Sauron Remains Undefeated

I'm delighted to co-author this note with my friend Brent Donnelly, president of Spectra Markets and FX trader extraordinaire.

Brent is a senior risk-taker and FX market maker. His latest book, Alpha Trader, was published last summer to great acclaim (by me, among others!) and can be found at your favorite bookseller. I think it’s an outstanding read, and not just for professional traders. He publishes a daily (!) note on FX, which you can subscribe to here, and a weekly note on crypto, which you can subscribe to here.

You can contact Brent at [email protected] and on Twitter at @donnelly_brent. As with all of our guest contributors, Brent’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security.

Last April I wrote a note titled In Praise of Bitcoin, which got a fair amount of attention for the first of its two assertions, that Wall Street was transforming Bitcoin into Bitcoin! TM — just another securitized and sanitized game in the Wall Street casino, with all the revolutionary potential of a bumper sticker.

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

But the second of that note's assertions didn't get nearly as much attention, even though I think it's the more important of the two.

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, and it will not rest until all of crypto has been transformed into Wall Street's securitized and sanitized casino game.

What Treasury did to Tornado Cash and its developers is just the beginning.

Here's Brent to explain ...

The US Treasury sanctioned Tornado Cash on August 8. This has triggered a massive wave of concern, outrage, anger, navel-gazing, disbelief, fear, beard-scratching and scrambling from the crypto community, even as the historic move garners minimal coverage outside the crypto media. The US Treasury press release is here.

Here are some key points:

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  1. Monero (XRM) is next.

    If you want to know how it is that Sauron plans to see everything then look no further than Chainalysis, the blockchain data platform that works hand-in-hand with governments across the world to crack down on ‘illicit’ uses of crypto. In 2020 the IRS posted a bounty for anyone who could build software to trace a Monero transaction. See if you can guess who won part of that contract.

    Yes, Bitcoin became Bitcoin!. But the other things that happened were more quiet and subtle. Crypto and blockchain data firms went from being SaaS for traders, arbitrageurs, and investors to being tools of Sauron. The revolution never really stood a chance.

  2. Summed up in two sentences.

    “Some are making free speech arguments because code is deemed to be speech. And in the US, money is sometimes speech, when that money is being funneled into Washington. I’ll leave these arguments to the constitutional lawyers.”

    “At the very least, it seems undeniable that the US Government is not going to allow a private, libertarian monetary system to be built on top of the USD.”

    Sheldon Whitehouse’s book Captured explained it well, imo.

  3. Towers are interesting. I suppose because Towers are one of the Old Stories. Implicit in their creation is the defiance of man v nature; implicitly, in turn, they can last for a very long time but they always fall in the end.

    round and round the winchesters go — sokkasass: apriki ...

    The question of scale overlays on everything for me, these days. Bitcoin became Bitcoin!TM precisely because they tried to challenge the tower of Sauron by building another tower that could reach the same scale. This was a misguided approach from the beginning; another of the old stories is that once your new tower is tall enough it becomes no different than the old tower and we all know this. I suppose this is why your title is not wrong ‘Sauron Remains Undefeated’. Barad-dur may fall today but the spirit of Sauron will just infect whatever tower is built next.

    Except now there is a caveat that never existed before. It is becoming increasingly plausible to build decentralized but interoperable systems of organizing humans that can have utility but don’t necessarily have to approach the scale necessary to attract Sauron’s gaze. This is why ‘crypto’ still has such great promise. Money may be a part of it but not the greatest part. Of course this is just another old story! The way you’ve always defeated Sauron was by being small enough to be out of sight until it was too late.

    The Tower of the US Treasury will last a very long time still I am sure. But when the people of the tower start to fear a loss of control their constant and only answer is ‘build the tower taller’. This may consolidate control over some time scale but it also hastens the fall in the long run.

  4. There is no one in DC who is more dishonest on this issue than Sheldon ‘Whites-Only’ Whitehouse. Dude is the absolute king of glass house construction. Be careful whose perspective you’re trusting. If their title begins with “Senator” or “Congressman” be even more skeptical than usual.

  5. As someone who once had something to do with AML/KYC/KYCC/ATF this is unsurprising its obviously for laundering money. That it’s a protocol or not doesn’t matter, and is a public good to shut it down.

    As someone whose hung around cryptobros and the scene the freak out is dumb and even they seem to know it.

  6. Avatar for aw21m aw21m says:

    Doesn’t really matter tbh. The cat is now out of the bag with zk-tech, and this will reappear and be even harder to detect, let alone shut down in the next iteration. It’s insane that wanting privacy over your financial transactions is considered “obviously money laundering”. Cash would be illegal if it was dreamt up today, that’s “obviously for money laundering” too, right?

    Today we have the least privacy humans have ever had. The current digital age means that everything you do, everywhere you go is surveilled by big brother. Fuck us for fighting back against that, but we are going to try!

  7. This was a great and very informative note on the specific events related to Tornado Cash and I read it with interest.

