10 ms·

This really reminds of the essay "Technologies of Control and Resistance"[1], which has really shaped my thinking over the years. Bitcoin itself is a technolog

This really reminds of the essay "Technologies of Control and Resistance"[1], which has really shaped my thinking over the years. Bitcoin itself is a technology of resistance. Private crypt-currencies more so. (Cash too) But as long as you have to go through central portals (like Coinbase) to access the rest of the economy, the government will lean on those central parties to regulate you indirectly. Central parties are technologies of control. [1] https://blog.elidourado.com/technologies-of-control-and-resistance-making-sense-of-our-stagnant-dynamism-d135149d0761 https://blog.elidourado.com/technologies-of-control-and-resi...

Cthulhu_ 9y ago
The alternative is to do things off the grid, so to speak - meet people in person, exchange funds for cryptocurrencies. Actually that might be a small side business idea. Of course, one of the goals of cryptocurrencies is to not have to go through central organizations at all. Not converting your cryptocurrencies back to fiat, and not storing them on an exchange will be the best way to dodge taxes. Pretty sure that if you hide your keys well enough, the IRS and co cannot prove that you have any assets in cryptocurrencies as long as how you acquired them can't be traced.
- eberkund 9y ago
  https://localbitcoins.com https://localbitcoins.com
  - tlrobinson 9y ago
    https://www.coindesk.com/localbitcoins-trader-pleads-guilty-money-transmitter-charge/ https://www.coindesk.com/localbitcoins-trader-pleads-guilty-...
    - dmix 9y ago
      So two people out of hundreds of thousands, who were running significant money-trading businesses through the network? They weren't targeting regular users or many people at all...
      - arcticfox 9y ago
        This would be so incredibly to sting if the authorities got interested at all. Sure, you can tax evade all you want at a small scale, but once you hit remotely interesting figures they are going to wreck you.
- NwmG 9y ago
  this exists - localbitcoins.com
- moduspol 9y ago
  In case you're not kidding: LocalBitcoins.com has been doing this. Although you still have to be careful, as one trader found out [1]. His was a little more than a "small side business," though. [1] https://www.coindesk.com/localbitcoins-trader-pleads-guilty-money-transmitter-charge/ https://www.coindesk.com/localbitcoins-trader-pleads-guilty-...
- brady747 9y ago
  I always think of this quote from the movie, "Body of Lies": "Our enemy has realized that they are fighting guys from the future. Now, ahem, it is as brilliant as it is infuriating. If you live like it's the past, and you behave like it's the past then guys from the future find it very hard to see you. If you throw away your cell phone, shut down your e-mail pass all your instructions face-to-face, hand-to-hand turn your back on technology and just disappear into the crowd"
  - matt4077 9y ago
    Your supposed "enemy", has barely even noticed you. If the big bad government wants to shut down your little cryptobubble, it can do so anytime it wants with the stroke of a pen. But yes: please walk into a forest and "life as if you don't exist". I suppose that includes not posting conspiracy fanfic online, right?
    - Karunamon 9y ago
      >If the big bad government wants to shut down your little cryptobubble, it can do so anytime it wants with the stroke of a pen. Let's think this through. How well has government prohibition of what private citizens do in their own homes worked in practice for anything else it's been tried on? Then consider that we're talking about data rather than physical objects, which are even slipperier. All such an action would do is drive it underground. Anyone who wants to use bitcoin still will.
    - grandalf 9y ago
      Why the vitriol. The comment was meant to allegorically offer a conceptual approach to fighting the dystopian onslaught of oppressive technology. By oppressive technology I am referring to the kind of tech that obviously oppressive governments would have built decades ago if it had been possible, and that the US will gradually arrive at soon enough without explicitly seeking to do so.
  - mattmanser 9y ago
    Only works until they have facial recognition everywhere.
- deegles 9y ago
  Sounds like tax evasion.
- pjc50 9y ago
  Sure, you can make tax evasion mainstream. That worked out brilliantly for Greece.
  - QML 9y ago
    To be fair, Greece didn't have any control over its currency (the Euro).
- xorcist 9y ago
