October 2016 Journal
WORDS is a monthly journal of Bitcoin commentary. This issue collects the October 2016 writing in the WORDS archive. For the uninitiated, getting up to speed on Bitcoin can seem daunting. Content is scattered across the internet, in some cases behind paywalls, and content has been lost forever. That’s why we made this journal, to preserve and further the understanding of Bitcoin.
Why You Can’t Understand Bitcoin
By Beautyon
Posted October 4, 2016
Running from an imaginary threat called “Bitcoin”. You have no clothes on, DERP!
Here are some of the reasons why people can’t understand Bitcoin. It’s taken years to dispel the many myths, misunderstandings and lies that have swirled around Bitcoin. Here is what ails the stragglers.
Computer Illiteracy
You can’t understand Bitcoin because you are Computer Illiterate. This means you have little to no understanding of how your devices or accounts work, and very probably have no interest either. You use Microsoft Windows, “Because its the Standard” . You don’t care how things work as long as they appear to work. You defend your ignorance like the Beavers shore up their dams.
This class of user is a massive problem, not only because they are computer illiterate; most people can get along without knowing the intricate details of the tools they use. They are a massive problem because they are computer illiterate, and they insist on “having their say” about Bitcoin, how it should be treated by market actors, by developers and how Bitcoin itself works.
Crypto Illiteracy
You can’t understand Bitcoin because you are Crypto Illiterate. You don’t encrypt your email, despite knowing that the State and other attackers can and do read all your emails and look at your photos. You prefer wilful, blissful ignorance to easily obtained absolute security, and when pushed to explain why you behave in this irrational way, have only platitudes, fallacies and learned by rote garbage as a response.
This user presents a cultural challenge to anyone who wants privacy to be the default. Many great efforts, aside from the writing of privacy enabling software like GPG, have been undertaken for years, and its only now that that work is bearing fruit in the form of mass adoption on Instant Messaging platforms. There is a long way to go before we achieve total blackout, but now the light at the end of the tunnel is approaching.
Monetary Illiteracy
You can’t understand Bitcoin because you are a Monetary Illiterate. Monetary illiterates come in serveral forms, but there are a small number that are the worst of the worst, and they are responsible for the majority of what’s wrong in this category; Keynesians and Statists. Keynesians believe that the money supply must increase forever. This is a lie. It’s like arguing that the number of numbers must increase over time because the number of things you need to measure is always increasing.
This user of government money is a problem to anyone who wants a stable economy and an end to the warfare state. The inflationary fiat currencies in use today are toxic to liberty, prosperity and peace, and this was one of the reasons Bitcoin was developed; to create a money that was separate from the State, economically sound, global and irrevocable. Monetary illiteracy is what stops people clamouring for sound money. They have no idea they are being robbed on a daily basis. If they understood what was being done to them, it would be pitchforks and bonfires in every world capital.
Statism
You can’t understand Bitcoin because you are a Statist. A Statist is a man or woman who believes that only the State should be the final arbiter of every activity man can engage in. In Bitcoin, Statists are a constant irritant and lethal toxin. Their belief that people should be forbidden from sending messages to each other over a public network is un-American and completely irrational. You don’t need to identify yourself to use WhatsApp, and its messages are fundamentally no different to Bitcoin; its encrypted with the same “tech” Bitcoin uses, yet these Statists can’t explain why the latter should require a passport to use and the former does not.
This user is delusional, violent and extremely destructive to human progress. She believes everyone must be dragged down to her level of base stupidity, and is very often a monstrous admixture of all the bad qualities listed above and below, increasing her toxicity. Once again, these people are not content to wallow in their own mud; they insist on dirtying and contaminating everything they touch with their error, making it increasingly difficult to get work done, make progress, integrate seamlessly with the market and help humanity. Eventually these people are always swept away by the flow of history, but when they are at their peak, they are a constant chafing, sore making irritant.
Clinical Paranoia
You can’t understand Bitcoin because you are Clinically Paranoid. People with paranoid personality disorder are very suspicious of other people. They often feel that they are in danger, and constantly look for evidence to support their irrational suspicions. They have trouble seeing that their distrustfulness is out of proportion to their environment. There are many people like this, who will (for example) immediately select only the perceived flaws in a new device or service, rather than the obvious benefits. In Bitcoin, an example of this would be immediately pointing out that it can be used by criminals to pay debts. Once again, this demographic overlaps with some of the other categories listed here.
This user is highly distracting and negative, and they exist in every generation. The same class of individual made bogus, unsubstantiated claims the State had broken PGP (it never did) and today, they claim that Bitcoin is broken (it isn’t) or that some vendor with a radical new design is vulnerable to an abstract Straw Man Flaw (nonsense). It appears that we will be stuck with these types forever as there are always insane people in every generation, and the only way they can be shut up is if mass adoption of the trigger for their paranoia makes it socially unacceptable to spread FUD. There are only two good things about these types: 1) They sometimes provide healthy analysis. 2) They are powerless, since they don’t overlap with the State when talking only about the hardware and software.
