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Bitcoin was supposed to be the financial revolution that freed us from banks and governments. Instead, it’s becoming the most powerful surveillance tool in hist

Bitcoin was supposed to be the financial revolution that freed us from banks and governments. Instead, it’s becoming the most powerful surveillance tool in history. Every transaction is public. Every wallet is trackable. Chain-analysis firms are mapping financial behavior with surgical precision. And regulators love it. Monero is the last stand. If privacy doesn’t become the default in digital finance, it will soon be criminalized and erased. The internet made the same mistake: TCP/IP was built for openness, not privacy. Now, decades later, Tor and I2P are playing catch-up against mass surveillance. Monero is trying to fix Bitcoin’s mistakes before history repeats itself. We are at a crossroads. If Bitcoin remains transparent by design, financial surveillance will become irreversible. If Monero gets crushed, there is no Plan B. I wrote a deep dive into this issue—how we got here, what happens next, and why this moment is critical. Would love to hear your thoughts.

globular-toast 2y ago
Are you aware of GNU Taler?
- beeflet 2y ago
  The problem with digicash-type of solutions based on blind signatures like GNU Taler, is that you need a centralized service to operate them. Digicash failed because banks wouldn't adopt it, and you have to recognize that centralized infrastructure profits off of the payment data and is susceptible to regulation and lock-in. I am optimistic about GNU Taler (clearly it has superior privacy and throughput versus cryptocurrencies), but you have to be aware of the possibility of re-creating the existing financial system.
  - jxjnskkzxxhx 2y ago
    What's wrong with the existing financial system?
    - beeflet 2y ago
      If you've been reading the news, you might laugh if I told you that the original goals of cryptocurrency were to combat the high fees, surveillance, and insecurity associated with centralized payment infrastructure. But that just goes to show how deeply original goals of cryptocurrency have been undermined by speculators and gamblers.
      - jxjnskkzxxhx 2y ago
        I pay zero fees tho. And centralised Vs decentralized doesn't really affect my use, it's just an implementation detail.
        beeflet 2y ago
        The vendors you spend at have to pay for credit card processing fees. That cuts into the margin for the business and ultimately the consumer pays for that, whether they recognize it or not. Issues like surveillance and insecurity are largely political and by the time they are realized on an individual level they are too late to solve. It is pretty easy track down protestors when the government has access to the network of all their transactions. Not to mention control: payment processors are private companies and can simply choose not to do business with you, locking you out of the market. With a typical bank, your money is protected by "open source" information like your name, address, and such. If you can copy information from a credit card you have everything you need to authorize a transaction: skimming is a major issue. When this security inevitably breaks down, it's called "identity theft" and the responsibility is pushed onto the consumer who has no agency to secure themselves. In a cryptocurrency, it's a keypair so the information needed to authorize the transaction (private key) is separate from the information needed to verify it (public key). And the end user has ownership of the keypair so they can take initiative in their own security. If they want to use a certain hardware token, they can do that. If they want to outsource some security to a third party, they can do that voluntarily with a multi-signature scheme.
        jxjnskkzxxhx 2y ago
npoc 2y ago
The Bitcoin network, bitcoin's base layer has to be at most pseudo-anonymous in order to prove the total amount of bitcoin. This is fine, because the Bitcoin network will not be used for everyday transactions. They will be performed on a higher-level network such as Lightning, Paypal etc. which are optimised for smaller, frequent transactions, rather than large transactions like the base layer. Monero has no proof of supply, and so I would have little confidence in storing my value in it.
- beeflet 2y ago
  Nonsense. The range proofs are the proof of supply. If you have a cryptocurrency where the range proofs don't work, you obviously have bigger problems than the supply. I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure. The bitcoin base layer is not pseudo-anonymous because chain analysts have access to data from exchanges and can de-anonymize the rest of users and transactions from this data. So it is transparent, but only for powerful institutions and not society at large. The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them. Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions.
  - npoc 2y ago
    > Nonsense. The range proofs are the proof of supply. If you have a cryptocurrency where the range proofs don't work, you obviously have bigger problems than the supply. Would you mind explaining how I might do a full audit of the total Monero supply using range proofs? > I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure. bitcoin on the Bitcoin network is not really a currency - the transaction fees are independent of the transaction size making small value exchanges extremely expensive, and large value exchanges extremely cheap. It's a crypto-asset that's optimised for storing large amounts of value of large amounts of time (similar to gold, but much improved). > The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them. The lightning network does not use public broadcasting of transactions. It works in a similar way to the Tor network, with an onion protocol. > Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions. No it doesn't recreate infinite money printing, which is the problem bitcoin solves, and why it will ultimately suck all the value out of fiat currencies. People can already practically self-custody, there is no need to use it for everyday transactions - it will have enormous success simply as a savings tool. In addition, it is fully auditable, meaning you can have your bitcoin fully or partially custodied by a third-party but have full access to the public keys for the bitcoin wallet, proving your money is where the custodian says it is. Something that's practically impossible with gold/fiat.
TeMPOraL 2y ago
There can't be financial privacy as long as there is a need to pay taxes - and therefore to be able to tell if you're paying them (and in the correct amount). There can't be a financial system if there are no taxes, because financial system is maintained by some form of government, which needs money to operate, and both are function of scaling up human societies. Therefore, financial system and financial privacy are mutually exclusive in practice.
nona 2y ago
While I was originally interested in the promise of bitcoin as a means of exchanging money bypassing banks, these days I'm wondering if complete secrecy is still a good idea. Are taxes – any taxation at all – a good idea? I would say yes – funding common infrastructure and services as charities or private companies seems doomed to fail. Making all financial transactions secret would make tax evasion rampant. What about money coming from criminal enterprises, ie. money laundering. What about extreme concentration of money, having an outsized and untraceable influence on our political system and increasing regulatory capture to the extreme. I'm not against disruption of our financial system in principle, but it seems we'll first need to also come up with good answers on how we organize society. A society of working poor, with a small but extremely wealthy elite doesn't seem like a good deal – even for the extremely wealthy.
- beeflet 2y ago
  You don't need to implement a sales or income tax in order to subsidize the government's operations. One proposal by "single tax" based on property tax, proposed by a certain Henry George has interesting merits. One such merit is that it is pretty hard to hide from a property tax. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax I think that in this century we've become accustomed to the existing credit card payment systems that have access to all of our payment data and are allowed to do with it what they wish (and by extension, the government also can subpoena our payment data in investigations). But if you look back in history this is a pretty new idea. Giving the government access to every single payment you make is pretty dangerous if you have a change of regime into something more authoritarian like in the case of China. I think that if cryptocurrency can provide about the same level of fungibility and privacy as ordinary cash, that would be fine. You can track marked bills with some level of effort (kind of analogous to an EAE attack in the cryptocurrency world) but the general principle is that not every transaction is automatically logged in some easily inspectable database and sold to the highest bidder.
- borgdefenser 2y ago
  We had currency secrecy in the past with physical cash. It is probably inevitable with currency secrecy that you get something like the mafia. At least physical cash though put a constraint on the scale of the mafia. A global, secret, digital currency will inevitably lead to organized crime on the scale of the currency. It is just an absolutely terrible idea. The appeal is in the abstract because it is easy to ignore the downside risks in the abstract.
Yizahi 2y ago
A few libertarians wanted to free humans from greedy banks and govts. But suddenly they have discovered that banks and govts are a feature, not a problem. Fully trustless society is a hellish dystopia, of the likes portrayed in the sci-fi books. And systems with at least some amount of trust function better if the trusted entity is government or at least some known person, and not come criminal sitting in the non-extradition offshore operating token network from a single laptop with zero oversight and zero restrictions. PS: but cudos where they are due - at least Monero folks have a clear purpose, a clear vision and they are executing according to it. Unlike slimy gamblers from BTC and other tokens, who all pivoted to scams and frauds and completely abandoned any notion of the original whitepaper about decentralized private currency.

