In Praise of Bitcoin

PDF download: In Praise of Bitcoin

My go-to avatar, Ptolemy, the most famously wrong scientist ever, now with laser eyes!

One evening a few weeks ago, I was on a Zoom call with a bunch of academic, think tank and Fed economists for a Bitcoin discussion. A lot of names you’d know if you’re familiar with those circles, the most famous one being Paul Krugman (who, btw, I found to be charming, genuinely open-minded, and surprisingly humble about the entire enterprise of academic economics). I had been invited to be on the anti-Bitcoin ‘side’ of the discussion, but they needn’t have bothered. Because there was no pro-Bitcoin side.

Krugman led with a simple question – what’s the use case for Bitcoin? Not a theoretical thing, but an actual use of Bitcoin to solve a problem in the real world? – which led to an hour-long, extremely earnest and altogether unsatisfying conversation about financial transfers out of Venezuela, trade settlement and securitization on a blockchain, and Taylor Swift’s ability to control the scalper/resale market for her concert tickets.

All of which are real things. All of which are interesting things. All of which are good things. But none of which are what got 20 busy people on a Zoom call at 8 pm on a Thursday night.

None of which ARE Bitcoin.

Now, to be fair, there were no old-school Bitcoin maximalists on the call, or if there were, they were too intimidated to make an Austrian economics, hard money, neo-goldbug, Bitcoin-is-the-inevitable-global-reserve-currency argument in front of Paul Krugman. LOL.

But I finally couldn’t take it anymore.

Is this really why we got on the phone tonight? To talk about a novel form of digital rights management? To talk about payment transfers out of authoritarian third-world countries? Are these REALLY our questions about Bitcoin?

Answer: of course not. What got these academic, think tank and government economists on the phone that night was Bitcoin trading at $50,000. The question that everyone truly cared about, but a question that everyone danced around for the better part of an hour, was this: Is there any there there in the price of Bitcoin?

To which everyone, including the supposedly pro-Bitcoin contingent, said no. Not just no, but no, no, no. The price of Bitcoin was an illusion. The price of Bitcoin was the madness of crowds. The price of Bitcoin had no connection to any fundamental economic activity, just like gold had no connection to any fundamental economic activity, and thus – to this audience – could have no inherent value by definition.

I think this is very wrong. And I’ll tell you, like I told this Zoom call, why I think there is a lot of inherent value in Bitcoin.

Because Bitcoin is good art.

Or better yet, because Bitcoin is elegant and beautiful fashion, sitting at the intersection of art and commerce.

Most importantly, because owning Bitcoin has been an authentic expression of identity, an extremely positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

I’ve been saying that Bitcoin is art for more than six years, from The Effete Rebellion of Bitcoin (Feb. 2015) to Too Clever By Half (Feb. 2018, my most popular note ever!) to Riding the Cyclone (June 2018) to The Spanish Prisoner (July, 2019), and it’s been a very frustrating place to be. Frustrating because public stances on Bitcoin are almost immediately turned into cartoons – either you’re the grumpy grandpa “Bitcoin is worthless!” cartoon or you’re the laser-eyed cultist “Bitcoin will be the world’s reserve currency!” cartoon, with no room in between.

The value-deniers, like the Zoom crowd the other night, think I’m agreeing with them when I say that Bitcoin is art. I’m not. The true-believers think I’m trolling them when I say that Bitcoin is art. I’m not. The creation of good art is – in my opinion – what we are put on this earth to do. It is our highest calling. It is my highest praise.

There is lasting value in good art, because it is a very scarce thing and it never gets used up.

Bitcoin is itself an NFT, a unique digital art work instantiated on a blockchain. It’s the most valuable NFT in the world. I don’t mean a Bitcoin, obviously that’s a fungible thing. I mean THE Bitcoin … the 21 million Bitcoins that make up the Bitcoin Project. The notion that Bitcoin would ever “go to zero” is ludicrous. Good art is always worth something. But how do we measure that something … how do we put a price on the value of good art at this particular moment in time? It’s a REALLY tough question.

There are no cash flows to art. There are no fundamentals to art. There is no “use case” to art.

There is only story. There is only narrative. There is only common knowledge – what everyone knows that everyone knows – about the value of art, common knowledge that emerges from our social interaction with story and narrative.

In every respect that matters, Bitcoin IS Epsilon Theory.

The Epsilon Theory Manifesto (June 2013)

Our times require an investment and risk management perspective that is fluent in econometrics but is equally grounded in game theory, history, and behavioral analysis. Epsilon Theory is my attempt to lay the foundation for such a perspective.

So yes, I’ve been saying that Bitcoin is art for a long time now. But what I haven’t been saying – or at least not as loudly – is that bit about identity, and that’s the part that needs to be shouted today. So here it is again, this time a little louder …

Most importantly, owning Bitcoin has been an authentic expression of identity, an extremely positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

This, too, IS Epsilon Theory.

Clever Hans (Oct. 2017)

Trainers don’t break a wild horse by crushing its spirit. They nudge it into willingly surrendering its autonomy.

Because once you take the saddle, you’re gonna take the bit.

Why am I shouting about identity?

Because the artistic Bitcoin identity I admire and value has been subverted by the neutering machine of Wall Street and the regulatory panopticon of the US Treasury Dept.

Because what made Bitcoin special in the first place is nearly lost, and what remains is a false and constructed narrative that exists in service to Wall Street and Washington rather than in resistance.

Yes, the Nudging State and the Nudging Oligarchy strike back. They always do when it comes to money. Not with imperial stormtroopers or legislative sanction, but with golden handcuffs and administrative surveillance.

It’s not that the State and the status quo institutionalization of capital – call it Wall Street, for short – have any desire to ban Bitcoin. Why would they do that? No, far better to accommodate and swallow Bitcoin, like they have every other financial “innovation” for the past 1,000 years. Far better to neuter the censorship-resistant and anonymity-preserving aspects of Bitcoin, and turn it into another gaming table in the Wall Street casino.

In my dystopian vision, Bitcoin isn’t banned or criminalized. Pfft. That’s a rookie, weak State move. No, I see a future where everyone buys Bitcoin. Where you are encouraged to buy Bitcoin. Where Bitcoin is sold to you morning, noon and night. Where normie economists get on conference calls late at night because they’re Bitcoin price-curious.

Except it’s not really Bitcoin.

Instead, it’s Bitcoin! TM — a cartoon version of the OG Bitcoin, either a Wall Street-abstracted representation of the price of Bitcoin or a government-painted version of Bitcoin in Dayglo orange. Either way — abstracted or painted — your Bitcoin! TM is trackable and traceable, fully KYC and AML and FBAR and SWIFT and every other US Treasury acronym-compliant. Either way, your Bitcoin! TM has all the revolutionary potential of a bumper sticker and all the identity signaling power of a small tattoo on your upper arm.

