Today’s News 20th January 2018

  • "No Deal" – Government Shutdown Begins

    Update 12:03am ET: The shutdown has brgun.

    Per Reuters, the White House says it will reopen negotiations on immigration reform ‘when the Democrats start paying our armed forces and first responders’.

    * * *

    Update 10pm ET:

    *SENATE LACKS VOTES TO ADVANCE STOPGAP PLAN AS SHUTDOWN LOOMS

    The New York Times headline summed things up well: Senate Democrats Kill Bill to Keep Government Open Past Midnight

    Despite last minute ‘compromise’ meetings, and continued “hopes” from various sides, The Senate failed to reach the 60 votes necessary to keep the government funded (even for a stopgap) and so, as of midnight tonight, the government will shut down.

     

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    John Cornyn, the second-ranking Senate Republican, said the two parties haven’t yet found an agreement that would provide short-term funding for the government with a little more than two hours before the deadline.

    “No deal,” Cornyn said as the Senate prepared to take up a House-passed funding bill that Democrats have the votes to block.

    A group of lawmakers has been working on a plan for a three-week funding bill that would give Democrats and Republicans time to negotiate a long-term compromise on immigration, the chief sticking point in the spending fight.

    CNN’s Phil Mattingly explained on air: “Democrats aren’t looking for a reduction in time in the continuing resolution, they’re looking for substantive policy, commitments, changes or actual legislative text before they are willing to come on board with that.”

    This is what America will wake up to…

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    This is the 19th US government shutdown in the last 40 years…

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    President Trump tweeted before the vote:

     

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    While the blame-scaping may have begun days ago, tonight has already seen a full court press of finger-pointing.

    Sen. John Kennedy (R-La.) blasted Congress on Friday as a government funding deadline approached, slamming the government as being “run by idiots.”

    “Our country was founded by geniuses, but it’s being run by idiots,” Kennedy told reporters hours before the government was set to enter a shutdown.

    Lindsey Graham issued a statement suggesting a three-week compromise CR to Feb 8th:

     

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    The White House has estimated 1056 staff will be furloughed during the shutdown.

    EXECUTIVE OFFICE OF THE PRESIDENT

    Updated Contingency Plan For Shutdown Furlough

    A. Summary of Contingency Plan

    Should Congress not pass a Fiscal Year 2018 (“FY2018”) appropriation or continuing resolution (“CR”) by January 19, 2018, the Executive Office of the President (“EOP”) would be without authority to incur any financial obligations in FY2018, with very limited exceptions, and would therefore implement a contingency plan for shutdown furlough (the “Contingency Plan”). The Contingency Plan entails placing an estimated I 056 ofthe 1715 EOP staff in furlough status (“Non-Excepted Staff’), while an estimated 659 EOP staff would continue to report to duty because they are (i) designated as excepted to perform emergency or excepted functions; (ii) Presidentially Appointed, Senate Confirmed staff; (iii) otherwise exempt from the Anti-deficiency Act; (iv) alternatively funded during a government shutdown (collectively, the “Excepted Staff’). Any EOP personnel that are other government employees (“OGEs” or “Detailees”) would be furloughed or continue to report to duty at the discretion of their respective home agencies.

    B. Implementation of Contingency Plan

    Once it becomes clear that neither an appropriations bill nor a CR will be enacted prior to January 19, 2018, the White House Office of Management & Administration (“M&A”) will notify EOP components to begin an orderly shutdown of unfunded functions. Non-Excepted Staff will receive shutdown and furlough notices. Detailees will be notified by their home agencies whether they are to be furloughed.

    On Monday, January 22, 2018, Excepted Staff will report to duty. Non-Excepted Staff will also report on January 22, 2018, either in person or via telework for no longer than four hours and for the sole purpose of engaging in orderly shutdown activities. Each EOP component will issue instructions to their employees for orderly shutdown.

    C. Specifics of EOP Component Contingency Plan

    Each EOP component has carefully considered the number of personnel required not only to complete orderly shutdown activities but also to ensure that the emergency or excepted operations of each EOP component can be carried out during shutdown. The chart below summarizes component-by-component the Excepted Staff that will be required to sustain minimal emergency or excepted operations.

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    Federal employees will work without pay:

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    The question is – will government ever re-open? As Trump tweeted earlier, the Democrats want to shutdown to dim the success of the tax cuts; and as Goldman noted earlier, for every week of government shutdown, GDP growth will drop 0.2ppt.

    CNN is reporting that House Democrats plan a 10am meeting tomorrow to discuss a stopgap bill.

    The battle of the hashtags has begun – #RepublicanShutdown, #TrumpShutdown, or #SchumerShutdown.

    All of which distract from the only hashtag that really matters currently – #ReleaseTheMemo.

    *  *  *

    Update (6:20 pm ET): Democratic Sen. Heidi Heitkamp says she will vote for a 5-day stopgap plan being hashed out by a group of senate Republicans. While Mulvaney has expressed optimism that a deal will be reached within the next 24 hours, Mark Meadows, leader of the House Freedom Caucus of conservative Republicans, said the 5-day agreement is a nonstarter – Which an administration insider confirmed.

    Heitkamp represents North Dakota – a state where Trump won more than 60% of the vote in 2016 – and will be running for re-election in November. Her seat is viewed as vulnerable by some Republicans.

    According to the Washington Post, Heitkamp also supported the Republican plan for a one-month extension, as did Indiana’s Joe Donnelly and West Virginia Sen. Joe Manchin III. All three senators face a difficult path to reelection in heavily Republican states.

    Meanwhile, Mitch McConnell announced on the Senate floor that a procedural vote on the troubled 4-week extension has been scheduled for for 10 pm ET. Senate Democrats will meet at 8:30 pm ET.

    * * *

    Update (5:40 pm ET): OBM Director Mick Mulvaney says he “thinks there’ll be a deal in the next 24 hours.”

    Meanwhile, a White House aide said a proposed 5-day bill is a non-starter – echoing sentiments expressed by Freedom Caucus head Mark Meadows.

    * * *

    Update (5:20 pm ET): Trump tweeted that he had an “excellent” meeting with Schumer, and that he’s working with both Democratic leaders, as well as Paul Ryan and Mitch McConnell to hammer out a four-week extension.

     

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    * * *

    Update (2:40 pm ET): Schumer has left the White House meeting with Trump…

    He confirmed to reporters that “some progress” has been made, but that a deal has not yet been reached and “disagreements on several issues remain.”

