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[liberationtech] Bitcoin and The Public Function of Money

Gregory Maxwell greg at
Fri Nov 2 09:26:20 PDT 2012

On Tue, Oct 30, 2012 at 9:51 PM, StealthMonger
<StealthMonger at> wrote:
> Yes, Bitcoin liberates trade from "public" extortion ("taxation").

It does no such thing. Under US law, for example, Barter in Bitcoins
is just as taxable as bartering with coal or cows and share many
similar properties (also with cash).  Adding 'bit' to the name of
something doesn't somehow make it magically invisible to authorities.

I'm happy that Bitcoin is interesting technology that inspires
fascinating political and technical discussions from people with all
kinds of backgrounds and political persuasions. At the same time I'm
disappointed (I used to be shocked, but that has long since worn off)
by the callous— and I believe very short sighted and non-pragmatic—
politics of a vocal few promote. This advocacy of dog-eat-dog and
everyman as his own militia as an ultimate ideal is not a phenomena
unique to Bitcoin. Many Bitcoin users I know are kind and thoughtful
people and all of the developers I know are. The fact that people with
vastly different views can find the system compelling is just one of
its attractions and challenges.

Dmytri's views don't sound incompatible with mine.  I just wanted to
speak up so that people wouldn't reject considering Bitcoin for
something off-hand because they, like I, find StealthMonger's politics

Tying it back to the list topic. There are some interesting challenges
int the context of anonymity systems 9in particular) which I think
that Bitcoin, and technologies from its ecosystem, can contribute to
improving.  Generally preventing denial of service from resource
starvation or spam is frustrated when participants are anonymous.
Expensive pseudonymity can help, but making those pseudonyms expensive
can be tricky (especially as computers will eventually better than
humans at captha solving, already I find I have to retry stronger
captchas myself several times). If Bitcoin becomes widely used then it
can be an option for making pseudonyms costly in a way which may be
more anonymous and equal in access than other options.

(and of course, making a pseudonym _cost_ no matter in what form
disenfranchises people who are poorer; which is unfortunate.  Socially
prudent technology uses that kind of measure as a last resort and in
the least impacting form.  I'm personally not a fan of web-of-trust
systems— they're strongly anti-privacy and second-order or higher
trust must have complicated heuristics to avoid abuse which I fear may
result in kafkaesque outcomes. It may be unjust to allow money to
govern our actions, but it can be more just than the deranged
correlations of a bayesian classifier.)

Another point here is that Bitcoin is more than a simple 1:1 value
transfer system.  Bitcoins can be specified with complex rules for the
criteria under which they can be redeemed.  For example, I can write a
transaction which can be redeemed by anyone publishing a
first-preimage of a specified hash; or only according to a quorum of
signers.   These kinds of zero or low trust mechanisms— especially
when coupled with other not yet existing infrastructure— can
potentially restore the freedom to safely make transactions for people
in places where the traditional methods of contract enforcement are
dysfunctional or are unavailable for political or privacy reasons; or
can simply be used to make strong enforcement available when it
otherwise would be too expensive. From a liberty perspective I think
that strongly cheat proof/resistant systems are generally preferable
to post-hoc enforcement— its better to build systems that cant be
cheated than to have the costs and risks of enforcement and fails for
people who do cheat. Bitcoin provides underling infrastructure for
building these such systems when they depend on the transferring

So I hope that thoughtful technology people continue thinking of
Bitcoin as a potential tool, and just ignore the politics of other
people who like Bitcoin for different (and sometime misguided)

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