  Even if you managed to convert all your crypto assets to cash completely off the grid, and not only your bed but also your closet is full of the stuff, what good does that do? You've just moved the "problem" from one asset to another. As soon as you buy a sports car, or a yacht and pay in cash (which is probably at least as difficult as doing it in Bitcoin) the IRS will take notice. You're going to have to explain why you suddenly drive an expensive car without any trace of payments for it, or you're going to lose it. Unless your money really come from illicit sources, in which case you have no choice, I doubt it is worth it.
ckastner 9y ago
The thing is, these central parties also provide an enormous amount of benefits. Take your average stock exchange. There's an enormous amount of regulation governing its operation, with the goal being to protect market participants from mischief. Enforcing this protection requires control. Forgoing this control also means forgoing this protection. The shit-show that was Mt. Gox (and a few other exchanges) -- and I don't mean just its demise, but all the market manipulation going on when it was still active, etc. -- would have been all but impossible if these operations would have been governed like modern exchanges.
- jackstraw14 9y ago
  Centralized institutions do provide a safety net, but is there anything necessarily wrong with a group of people saying they don't want or need that? And isn't this better than conservative activists trying to strip those protections away from the existing institutions with the "enormous amount of benefits" bit by bit until their profit is maximized and no protections are left? edit: regarding the Mt. Gox situation. You present it as something that should have never happened in civilized society, but I think it's growing pains on the way to something better.
  - ckastner 9y ago
    > Centralized institutions do provide a safety net, but is there anything necessarily wrong with a group of people saying they don't want or need that? Not at all! However, within the context of cryptocurrencies, I can't help but note that there seems to be a certain tendency to blindly idealize decentralization, and especially to blindly demonize regulation, without giving any thought as to why things are what they are right now. > regarding the Mt. Gox situation. You present it as something that should have never happened in civilized society, but I think it's growing pains on the way to something better. Here, I disagree. Growing pains are no excuse for being as reckless as they were. If your clients entrusted you with hundreds of millions of their USD (either directly, or through Bitcoin), then I don't see "but startup" as a valid excuse; you owe them a certain amount of diligence in your conduct. Note that this isn't investors losing hundreds of millions on some innovation gamble (à la Uber), but on an operation where there are literally hundreds of years of precedent to learn from, namely: exchanges.
urza 9y ago
Thanks for the essay. This is on the same topic, from similar angle, also very good one, by Nick Szabo: "Trusted Third Parties Are Security Holes" http://nakamotoinstitute.org/trusted-third-parties/ http://nakamotoinstitute.org/trusted-third-parties/
jstanley 9y ago
Fascinating article, thanks for sharing.
eveningcoffee 9y ago
This is the main danger of the app store business model. This is the main danger of a centralized messaging application.
cup-of-tea 9y ago
You don't have to go through Coinbase or any other electronic exchange. It's just that, like many things, it's more convenient so everyone submits to it, and therefore the government, voluntarily.
- gedrap 9y ago
  What would be a feasible alternative?
  - sliverstorm 9y ago
    Craigslist If meeting in person is not convenient enough- well, this is really just the tradeoff you make choosing between Coinbase and Craigslist. Convenience vs security/anonimity.
    - arcticfox 9y ago
      > Convenience vs security/anonimity While true for some, let's be real, the real decision will be between convenience vs. tax evasion.
grandalf 9y ago