     

    Nancy Pelosi says she believes a deal is “within reach.”

     

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    Steny Hoyer appears to agree:

     

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    Citing an anonymous source at the White House, ABC is reporting that talks will continue..

    * * *

    Update (2 pm ET): House Rules Committee Chairman Pete Sessions said the House will vote again tonight if Trump and Schumer manage to work out a separate deal.

    * * *

    Update: There is still no vote scheduled for the Senate, but that didn’t stop John Cornyn, the Republican No. 2 in the upper chamber, from telling reporters that he expects a vote to be held “after lunch.”

    Meanwhile, Mark Meadows, leader of the House Freedom Caucus, said he understands a proposal for a five-day short-term fix has been rejected by the House.

    According to the latest headline from the New York Times, Trump has invited Democratic leader Chuck Schumer to the White House t try and hammer out a last-minute deal.

    Schumer has reportedly accepted, and is on his way to the White House to meet with Trump, who is addressing a crowd of supporters at the March for Life from the Rose Garden.

    <a href="

    https://platform.twitter.com/widgets.js“>Fox News is reporting that Schumer has arrived at the White House.

     

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    Despite all of this, markets haven’t shown much of a reaction…

     

    * * *

    Update: Hardly a surprise, Mulvaney and Short arrived more than a half hour late, then proceeded to blast Democrats as obstructionists for trying to force a shutdown.

    They even have a name for it: “The Schumer Shutdown”.

    “This is an attempt by democrats led by Schumer – that’s why we’re calling it the Schumer shutdown – to embarrass the president,” Mulvaney said.

    “They don’t oppose anything in there. They support chip they don’t want the cadillac tax to go into place they’ve always supported clean CRs. And again, it worked in the House – there were several Democrats who voted for it,” Mulvaney.

    DACA doesn’t expire until March 5 – and therefore, doesn’t need to be dealt with until mid-February, Mulvaney said.

    Unlike the last shutdown in 2013, federal parks will be open, Mulvaney said. But all federal employees will be working for nothing (that is, until their back pay is approved by Congress). The military, TSA, Fannie Mae and Freddie Mac will also go to work, but they will not be paid.

    As of now, it looks like the federal government expects the shutdown to happen – though Mulvaney said their version of the shutdown would be more “moderate” than the previous shutdown, which happened during the Obama years. Mulvaney accused the Obama administration of “weaponizing” the shutdown by ensuring that virtually all federal employees didn’t show up for work. 

    While Mulvaney and Short were answering questions from the media, President Trump chimed in on twitter, chiding Democrats for opposing the bill. Trump blasted California Sen. Dianne Feinstein, tweeting a quote from her in the Washington Examiner: “Shutting down the government is a very serious thing…People die, accidents happen. I don’t know how I would vote right now on a CR, OK?”

     

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    * * *

    With the one-month stopgap spending bill stalled in the Senate, the White House is finally accepting the fact that there’s little it can do to prevent the government from shutting down at midnight on Friday.

    Trump has promised to remain in Washington – postponing a weekend trip to Mar-a-Lago – until the shutdown is averted or ended, and in order to keep the media apprised of what’s about the happen, the White House is holding a press conference at 10:30 am ET.

    Watch it live below:

    The press conference will feature White House Legislative Director Marc Short and OMB Director Mick Mulvaney, who only minutes ago warned that the odds of a shutdown were “50-50” – another way of saying “we have no idea what’s going to happen.”

    According to the Hill, Senate Majority Leader Mitch McConnell adjourned the Senate until 11 a.m. Friday without scheduling a vote on the House measure, giving lawmakers just 13 hours to reach a deal to avert a shutdown. McConnell has vowed to keep the Senate in session until an agreement is reached. Democrats are digging in their heels, demanding that they receive some concessions on DACA, opioids and funding for Puerto Rico before assenting to another short-term spending bill.

    One thing’s for certain: Don’t expect the steady stream of headlines to abate until late tonight…

     

  • Riz Virk Explains Why Quantum Physics, AI, & Eastern Mystics All Agree We Are Living In A Video Game

    Authored by Riz Virk via HackerNoon.com,

    An MIT trained computer scientist and Silicon Valley video game designer gives 10 reasons for the ‘Simulation Hypothesis’: that our reality is a simulated, pixelated 3d world where we all have individual xp, levels, and quests run by some giant Artificial Intelligence

    Recently, the idea that we may be living in a giant video game, or as it’s sometimes called, the Simulation Hypothesis, has gotten a lot of attention because of prominent figures like Elon Musk who have openly discussed the idea. As Virtual Reality technology has gotten more sophisticated, we are starting to contemplate virtual worlds like that of the omni-present Oasis in Ready Player One, soon to be a blockbuster movie directed by Stephen Spielberg.

    Some like sci fi writer Philip K. Dick, believed strongly that we were living in a kind of simulation. Others, like futurist Ray Kurzweil, have popularized the idea of downloading our consciousness into a silicon based device, which would mean we are just digital information after all. Some, like Oxford lecturer Nick Bostrom, goes further and thinks we may in fact be artificially simulated consciousness inside such a simulation already!

    Science Fiction Or Mysticism?

    Like my first exposure to most great ideas, I discovered the Simulation Hypothesis through watching and reading too much science fiction.

    The first time was during an episode of Star Trek: The Next Generation, where a holo-deck character realized that he was in a simulation and that some of the people in the simulation existed “out there” (in this case, out there was the rest of the Enterprise) and he wanted to go there, too! Was it possible that we were in a “holo-deck-like” space and that there was another world “out there”, I wondered?

     

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    A Star Trek character in the Holodeck realizes that he is in a simulation

    Although this was only a passing thought at the time, it wasn’t until the movie the Matrix was released in 1999 that the idea grew in the popular consciousness. It occurred to me then that this kind of simulation could exist with or without the alien overlords that make this a nightmare situation (in both the Matrix and Elon Musk’s version of the giant video game, there are also super-intelligent aliens behind the simulation).

     

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    The Matrix planted the idea in the popular consciousness that we are in a simulated reality

    As a computer scientist and video game designer, I have to admit that this idea is not really that crazy. A civilization that implemented an advanced simulation like ours might be many thousands (even millions) of years ahead of us; it’s not that hard to imagine such a civilization creating much more sophisticated games than we are capable of building today.

