diff --git a/notes/bitcoin-as-anti-authoritarian.md b/notes/bitcoin-as-anti-authoritarian.md index 56445c2..0e8ccd5 100644 --- a/notes/bitcoin-as-anti-authoritarian.md +++ b/notes/bitcoin-as-anti-authoritarian.md @@ -2,7 +2,7 @@ title: Bitcoin as an Anti-Authoritarian Force date: 2022-05-02 created: 2022-05-02 -description: "Episode #7 of our ongoing deep dive into web3 and crypto with Rufus Pollock and Stephen Diehl. This week we’re exploring the thesis that Bitcoin (and crypto more generally) is an anti-authoritarian force and can help undermine tyranny." +description: "Evaluating the thesis that Bitcoin (and crypto more generally) is an anti-authoritarian force and can help undermine tyranny by providing a state-resistant payment rail." image: /img/anti-auth-thumbnail.png youtube: https://youtu.be/U_-Bdx1mqS8 podcast: https://anchor.fm/life-itself/episodes/Bitcoin-as-an-Anti-Authoritarian-Force-e1i25vg/a-a7gpq18 @@ -12,26 +12,40 @@ aliases: notes/bitcoin-as-anti-authoritarian.md *** -# Episode Notes +# Summary -## Summary +## Claim Steel-Manned -This week we’re exploring the thesis that Bitcoin (and crypto more generally) is an anti-authoritarian force and can help undermine tyranny. Specifically, Bitcoin provides a privacy-friendly way to store or transfer funds in situations where the state is an adversary – for example, when opposing a repressive regime. +Bitcoin provides a privacy-friendly way to store or transfer funds in situations where the state is an adversary – for example, when opposing a repressive regime. -We will begin by steel manning this claim, before moving on to evaluate it. Our main points in critique of the claim are: -* The malign uses outnumber the benign -* Bitcoin is traceable -* Countries with the worst human rights records have very sophisticated surveillance software. Trying to undermine powerful nation states in this way is therefore fraught with risk for individuals. -* For most uses, Bitcoin must be cashed out by those in charge of the monetary supply, most often the very regime the transferor is seeking to circumvent. -* Forces people to move from the country. While that might be beneficial for the individual, will not help solve the overall problem. -* Crypto further enables and expands the scope of the shadow banking system. -* The argument for bitcoin as a hedge against authoritarianism suffers from fallacy of composition and selection bias. -* The rule of law must always take precedence. -* We shouldn't be building systems which have such vast negative externalities in all our lives. +There are examples of crypto being used as a form of, or to facilitate, disobedience: Edward Snowden and Sci-Hub. +* Snowden speaks on the infosec conference circuit and likely receives all his speaker fees via bitcoin which he converts into Russian rubles. +* Sci-Hub pirates every scientific paper from Elvesier, Wiley, and other academic publishers and hosts a PirateBay style mirror site in which researchers can bypass paywalls and download paper. The server is run by one woman in Russia,Alexandra Elbakyan, who takes crypto donations. She is seen as a folk hero giving knowledge to the world and advancing science. -We will conclude that **Bitcoin and crypto generally is not an liberatory force in the world, nor a means to counter authoritarianism in any substantial manner. In fact, it is likely to largely amplify the worst parts of society’s existing corrupt power structures.** +## Evidence of claim being made -## Steel manning the claim that Bitcoin is an anti-authoritarian force +Lyudmyla Kozlovska quoted in [financialinclusion.tech. ‘21 Human Rights Advocates Write to Congress about Bitcoin’s Humanitarian Benefits’. Accessed 13 September 2022:](https://www.financialinclusion.tech/) + +> For me, Bitcoin is not just technology. It has literally saved the lives of my friends and many Ukrainians. Without it, we would not have been able to raise money so quickly to pay for protective equipment for soldiers in the early days of the Russian invasion + +## Evaluation: False + +**Crypto assets are not a shield against government tyranny.