Crypto enthusiasts call me a Luddite, statist, technophobe or worse. Asset bubbles are maintained by a common narrative, and anyone who dares question it must be attacked. But a growing chorus is pointing out the emperor has no clothes.
Lee Reiners
May 25, 2021
Ban Cryptocurrency to Fight Ransomware
[I’m certainly no fan of cryptocurrency. I might even concede that banning it would put a serious dent in ransomware. But I am very reluctant to advocate a ban on it. Doesn’t the First Amendment protect it?
When I first heard of Bitcoin I was rather enthused about it until I discovered it wasn’t completely anonymous. Anonymous financial transactions are a critical component of a free society. Anonymous financial transactions with anyone in the world who has access to a computer would solve a lot of freedom issues. To the best of my knowledge all anonymous financial transactions still, and will in the foreseeable future, require a physical exchange.
Hence, I am inclined to agree with Reiners:
It isn’t obvious that cryptocurrency provides any benefit at all beyond the chance to make a quick buck. I have been studying the crypto market since its inception, and I have yet to identify a single task or process that crypto makes easier, better, cheaper or faster. Don’t take my word for it. Ask any friend why he owns cryptocurrency, and the answer will invariably be “to make money.” In other words, speculation.
With all the above in mind what I would like to see is the natural death via a loss of faith in Bitcoin and cryptocurrencies in general such that it can’t be used for criminal acts.—Joe]
Great. How do you ban it without damaging our already damaged liberty?
Bitcoin seems like another ooh-shiny, fad. I predict it will die by it’s own hand. And just like bell-bottoms and electric cars. The shine will wear off.
As far as crime and money go. The treasury should print nothing larger than a twenty dollar bill. Would that stop crime? No. But no one is ever going to stop crime anyway.
You just make it 5 times harder to pack around in large amounts.
That and hold in suspect all foreign banks/accounts with large dollar holdings.
Our focus has been on street level crime. (George Floyd). Instead of going after the cartels money/transfers. Which government could put the hammer on in a matter of minutes.
But then we wouldn’t need government to protect us from all the meanies out there would we?
Joe, I wanted to point you to a cryptocurrency with true anonymity. Pirate Chain, at https://pirate.black/ (yes, unfortunate name…) seems to be one. I don’t fully understand it, but it uses zero-knowledge proofs to create completely opaque yet provable transactions, allowing it to be 100% anonymous by default. There are ways to opt out and make things visible, or share details via a “viewing key”, but it’s not the default, and for that reason should be safer than the same sort of thing with an opt-in anonymity.
I don’t see cryptocurrency as that big a step – it just lowers the cost of monitoring. We have already sold our soul to the devil in exchange of living a life of unimaginable luxury. And it does not matter much who the private and public authorities are – they will still find reasons to collect and use more and more data. Laws are just fig leaf’s and only increase the cost of collection and use. Where there is will there is a way even if you have to go half way around the globe (which is now routine).
If data is recorded in any manner then it can be accessed and used to control us – privacy laws and EULA notwithstanding (which do not even pretend to offer protection from the authorities). The only question is can we trust the authorities? The answer will have to be negative for anyone who values freedom.
Here is an example of the right pushing for less freedom:
“US Chamber doesn’t want facial recognition technology banned
The U.S. Chamber of Commerce and other groups that represent facial recognition technology vendors oppose the government banning the technology and instead are pushing for greater regulation of the industry to mitigate risks posed.”
Translation: We want our tech businesses to grow. Trust us – we’ll follow the rules, but we won’t say anything about the government getting more ability to see into our lives.
While I agree with your general principle, calling the US Chamber “the right” doesn’t pass the laugh test these days.
Exactly. Also, the real translation of that message is “we want the government to create regulations that we’ll help write, designed so our friends can stay in business but any new competition won’t have a chance.”
I agree. I should have used a different term. Yet the US Chamber is certainty not a leftist group.
This argument is a complete failure of logic.
No transaction, other than the traditional “blind auction” (and not assuredly even then), is “completely anonymous” – not even cash currency or refined metals. If a transaction must be made in person, obviously the participants identities are at risk of discovery. The same risk exists with any transaction that involves documentable stages (pretty much any transaction involving any number of third parties).
Essentially, there is no possible transaction model – that doesn’t involve the physical deaths of all other participants (to what degree of separation?) than ones self – which can be honestly described as “completely anonymous”. This objection based upon individual anonymity post-transaction can only ever be one of degree, not certitude.
That being established, what are your objections to the degree of anonymity bitcoin/cryptocurrency currently provides relative to cash currency based transactions, and what technology would you suggest to improve the likelihood of anonymity in future transactional models?
I won’t speak for Joe, but for me it’s the false advertising that grates.
I don’t have a better solution; I simply don’t like being lied to by people who are trying to sell me something.
Also, Joe’s argument that faith in cryptocurrency is the problem equally fails the logic test. Based upon the record of human history, it is equally plausible (not to mention vastly more logically consistent) to argue that faith itself is the overwhelming cause of human criminality.
Rwanda.
Afghanistan.
The Christian Crusades (you pick).
Jim Jones.
Communism.
All of the above suggestions rely upon individual human faith in the strictures of the belief system being practiced in order to function at all. All of them are easily associated with acts of “criminality” that beggar belief, but are extensively documented. The fact that cryptocurrency technology can be utilized to a criminal end has no relevance to the technology itself, but rather to the safeguards imposed upon transactors using the cryptocurrency technology.
This objection (that cryptocurrency is in some way more subject to criminal purposes than is any other currency) is invalid as stated (although I agree that there is transactional weakness in the existing structure, I can offer no practical suggestions as to how to effectively repair that defect that wouldn’t equally “throw out the baby with the bath water”). The judgement on the ends to which a thing is put has no relevance to the existence of the thing; See: gun control.
Will, you forgot atheism/tens in there.. Never mind the fact that humans can’t live without, belief/faith. It’s what makes money/crime/life go round.
It’s been just a couple years ago that researchers determined that humans are hard-wired for a belief system. In other words, religion. They weren’t very happy with their conclusion.
It would appear that if one avoids or discounts religion in their life, it is easy to fill that void with another belief system like communism, or its many variants. Some people seem able to resist going in that direction, but most of them seem to end up there eventually.
It seems obvious that people can have more than one belief system at the same time. They can even be contradictory to some extent, but then facts are not necessary to validate a belief system, so I guess that might explain why it is possible.
It doesn’t seem that banning cryptocurrency is either feasible or necessary. Not necessary, because it isn’t interesting (to criminals in particular) as such, only as a token that can be exchanged for regular money. That exchange can easily be regulated or restricted, and in fact already is (since the IRS taxes it).
Not feasible, because it’s really hard to explain what would be banned. What is bitcoin? Signed messages in a blockchain ledger. Mr. Reiners isn’t proposing to ban blockchain, which makes sense (it has real world applications). That leaves signed messages. How would you ban the messages that constitute Bitcoin transactions without also banning email, or digital signatures in HTTPS exchanges?
Good point: you might as well try to ban and regulate IOUs.
I’m in favor of banning it (well, not really, only in a facetious way). I predict that banning crypto would be the most highly effective possible way of creating multiple popular, user-friendly, effective, anonymous, extremely difficult-to-crack versions in record time.
ALL “bubbles” collapse. Nothing and nobody can change that fact. All that changes is who wins and who loses from the “bubble”. Crypto currencies are
not exempt from this reality. Neither is the dollar.