    As I started to study Quantum Physics and its startling revelations about the nature of “objective” vs. “subjective” reality, I started to wonder again about the idea of a giant multi-player video game. Moreover, as I delved more into the Eastern traditions, particularly Yogic and Buddhist philosophy, I found that their ideas about the nature of the world were actually pretty consistent with the idea that we are living in a simulation.

    Why Might This Be A Video Game After All

    Let’s delve into the top reasons why we may be living in a simulation after all:

    1. Pixels, Resolution, Virtual and Augmented Reality

    One of the main arguments that Musk makes is that a more advanced civilization will have games that are of very high resolution — so high that we would be unable to distinguish between the “real” world and a “simulated one”.

    Today we are already seeing with Virtual Reality that “full immersion” is possible. Anyone who has played a convincing VR game will realize that it’s possible to forget about the real world and “believe” the world you are seeing is real.

    As a great example, I was playing a prototype of a Ping Pong VR game last year (built by Free Range Games), and even though it wasn’t realistic resolution, I lost myself and thought I was playing ping pong for real. So much so that I set the paddle on the ping pong “table” and leaned against the table. Of course it was a VR table so it didn’t really exist — I ended up dropping the paddle (actually the Vive controller) onto the floor. As I leaned into the “table” I almost fell over before realizing that there was no table. In other words, to quote from the Matrix, there is no spoon.

     

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    In Ready Player One, a realistic immersive virtual reality world, Oasis, becomes the ultimate escape

    Imaging what kind of pixel resolution we might have in a hundred years, let alone in a thousand years! It could be pretty convincing. Also, as AR technology evolves to project onto the retina without needing external glasses, we could be seeing things around us that aren’t really there in a resolution that’s indistinguishable from the physical world. This brings up the idea that the world “out there” could really be just a projection in our minds.

    2. Pixels, Quanta, and Xeno’s Paradox.

    I recall late nights at MIT during my undergrad years where I had philosophical debates with my classmates about the nature of reality. This was the first time I’d heard of Xeno’s paradox. The idea was that if space was continuous, like numbers are (you can always find an infinite number of numbers in between any two numbers), how is it possible to touch an object such as the wall? You would always have to cover half the distance and neve get there.

    Xeno (or Zeno, whichever spelling you prefer!) related the paradox using the example of Achilles and a tortoise. If the tortoise was ahead of Achilles, how could he possibly ever catch it if he always had to make up “half the distance”?

     

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    When I first heard about this paradox, my initial reaction was that space must be quantized — there must be some minimum distance that we traverse. Later, I discovered that I wasn’t alone in this idea; whether this “minimum” amount is the Planck constant or some other amount isn’t as important as the idea that the physical universe, as we know it, may consists of pixels. Just like a video game! How many pixels are in the real world? To use a non-scientific term, a shitload.

    3. An Open World and the Illusion of Infinite Possibilities.

    Early video games were very linearly structured, such as space invaders or Pac-Man. There was a limited set of “motions” that were allowable using some “input” control, and there were specific objective as part of the each level, and you progressed linearly through the levels.

    As video games evolved and 3d models of a “world” became commonplace, video games took an evolutionary leap. It seemed from the player’s perspective that you could move around and do anything. Examples of open world video games range from GTA (Grand Theft Auto) and WOW (World of Warcraft), or the Sims, which simulated life and eventually Virtual Worlds like Second Life. Of course the idea that he world is infinite and that we can do “anything” inside the world is a carefully crafted illusion.

    Game designers know that’s not true. Using 3D modeling we can have a world that is generated and looks infinite but is really a set of maps and rules. In any game, no matter how “open” it appears, there are underlying tasks, or quests, or accomplishments, which are mapped out by the game designers. Is it possible that we have a similar illusion of “open-ness” in life?

     

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    Open World games like Second Life give the illusion of free choice

    4. The Collapse of the Probability Wave, Future Selves, and Parallel Universes

    In Quantum physics one of the most intriguing ideas is the probability matrix, which is an interpretation of how subatomic particles can exhibit properties of both a wave and a solid particle at the same time. At the level of an electron or a photon, the wave is interpreted as a set of probabilities of where the particle might be at any given time. When we observe a particular possibility, then the probability wave is said to “collapse” and we see a single particle in a particular location.

     

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    Probability wave of the location of a particle

    Some interpreters have taken this to the macro level to say that there are a set of probabilities in which we exist both in the present and in the future.

    Which of the possible paths do we follow? There isn’t a good explanation; how the probability wave collapses is one of the biggest mysteries in Quantum Physics. The best answer physicists have come up with is that consciousness somehow determines the collapse.

    Physicist Fred Alan Wolf, for example, says that information from these possible futures is coming to us in the present and that we send out an “offer wave” into the future, which is interacting with the “offer waves” coming from the future to the present. Which possible future we navigate to depends on which choices we make, and how these two waves super-pose on each other (or cancel each other out).

    These are startling results. Future probable selves are sending back information to the present, and we are consciously choosing which path to follow.

     

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    Figure 1: Multiple Probable Futures Are Sending Us Back Information we use to make decisions.

    Another related aspect of Quantum Physics that sounds like science fiction is the Parallel Universes theory, where we branch into different “universes” when we make decisions. If that’s true, then there is a directed graph of multiple universes that are branching out each time we make a decision, resulting in different timelines (in fact, the parallel universes theory was put forward to solve the grandfather paradox of time travel).

    This reminded me of the very first video game I made back at MIT. The way that the computer chose the next move was to project the possible futures, and then use a certain algorithm to “rank” those futures, and then bring those values back to the present and then the AI would choose the path to follow.

    Did the possible futures we were calculating in our game actually exist? Or were they just probabilities? I realized that this isn’t too much different from what’s happening at the quantum level, except that in existing games like chess or checkers, we use a simple function (based on the rules of the game) to decide which of the paths is most optimal. We used the “minimax” algorithm in game design, trying to maximize our score and minimize our opponents score at each “turn of the future”.

     

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    The minimax algorithm: a simple AI for evaluating future outcomes and choosing hte best path

    In the Great Simulation of life, suppose there is another “function” which is ranking these possible futures, and we at some subconconscious level are choosing which of those possible futures and branches we may want to take from the present forward, just like in a video game!

    5. Observables and conditional rendering.

    When we have a 3d video game, we map out the world using 3d models. In some games, we allow user-generated content that stays in the world even after we log out of the gameplay session so that other players can see it.

