When it comes to "additional utility" specifically, I'll defer to Jill Carlson: "Decentralized systems forsake scale, speed, and cost in favor of one key feature: censorship resistance. Cryptocurrency solves problems faced by the censored who, by definition, are not the mainstream." In other words, if you're not subject to censorship yourself, the tangible benefits are nil. (No, 🚀🌝 doesn't count.)
If I read him correctly, Josh was also asking a broader question: What is point of cybercoins? Why should anyone pay attention to cryptocurrency when conventional USD gets the job done?
The answer is that USD — actually, fiat money in general — doesn't get the job done. It has an intrinsic weakness that endangers all of us, robbing individuals and communities of their agency. That weakness is centralization.
The state controls fiat money, utterly. Not merely supply — the state defines what you are allowed to do with its money. The only exception is physical cash, which would be equally surveilled and censored if it were practical for the state to do so. (By the way, "the state" in this context means "whatever government is most relevant to you." Propensity to abuse the populace can be curbed, but I've yet to see it eliminated.) And while cash is the most free-as-in-freedom form of fiat money, its value can be debased without your consent.
Digitized finance is much worse. Every single transaction goes through an intermediary. What may feel like your property is actually an entry in an intermediary's database. If that intermediary decides to cut you off, or yields to pressure from above? You're shit outta luck.
It's a business, after all! No shirt, no shoes, no service! But when you trace it back, pressure on the business tends to come from a populist mob (pick your flavor), be it real or imagined, or from a payment processor.
Let's say it's a payment processor, no pitchforks involved. Those companies are always slavering for transaction fees, right? Alas, banks are strict — substantially for risk reasons but also substantially because banks are beholden to regulators. Whaddaya know, regulators can use soft power to financially censor at will 🤔
Cybercoins enable opting out. I wrote in 2018:
Cryptocurrencies port [gun advocates'] defiant "come and take it" attitude over to money, in the form of scarce digital tokens. The incentive structure that Satoshi Nakamoto designed makes it extraordinarily hard to corrupt a cryptocurrency network (once it has scaled enough). By contrast to the traditional banking system, in the cryptocurrency world the government can’t lean on third parties to prevent you from transacting however you wish. Third parties themselves may still refuse to serve you, but decentralized alternatives exist. [...]
Encryption is a tool of autonomy and consent; its application to money reduces the degree to which governments can arbitrarily compel economic obedience, or even detect the absence of compliance. I have no illusions that we’re on the brink of ancap paradise, nor that such a thing will ever be feasible. And I still pay my taxes. But I am happy to see this shift in the balance of power. Exit technologies improve a population’s BATNA. Members of the cypherpunk movement, after decades of collective effort, have made it possible to opt in to the monetary policy of your choice rather than bowing to whatever level of inflation the Fed prefers.
There's been some progress, but the status quo remains maddening. In September, 2019, reporter Leigh Cuen examined bitcoin usage in Palestine. A line from her story jumped out at me:
Since PayPal and other online services exclude the Palestinian territories, [bitcoin] is one of the only ways for freelancers to easily receive international payments.
That sentence is a microcosm of the status quo that cryptocurrency exists to destroy. I don't want any government to be able to dictate who I can speak and transact with, nor who can speak and transact with me. Literally zero nations deserve that trust from the citizenry, let alone foreigners.
After hearing my spiel, people usually want to know why I'm such a raving libertarian. The full justification is
too daunting to write out of scope, sorry, but in broad strokes it comes down to civil liberties. Fundamentally, I believe in freedom of speech and freedom of association. The Bill of Rights didn't get everything right, but it sure as hell nailed that part.
My friend Geoff Greer wrote a phenomenal defense of free speech:
The key question of censorship is: Who decides what to censor? Framing freedom of speech in terms of hearing reveals how insidious this question is. If you ask, "Who should decide which ideas one may speak or publish?", many are willing to let a government body take the reins. If you ask, "Who should decide which ideas you may hear or read?", people boggle. But as Paine and Mill pointed out, these are the same question. If you don't trust others to decide what you can read or hear, then you don't trust them to decide what can be written or uttered.
Imagine our society passes laws to ban the publishing of abhorrent and bigoted ideas. No longer are people allowed to express racism, sexism, homophobia, or antisemitism. So we ban Mein Kampf. No great loss there. Can you think of some other influential texts that are full of racism, sexism, homophobia, and antisemitism? A couple come to my mind: The Bible and the Qur’an. Honestly, how can you not ban them? These texts contain passages endorsing slavery. For centuries, the ideas in these books have been used to justify pogroms. Even today, they create needless suffering for much of humanity. If you find yourself struggling to find reasons why religious texts should be exempt, then you see the problem. If censorship laws are consistently applied, most religious texts will be banned. If they're inconsistently applied, the people in charge will censor according to their own beliefs and biases. Would you trust the current administration with that kind of authority? Neither outcome seems desirable to me.
Amen to all of that.
In the same vein, "In Favor of Niceness, Community, and Civilization" (Slate Star Codex) has a passage that always fires me up:
Civilization didn't conquer the world by forbidding you to murder your enemies unless they are actually unrighteous in which case go ahead and kill them all. Liberals didn't give their lives in the battle against tyranny to end discrimination against all religions except Jansenism because seriously fuck Jansenists. Here we have built our Schelling fence and here we are defending it to the bitter end.
To defend these principles, we need freedom to as well as freedom from.
Wanna read more? I have recommendations!
If you're looking for a book, try Digital Cash by Finn Brunton. That's the best one-stop introduction that I've personally read. (There are others, but I haven't read them.) Digital Cash has layman-level technical explanations and delves into the cultural history of bitcoin.
Articles you should read:
|"The Crypto Anarchist Manifesto"||Timothy C. May||1992, "dates back to mid-1988"|
|"A Cypherpunk's Manifesto"||Eric Hughes||1993|
|"A Declaration of the Independence of Cyberspace"||John Perry Barlow||1996|
|"Trusted Third Parties Are Security Holes"||Nick Szabo||2001|
|"Shelling Out: The Origins of Money"||Nick Szabo||2002|
|"A Ledger and a Network"||Quinn Norton||2014|
|"Bitcoin, Free Trade, and Terrible Humans"||OpenBazaar||2014|
|"Why Is Decentralization Important?"||OpenBazaar||2017|
|"The Conversations that Cryptocurrency Killed"||Sonya Mann (me!)||2018|
|"Resistant protocols: How decentralization evolves"||John Backus||2018|
|"Minimum viable decentralization"||John Backus||2018|
|"Invest in the ugly duckling — decentralization, product/market fit, and the law"||John Backus||2018|
|"The Beginner's Guide to Decentralization"||OpenBazaar||2018|
|"Bitcoin Equals Freedom"||Ross Ulbricht||2019|
|"Cryptocurrency Is Most Useful for Breaking Laws and Social Constructs"||Jill Carlson||2019|
Finally, a video: Allan Stevo's talk "Infosec v Hacker: The War for the Soul of a Technology" (delivered at the Defcon 27 Monero Village in August, 2019).
Still not sated? Find more:
- "A Cypherpunk Privacy Reading List"
- Jameson Lopp's curated list of links
- Satoshi Nakamoto Institute's library
Header photo by Pawel Janiak.