Will The Individual Please Stand Up
In America, we once thrust into the future with a curious sense of exploration that was unequivocal the world over. A synthesis of hard work, ambition, and open-mindedness steered our civilization to the height of technological prowess and achievement. We are a mixed people of diverse backgrounds and ideological dispositions, but, nonetheless, have remained united under the auspices of a notion that we are better as the sum of our parts for 244 years.
In spite of our successes, the fatal premonition that we may succumb to the adverse effects of our achievements grows more palpable than ever. Technology, under its unassailable shield of human progress, has embedded pernicious tendencies in our capacity to reason.
For all our evolutionary edge over our ancestors dating back millennia, we remain blinded by our hubris that indulges recursive behavior. We have become a victim of collective thought where we stand before the same headsman that fell our ancestors.
We face the ouroboros of our time. Where our ability to discern whether the digital world is an escape from the physical, or the physical and escape from the digital, has become clouded.
Technology has augmented the more embarrassing cognitive tendencies of ignorance and confirmation bias. In doing so, it has made mob rule more trivial and comfortable, ignorance ubiquitous, and kindled conformism to an alarming extent. That conformism is even advocated, but not in the manner in which it is obvious. We have swapped non-conformist erudition for conformist cultural behavior, crafting a dangerous threat to independent thought.
This essay, and how I intend to follow it, is not just another piece in a series of essays about how bitcoin will change the world. I derive my intention from a more subtle heuristic that bitcoin helped illuminate as I have followed its ascendance. Bitcoin is a useful prism to expose a blossoming quandary across the world, and the struggle to emerge with a result that proves our hubris can be tempered.
This is the prologue to a 12-part essay series,
Wielding Context, which gradually tracks a strange story of individual empowerment. It is a prism for grasping a powerful tool in the arsenal of crafting a more skillful intuition — context.
And it draws its inspiration from an idea that will not die.
There’s a certain adversarial feeling that Bitcoin engenders among its most uncompromising supporters. Outsiders perceive such hostility as toxic. Meanwhile, core proponents view antagonism towards bitcoin as more of the same fear of change and misconceptions spouted throughout the cryptocurrency’s existence.
With such a revolutionary concept, it’s not surprising that the reception of bitcoin has been nothing short of polarizing.
Bitcoin is antifragile for several reasons. But one of the most overlooked causes is the intrepid stance that its most diehard supporters have taken in stride with the accompanying criticism.
Cypherpunks built precursors to bitcoin with the unabashed intent of tilting at the financial and political hegemony. Bitcoin is a manifestation of their vision, not an armchair critic’s. It is a vision that necessarily entails a small antagonistic community cutting down puff piece narratives and perceptions of bitcoin that do not align with the original intent.
If people want a fully-regulated bitcoin with KYC/AML gateways and a malleable monetary policy, they can join the #XRPArmy.
Whether that resolute perspective on the potential of bitcoin draws from cypherpunk roots and ideological preferences, the promise of a censorship-resistant digital currency, or anger at the concealment of risk in the current financial paradigm, it doesn’t matter.
Bitcoin has transformed into more than just some fringe cryptocurrency. Perhaps fueled further by the anonymous nature of its founder, Satoshi Nakamoto, bitcoin is much more than a technological abnormality with the ability to break conventional financial shackles.
Bitcoin is an idea that has become unstoppable.
The positive externalities that it has already sparked are not only noteworthy, but they may come to shape the very technological, social, and geopolitical landscape of the next few decades.
Bitcoin has become a global messenger for the empowerment of individual liberties.
But it’s the more intended narrative where it procures its invincibility as an idea: for the first time in history, people realize they have optionality of money. And not just any money, an unprecedented form of digital currency that has arisen from the crucible of technology and finance — the money chosen by the market, not governments.
It is inevitable that droves of people will gravitate towards such a visceral concept, whether bitcoin is the flag-bearer of such a wholesale transition or not. You may be able to destroy bitcoin, but the powerful idea underscoring its ascendance will only grow in strength with time.
Down The Rabbit Hole
A remarkable aspect of bitcoin is the individual journeys that random people undergo to learn more about it, and by extension, many other relevant fields. Myself included, I’m sure that many people enthralled by the concept of bitcoin are driven by a curiosity into why we never understood how much of modern central banking and finance worked, and have an insatiable desire to learn more.
And what’s very telling is that the feeling is widespread, dispersed among people of all backgrounds from around the world. Just ask anyone how they got into bitcoin, and you’ll hear a wholly unique, enlightening story.
We often forget how important of a role money and commerce play in our daily lives, and so it is easy to overlook the global financial system if you’re not professionally involved in it — until you discover bitcoin. Even with financial literacy into contemporary markets, making connections between the history of finance and the modern economy requires an abundance of dedication to uncover.
Historical and contemporary financial literacy should be seared into the minds of elementary, middle, and high schoolers. It shouldn’t be confined to college entrants in a financially-oriented major or a random stumble into bitcoin.
Maybe they’ve changed the curriculum for K-12 students today, but real-world evidence strongly dictates otherwise.
The noticeable financial illiteracy of my fellow Millennials and Generation Z is representative of a continued sharp decline in the area. Moreover, such financial illiteracy is inextricably linked to the tendency of younger generations to fall prey to Socialist chimeras.
Inevitably, such holes in our educational system when it comes to the history and nature of money will erode the vitality of liberties and fixtures of free markets that allowed bitcoin to arise in the first place. As a corollary, the theaters of external benefits that bitcoin provokes will also be disparaged. Namely, property rights, privacy, free speech, and other victims of political oppression as the state grows more omnipresent.