Bitcoin! TM doesn’t stick it to the Man … Bitcoin! TM IS the Man.

Welcome to the MMXXI Hunger Games.

Hunger Games (Feb. 2021)

You’ve been told that the odds are ever in your favor. You’ve been told this for your entire life.

More and more, you suspect this is a lie.

This is no “democratization” of Wall Street. You’ve been played. Again.

The abstracted version of Bitcoin! TM is a Wall Street specialty.

What is Bitcoin! TM in abstracted form? It’s a securitization or representation of Bitcoin ownership that promises the price appreciation of Bitcoin without the hassle of Bitcoin ownership. It’s a casino chip that represents the price of Bitcoin. Michael Saylor, for example, is only too happy to sell you a MicroStrategy casino chip. Or maybe you’d prefer to play on the Canadian crypto ETF felt? Or try your luck at the wheel of a Morgan Stanley private fund?

Why does Wall Street loooove abstracted forms? Because there are no fundamental limits to how many of these Bitcoin! TM casino chips Wall Street can sell. It doesn’t matter if all the OG Bitcoin HODLers keep on HODLing. It doesn’t matter if the vast majority of all the Bitcoins ever mined never get caught up in the Wall Street neutering machine. There are an infinite number of games that can be created around the price of Bitcoin as a reference point, just like there are an infinite number of bets that can be made on a football game. There are an infinite number of rehypothecations and derivative representations that can be made off the millions of margined Bitcoins that have already been captured by Wall Street-custodied accounts.

The only limiting factor on how many of these Bitcoin! TM casino chips Wall Street can sell is the effectiveness of the narrative they have created around Bitcoin itself, that Bitcoin is a “hedge against inflation” and a “store of value” that is uniquely positioned to “protect your portfolio” against “dollar debasement” because it is “hard money” immune to “money printer go brrrr”.

It’s rather artistic in and of itself, right? Selling an unlimited number of Bitcoin! TM casino chips off a meme slamming unlimited fiat money printing? Creating an unlimited number of entertaining market games and venues where we can use our Bitcoin! TM casino chips?

If these narratives and casino games sound familiar, it’s because this is exactly the same process of abstraction, securitization and leverage that Wall Street has been using for the past twenty years with precious metals.

What is the GLD ETF? It’s gold! TM. What is a unit in an ETF basket of gold miner stocks? It’s gold! TM. They and their many kin are securitizations of gold ownership that promise the price appreciation of gold without the hassle of gold ownership. They are casino chips that represent the price of gold.

I’m old enough to remember when people bought and sold gold coins in private transactions. I guess we’d call that peer-to-peer today. I’m old enough to remember when well-meaning people would have earnest conversations about gold as a reserve currency, just like well-meaning people today have those earnest conversations about Bitcoin. I’m old enough to remember how quickly those conversations died out after State Street launched GLD in 2004 and took in a billion dollars in a few days. Turns out people didn’t really want the grumpy grandpa identity of owning physical gold in some Mad Max world as much as they wanted gold! TM in their financial portfolios as an abstracted insurance policy against central bank error.

It’s exactly the same with Bitcoin! TM today.

You think “institutional adoption” is driven by a spirit of personal autonomy, entrepreneurialism, and resistance to the Nudging State and Nudging Oligarchy? You think Paul Tudor Jones and Mike Novogratz want to BITFD? LOL.

The ONLY difference to Wall Street between gold and Bitcoin is that gold! TM is tired and Bitcoin! TM is wired.

The king is dead. Long live the king!

This is the artistic genius of Wall Street – the creation of new product to trade and new assets to manage, all through the alchemy of securitization and leverage. This is Flow.

It’s like Ash said about the chest-bursting xenomorph in Alien – you may not admire the creature itself, but you gotta admire its purity. Unclouded by conscience, remorse, or delusions of morality. Yep, that’s Wall Street.

Ditto the US Treasury.

If there’s a Western governmental institution that is more unclouded by conscience, remorse, or delusions of morality than the US Treasury, I am unaware of what that institution might be. But unlike Wall Street, which is motivated by Flow, the US Treasury has an entirely different (but highly compatible!) goal.

The goal of the US Treasury is to see all of the money in the world.

That’s really all it is. That’s what Anti-Money Laundering (AML) regulations are all about. That’s what Know Your Client (KYC) regulations are all about. That’s what Report of Foreign Bank and Financial Accounts (FBAR) regulations are all about. That’s what the Treasury-led Society for Worldwide Interbank Financial Telecommunications (SWIFT) is all about. That’s what the Bank Secrecy Act (BSA) is all about. None of these programs are really about taxes. None of these programs are really about catching crooks or fighting terrorists. All of these programs are really about information for information’s sake regarding the greatest source of power in the world and the raison d’etre of every government on Earth: money.

The US Treasury is the Eye of Sauron — a gigantic panopticon tower that sweeps the world with its unblinking gaze, seeking out the owners of power, i.e. money.

The US Treasury can’t see Bitcoin. It can, however, see Bitcoin! TM.

The giant all-seeing eye of the US Treasury is primarily built on two regulatory structures — the Bank Security Act (BSA) to compel transparency and reporting by financial institutions on their clients and themselves, and the Report of Foreign Bank and Financial Accounts (FBAR) system to compel transparency and reporting by individuals on their financial institutions and themselves. There are a dozen more acronyms and programs involved here, all overseen by Treasury’s Financial Crimes Enforcement Network (FinCEN), but to keep things simple I’m going to refer to all of this as the BSA/FBAR regulatory panopticon.

Everything in plain text in the next two paragraphs is regulatory policy as it currently stands with the BSA and FBAR. Everything in bold italics is a new policy proposed in the past few months and expected to go into effect shortly. Taken together, I think it will be clear how Treasury uses the combined BSA and FBAR instruments to mark your Bitcoin with a DayGlo orange fluorescent paint and create their highly visible version of Bitcoin! TM.

BSA — If you are in the business of money in any way, shape or form (what Treasury calls a “money transmitter”), and you do any of that business in the US, then you are subject to the Bank Secrecy Act. Note that this money transmitter designation and BSA jurisdiction explicitly includes peer-to-peer exchanges that work with self-hosted wallets. If you are subject to the BSA, then it is your affirmative obligation to collect complete identifying information regarding clients who transmit or receive more than $3,000 over your systems, and to collect and immediately report to Treasury complete identifying information regarding clients who transmit or receive more than $10,000 over your systems – including any cryptocurrency (“convertible virtual currency”) transmitted to or from a self-hosted wallet.

