Isaac Asimov On Working With Editors

Apr 07 2014

So I just released my third novel “Last Week” as a PDF file (available for FREE here).

In contrast to my first and second effort, this time I paid Zoë Markham of some money to provide copy editing service. In this post, I am going to discuss my experience. And to spice things up a bit, I will use some quotes from Janet and Isaac Asimovs’ book “How to Enjoy Writing”, published in 1980. It contains a short section on working with editors, not titled “how to enjoy editors”.

But I sure enjoyed this part of the process. Isaac Asimov seems to share this feeling. First quote:

JANET: It’s amazing that editors all seem to love you.

ISAAC: I like them. I’m funny that way.

Before I started this experiment, I assumed I would hate the experience. After all, the job of an editor is to point out my failures and weaknesses. How can I possibly like that, if I am not a masochist, which I am not?

Part of the answer is that I get to read my manuscript again. And since it was fun to write in the first place, it was fun reading again.

Another part of the answer is that my editor made some super valuable suggestions for improving the manuscript. And I like having a better manuscript as a result of the process.

That is of course true on a purely grammar and spelling level. Some of these mistakes were difficult to find for me because I have German as a first language. For example, in German “glasses” (Brille) is singular. In English it is plural.

But it is also true for many suggestions that improved the clarity of the manuscript. My text would be not wrong on a grammar and spelling level, but would still be improved by one of the suggestions.

Yet another level of usefulness were a couple of places where the editor found and pointed out inconsistencies.

In contrast, there were also some suggestions I did not follow. Let’s quote Asimov again:

But really, I don’t think I’m the best writer in the world, and I’m ready to accept changes. I went through the manuscript and adopted at least one hundred of the ten thousand changes he put in, where the changes actually corrected me in matters of fact, or where he really did catch me in what I like to call an “infelicity in phrasing”. However, my general writing style must be inviolate, not because it is perfect but because it is the only style to which I want my name attached.

When leaving the level of grammar and spelling (“infelicity in phrasing”) and reaching into the level of style, there is a fine line between helping to improve and changing the voice of the author. I don’t have enough experience, so I am not sure how to navigate that. But the above quote from Asimov (who does have lots of experience in these matters) does show that there is a need for the author to reject some of the suggestions. And, interestingly, that may be the right answer in some cases even if the suggestion would lead to a more perfect text.

Another set of suggestions would be those that one could call exchanging URLs for uniform resource locators. That’s a Dilbert reference, if you didn’t recognize it. In other words, some of the suggestions may replace one good way of phrasing with another good one.

In those cases, I mostly followed the suggestions.

To sum up, I enjoyed the process of editing. And I like the fact that my manuscript is much improved. I could never have found so many errors on my own. It was a pleasure to work with my editor on this project, and I strongly recommend Zoë Markham for anyone who thinks about hiring a copy editor.

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Germany Doesn’t Matter Much Anymore

Apr 07 2014

The recent news about reforming the Law on Priority for Renewable Energy in Germany is not great for people like me. As Hans-Josef Fell (one of the original authors of the law) explains in much detail, the reform that will likely become law is restraining growth just about everywhere.

That is bad news for the climate. It is also bad news for Germany’s economy. In the long term, renewable energy is much cheaper than importing fossil fuel. And it doesn’t make much sense to reduce the speed of deployment now, with costs for solar and wind already way down compared to when the Law was first enacted.

But the good news is that Germany doesn’t matter much anymore.

As this article by Bobby Magill at Climate Central just explained, Germany’s investment in renewable energy was a measly $10 billion last year, down from $22.4 billion in 2012. That’s around $125 per capita, which is close to $10 a month.

And it gives Germany a rather mediocre rank of five. China ($54 billion), United States ($36.7 billion), Japan ($28.6 billion) and the United Kingdom ($12.4 billion) all beat Germany’s record. If there was a World Cup for renewable energy, Germany would not even make it to the semi finals. On top of that, we may even fail yet again to win the FIFA World Cup this year.

And that’s before the further reductions in deployment speed from the 2014 reform are even enacted.

It’s all very depressing.

But the good news is of course that with Germany now out of the race, these further reductions don’t matter so much anymore for the global picture.

And that global picture still shows solar deployment up by 29 percent, even with total investment in renewable energy down. The explanation for that is of course less cost per kW of deployment.

So once the politicians in Germany have succeeded in their goal of reducing deployment speeds, we will see Germany fall back even more in the global race. Other countries with China at the top will reap most of the benefits from the cost reductions Germany has paid for with high feed-in tariffs while solar and wind were still expensive.


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Nine Months Later

Apr 06 2014

Part 52 of my third global warming science fiction novel “Last Week” (last part). Link to Part 1: “Back To Paradise Era”.

Tuesday, November 21, 2023, 1:34 P.M.

Nine months had passed since Angel’s last week.

Oil had gone up to $900 a barrel from the double shock of the 24th Century Princess Angel Fund buying up every barrel in sight, and the oil companies all reducing their production.

The fund had increased its holdings to 90 billion barrels. With an average profit of $390 per barrel, they had made more than $35 trillion for their investors. Around one third of World GDP in nine months. Not bad for a start. Not bad at all.

People almost completely stopped driving gasoline cars. Demand for electric vehicles exploded. You could drive your gasoline car to the garage and get it changed to an electric vehicle within a week, and with gasoline prices going through the roof, that made perfect sense for car owners.

The baby Angel gave birth to on that day would live to see a World with radically reduced CO2 emissions.

It proved one thing. Global warming can be solved. And it can be solved even if you have only left one last week.


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Last Week Cover

Apr 05 2014

I did the cover for my global warming Bitcoin novel “Last Week”. Here it is:


Of course I needed to use “Royal Blue” as the font color for this project. I am talking about Princess Angel here.

With that decided, white seems to work best as a background color.