This is true, but unless one feels that he/she should not need to pay taxes, it's reasonable for the IRS to demand records from a firm operating in the US that would allow for very quick and efficient tax enforcement. They already do it with banks, etc. While I'd like to see much lower Federal taxes and no more expensive wars of aggression, I don't think there is a principled reason to oppose the IRS doing this very basic audit of tax compliance. After all, the ease of doing an audit is a major feature of a public block chain, and KYC requirements were not introduced by accident. Early adopters of BTC who still use it (or aspire to use it) in an economy that still relies heavily on fiat currencies need to expect this sort of thing to happen. Yes, it's heavy handed but so is everything about the IRS and our massive Federal war/propaganda machine. I suspect Satoshi would have randomized BTC transactions to make the audit impossible but for his anticipation of this transitional phase when fiat regulators have the power to compel firms to disclose non-cryptographically-secured information and link it with KYC data. What can we do? Let's hope that enough of the useful organizational structures found in fiat currencies come to exist for crypto-currencies. Things like insurance markets, dispute resolution, consumer credit, etc. To date most of the benefits of BTC have been related to the ease of sending and receiving funds securely, but there are many more benefits to come as new institutions and mechanisms for cooperation come to exist via blockchain technology that require less trust and authority and less overhead.
- lostboys67 9y ago
  so you think going back to pre 1900 isolationism will work let alone the moral issue of abandoning the USA's role in the world is a good idea. I suppose Liz II could take you back and put Prince Hal in charge :-)
  - grandalf 9y ago
    Not isolationism, simply democratic approval for the scope, budget, and success criteria of military action, and an honest discussion of national interest that doesn't involve fear mongering or appeals to xenophobia or racism. And while I personally view the doctrine of American Exceptionalism as a sort of evil religion that causes much worldwide suffering, I could tolerate it if there was a corresponding definition of national interest that could be used to assess the claims of our political leaders. Its not a choice between the modern massive federal\military bureaucracy and serfdom.
jfaucett 9y ago
> Bitcoin itself is a technology of resistance. Private crypt-currencies more so. this. Centralization of power arguably removes risks and is "safer" - at least so long as the power holder acts benevolently. At least that's the common assumption. However, If we are going to argue against the freedom of Bitcoin technologies and for more safety, centralization and control, we should look at the full context of human flourishing when thinking about what "safety" means. Some people will use BTC tech to do some bad things, they will avoid paying taxes, they will buy drugs, they will hire hitmen. Our societies will have to find better ways to detect and prevent this behaviour. On the flipside though, the USA had a tax revenue of roughly 3.5e9 in 2017 and a military spending of 0.8e9 [1,2]. That's roughly a quarter of all tax revenues. If you think a large portion of that is not leading to the deaths of thousands of innocent people yearly you're dillusional. [3] We need to ask ourselves, and historically we can look at the evidence for/against, whether or not we should trust our Governments to act benevolently. I think the benefits of more checks and balances on the abuse of power, far outweigh the negatives, which we will have to find other solutions for whether we have a Bitcoin technologies or not. 1. https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... 2. https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch... 3. https://www.globalresearch.ca/us-has-killed-more-than-20-million-people-in-37-victim-nations-since-world-war-ii/5492051 https://www.globalresearch.ca/us-has-killed-more-than-20-mil...
- Xeoncross 9y ago
  > so long as the power holder acts benevolently History fills in the rest.
  - RobertoG 9y ago
    History tell us that the powerful always abuse their power, but it also tell us that, government or not government, the powerful always exist. So, you can see modern governments as a power to defeat or as a way of trying to control power.
maxerickson 9y ago
Just remember that tax evasion is criminal and you only get to make 1 mistake.
- sealthedeal 9y ago
  Tax evasion is unlawful, tax avoidance is your civic duty.
- jackstraw14 9y ago
  Well, you can make two mistakes if you want to. Probably even three if you're determined.
perlpimp 9y ago
through grapevine I heards that some medium sized chinese exporters already accept coin as a payment. Process already has started, this is a minor inconvenience. Afaik speculating in the first place does not contribute to adoption, not in a direct sense. Music industry did shut down napster digital distribution has grown anyway.
nicodjimenez 9y ago
Exactly. And between Coinbase / bitcoin exchanges vs banks, who do you really trust more to keep all your money safe?

