Cypherpunks want to keep governments from shutting down Bitcoin by hiding in anonymity. What they never understood is that Bitcoin lives and dies by the economics. A widespread ban kills the economics, thus kills Bitcoin.
Incentives are the key to survival. It MUST appeal to government.
This says nothing about the desirability of government, only about reality. Bitcoin fits into all major legal traditions like a glove. Governments will love it even as it shrinks them.
Bitcoin is Capitalismfinger. It turns everything it touches to capitalism.
Satoshi solved the Byzantine generals problem via economics, not cryptography. Satoshi also solved governance by economics, not cryptography.
Hold onto your hats. We’re entering a world where capitalism permeates every fiber of society. This is the 4th Industrial Revolution.
Governments will be too addicted to the tax money coming from all the increased productivity driven by Bitcoin to ever think of banning it. But to get there Bitcoin must stay in its original common-law-friendly form with transparent ledger and privacy via pseudonymity, not anon.
Crime (including gov corruption) is another problem Satoshi solves by economics, not cryptography. Via risk and cost functions, not absolutes.
In Bitcoin world, crime always leaves traces and can be tracked down at cost. But the pseudonymity prohibits mass surveillance, by cost.
It’s the kind of solution a cypherpunk would never see, and the one that any leftover trace of the cypherpunk mentality of “shrouding the world in darkness through technology” stops you from seeing.
Light, not dark, is the libertarian path. “Sunshine is the best disinfectant.”
The end result of Bitcoin’s combination of privacy and transparency is that minor lawbreaking goes unnoticed but true evil can always be found and rooted out.
It’s a world, in short, where crime doesn’t pay. Whether you are a criminal inside or outside the government.
It’s a world where the $5 wrench attack fails because justice is done for all crimes of consequence (within government as well), but where minor infractions are not economically worth law enforcement pursuing, and where widespread surveillance is prohibitively expensive.
Satoshi said Bitcoin is capitalism in code form, and capitalism is a product of Western cultural traditions of respect for property rights, which themselves are codified in thousands of years of customary legal tradition evolved through group selection on the market of societies.
Bitcoin embodies Western liberalism, a.k.a. the classical liberal or libertarian values that are the evolved precondition, the fertile soil of moral sentiments as explained by Adam Smith in his lesser known companion book to the Wealth of Nations, from which capitalism sprung.
The tradition of justice via transparency goes back at least to the ancient Greek story of the Ring of Gyges, the ring that lets one plunder society with impunity, unseen. Anonymity is that ring. Sunshine with privacy is the exact opposite.
Bitcoin’s combination of sunshine with privacy, with enforcement driven by economics, means everything is investigable but requires old-fashioned police work. Information must be compelled from certain parties, always at a cost.
The beautiful result is that broad snooping becomes much more impractical than it is today, yet targetted investigation of career criminals becomes much easier. This is how it should be. A world that is both more private and more just.
And a government that is fully auditable.
The tiny dot that is government cannot run and hide from prying eyes, but a million moms and pops paying their help under the table probably aren’t ever going to be found. Not because they can’t be, but because it simply isn’t worth investigating.
Economics, not absolutes.
Security is a risk function. Justice is economic. Everything runs by incentives. Satoshi’s vision fitting into Western legal tradition like a glove has a deeper significance than most realize: not only does it require no new laws to allow its use, Bitcoin is capitalism incarnate.
Satoshi identified the 3 key strands of Western civilization that made it work: individual property rights (economics), transparency, and privacy.
He built Bitcoin in Western tradition’s image, so that Bitcoin embodies AND enforces these ideals. Truly capitalism in code form.
Thus Bitcoin is both a technology and a thesis that Satoshi has advanced.
Such a finely tuned machine, such an epitomization of the best of Western ideals, was immediately pissed all over by the cypherpunks, from the mailing list’s James A. Donald onward.
From the transparency to the huge scale, from the economic incentives driving the highly interconnected node (= miner!) network shape and the security of instant transactions to the design’s deep awareness of common-law precepts around money, fraud, and tracing - all was suspect.
All were suspect and systematically dismantled by Core, and later others tried to go further afield. Everyone missed the beating heart of capitalism underpinned by Western justice and rights at Bitcoin’s center. The bumbling errors were mimicked, the vision lost in the shuffle.
Enter Craig Wright, or rather re-enter Satoshi Nakamoto, named after Tominaga Nakamoto whose writings about Western capitalism helped usher in a new era for Japan. Capitalism is an idea that enriches everything it touches, and Bitcoin IS capitalism in code form.
As such, like capitalism itself, Bitcoin is its own adoption machine. Governments will want it just as badly. It turns capitalism from an idea and a practice in law and society, to a technology that spreads like wildfire, not only to all countries but to all aspects of life.
It expands the scope of win-win interactions that are possible in society, vastly improving the world. This is why Bitcoin is the 4th Industrial Revolution. It isn’t just a catchphrase.
It can only do this at scale, transparently, upholding law and order as it was designed to.
Once you understand this, you see that Bitcoin SV is the only player on the field. It has been driving toward the goal by relentlessly building for years, while all the others are off exploring the parking lot.