I got my cover picture again (like with my previous novel Tasneem) from for less than 2,000 yen, and I feel quite satisfied with the large collection of women with sunglasses they offered. I finally settled for this one. The reason is that I think this would probably look halfway decent even when reduced down in size to a Twitter avatar icon. I am changing my icon from the cover of Tasneem to this, so that was an important consideration.

Here is the back cover text:

Princess Angel came with a time machine from 2323. Her mission is to tell humanity how horribly global warming has played out.

She has a hard time convincing people that her story is true. But she does meet a guy called Satoshi Nakamoto early on.

Will she be able to get her voice heard in time? Or will humanity just ignore her?


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Apr 02 2014

Part 51 of my third global warming science fiction novel “Last Week”. Link to Part 1: “Back To Paradise Era”.

Tuesday, May 23, 2023, 3:21 P.M.

“I have great news,” Satoshi said. “The Fund has reached $1 trillion.”

“That’s rather good for only three months of activity,” Angel said. “How much oil have you bought?”

“I could get only about one billion barrels. I still have a much larger percentage of cash in the fund than I would like,” Satoshi said. “But it does have an impact on the market already. Oil is up by about $50 compared to February.”

“So, with one billion barrels, that gives the Fund a profit of $50 billion for its first three months?”

“Not exactly. I wasn’t able to buy everything at the rock bottom price of $250 a barrel recorded in February.”

“But you’re still up?”

“Of course I am. There’s no way anyone could lose money investing in the 24th Century Princess Angel Fund.”

“How do you store all the oil you are taking from the market?”

“Easy. I have bought quite a lot of unconventional oil still buried in the ground at the Canadian tar sands from my good friend John Baker. He has seen the light. His announcement of stopping production at the Canadian tar sands for one day in your honor has raised oil prices by $10 a barrel. He immediately understood that it would be good for his business to do more of the same,” Satoshi explained.

“So you are buying oil in the ground. That solves that storage problem, of course.”

“Yes. But there’s still a lot of heavy oil out there in those tar sands. People estimate it at about 1.7 trillion barrels.”

“You’ll never be able to buy 80 percent of that,” Angel said.

“Of course not. But as I said, John Baker has seen the light. I don’t need to buy everything. It is enough if the other owners of fossil fuel understand that they can make more money by selling less. Non Standard Oil stock has gone up quite a lot as well in the last three months. John Baker got another extra bonus for that.”

“What happened to Senator Nutt? Is she still opposing all climate legislation?”

“Of course not. She does whatever John Baker wants her to do. And, as it happens, he wants legislation now that requires oil companies to decrease their production each year. So as to leave more of the valuable resources to future generations. That’s their explanation, at least. They don’t dare to admit that they’ve been wrong on global warming just yet. Of course the real reason is that Non Standard Oil has found out that they will make more profit if they reduce their production,” Satoshi said.

“One other thing I need to tell you,” Angel said.


“Remember all that 24th Century sex we had in my first last week?”

“Of course. It was extremely hot,” Satoshi said.

“Remember that we didn’t bother using condoms, because I would be dead in a week anyway?”

“You mean…”

“Exactly. Congratulations. You scored yourself a hit there. You’ll be a father soon,” Angel said, smiling.

“That’s great news!” Satoshi smiled back and gave Angel a hug. Then he got down on his knees.

“Your Majesty, Princess Angel! Will you consider marrying this common guy before you? It would be a great honor for me.”

“Yes. Though there is nothing to consider. I’m all for it.”

“Okay, that’s settled. Let’s get it done immediately.”

So they got themselves married. Then they completely dropped off the grid.

Satoshi left the day to day running of the 24th Century Princess Angel Fund to someone else, only discussing business by anonymously routed mail from time to time. He used still the same PGP key as in his early Bitcoin network days.

The Fund had started in February to invest one percent of its value into research on asteroid deflection. With Satoshi gone again there was no need to keep the government out. Many governments took part in the collective effort. There were already seven fairly good and six completely crazy ideas on how to do it floated in May.

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Enemies of Wind Organize in Germany

Mar 30 2014

Daniel Wetzel at WELT reports on a new nationwide anti-wind organization recently founded in Germany. The name of the new lobby group is “Vernunftkraft” (reason power). I am not linking to them, but I think that’s an interesting name. I was not aware that you could make electricity from your power of reasoning, but maybe I missed some technological breakthrough while I was distracted by the Bitcoin network.

Anyway, as the article describes, they want to petition the German legislation to end the privileges for wind power under the German building regulations (Bundesbaugesetzbuch). I don’t think they will get anywhere with that, since the enemies of renewable energy FDP have been booted out of the German Bundestag in last year’s elections (hooray again for that).

And this is a good opportunity to take a look at Article 35 of the Bundesbaugesetzbuch. In Paragraph one, it mentions different methods of generating power, with some of them allowed to be built even in the “undesignated outlying area” (Aussenbereich), which basically means outside of towns as well as outside areas within a binding land-use plan.

Wind power is one of them (Number 5), along with hydro power.

In contrast, solar can only be built on rooftops of buildings that are legal in the “undesignated outlying area” in the first place, Number 8. That is actually more generous than until a liberalization in 2012, which introduced this exception in reaction to a court case.

Nuclear energy used to get a free pass under Number 7, but that has been amended to make it clear that the exception does not apply anymore to building of new nuclear power plants. No one would dream of building new nuclear in Germany anyway, so this change does not have much practical relevance.

There are also rules on biomass generation (Number 6). Biomass energy plants can be built as an accessory to farms (which are allowed under Numbers 1, 2, and 4), within certain thresholds.

So, as long as the enemies of wind energy from the “reason power” movement don’t succeed with their petition, wind and hydro are the most privileged forms of renewable energy under Article 35. Solar and biomass are restricted, and new nuclear is shut out.

I am not sure why solar energy needs to be restricted to rooftop installations in “undesigned outlying areas”. But that problem is not very  relevant anymore, since people have not much incentive to build solar power installations directly on the ground. Such installations don’t qualify for feed-in-tariff payments since 2010.