Eventually, as the killer Bitcoin business model emerges, everyone will settle on the correct definition of Bitcoin, and no one will suffer from any of the traits above. Bitcoin will become as normal as bottled water. It will invoke no curiosity, questions or false assumptions. It will just be. It will be everywhere, in every pocket, on every computer, just like email, just like cameras and telephony.
Computer Illiteracy will not matter, because the workings will disappear.Crypto Illiteracy will not matter, just as it doesn’t to WhatsApp users.Monetary Illiteracy will disappear with the death of Keynesianism.Statism will disappear…because there will be no State!Clinical Paranoia will remain. For the lulz.
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Fungibility and Irrationality
By Beautyon
Posted October 11, 2016
You can’t be for Bitcoin and against it at the same time. It’s not rational to implement Know Your Customer (KYC) and Anti Money Laundering (AML) and also to expect Bitcoin adoption to go viral.
Lets start with the definitions of “fungibility” and “irrationality”:
Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are “capable of being substituted in place of one another”.
and…
Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate use of reason, or through emotional distress or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful, or more illogical than other more rational alternatives.
Bearing these definitions in mind, lets look at the current irrational practices of a handful of Bitcoin market participants and startups whose effect is to slow Bitcoin’s growth in their jurisdictions. Remember also; every properly run Bitcoin business wants Bitcoin adoption to go viral, so their fees can shoot through the roof and they can profit.
Anyone who wants Bitcoin to succeed needs to understand that Bitcoin must flow between users without any impediments beyond owning a device or downloading an app, in the same way WhatsApp messages flow from person to person through an app on a device. That means anything that stops or slows Bitcoin acquisition or flow between wallets is bad for Bitcoin or “Anti Bitcoin”. Here are four examples of Anti Bitcoin practices:
- Asking users to “Sign Up” to your service with usernames and passwords
- Requiring KYC/AML as a condition of service
- Arbitrary limits on the amount of Bitcoin your service will transfer
- Bitcoin Blacklists
One of Bitcoin’s powerful features is that you don’t need to collect any information about the user in order to offer them service. You can even use The Bitcoin Network as a secure and anonymous means of identifying users and managing their accounts.
All of the Anti Bitcoin practices in the bullet list above are in place at some Bitcoin businesses. These Anti Bitcoin practices are not only highly damaging and risk enlarging to the businesses that implement them, but they are completely irrational to boot.
Bitcoin Surveillance Companies are Anti Bitcoin.
Imagine a company that has pivoted from the ethical business model of “Bitcoin Storage” to becoming a Surveillance Service (SS) provider to the State. They understand how the Bitcoin of today works, and made a calculation that leverages the ignorance of the State and public paranoia; bridging the experience gap is a valuable service, and allows businesses to act as specialist contractors. It was always inevitable that a company like this would pivot to an unethical business model; Bitcoin doesn’t require safes and banks for it to be stored safely, and the sort of “thinking” that produces Bitcoin Banks as a business model can only come up with bad business models and bad faith pivots to crony capitalism.
Cash is a natural form of exchange. When you use it, you don’t have to think about anything other than the parameters of your exchange; are you getting your money’s worth? When surveillance is added to cash, you have to think about the purchase and whether or not what you are doing could land you in arbitrary trouble in the future after the purchase.
Bitcoin transactions related to acts classified as crimes in some jurisdictions.
People who are otherwise perfectly innocent worry about spending cash because it “looks suspicious” by dint of an arbitrary, chance connection to another person’s transaction. This damaging psychological effect interferes with the free flow of commerce, dampening its efficiency and is anti Praxeological. Companies providing SS to the State introduce negative, anti market effects into Bitcoin, and because Bitcoin’s records are forever, the increase of these ill effects over time is infinite, eventually encompassing all transactions.
You don’t know when the purchase history of your Bitcoin may be used against you (guilt by association), or if the Bitcoin you are having signed to your private key (not “receiving” since Bitcoin never actually moves anywhere) has been used in the commission of a crime. Quite rationally, you will be less likely to adopt, receive or spend Bitcoin because its less private than cash, and in the case of accepting Bitcoin in return for goods or services, less likely to do so because you don’t know the provenance of the Bitcoin you are receiving in advance. Why take the risk?
Therefore, we can say categorically…
Anyone who helps foster and solidify Bitcoin surveillance, or runs a company that provides that service, is an irrational, self harming enemy of Bitcoin.
KYC/AML is Anti Bitcoin.
At least two currently operating companies block accounts that receive Bitcoin that appear on an arbitrary blacklist of addresses maintained by them. These blacklists are not mandated by law, nor are they offered by the State; this is something bad market actors have come up with themselves, and is voluntarily implemented. These Anti Bitcoin companies will close your account (in themselves accounts linked to real world identities are Anti Bitcoin by default) if you receive Bitcoin that has passed through a wallet of a blacklisted address.
