Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?

Op-Ed

When the idea of a working digital currency like bitcoin was introduced, many of its early adopters disliked the current bureaucratic system, with a cartel of bankers pulling the world’s monetary strings. Over time, however, something weird has happened and the idea of permissionless innovation perverted into people literally asking nation states for permission, begging for ETFs, and creating a settlement layer for the ‘new 1%.’

Also Read: Bitcoin Ownership: Your Private Keys to Financial Sovereignty

Bitcoin Changed Everything — But Some People Want to Pervert the Original Goals

Over the last two decades, there’s been a growing faction of anarchists, libertarians, and freedom fighters aiming to change the world. They have become fed up with the sociopaths leading the world into never-ending conflicts and are tired of the central banks printing massive amounts of fiat, devaluing currencies, and causing hyperinflation.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?

Then, after the 2008 economic crisis, a technological innovation called Bitcoin was born, allowing users a medium of exchange that couldn’t be censored. For the first time ever, a software-derived currency gained value, even though it wasn’t backed by a single individual, corporation or nation-state.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?Many people believe cryptocurrencies are meant to end the nation state’s and central bank’s rule over money.

Back in the early days, on Bitcointalk.org and developer IRC channels, Satoshi and other developers discussed many ideas that revolved around removing central authorities. On Feb. 11, 2009, Satoshi posted to the Foundation for Peer to Peer Alternatives (P2P Foundation) introducing his software to the world. Within that specific post, the software’s creator explained that most commerce now relies on third parties and financial institutions that ultimately can’t be trusted.

“Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve,” Satoshi explained. “We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.”

From this point on, not only did Satoshi’s idea changed the entire way people had thought about money, but the entire concept of trusting a third party was turned upside down for those who listened. During Bitcoin’s infancy, there were no discussions of exchange-traded funds (ETF) backed by corporate entities like Cboe and Vaneck. Network fees were a penny or less for the network’s first few years and at that time anyone could send micro-transactions across the globe. But since then, BTC fees have fluctuated wildly, effectively censoring people in developing nations, from time to time, who can’t afford higher fees. This makes the network undesirable for remittances.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?How can BTC be censorship resistant if network fees censor more than half of the world?

Long ago, no one cared about Wall Street deals from Bakkt and institutional money flocking towards bitcoin. Satoshi talked about privacy, Tor and I2P integration back then — not shaking hands with the devil. Most people talked about using bitcoin to remove central authorities in banking, content publishing, music, tipping, domain services using .bit, and literally anywhere they could think of on the open web.

Taboo Talks of Darknets, Avoiding Taxes, and Even Remittances Has Been Replaced With the Need for Status Quo Acceptance

For a while now, these ideas have since been silenced by loud discussions of futures markets, politicians accepting bitcoin, and Wall Street thieves swapping BTC paper notes. Talking about things like darknet markets and the Silk Road is deemed ‘too taboo’ for the masses hoping and praying for elected officials to define bitcoin as ‘money.’

The malaise started in 2015 when blockchain hype jumped into light speed and more people began begging the state for cryptocurrency acceptance. Can you believe people ask permission from bureaucrats to use a permissionless currency? Instead of donating funds to Wikileaks, Antiwar, and other activists on the front lines, people now clap feverishly when they hear Goldman Sachs is contemplating a trading desk.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?My interview with Cody Wilson back in 2015.

We have not yet realized that institutional money does not equate to mass adoption. For some odd reason, many people believe that once big money players jump in on bitcoin, the demand will skyrocket. They grow excited any time a financial incumbent enters the ‘blockchain space’, thinking that this lead to a significant network effect. These individuals seem to forget how small the financial elite is within this world, and they are forgetting or ignoring the massive amounts of people who could use a hard currency without a third party. One would think that mass adoption begins with the people who need it the most — the unbanked. Some people will recall that at one time the remittance industry was regarded as a prime sector for bitcoin to dominate, but nowadays cross-border payments are a distant memory.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?Anarchist Amir Taaki has been very vocal against the current thought leaders and dogmatic followers.

There are certain thought leaders who are pushing a new agenda for Bitcoin technology. Many of these clowns disingenuously imply that the unbanked will be able to use bitcoin despite its high fees. Developers using sophistry act like meritocracy has elevated them to their positions. In fact, they’ve created a disgusting technocracy applauded by those prone to confirmation bias and circular logic.

