The Global Liberty Community
Bitcoin is Not a Tool for Freedom
For all of you clutching at your chests in horror, put those racing hearts back to rest–I’m as big a crypto fan as they come. But that doesn’t change the simple fact that Bitcoin–like all tools–is neutral in nature. It can just as easily be used for tyranny as for freedom.
Look at one of most freedom-lovers’ favorite tools: the gun. The gun can be used to protect your life and the lives of those around you. It can be used to defend your property. It can even be used to hunt game for food or sport. All good, freedom-friendly things.
But the gun can also be used to threaten the innocent. To oppress the unpopular. To control and murder.
One tool. Multiple uses. Whether a tool’s use furthers freedom or tyranny depends on the ideas held by the tool-wielder.
A Bitcoiner who subscribes to the idea of freedom can work wonders with it. Can send any amount of money to family and friends, across any political boundary, almost instantly and for about five cents. Can hide his savings away from the ravages of inflation and the very real threat of government-sponsored bank “bail-ins.” Can trade seamlessly with so-called “third world” inhabitants, who lack bank access but have a trusty smartphone.
But what about an advocate of cryptocurrency who rather prefers tyranny? I wrote an article yesterday about one such development already in the works. A “nonprofit” born of MIT called ID3 is developing identity-tracking software that they hope will be used for digital commerce like the so-called “driver’s license” is used in transportation. Whereas government claims ownership of all the roads and tries to force you to get revocable permission to drive, ID3 hopes their software will become your “commerce license.” They envision a future in which businesses are forbidden from selling to customers who don’t first submit their ID3 identification pack for tracking and monitoring.
Sound like ID3 is up in the night? I wish. In fact, they developed the software side-by-side with government employees. This is another testament to the fact that the human power of governments alone is not nearly enough to control entire populations. It takes the ready and the willing–like ID3’s development team–to actively assist in their own surveillance and oppression. Bureaucrats couldn’t have developed this sophisticated software on their own. They’re literally not smart enough. They require the acquiescence and even assistance of those they hope to rule to make any progress as would-be rulers.
Though I hoped it would be true, Jeffrey Tucker was wrong–Bitcoin itself will not end the nation-state. It is just a tool, neutral like all tools, and so ripe in its potential for both freedom and tyranny. It’s only ideas–good ideas–that can end statism. Though many cryptocurrency fans are still mired in the mindset of serfdom, there are many others who aren’t. It is through working, trading and partying with those who hold good ideas that the free economy can and will continue to grow.
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Jeffrey Tucker November 12, 2014 , 6:11 pm Vote38
A crucial point overlooked here: BTC lives on a distributed network. So it is not like physical property that the state has always regulated and controlled. It’s a different animal entirely. THere will be fits and starts to be sure and the state can slow down progress. But utlimately it can’t stop it.
Amanda B. Johnson November 12, 2014 , 6:24 pm Vote38
I agree that the state cannot stop Bitcoin, Jeffrey. No more than they’ve been able to stop drugs or prostitution or gambling. I just don’t think it by itself will end them.
Bryan HM November 13, 2014 , 4:13 am Vote38
You could also say that the government is in bed with the central banks – but is not in bed with people upholding the bitcoin network and its associated protocol. So by that I would argue that bitcoin or a crypto-currency is less able to be influenced by a nation-state than central bank notes are.
Do you have a problem with people who DO think bitcoin is a tool for freedom?? The matrix is real to a degree Amanda – whatever “mindset” you choose to hold.
Akin Fernandez November 12, 2014 , 6:50 pm Vote38
The premiss of this article is fatally flawed. Email encryption (for example) can be used by the State to hide its communications from its enemies. They have been doing this for years. Now that GPG is available to everyone, it is a far bigger threat to the State than the State hiding its communications from us.
All software tools have this in common; the scale of all of us using them over powers and overwhelms the State every time. Apple with iOS and Google with Android have just rolled out encryption into their phone software, locking out the State. This is an unprecedented event, meaning that the NSA, GCHQ and all the other “security services” are locked out of people’s communications, in the tens of millions. Only a few months ago, it was assumed that the State would have access to everyone’s communications forever, now they have no access. This is a perfect lesson in how things can change for the better overnight, and how weak the State is when faced with a mass rebellion.
You give the example of the ID3 company putting software to bad uses. I wrote about the Blockchain being used to “secure identity” a few days ago: https://medium.com/bitcoin-think/putting-id-cards-onto-the-blockchain-42271772b340 another entirely bad and unethical use.
We must remember that ID Cards, driving licenses and all other excrescences of the State are funded by the population. Once that funding goes away, all their apparatus dissolves into nothing, because there is no money to pay for it, the men who run, police, and enforce it.