FBAR — If you are a US entity (citizen or resident, any type of US-registered corporate or trust structure, etc.) and you have any sort of account (banking, securities, custodial, etc.) with any non-US money transmitter, anywhere in the world, and at any time during the course of the year, you have in the aggregate across all accounts more than $10,000 in value in those accounts – including the value of any cryptocurrency holdings (“convertible virtual currency”) in those accounts – then it is your affirmative obligation to report complete identifying information regarding each of those accounts to the IRS in a Report of Foreign Bank and Financial Accounts (FBAR).

I think the intent here is crystal clear. Whatever rules were in place yesterday regarding transfers of dollars or rubles or pesos through US-touching money transmitters or by US entities … well, now those exact same rules are going to apply to Bitcoin. As soon as your virtual currency holdings land in any financial institution that cooperates with or does business in or is regulated by the United States … BAM! your Bitcoin is painted DayGlo orange and becomes the Treasury-preferred form of Bitcoin! TM.

When these regulations go into full effect, as I understand them, the only remaining safe harbor for keeping your Bitcoin hidden from the BSA/FBAR Eye of Sauron will be to maintain a self-hosted wallet that never connects with a money transmitter that does business in the US.

That’s a safe harbor for the moment, but ultimately nothing is safe from the Eye of Sauron. While 2019 guidance explicitly states that “a person conducting a transaction through an unhosted wallet to purchase goods or services on their own behalf is not a money transmitter”, and so is not subject to the Bank Secrecy Act directly, the December, 2020 proposed rule-making doc also included this doozy of a comment.

The Treasury Department has previously noted that “[a]nonymity in transactions and funds transfers is the main risk that facilitates money laundering.”

The Financial Action Task Force (“FATF”) has similarly observed that the extent to which anonymous peer-to-peer permit transactions via unhosted wallets, without involvement of a virtual asset service provider or a financial institution, is a key potential AML/CFT risk in some CVC systems.

FATF members have specifically observed that unregulated peer-to-peer transactions “could present a leak in tracing illicit flows of virtual assets,” particularly if one or more blockchain-based CVC networks were to reach global scale.

Importantly, as explained below, while data contained on some blockchains are open to public inspection and can be used by authorities to attempt to trace illicit activity, FinCEN believes that this data does not sufficiently mitigate the risks of unhosted and otherwise covered wallets.

That last paragraph doesn’t mince words. Even if the blockchain facilitating a crypto currency allows for “authorities” to trace transactions, “the risks of unhosted and otherwise covered [i.e., hidden from the Eye of Sauron] wallets” are too great to let stand. LOL. I think we all see where this is going.

The response I get from the Bitcoin and larger crypto community to what seems to me to be the clear intent and path of Treasury regulations is always this: well, good luck enforcing that!

Unfortunately, that’s the evil artistry of panopticons like the Eye of Sauron or Treasury’s BSA/FBAR regulatory structure: we are driven to willingly enforce their discipline on ourselves.

A panopticon is an institutional structure that creates a permanent feeling of being watched. Maybe you are and maybe you aren’t at any given moment. But you’re never sure that you’re NOT being watched. And if you ARE being watched, then you better ‘fess up and cooperate before you get your head stuck on an orc’s pike. Did I mention that the penalty for a willful failure to make an FBAR report was the greater of $100,000 or 50% of the unreported foreign assets?

Moreover, a panopticon structure allows you to see the behavior of others. And they of you. If the discipline imposed by the Watcher includes obligations to snitch — and that’s exactly what the Treasury requires here, with obligations on money transmitters to report on clients, and obligations on clients to report on money transmitters — a panopticon sets up a classic Prisoners Dilemma game, where the only equilibrium is for both the money transmitter and the client to volunteer information about the other.

Once you start looking for panopticons in our modern world, you will find them everywhere. And of course there’s an Epsilon Theory note on this.

Panopticon (March 2014)

“Transparency” has little to do with freedom and everything to do with control, and the more “radical” the transparency the more effective the control … the more willingly and completely we police ourselves in our own corporate or social Panopticons. 

You’re not opposed to “transparency” are you? Why would you be opposed to “transparency” unless you have something to hide? You’re not a … a … terrorist-lover, are you? No, I didn’t think so.

It’s not just that Wall Street and the US Treasury dominate policy.

Far more perniciously, they also dominate narrative.

And that’s why I’m writing this note.

Frankly, I doubt that the policy battle can be won. This has been my view since I first started writing about Bitcoin, and nothing has happened to change my mind. On the contrary, Treasury’s moves to make crypto visible and controllable have happened faster than I thought they would. I mean, I’m hopeful that we are at least at some point of policy equilibrium with the proposed rule changes to BSA and FBAR, an equilibrium that will at least allow self-hosted crypto wallets to exist in peace. But hope, unfortunately, is not a strategy.

Too Clever By Half (Feb 2018)

The inevitable result of financial innovation is that it ALWAYS ends up empowering the State. When too clever by half coyotes misplay the meta-game, that’s all the excuse the State needs to come swooping in.

Just as they did with Bear and Lehman in 2008. Just as they’re doing with Bitcoin today.

So, no, I don’t think I can help much in the policy battle.

But I think I can help a lot in the narrative battle.

Or rather, the Narrative Machine can help.

Inception (April 2020)

The systematic study of narrative, what we call the Narrative Machine, can be used for analysis, yes, but also as an active instrument to reclaim our autonomy of mind and our generosity of spirit.

Everything else is commentary.

I know you don’t believe me, but we’re going to change the world … you and me.

The Bitcoin narrative must be renewed.

Bitcoin has been an authentic expression of identity, a positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

It can be again.

Wall Street and Treasury are running a psyop with their creation of Bitcoin! TM, and it’s necessary to think about Bitcoin in those psyop/narrative terms if the goal is to preserve an active community with an identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy in the context of Bitcoin specifically and crypto more generally.

That’s my goal, anyway.

I’m not in this for Bitcoin-as-global-reserve-currency. I’m not in this for Number Go Up. I’m not in this for “store of value” against that gosh darn “dollar debasement”. I’m not in this for Flow. I’m not opposed to any of those things, and I don’t think you’re a Bad Person if those are your things. They’re just not my things. I’m in this for Bitcoin as good art and the inspiration it provides to a community that shares my values and goals for making a better world.

Phase 1 of this anti-psyop campaign is to identify Schelling points (game solutions that people arrive at by default in the absence of direct communication … also called focal points) so that people who share this goal of community organization and narrative reclamation can find each other.

I think that one of these Schelling points is maintaining a self-hosted wallet and the capacity for peer-to-peer connections away from the Eye of Sauron.

Starting today, Epsilon Theory will accept Bitcoin as payment for all annual subscriptions through our BTCPay server. It’s a plain vanilla Raspberry Pi set-up. We’re not holding ourselves out as crypto mavens. We’re signaling an identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy in the context of Bitcoin.