Bitcoin Intentions: Are We Aiming to Replace the Status Quo or Become Them?In the Bitcoin space ‘thought leaders’ have grown in number. 

Thankfully, they don’t seem to have anticipated the blowback they’ve instigated. The cult of Bitcoin personalities is slowly losing power but it will take time to dissipate. Over the past year, after 2017’s absurd comments about high fees being good for settlement, these individuals have started to promote using fiat over bitcoin.

People should start looking at the early days of Bitcoin again. They should re-read old forum posts and discussions concerning how it was once the goal to remove the world’s money from the state and central banks. Back then people followed a philosophy that aimed for consistent freedom, but the get-rich mentality and permission-seeking mindset has proven pernicious.

As John Lennon once said, it’s easy to become the status quo when you are entrenched in trying to replace them. Bitcoin deserves better.

What do you think about the original philosophy of the early adopters and cypherpunks being replaced by visions of joining the status quo? Let us know what you think about this subject in the comment section below.

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Images via Shutterstock, Twitter, Banksy, and Pixabay. 


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Novogratz Addresses Tether’s Shortcomings, Roubini’s Remarks

Mike Novogratz, the founder of Galaxy Digital Holdings and an avid supporter of cryptocurrencies, has said that Tether has nobody but itself to blame for the recent issues they have been facing.


Novogratz Addresses Recent Tether FUD

Bitcoin bull Mike Novogratz believes that Tether (USDT) needs to be more transparent. He was speaking recently at a conference in Frankfurt, and his observations were published in an article on Bloomberg.

The billionaire investor, founder of Galaxy Digital Holdings, and former partner at Goldman Sachs said, “I think Tether didn’t do a great job in terms of creating transparency.” He added that the digital asset will need time to regain the lost trust.

Tether

Tether, a U.S. dollar-backed stablecoin, experienced panic selling earlier Monday based on rumors that many leading exchanges were going to delist the coin. Traders and investors dumped their USDT holdings in favor of Bitcoin and other stable currencies like the Circle-backed USD Coin (USDC) and Gemini USD (GUSD). This led to a 7% drop – from USDT’s Sunday high of $0.995 to a low of $0.925 on Monday.

“The concept of stablecoins make sense,” Novogratz said, adding that stablecoins have more of a transactional character than other cryptocurrencies like Bitcoin. He further mentioned that he would prefer a stable coin like GUSD as it is backed by a U.S.-based bank like State Street to maintain its backup reserves.

Tether earlier had a banking relationship with Noble, a Puerto Rico-based bank, which recently ran out of cash and is likely to be put up for sale. As reported by Live Bitcoin News, Tether is known to have withdrawn its cash reserves from Noble and switched over to Bahamas-based Deltec Bank.

Seeking to clarify some of the statements made in the Bloomberg article, Novogratz later tweeted:

Also Talks About Roubini’s Senate Remarks

Responding to the recent attack on cryptos by economist Nouriel Roubini during a Senate hearing, Novogratz said that the rise in custodian firms will help give the asset class a boost. He added that these firms have the potential to replace credit card companies. Roubini had called digital money, “the mother of all scams and (now busted) bubbles.”

“You can agree with Roubini on several points, but he is judging cryptocurrencies as if it was a PhD student. Cryptocurrencies are third- or fourth-graders, so still in need to mature,” Novogratz said.

Nouriel Roubini

Observing that the bubble last year was the result of speculation by retail investors, he argued that the investments into cryptocurrency infrastructure and custodian services will help the industry mature.

Novogratz, along with Goldman Sachs, earlier this week announced the investment of over $15 million in BitGo’s custody services arm. He also referred to Fidelity setting up a subsidiary for custody of digital assets.

He believes that custodians may also take over a significant part of the business currently done by credit card companies like Mastercard or Visa. “The transaction costs are much cheaper,” he said, adding “The least the proliferation of custodians will do is drive fees much lower.”

With growing competition from USDC and GUSD, which are more open in their operations, Tether needs to bring transparency in its working if it must maintain its current lead in the stablecoin space.

Do you agree with Novogratz that lack of transparency is hurting Tether? Let us know in the comments below.


Images courtesy of Twitter/@novogratz and Shutterstock.