Bitcoin, by removing the State’s ability to tax, will make at a minimum, adoption of new methods of tyranny impossible to implement, because there will literally be no stolen money to pay for it. At a maximum, the entire economy will move to Bitcoin, and everyone will suddenly realise that they no longer can be compelled to pay tax. The entire corrupt edifice will collapse, the Emperor will be stripped naked, and the State will die. Anyone who does not think that this can happen, needs to study the fall of the Soviet Union, which before it died, had the feel of something that would never be destroyed, but which was in fact, extremely fragile. All States today are exactly the same in structure and fragility.
Jeffrey Tucker is right; Bitcoin itself can and very probably will end the nation-state. This will take place when Bitcoin is in everyone hands, globally. No amount of talk or threats can stop this from happening, and we need only look to movie piracy to get a sense of the scale that this phenomenon will grow to, and how difficult it will be to stop.
One third of all internet traffic is taken up by software and movie piracy via BitTorrent; an illegal act that cannot ever be prevented. All copyright laws are now utterly worthless, and it is only the unlucky that are ever caught, while billions of files are swapped daily, openly without any fear of reprisals.
It doesn’t take too much imagination to superimpose the BitTorrent experience onto Bitcoin, and then to understand that the money motivation is far more powerful than the desire to download the latest movie. No one needs to watch the latest Hollywood garbage, but everyone needs money; its one half of all transactions. Given a Bitcoin clients ability to spread and the ability of Bitcoin itself to propagate frictionlessly and virally and everyone’s need for money, we can expect Bitcoin to spread everywhere and get into every device at a rapidly expanding rate.
All the odds are entirely against the State. The history of software piracy, the nature of money and the fragility of the State point to its utter demise and replacement with a voluntary society. It might not be obvious to everyone now, just as the fall of the Soviet Union was a surprise to many, but all the pieces are in place making this prediction entirely reasonable.
Don’t bet against Bitcoin, software and the power of Liberty!
Martin Brock December 6, 2014 , 2:52 am Vote38
How does Bitcoin impede the state’s ability to tax? The state’s ability to tax depends upon its ability to threaten its subjects. I don’t see how Bitcoin changes the credibility of these threats. Spending Bitcoin to buy a house or a car still requires a transfer of title to the house or car. Even if this transfer occurs via the blockchain, a title transfer necessarily must be transparent, because everyone expected to respect your title must know that you hold it. The state ultimately taxes transfers of real property, not currency. Currency is only an accounting device.
Jeffrey Tucker November 12, 2014 , 7:11 pm Vote2
We should do a hangout on this topic
Tiffany Madison November 12, 2014 , 7:42 pm Vote2
I would love to see that!
Gabriel Scheare November 12, 2014 , 8:24 pm Vote2
Absolutely
Amanda B. Johnson November 13, 2014 , 7:39 pm
This comment section has prompted a thorough followup: http://cryptoanarchy.liberty.me/2014/11/13/the-wet-code-of-your-heart/?refer=libertyme
John Brown November 12, 2014 , 7:15 pm Vote3
I agree entirely with Akin here, and I explored the possibility of Bitcoin being the agent in the State’s demise, or at least its shrinking, here
http://stateofterrorwebsite.liberty.me/2014/08/01/alternative-currencies/
John Brown
Adam November 12, 2014 , 8:17 pm Vote3
I agree Amanda. Bitcoin will not end the state. The only thing that will end the state is the determination in the minds and hearts of enough to people to not take part in the initiation of force; a moral conviction if you will. Having a proper moral conviction entails a correct understanding of what constitutes the initiation of violence. How many people have we met who, are kind, caring and strive to serve others who believe in patriotism?
I like to think that liberty is a societal state of being more than it is an ability or a right. The more moral the people are in a society, the more liberty there is. Bitcoin can be a tool in those who want to avoid the initiation of force, and avoid giving power to the greatest entity that initiates force — the state — but if we want liberty, it’s my opinion that we must use thoughtful persuasion to help instill a sense of proper morality in the hearts and minds of others. I believe that working to increase the moral agency of others is the very definition of love.
Chip Marce November 13, 2014 , 12:09 am
Nice first article, Amanda. A provocative point and well argued. I hope you’ll debate this at a later date if Jeffrey and you both are game.
Maybe get a Shire versus Alabama cheering section?
Account deleted December 4, 2014 , 5:08 am Vote3
The state will not end Bitcoin, and Bitcoin will not end the state. Bitcoin will end when a superior cryptocurrency defeats it in the free market. The state will end when enough people with enough resources decide to use force to defend themselves from it.
Martin Brock December 6, 2014 , 2:42 am Vote2
Exactlu.
Martin Brock December 6, 2014 , 2:41 am Vote2
Bitcoin itself will not end the nation-state, but stateless, digital money could be part of the solution. Bitcoin is technically flawed and may not survive the decade in its current form, but I never expected the first crypto-currency to be the last.
That said, Amanda is right. Crypto-currencies and decentralized title registries are not state-proof. A state can bank Bitcoin as easily as the next person, and a state can tax Bitcoin, spend Bitcoin and sell entitlement to Bitcoin tax revenue. Bitcoin is not immune to any of this stuff.