Phase 2 of this anti-psyop campaign is to use the Narrative Machine to measure and visualize the narrative archetypes and story arcs of Bitcoin! TM. In exactly the same way that there are only, say, a dozen archetypal scripts for every TV sitcom episode ever filmed, or in exactly the same way that there are three acts to every modern movie screenplay, so is there an underlying structure and a finite number of underlying archetypes to the media coverage of every market entity.

We believe that we can measure these narrative structures and archetypes as they apply to Bitcoin! TM, and map those structural dynamics to market behaviors.

Seeing is believing, and I think there is no better way to prove the existence of Bitcoin! TM, in both its Wall Street-abstracted and its Treasury-painted form, than to show the psyop in action. I think this sort of analysis and visualization will get a lot of people who would otherwise be quick to dismiss our claims to take a fresh look at the ways in which we have been nudged.

Phase 3 of this anti-psyop campaign is simply to call things by their proper names. That starts with locating the value of Bitcoin in its elegant art and its ability (like all elegant art) to inspire great things away from the art itself. Yes, great things away from Bitcoin itself, so that even if Bitcoin! TM dominates financial markets (which it will), the story arc of Bitcoin doesn’t end there, but generates a thousand new initiatives to improve our world.

We don’t have to tell a story of price. We don’t have to tell a story of apocalypse. We don’t have to scold or “educate”.

We can tell an Old Story of autonomy of mind and generosity of spirit within a new context of Bitcoin and crypto.

You know, a couple of thousand years ago, a really smart guy — the most subversive, revolutionary guy you can imagine — had a good line. Render unto Caesar what is Caesar’s.

Bitcoin! TM definitely belongs to Caesar. It’s part of his game. But Bitcoin doesn’t have to be. It can be part of our game. Still. Again. And that will change everything.

PDF download: In Praise of Bitcoin

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  1. Avatar for w4x w4x says:

    Time for a good, old-fashioned hard fork.

  2. If a subscriber pays for the ET subscription with BTC through your BTCPay Server, won’t you have to report it to Sauron?

  3. Ben, Granted this article is focused on Bitcoin (sorry, Bitcoin!), but isn’t it fair to say that the developments in DeFi and protocols focused on self-sovereign data (Web 3.0) are: 1. real world use cases with real cash flows, that offer a quantum improvement in the product (financial services) offered to its users, and 2. are built on the foundation of Bitcoin’s idea of - if not taking power away from the state, then at least reclaiming some power from and offering an alternative to oligopolistic rent-seeking middlemen?

    Even assuming that KYC/AML will be enforced on all DeFi protocols (and I agree that this is inevitable), they will still offer a fundamentally better financial system to users as they redirect the rents collected by the middlemen to users of the system. So borrowers and lenders, for example, can BOTH get better financial terms in a DeFi protocol than they can in the traditional financial system. And this will be very hard for Wall St to completely co-opt and corrupt, because the ‘pure’ DeFi systems that cut out the middlemen will provide inherently better financial returns, due to the lack of the rent seekers in the middle. Let Wall St trade the tokens that power DeFi, that does not inherently corrupt what it does, or what it is about. And while the oligopolistic banks and others directly targeted by DeFi will try to fight it, Sauron will be happy as long as KYC/AML is enforced and taxes are paid.

    Sure, a KYC/AML’d DeFi system is not the purist revolution that many Bitcoin proponents dreamed of, but it is a hell of a lot better than what we have now, and the excessive focus on Bitcoin by people like Mr Krugman has blinded them to the real benefits offered by DeFi. And lets be clear, none of these DeFi developments would have happened unless Bitcoin (or even Bitcoin!) had paved the way first. So give it some credit for that.

  4. Ben,

    I suspect you are familiar with the below book by Juan Zarate, a recent architect of modernizing the FinCEN complex at Treasury and State. While my read of it was with great interest being more than familiar with aspects of AML, RICO, KYC, etc - my overall impression was one of confirming my fear the US Govt was overusing it’s power of being the world’s reserve currency and Wall Street being the center of the financial world. That fear being that we would drive not only enemies but allies to move asway form $US and Wall Street and doing so reduce our ultimate power, soft and hard - that of MONEY.

    Your latest piece on Bitcoin hits on all of this. My question for you is not weather Treasury and Wall Street are securitizing Bitcoin for the purposes to be able to “see it”, it is clear as you so elegantly point out. But rather, is there a better alternative available to the policy makers and the money traders?

    Our/your "anti-psyop campaign is necessary and compatible with above, I believe.

    Treasury’s War: The Unleashing of a New Era of Financial Warfareby Juan Zarate

    For more than a decade, America has been waging a new kind of war against the financial networks of rogue regimes, proliferators, terrorist groups, and criminal syndicates. Juan Zarate, a chief architect of modern financial warfare and a former senior Treasury and White House official, pulls back the curtain on this shadowy world. In this gripping story, he explains in unprecedented detail how a small, dedicated group of officials redefined the Treasury’s role and used its unique powers, relationships, and reputation to apply financial pressure against America’s enemies.

  5. Avatar for Kpaz Kpaz says:

    I remember being so stoked about blockchain, BTC and ETH when I first read about them and really learned what was behind crypto… and then it slowly dawned on me that it couldn’t escape the regulators forever. After the Mt Gox crash, I figured they’d sweep in and put in massive regulation and possibly even prohibitions. Failure of imagination. Art is abstraction and these proposed rules will morph and morph again as the water drains out. The more interesting and, I think unpredictable, changes will come as we get issuance of CBDC, central bank digital currencies. Serious disintermediation will happen then but the racoons will be all over it. Jamie Dimon heading up the USPS? Talk about the eye of Sauron!

  6. Avatar for bhunt bhunt says:

    Nope. We’re not a money transmitter as defined by UST.

  7. Totally get the distinction you are making between “(original) Bitcoin” and “Bitcoin™”. Totally sympathetic to your antipathy to “the State and the status quo institutionalization of capital” and the general point that governmental programs tend to expand well beyond their original justification. But I don’t think you’ve explained why you think (original) Bitcoin is “an authentic expression of identity” requires a ferocious defense and that every attempt to monitor or constrain Bitcoin needs to be ferociously opposed.

    You haven’t explained why Bitcoin enthusiasm is different from many other expressions of identity that sometimes rub people the wrong way and are sometimes weaponized against non-group members. How are your Bitcoin enthusiasts different from people who use MAGA, Antifa, extreme Second Amendment rights, extreme abortion rights, or the Yale Alumni Society as expressions of identity? How is the enthusiasm for identity politics here consistent with your concern about the widening gyre of public discussion and the huge decline in open hearts and open minds?

