The politics of Bitcoin

Things are finally getting interesting.

There's two parties to Bitcoin as it stands right now. Well, two that I see at any rate, maybe a lot more I don't see. Let's delve a little into their history.

Bitcoin, in and of itself, is in no need of any particular government or any government at all. It doesn't need the Internet, as proven by the existence of brain wallets, and it doesn't need computers : you could do the whole blockchain thing pen-on-paper if you had the inclination. It doesn't even need people : it's perfectly possible for gas molecules somewhere to play out keypair generation, hashing, blockchain creation and all that.

This means that people, computers, the Internet, and ultimately any particular government and government in general is irrelevant to Bitcoin. This is after all how it should be, as the most recent embodiement of an Essenceⁱ it couldn't work any other way.

States, in and of themselves, always regard their sovereignity as "over everything". Indeed, you'd be hard pressed to find a Parliament which earnestly believes that there's any limit to what it may, in principle, consider. Sure, some places have Constitutions, but as shown by the political crisis in Romania this summer, even the Parliament of an EU member state has serious difficulty coming to terms with any limitation of its rule. Governments are even worse, as perfectly illustrated by the decades-long Constitutional crisis in the US : the Presidential administration thereⁱⁱ feels perfectly entitled to outright ignore Congress on most matters by now. "For the children", or "because of the terrorists" or something like that. Excuses there shall forever be.

These two realities then will have to come in conflict, and they have come in conflict at the point of contact : there where bitcoins are exchanged for fiat and fiat is exchanged for bitcoin. States see any such exchange as something certainly within their empire (as this involves their currency). Bitcoin sees this as just another transaction, perfectly identical to any other transaction. Dollars are worthless in Bitcoinⁱⁱⁱ just as states are irrelevant in Bitcoin. The argument is usually brought in reverse ("Bitcoins are worthless in Dollars"), and that is obviously true, for instance for someone who has no access to Bitcoin. However, in any conflict between two systems it is witout fail the more encompassing one that comes out a victor (much like in the battle between two snakes : that snake wins which can fit the other within his gullet^iv.)

Out of the fear of very much imaginary terrorists and very much risible "threaths to the safety of children" coupled with the very desperate need to limit people's access, control and free disposition of wealth (which in turn arises from the desperation of the bankrupt welfare system coming to terms with the exact causes of the collapse of the Soviet Union) states have currently introduced a complex program of mostly illegitimate dickery known as "Anti-Money Laundering". It is this instrument, created to prop the collapsing giant with clay feet, that comes into conflict with the adamantine rock of Bitcoin.

From this contact then sprout two parties : the Obsequious^v, mostly the opperators of the largest exchanges, who have for instance proceeded to introduce some shoddy and possibly illegal "KYC" procedures in their business, demanding various things from their prospective customers (in many cases after the relationship was already established) on the grounds that FinCEN (the enforcing arm of the US Dept of Plenty) stated orally and unbindingly that Bitcoin may be included in their most recent power grab^vi ; and the... well... I'm part of it so I will leave the naming to the opposition. Seems only fair. Perhaps the Irresponsibles.

Whatever it may be called, this latter party cares not one whit for the difficulties of the exchanges, nor does it care that their hopes of creating fiat-businesses out of exploiting Bitcoins are pretty much quashed by even a cursory examination of some aspects of the legality of the matter. Sure, they had hoped to one day be listed on NYSE on the strength of their marginal position in this virtual but probably last currency, and make the bright original investors a pot of... well, not gold, anything but gold, some government scrip (which you may not spend and soon enough may not hold, either). Bully for them, but that's a way of being part of the problem, not part of the solution.

All that aside, the other party sees little of any import coming from their quarter : some minor benefit, possibly some minor hindrance. Overall, their relevancy is a temporary and self-limiting accident in the evolution of this thing.

Or at least that's how I feel about it^vii.

PS :

pigeons you live in a place where fighting back worked. the rest of us live in the rest of the world where we got crushed.
pigeons so we use a different stategy than head-on
mircea_popescu that is a good point, yes.
mircea_popescu but i intend to hold up that legacy.
pigeons i respect that
mircea_popescu after all, the main advantage of btc is exactly that we may cooperare.
mircea_popescu cooperate*
pigeons aye
mircea_popescu understand, i have no problem whatever with a myriad strategies being employed.
mircea_popescu quite the contrary.

1. Romanian article. Pretty good one, too. [↩]
2. Our colonies employ a bizzare system whereby the President is really Prime Minister and the actual President is called Vice-President for some ungodly reason. [↩]
3. Which would be the reason BTC went from nothing to over 30 Dollars then from ~2 to ~13 and so on. [↩]
4. Yes, I know snakes don't have gullets. It's a simile which is like a metaphor [↩]
5. Adjective: Obedient or attentive to an excessive or servile degree. Synonyms: servile, subservient, slavish, menial, fawning. [↩]
6. You can read more for instance here, but the amusing gist of it would be that "a foreign Money Service Business (as defined) may now be subject to US regulations and criminal penalities even if none of its agents, agencies, branches or offices are physically located in the United States”, as if anyone outside of the US actually cares what some proud members of the US President's household firmly believe with conviction, really-really strongly and swear on red. [↩]
7. Apud Remo Gaggi. [↩]