With all the chatter about the latest statist overeach in the EU regarding bitcoin and 'unhosted wallets' I figured I would share some slides from my talk at Bear Arms and Bitcoin conference in Miami in 2022.
This post is adapted from a Tweet originally posted on June 30, 2022
"Bitcoin: A Peer-to-Peer Electronic Cash System."
The clue is in the title. Take note of the following key words: - Peer-to-Peer Electronic Cash. We'll come back to that, but first to understand what Satoshi invented we need to understand physical (non digital) cash.
What is cash?
Aristotle explored what makes good money in his Nicomachean Ethics. No doubt many of you have seen this before, usually when someone is trying to convince you to buy gold. But it just so happens that even physical fiat dollars tick these boxes too.
Isn't cash for criminals?
We're increasingly in a world where we are taught to be suspicious of cash, that those who choose to deal primarily with physical cash are shady at best or criminals at worst. This gas lighting is a recent innovation. The old expression 'Cash is king' exists for a reason.
The War On Cash
This ties into what is referred to as "The War on Cash". Make no mistake, this is a war, and the victory condition is a state where all transactions are tied to an identity that leaves an audit trail for law enforcement and tax authorities.
Like all wars, propaganda plays a huge part. Thanks to industry involvement and collaboration, physical cash is seen as dirty, illicit, and strange
Control the money supply, control the nation
Another effective tool in this war is the absolute legislative and policy control our adversary commands. In the US private money was banned in the 1930s, with the power to control supply and denominations of notes under total state control. Control the money control the people
Adding to the legislative weapons of this war is the legal ceiling on cash payments. In Greece it is illegal to transact more than €500 in cash
Make no mistake, the War On Cash is a real thing. The benefits of a cash-free society are too great (from the perspective of central bankers and the state)
And make no mistake, the war on cash is a WAR ON YOU With that let's jump back to Satoshi's white paper. Earlier I highlighted two key words in the white paper title.
Peer-to-Peer - Electronic Cash But actually I think it is misleading... In fact, the emphasis shouldn't be 'Electronic Cash' but actually 'Cash System'
Bitcoin isn't money. Bitcoin isn't cash. Bitcoin is an entire system, a system for creating the conditions of physical cash, electronically.
Fundamentally Bitcoin (Satoshi's Cash System) is software. Unfortunately from the very early days Bitcoin has been painted as "a better money" but this is flawed and why Bitcoin is being actively attacked in the war on cash, tied up in 'Anti Money Laundering' regulations
Satoshi's Cash System was successful. The system created the conditions for an electronic analog to physical cash. For the first time ever, data could be cash. And even more brilliantly, data is analogous to speech, and speech always wants to be free.
Bitcoin isn't money
Let us return back to the flawed concept of equating Bitcoin to money. By framing Bitcoin in this way is to let the enemy choose the battlefield. If Bitcoin is money you eventually accept it must be regulated and controlled as all money is (yes even gold)
There are no 'coins', no 'notes', no 'currency units'. There is only a chain of digital signatures. Text. Data. Speech.
There is no issuance of currency. When a new block is found a new special digital signature is created. The signature announced publicly to anyone who will listen Text. Data. Speech.
And yes, we are guilty of this metaphor, but there are no wallets. There are only keychains that hold public/private key pair data Text. Data. Speech.
To wrap things up let's look at Satoshi's Cash System in the context of the War on Cash - Bitcoin represents a serious threat to the war on cash - Without firm control the central banker vision of a cashless society can be severely undermined with Bitcoin
With that in mind regulatory capture is the best bet for neutering and controlling the fall out of a cash system they cannot outright shut down or effectively ban.
KYC is among the most effective tools they have to not only wrangle the cash system but to completely capture it. More users of the cash system that are identified plays right into their strategic vision of a cashless society where all transactions are tied to an entity.
For those of you who made it this far, thanks for reading