    Your piece fails to explain why those of us opposed to the Nudging State and the Nudging Oligarchy need to not just allow Bitcoin enthusiasts some space but need to become dedicated supporters. But your piece uses the same propaganda-based emotional good-versus-evil/everyone needs to take sides framing that dominates most manufactured political, corporate and ideological narrative that Epsilon Theory has attacked in the past, and (as you’ve pointed out) is used to promote things like “Bitcoin™”.

    You’ve argued that all of the nominal reasons for existing financial reporting requirements (money laundering, fighting terrorism etc) are complete BS, and that the only purpose these laws ever served was to Take Away All Our Freedoms. Yes these laws have serious problems, but you’ve ignored substantial evidence that Bitcoin has clearly facilitated things like drugs and arms trafficking  and industrial scale tax evasion. You’ve failed to provide evidence supporting your claim that the immediate gains eliminating them would massively outweigh the costs and risks.

    I happen to agree that the loss of privacy and autonomy driven by surveillance capitalism is a very important issue, but if fighting Bitcoin-related financial reporting requirements is now a requirement for pack membership, why aren’t the many other problems caused by surveillance capitalism given similar emphasis? Why haven’t you posted lots of major articles on Epsilon Theory attacking both the Silicon Valley (Google, Facebook) and military-industrial-homeland security assaults on privacy and autonomy?

  8. Thank you, Ben. Your article was “brave”. Lol. Seriously. It’s brave to try to make the “grey” case for Bitcoin, in between the ferocity that is team black & team white. And even braver to heap praise on it that has absolutely nothing to do with its most alluring facet… it’s price!

    To think of it as art - for me, anyway - allows all the frustrating ambiguity & debate around its “price” to melt away. It’s worth what folks will pay. Same as any other art. Simple.

    I’ve thoroughly enjoyed the show that is Bitcoin thus far; observing it’s affect on the masses. It constantly has me thinking of delusions & crowds & madness & something or other…

    I digress.

    Is it a million yet?

  9. These are thing that bothered me as well, to the extent that I kept looking for rationales that never showed up. I’m sure there’s something here that Ben is trying to get us to understand, but I simply don’t see it. The expanding intrusion of gov’t into the untouchable realm of Bitcoin was predictable from day 1; small efforts like Ben’s to stay separate from that but still utillize Bitcoin are futile, I believe. More is needed - more thought, more explanation, more comparisons — we’ve only just begun … to learn.
    But Bitcoin as Identity is a huge stretch. Gotta let that one settle in.

  10. It is a huge stretch, but gradually as the Bitcoin way of thinking seeps into the everyday it becomes clear. It is grass fed beef as opposed to feed lot reared processed sludge, it is butter as opposed to vegetable oil spread, generosity versus grabbyness, unexpected acts of kindness versus passing by on the other side, finely engineered locally manufactured versus cheap Chinese knock offs. As background I am 69 and six years into Bitcoin. It took 5 of those to begin to see past price and see the possibility of a different way with clear eyes and a full heart. As Ben has articulated, “with autonomy of mind and with generosity of spirit”.

  11. In the context of punk history, The mohican haircut was not mandatory. You could be a punk without one. It was not illegal to have your hair styled in that fashion, but it might as well have been. But that was largely the point. It was art. It increased the range  of the experience #life#. No law changes needed. Just people and feelings evolving, finding a greater dynamic range of self-expression. I don’t remember any detailed arguments about the appalling tyranny of fascism. Did the beneficial changes outweigh the risks? The beautifully complex system of the human world defies understanding in those terms, luckily.

  12. Avatar for Marc1 Marc1 says:

    Ryley- thank you very much. Suddenly, while Reading your comment, I understood what Ben meant about it being art. Wow. It’s art. So clear.

  13. You can look at art. If it is not garbage, you might enjoy it. Bitcoin?

  14. I was reminded of when Ben speaks of small “l” liberalism vs. Liberalism, or small “d” democracy vs. Democracy. One is an expression of core individual values and principles, and the other is a narrative, a cartoon, sold to us by the nudging State and Oligarchy. I also don’t see how something like crypto can exist for very long outside the Panopticon of Treasury. The global dominance of the Dollar in trade and finance is perhaps the greatest power the US wields. And it’s no wonder there is momentum building for other governments to get out from under that dominance.

  15. Your comment suggests that everyone should equate your passionate love of Bitcoin with grassfed beef, pure butter, generosity and kindness and finely manufactured products. You seem to believe that those of us who don’t share that love should be seen as processed sludge who totally lack any sense of kindness and are similar to cheap oils and Chinese knock offs. And this contempt for the rest of us demonstrates your “generosity of spirit” and the kind of attitude and approach to discussion that Epsilon Theory has been trying to promote.
    Can anyone explain how this comment differs from Hilary Clinton saying that anyone who couldn’t immediately grasp her superiority must be a “deplorable”? That anyone who couldn’t see that Hillary Clinton was leading a conspiracy of pedophiles must be part of the conspiracy? Can anyone find anything in this comment that attempts to respectfully reach out to people who don’t share one’s ideological/identity group priors, using logic and evidence that people who don’t share similar tribal loyalties might understand?

  16. A good article and a lot of good comments. I would be curious to know if John Hussman was in the Zoom meeting. I doubt it, he is an academic and an economist but a lot different than an academic economist. He isn’t a big believer in Bitcoin and probably would have been way too practical in his answers.

    The blockchain algorithm is a masterpiece. I am not so sure about Bitcoin as a payment system though. I agree with @bubbles … that the “rent seekers” take too much out of the transaction. I assume that he is referring to MasterCard, Visa, and similar entities along with FX, etc. I think that Bitcoin has high transaction costs (depending on the amount of the transaction). It is $29.69 today, $37.77 yesterday. See,K%%20from%20one%20year%20ago.
    The costs will increase rapidly once there is no more Bitcoin to be mined.

    I think that people would believe less in Bitcoin if they could believe more in the dollar and believe that their government was doing a good job representing their interests against those entities that seek to financialize our lives. It really seems to me that corporate capitalism exists to suck the last penny from our wallets just like The Matrix took the last btu from the people in their hives and then flushed them down the drain when they died. Instead of being a “Coppertop” battery I am a source of subscription revenue (sorry ET).

    @Richard Simonson comment is a good one. The UST pushes it weight internationally like the dollar still is something. It tries to enforce policy (some with which I agree and some that I don’t) using its control and participation in the worldwide banking system. Some time in the near future other countries which produce more than they consume (export more than they import) will get tired of playing by the rules of a country that consumes more than it produces. This monetized debt driven inflation caused by increased demand at the same time that production capacity is lower may be a turning point for other countries, especially resource rich emerging market countries that don’t have a stable currency.

