Public audit of finance

The biggest Ponzi scheme orchestrated Bernie Madoff in 2009 was possible because of the current banking system setting. It is based on trust in banks, third parties and authorities. SEC issued 400 pages document called “Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme” where describes it’s own failure to audit Madoff company.
Audit and control of Madoff “business” was failure after failure as Harry Markopolos described. This whole scam was possible because SEC used no hard evidence, but rather relayed on monkey social rituals.

Bernie Madoff fooled top investment companies, wealthy individuals, lawyers, and even SEC. Why do you think you are better?

When I did SEPA transaction recently, my money just left bank account and I was waiting 3 days to confirm transaction by other party. It was complete black box for me. I didn’t know where are actually my money and what is current status of my transaction. I trusted my bank and had no other option. Only if…

Bitcoin as a cash machine

Now there are huge implications from the fact that the human mind is put together this way. One implication is that people who create things like cash registers, which make dishonest behavior hard to accomplish, are some of the effective saints of our civilization because, as Skinner so well knew, bad behavior is intensely habit-forming when it is rewarded. And so the cash register was a great moral instrument when it was created. And, by the way, Patterson, the great evangelist of the cash register, knew that from his own experience. He had a little store, and his employees were stealing him blind, so that he never made any money.

Then people sold him a couple of cash registers, and his store went to profit immediately. He promptly closed the store and went into the cash register business, creating what became the mighty National Cash Register Company, one of the glories of its time. “Repeat behavior that works” is a behavioral guide that really succeeded for Patterson, after he applied one added twist. And so did high moral cognition. An eccentric, inveterate do-gooder (except when destroying competitors, all of which he regarded as would-be patent thieves), Patterson, like Carnegie, pretty well gave away all his money to charity before he died, always pointing out that “shrouds have no pockets.” So great was the contribution of Patterson’s cash register to civilization, and so effectively did he improve the cash register and spread its use, that in the end, he probably deserved the epitaph chosen for the Roman poet Horace: “I did not completely die.”

The aspect behind Bitcoin trust is transparency, public control, math, automation, verifiability and no chain of reputation. Everybody on the world can audit the system, transactions and code.

I know, there is no interest in Bitcoin and it produces no profit. I think about Bitcoin more like a battery of energy and good deeds or a cash machine. But my final question for you is this. Do you believe your broker and banks more than your private keys and public Blockchain?