Dr. Craig Wright is taking issue with more popular Bitcoin myths in his latest blog post, and this time it’s “censorship resistance” and “permissionless.” Describing them as “empty jargon (that) have nothing to do with the nature of Bitcoin”, he explains the background to these misconceptions, and why Bitcoin isn’t trying to achieve those goals.
Bitcoin is for cash micropayments, and not as a workaround for money laundering laws, he says.
Bitcoin is digital cash, rather than an attempt to create a new currency. The blockchain is public, and it is not encrypted. While information cannot be removed from the blockchain, it can be prevented from disseminating if it’s found to be illegal.
As for the term “permissionless”, it’s hardly true—you cannot do whatever you want with Bitcoin. You can’t change its protocol, and it comes with its own set of rules. Many of its real-life operations are based on economic incentives, which can determine outcomes just as effectively.
Where did these two expressions come from, anyway? Dr. Wright traces them back to a report by the Electronic Frontier Foundation (EFF) from January 2011, a document he notes coincided with the rise of Silk Road (one of many “dark marketplaces” that traded in mostly illegal goods and services). He takes aim at some of the people who backed Bitcoin as a currency for such places, and accuses the EFF of deliberately promoting “flaky ideas” about Bitcoin to serve their own purposes.
“For the last decade, people with agendas and many who are funded by money launderers, child pornographers, drug dealers, and tax evaders have sought to change the narrative and turn Bitcoin into a criminal system. Bitcoin is a terrible system for criminals.”
Bitcoin is more “scambag resistent, though not scumbag proof,” he says.
As Dr. Wright has pointed out before, the number of nodes on the Bitcoin network that actually matter is far smaller than most realize. The same goes for the internet itself. It could be as low as 10, or even five. That’s small enough for anyone to “censor” or define rules for “permission” to use it.
Deploying Bitcoin’s “alert key”, which was removed from BTC several years ago, could stop any unwanted transactions fast. Bitcoin ownership in the future will be decided by a court, not by code. Due to the above-mentioned economic incentives, defying a court order would prove too costly to consider.
This does not mean Dr. Wright is a fan of the pervading socio-political or technology industry ideologies, or share their goals. He’s just looking to clear up some misunderstandings about the tool he created.
“Bitcoin is not a response to the current financial system. It is a response to the flawed and poisonous system that is being developed by companies in Silicon Valley. It is a response to the advertising-based economy where for fractions of a cent in profit, hundreds of dollars’ worth of tracking information, advertising that is forced down our throats, and eternal monitoring occur.”
About ‘censorship’ in payments and speech
What is censorship, actually? It depends. In the media and written/spoken word world, it would be described as restricting or deleting statements considered harmful or sensitive. However, almost every term in that definition could cause a debate of its own. The matter of who is doing the “censoring” also affects its gravity—parents controlling their kids’ access to online content, moderators in an online forum, private companies like Facebook, or the government. Opinions here differ a lot.
Money and payments are often regarded as a form of speech. The U.S. Supreme Court agrees, having decided in 2010 that political donations could count as speech, and thus have protections under the First Amendment.
Anyone calling Bitcoin “censorship resistant” is likely referring to payments as speech. Stopping someone paying money for an illegal good or service isn’t really censorship then. Preventing someone from making a donation to a certain political cause, or removing an individual’s access to a payments account such as PayPal (not for illegal actions, but due to their opinions or political activities) could potentially be regarded as censorship. For what it’s worth, the Supreme Court has also ruled that so-called “hate speech” is also protected under the First Amendment.
A person may also want to engage in an activity that’s illegal or frowned upon in his/her home jurisdiction—such as online gambling, or adult services. Apart from the payer’s physical location, no other activity takes place in their home jurisdiction. Again, whether that counts as “censorship” or not is open to debate.
Look at what they really mean when they say ‘censorship resistant’
Dr. Wright sees things differently, saying “the only people who truly want ‘censorship resistance’ and money of any size are generally criminals.” You may agree or disagree with this opinion, but he has a point: for every one person who wants 100% financial freedom for political or personal reasons, there are likely hundreds who want it for money laundering, tax evasion, corporate fraud, political corruption, or some other criminal activity.
We could debate the question of whether it’s right to monitor or restrict everyone’s access to financial services in order to stop bad actors. However, as Dr. Wright points out, the question is moot. In the digital world, it’s far more possible to monitor and restrict both speech and payments. And Bitcoin does not solve this problem. Even blockchain projects that aim to “solve” it by obfuscating transactions are only playing a cat-and-mouse game with the authorities, who will inevitably find ways to trace the new method or restrict access to it.
In the end, we are all governed by laws. Every society, from large countries to the most ideologically anarchist or libertarian communities that has ever existed, still has certain rules of conduct. Those rules are subject to change, and there are millions of opinions on which of them are fair.
And as Dr. Wright also points out in this post, these rules apply just as much to governments who would oppress citizens as they do to the public. On Bitcoin, even a totalitarian government’s actions would be transparent.
“Bitcoin counters bad actors. It allows change, but change through sunshine. Bitcoin does not stop people from freezing transactions, it stops them from using illicit money at scale.”
Satoshi Nakamoto created Bitcoin, and also the alert key. Satoshi Nakamoto never once used the expressions “censorship resistant” or “permissionless”. Bitcoin is built on capitalist principles, it provides a technology for cheap and fast transactions of any size, with the aim to help its users create wealth. It was never meant to be a means to hide activity, wrong or right.
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