    The proposed government sponsored digital currencies, as far as I can tell, are neither blockchain, decentralized, nor less expensive. They keep the existing banks/payment processors in the middle so to keep the existing financial status quo with the added benefit of knowing exactly where, what on, and when you spend your money.

    The easiest way for the government to reduce the use of Bitcoin and other cryptocurrencies would be to require that any business which accepts Bitcoin to take a 25-100% withholding for potential capital gains. The payer could then claim the amount to be refunded on his taxes. It would immediately raise the cost of transactions.

    Sorry to ramble.

  17. For me, Ben’s emphasis on Bitcoin as an expression of identity brings to mind “brand” before it does “art”. Are you an Under Armour guy or are you a Nike guy? Are you a BTC guy or are you a GME guy?
    The other day I think I read that 60% of global hash bandwidth is in China. That sounds like a single point of failure to me.

  18. Why must a rationale be provided to say “No” to the state? Why must the state have the power to monitor and tax everything? Why must the common citizen be burdened with the extra costs of complying with the regulators in their effort to see everything?

    Your starting point is that compliance with problematic laws is essential to keep the bad guys at bay. It is a necessary condition we all must submit for the benefit of State. If so, you haven’t just missed the point of the article, you’ve missed the entire point of what Epsilon Theory is about.

  19. Yes, if you think that the entire point of Epsilon Theory is that any action that “says no the State” is automatically and totally justified then, yes, I have missed that point. I hope others will chime in as to whether they think this is in fact the entire point of this site.

    I don’t hold out state motor vehicle departments as paradigms of efficiency, but I think there are very good reasons that common citizens should be burdened with the extra costs of carrying auto insurance policies and that those regulators should be allowed to see whether citizens are obeying the laws. We all know how tax laws have been corrupted by special interests but allowing people to freely violate those laws because it would be “an authentic expression of identity” would not in any way contribute to the solution of those problems.

    I take expressions such as “BITFD” as symbolic references to the understanding that major structural economic and political changes are needed. I do not take it as saying that people who burn down police stations or public schools or IRS offices or CDC headquarters or military bases should be tolerated (or applauded) because their desire to “say no the State” is an important aspect of their personal identity.

    I signed up here because Epsilon Theory seemed to recognize that enacting the needed major structural economic and political changes was going to be horribly difficult, and, at a minimum it required rejecting debate based on simplistic, tribal, propaganda-based “say no the State” type narratives. Even though there are many issues where “say no the State” might be a defensible position, progress is impossible if everything is framed in good-versus-evil terms that makes respectful, open-minded discussion impossible.

    Again, I hope others will chime in. Ben’s post raised basic questions about core Epsilon Theory values, and this and other comments seem to reflect a range of incompatible views.

  20. The BTC=art comparison is apt in that, like the body of works by Monet, the supply is finite and will gradually decrease over time. The Bitcoin mining production rate is now lower than the average rate of coin destruction due to wallet loss. Millions of BTC are already lost forever. It’s a shrinking supply of a fragile asset! “Art” is a really great comparison here. And nobody is using Monets as currency, even if there were millions of them and they could be emailed. A lot of crypto advocates simply don’t grasp that appreciating assets make nonfunctional secondary currencies. (Because people would rather wait for the value to go up than spend it. The near-mythical regret-story of buying a pizza for 50 BTC is powerful narrative mojo.)

    However, I want to modify the identity argument. The underlying Use Case #1 for BTC is what I would call “government-tolerated economic transgression.” People can wear “participant in economic transgression” as an identity, sure, but the economic usage case for mainstream blockchain currencies comes from the fact that crypto transactions are resistant to mass surveillance (which makes it useful for certain transactions) WITHOUT being immune to major law enforcement action (which would result in bans). Nobody regularly transacting in cryptocurrency in the real world particularly cares that it’s “decentralized,” they use it for its perceived legal blind spot characteristics. It’s viewed as much more secure than it is. This puts crypto transactions in a sweet spot where minor transgression transactions (like small drug buys, or a rich family moving some money across borders) are sufficiently anonymous to be a reasonable risk for users, while major illegal transactions (like terror funding or narco laundering) are still very traceable for a well-resourced nation-state. In a way, it’s a panopticon workaround, like slatted blinds on your prison cell, that block the other prisoners but still allow the prison guards to see you’re not misbehaving badly enough to be worth the trouble of cudgel-based discipline.

    This is what makes crypto a functional and useful currency today. It’s the main link to the real economy — illegal transactions that aren’t illegal enough to be worth the hassle of government effort for enforcement.

    But crypto doesn’t have to be a functioning currency OR a gold style “store or value” to be useful to Wall Street. It just has to be a fungible asset class with beta low enough to have diversification value. That’s Use Case #2. It’s a HUGE use case for BTC specifically, perhaps less so other coins like ETH or DOGE. Packaging crypto for portfolio diversification and factor tilts is going to end up being the biggest use (by volume) of major coins. But I personally think the underlying long-term value of these investments — the willingness of people to agree that the coins have value outside Wall Street and between periodic bubbles — will still be determined by Use Case #1. So my belief is that non-transgressive centrally-controlled coins are unlikely to gain traction as investable assets, and none of the academics and politicians will be able to figure out why. It’s because minor illegal transactions are the secret sauce.

    Neither of these core usage cases care that Chinese businesses control the blockchain. Nor do they ever go to zero. Volatility is a feature for Case #2, not a bug. Poor (but non-zero) AML visibility is a feature of significant value to both users and governments, so it’s not getting regulated out of existence. Government-backed coins don’t serve the same social relief valve function. This is an area where governments are going to let the little guys go so they can keep catching bigger fish.

  21. Hey Ben,

    There is concern among the Bitcoin community that America will

    1. lose its reserve currency status
    2. transition to a digital currency similar to China’s where the government can exclude people from the economy, track all transactions, etc.

    Is it possible that the Bitcoin community is giving the Treasury exactly what it needs for 1 & 2? An updated SWIFT & digital currency to track every transaction while exercising more control over the economy?

    The Treasury just might have outsourced its problems to the Bitcoin community in an incredibly ironic & crony capitalist way. At least that’s what I’ve thought after reading the article, which was wonderful.

  22. I think the point Ben is getting at is that Bitcoin is the new GLD. Gold isn’t really gold, like Ben said. You can’t trade it for actual gold like you could in the 60s.

    Whereas Bitcoin has the following main selling points:

    1. 21 million max bitcoins
    2. You get to actually own bitcoin addresses. You can’t own GLD’s underlying.
    3. Infinitely hypothicatable

    Easier to sell. Gold does not have a religion that surrounds it.

  23. I’m sorry that you interpreted my clumsy attempts to express myself in that way. It is just about the furthest thing from my mind. I reserve my contempt for the politicians, racoons and mainstream media who have collaborated to promote debt over saving, global over local and short term profit over humanity.
    I think the Bitcoin mindset I was trying to express is perhaps better equated with the Quaker belief that each human is of unique worth.