That’s why bitcoin exists in a much more abstract state than solely an invention at the convergence of money and technology.
It functions as a conduit for understanding the limitations of government-issued fiat currencies and helps pull back the veil of sophistry used in ridiculous schemes like modern monetary theory. It highlights pillars of Western civilization like property rights and has sparked a movement into privacy protections in a digital age of surveillance and emboldened authoritarian political regimes.
The information journey that curious bitcoin explorers embark on leads them to investigate other fields highly relevant to ongoing geopolitical and social developments.
But the heart of bitcoin remains a monetary invention.
At its most basic, bitcoin is an alternative form of money. You can choose to accept it or not, but it’s going to be there, regardless, to help people when they need it. Bitcoin is not mutually exclusive with the existing financial paradigm; it is simply an optional monetary system that contemporaneously illuminates some of the darker corners of the legacy market.
It only needs to exist in the form envisioned by cypherpunks, and that is all.
For the first time in history, armed with the power of the Internet and a legitimate competitor to central banking, the financial stage has never been so conducive to individual liberties amid a concerted threat to curtail them.
Cypherpunks presented the red pill to society, and people finally have a choice to take it down the rabbit hole.
A Most Loathsome Way to Die
In the 2016 movie, The Nice Guys, featuring Ryan Gosling and Russell Crowe, the two leads have a brief exchange towards the end of the film where Crowe’s character describes a story of a man who was momentarily pronounced dead and experienced a strange vision during his temporal interruption.
He saw Richard Nixon. Terrified, the man then came back to life and shared the phenomena.
Using a prolix story to convey the point that there are two ways to look at something, Crowe heckles Gosling for detailing an odd story when a simple sentence would’ve sufficed. Crowe’s point was that it’s impossible to know if everyone sees Nixon before they die or if it was specific to that individual’s case.
In 1971, the John Hancock of that very same Richard Nixon put into motion a series of events that have had an outsized impact on America and the rest of the world. That watershed instant in history is mostly glossed over, but considering the negative consequences it has produced today, it begs the question:
The pressure to make the decision primarily stemmed from the quandary of stagflation in the US economy. At the same time, European countries were demanding the conversion of their US Dollar reserves for gold.
Persistently high inflation and unemployment accompanied by slow economic growth present a daunting problem for centrally-managed economies. In the early 1970s, the combination of stagflation in the US and UK with European disgruntlement set the table for the contemporary monetary system.
“I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States. Now, what is this action—which is very technical—what does it mean for you? Let me lay to rest the bugaboo of what is called devaluation. If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today. The effect of this action, in other words, will be to stabilize the dollar.”
Notice what happened in 1971. It is not a coincidence.
These entities invest in real assets that inflate in value from the expansion of the money supply, leaving the middle and lower classes to feel the tangible effects of inflation — reduced purchasing power of their income as consumer prices rise paired with gradually overpriced assets when they enter the market.
“In my view, derivatives are weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
Derivatives provide an effective tool for price discovery, hedging, smoothing volatility, and more — but it comes at a high cost. And sometimes, a lethal one.
Randomness is uranium to those who don’t understand its nature, and a cursory glance at the 2007-2008 financial crisis exposes the type of tail risk that cannot be willfully ignored anymore.
These CDOs made it possible to inject bad debt (e.g., PLS-enabled subprime mortgages) into investment-grade bonds, you know, the type pension funds invest in, ominously coinciding with the
Bankruptcy Bill of 2007. Millions of homeowners eventually defaulted on their mortgages, the underlying commodity of the obscure CDOs, triggering a terrible cascade of events.
Nothing to see here.
Nixon doomed fiat currencies with an egregious violation of people’s most precious resource — time.
People could no longer project value from income streams over time even remotely accurately. Your time was no longer yours because the government demonstrated a willing capacity to sever the public’s trust with a signature at its whim, lie about it, and then have the audacity to broadcast it as in “the best interests of the United States.”
These effects are much more common than they seem, and appear to be growing in severity.
As Mark Twain once famously said using his inimitable style:
“History doesn’t repeat itself, but it does rhyme.”
I ask you, why place your trust in a government-controlled monopoly on money when they repeatedly abuse that trust? Blind trust in a government-controlled monopoly of money is, quite simply, an offensive proposition.
Take a chance and learn more about bitcoin.
Now on deck for the inviolable guillotine of monetary history, it is highly probable that a ghostly apparition of Nixon will haunt their final demise. A most loathsome way to die.
The Hoax of Trust
One of the forces that underscore bitcoin as an unstoppable idea is its value as a buffer towards a more globalized and debt-inflated economy. Institutions in the legacy financial system ooze systemic risk and disguise it with a convoluted regulatory regime that nobody besides regulators has the time to understand.
Many of those regulators then go on to (unsurprisingly) work for banks.
Bitcoin returns risk choice to the individual by eliminating hidden risks masked by collective complexity. And it does so with the unassailable shield of censorship-resistance guided by an ethos of decentralization. Decentralization is not the end game, however.
Bitcoin’s censorship-resistance is like the center of a tootsie pop. Without it, you just get a standard, flavored lollipop that’s more of the same boring duplicates. Bitcoin was deliberately created with the goal of censorship-resistance as its primary value proposition. If it wasn’t, like some people claim, then what is the point of making it decentralized?
Censorship-resistance imbues bitcoin with an uncommon significance that people have always sought and is not readily available anywhere else — escape from financial tyranny.