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Waking Up

Mar 30 2014

Part 50 of my third global warming science fiction novel “Last Week”. Link to Part 1: “Back To Paradise Era”.

Tuesday, February 21, 2023, 10:12 A.M.

“Good morning, Angel.”
“Good morning.”
“See? You’re still my Princess. Are you going back to work?”
“Not today. I have another week of vacation left.”
They had slept late, after they had made sure that Princess Angel was really only a memory now. Now they were having breakfast together.
“Do you still have all your memories about how horrible global warming will play out?”
“I sure do. But I know now that they are not real memories. Even with Khalmorot’s alien technology, time travel can’t be done. So everything I thought was fact is only prediction. Of course, these are predictions done with far superior technology, and by aliens who had the experience of torching their own planet, but they are still only predictions.”
“And of course all of that will change now anyway. The 24th Century Princess Angel Fund will work as a solution. How about Moros 27? Is that prediction true?”
“I think it is. I think Khalmorot really has located that rock 300 years in advance, and the warning is real. We have a lot of detail on that, in the Glaring Glasses information databases. That will be the more difficult thing to solve. It won’t be enough to stop our irresponsible use of fossil fuel.”
“I’m going after oil first,” Satoshi said. “Coal will be next.”
“We need cars to stop burning fossil fuel. Just like trains. People have stopped burning coal for running trains in the last Century. We need to do the same for cars and trucks. That means increasing the price of oil, not coal.”
“What about air travel? You can’t run airplanes on electricity,” Angel said.
“You told me the solution already. Remember? In your World, everything has switched to airships. We need to get that done fast.”
“Want to hear about how it has worked out in my memory of the future?” Angel said.
“All air travel over land will be replaced by high speed trains. They can go about half of the speed of a jet. And they depart and arrive right in the center of the cities because they don’t need large airports. People who want to cross the oceans will need a couple of days’ time to do so, but they get much more space in return,” Angel explained
“I see.”
“Airships will get the market for transporting cargo first. They will be faster than ships and able to reach inland destinations, but much cheaper than jets or helicopters.”
“Anyway, the market will work that out one way or another,” Satoshi said. “All we need to do is get the price of oil up.”
“And what about Moros 27?” Angel said. “How are we going to solve that problem?”
“I don’t know,” Satoshi said. “What would you suggest?”
“I don’t know either,” Angel said.
“Okay. Listen. We’ll start out with something obvious. I’ll make it one of the official goals of the 24th Century Princess Angel Fund to deflect that rock.”
“That’s a good idea,” Angel said. “I got another one.”
“Which would be?”
“We should start studying the problem. People of course have been working on this kind of question before. But now it’s a real world problem. If we don’t find a solution, the whole planet gets torched in 2327.”
“Makes sense to me,” Satoshi said. “We probably also should start working together with some government agencies. Countering this kind of threat would seem to be a good use of taxpayer money.”
“We would need to convince the government that the threat is serious first. We should give them all our information,” Angel said.
“Careful with that. They might want to confiscate the Glaring Glasses.”
“If it comes to that, would you want to transfer root authority?”
“No. I’m afraid it would be abused. Now that you mention it, I think it would be a good idea to avoid talking to the government.”

Link to part 51: Proposal

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Last Week’s End

Mar 26 2014

Part 49 of my third global warming science fiction novel “Last Week”. Link to Part 1: “Back To Paradise Era”.

Tuesday, February 21, 2023, 3:07 A.M.

“Ten. Nine. Eight.” Satoshi did the countdown. Angel just listened, leaning her head on his body, feeling safe in his arms.

“Seven. Six. Five.” She still didn’t believe Satoshi. There was no way she wasn’t really Princess Angel from the 24th Century.

“Four. Three. Two. One.” Satoshi had finished the countdown. It was exactly two weeks after Princess Angel had appeared in the 21st Century World.


“Do you feel the change?” Satoshi said.



“You were right. I’m not a Princess. My name is Thusnelda Sneeze. I’m a common girl. I work in a book store right here in New York.”

“You remembered all of that right in this moment?”

“Exactly. It’s been two weeks since I came from the 24th Century. I mean, since Khalmorot made me think I’d came from the 24th Century. I remember now how he explained the whole mission to me.”

“What did he explain?”

“He told me that I’d had won some kind of lottery. That was weird, since I didn’t remember buying any lottery tickets. Anyway, he asked me if I would like to live for two weeks as a Princess. I agreed. Then I took a vacation at my job, told everyone I’d be in Waikiki for three weeks, and went with Khalmorot to the New York Stock exchange. He hypnotized me right there, and from that moment on I always thought I was Princess Angel.”

“Amazing, isn’t it?”

“It sure is.”

“Do you remember about us?”

“Of course. I remember everything. Especially our last couple of hours waiting for the final change. That was really hot! You’ll still call me ‘Princess Angel’?”

“Of course I will. As I said, you will always be my pretty Princess from the 24th Century. Nothing will ever change that.”

They had spent every second right until the last minute practicing 24th Century sex. Satoshi figured it might be the last chance he got. And he certainly was not going to leave Angel alone for the last couple of hours, as last week.

Of course he knew that Angel wouldn’t just disappear. She would just change, back to a common girl. Maybe she would even remember everything she had learned in her alternative life as a Princess in the 24th Century. Including her 24th Century sex.

But he wasn’t sure about that. That was at least his excuse to get Angel willing for one last really long session. Not that such an excuse was necessary, though.

“It’s strange. I remember all of my life in the 24th Century. Just like I would remember a series of good books. But I know now that it’s all just a fantasy, written by Khalmorot and planted into my brain with his alien technology. I remember my own life now as well, and I know which one was real and which one was just an illusion.”

“And, in real life, do you care about global warming?”

“Actually, yes. I do care about that. I’ve been involved in the campaign for close to a decade right now. Hearing from John Baker that he’ll stop production at the Canadian tar sands in my honor was very sweet. I mean, it is, when I am looking back right now. We all hated losing that fight against the Keystone pipeline.”