    In video games, this “model” of the “world” exists outside of the character’s perception. In a trick meant for optimization, we don’t “render” the whole world on every single player’s computer. We only render the part of the world that the player is in, and then usually only for a certain point of view at a certain time. It would be impractical to render the entire world!

    Moreover, in 3d video games, there are techniques to optimize the rendering based upon what the player is looking at. These techniques were pioneered in first person shooters like Doom and now used heavily in VR headsets.

     

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    A philosophical question that comes up in both Quantum Physics and in Video Games is that if no one is in a particular part of the 3d world — i.e no one is observing it, or no player is there — does the particular possibility exist?

    Just like Schroedinger’s mysterious cat, which is neither dead nor alive until someone observes it, the world of video games relies on a player being logged in to render the world. If no one is logged into a particular room or a particular world, what state is it in? For example, what happens if there are no players logged into any of the servers of an MMORPG like World of Warcraft? The servers are running but nothing generally happens until a player logs in to observe what is going on, not unlike Quantum Physics.

    Spiritual and Mystical Traditions

    The next few reasons reflect interesting parallels between some of the spiritual and religious traditions, particularly the Eastern traditions and the Simulation Hypothesis. If you’re not into that, skip to reasons #9 and #10.

    6. The World is an Illusion.

    In many mystical traditions, particularly in Buddhism and Hinduism, we are told that the world around us is actually an illusion. Maya, the Sanskrit word for illusion, is used to describe the world we see, and Brahman, is the real world.

    In Buddhism, the idea is that to “wake up” you have to recognize that the world around us is an illusion. In fact the term “Buddha” means literally “awake”.

    In modern terms, they might just be describing a type of video game that we are all caught within, not unlike the HoloDeck from Star Trek. We are caught inside the illusory world, while there is a real world just beyond that we cannot normally perceive unless we “wake up”.

    In fact, there is a branch of Buddhist Yoga called Dream Yoga, which is used to help us “wake up”. In Dream Yoga, a form of lucid dreaming, participants are taught to realize that the dreams we go through at night are “simulated” experiences. By learning to recognize that we are in a simulation, we can “wake ourselves up”. The idea is that if we can do this in the “fake” worlds of dreams, so that we can do it in the “fake world” of real life — which is also a simulated reality!

    7. Multiple Lives, Points, Levels & Experience.

    According to many eastern traditions, we are actually going through multiple lives, gaining experience in each life and moving up to different levels of “evoluation”.

    In early video games like Pac Man or Space Invaders, each player also had a number of lives — the player accumulated points until the character was killed. The player could “continue” from the place they died, or could “start over” until the dreaded “GAME OVER” flashed on the screen.

    In MMORPGs, the player usually has a character which stores up a certain set of experiences between gameplay sessions (the character’s state).If we start over, the player of course remembers the skills they have gained in previous lives, but the character starts over with zero values in their state.

    This is analogous to how in some Buddhist traditions, when we are born, even though we retain the tendencies of previous lives, we cross the “river of forgetfulness” when we “start over”. In these traditions there is still someplace that we store all of our experiences and our points. Where? It’s not explicitly stated, but it sure sounds like they are uploaded to some kind of “cloud server”.

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    In some traditions, we go through multiple lives on the wheel of re-incarnation. Sure sounds like a Video Game to me!

    Let’s look at Western religous traditions. As I was growing up in the Islamic tradition, I was told that there was “scorecard” that was being kept for us in this life — every good deed was recorded (“swab”) and every bad deed was recorded (“haram”) and depending on the score at the end of your life (and on Judgement Day, the day of Kyamath) you would go to either Junnath (Heaven) or Jahanam (Hell). In the Christian traditions, there is also the idea of the two angels on each shoulders and the idea of going to Heaven or Hell (with Purgatory thrown in for good measure). Again, we have the same idea: of a player game-state that is uploaded somewhere “outside” the rendered world.

    8. Quests, Karma and God-like AI

    In the eastern traditions, our experiences in life are not random; there is a system that is keeping track of what we think and do, and then creating situations in the world to deal with our past actions, called Karma.

    Now if you were going to design a seemingly open-ended game, a simulation that can track billions of players, you would need to keep track of quests and achievements for each person.

    In today’s video games, the quests/achievements/challenges are the same for each player. However, it’s not very difficult to envision a more sophisticated video game where quests were chosen based on the past experience of the player. And like in a particular level of a video game, the player could be confronted with similar challenges, again and again, until they are able to pass the challenge.

    To accomplish these kinds of “personalized quests” you would need to synchronize across a very large base of “players” and “NPC” or non-player characters (billions of concurrent players in the Great Simulation). You would also need to figure out which group of other players might be compatible, right now, in the moment, in a specific section of the 3d world, to a player’s quests. The result of each interaction in the game could have lasting consequences, leading to more challenges in the future.

    Some intelligence would need to keep track of billions of concurrent players (something we can’t do yet in any video game today). It would seem that an Artificial Intelligence system would be ideal for this kind of task. It may not even need to be that intelligent, as long as the rules were clearly defined and it could scale infinitely!

    Let’s move from the East to the West, to a more traditional religious framework. In these religions everyone prays to God. Let’s assume for a moment that God is real. What is God? What kind of intelligence, if it existed, could keep track of so many, billions of individual prayers and timelines? What could keep track of whether on judgement day, you are to go down to a deeper, less pleasant level (“Hell”) of hte game, or go to a higher, more pleasurable level (“Heaven”). You guessed it — an extremely sophisticated AI.

    Final Reasons

    Moving away from spiritual traditions, let’s come back to science for our final two reasons.

    9. Player Characters (PC) vs. Non-Player Characters (NPCs)

    Nick Bostrom, on the faculty at Oxford University, has long been a proponent of the simulation hypothesis. The argument that he makes is different — that civilizations are unlikely to survive and if they do, then they would have powerful computers that can do “ancestor” simulations. We are more likely, concludes Bostrom, simulated consciousness than actual biological beings. From his famous paper:

    One thing that later generations might do with their super-powerful computers is run detailed simulations of their forebears or of people like their forebears. Because their computers would be so powerful, they could run a great many such simulations. Suppose that these simulated people are conscious (as they would be if the simulations were sufficiently fine-grained and if a certain quite widely accepted position in the philosophy of mind is correct). Then it could be the case that the vast majority of minds like ours do not belong to the original race but rather to people simulated by the advanced descendants of an original race. It is then possible to argue that, if this were the case, we would be rational to think that we are likely among the simulated minds rather than among the original biological ones

    As a video game designer, this reminds me of our attempts to create realistic “NPC”s or non-player characters. As games have gotten more sophisticated, these AI characters have gotten more sophisticated. We may rapidly be approaching AI which can pass the Turing Test, which is an AI that is indistinguishable from a human being (if you were conversing with them).