  24. I have always found a positive energy and desire to change the world for the better in the Bitcoin and crypto community, and this is my attempt to build a bridge to that community. No idea why you would feel threatened by that effort.

    As for your interpretation of what I wrote in this article, particularly your straw man arguments about “identify politics” and ideological “requirements” for Pack membership, give me a freakin’ break.

  25. Avatar for Marc1 Marc1 says:

    Read nic carter. Very knowledgeable guy. He will explain the good and bad of hash rate wrt china miners.

  26. just like synthetic CDOs are not limited by the supply of underlying mortgage and CDOs, wall street can create and profit as long as it can sell the narrative

  27. Hubert,

    You talk about a place for “respectful, open-minded discussion” and yet… Straw-man arguing is your tool of choice.

    Here is an example…

    “I do not take it as saying that people who burn down police stations or public schools or IRS offices or CDC headquarters or military bases should be tolerated (or applauded) because their desire to “say no the State” is an important aspect of their personal identity.”

    Honestly - I haven’t come across many (if any) pack members that are applauding literally burning down anything and we have had a robust conversation about changing BITFD to something different. Your using that in reply to my post is a great example of well something that isn’t a discussion.

    Similarly statements like “we all know” - yup. Not very effective. Those are precisely the kind of vague missionary statements that are used to tell you what to think through narrative. Vaccinated against those.


    I asked you a series of plain questions about why you thought the State had absolute powers and in re-reading your reply (checks notes) you argued the DMV and roads. Which is a specific example. And one I agree with. I am an EMT and a large part of my work depends on a strictly regulated DOT process for managing car accidents. (I have many other thoughts about what is fucked up about having EMS under DOT…but that is not germane to our discussion…I still agree with it being a regulated area).

    If you want to provide a rationale for why you think the State has absolute powers, have at it. I am interested in hearing your thoughts. I am not interested, however, in your thoughts about what you think my thoughts are. Or your thoughts about what you think the Pack’s thoughts are.

    Examples of what isn’t an open discussion - your reply to Hugh Fowler’s most excellent post. It’s bullying, its trolling, its the worst example of how not to engage anyone in a discussion.


    And what you missed about Epsilon Theory is that this place is not about telling people other people what they should think using abstractions, missionary statements, whataboutism, straw-mans and the like. Epsilon Theory is the antidote to that lunacy. Epsilon Theory is the place where you learn to think for yourself. Where you take your own thoughts…well that is really up to you isn’t it?

  28. Avatar for bhunt bhunt says:

    If I could upvote this reply, Hugh, I would! Well said.

  29. +100

  30. Yet.

  31. wait are using real world reasons to support a crypto platform. you’re on the wrong site buddy.

  32. “These are people who want you to write sanctimonious stories about the genius of the rock stars, and they will ruin rock and roll and strangle everything we love about it.”

  33. I looked into Nic a little bit, and most of his comments regarding China seem to address the straw man “what if China uses its dominance to mine all the rest of BTC?” I’m not too interested in that, because I already think of BTC as a gift card to a store I will never patronize.
    I’m more interested in what would happen if the Chinese government were to seize at gunpoint, continue to operate, and expand their domestic mining infrastructure. What happens to this “globally unique” ledger? Can the small investor still redeem what he thought he owned? Do the West’s big banks have too much exposure?

  34. but you’ve ignored substantial evidence that Bitcoin has clearly facilitated things like drugs and arms trafficking and industrial scale tax evasion.
    And? So has cash. And works of art. And diamonds. Pretty much anything that has a value has been used at one time or another to fund something nefarious. I don't see how this particular objection is noteworthy.
  35. Avatar for Pat_W Pat_W says:

    Precambrian- I appreciate your ramble!

  36. But I like it. (its only rock and roll).

    Failed at it miserably in my case.

  37. Interesting and challenging to me because I have not invested time to learn about Bitcoin. There is an emotional attractiveness in Ben’s suggestion that is similar to hell yeah, just BITFD, but I need to reread this note and process. By the way, I have never been comfortable with “GOLD” but I do hold quite a few gold coins in a lock box.

  38. I hear, understand and am sympathetic with the Libertarian bent of the crowd. And perhaps Bitcoin ultimately replaces gold as a perpetual store of value. Gold has a 5000 year head start, has a nice shin and feels good in your hand so I’m still not sold on Bitcoin’s survival once the 21 millionth coin is found. For giggles I suggest reading Asimov’s Nine Billion Names of God

    What’s missing here is any discussion of why the state is compelled to control the medium of exchange. There’s a long sordid history of what happens to society when currencies get out the control of a stable state. We even tried it in the U.S. in the first half of the 19th century with currency issuance by private banks. Merchants had to subscribe to a valuation listing to determine which notes to accept. Successful societies need a readily and efficiently accepted medium of exchange. Without that there is too much friction for the market to work effectively.

  39. indeed.

    If we are to follow this logic, let’s start with outlawing the most weaponised unit of account that is consistently used for the most nefarious means: the USD.

    Let’s not conflate the thing, with the numerous usages for the thing - good and bad.

    I think it’s safe to assume we all share your distaste for the - shall we say, unsavoury - usages of Bitcoin. But those unsavoury usages are not exclusive to Bitcoin. And I think one of the points of Ben’s article was that with these changes in regulation, these unsavoury usages of Bitcoin will become easier to detect and bring the hammer down on, by definition. So if it’s more regulation you want, it’s more regulation you’re gonna get :slight_smile:

    I personally didn’t take Ben’s commentary to he anything even resembling a celebration of these unsavoury usages of Bitcoin. I found it to be an intelligent dissection of a truly polarising topic. I don’t own Bitcoin. But the narrative surrounding it is a fascinating one. I truly believe there are fundamental things to be learned here, unrelated to profits and losses, if we can only be open enough to bathe in the waters between the banks of team black and team white, which is where I believe Ben was wading when he wrote this :slight_smile:

  40. Avatar for Kpaz Kpaz says:

    Fishnet art with certain sized holes… I like it.

  41. I have been spending some time contemplating Ben’s Bitcoin Narrative article along with the latest April 30th Zeitgeist article which mentions the digitization of everything. I don’t believe that it will be very long before “things” (real tangible goods) mean more than “digits” even digitally controlled scarcity of digits such as Bitcoin. At some point the real world intrudes on the digital world. Like in Avatar where the Colonel is fighting Jake Sully in the Avatar body and say “you think that you are one of them? Time to wake up” and tries to smash him in his connection pod. Or similarly in The Matrix where Neo is fighting Agent Smith inside the Matrix but the “squiddy’s” are attacking the Nebuchadnezzar and Neo needs to exit the Matrix or he will die. Or maybe I am just like Admiral Adama in Battlestar Galactica who never trusts a totally digitized society. Anyway I just think that our digitally created dollars and even Bitcoin have gotten so cheap and commoditized that real things will matter more soon.