Many of bitcoin’s narratives are also contrived for self-serving purposes (i.e., bitcoin cash) or to promote ancillary companies tethered to bitcoin. Or worse, promote the advantages of altcoins over bitcoin in areas where bitcoin clearly made deliberate trade-offs.
However, that is precisely why an unruly base of core supporters, like true cypherpunks, is critical to the sustainability of the bitcoin ecosystem. Bitcoin is a Schelling point for many of the relevant (and snowballing) topics that are poised to shape the 2020s, which is why its conservative approach to change and unyielding core principles are a necessity.
Information will only continue to accelerate over the next decade. Progress for the sake of progress will inevitably need to be tempered as we are all too aware that our grasp exceeds our reach. And an experiment at the scale of bitcoin can provide a useful reference point for assessing the advantages of moving slower when the world around us moves at hyperspeed.
Sometimes moving slower is better.
Bitcoin’s existence as an idea means evaluating it as more than purely in its technological form and more as a shapeless amalgamation of ideas that have yet to fully crystallize. Don’t look to mass adoption for bitcoin’s applications, explore where its core principles can make an impact right now — even if they are fringe cases.
Additionally, he elaborates a common point criticizing bitcoin as not measurable as a store of value (SOV) because of its limited adoption. He is missing the silent evidence that only one realized fat tail can lead to another instance where public faith is further degraded in the legacy financial system.
Bitcoin has value because it is an option to transact or deposit wealth outside of the financial system. Bitcoin won’t bend its core principles to cater to users, the users will come when they need it.
Whether or not bitcoin emerges as a SOV is unpredictable. But if pension funds (which are increasingly underwater) lose significant value in the next financial crisis, all it takes is one shift in social perspective to herald a new SOV. Perhaps it won’t be bitcoin, but definitively saying that it won’t be because its adoption curve is sluggish misses the point.
That’s why the “mass adoption” game is dicey. It’s projecting an uncertain future. We should take what we have with bitcoin because it is better than nothing. Let’s improve it and focus on what we know.
For example, at a time when people are slowly realizing the dystopian potential to wield technology maliciously, bitcoin’s staying power is a model for hope.
From Hong Kong to Syria, people need an escape route from political oppression and the invisible confiscation of wealth via inflation, capital controls, and property seizure. A non-sovereign, censorship-resistance digital currency that supersedes geopolitical boundaries is their daring response.
“Owning bitcoins is one of the few asymmetric bets that people across the entire world can participate in.”
Bitcoin’s illumination of faults in the legacy system will only become more radiant because it cannot be shuttered. And it begins with minimizing the risk of perpetual reliance on institutions with the ability to abuse the public’s faith with impunity.
Citizens of impoverished economies finally have an avenue to wrestle back control of their financial standing. It is antithetical to the promotion of the welfare state, where financial independence is swapped for the individual’s dependence on institutions that have perpetually proven to abuse trust and generate crises.
Concepts, like MMT, proposed to “solve” deficit spending are absurd because they ignore basic precepts of what constitutes value.
And all of it is protected under the age-old phrase of “trust us, we’re the government.”
When the idea is unlocked that you can minimize many of the negative consequences of centralized trust in a complex world, people should take the time to listen — even if they end up disagreeing.
Existing financial infrastructure is not all bad; there are just parts that need replacing or competition to help stimulate improvement. Bitcoin does both.
Bitcoin will be the medium where the state’s most prized weapon in its arsenal of power, monetary control, will be pitted against the resolve of a small group of hackers and cryptographers whose vision has metastasized throughout the world by divesting money from the state.
And they have done so in a manner that pisses off the people who it was intended to help in the first place — it’s almost poetically ironic.
The government is the most avaricious of all historical institutions. To deceive yourself that the state can be altruistic or manufacture egalitarianism is to be ignorant of human nature and the cacophony of misaligned incentives that commingling monetary and political power produces.
Such utopian dreams are the bane of Socialism, which is just a euphemism for the government stealing your shit.
Bitcoin decouples the state’s political and monetary authority, conferring financial independence, and individualistic interpretation of costs and risks to the public — perceptions that have been in drastic decline since the onset of government-induced inflation.
As we dip our toes further into the uncharted territory of a digital information age, it is abundantly clear that many archaic aspects of the conventional monetary hegemony need to be curtailed, and subsequently improved. The byproducts of assessing the shortcomings of contemporary fiscal regimes can also induce a meaningful change in other fields too.
Should we choose to delay changes to the current financial infrastructure, digital communication pathways, and centralized trust models, we risk a much more destitute sequel to the 2008 financial crisis. An unchallenged progression of current technocratic and authoritarian impulses will damage individual liberties in the digital age to the point of no return.
Statists would argue otherwise, but since when did we give credence to proponents of expanding state power over the inviolability of individual liberties in America?
And the looming dilemma between statists (i.e., or whatever other guises they have now) and cypherpunks is coming to a head — with bitcoin as the lightning rod for property rights in the digital age taking center stage.
Fortunately, bitcoin has already shed a spotlight on one of property rights’ most distinguished weapons, cryptography.
Chesterton Front-Runs The Mob
When you hear the name “Chesterton,” it likely indulges images of 17th-century aristocrats wearing opulent clothes playing polo on a vast English estate. A sumptuous image indeed, but the incisive G.K. Chesterton’s famed principle conjures a more meager image — a fence.