“How do you like the Buy & Hoard solution?”

“I think it will work.”

“I think so as well. We’ve already got the first 10 trillion dollars committed. There are a lot of private funds trying to get a piece of this.”

“Ten trillion? That’s a lot of money,” Angel said.

“It is. It sure is. I must admit it. We could buy forty billion barrels of oil with that at present prices of $250 a barrel.”

“Are you going to do that?”

“I’m not sure. It would be rather difficult, I guess. There’s not enough oil on the market for that kind of deal. It’s more than a year’s worth of World consumption.”

“You would also have trouble storing so much.”

“We would. But anyway, we’ll start slowly. Buy a billion barrels here, a billion barrels there, and before we know it we’re talking about amounts that have a real impact on the market. Maybe John Baker will just sell us some of the oil that’s still in the ground in the Canadian tar sands. That would solve our storage problem right there.”

“Are you going to invest some more in the Fund as well?”

“Of course I will. Those four billions were just for starters. I’ll put my money where my mouth is. I’ll keep a couple of billion in bitcoins, for sentimental reasons, but I think it is quite clear that Khalmorot wants me to invest most of my money right here.”

“So, this is the point where I get all insecure about your enormous wealth and leave you. I’m no Princess. I’m just a common girl. You can’t possibly find anything in me, can you?”

“I can’t let you leave me.”

“Why not?”

“You know my identity. You have seen my face. You promised me to keep my secret, remember? How could I ever feel secure about that if I don’t have you around me every day?”

“You wouldn’t mind if I stay?”

“Of course I wouldn’t mind. I told you, remember? I don’t give a damn. You’re still my pretty Princess Angel, as far as I’m concerned.”

“I will never be able to match her optimism. And her way of talking down to people. I’m sorry. I really am.”

“That’s okay. I’ll probably miss that a little bit. But you’re just a common girl, so it would be unreasonable to expect from you acting like a Princess. Maybe you can practice acting a bit. Might make a nice little scenario for 24th Century sex, now that I come to think of it.”

“Yes. I’m just a normal girl.”

“And I’m just a normal guy. Just like you, I got lucky I got to meet Khalmorot.”

Link to part 50: Waking Up

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Angel Wins Her Bet

Mar 23 2014

Part 48 of my third global warming science fiction novel “Last Week”. Link to Part 1: “Back To Paradise Era”.

MONDAY, FEBRUARY 21 2023 1:37 P.M.

“I have one thing that would seem to be fun,” Satoshi said. “I want to get it done before you’re gone.”

“What would that be?”

“I want to make you win your bet. Remember? You bet John Baker four bucks that he would stop production at the Canadian tar sands before you die.”

“Yes. But we tried this morning. He’s stubborn.”

“Let’s try again. I have an idea.”

“What idea?”

“You’ll see. Let’s go and visit him once more.”

Satoshi took out his phone and called John Baker’s office. He got another short appointment without problems. John Baker liked talking to the World’s richest man. Especially if there was some major business for Non Standard Oil involved.

“Thank you, Mr. Baker, for receiving us on such short notice. Again.”

“You’re welcome. I’m always happy to talk to Satoshi Nakamoto. And Your Majesty, Princess Angel from the 24th Century.”

“What? Your Majesty? Have you finally seen the light?” Angel said.

“Of course not. I’m just going along with your publicity stunt. Just as a matter of basic courtesy. I understand it will be over tomorrow. This time for good.”

“And there I was thinking that the hypnotic power of the Glaring Glasses had worked on you after all,” Angel said.

“What is it about that hypnotic power? And why doesn’t it work on me?” John Baker seemed rather interested in the topic. He had studied a lot of hypnotic techniques for magic trick applications.

“I don’t know myself exactly,” Satoshi said. “But I can tell you what I do know.”

“Please do so,” John Baker said.

“Let’s start with that unfortunate incident last week. Where you tried to rob Angel of the Glaring Glasses. It didn’t work. As you may recall, that was a very unpleasant experience for you.”

“I sure do recall that,” John Baker said.

“The way this works, the Glaring Glasses are under my control right now. Princess Angel has transferred that root control to me before she was supposed to die last Tuesday. It’s only possible to do if the person transferring control is willingly doing so, you can’t force someone into doing it. Anybody who tries using the Glaring Glasses without authorization will be quickly dissuaded from the idea.”

“I see. And what about the hypnotic force?”

“One of the powers these Glaring Glasses have is getting anybody in sight under hypnotic mind control. But the weird part is, they don’t work on everyone in that mode. They didn’t work on me. They didn’t work on Senator Nutt. And they didn’t work on you. There’s no way I could just put you under mind control. And there’s no way to know if they work or not, short of actually trying.”

“So you don’t know why they don’t work on you? Or me?”

“No. I have no idea. But there is another mode that works all the time, except with the person who has root control. It’s mind reading mode. I would like to try it on you, if you don’t object to the idea.”

“Couldn’t you just do it anyway? Is my consent necessary?” John Baker said.

“I could. I certainly could. But I wouldn’t want to. That would not be appropriate. I need your cooperation for the 24th Century Princess Angel Fund, after all. So, I would like to ask for your kind cooperation. And it’s not a one-sided deal. I had this idea of what I’d like to try. Care to hear about it?” Satoshi said.

“Go ahead,” John Baker said.

“Listen. You go first. You take the Glaring Glasses, and read Princess Angel’s mind. You will find it most interesting. Then it’s my turn. I take them back and read your mind. How about it?”

“I’m not sure I want those Glasses on me ever again,” John Baker said, his face slightly pale.

“It’s safe. You get them with my consent this time. Be advised, though, that that consent is limited to five minutes. You’ll need to give them back before those five minutes run out, or it’s back to the solar cross. I wouldn’t want to give you any funny ideas about trying to keep them,” Satoshi explained.

“I’m not sure,” John Baker said.