Cthulhu_ 9y ago

The alternative is to do things off the grid, so to speak - meet people in person, exchange funds for cryptocurrencies. Actually that might be a small side business idea. Of course, one of the goals of cryptocurrencies is to not have to go through central organizations at all. Not converting your cryptocurrencies back to fiat, and not storing them on an exchange will be the best way to dodge taxes. Pretty sure that if you hide your keys well enough, the IRS and co cannot prove that you have any assets in cryptocurrencies as long as how you acquired them can't be traced.

eberkund 9y ago
https://localbitcoins.com https://localbitcoins.com
- tlrobinson 9y ago
  https://www.coindesk.com/localbitcoins-trader-pleads-guilty-money-transmitter-charge/ https://www.coindesk.com/localbitcoins-trader-pleads-guilty-...
  - dmix 9y ago
    So two people out of hundreds of thousands, who were running significant money-trading businesses through the network? They weren't targeting regular users or many people at all...
    - arcticfox 9y ago
      This would be so incredibly to sting if the authorities got interested at all. Sure, you can tax evade all you want at a small scale, but once you hit remotely interesting figures they are going to wreck you.
NwmG 9y ago
this exists - localbitcoins.com
moduspol 9y ago
In case you're not kidding: LocalBitcoins.com has been doing this. Although you still have to be careful, as one trader found out [1]. His was a little more than a "small side business," though. [1] https://www.coindesk.com/localbitcoins-trader-pleads-guilty-money-transmitter-charge/ https://www.coindesk.com/localbitcoins-trader-pleads-guilty-...
brady747 9y ago
I always think of this quote from the movie, "Body of Lies": "Our enemy has realized that they are fighting guys from the future. Now, ahem, it is as brilliant as it is infuriating. If you live like it's the past, and you behave like it's the past then guys from the future find it very hard to see you. If you throw away your cell phone, shut down your e-mail pass all your instructions face-to-face, hand-to-hand turn your back on technology and just disappear into the crowd"
- matt4077 9y ago
  Your supposed "enemy", has barely even noticed you. If the big bad government wants to shut down your little cryptobubble, it can do so anytime it wants with the stroke of a pen. But yes: please walk into a forest and "life as if you don't exist". I suppose that includes not posting conspiracy fanfic online, right?
  - Karunamon 9y ago
    >If the big bad government wants to shut down your little cryptobubble, it can do so anytime it wants with the stroke of a pen. Let's think this through. How well has government prohibition of what private citizens do in their own homes worked in practice for anything else it's been tried on? Then consider that we're talking about data rather than physical objects, which are even slipperier. All such an action would do is drive it underground. Anyone who wants to use bitcoin still will.
  - grandalf 9y ago
    Why the vitriol. The comment was meant to allegorically offer a conceptual approach to fighting the dystopian onslaught of oppressive technology. By oppressive technology I am referring to the kind of tech that obviously oppressive governments would have built decades ago if it had been possible, and that the US will gradually arrive at soon enough without explicitly seeking to do so.
- mattmanser 9y ago
  Only works until they have facial recognition everywhere.
deegles 9y ago
Sounds like tax evasion.
pjc50 9y ago
Sure, you can make tax evasion mainstream. That worked out brilliantly for Greece.
- QML 9y ago
  To be fair, Greece didn't have any control over its currency (the Euro).
xorcist 9y ago
Even if you managed to convert all your crypto assets to cash completely off the grid, and not only your bed but also your closet is full of the stuff, what good does that do? You've just moved the "problem" from one asset to another. As soon as you buy a sports car, or a yacht and pay in cash (which is probably at least as difficult as doing it in Bitcoin) the IRS will take notice. You're going to have to explain why you suddenly drive an expensive car without any trace of payments for it, or you're going to lose it. Unless your money really come from illicit sources, in which case you have no choice, I doubt it is worth it.

ckastner 9y ago

The thing is, these central parties also provide an enormous amount of benefits. Take your average stock exchange. There's an enormous amount of regulation governing its operation, with the goal being to protect market participants from mischief. Enforcing this protection requires control. Forgoing this control also means forgoing this protection. The shit-show that was Mt. Gox (and a few other exchanges) -- and I don't mean just its demise, but all the market manipulation going on when it was still active, etc. -- would have been all but impossible if these operations would have been governed like modern exchanges.

jackstraw14 9y ago
Centralized institutions do provide a safety net, but is there anything necessarily wrong with a group of people saying they don't want or need that? And isn't this better than conservative activists trying to strip those protections away from the existing institutions with the "enormous amount of benefits" bit by bit until their profit is maximized and no protections are left? edit: regarding the Mt. Gox situation. You present it as something that should have never happened in civilized society, but I think it's growing pains on the way to something better.
- ckastner 9y ago
  > Centralized institutions do provide a safety net, but is there anything necessarily wrong with a group of people saying they don't want or need that? Not at all! However, within the context of cryptocurrencies, I can't help but note that there seems to be a certain tendency to blindly idealize decentralization, and especially to blindly demonize regulation, without giving any thought as to why things are what they are right now. > regarding the Mt. Gox situation. You present it as something that should have never happened in civilized society, but I think it's growing pains on the way to something better. Here, I disagree. Growing pains are no excuse for being as reckless as they were. If your clients entrusted you with hundreds of millions of their USD (either directly, or through Bitcoin), then I don't see "but startup" as a valid excuse; you owe them a certain amount of diligence in your conduct. Note that this isn't investors losing hundreds of millions on some innovation gamble (à la Uber), but on an operation where there are literally hundreds of years of precedent to learn from, namely: exchanges.

urza 9y ago

Thanks for the essay. This is on the same topic, from similar angle, also very good one, by Nick Szabo: "Trusted Third Parties Are Security Holes" http://nakamotoinstitute.org/trusted-third-parties/ http://nakamotoinstitute.org/trusted-third-parties/

jstanley 9y ago

Fascinating article, thanks for sharing.

eveningcoffee 9y ago

This is the main danger of the app store business model. This is the main danger of a centralized messaging application.

cup-of-tea 9y ago

You don't have to go through Coinbase or any other electronic exchange. It's just that, like many things, it's more convenient so everyone submits to it, and therefore the government, voluntarily.