“In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, ‘I don’t see the use of this; let us clear it away.’ To which the more intelligent type of reformer will do well to answer: ‘If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”
The acumen to see beyond the obvious impediment of the fence is an ability long lost on the broader public in modern America. Short-form media consumption and blind following of mainstream spheres of influence have driven erudition out of the indolent. And with it, a passion for individual liberty.
Amidst the forgotten fortitude with which the American once pursued liberty lingers the mob.
“So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society.”
Madison goes on to enumerate how a Constitutional Republic is the guardian of domestic faction sundering an American people. Concluding with the power of a Constitutional Republic to stifle mob faction, Madison states:
“A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire State.”
The relevant prediction of paper money’s fallacy aside, unfortunately, Madison could not foresee the Internet and how Twitter would become a global forum of social and political discourse. In spite of his steadfast position, those threats of mob faction have prospered in the uncharted territory of the modern Internet, culminating in the task at hand today:
Amid a widening scope of highly influential social flash mobs is a gradual drip into positions of political power, exposing the daunting potential to disparage long-venerated pillars of individual liberties — namely, property, privacy, and free speech. We have reached the penultimate phase of a recycled (and tragic) march towards succumbing to our own ignorance.
For those currently under authoritarian rule, and eventually those in common law nations like the US, cryptography provides the last vestige of hope against coercive abuses of privacy and property.
Exposing a prescient front-running of their own, cypherpunks have been the censured keepers of cryptography for decades.
Again, trust in a centralized entity that has proven untrustworthy for millennia.
In the US, property rights are robust. But to think that will last forever is to scoff at history.
Forget about even diving into how billionaires are absurdly more efficient at allocating capital than the government.
Such blatant rhetoric on public platforms of discourse is not only outright dangerous, but it also encourages people who lack a kindergarten understanding of finance, and how wealth can be created, that billionaires are inherently morally bankrupt people.
The problem lies directly with a coarse conflation of the morality of the individual with that of society as if the collective public has a tangible moral compass. More crudely, such mob moralism is always looking for a home and unsurprisingly misses its mark entirely, embedding itself with the state. Nothing could be more dangerous towards property rights.
“It is indeed probable that more harm and misery have been caused by men determined to use coercion to stamp out a moral evil than by men intent on doing evil.”
When the entity dishing out coercion to stamp out a perceived “moral evil” is the state, you get authoritarianism. Hayek’s principle on the lessons learned from the failures of authoritarianism?
“Never identify the cause of moral values with that of the state.”
Property rights, particularly of the intellectual variety today, are the boon of technological progress. Our ability to thrust into the future with curious vibrancy will be hindered as government officials bent on confiscating wealth do not realize that patents and property rights are also one of the greatest conduits of wealth, capital generation, and human progress.
“The patent system added the fuel of interest to the fire of genius.”
One of the earliest problems for the digital realm was creating scarcity. Files can be copied and replicated continuously, which fueled file-sharing and pirating of digital media of the early 2000s. There was formerly no mechanism for actualizing digital property without going through the analog world via intellectual property rights or a trusted intermediary.
How can you transmute the scarcity of traditional property like land to the digital world?
Satoshi Nakamoto figured out how to make scarcity on the Internet with bitcoin, and in the process, inaugurated a different dimension of value.
When evaluating individual rights that have defined Western civilization’s rise and the pillars of individual freedom, property rights are the ultimate harbinger of liberty.
“Bitcoin unlocks a different dimension of value. In the same way that boats unlocked transport over water, and airplanes through the air, Bitcoin unlocks a new, alternate layer to store and move value — as the first native digital asset. It is the ability to exist solely in that digital world, from which Bitcoin derives all of its properties. It cannot be attacked in the physical space the way that physical assets can.”
Fiat government power is not only diminished because it is more challenging to confiscate bitcoin but because bitcoin offers an elusive escape hatch from inflationary monetary policy.
Cryptography infuses bitcoin with a verification mechanism at scale for a decentralized network. It’s not only censorship-resistant to sovereign forces but enables users to hide untold fortunes in an encrypted USB drive, a piece of paper, or only your memory.
The costs of verification are negligible, basically eliminating fraud, with fraud detection conductible by anyone.
“The fact is, Bitcoin reduces government revenue potential by providing a way to opt-out of hyperinflationary forces and by altering taxation enforceability. With digital money, personal wealth becomes more difficult to seize and easier to transport. It further reduces geopolitical borders and allows the cybereconomy to flourish without gatekeepers. Bitcoin allows individuals to better defend. Defend against inflation. Defend against seizure. Defend against censorship. As these needs grow, so too will the value proposition of Bitcoin and ancillary applications.”
Leveraging bitcoin’s property rights, people can accumulate capital previously under constant threat, they can invest in assets outside of government control, and they can become a part of the global financial community as individuals, not statistics.
Privacy and property have been forever intertwined and never more crucially than now.
Unified under the banner of cryptography, cypherpunks have been the faithful stewards of property rights and privacy in dark corners of the Internet. Under the auspices of uncompromising ideologies and hobbyist interests, their conviction has remained adamantine.
Amid government condemnation of encryption in those early days of their war with political omnipresence, cypherpunks have never strayed from their goal.
Today, property rights and privacy are under threat, with the public mob’s position on property rights aligning with authoritarian tendencies. Cypherpunks crafted the tools to defend our property rights under these very circumstances, drawing their inspiration from a conflict that has embroiled them for decades, giving them superior acumen in the face of relentless threats.
These are uncertain times. The public’s wont to preserve the gifts furnished by cypherpunks will be tested.