“Give it a try,” Angel said. “I don’t mind. This is your one and only chance to read the mind of a 24th Century Princess. Don’t blow it.”

“Okay. Two minutes max. I’ll try it.”

Satoshi handed the Glaring Glasses to John Baker. Satoshi had concealed his eyes under the Glaring Glasses with a veil that allowed him to see through but prevented any security cameras John Baker might have had installed in his office from getting a picture.

Angel sat down right in front of John Baker. He put the Glaring Glasses on.

Instantly, he heard loud rock music playing. Lucky Man, by Emerson Lake and Palmer.

And instantly, he understood that Angel really thought she was a Princess from the 24th Century. She wasn’t lying to him, or to the World.

But he also understood that all of that was an illusion that would end the next day. Angel would wake up as Thusnelda Sneeze, a common girl and clerk in a bookstore.

He couldn’t read anything about the romantic feelings of Angel for Satoshi. That area had been put off limits.

John Baker took the Glaring Glasses off, rather hastily. He didn’t want to risk going over the time limit. He handed them back to Satoshi.

“I am sorry, Your Majesty,” John Baker said. He had decided to go along with the illusion for this last day. That was something he was actually doing on a regular basis when performing magic tricks. “I really am sorry. I now know for a fact that your story was true. You really are Princess Angel from the 24th Century. I am deeply honored to receive your visit today.”

“I forgive you,” Angel said. “It was my fault. I should have done that the first time I came here.”

Satoshi had put the Glaring Glasses back on.

“So, now it’s my turn. You’re ready to go ahead with it?”

“I’m not sure. You’ll be able to see everything I think and feel?”

“I would. But I’m going to restrict access now to everything you think and feel about your business. I’m not interested in your private life.”

“Okay. Let’s do this,” John Baker said.

Satoshi activated the Glaring Glasses and looked into John Baker’s mind.

First off, he saw three things.

One giant dollar sign.

Another giant dollar sign.

And yet another giant dollar sign.

Satoshi concluded that John Baker was interested in making money, and in nothing else.

Then, somewhat in the background, he saw some interest in magic, especially in hypnotic effects, and a lot of experience in using them to his advantage in business negotiations.

Satoshi deactivated the Glaring Glasses.

“Thank you. Here is what I saw. Nothing of it is really news to me, but for the record, I saw three giant dollar signs. I understand you have some interest in making money, which makes sense for someone in your position.”

“Did you see anything about his thoughts on the Canadian tar sands?” Angel asked.

“Actually, no,” Satoshi said.

“I can tell you my thoughts on that,” John Baker said. “They haven’t changed. I’m not going to stop production there.”

“Of course you won’t. You would lose four dollars in your bet with Princess Angel,” Satoshi said, grinning.

“I see,” Angel said. “I lost. I brought four dollar bills. Here you are.”

She took four dollar bills out of her pocket.

“Wait a minute,” Satoshi said. “You might still win.”

“I don’t think so,” John Baker said.

“This bet doesn’t say how long you need to stop production. What if you just announce now that you will stop production for exactly one day tomorrow, in honor of Princess Angel’s death?”

“Why should I do that?”

“Well, for one, I would like to see Angel win this last bet. It doesn’t mean much in the big picture, but it would be a nice thing to do for her on her last day. Don’t you agree? But there’s another side to it.”

“I see. I probably could go along with that. What’s that other side?”

“You could see how the markets react to your announcement. We have already seen some reactions to our own announcements related to the 24th Century Princess Angel Fund.”

“Yes. I have seen that. Oil is already up in price by twelve dollars over last week, even though you haven’t bought the first barrel yet with your new multi-trillion dollar fund. People are starting to figure your activities into their market analysis,” John Baker said.

“What does that price increase of twelve dollars mean for your profits? Do you think they might go up because of it?”

“Of course they’re going to go up. We’re in the business of selling oil. We like high prices.”

“Listen. Announce a one-day production stop at the Canadian tar sands right now. Look what that will do to the oil price and your profits. I think they will go up by at least another four dollars. You’ll be able to pay Angel, and then some.” Satoshi grinned again.

“I see. You have me cornered. I must admit it. Let’s try that little experiment. Congratulations. You got yourself a one-day production stop at the Canadian tar sands. And I’m going to announce it officially as in honor of Princess Angel, the valiant girl from the 24th Century that gave her life to warn us about the dangers of the Moros 27 asteroid. If it really gets prices up, I might even make it a regular holiday each year.”

John Baker ordered his assistant to prepare a short announcement. Then he took out his wallet, slowly counted out four dollars, and handed them over to Angel.

“Congratulations, Your Majesty. You win your bet. I wish you the best for the last day of your life.”

Link to part 49: Last Week’s End

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Second Round of Questions from Member of House of Councillors Okubo

Mar 22 2014

Member of the House of Councillors Tsutomu Okubo has asked a second set of questions relating to Bitcoin, and the government has answered these questions. See here for my translation of the first set.

Below, I provide a full translation of all questions and all answers, with only a couple of comments from me. My general impression is that the government does not provide much insight. Most of the questions are answered with a slightly more polite version of “no comment”.

I think it is a good thing that the Japanese government takes the time to study the issue in detail, before committing themselves to any course of action. Eventually, some regulation or other will be enacted. It should be enough to make sure a mess like MtGox doesn’t happen again, but not so burdensome as to impede the development of the sector in the Japanese market.

Here we go:


(Okubo) “Since I had some doubts about the government’s answers to my last set of questions about Bitcoin, I add the questions below:

Question one: In answer to my question, the Bank of Japan delivered a report. According to that report, there are about 12 million bitcoins issued. At the rate of February 27 of this year (one bitcoin was at $621), that would be the equivalent of about $7.7 billion. Looking at these numbers, one can say that bitcoins are on their way to being recognized as a method of payment and investment.

“Considering these facts, what is the government’s position on the opinion that bitcoin provides its users with a method of measuring value, storing value, and exchanging value?”