globular-toast 2y ago

Are you aware of GNU Taler?

beeflet 2y ago
The problem with digicash-type of solutions based on blind signatures like GNU Taler, is that you need a centralized service to operate them. Digicash failed because banks wouldn't adopt it, and you have to recognize that centralized infrastructure profits off of the payment data and is susceptible to regulation and lock-in. I am optimistic about GNU Taler (clearly it has superior privacy and throughput versus cryptocurrencies), but you have to be aware of the possibility of re-creating the existing financial system.
- jxjnskkzxxhx 2y ago
  What's wrong with the existing financial system?
  - beeflet 2y ago
    If you've been reading the news, you might laugh if I told you that the original goals of cryptocurrency were to combat the high fees, surveillance, and insecurity associated with centralized payment infrastructure. But that just goes to show how deeply original goals of cryptocurrency have been undermined by speculators and gamblers.
    - jxjnskkzxxhx 2y ago
      I pay zero fees tho. And centralised Vs decentralized doesn't really affect my use, it's just an implementation detail.
      - beeflet 2y ago
        The vendors you spend at have to pay for credit card processing fees. That cuts into the margin for the business and ultimately the consumer pays for that, whether they recognize it or not. Issues like surveillance and insecurity are largely political and by the time they are realized on an individual level they are too late to solve. It is pretty easy track down protestors when the government has access to the network of all their transactions. Not to mention control: payment processors are private companies and can simply choose not to do business with you, locking you out of the market. With a typical bank, your money is protected by "open source" information like your name, address, and such. If you can copy information from a credit card you have everything you need to authorize a transaction: skimming is a major issue. When this security inevitably breaks down, it's called "identity theft" and the responsibility is pushed onto the consumer who has no agency to secure themselves. In a cryptocurrency, it's a keypair so the information needed to authorize the transaction (private key) is separate from the information needed to verify it (public key). And the end user has ownership of the keypair so they can take initiative in their own security. If they want to use a certain hardware token, they can do that. If they want to outsource some security to a third party, they can do that voluntarily with a multi-signature scheme.
        jxjnskkzxxhx 2y ago

npoc 2y ago

The Bitcoin network, bitcoin's base layer has to be at most pseudo-anonymous in order to prove the total amount of bitcoin. This is fine, because the Bitcoin network will not be used for everyday transactions. They will be performed on a higher-level network such as Lightning, Paypal etc. which are optimised for smaller, frequent transactions, rather than large transactions like the base layer. Monero has no proof of supply, and so I would have little confidence in storing my value in it.