    I recall early text games like Zork had players that would talk to you and attempts to make these characters realistic. AI has advanced well beyond that but we do not currently have NPCs which can pass the Turing Test. Once we do (in 10 years? In 100 years? In a thousand years), the possibility that people we are interacting with inside a simulation are NPCs goes up considerably. Professor Bostrom thinks that “we” are the simulated consciousness.

    10. Speed of Light, Wormholes, etc.

    It is curious that in our Universe, as far as we can tell, the fastest that we can travel from point A to point B is the speed of light. This also happens to be the speed of electrical systems and electromagnetic waves. In a normal video game, the fastest we would be able to send information from one player to the next would be over electrical wires. Why would the fastest we can travel through space be the same as the speed of electromagnetic waves, unless our idea of space was being generated by some form of electromagnetic wave?

    In the Virtual World of Second Life, if you try to go from point A to point B, you would be stuck traveling through the “space” of the game and would have to move slowly — whether you were walking or flying. On the other hand, you could instantly teleport to another part of the game at which point a different part of the 3d world will render around you.

    Do we also have this ability in real life? Some physicists have theorized wormholes, or Einstein-Rosen bridges, which would allow us to tear through the fabric of spacetime to shortcut the fabric of space and time. You could think of it as a backdoor — basically a teleport in video game terms.

     

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_reality11.jpeg?resize=500%2C377&ssl=1

    Wormholes allow us to get outside the 3d world to go from one place to another

     

    Conclusion

    These are just some of the reasons why we may be living in a Video Game after all, the Great Simulation. I haven’t even gotten into some of the more esoteric or psychological reasons (which would take a whole book unto itself).

    As computer science and artificial intelligence rapidly advance their capabilities, it may be possible to create a simulated world that looks and feels as real as our own. Video games, which started out with simple rules about what can be done and simple 2d worlds, have advanced rapidly into a MMORPG (massive multi-player online role playing games) with millions of players interacting in a simulated world. As computer technology advances, the chances of creating a billion player plus simulated world like our own is rapidly approaching.

    Moreover, Quantum Physics gives us a description of the univere (or multiple universes) that doesn’t make sense from the perspective of an “objective reality” but requires observation by some consciousness. These sometimes incredible findings defy common sense, unless we are living inside a video game rather than a physical reality and consciousness is the equivalent to us “logging into” the system.

    Eastern traditions, particularly Buddhist traditions, have long contended that we are living in world of illusion, and that we go through multiple lives trying to work out our individual quests, all of which are stored beyond the “rendered world”. There is a giant system that not only stores this but creates new situations for us to get our “achievements”. Sure sounds like a Video Game to me.

    All of these areas, Computer Science/Artificial Intelligence, Quantum Physics, and Eastern spiritual traditions point to one likely scenario: That we are living inside a very sophisticated Video Game, which I call The Great Simulation.

    Like all simulations, our world may only be real while the “simulation” is running.

    This reminds me of a quote from the British intellectual, Havelock Ellis, about dreams. He said:

    “Dreams are real while they last. Can we say any more of life?”

    Can we indeed??

  • Worldwide Approval Of America's Leadership Is Waning

    Donald Trump has been in power as the 45th President of the United States for a year, since his inauguration on January 20, 2017.

    The set-up of the international arena has long been shifting, away from lone American leadership towards a more multipolar world in which other powers are gaining influence, but as Statista’s Dyfed Loesche notes, Trump’s political agenda seems to be speeding up this process, as data by research institute Gallup on the approval of other nations’ of U.S. leadership suggests.

    Infographic: Worldwide Approval of America’s Leadership is Waning | Statista

    You will find more statistics at Statista

    Ever since the Second World War came to an end in 1945, the United States presided over the so-called “Pax Americana”, she had inherited the position of world leadership from Great Britain, who saw her long-standing predominance in the world dissolve together with her pre-war empire. This new set-up had its ups and downs, but brought with it a promise of stability during the Cold War stand-off with the Soviet Union, and even after the Berlin Wall fell in 1989.

    While the United States has always been willing and ready to wield her military might, the basis of her strong leadership position had to do with other nations accepting her as an agenda-setting hegemon. This order of things has been called into question from the outside, by emerging powers. Most notably China is challenging the status quo as she is constantly gathering economic and therefore political clout.

    But this process, it seems, is also being hastened from within the United States itself, by domestic politics. Since Donald Trump became president on an “America first” ticket, the world seems to become less accepting of America as a lead nation. There is a somewhat tragic, or at least ironic, ring to Trump’s often repeated vow to make “America great again”, as he might be the president who cements America’s fall from grace and power in the international arena.

  • London Sex Dungeon For Sale: Asking Price £3 Million

    Authored by Joel Golby via Vice.com,

    What else are you doing with your basement, come on…

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon1.jpg?w=750&ssl=1

    What is it? Oh we’ll get to that buddy…

    Where is it? Vauxhall, or: “This Gigantic Roundabout Got Too Horny”;

    What is there to do locally? I’ve been to Vauxhall two significant times in my life: once to see an under-the-arches musical about bathhouses which lurched from the surreal into the manic when Su Actual Pollard stood up at the end of it to lead the audience in a standing ovation, Su Pollard turning to the rest of us, roaring us to our feet to clap, all eyes on Pollard, Pollard furious, almost, with the clapping, Pollard replete in woven clothing inked in every neon colour beneath the sun, Su Pollard stalking Vauxhall like an apparition or a ghost; and ii. I went there this weekend, got drunk on a docked boat, lost on a building site and hit my head multiple times on a low ceiling before falling fully asleep in an Uber, passing out so entirely that my rating went down somewhere so low into the doldrums that I can no longer be picked up. So I suppose the answer to the question actually posed at the start of this is: anything you want, really, in Vauxhall. Anything your tiny mind can imagine.

    Alright, how much are they asking? In a rare zig from the format of “London Rental Opportunity of the Week,” this property is actually fully for sale, and will cost you £3 million. Three million pounds.