** In his whitepaper *Bitcoin, Currencies, and Fragility*, Nassim Taleb writes of the "safe haven from tyranny" thesis: + +> By its very nature, bitcoin is open for all to see. The belief in one’s ability to hide one’s assets from the government with a public blockchain easily triangularizable at endpoints, and not just read by the FBI but also by people in their living rooms, requires a certain lack of financial seasoning and statistical understanding — perhaps even a lack of minimal common sense. For instance a Wolfram Research specialist was able to statistically detect and triangularize "anonymous" ransom payments made by Colonial Pipeline on May 8 in 2021 — and it did not take long for the FBI to restore the funds. We can safely assume that government structures and computational power will remain stronger than those of distributed operators who, while distrusting one another, can fall prey to simple hoaxes +> +> [..] The slogan "Escape government tyranny hence bitcoin" is similar to advertisements in the 1960s extolling the health benefits of cigarettes. + +The massive power asymmetries of authoritarian regimes and their control over both traditional payment rails and domestic implies that dissidents attempting to use crypto assets to circumvent repression or capital controls will find it very difficult to move assets or cash out. Without the capacity to cash out, the efficacy of their actions is fundamentally limited to external geographic regions outside of the authoritarian regimes. Since no action can be effected internal to the regime this refutes the argument that crypto assets are an effective tool for dissidents. + +This is best evidenced by the Canadian convoys in 2022 which attempted to take international donations in crypto assets and found themselves and their accounts frozen by both banks and Canadian [crypto exchanges](../concepts/crypto-exchange.md) which blocked transactions under [illicit financing](../concepts/illicit-financing.md) laws. This made using the donations to purchase supplies impossible and undermined the [crypto assets](../concepts/cryptoasset.md) narrative. + +The complete ban of [crypto assets](../concepts/cryptoasset.md) by the People's Republic of China also does not lend credibility to the thesis that [crypto assets](../concepts/cryptoasset.md) are outside the remit of authoritarian controls and their restriction on capital movement and controls over domestic [money services business](../concepts/money-services-business.md). + + +# Full Analysis + +## Steel-Man * Not everyone lives in a stable liberal democracy. Sometimes it’s necessary to violate laws, when laws are unjust or regimes are corrupt. In such circumstances, Bitcoin can be used as a safe haven for one’s investments or a shield against government tyranny. * Nonviolent resistance and civil disobedience have some very notable success stories and are an important part of the arc of “moral universe bending towards justice”: @@ -113,25 +127,31 @@ We will conclude that **Bitcoin and crypto generally is not an liberatory force ## References 1. Allen, Hilary J. 2022. ‘DeFi: Shadow Banking 2.0?’ SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4038788. -1. Alvarez, Fernando, David Argente, and Diana Van Patten. 2022. ‘Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador’. -1. Analytica, Oxford. 2021. ‘El Salvador Bitcoin Experiment Comes with Risks’. Expert Briefings. -1. Binder, Carola. 2021. ‘Technopopulism and Central Banks’. SSRN Electronic Journal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456. -1. 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MIT Technology Review. MIT Technology Review. http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/. -1. Ottenhof, Luke. 2021. ‘Crypto-Colonialists Use the Most Vulnerable People in the World as Guinea Pigs’. VICE Media. -1. Pilkington, Marc. 2017. ‘Can Global Elites Pave the Way for a New Transnational Unit of Account? A Reflection on the Numerical Nature of Money’. World Review of Political Economy 8 (4). https://doi.org/10.2139/ssrn.2339678. -1. Popper, Nathaniel. 2019. ‘Terrorists Turn to Bitcoin for Funding, and They’re Learning Fast’. The New York Times, 92–94. -1. Renieris, Elizabeth M. n.d. ‘Why a Little-Known Blockchain-Based Identity Project in Ethiopia Should Concern Us All’. Centre for International Governance Innovation. Accessed 22 February 2022. https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/. -1. Steele, Graham. 2021. ‘The Miner of Last Resort: Digital Currency, Shadow Money and the Role of the Central Bank’. Technology and Government, Emerald Studies in Media and Communications, Forthcoming. +2. Alvarez, Fernando, David Argente, and Diana Van Patten. 