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Wendy McElroy: Crypto Anarchism and Civil Society – The Technology is the Revolution

Wendy McElroy: Crypto Anarchism and Civil Society – The Technology is the Revolution

News

The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the World Through Anarchism
Chapter 11, Part 3
Crypto Anarchism and Civil Society. The Technology is the Revolution.
by Wendy McElroy

Not only is democracy mystical nonsense, it is also immoral. If one man has no right to impose his wishes on another, then ten million men have no right to impose their wishes on the one, since the initiation of force is wrong (and the assent of even the most overwhelming majority can never make it morally permissible). Opinions—even majority opinions—neither create truth nor alter facts. A lynch mob is democracy in action.

–Morris Tannehill, The Market for Liberty

The simplicity of anarchism is stunning: live and let live. Do not use force against those who also pursue their own lives.

Most people are anarchists in how they conduct daily life with family, associates, and strangers. Whether or not law enforcement is present, most people behave peacefully, and being violent never occurs to them. It is not a police presence that makes people wake their children for breakfast or greet their neighbors on the sidewalk. Legislation does not persuade them not to murder strangers. Civil society does. It manifests the natural harmony of interests between human beings as they interact and separate to pursue their own self-interests.

Violence is the greatest obstacle to the functioning of civil society, especially violence in the form of a state. Just as society consists of individuals cooperating to achieve their own goals, the state consists of individuals who use force for the same purpose; they want wealth and status without earning it. That’s the key difference between the two forms of social organization. With cooperation, both sides benefit from an exchange, or else it does not occur. With violence, one side benefits at the expense of the other; it is might versus the right of people to enjoy their own bodies and property.

In order to continue the flow of unearned benefits, a state must continue to use force or the threat thereof. A successful state does two things: it institutionalizes violence; and it mimics civil society by monopolizing valuable services that would otherwise exist commercially and competitively, such as the adjudication of disputes. The monopoly itself is an act of violence against competitors and so-called customers. The two maneuvers allow the state to embed and to legitimize its power. Individual consent is gradually replaced by state coercion, and the principles of civil society are slowly eroded.

Individuals are vulnerable to the institutionalized and well-organized violence of the state. This is a paradox. The state exists only because individuals produce wealth that it confiscates and regulates. How does the impotent state retain its control over the power of individuals? Why don’t people say “no”?

Part of the answer is the centralization of state violence that intimidates people into the mockery of ongoing cooperation that is called obedience. State violence is centralized into institutions that coordinate the control of society; that is, they control individual exchanges and whatever benefits result. By contrast, individuals are decentralized; most people go about their own business and sleep in their own beds at night. They band together in larger homogeneous groups only when there is an advantage to doing so, such as producing goods or enjoying community. Banding together—centralizing–against state violence means that the violence has become egregious enough for people to disrupt their own lives and risk injury in order to oppose it.

Modern technology is more than a game changer in this dynamic; it is a game reversal. Cryptocurrency epitomizes this. The state centralizes control of wealth through institutions, such as central banking, and a monopoly on the services they provide. Crypto decentralizes the locus of power down to the level of individuals; it gives them back control over their own exchanges. Remember: civil society is the cumulative exchanges of the individuals within it; the state is the cumulative use of force to control those exchanges. Technology returns individuals to the conditions of civil society without a need to relinquish its benefits or to fear violence from the state.


Decentralizing The Revolution

Civil society is empowered and state violence is rendered impotent by three revolutionary steps, each of which occurs due to a radical decentralization of power.

Encryption returns privacy to the individual. Strong cryptography is the antithesis of the massive data collection that states rush to establish. Centralized data allows the state to regulate every activity within a society; gradually, society and the state merge into one unit called the total state. But individuals who control their own data can control their own lives.

The impact of this decentralization is much more than economic. It does more than deprive the state of taxes and other forms of revenue. The technology is a political revolution in and of itself. Consider one example. Modern technology—from encryption to the blockchain to 3-D printers—obsoletes the geographical borders that define a state; namely, a state is the organization that claims a monopoly or jurisdiction of force over a given territory. Its jurisdiction is defended through harsh border policies and tariffs, as well as through military force, if necessary or opportune. But what happens when individuals can leap continents at will to conduct the daily business of exchanging information and wealth? What happens when they do so without permission and privately, simply by pressing a button? Borders become meaningless. How long before states follow suit?