    What would you do if you were rich? Would you:

    1. Fill a swimming pool w/ champagne, luxuriate in it until you die—

    2. Turn your enormous mansion-surrounding garden into a sort of exquisite zoo, full of giraffes and rhinos and men in straw boaters handing out balloons, and free cotton candy, a sort of fantastic magical Disneyworld, all for you—

    3. Buy a football club, or an F1 team, or just eat at Nobu, like, every single night, fly first class, holiday in the Maldives, pay to have Richard Branson killed by the world’s most expensive hitman, anything you want, live in a fantasy world—

    4. Chain some lads to the floor of your basement and just Fuck. Them. To. Absolute. Bits. Mate.

    If you chose 4: correct, that is the correct choice to make.

    And may I also recommend to you this beautiful property in Vauxhall, which costs more than you will earn in your lifetime – more than you will earn in five lifetimes – which is tastefully decorated, gorgeously laid out, perfectly positioned (in Zone 1!), has both a conservatory and a spacious designer garden, modern luxuries throughout, and then also, should you choose to descend of an evening, it has an entire dungeon in it, dedicated to fucking:

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon2.jpg?resize=500%2C688&ssl=1

    Like: look how perfectly arranged this sentence is:

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon6.jpg?resize=500%2C34&ssl=1

    Additional street access… bwuahahaha.

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon3.jpg?resize=500%2C281&ssl=1

    I have so many questions about the fuck dungeon, obviously, but mainly one pure and shining concern: that the Fuck Dungeon House not be sold to someone who will not maintain the dungeon of fuck. Some young family. You know, he works in the City and went to Oxford, she has a very successful interior design blog, they have a three-year-old called “Jessamyn” and they want to buy the fuck dungeon. “Yah, great space down here,” one of them is saying. “Maybe we could turn it into a nurs—” No. No. I forbid it. You keep it as a fuck dungeon. If you didn’t want a fuck dungeon in your house, why did you buy a house with a fuck dungeon in it? Exactly. For me, the fuck dungeon is a dealbreaker, the promise of its sanctity being the only condition of the sale. I fear a lot of things in this life, but some normie couple buying this fuck dungeon and turning it into anything that isn’t “a more complex and intense fuck dungeon” is highest among it.

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon4.jpg?resize=500%2C281&ssl=1

    (Side note, but, like: some dudes have taken a real arseful in this place, and you can’t escape that. You cannot get that out of a room. You can’t paper over a vibe that musky and powerful with a bit of Farrow & Ball and some £200-a-roll wallpaper. Doesn’t matter if you crank a skylight into this thing and put a pool table in the middle. Some vibes cannot ever truly be aired out. No way a fuck dungeon, once converted into and then used as a fuck dungeon, can ever be anything other than a fuck dungeon. Some doors you cannot walk back on once you’ve been through them. Putting a fuck dungeon in the basement of your house is one of them.)

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_fuckdungeon5_0.jpg?resize=500%2C281&ssl=1

    Questions about the fuck dungeon, in no particular order:

    1. Once you have committed to putting a fuck dungeon in your house, how do you reverse out of that decision, i.e. by selling the house the fuck dungeon underpins? Like: does there come a time, in your life, when you look down the gloomy stairs at your fuck dungeon, hands on hips, and think: “This is a young man’s game. It’s not for me any more.”

    2. Are there specialist contractors who can install a fuck dungeon for you, or do you need to buy all the parts and just sort of put it together yourself?

    3. How often, once you’ve put a fuck dungeon in, do you actually fuck in a dungeon? A fuck dungeon always feels like a good idea, doesn’t it, and then eight months roll by and there’s dust on the shackles and you realise you haven’t been rimmed by a gimp for like two entire seasons. Not a perfect example, but one I’m going with nonetheless: I bought a Nintendo Switch in November. Really thought I’d use it more. Like: I love it, obviously. It’s great. Used it on the train. Mario Kart for Christmas. But now it’s there… some days, I just don’t play with it. I’ll look at it. I’ll think about it. And then I’ll go to sleep. I feel like this is very much what owning a fuck dungeon is like.

    4. The seller is trying to shift this £3 million townhouse via a free gmail address, namely dungeonhousevauxhall@gmail.com, and all this makes me think is: was dungeonhouse@gmail.com already taken? How many dungeon houses are there?

    5. Does the dungeon street access mean, and bear with me, that a pair of padlocked double-doors open out directly into the street, into which blinking pale nude boys can escape after a weekend of being rigorously fucked, searing beneath the flood of sunlight around them, and if so what are the neighbours like? Are they nice about that?

    I truly think Fuck Dungeon House has ruined all other houses for me. I’m going to go home tonight and just look at all the rooms and just be disappointed I can’t be pinned mechanically to the floor of them and shagged. Please – if you have £3 million spare, and you are exceptionally horny – please, please buy this house. Do this fuck dungeon the honour it deserves.

     

  • Alarming Rise In The Number Of Gun-Store Burgalaries Across America

    According to a new explosive report from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), for the fifth consecutive year, the reported number of burglaries at gun stores across the United States is surging.

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_gunstores2.jpg?w=750&ssl=1

    The ATF’s annual Federal Firearms Licensee Burglary and Robbery Statistics report released on Tuesday paints a troubling truth of organized crime gangs targeting gun stores.

    The statistics are shocking: the number of robberies of gun stores reported to the ATF have increased 227 percent since 2013 and burglaries rose 71 percent during the same period.

    The report found there were 577 gun store burglaries in 2017, an increase from 558 in 2016. “Since 2013, 27,685 guns were reported stolen in 2,315 burglaries from gun stores licensed by the federal government, including 7,841 guns last year,” said the Giffords Law Center.

     

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_gunstores1.jpg?w=750&ssl=1

    The Giffords Law Center expresses concern how the federal law does not require gun dealers to follow a strict code for building security or securing storage of inventory.

    On the state level, some states like New Jersey have more stringent security requirements for gun shops, which has led to a decline in gun store robberies. According to the Giffords Law Center, “over the past five years in New Jersey, there have been just two reported burglaries with a total of three guns stolen.”

    David Chipman, senior policy advisor at Giffords, and a retired ATF Special Agent for two decades issued the following announcement:

    “Criminals know that gun stores can be easy targets to obtain armfuls of firearms in a matter of minutes. Every successful break-in opens a new threat to our community and puts law enforcement officers at risk.

    While we should all be alarmed and outraged that gun store burglaries increased for five years in a row, it’s important to remember that theft from gun stores is preventable — just look at what’s happening in New Jersey.