The only hope we can place is in a fence. Chesterton front-runs the mob, but can you?
Shadow Games & Disguises For The Win
The stakes? Whether or not privacy would exist in the digital age.
Tim May, the late cypherpunk, once called privacy:
“The ability to selectively reveal oneself to the world.”
His statement harps on the doctrine that privacy is a fundamental human right, not a privilege. But it has also come to represent something much more.
After the battle lines were drawn between cypherpunks and the indomitable state power, a whisper grew into a full-fledged movement that privacy would evolve into something much broader in scope — the translation of individual liberties into the digital age.
Individual liberties are continually under assault, and protecting them is an intricate battle. After the onset of the Internet, the medium for that fight became abstract. Both sides are still learning how to out-maneuver the other.
There’s often strange gravitation of people towards mysterious figures. But with Satoshi Nakamoto, it has hit a new level.
I mean, in the age of the Internet, where virtual privacy is never perfect and basically at the whims of whether or not the NSA wants to find you, Nakamoto’s anonymity is astounding. The notion that a person(s) created something that competes with central banking and has accrued a worth of more than $150 billion in just over 10 years, all the while remaining a ghost, deserves a standing ovation from the NSA.
Perhaps Satoshi was trying to demonstrate something.
Privacy is puzzling. It depends on granular personal preferences, but those preferences are beginning to become obsolete. As government and tech oligopoly power grows, their interests will descend directly on peoples’ digital habits as we engage more with the Internet — leaving intimate data trails behind us.
Many people say “I don’t have anything to hide, so I don’t care” when it comes to government snooping into Internet data packets, which Edward Snowden offers a sound rebuttal to:
“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.”
Privacy is an enduring conflict between its most ardent supporters (i.e., cypherpunks) and forces bent on eliminating it, like the current Chinese government, because neither side is ever satisfied. The game never stops.
The movement to bolster privacy in the digital age has been going on much longer than bitcoin has been around, but bitcoin injected jet fuel into the campaign.
Add in a proposal by Facebook to hoard a gang of big tech firms under one monetary roof, Libra, commingling financial and social data in the process, and you get passionate reactions from both politicians and the public. Weird right?
Institutions of power only care about privacy when its essence remains firmly in their hands.
Privacy remains a conundrum.
People are decisively split on what scale of privacy should exist. And bitcoin is setting up to be one of the most hotly debated mediums for just how far people are willing to go to accept privacy. But its founder is where we should look for inspiration.
A dogma that Satoshi presented then disappeared. Privacy and bitcoin’s protocol may never be perfectly achievable, but Satoshi’s vanishing act was.
Bitcoin is an inspiration for privacy, with Satoshi Nakamoto as the prophetic mirage.
Now, we have both the tools, conviction, and standard from which to work with. There will be hurdles along the path towards digital privacy, however, and bitcoin’s path to privacy will be fraught with antipathy. But bitcoin’s antifragility may prove its lasting defense in the face of heightened conflict.
“The real schism in Bitcoin will happen when there’s a credible path towards making it fully private.”
His statement reflects the manifestation of technological advance, privacy prudence, and the vaunted threat of new suppression tools at the disposal of institutions in positions of power — namely, governments, the media, and big tech corporations.
Bitcoin’s next community split will be its most polarizing yet because it will represent the culmination of nearly 3 decades in the surreptitious affair between cypherpunks and the powers that disguise malice towards privacy with national interests like security and the vague “public good.”
The public will be the battlegrounds between these two sides, and the affair will snowball into an ideological and information warfare campaign that will have many unintentional consequences.
But it is most definitely a fight worth fighting.
A non-private bitcoin will simply not be bitcoin because it is antithetical to the original vision of cypherpunks, like Satoshi. Should digital surveillance tools continue to develop (a certainty), financial privacy tech needs to keep pace. Whether it be bitcoin or a future replacement, taking the daunting position of challenging the state’s monetary dominance requires a strong degree of privacy.
Otherwise, a vanilla regulatory-approved version of bitcoin will enable censorship through coercion by the ability of the state to identify, intimidate, and exclude users from the network. Which is exactly what they do now with the USD.
To bend the knee to regulators is to signal defeat.
It’s easy to fool yourself into believing the mendacious goal of “mass adoption” of bitcoin warrants government approval to convince your friends at the dinner table it is legit — that’s not the goal.
For bitcoin to function properly, it requires censorship-resistance, which emphatically dictates an existence separate from the state. Privacy cannot be sequestered from that goal.
Watching all these finance bros enter the bitcoin space preaching central banking orthodoxy and compromises between regulators and cypherpunk ideologies is exhausting.
If you have conviction, keep those people at arm’s length — they only seek to reduce you to their level. Comfortability is the true thief of passion. And it’s hard to absorb commentary on conviction from suits on Wall Street.
Privacy extends far beyond some financial protocol too, into the everyday lives of people all over the world. If some purported anonymous, decentralized cryptocurrency can’t dodge the fell swoop of the government’s grim scythe, where do the oppressed place hope?
Privacy is largely a shapeless conflict fought between esoteric ideological camps, but bitcoin changed that. We now have the vanguard for privacy in the digital age. People naturally gravitate toward narratives, and bitcoin’s antifragility and external privacy benefits can elicit passionate responses from people looking to herald brave changes.
It is only when you have the option to reveal yourself that you are truly free from oppression. And without the option of privacy, the truth becomes an elusive endeavor.
To understand why, it is relevant to understand the other side’s motives.