gedrap 9y ago
What would be a feasible alternative?
- sliverstorm 9y ago
  Craigslist If meeting in person is not convenient enough- well, this is really just the tradeoff you make choosing between Coinbase and Craigslist. Convenience vs security/anonimity.
  - arcticfox 9y ago
    > Convenience vs security/anonimity While true for some, let's be real, the real decision will be between convenience vs. tax evasion.

grandalf 9y ago

This is true, but unless one feels that he/she should not need to pay taxes, it's reasonable for the IRS to demand records from a firm operating in the US that would allow for very quick and efficient tax enforcement. They already do it with banks, etc. While I'd like to see much lower Federal taxes and no more expensive wars of aggression, I don't think there is a principled reason to oppose the IRS doing this very basic audit of tax compliance. After all, the ease of doing an audit is a major feature of a public block chain, and KYC requirements were not introduced by accident. Early adopters of BTC who still use it (or aspire to use it) in an economy that still relies heavily on fiat currencies need to expect this sort of thing to happen. Yes, it's heavy handed but so is everything about the IRS and our massive Federal war/propaganda machine. I suspect Satoshi would have randomized BTC transactions to make the audit impossible but for his anticipation of this transitional phase when fiat regulators have the power to compel firms to disclose non-cryptographically-secured information and link it with KYC data. What can we do? Let's hope that enough of the useful organizational structures found in fiat currencies come to exist for crypto-currencies. Things like insurance markets, dispute resolution, consumer credit, etc. To date most of the benefits of BTC have been related to the ease of sending and receiving funds securely, but there are many more benefits to come as new institutions and mechanisms for cooperation come to exist via blockchain technology that require less trust and authority and less overhead.

lostboys67 9y ago
so you think going back to pre 1900 isolationism will work let alone the moral issue of abandoning the USA's role in the world is a good idea. I suppose Liz II could take you back and put Prince Hal in charge :-)
- grandalf 9y ago
  Not isolationism, simply democratic approval for the scope, budget, and success criteria of military action, and an honest discussion of national interest that doesn't involve fear mongering or appeals to xenophobia or racism. And while I personally view the doctrine of American Exceptionalism as a sort of evil religion that causes much worldwide suffering, I could tolerate it if there was a corresponding definition of national interest that could be used to assess the claims of our political leaders. Its not a choice between the modern massive federal\military bureaucracy and serfdom.

jfaucett 9y ago

> Bitcoin itself is a technology of resistance. Private crypt-currencies more so. this. Centralization of power arguably removes risks and is "safer" - at least so long as the power holder acts benevolently. At least that's the common assumption. However, If we are going to argue against the freedom of Bitcoin technologies and for more safety, centralization and control, we should look at the full context of human flourishing when thinking about what "safety" means. Some people will use BTC tech to do some bad things, they will avoid paying taxes, they will buy drugs, they will hire hitmen. Our societies will have to find better ways to detect and prevent this behaviour. On the flipside though, the USA had a tax revenue of roughly 3.5e9 in 2017 and a military spending of 0.8e9 [1,2]. That's roughly a quarter of all tax revenues. If you think a large portion of that is not leading to the deaths of thousands of innocent people yearly you're dillusional. [3] We need to ask ourselves, and historically we can look at the evidence for/against, whether or not we should trust our Governments to act benevolently. I think the benefits of more checks and balances on the abuse of power, far outweigh the negatives, which we will have to find other solutions for whether we have a Bitcoin technologies or not. 1. https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... 2. https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch... 3. https://www.globalresearch.ca/us-has-killed-more-than-20-million-people-in-37-victim-nations-since-world-war-ii/5492051 https://www.globalresearch.ca/us-has-killed-more-than-20-mil...

Xeoncross 9y ago
> so long as the power holder acts benevolently History fills in the rest.
- RobertoG 9y ago
  History tell us that the powerful always abuse their power, but it also tell us that, government or not government, the powerful always exist. So, you can see modern governments as a power to defeat or as a way of trying to control power.

maxerickson 9y ago

Just remember that tax evasion is criminal and you only get to make 1 mistake.

sealthedeal 9y ago
Tax evasion is unlawful, tax avoidance is your civic duty.
jackstraw14 9y ago
Well, you can make two mistakes if you want to. Probably even three if you're determined.

perlpimp 9y ago

through grapevine I heards that some medium sized chinese exporters already accept coin as a payment. Process already has started, this is a minor inconvenience. Afaik speculating in the first place does not contribute to adoption, not in a direct sense. Music industry did shut down napster digital distribution has grown anyway.

nicodjimenez 9y ago

Exactly. And between Coinbase / bitcoin exchanges vs banks, who do you really trust more to keep all your money safe?