Animal Odd Couples of the world

Catalan and similarities to past WA succession proposals

In Australia West Australians have been reported to have some sympathy for Catlin separatists as distinct from those in other states.  A brief history of both regions is helpful in demonstrate similarities. In the case of the Catalonians they no doubt rally around their countries past when Spain was the leading powerhouse of Europe during the 16^thand mostly the 17th century. However in the latter half of the 17th century, Spain went into decline, surrendering territories to France and the Netherlands; with a diminished but still vast overseas empire until the beginning of the 19th century. The 20th century brought little peace. The Spanish Civil War broke out in 1936, led by General Francisco Franco and supported by Nazi Germany and Fascist Italy.

It was only after a peaceful transition to democracy following the death of the dictator Francisco FRANCO in 1975, that economic and modernization proceeded. In 1986 Spain joined the European Economic Community, which became the European Union. Some would say this move was premature since it was still recovering from her dictatorship past. The country subsequently borrowed large amounts at low rates of interest and clocked up deficits accompanied by some reckless lending. What the Catalonians say is this reckless behaviour didn’t apply to them. The end result for Spain following the GFC was to expose Spain’s fragile position and to enter a severe economic recession from 2008.  The austerity measures have led to one of the highest unemployment rates in Europe.

Against this backdrop it is hardly surprising old loyalties by Catalonians boiled over in a desire to form a separate sovereign state. Catalonians claim they disproportionally contribute to the economic pie whilst receiving lower returns from the central government and were not responsible for the economic mess.   

But Secessionism was also on the minds of Western Australians just after British settlement in 1829 who raised the same sort of arguments.   Petitions emanating from the WA Legislative Council were presented to London in 1865 and 1869. This was granted in 1870 but maintained a Governor's veto.

1933 referendum
On 8 April 1933 a referendum on secession was held in conjunction with the State parliamentary election. The Nationalists campaigned in favour of secession while the Labor party had campaigned against breaking from the Federation. 68% of the voters voted in favour of secession, but remarkably at the same time the Nationalists were voted out of office. It was only the mining areas, populated by keen Federalists, voted against the move. Today some west Australians feel they disproportionally contribute to Australia’s wealth because of mining but get back unfairly a diminished proportion of GST. Past history indicates just how close they came to secession.
   

Understanding Cryptocurrencies and Block Chain technology.

Jamie Diamond caused a stir in September when he claimed bitcoin as a fraud although he did commend the block chain technology which facilitates not only the use of Cryptocurrencies such as Bitcoin, but has many other applications. 

Block chain is regarded by many as a brilliant technology which will revolutionise the way business is conducted.

Someone asked me yesterday at a luncheon celebrated with former workmates how to explain it and although I am no expert here is how I would attempt a simple explanation.
Maybe the first thing you need to understand is how the age old universally accepted Double Entry Accounting concepts work. In a nutshell the principle of double entry recognises the reality there is always two sides to every transaction, so there is always a seller and a buyer, a receipt to add to one account and a corresponding reduction in another’s indebtedness and so on. 

Now replace that double entry principle with double entry block chain accounting.  That’s because block chain accounting at the outset facilitates transactions between two pairs, a buyer and a seller or a receipt and payment or one virtual wallet increasing whilst another deceases. It happens virtually instantaneously because those in the encrypted chain using cryptocurrencies to record the transactional effects at the same time. Think of it as giant ledger in cyber space where all the debits equal to the credits of the linked parties from the aggregate of parties’ transactions at any given time in the block chain.
The final seal of approval has led some to try and distinguish the process from double entry accounting by call this the third entry. 
  
Parties hold the Cryptocurrencies in so called wallets and the largest of these is Bitcoin.
Hence, there is no need for 3^rd party clearing houses or back office staff to facilitate large numbers of bundled same type transactions for subsequent settlements which mostly occurs to day.  


What is mining Bitcoin ? Mining can be carried out by anyone who has invested in a very powerful fast computer, has the capacity to pay for the large energy bills and has a penchant or talent to solve puzzles. The system was predicated on the basis of each batch of transactional  data is encrypted by a formula that can only be unlocked after a  massive scale of trial and error guesses. As the first miners solve the puzzle, the answer is verified by others, so that the data is added to an existing linked chain of blocks of data. The miner in return  receives newly issued Bitcoin. One of the criticisms of the system is it uses up a lot of electricity.    

I think financial institutions will eventually begin to use more of the Block chain technology which will mean the adoption of either a digital cryptocurrency or a similar substituted means to do that. After all cryptocurrencies are no more than bits of code. But eventually such facilities will have to have some form of regulation for what it is as an alternative more efficient system of settling business transactions. But even given eventual regulation not everyone is going to be happy trusting in the integrity of a new technology and we all will have to have a new breed of technologically savvy auditors to check the integrity of the Block chain providers. 

In relation to Bitcoin there are currently several Hedge Funds which have bought large holdings which of course have gone up exponentially due to the rapid rise in this Cryptocurrency. Such rises are underpinned by pure speculation as no one can put a value on this Cryptocurrency which is responding to a rapid demand when there is currently only a limited supply.

But Cryptocurrencies are no different to traditional currencies which appreciate or depreciate according to supply and demand.   But the important distinction of course is currently they are unregulated by any central banks and have attracted criminal activity as it is much harder to ascertain transactional records.

The question of trading in Bit Coin is facilitated by on line platforms such as Coinbase which provides a market. The facility allows for buying, selling or transfer of digital currency between online wallets involving merchants or individuals. Currently the facility is free of charges and such facilitators claim they provide both security and backups.

Nevertheless there has already been some bogus websites where the holdings of digital currencies have vaporised without trace.  Since the arrival of Cryptocurrencies more than one billion has been stolen from wallets. 

On the question of Bitcoin being a bubble set to burst that in turn depends more on whether or not merchants will continue to accept them. Microsoft and Pay Pal already accept Bitcoin under their platforms.

The total size of the traditional market dwarfs that of the Cryptocurrencies suggesting it may well have further to run. But when it finally crashes don’t rule out another version rising from the ashes.