An important contextual game of thought to play is that if you swap the sunshine and rainbows narrative of the Internet’s potential for a hostile perspective, some intriguing conclusions are exposed.
“Let us, then, not fail to protect ourselves from the will of those who might seek domination of those resources we cannot do without. If we do not take this moment to secure our sovereignty over the choices that our information age has allowed us to enjoy, we cannot reasonably blame its loss on those who are free to enrich themselves by taking it from us in a manner history has foretold.”
The more we passively let intrusions of privacy go unchallenged, the more daunting the odds we face. The less truth has its stay. Fewer people can wield free expression. And the less freedom exists in the world.
Imagine a world where Snowden’s revelations are never published, strange pedophile figures connected to royalty and presidents are never exposed or arrested (and subsequently murdered in jail), and companies harvest user data knowing they can do so with impunity.
We’re not that far removed from such a world.
Without the conviction to expose the truth and protect the sources of those public divulgences, the incentive to publish or even corroborate the truth declines dramatically. Contemptible powers generate rewards, and the public’s free expression and grasp on individual liberties is polluted forever.
Fortunately, people have the resolve to let the truth have its stay, and rather than being supplanted by the base privacy intrusions of governments and big tech firms, an annoyance has blossomed into a movement that nobody could’ve anticipated.
Year after year, the scandals bombard our news feeds. And year after year, the public’s resolve grows.
“The Venezuelan government has been very selective about how they police the Internet, so a lot of people think they can use it freely.”
Imagine what the NSA is capable of today. The methods through which they abuse privacy are so subtle that you would never know it, so we must proceed to build tools that provide non-discretionary privacy.
Want an example?
“Wasabi is enemy number one. There is no way to de-anonymize it, and I don’t see how the government can legally take Wasabi down, so it will probably persist. Put it this way, if everyone used Wasabi, Chainalysis would go out of business.”
I often find that such irony gives truth to subtle narratives, and in this instance: privacy can win with steadfast preservation of privacy principles. Powerful innovation will follow.
All that people need is a flag-bearer to calibrate their progress. And whether it is bitcoin or the simple notion of crafting a sovereign future by severing the propensity of centralized power to intrude on your personal life, swaths of people will follow.
Without privacy in bitcoin, that flag-bearer will be disparaged in the vicious public arena where fear of change and collective narratives reign. And the inspiration placed in its mysterious founder will be lost along with it.
Governments will be able to abscond with control of the network by the slow-grind of regulatory induced surrender and pressure on miners not compliant with state policies. Fear-infused government critics will have nowhere to hide.
That lack of privacy will inevitably lead to more inflationary monetary policies — one of the most effective tools of the state to extract value from the public with impunity.
That’s why we need disguises for the win. A mask is much more than a means to protect the things you care about; it evokes a sense of allure and vigor not easily rendered by Americans protesting with manufactured signs on sticks in front of the capitol building. It is a non-discretionary shield against powerful entities that seek to suppress the truth.
Just ask a teenager in Hong Kong.
When the stakes are raised, so is the passion, and the resulting imagery below.
That world we’re not far removed from will become a reality, and generations after us will have to live with the consequences.
We will have triggered a cascade of collateral effects that lead us in a circle right back to where we were in 2008 — in the midst of an unprecedented financial crisis before the birth of bitcoin where easy money rules. Where privacy is an afterthought and the public feigns contempt at abuses of liberty but does not act.
Where pithy truths hide in broad lies, where government-induced inflation quietly chugs along, where scruples of the media no longer exist, and where blind trust in government goes unquestioned.
And the challenge to such a world born out of little mailing list, by someone that nobody knows, for a cryptocurrency that is both an inspiration for privacy and a staunch competitor to the fiat hegemony. What a story.
Don’t Fuck it Up, World
“People having the power to express themselves at scale is a new kind of force in the world. It is a fifth estate alongside the other power structures in our society. People no longer have to rely on traditional gatekeepers in politics or media to make their voices heard, and that has important consequences.”
It is more than difficult to accept Facebook’s pivot to support freedom of expression when the company’s history is littered with targeted algorithmic censorship and questionable data ethics. However, Zuckerberg does expose an intriguing flower that is poised to bloom — the fifth estate.
The fifth estate belongs to a more discretionary crowd.
What constitutes the fifth estate is polarizing and continuously debated. The most accepted current socio-cultural classification of the fifth estate resides in bloggers, independent whistleblowers (e.g., WikiLeaks), boutique publications with thousands of contributors (e.g., Hackernoon, Medium, etc.), grassroots journalists (e.g., YouTube independent journalists), and influential social media figures who use their followings to expose news not covered in the mainstream media.
It is very telling that the emergence of the fourth estate was met with hostility by the powers that be because it is precisely the same animosity with which the media is meeting the ascendance of the fifth estate today. There’s a reason why Julian Assange is rotting in a prison cell for the crime of exposing the truth while the media continues to assail his character.
The passing of the torch of power is never a journey without conflict.
The fourth estate has become polluted with power, bias, and myopic coverage of topics that are more reminiscent of entertainment networks than productive mediums of thought or neutral information aggregators. Their abuse of manipulating public opinion is now more evident than ever, principally because of the presence of the fifth estate.
Bloggers, YouTubers, small media publications (not the ones with talking heads every night), and other independent content creators have compiled the largest and most diverse repository of information in history, the web. In doing so, they have broached discussion on topics and viewpoints that would have never seen the light of day in the age-old days of ABC’s prime.