(Government) “The government does not yet understand the big picture regarding Bitcoin. We are in the process of gathering information, coordinating the efforts of relevant Ministries. There are many different informations about the amount of bitcoins issued, and their price. Therefore, as we answered the last time, it is difficult to make a definite statement about the amount of bitcoins issued and their market capitalization. Therefore, it is difficult to state a position about the opinion mentioned in the question.”

(Comment by me): It is hard to believabe that the government would not know such basic facts. If they still have not been able to figure this out, the “coordinated effort to gather information” does not seem to progress very well.

Even if you don’t know how many bitcoins there are, you could still discuss the question if the Bitcoin network functions as money that was raised in the question.


(Okubo) “Question two: In the answer to my previous questions one and two the government states: ‘We are in the process of gathering information, while aiming for an approach coordinated between Ministries involved.’ But, considering the bitcoin market capitalization of $7.7, the petition for civil rehabilitation filed by the MtGox stock company, and other recent developments, I think that it would be desirable to speed up the information gathering and provide for the necessary regulation quickly.

“When does the government intend to legislate in this area? Especially, I would like to ask for clarification if it is possible to get this done in the current legislative period.”

(Government) “Regarding to Bitcoin, the government is now in the process of gathering information in an effort coordinated between relevant Ministries. Once we understand the big picture, we will proceed to thinking about necessary policies. Therefore, we can not give any certain answer on the question if we plan to legislate, and if so, when that will happen.”

(Comment by me): The bright side is that the government has not committed to any position right now. That means interested parties can still contribute to the discussion. Having no position is much preferable to knee-jerk reacting with legislation not thought through.


(Okubo) “Question three: In the last answer to my previous question three, the terms “legal tender” and “force as legal tender” are used.

“1. How does the government understand the terms “legal tender” and “force as legal tender”? If these terms are based on laws, what are these laws, and where are the definitions for these terms?

“2. Which is the subject that assures “legal tender” or “force as legal tender”? Especially, I would like this point explained for foreign currency traded in Japan.

“3. In Japan, American dollars, renminbi, Indian rupees and other foreign currencies are not recognized with force as legal tender. Considering that, one may think that bitcoins have the same quality as these foreign currencies. What does the government think about this point? If the government disagrees, please state the reasons for that.”

(Government) “1. The term “force as legal tender” as used in our last answer means that if the debtor of a claim of money uses the medium in question to fulfill his obligation, the creditor cannot refuse this as performance, and the performance becomes valid as a matter of course. For coins this force as legal tender is ordered by Article 7 of the Act on Currency Units and Issuing of Coins (Act No. 42 of 1987), which allows for issuing up to twenty times of the face value, and for banknotes in Article 46 Paragraph 2 of the Act on the Bank of Japan, which allows for unlimited issuing.

“2. The “force as legal tender” is guaranteed by the sovereign State, or by an equivalent entity. Foreign currency is currency for which a foreign country recognizes force as legal tender. Foreign currency does not have force as legal tender in Japan.

“3. As stated above, foreign currency has force of legal tender in a foreign country. Since there is no state recognizing bitcoins as legal tender, it is difficult to understand bitcoins as an equivalent to foreign currency.”

(Comment by me): This answer shows that the government is right when asserting they don’t understand Bitcoin yet. I will discuss this question in detail elsewhere. But, in short, when talking about the situation in Japan, both bitcoins and American dollars lack force as legal tender. And the freedom of contracts allows parties to recognize the force as legal tender for a specific contract both for dollars and bitcoins.


(Okubo) “Question four: In the answer to my previous question 4-2, the government states that brokering the sale of bitcoins, offering an account denominated in bitcoins, or providing payment services with bitcoins are not businesses allowed to banks.

“Can banks buy bitcoins for themselves? Can they set up an investment trust? Can they set up derivative investment schemes based on bitcoins? Please explain if these business activities are allowed under the law, and the Articles this is based on, or the conditions that apply.”

(Government) “The act of buying bitcoins in the question is not a business listed as a bank business activity in Article 10 Paragraph 1 all numbers, Paragraph 2 all numbers, or Article 11 all numbers.

“It is correct that a bank can engage in the business activity of buying and selling securities (Article 10 Paragraph 2 Number 2), the business activity of trading in security and financial derivatives (Paragraph 2 Numbers 2, 12, and 14). However, since it is not entirely clear what is meant by “bitcoin investment trusts” or “investment schemes based on bitcoins” in the question, it is difficult to give a general answer.

“On the other hand, as long as “buying bitcoins” does not reach the level of a business activity, while it may be open to debate if that would be appropriate, this would be dealt with like a bank buying other assets not directly related to their business activities. There is no provision in the Banking Act that would clearly prohibit such an act.


(Okubo) “Question five: Is the business of offering put options on bitcoins, for example the derivative right to buy one bitcoin at $500, a business listed in the relevant laws for institutions taking deposits, enabling these institutions to offer such derivaties? For example, with banks that would be the Articles 10 and 11 of the Banking Act, and for securities brokers it would be Article 35 of the Financial Instruments and Exchange Act. If this is possible, I would also like to ask if these are legally classified as specific business or incidental business.

Another business would be offering a saving plan or a financial instrument the value of which changes with the price of bitcoins. I would like to know if financial deposit institutions or securities brokers can set up, issue, or broker such investments.”

(Government) “Under Article 10 Paragraph 2 Number 2, Number 12, and Number 14 of the Banking Act, a bank may engage as a business activity intrinsic to banking in trading in securities or financial derivatives. Under Article 35 Paragraph 4 of the Financial Instruments and Exchange Act a securities broker may engage in business activities, beside those of brokering and those regulated in Paragraph 1 and 2 of that Article, for which they have received a special permit from the Prime Minister. However, since it is not clear what exactly the meaning of an “option on bitcoins, for example the derivative right to buy one bitcoin at $500” is supposed to mean, it is difficult to give a general answer if this would fall under these rules.