beeflet 2y ago
Nonsense. The range proofs are the proof of supply. If you have a cryptocurrency where the range proofs don't work, you obviously have bigger problems than the supply. I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure. The bitcoin base layer is not pseudo-anonymous because chain analysts have access to data from exchanges and can de-anonymize the rest of users and transactions from this data. So it is transparent, but only for powerful institutions and not society at large. The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them. Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions.
- npoc 2y ago
  > Nonsense. The range proofs are the proof of supply. If you have a cryptocurrency where the range proofs don't work, you obviously have bigger problems than the supply. Would you mind explaining how I might do a full audit of the total Monero supply using range proofs? > I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure. bitcoin on the Bitcoin network is not really a currency - the transaction fees are independent of the transaction size making small value exchanges extremely expensive, and large value exchanges extremely cheap. It's a crypto-asset that's optimised for storing large amounts of value of large amounts of time (similar to gold, but much improved). > The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them. The lightning network does not use public broadcasting of transactions. It works in a similar way to the Tor network, with an onion protocol. > Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions. No it doesn't recreate infinite money printing, which is the problem bitcoin solves, and why it will ultimately suck all the value out of fiat currencies. People can already practically self-custody, there is no need to use it for everyday transactions - it will have enormous success simply as a savings tool. In addition, it is fully auditable, meaning you can have your bitcoin fully or partially custodied by a third-party but have full access to the public keys for the bitcoin wallet, proving your money is where the custodian says it is. Something that's practically impossible with gold/fiat.

TeMPOraL 2y ago

There can't be financial privacy as long as there is a need to pay taxes - and therefore to be able to tell if you're paying them (and in the correct amount). There can't be a financial system if there are no taxes, because financial system is maintained by some form of government, which needs money to operate, and both are function of scaling up human societies. Therefore, financial system and financial privacy are mutually exclusive in practice.

nona 2y ago

While I was originally interested in the promise of bitcoin as a means of exchanging money bypassing banks, these days I'm wondering if complete secrecy is still a good idea. Are taxes – any taxation at all – a good idea? I would say yes – funding common infrastructure and services as charities or private companies seems doomed to fail. Making all financial transactions secret would make tax evasion rampant. What about money coming from criminal enterprises, ie. money laundering. What about extreme concentration of money, having an outsized and untraceable influence on our political system and increasing regulatory capture to the extreme. I'm not against disruption of our financial system in principle, but it seems we'll first need to also come up with good answers on how we organize society. A society of working poor, with a small but extremely wealthy elite doesn't seem like a good deal – even for the extremely wealthy.

beeflet 2y ago
You don't need to implement a sales or income tax in order to subsidize the government's operations. One proposal by "single tax" based on property tax, proposed by a certain Henry George has interesting merits. One such merit is that it is pretty hard to hide from a property tax. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax I think that in this century we've become accustomed to the existing credit card payment systems that have access to all of our payment data and are allowed to do with it what they wish (and by extension, the government also can subpoena our payment data in investigations). But if you look back in history this is a pretty new idea. Giving the government access to every single payment you make is pretty dangerous if you have a change of regime into something more authoritarian like in the case of China. I think that if cryptocurrency can provide about the same level of fungibility and privacy as ordinary cash, that would be fine. You can track marked bills with some level of effort (kind of analogous to an EAE attack in the cryptocurrency world) but the general principle is that not every transaction is automatically logged in some easily inspectable database and sold to the highest bidder.
borgdefenser 2y ago
We had currency secrecy in the past with physical cash. It is probably inevitable with currency secrecy that you get something like the mafia. At least physical cash though put a constraint on the scale of the mafia. A global, secret, digital currency will inevitably lead to organized crime on the scale of the currency. It is just an absolutely terrible idea. The appeal is in the abstract because it is easy to ignore the downside risks in the abstract.

Yizahi 2y ago

A few libertarians wanted to free humans from greedy banks and govts. But suddenly they have discovered that banks and govts are a feature, not a problem. Fully trustless society is a hellish dystopia, of the likes portrayed in the sci-fi books. And systems with at least some amount of trust function better if the trusted entity is government or at least some known person, and not come criminal sitting in the non-extradition offshore operating token network from a single laptop with zero oversight and zero restrictions. PS: but cudos where they are due - at least Monero folks have a clear purpose, a clear vision and they are executing according to it. Unlike slimy gamblers from BTC and other tokens, who all pivoted to scams and frauds and completely abandoned any notion of the original whitepaper about decentralized private currency.