Rather than being spoonfed misinformation, online readers averse to mainstream thought streams are afforded optionality of information — they are independent thinkers. That optionality of information is simply context.
When presented with context, it is easy to spot bullshit.
The Internet’s darker side comprises a game of tug of war within the individual’s mind. On one side, the pavlovian-style conditioning of short-form content (e.g., media clips, news articles, short-form entertainment, porn, etc.), and on the other, the deliberate attempt to moderate the consumption of the daily information bombardment. Should the mind become too engrossed with the former, the latter becomes a distant dream.
People are so consumed with the Internet’s instantly-accessible catalog of desires that their convictions on principles continue to wane. The vicissitudes of the Internet have degraded the wisdom of context. And with it, the appetite for independent intuition tarries behind.
Tech companies, the media, and governments are well-aware of this development — demonstrated by a growing predilection for mediums populated with propaganda (sometimes called fake news).
Context deserves its own in-depth exploration outside of this essay, but bitcoin has a strangely piercing effect on context that can translate into mainstream information and the fifth estate.
This is a powerful development for the arbitration of information’s verity.
Bitcoiners are adept at spotting bullshit because the idea of not trusting third parties and using only their personal intuition is rooted in them. They have developed early-stage prisms for filtering information, where it morphs into an instrument of context over time.
That context manifests itself by the ability to identify the historical tendencies of third-parties to abuse trust, exist as security vulnerabilities in complex interactions, and manipulate information.
In connection to the fifth estate, just look at the perception of the mainstream media today.
There is palpable distrust between legions of Americans and the Mount Rushmore of publications like the NYT, ABC, CNN, WaPo, and Fox News. People are increasingly maligned by subtle alterations in snippets of stories that change their entire context and message. They feel like they are being played, and nobody likes to feel like a sucker.
Rather than becoming agents of individual empowerment, mainstream media publications have become mouthpieces of power.
“Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.
In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”
Bitcoiners are acutely aware of this effect because of how abhorrent MSM coverage of the crypto sector has been throughout the last decade. It’s literally a running joke in the community.
They hesitate to trust mainstream publications. The timidness to trust institutions of power is a reservoir from which context extracts its peculiar abilities.
The more wide-scale problem around the world is how to prove to people that they are the true arbiters of truth, not a third party. The first step lies with fomenting the fifth estate, which provides a bastion of context by offering information optionality.
We are humans, we cannot leave the arbitration of truth to algorithms. Our ability to reason is the epitome of our status as the world’s apex predator. Offloading that ability to the uncertainty and tail risk of algorithms will only serve to devour ourselves in the long-run — the ouroboros of our time.
Algorithms also embolden firms using them to amplify their asymmetric risk. The ubiquity of algorithms to curate information by both tech companies and the media has been weaponized to mask human bias, deflect risk, and reduce their liability from the adverse consequences of algorithms. The notion that algorithms are unbiased is objectionable. There’s a person (or people) behind those algorithms with distinct goals and biases. Continually defaulting to algorithm neutrality as an excuse for base actions (i.e., censorship) sets a dangerous precedent.
Unsurprisingly such activity has led to a declining level of clout of the mainstream media among the public and growing polarization of political viewpoints.
Origins of the American press indulge feelings of a distributed set of freelance journalism, unhindered free speech, and coverage of topics through perspectives animated by the prospects of a newly free nation.
Many of these independent outlets were often confined to local communities and regional or city newspaper publications, building rapport with their readers, who were also their neighbors. It marked a decidedly different era than the centralized institutions and massive public forums of social media debate today where connections between people are desensitized. Where localism combs for a hook to return to the surface of public discourse.
Alice in New York never cared what Bob said when he was 16 to his friends in Georgia before the Internet, but apparently, now she does. We’re dealing with the fallout of stapling together localized social interactions into a vast patch of public awareness. Of course, there were going to be mistakes along the way.
But the media has exercised this transient moment in history for perverse means.
Despite a more extensive repository of perspectives today, it is much easier to watch talking heads on TV spewing collective thought than to discover and analyze various outlooks via smaller publications or blogs. Coalescing perspectives into an individual bias, not a collective one, is even more challenging as the onset of social culpability for “wrong think” endangers jobs and lives.
This is not an accident. Major publications release hit piece after hit piece on entities that take up the opposite side of their ideology, born out of some misplaced sense of “holier than thou” peppered over the American public.
Mainstream media has disparaged the verity of information from smaller publications, and have centralized attention towards themselves in the process.
Prominent journalists, under the high esteem of their lofty social perches, can act with impunity against mainstream criticism, manipulating emotions and dispensing imperious takes under self-aggrandizing public worth. And they usually have verified Twitter profiles.
Such centralization is a natural aphrodisiac of the power-hungry. It is the modern actualization of many fears that critics of centralized media power have continually expounded.
The Internet has divulged the power of the fifth estate to propagate streams of information that do not adhere to the popular opining of the day or “topic du jour” to be enraged about that week in MSM weekly news cycles.
In America, the penchant of journalists to admonish people that do not agree with them at the expense of valuable content that emanates from the fifth estate is increasingly discernible. And it is something that observers even centuries ago identified.
“The characteristics of the American journalist consist in an open and coarse appeal to the passions of the populace; and he habitually abandons the principles of political science to assail the characters of individuals, to track them into private life, and disclose all their weaknesses and errors. Nothing can be more deplorable than this abuse of the powers of thought;”
I admit that I have linked to several MSM publications as sources throughout this piece but do so with both caution and acknowledgment that all journalism is not dead. It’s just hiding behind a veil of macro-political bends.