“Also, Article 13-4 of the Banking Act allows banks to accept deposits set up in a way that are linked to market indexes or other indexes. Article 2 Paragraph 8 Number 1 and 2 of the Financial Instruments and Exchange Act allow securities brokers to engage in the business of selling and buying financial instruments, brokering such sales, and acting as intermediary for them. However, since it is not clear what exactly “offering a saving plan or financial instrument the value of which changes with the price of bitcoins” is supposed to mean, it is difficult to give a general answer if this would fall under these rules.”


(Okubo) “Question six: Since the government thinks that bitcoins are no currency, I would like to know the government’s position on if it is not illegal for someone to take deposits of bitcoins from a multitude of unspecified customers, guaranteeing the capital, or lend those bitcoins in a continuing basis, under the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates. If the government thinks taking such deposits is illegal, I would like to know the detailed interpretation such an opinion is based on.

“Also, if someone lends 100 bitcoins at an interest of 30 bitcoins a year, receiving 130 bitcoins back, would in the government’s opinion such a contract using bitcoins be possible even if the interest is above the interest rates allowed by the Interest Rate Restriction Act and the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates?”

(Government) ”It is not clear what exactly “to take deposits of bitcoins from a multitude of unspecified customers, guaranteeing the capital, or lend these bitcoins on a continuing basis” is supposed to mean. Also, establishing the facts of a crime is a decision to be taken by law enforcement based on the evidence collected in individual cases. Therefore, we can only make some general statements. As the Act of Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates (Act No. 95 of 1954) is concerned, if the criminal sanctions rules in that Act are violated, it would be illegal under that Act. As to the question which laws might be violated in that case, that would be a matter decided looking at the circumstances of the concrete case at hand. Furthermore, regarding the question of application of Article 1 of the Interest Rate Restriction Act (Act No. 100 of 1954): This rule makes void contracts about lending money as far as the interest rate stated in each Number of that Article is surpassed. The question if this rule would be applicable to lending of bitcoins is difficult to answer, since it is not clear how bitcoins are used.”


(Okubo) “Question seven: The MtGox stock company was the World’s largest exchange before it filed a petition for opening a civil rehabilitation procedure. On the other hand, there is a report by the American Congressional Research Service which states that bitcoins may be used for money laundering purposes. There is also a case in which one of the board members of an institution promoting Bitcoin was arrested. (Note by me: This refers to the arrest of former Bitcoin Foundation board member Charlie Shrem).

“Under these circumstances one could think that financial institutions offering accounts to MtGox and other bitcoin exchanges in Japan would have a obligation to enhanced due diligence. What does the government think of such an opinion? If there is such an obligation, I would also like to know the extent of such an obligation.

“Also, if someone wires large sums of money into the account of a bitcoin exchange that is offered by a bank for the purpose of buying bitcoins, has the bank in question a duty to make sure of the identity of the person wiring the money, make sure if there are bitcoins bought with that money or not, and hold on to documents about the identity of the person wiring the money? I would also like to know if the government has plans to introduce any such enhanced due diligence obligations.”

(Government) “It is not clear what exactly “enhanced due diligence regarding money laundering” is supposed to mean. For example, Article 8 Paragraph 1 of the Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007) (Criminal Proceeds Act) requires financial institutions that accept deposits or savings to report to the authorities specified in Article 21 of the Crime Proceeds Act in certain cases. If assets they receive in their business are suspect of being proceeds of a crime, or if the customer is suspect of having violated the Act on Organized Crimes and Control of Crime Proceeds (Act No. 94 of 1991), then they need to report. It does not matter for that if the customer in question is a “bitcoin exchange” or not.

“Also, under the Crime Proceeds Act, if there is a wire transfer to some account, financial institutions are under no obligation to make sure of the identity of the person wiring the money, or the purpose of the wire transfer, or to hold on to records of the transaction. It does not matter for that if the account in question is that of a “bitcoin exchange” or not. Also, a bank that receives a request for a wire transfer needs to make sure of the identity of the person wiring the money, the purpose of the wire transfer, and needs to hold on to records of the transaction, if the wire transfer is done by deposition more than 100,000 yen, or in other cases prescribed by the Criminal Proceeds Act.”


(Okubo) “Question eight: If someone runs a bitcoin exchange in Japan, are they obliged to register in some way, or report in some way, in the opinion of the government? I would also like to know the relevant law regulating bitcoin exchanges, and the Ministry in charge.”

(Government) “It is not exactly clear what business model the “bitcoin exchange” in the question is supposed to take. But as far as the business activity of exchanging bitcoins and currency, there is no rule in Japanese law that would require such an exchange to register or report to the relevant Ministry, and there is no “Ministry in charge”.


(Okubo) “Question nine: If someone runs a bitcoin exchange in Japan, do they have any obligations regarding anti-money laundering measures, like recording facts, or report the value of bitcoin trades or withdrawals to the relevant Ministry, in the opinion of the government?”

(Government) “As we said in our last answer to question three, there is no law in Japan that clearly regulates Bitcoin. Also, since it the concrete circumstances of the “bitcoin exchange” in the question are not exactly clear, it is difficult to give a general answer.

(Okubo) “Question ten: In the answer to my last question three the government says that bitcoins are not currency or a foreign currency. Does the government think bitcoins are tangible things like gold or antiques, or does it think they are electronic records?

“Also, if the government thinks bitcoins are electromagnetic records, is an act of illegal access to a computer and changing the records on bitcoins an act of computer fraud?”

(Government) “It is not clear what exactly “tangible things” in the question are supposed to mean. Anyway, since the use of Bitcoin is not clear at the moment, it is difficult to answer if bitcoins are “tangible things” or electromagnetic records.