    When states require gun dealers to take responsible steps to prevent their stores from being burglarized — by properly securing not only their stores, but the firearms themselves — they eliminate the risk of thieves taking off with weapons. We know how to solve this problem, but we need more states to acknowledge this issue and put best practices for reducing gun store theft into action.”  

    A spokeswoman for the ATF provided a statement to Bloomberg about the manner, who said it is investigating into the data in order “to identify causation for the uptick in these types of crimes over the past five years.”

    Perhaps, our article titled “The Next Hurdle For Retailers,” could offer some insight into the ebb and flows of the flourishing organized crime networks in the United States. However, this week’s exposure of out of control gun store robberies is a telling sign that the organized crime networks are heavily arming themselves. The one question we ask: why?

  • Russia Accuses US Of Carving Out "Alternative Government" In Syria As Mattis Says No Longer Focusing On Terrorism

    Russia’s Foreign Minister Sergey Lavrov has accused the United States of working to carve out “an alternative government” on Syrian soil in statements made at a UN press briefing related to the recent Turkish military build-up poised to assault Syrian Kurdish areas of Northern Syria. Lavrov’s words come after Secretary of State Rex Tillerson pledged in a speech on Wednesday that US military forces would remain in Syria indefinitely until various objectives are met, which include Syrian government transition and the curtailing of Iran’s influence.

    Lavrov said “It’s a fact that US forces are seriously involved in creating alternative government bodies on vast part of the Syrian territory. And this, of course, absolutely contradicts their own obligations, which they committed to on numerous occasions, including at the UN Security Council, on maintaining the sovereignty and the territorial integrity on Syria.”

     

    asd
    Image via Anadolou News Agency

    The Russian FM further accused the US of contradicting its previous claim that US troops – which number at least 2,000 according to recent Pentagon statements – were only in Syria to fight the Islamic State and not wage a proxy war against the Syrian government and its allies.

    The prior US policy of regime change in Syria, which began under the Obama administration and intensified under a CIA program, was something many analysts perceived that President Trump had abandoned – consistent with earlier campaign promises. In the summer of last year Trump shut down the CIA program – widely reported to be the agency’s largest covert program – even while boosting support for the Pentagon program to arm and train the predominately Kurdish Syrian Democratic Forces (SDF).

    Rex Tillerson told me many times that the only reason for their presence there [in Syria] is defeating Islamic State (IS, formerly ISIS/ISL). Now they have some much more long-standing plans,” Lavrov said further of the inconsistency in US policy. “We will have to take this into account and look for solutions that won’t allow the destruction of Syrian sovereignty.”

    At the start of this week the Pentagon rolled out with deeply controversial plans for the US coalition in Syria to establish a 30,000-strong new border security force primarily utilizing the SDF, which many analysts see ultimately as a US commitment to the partitioning of Syria along ethnic and sectarian lines. And Russia has now issued a formal complaint alleging as much. 

    Meanwhile US Defense Secretary James Mattis unveiled a bit of a foreign policy 180 when in a speech on Friday he said that US national security focus was no longer terrorism, but “competition between great powers.” He said the US faced “growing threats from revisionist powers as different as China and Russia,” while unveiling a new national defense strategy.

  • The Pope's WW3 Warning: The World Is At "The Very Limit" Of Nuclear War

    Authored by Mac Slavo via SHTFplan.com,

    Pope Francis said this week he was really afraid of the danger of a nuclear war and that the world now stood at “the very limit.”  According to his comments, the world is one step away from a devastating nuclear war.

     

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_pope.jpg?w=750&ssl=1

    The Pope made the comment as he flew off for a visit to Chile and Peru, and the statement comes just after Hawaii issued a false missile alert that provoked panic in the U.S. state and highlighted the risk of possible unintended nuclear war with North Korea. The mistaken alert underscored the risk of potentially entering an unintentional war with North Korea. Hawaii Democratic Representative Tulsi Gabbard said Sunday that the false alert shows the need for direct negotiations with North Korea.

    When asked if he was worried about the possibility of nuclear war, Pope Francis said:

    I think we are at the very limit. I am really afraid of this.

    One accident is enough to precipitate things.”

    Although the Pope did not specifically mention Hawaii or North Korea, he did say that stockpiling nuclear weapons is against the teaching of the Catholic church. According to One America News Network, Pope Francis has often discussed the danger of nuclear warfare. Back in November, the Pope appeared to harden the Catholic Church’s teaching against nuclear weapons, saying countries should not stockpile them even for the purpose of deterrence.

    As reporters boarded his plane bound for Chile, Vatican officials handed out a photograph taken in 1945 that shows a young Japanese boy carrying his dead brother on his shoulders following the U.S. nuclear attack on Nagasaki.

     

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180119_pope1.jpg?w=750&ssl=1

    “I was moved when I saw this. The only thing I could think of adding were the words ‘the fruit of war’,” Pope Francis said, referring to a caption put on the back of the image.

    “I wanted to have it reprinted and distributed because an image like this can be more moving than a thousand words. That is why I wanted to share it with you,” he said.

  • Tax Reform And Trump's Chinese Trade Deficit Conundrum

    Authored by MN Gordon via EconomicPrism.com,

    Most things come easier said than done.  Take President Trump’s posture on trade with China…

    https://i0.wp.com/www.zerohedge.com/sites/default/files/inline-images/20180118_mng.png?w=750&ssl=1

    Trump doesn’t want a bigger trade deficit with China.  He wants a smaller trade deficit with China.  In fact, reducing the trade deficit with China is one of Trump’s promises to Make America Great Again.  In May 2016, he even told a campaign crowd:

    “We can’t continue to allow China to rape our country and that’s what they’re doing.  It’s the greatest theft in the history of the world.”

    Yet as Trump approaches the conclusion of his first year in office, he’s achieved the exact opposite of what he said.  The trade deficit with China hasn’t gotten smaller.  It has gotten bigger.  Actually, it has gotten a lot bigger.

    For example, the U.S. trade deficit with China from January through November 2017 was approximately $342 billion.  Over this same period in 2016, the trade deficit with China was $317.4 billion.  This amounts to a 7.7 percent widening of the U.S. trade deficit with China that has occurred on Trump’s watch.

    What gives?  Is China better at manipulating its currency than the U.S.?  Does China somehow outplay the U.S. when it comes to both trade strategy and strategery?

