a fan of my True20 House Rules. I can teach the rules to newbies in 10 minutes, yet they have high re-play value. Link to econfaculty.gmu.edu
Do you think investing in private companies that provide services that are traditionally provided by government is an effective strategy for bringing about anarcho-capitalism? No, but it is an effective strategy for moving the world in an anarcho-capitalist direction.
Are there any contemporary thinkers that you admire? It doesn't just have to be in economics. Mike Huemer, above all. But absolutely. The world is full of admirable thinkers. Some non-libertarian favs: Bill Dickens, Daniel Kahneman, Josh Barro.
I see you enjoy the book "The Myth of Democratic Failure".Why was it so influential to you? Before I read it, I was largely an orthodox Public Choice guy. Wittman convinced me that orthodox Public Choice greatly overstated its claims - and led me to search out a lot of relevant empirics, too.
Vivek posted on your blog that he would agree to debate you on immigration. Is this debate going to happen? News to me.
You know what they say. "Diversity is good, diversity is a strength, diversity is what makes the middle east so peaceful!" The Middle East really could use a lot more diversity. One religion gives you totalitarianism. Two gives you civil strife. A hundred gives you peace. (With apologies to Voltaire).
Oh god. He better be at ISFLC! That'd be rad. See you there. I'm bringing my 11-year-old sons.
I'd love to hear a bit about your approach to teaching graduate econ. In particular, I'm interested in your thoughts on the proper role of math in econ grad programs. My first rule: I only teach math I plan to test. Otherwise, students suffer for no reason.
Big fan of your work in general, keep it up. Overall, I try to expose grad students to standard mainstream stuff, give them some perspective on why it's overrated, then move to the research frontier.
Last updated: 2014-02-08 21:39 UTC
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