The founding crypto anarchist, Timothy May, considered the boundary-breaking feature important enough to be the opening paragraph of his pivotal 1994 work “Crypto Anarchy and Virtual Communities.” May wrote, “The combination of strong, unbreakable public key cryptography and virtual network communities in cyberspace will produce interesting and profound changes in the nature of economic and social systems. Crypto anarchy is the cyberspatial realization of anarcho-capitalism, transcending national boundaries and freeing individuals to make the economic arrangements they wish to make consensually.”

Technology sidesteps trusted third parties. The state exerts control through monopoly institutions with which individuals must comply if they want to participate in what remains of civil society. The central banking system is an example. In partnership, the state and the banks create money and monetary policies that are enforced by draconian laws; some nations punish counterfeiting with death. The money monopoly offers the state more than economic benefits, such as taxation and inflation. The data collected by banks is a mainstay of social control in two ways. The information and detailed records of every financial transaction are shared with the state, which uses it for social control. Those who eschew the banking system, along with those who are denied access by the system itself, are shut out of important aspects of civil society and from “services” offered by the state; they become secondary citizens. This, too, is social control.

Again, peer-to-peer technology is a game changer here. It sidesteps the trusted third party problem by providing banking services without an intermediary. Individuals become self-bankers, who exchange wealth through their own wallets and an autonomous network. If sophisticated monetary exchanges are desired, then a self-banker can hold an amount in a decentralized and reputable exchange for as long as the transaction requires. Privacy is maintained, and control of specified wealth is temporarily relinquished in exchange for a benefit. This is as close as crypto comes to needing a trusted third party. And, ideally, the decentralized exchange is worthy of trust, in the same manner as a private lawyer who facilitates a contract.

Bypassing unwanted intermediaries was the intent behind the blockchain. Satoshi Nakamoto announced this feature in the first lines of his 2008 White Paper, “Bitcoin: A Peer-to-Peer Electronic Cash System.” Satoshi wrote, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required…”

Freedom no longer requires consensus or groundswell support. This is a comparatively unacknowledged aspect of crypto’s revolutionary impact: the decentralization of revolution down to the individual level. In traditional revolutions, masses of people take to the street after being convinced of the need to rebel. A crypto revolution does not require the centralization of political awareness or resistance within crowds of people who become powerful enough to confront the state. Decentralized individuals can free themselves, one by one, even if they remain a small minority. The more individuals who choose digital exchanges and decentralizing technology, the greater the impact on society will be.

But crypto will never appeal to everyone. Nor should it. The diversity of human beings is too vital and productive to be reined in. The beauty of a radically decentralized revolution is that it succeeds on an individual level; it has no need for consensus rebellion in the streets or collective action at the ballot boxes. Just as crypto anarchy sidesteps trusted third parties, it also bypasses the traditional means by which individuals can achieve freedom.

Everyone can be a self-banker. Everyone can be a self-revolution.


A Mystery Is Solved

The vision of crypto anarchism makes sense of what must be a mystery to many observers: Why did the creators of crypto, the blockchain, and associated technology release their inventions for free? Why was highly-valuable technology thrown to the wind and dispersed like seeds? It was not because crypto anarchists didn’t realize the technology’s potential. Quite the opposite. They saw it clearly.

Crypto anarchists believe that enabling others to control their own lives is an unalloyed “good.” Each person’s peaceful freedom benefits that of everyone else. It creates the community and world in which the crypto anarchists wish to live. The crypto revolutionaries released the technology in the same manner and for the same reason that people teach others how to read. Literacy enriches both individuals and society as a whole. It is not possible for a cynic to explain why the the incredibly valuable phenom of crypto was given away for free. It is a trivial task for idealists.


The State’s Main Chance 

Violence. Violence is how the state maintains itself; it is also the main hope to defeat the threat of crypto freedom. To do so, the state needs to convince people that crypto is the violent factor. Then, the state must convince people that it is what stands between them and “anarchy,” in every bad sense of that word.

There is a grain of truth to the statist claim. All societies contain violence because it is an aspect of human nature. With crypto, the violence is overwhelmingly expressed through fraud and theft. “How can the damage of violence be reined in and rectified?” is always last question asked of peaceful anarchism. And, then, discussion is closed down. It is now time to consider how law enforcement and a court system could be provided by the free market.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.