    I also feel like it will be easier to take the system down from within that from outside. And whether that means attacking dollar flows from within the established system or using Bitcoin once it has been brought into our financial mainstream I don’t know. But I do know that it is very likely that those players which we (the US) intend to stifle by weaponizing the world monetary system against them (China, Soviet Union, North Korea, Iran) most likely are spending substantial resources into simulating, developing, and hacking both the traditional financial networks (SWIFT, Internet, BIS) and the Bitcoin network. The blockchain algorithm is probably secure given the current state of computing but China controls about 65% of the miners hashrate, Russia 7%, Kazakhstan 6%, and Iran 4%.,Bitcoin%20mining%20pools%20in%202020. I know that the Bitcoin nodes are more distributed in Europe and North America but it wouldn’t take much to change all the Bitcoin miners to Bitcoin nodes and there are many more individual mining computers than nodes. So it is possible that the Bitcoin system could be put under attack especially after all the Bitcoin has been mined profitably. Such an attack on SWIFT, BIS, Bitcoin, etc. would only work once and probably only be utilized if these systems were weaponized against China or Russia.

    But a real conflict (with anyone) will eventually be fought in real space as opposed to virtual reality and we won’t be able to fight them with digital bullets or starve them of virtual food or smother them with virtual money. The real bullet or real food will eventually reign supreme. I am not minimizing the use of technology, even Admiral Adama used computers on Battlestar Galactica, he just didn’t network them so that a failure of one system would lead to a failure of another.

  42. You read my mind… i was just listening to a podcast from a german financial magazine about an interview with the head of Interpol who discussed cryptocurrencies as facilitating crimes… i file my FBar every tax season and report my overseas financial holdings and pay my taxes… i do not fear IRS audits and sleep well at night… nobody has yet convinced me that crypto serves any other purpose that facilitating tax evasion and crimes.

  43. Thats the point… bitcoin is no different…

  44. Dear Ben, as always you make me think, think twice and then think again. Bravo, that is one of the main reasons I subscribe and like being part of “the pack”.
    FWIW, I can’t get on board on this one.
    I don’t see art, I don’t see beauty-I see an algorithm. A string of 27-34 alphanumeric characters.
    I don’t see good and noble supporters - I see the Winklevoss twins, John McAfee
    I see massive pollution as electricity is used to mine, coal being burned to mine this. Wasteful and polluting the environment
    I see perhaps the greatest Marketing campaign ever created. Bitcoin is not even a “coin”
    I see the perfect speculative item for the most speculative market of all time. An item that has no inherent value and cannot be valued

  45. Arthur C. Clarke (of “2001” fame).

  46. If I ever decide to obtain an NFT it’ll be one that doesn’t use so much damn electricty.

  47. Avatar for Dan Dan says:

    As always, it’s context, all the way down.

  48. Just read the note while concurrently listening to Ben’s reading on the podcast. It was like live theater or performance art…good art.

  49. Have you had a close look at Ethereum?

    Because, to me, Ethereum > Bitcoin in every way.

    Ethereum changed computing with smart contracts – turing complete distributed computing between parties that don’t trust each other? Didn’t exist on a large scale before Ethereum.

    Bitcoin’s proof of work is really, really resource intensive. The amount of electricity used to secure Bitcoin is insane. Ethereum is moving towards Proof of stake which is much less resource intensive.

    Identity, governance, NFTs, stable coins – all possible with Ethereum.

    The only thing Bitcoin has that is “better” than Ethereum is a fixed supply of BTC. But if you are in it for the art, not the “store of value” that doesn’t matter.

  50. I’ve heard the “muh electricity!” boomer argument before. I think it’s one of the most pure post-rationalizations ever captured in the wild. The amount of electricity globally wasted by “always on” appliances like your stereo, sitting around waiting for you to press the power button on your remote controller so you don’t have to get off the couch, is many multiples the amount used in all cryptos combined.

    Skin in the game requirement for further “muh electricity!” please: tell me you unplug your stereos and other always-on appliances when not in use, because you care so much about the electricity waste.

  51. Ditto my last for you as well good sir.

  52. The use case for Bitcoin and BITCOIN! is epimethean. As it stands today (May 2021) there are many individuals and organisations who like both of them. The only tribes who show dislike can only be upset about the success of others, have feelings of ‘missed out’, or are sensitive to a lack of control. From here onwards a true Sauron could demonstrate the power of his magic to the shadowy heart’s content. A communications channel like none before.
     Except, how in a more distant future will the history of Crypto’s childhood be remembered? Does it matter who teaches it, mingled with how many people have associative feelings of joy or regret? Will it be a cursed symbol or held aloft, loved for our progress. A hero or a ghost. Depends, because it is art.  

  53. Such derision. You can make a better argument than that, IF your goal is to convince. Full heart. The scale between the two things you cited is incalculably immense.

  54. Thanks for the realization: the origin of any institution is the subversion of new art.

  55. When the US weaponized the dollar and SWIFT system, they put rest of world on notice that it is NOT in their best interest to leave this much control in the hands of unelected Federal Reserve (aka private banksters). Plans to deposition USD as world reserve currency were made 10+ years ago by the aggrieved, and are being put into action now. FED is running the printing presses at high speed but the global financial system is creaking and groaning. Have you compared growth of M2 money supply in last year to growth of money supply in Weimar Republic? Despite continuing shifts in the definition of M2 so you will look away and not notice the change. Do you think current system is sustainable for more than a few years? If not, what will be the alternative to USD for global reserve currency?

  56. Very thoughtful. Thanks for sharing it “out there” among the artists.

  57. Doomberg this morning quoted Ben’s 4/4/21 note 'In Praise of Bitcoin" :

    As Ben Hunt brilliantly describes in his excellent piece In Praise of Bitcoin , the goal of the US government is to see and preside over all the money in the world because once that power is obtained, it’s game over. Here’s a key passage (emphasis in the original):

    That’s really all it is. That’s what Anti-Money Laundering (AML) regulations are all about. That’s what Know Your Client (KYC) regulations are all about. That’s what Report of Foreign Bank and Financial Accounts (FBAR) regulations are all about. That’s what the Treasury-led Society for Worldwide Interbank Financial Telecommunications (SWIFT) is all about. That’s what the Bank Secrecy Act (BSA) is all about. None of these programs are really about taxes. None of these programs are really about catching crooks or fighting terrorists. All of these programs are really about information for information’s sake regarding the greatest source of power in the world and the raison d’etre of every government on Earth: money .”

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