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A Use Case for Cryptocurrency
As I’ve said many times, I’m broadly skeptical about cryptocurrencies, think blockchain falls right behind self-driving cars as the second most over-hyped computer technology, and believe Bitcoin is a speculative bubble of little intrinsic value.
Having said that, there is one use case for cryptocurrency that I’ve acknowledged from the start: it can be a practical way for people to execute transactions that those in authority would like to prevent them from making. In some benighted places, like Cuba and Venezuela and other progressive utopias, cryptocurrencies allow people to circumvent kleptocratic governments. That’s nice, and I’m all for that, but it isn’t (yet) a First World problem.
However, what is a First World problem is sanctimonious “woke” corporations that put their own smug self-righteous moral superiority over serving their customers. That includes, for example, every financial institution that threatens to refuse service to legal gun dealers.
So, while the largest serious application of cryptocurrency transactions in the United States is probably to enable criminals to get paid for their crimes, there’s a real, legitimate application as well: making it possible for law-abiding citizens to transact legal business that gives the preening pansies of woke America the vapors.
Those gun sellers who don’t already should start accepting cryptocurrencies.
Anyone interested in cryptocurrencies might want to listen to Rich Goldberg’s excellent new Cryptonite podcast.
Published in General
Crypto would be a good idea, except that Canada says it’s blocking crypto to the truckers. And even if they couldn’t block it, who takes crypto? Most merchants don’t and the crypto (the $10 million dollars worth) would need to be converted into Canadian or US dollars. So once again it needs to enter the official banking system, which is the choke point.
All of this is true at the moment; however, we need to look into ways to change this. What Canada is doing could happen here as well and we have already seen we have little reason to trust the government. CoVid is opening the eyes of many people to just how much the government despises them.
Flick, Canada can’t block crypto to the truckers.
There’s a difference between the casual use of cryptocurrencies through coin brokers, on the one hand, and serious use intended to circumvent authoritarian restrictions on the other. There is no way Canada or any other nation can “block” crypto, short of preventing people from using the internet and VPNs. It simply requires sufficient motivation on the part of the cryptocurrency users.
Any gun dealer who wishes to accept cryptocurrency can begin doing so now. And I’m not sure that even a coin broker could prevent someone from sending cryptocurrency to a gun dealer, given that the dealer can have an anonymous cryptocurrency identity.
Yes, merchants will have to figure out how to get their money out of the cryptocurrency, but that’s a relatively easy problem to address. There are thousands of cryptocurrency users who would be happy to facilitate such transactions.
Hm. You sell your crypto to a dealer, right?
How do you get your money to buy 5,000 cups of coffee for the truckers if not through a bank?
Yes. At some point, I have to extract it into something I can use.
One caution: AFAIK, crypto transactions on a block chain are not anonymous, they are pseudonymous. If there’s a wallet involved, it’s digital ID is the pseud. If the pseud can be bound to a real world ID, then transactions with that wallet and potentially a whole network of transactions can be unmasked.
How would a bad guy, or an intelligence service, do that? Usually a transaction involves out-of-band data, such as web site page loads, e-mail, or the like. If those aren’t secured, they are a path of attack by unmasking the metadata around the transaction.
So if you’re thinking of how to work around the compromised mainstream financial system, the communications path used needs to be as secure as the crypto and blockchain chosen.
The inherent value of gold is $1000/oz (it is pretty and has great electrical properties).
The inherent value of paper money is zero (it is fancy linen, but not useful as paper).
The inherent value of bitcoin is negative. (without constant computational effort, the block-chain collapses).
Think about that.
Exactly and you better not buy anything that is delivered to your home or computer.
Basically, you have to purchase your crypto with cash and then using a secure connection transfer it to the truckers remove any connection you had with that crypto. Good luck!
Well, “positive”, but your point is valid. Paper money has no inherent value, therefore no inherent value can be specified in it for longer than [now]. But your larger point is a good one.
Right. Crypto can be used with a high reasonable expectation of evading identifcation by people desperate enough that they have no choice but to go to the extreme lengths required. For most of us who aren’t about to put on facial recognition-defeating angular camo face-paint and steal a computer to make a single transaction behind a Starbucks with no cameras nearby (and no cellphone, and in a car older than your sister’s worst boyfriend) — well, it can be handy for some things. But not [x]-onymous.
I think the example cited in my post — gun dealers — is actually a pretty practical one for cryptocurrency.
Yes, cryptocurrency anonymity can sometimes be broken, if an agency wants to invest the time and energy. But we aren’t talking about government restrictions here, we’re talking about credit card companies, banks, services like PayPal and Venmo, things like that. Those entities don’t have the resources to walk back the blockchain and figure out who spent $650 on a Sig P320.
As for getting money out of, say, Bitcoin, that’s not too hard either. Anyone can open an account with a cryptocurrency broker, and there’s no practical way the broker can identify the source or destination of funds from that account. Remember, the problem with banks, etc., restricting trade with, say, gun dealers, is that it makes it hard for people to give money to the gun dealers. Once the gun dealer has the money, turning it into a fungible form really isn’t the challenge. (This does assume that the dealer has a bank somewhere willing to provide him with an account. But I’d be surprised if dealers can’t find basic banking services for their businesses.)
The chokepoint is the networks, the credit card and money routing systems. Cryptocurrencies effectively circumvent that chokepoint.
Unless of course there’s an active program to do just that with government, big tech, and finance pooling resurces for mutual benefit. Not that I can cite a source or anything. That just seems to rhyme with a lot that’s going on these days.