2022. ‘Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador’. +3. Analytica, Oxford. 2021. ‘El Salvador Bitcoin Experiment Comes with Risks’. Expert Briefings. +4. Binder, Carola. 2021. ‘Technopopulism and Central Banks’. SSRN Electronic Journal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456. +5. Bogost, Ian. 2017. ‘Cryptocurrency Might Be a Path to Authoritarianism’. The Atlantic 30. +6. Braun, Benjamin, and Daniela Gabor. 2019. ‘Central Banking, Shadow Banking, and Infrastructural Power’. https://doi.org/10.31235/osf.io/nf9ms. +7. Buttigieg, Christopher P., Christos Efthymiopoulos, Abigail Attard, and Samantha Cuyle. 2019. ‘Anti-Money Laundering Regulation of Crypto Assets in Europe’s Smallest Member State’. Law and Financial Markets Review 13 (4): 211–27. https://doi.org/10.1080/17521440.2019.1663996. +8. Crandall, Jillian. 2019. ‘Cryptoeconomic Geographies and Contestation in Puerto Rico’. Thesis. PhD Thesis. http://jilliancrandall.net/cryptoeconomic-geographies-and-contestation-in-pr/. +9. Doody, Sean. 2020. ‘Reactionary Technopolitics: A Critical Sociohistorical Review’. Fast Capitalism 17 (1): 143–64. https://doi.org/10.32855/fcapital.202001.009. +10. Ferreira, Agata. 2021. ‘The Curious Case of Stablecoins—Balancing Risks and Rewards?’ Journal of International Economic Law 24 (4): 755–78. https://doi.org/10.1093/jiel/jgab036. +11. Fletcher, Emily, Charles Larkin, and Shaen Corbet. 2021. ‘Countering Money Laundering and Terrorist Financing: A Case for Bitcoin Regulation’. Research in International Business and Finance 56 (January): 101387. https://doi.org/10.1016/j.ribaf.2021.101387. +12. Greenberg, Andy. 2012. This Machine Kills Secrets: Julian Assange, the Cypherpunks, and Their Fight to Empower Whistleblowers. Penguin Randon House. https://www.penguinrandomhouse.com/books/309904/this-machine-kills-secrets-by-andy-greenberg/. +13. Gürses, Seda, Arun Kundnani, and Joris Van Hoboken. 2016. ‘Crypto and Empire: The Contradictions of Counter-Surveillance Advocacy’. Media, Culture and Society 38 (4): 576–90. https://doi.org/10.1177/0163443716643006. +14. Hanke, Steve, Nicholas Hanlon, Mihir Chakravarthi, and others. 2021. ‘Bukele’s Bitcoin Blunder’. The Johns Hopkins Institute for Applied Economics, Global Health, and the …. +15. Howson, Peter. 2020. ‘Climate Crises and Crypto-Colonialism: Conjuring Value on the Blockchain Frontiers of the Global South’. Frontiers in Blockchain 3 (May). https://doi.org/10.3389/fbloc.2020.00022. +16. Howson, Peter, and Alex de Vries. 2022. ‘Preying on the Poor? Opportunities and Challenges for Tackling the Social and Environmental Threats of Cryptocurrencies for Vulnerable and Low-Income Communities’. Energy Research and Social Science 84 (xxxx): 102394. https://doi.org/10.1016/j.erss.2021.102394. +17. Jutel, Olivier. 2022. ‘Blockchain Humanitarianism and Crypto-Colonialism’. Cell Press Open Access, Patterns, 3 (1): 8. https://doi.org/10.1016/j.patter.2021.100422. +18. Krugman, Paul. 2022. ‘The Strange Alliance of Crypto and MAGA Believers’. The New York Times, 11 January 2022, sec. Opinion. https://www.nytimes.com/2022/01/10/opinion/crypto-cryptocurrency-money-conspiracy.html. +19. Murray, Christine. n.d. ‘IMF Urges El Salvador to Ditch Bitcoin as Legal Tender | Financial Times’. Accessed 3 March 2022. https://www.ft.com/content/fbf9aef0-453f-4e61-bd83-ff2b2bc92221. +20. Orcutt, Mike. 2020. ‘This Is How North Korea Uses Cutting-Edge Crypto Money Laundering to Steal Millions’. MIT Technology Review. MIT Technology Review. http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/. +21. Ottenhof, Luke. 2021. ‘Crypto-Colonialists Use the Most Vulnerable People in the World as Guinea Pigs’. VICE Media. +22. Pilkington, Marc. 2017. ‘Can Global Elites Pave the Way for a New Transnational Unit of Account? A Reflection on the Numerical Nature of Money’. World Review of Political Economy 8 (4). https://doi.org/10.2139/ssrn.2339678. +23. Popper, Nathaniel. 2019. ‘Terrorists Turn to Bitcoin for Funding, and They’re Learning Fast’. The New York Times, 92–94. +24. Renieris, Elizabeth M. n.d. ‘Why a Little-Known Blockchain-Based Identity Project in Ethiopia Should Concern Us All’. Centre for International Governance Innovation. Accessed 22 February 2022. https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/. +25. 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