“Establishing the facts of a crime is a decision to be taken by law enforcement based on the evidence collected in individual cases. However, as a general rule, if a person obtains or causes another to obtain a profit by creating a false electromagnetic record relating to acquisition, loss or alteration of property rights by inputting false data or giving unauthorized commands to a computer utilized for the business of another, or by putting a false electromagnetic record relating to acquisition, loss, or alteration of property rights into use for the administration of the matters of another, then such an act would qualify as computer fraud.”


(Okubo) “Question eleven: If a Japanese company exports luxury goods like watches, perfume, or caviar via a third country to North Korea, receives payment in bitcoins and exchanges these bitcoins on an exchange into yen, is such a business without problems under existing laws? If there is a problem, what statutes would apply and which Ministry would be responsible?

“Also, if someone living in Japan transfers one hundred million yen worth of bitcoins to someone in North Korea, is such an act without problems under existing laws? If there is some kind of reporting obligation, or an obligation to receive a permit, I would like to know the reason and the applicable law.”

(Government) According to Article 10 and 48, Paragraph 3 of the Foreign Trade and Foreign Exchange Act (Act No. 228 of 1949) (below “Foreign Exchange Act”), if the final destination of freight is North Korea, it is necessary for such export to obtain the permission of the Economy Minister, even if the trade is done via a third country. Since such a permission will not be given except for humanitarian reasons, export of luxury goods is in violation of the Foreign Exchange Act. The fact of payment in bitcoins does not change that either way.

“As for the question if somebody transfers bitcoins worth 100,000,000 yen from Japan to North Korea, that would require a report under Article 55 of the Foreign Exchange Act if that was a “payment” under that Article.

“However, if that payment was done for an import that has either North Korea as country of origin or was loaded into a ship in North Korea, and that import has not received a permit under Article 52 of the Foreign Exchange Act, it is prohibited under Article 16 Paragraph 5 of the Foreign Exchange Act, and in violation of that Act.

“Also, if that payment is to a person specified as connected with the North Korean missile or weapons of mass destruction program, or if it is done with the purpose of contributing to North Korea’s nuclear weapons, missiles, or other weapons of mass destruction programs, such a payment needs permission by the Ministry in charge under Article 60 of the Foreign Exchange Act.”


(Okubo) “Question twelve: In answer to my last question four, the government said that as a general principle, Bitcoin could be an object of taxation under the Income Tax Act and the Corporate Tax Act.

“1. If someone who has gained an economic advantage from trading in bitcoins declares his income, what is the correct category of such income, as a general rule? Is it capital gains? I would also like to receive an explanation on how to deal with these issues as a matter of corporate tax.”

(Government) “It is necessary to decide case by case on individual taxation issues. Also, it is not exactly clear what “gained an economic advantage from trading in bitcoins” means. Therefore it is difficult to give a general answer. As a general rule, economic advantages gained by an individual are capital gains if they meet the conditions of Article 33 of the Income Tax Act (Act No. 33 of 1965). For economic advantages gained by a legal person, that economic advantage would be included in the calculation of income of that legal person for the business year involved.”


“2. If someone not living in Japan or a foreign corporation gained such an advantage from trading on an exchange in Japan, is it correct to assume that as a general rule such gains would be taxable, in the opinion of the government?”

(Government) “It is necessary to decide case by case on individual taxation issues. Also, it is not exactly clear what “gained an economic advantage from trading in bitcoins at an exchange based in Japan” means. Therefore it is difficult to give a general answer. As a general rule, non-residents of Japan under Article 2 Paragraph 1 Number 5 or foreign legal persons under Article 2 Number 4 of the Corporate Tax Act (Act No. 34 of 1965) are taxable in Japan for income in Japan, as defined under Article 7 Paragraph 1 Number 3 and Number 5 of the Income Tax Act and Article 9 Paragraph 1 of the Corporate Tax Act. If some income does not qualify as “income in Japan” under these Articles, it is not subject to Japanese taxation.”


(Okubo) “Question thirteen: If someone has gained an economic advantage from trading in bitcoins, would he need to report in his form declaring the amount of assets and obligations? Also, is that something he would need to report under the system on reporting assets outside of Japan, in the opinion of the government? If bitcoins need to be included in these reports, I would also like to know under which category bitcoins fall, in the opinion of the government.

(Government) “It is not clear what “economic advantage gained from trading in bitcoins” is supposed to mean. Therefore it is difficult to give a general answer. As a general rule, the form declaring assets required by Article 232 Paragraph 1 of the Income Tax Act needs to be filled out according to the rules specified in Table 10 of the Ordinance on the Income Tax Act (Finance Ministry Ordinance 11 of 1965). And the report required under Article 5 Paragraph 1 of the Act on Submission of Overseas Wire Transfers for Purpose of Securing Proper Domestic Taxation (Act No. 110 of 1997) is to be filed according to the rules specified in the Ordinance on the Act on Submission of Overseas Wire Transfers for Purpose of Securing Proper Domestic Taxation (Financy Ministry Ordinance No 96 of 1997).”


(Okubo) “Question fourteen: In the answer to my last question four, the government said that bitcoin transaction may as a general rule be subject to consumption tax. If for example on a bitcoin exchange in Japan one bitcoin was sold for fifty thousand yen, does that mean that at present tax rates there would be a consumption tax of 2,500 yen to be paid, in the opinion of the government? In that case, does the consumption tax also apply to the fees of the exchange, and the fees for wiring the money? Also, if there is a consumption tax obligation, who would be the person obliged to pay that tax?”

(Govenment) “It is necessary to decide case by case on individual taxation issues. Also, it is not exactly clear what “one bitcoin was sold for fifty thousand yen at an exchange based in Japan” means. Therefore it is difficult to give a general answer. As a general rule, if this is disposing of an asset under Article 4 Paragraph 1 of the Consumption Tax Act (Act No. 108 of 1988), and it does not fall under one of the exceptions under Article 6 Paragraph 1 of that Act, it would be subject to consumption tax.

“Also, as to the person obliged to pay the tax, it is the business that has disposed of the asset, except if it is one exempt under Article 9 Paragraph 1 of that Act.”


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