Yeah, but Hank does not think that way.
No, I don’t. I think I’m generally kind of evidence-based in my beliefs.
I don’t claim to know that such a thing exists. I just get the creeps about it.
You tend to assume the rosy outcomes.
Based on what I am seeing, I am more than willing to believe that they would stop at nothing to track people down to stop them spending money.
Regarding the purchase of the Sig, where is the end dealer going to get the money to pay the distributor for the Sig? If he uses crypto, where is the distributor going to get the money to pay Sig for the pistol? If you say this is a micro economy in which everyone uses crypto, then look back the everything the manufacturer need to make a pistol, from buying specialty steel stock, to formed or unformed plastics, to tempered bits, to treatment chemicals, to ventilations systems and repair, machine repair and replacement, to paint or bluing.
To boxing and lettering, and enclosed documentation, and other subcontracted parts.
And back further still to the mortgage or rent on the fabrication facility, the energy bills, just for examples.
You’re talking about hundreds of companies (and not a few government agencies) that go into making a single gun, that need to be paid. They’ll all take crypto?
[And I forgot payroll. Every employee would have these same problems.]
Even if you say this can be a long-term strategy, that only gives the government and the increases in computing power more time to work on monitoring systems for crypto.
I’m serious, that I’d like to see a way around this question of the government and the banking institutions controlling and tracking money, but I can’t see it.
That is the difference between a free economy (or state) and a totalitarian one. The totalitarian state can bring all its resources to every transaction.
It’s more that your imagination sticks to a limited space. You’ve got boundaries you don’t transgress. It’s just as obvious that government can develop a way to divine identity from the blockchain and make it available to favored clients, as it is that merchants can decide to accept BTC.
Is this the psychedelics thread?
Of course they CAN. They CAN put us all in gulags.
But there’s no evidence that they DO. That’s my point.
Well, if you’re talking about buying a new (especially) gun from a dealer, what “currency” you use might be the least of your concerns regarding privacy. If you find a dealer that won’t do the federal paperwork and background check etc, you’re dealing with criminals (according to the government) right from the start. And if you do everything normally but just pay with bitcoin, your actual identity is going to be all over a bunch of paperwork. They won’t need to backtrack your payment.
“So you’re saying there’s a chance?”
Oi! You got a loicense for that loaf o bread?
KE, you’re hypothesizing a problem that is different from the one for which Bitcoin is a solution. It isn’t about “privacy,” per se. Cryptocurrencies don’t prevent the government from over-regulating gun purchases or otherwise trampling on our freedoms. What they do is prevent financial institutions from doing those things.
The problem cryptocurrencies address is that of financial institutions appointing themselves vigilantes and preventing people from using their services when executing perfectly legal transactions that meet with the institutions’ disapproval. For example, it’s the credit card processing networks refusing to allow legal gun dealers to process credit card transactions. It’s Venmo and Paypal deciding that they won’t allow transfers to individuals they identify as gun dealers.
So I walk into my local gun shop with my eye on a Smith and Wesson 686. The guy behind the counter compliments me on my good taste in choosing one of the finest .357 Magnum revolvers made, but tells me he can’t take my credit card, and I can’t Venmo him the money, because financial institutions have taken it upon themselves to become little fascistic virtue police. But he accepts Bitcoin. He gives me a bitcoin address, and I whip out my cell phone, log in to my coin broker, and transfer $950 worth of Bitcoin to the address he gives me.
At that moment, no one knows who I sent money to nor why I sent it. There’s no system in place that will prevent me from making that transaction, nor any system that will prevent my gun dealer from receiving the money. I do all the other paperwork, wait however long the government thinks I’m supposed to wait, and eventually walk out with my handgun.
The function of cybercurrency in this case is to make possible transactions which financial institutions refuse to facilitate.
Yes I see that too, but then you’re dealing with the issues that someone else pointed out earlier: basically, unless everyone else in the “supply chain” – including Smith & Wesson and their various suppliers – all use bitcoin, at some point it falls apart. And I don’t think there’s a snowball’s chance of them all using bitcoin.
And frankly, it seems like you’d get the same benefit just from using cash. Unless you’re like Woody Boyd and feel the need to memorize the serial numbers on all of your currency. Or unless you think the government and the banks are doing that, so they can trace the individual bills you get from the ATM and where you spend them.
No. They just use civil asset forfeiture
This is a much broader version of this discussion if anybody’s interested. Pretty clear about the motives of the state and the complications of dealing with that.
https://www.adamtownsend.me/investor-series-5-simon-mikhailovich-gold/
The guy being interviewed is insanely smart, so I’ve never seen him being interrupted so much, but it turned out pretty constructive.
@henryracette
Crypto currency + Starlink might be a useful combination. They address similar concerns but along different threat vectors.
http://www.smalldeadanimals.com/2022/02/16/communications-upgrade/
Whenever I see discussions like this always default to at some point silver rounds and pre-1964 coins are going to be really hot at some phase in all of this grief.
Bitcoin, small bills, and silver rounds are basically your only options.
If you have been paying attention to what they are locking up in the hood now and sometimes not the hood now, they’ve moved on to toothpaste. Even Reverend Al Sharpton is complaining about what a bitch it is to get toothpaste. Everybody’s running out of it and you can trade it for whatever you want. The big one has always been laundry detergent. Razor blades is another one. It’s probably too late now, but small ammunition would probably be really good.