    Certainly, The Donald will get to the bottom of it…

    Unintended Consequences

    Earlier this week President Trump called up Chinese President Xi Jinping to have a frank phone conversation on the matter.  From what we gather, Trump “expressed disappointment that the United States’ trade deficit has continued to grow.”

    We don’t know what Jinping said in response.  But what he could’ve said was, “Donald, you ain’t seen nothin’ yet!”

    One of the unintended consequences of increasing the budget deficit to pay for the GOP tax reform bill is that it also increases the trade deficit.  In other words, the budget imbalance between taxes and government expenditures has a direct impact on foreign trade imbalances.  In an article published in Asia & the Pacific Policy Studies, economist Ralph W. Huenemann explains:

    “In 2016, the American government budgets carried a fiscal deficit of $865 billion, and the balance of payments showed a trade deficit of $521 billion.  A surplus of private savings (including substantial retained corporate profits) of about $344 billion over investment partially offset the budget deficit, but as long as there is such a massive deficit on government budgets, the net inflow of imports will continue.  This is inherent in the nature of national income.  No President, Donald Trump or any other, can change this reality without tackling the government budget deficit.

    So if Trump doesn’t want a trade deficit with China then he needs to reduce the government’s budget deficit.  However, reducing the government’s budget deficit is near impossible under the new GOP tax reform bill.  Hence, President Trump is left with a weak hand of bluster.

    Tax Reform and Trump’s Chinese Trade Deficit Conundrum

    This week Reuters released parts of its exclusive interview with President Trump.  On the prospect of a trade war with China, Trump remarked that he hopes a trade war won’t ensue, “But if there is, there is.”

    Trump also commented that any change in China’s purchases of U.S. Treasuries would not hurt the U.S. economy.  This is because, according to Trump, “everybody wants to buy Treasuries.”

    Let’s hope Trump knows what he’s talking about.  At the moment, China and Japan account for one-third of all foreign-held Treasuries.  However, China has currently tapered back its Treasury holdings to a four month low.  And Japan has reduced its Treasury holdings to a four year low.

    But maybe Trump’s right.  Maybe China and Japan don’t matter.  Maybe someone else – like the Swiss National Bank – will pick up the slack that’s needed to finance Trump’s deficit.

    Still, what would this get him?  It wouldn’t address his trade deficit conundrum; rather, it would make it worse.

    The point is attempting to spend a nation to prosperity using borrowed money is not without consequences.  In the short run, an illusion of wealth can be erected.  In the long run, the illusion slips into decay and disrepair at the precise moment the bill comes due.

    This is one of the tradeoffs of deficit spending based government stimulus that politicians fail to mention when promising free lunches.  Any economic boost that deficit financed tax reform delivers will be short-lived.

    Quite frankly, such a contrived economic boost is akin to burning one’s furniture to stay warm.  The heat it produces feels good while it lasts.  But once the furniture’s all burned up, it’s game over.

  • This Is How Chinese Bitcoin Buyers Are Getting Around The Government Ban

    China stunned cryptocurrency traders in September when, after announcing a crackdown on ICOs, it went a step further and warned all crypto exchanges operating in mainland China that they would need to wind down their operations by October – effectively killing the nascent cryptocurrency and blockchain industry.

    Observers expected this to be a huge blow…though Chinese trading volume had already fallen dramatically since January 2017 when authorities forced local exchanges to raise fees and implement AML controls, it was still a crucial market for bitcoin. However, the drop in Chinese trading didn’t stop the pioneering cryptocurrency from rocketing to an all-time high around $20,000 a few months later.

    As we noted at the time, several of the largest China-based exchanges, from OKCoin to Binance.com, and wallet services too sought a second life in friendlier Asian jurisdictions, applying for licenses in Japan – solo or via partners – setting up over-the-counter shops in Hong Kong, or laying the groundwork to operate from Singapore and South Korea.

     

    BTC

    But crypto enthusiasts living in mainland China can still transact domestically: But instead of these transactions being routed through exchanges, they’re negotiated on over-the-counter (OTC) trading platforms like Huobi, OKEx and OTCBTC, according to a Yahoo Finance  report.

    Of course, Chinese buyers who still want to participate in the market are doing so at significantly higher prices. On OTC platforms, prices are 10% to 20% higher than the prices on traditional exchanges. On Jan. 18, when bitcoin was trading at $11,730 on Coinbase, the biggest US brokerage, the lowest price on the Huobi OTC platform was 84,000 yuan, or $13,085.

    The premium that Chinese investors pay is a direct result of the limited OTC coin supply caused by government regulations. For more sophisticated traders, there’s an arbitrage opportunity: Traders will buy cryptocurrencies cheaply on foreign exchanges and immediately sell on domestic OTC platforms at a higher price. But there are risks, including price volatility, slow transaction times and China’s strict control on capital outflows.

    On platforms like OTCBTC, buying cryptocurrencies is like shopping on Ebay: choose the coin you want, then offers from multiple sellers appear. Buyers can link their bank accounts or use popular mobile payment methods like Alibaba’s Alipay or Tencent’s WeChat Pay. Once they get their hands on the coins, investors can trade them on any exchange in the world.

    OTC

    Chart showing number of daily transactions on OTCBTC

    As we highlighted in November,  several China-based trading platforms, including Huobi and OKEx, which were among the largest exchanges in the world and were included in the ban, decided to take advantage of a loophole: China hadn’t outlawed cryptocurrencies, it just outlawed the operation of exchanges. So, many of the companies that decided to stay soon opened OTC platforms and promoted their new operations by waiving transaction fees.

    According to  Yahoo Finance, while it’s hard to measure the exact size of OTC trading across all platforms, one single seller at Huobi recorded more than 10,000 separate bitcoin transactions in the past month. Another Taiwan-based platform, OTCBTC, which now offers more than 40 cryptocurrencies, boasted $100 million in transactions in the first 50 days after it launched last October.

    Meanwhile, Huobi and other Chinese companies are still operating crypto exchanges in friendlier, overseas markets.

    “Now our focus is the overseas expansion,” Huobi CEO Leon Li tells Yahoo Finance. “More than half of our newly-registered users are from outside China.”

    However, concerns about regulatory risks aren’t going away either. Huobi, for example, marks the reminder in red that buyers should not mention sensitive words like “BTC” or “bitcoin” in their bank transfers in order to reduce the likelihood of having the transaction blocked.

     

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