This is pure Anti Bitcoin. It means that if you use one of the two companies described here to receive Bitcoin and unbeknownst to you that Bitcoin has passed through addresses on their blacklist, you will be judged as guilty of the crime the Bitcoin you are receiving was involved in, and your account will be frozen and shut down. For the sake of removing any doubt, these companies have every right to write whatever lists and blocking software they choose. They can run whatever software they want and try to make a success of what they are doing, and they are under no obligation whatsoever to serve anyone. What they cannot claim is that they are pro Bitcoin, because blacklists are pure Anti Bitcoin. They actively destroy the necessary condition of one Bitcoin being equivalent to every other Bitcoin, essentially rendering Bitcoin almost useless in their services and even de facto destroying some Bitcoin. Much is made of “the community” of Bitcoin; these policies are clearly against the community’s best interests, since they spoil Bitcoin’s fungibility.
Not only is blacklisting Bitcoin incredibly stupid, it is in total opposition to trying to foster Bitcoin adoption, and reality. Since the number of Bitcoin in existence is permanently fixed, eventually all Bitcoin on Earth will have been used in every possible human activity. Eventually there will be no “Clean Bitcoin” anywhere at any price; in fact the US Dollar is in exactly this position right now. 90% of all dollars in circulation are tainted with cocaine residue.
Bitcoin can never be put in a G-String.
If retailers were to take the stance of the two Bitcoin companies I do not mention here, 90% of all money would be unspendable and worthless. Clearly everyone simply ignores that most cash has been involved in “crime” because the utility of money is more important than crime committed with it. There is legal precedent too for the provenance of money to never be taken into account when it is presented for a transaction by an owner of it; see Crawfurd v. The Royal Bank. This caselaw is well understood and its shocking that the law firms advising these companies didn’t hold it up as iron clad proof that blacklists were not needed and indeed were suicidal and inappropriate. There are reasons why an extralegal recommendation like this might have been made of course. One thing is for certain; Bitcoin businesses who don’t adopt the legal precedents, especially when they are mischaracterizing Bitcoin as money, are, to be generous, amazingly, astoundingly dumb.
Therefore, without a shadow of doubt, we can assert that…
Anyone who implements, shares, promotes and or sells the service of Bitcoin Blacklists is an irrational enemy of Bitcoin.
Opposing Bitcoin Anonymity is Anti Bitcoin
Anonymity is central to fungibility. If you know you are being watched while your’e using money, your calculations are not solely Catalactic. Any company therefore, that opposes anonymity in Bitcoin is anti fungibility and Anti Bitcoin, as I have already described.
KYC/AML is different to Bitcoin anonymity. When you are “verified” with arbitrary and irrelevant biographical information at a Bitcoin business, you are allowed to transact without explicit surveillance up to a limit of fiat or Bitcoin. Anonymity in the case of Bitcoin on the other hand, means the entire network and all transactions across it going dark at the protocol level. In other words, the network itself becoming anonymous as opposed to parasitic service providers at the edges violating your privacy under contract or not, or opting for an exiting and ethical device like OpenDime or not.
You have a right to speak in private. Bitcoin is speech. Combining these two tells us that anyone against Bitcoin anonymity is Anti Bitcoin. The only arguments that can be made against this are fallacious, and are arguments that don’t take Bitcoin’s true nature into account. When you accept what the true nature of Bitcoin is, it is inescapable that State mandated KYC/AML, blacklists, withdrawal limits and other nonsense are clear rights violations.
It should therefore, be abundantly clear that…
Anyone who opposes Bitcoin anonymity or improvements to the protocol that implement it or devices and services that provide Bitcoin anonymously is unethical, and an enemy of Bitcoin.
Thankfully many people understand this, and most importantly, the men who are in charge of writing the software that controls Bitcoin are aware of the need for Bitcoin to be cash like. That means anonymous and traceless. There is more than one way this can be done, in both hardware and software. Without fungibility, Bitcoin is less powerful than cash, when it should (and will be) many times more powerful than cash.
The people working to cripple Bitcoin are bereft of ideas, bereft of their senses and on the wrong side of history. Whether Bitcoin becomes anonymous or not, everyone will eventually have to accept that blacklists are a non starter thanks to the “Cocaine on Cash” rule, and companies that use blacklists will be punished by the market if they do nothing less than completely abandon them.
Bitcoin will become anonymous by default, just as the dollar is, and in the future the history of each Bitcoin will never be used against its current owner. Just as you can’t be convicted of using illegal drugs because your $100 bill has traces of cocaine on it, or the last user of it was a criminal; the majority of money has the property of being used in a crime, and nothing bad can be assumed about you because of the history attached to the money you own.
Perfect fungibility will eventually be the global default in Bitcoin and that is an entirely good thing.
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