I place my faith in the hard work and dedication of independent journalists under threat of censorship and character assassination. Not the fragile NYT writers that use asymmetric risk as a tool for administering propaganda without consequences.
To a certain extent, journalists of mainstream media are right in that the American public needs shields against misinformation and contrived government narratives, but they are no longer those guardians. Powers of one vertical always flirt with powers of another, and the government and mainstream media are intertwined to an unsalvageable extent.
That impunity that engenders such vitriol from the mainstream media will not last. The fifth estate is here, and they have taken up the mantle of truth. Whether people want the truth to have its stay or not is no longer the presupposition for concealing it.
The “don’t trust, verify” maxim attracts the humble, curious, and free seekers of truth. It is the calling card of both bitcoiners and the fifth estate, and an ethos that is unassailable.
Bitcoin’s aversion to conformism has sparked a movement for independent thought in finance that has trickled into other fields, arming people with the tools to strengthen and protect self-determining streams of information as a side effect.
Once people realize they have been peddled systemic financial misinformation since 1971, their intellectual barrier solidifies. The Gell-Mann Amnesia effect presents itself, and the mind learns to become more discerning.
“Society everywhere is in conspiracy against the manhood of every one of its members. Society is a joint-stock company, in which the members agree, for the better securing of his bread to each shareholder, to surrender the liberty and culture of the eater. The virtue in most request is conformity. Self-reliance is its aversion. It loves not realities and creators, but names and customs. Whoso would be a man, must be a nonconformist. He who would gather immortal palms must not be hindered by the name of goodness, but must explore if it be goodness. Nothing is at last sacred but the integrity of your own mind. Absolve you to yourself, and you shall have the suffrage of the world.”
Amid lucid tensions between the public and the media, independent thought is the salve of violent conflict. The uprisings throughout the 21st century that have followed in the footsteps of the Arab Spring hit on a decisive truth that is the conflict between conventional institutions and a rising public awareness of their shortcomings.
The aggravation between the fifth estate and mainstream media is palpable. Bloggers and independent content creators necessarily take an adversarial view of the criticism and disparaging comments from mainstream journalists about their efforts.
The motivations of emerging groups like advocates of free speech, grassroots journalism, and cypherpunks are cut from the same cloth. But now the advent of cypherpunk’s most treasured weapon, cryptography, is introducing meaningful changes in areas that are conducive to the success of the fifth estate.
Privacy tools can help proponents of disrupting MSM’s stranglehold on information mediums avoid the ire of oppressive entities. Property rights have a compelling ability to revert data into user control, severing the revenue-generating, controversial paradigm of advertising for major tech firms.
The fifth estate’s unique power resides in its ability to wield the aspects of the Internet that have not been reduced to overt political bias or adherence to outdated standards. They do not eschew the truth in favor of the implicit edicts on what can and can’t be said — a form of self-censorship colloquially known as political correctness (PC).
Bloggers don’t adhere to PC orthodoxy that governs media companies and earn their resentment for it. YouTube journalists cover and discuss topics utterly more fascinating than what Donald Trump tweeted, and so they are censored. Social media figures make sure that people find that content, and so they are silenced.
They offer the citizens of the web the content that they deserve, not what the public mob dictates.
Loaded with the technological tools and ideological inspiration of bitcoin in the fields of privacy, property rights, and trust-minimization, the fifth estate represents the type of irony that I find gives truth to subtle narratives.
Cypherpunks may not have envisioned the type of role or shape that the fifth estate would take, but they sure crafted and safeguarded the tools to help it succeed.
Amid a chaotic, surging global backdrop of collective tendencies and centralization of power, context is your shield.
Cypherpunks have performed their duty admirably. Now the torch lay ready for the burgeoning numbers supporting free speech and independent discernment of truth to take up their humble mantle as the guardians of individual liberties.
With so much promise underscoring bitcoin, the world cannot afford to fuck it up. Looking at you, fifth estate.
Breaking The Ouroboros
Past defenses against the infringement of individual liberties appear tenuous in a time where the digital realm can have an outsized impact on the physical world. Authoritarianism is making a brazen return under new disguises of digital censorship and public security. People across the world have taken issue with this ascendance, and from Hong Kong to Iran, they are making it known.
People drift towards compelling narratives and stories. In a fragmented world of political discontent, people require much more than a technological solution to inspire them to take bold action.
State monetary policy, big tech’s dystopian proclivities, and the concealment of risks has instilled bitcoin with a narrative countering influential players that have usurped institutions of power and mutated them into spigots of rent-seeking.
In doing so, it has attracted the bear of power, with all its enmities towards disruptive change.
Luckily, that adversarial community that armchair critics call toxic bitcoin culture has preserved the core vision, and in doing so, has assisted in the crystallization of a much more powerful outcome.
Satoshi Nakamoto unlocked the belief that money has optionality among a culturally and politically fragmented global population, and then simultaneously gifted the hardest money ever created to the people. And it all began by imagining a competitor to those irreverent “paper currencies” decried by James Madison back in 1787.
In the fallout of the 2008 Financial Crisis, bitcoin was delivered with a longshot vision of becoming more than just a disruptive technology, but an idea. A notion that has revitalized efforts to translate individual liberties into the digital age despite attempts to circumscribe them.
Bitcoin may not last, but that vision will endure. And that’s precisely why the idea embedded in bitcoin’s cypherpunk roots is unstoppable.
Don’t be the mob — wield context.