    However, these are some thoughts that crossed my mind while reading:

    • Your “the US Treasury is Sauron” analogy is a powerful, and I agree that one should not underestimate the US Treasury’s desire to regulate whereever it can, and even to expand its sphere of influence whenever possible. Non-Bitcoin crypto currency protocols everywhere should beware - a formal warning about the future has most def been issued and let’s hope it is received.

    • Your point about Bitcoin in many places becoming Bitcoin!TM is also a good one. This is absolutely happening and anyone who invests in this Bitcoin!TM should be clear about what they are investing in. Which for the avoidance of doubt, is a product that is labelled as Bitcoin but exists as a mere shadow of the original thing. A one-dimensial version of a multi-dimensional concept.

    • All of that said, I don’t think this note, or those before it, have made a great case for why the creation of Bitcoin!TM means the end of Bitcoin. The end being defined as something very different than negative price action. And this is important to the general gist of this note, which seems to suggest that Sauron is coming for Bitcoin and will eventually defeat it. In my mind, this argument only makes sense if we view Bitcoin as simply a new currency with exciting price prospects and with the simplistic aim of “number go up”.

    While I acknowledge this aspect of Bitcoin and its importance to many so-called Bitcoin proponents, it seriously underestimates the scope and nature of the Bitcoin protocol. By subverting Bitcoin into Bitcoin!TM, “Sauron” has not made away with Bitcoin. It has simply created a distraction among retail investors who only see Bitcoin as money, and whose only interest in Bitcoin stems from a desire to watch its “number go up”. This, most certainly will slow the pace of the price of Bitcoin, but it is categorically NOT the same as defeating Bitcoin the protocol.

    Admittedly, my view of Bitcoin is different from that of many other Bitcoin supporters and many would disagree with me, so take my “two cents” on Bitcoin as exactly that:

    • Bitcoin is not simply a new type of money. Bitcoin is a powerful protocol which many different spheres of potential influence. It is categorically different from other cryptocurrencies because of its Proof-of-work protocol, but while that point is often made the more important point is that the comparison itself is misguided. It is not just apples and oranges, it is apples and…say a fertile field somewhere. The field certainly has the ability to grow apple trees and apples, but it is not in the same category.

    • There are so many aspects of Bitcoin to think about - it is a philosopher’s dream - but to try and make my point here I’ll focus on one additional aspect of Bitcoin that does not get talked about very often, namely Bitcoin as a national defense protocol and a proxy for war.

    • For fellow eager beaver researchers, this idea has been put into the mainstream by a guy called Jason Lowery, who is a US National Defense fellow at MITs US Space Force. He has published a lot of the thinking behind his Masters’ Thesis on Bitcoin here:

    Keep in mind that I am not simply saying that Jason’s view on this is correct (though I have come to believe it is) but that the Bitcoin protocol is a very powerful baselayer of “truth” - not just a new form of money. The fact that hoardes of people jumped on the bandwagon and bought Bitcoin with the singular goal of price ascent does not take away from the underlying value of the protocol. Jason writes about what makes Bitcoin special at the link above and it is well worth a read.

    • Jason Lowery’s main argument is that Bitcoin’s proof of work protocol is essentially a power-based control structure through which owners achieve zero-trust and egalitarian access to property, without power projection. This to me is a point that cannot be overstated, and Jason’s points about implications for national security are well worth exploration.

    • As you/Ben have said before, Sauron cannot “see” Bitcoin - which is why it wants to turn Bitcoin into something that can be more easily seen. But perhaps “seeing” Bitcoin is not the most essential concern here. Perhaps Sauron has already fully grasped that not only can it “see” Bitcoin, it also has no ability to “control” Bitcoin. Creating a side-show casino-chip Bitcoin version is a useful distraction, but perhaps Sauron needs to think “bigger”.

    • Perhaps Sauron needs to consider how the very existence of the Bitcoin protocol may influence other nation state’s willingness to allow the US Dollar its hitherto prime spot in global finance. Jason makes the point that the US (and the Western World) better consider the implications of game theory and the obvious first-mover advantage as the zero-trust and egalitarian control structure of Bitcoin sets about creating a new and powerful industrial defence complex.

    At this point, most people will roll their eyes at perceived hyperbole - but I have found these fundamental aspects of the nature of Bitcoin well worth exploring:

    Quoting Lowery further:

    The sociotechnical implications of proof-of-work digital assets are huge. There are major national strategic security implications of Bitcoin – the world’s most widely-adopted proof-of-work digital asset defense protocol. Today’s kinetic superpowers should be taking Bitcoin extremely seriously and summoning all of their capacity to produce responsible strategic policy that actually understands this technology for what it is, and postures their nation to thrive in this new era of strategic power competition. Like all examples of when new power projection technology emerged in history, the future of digital warfare will be highly path-dependent; the first nations to adopt it will be asymmetrically rewarded, and there will likely be no second chances.

    But this is about more than what nations choose to do; this technology is transnational – it taps into something much deeper. If the theory is valid, then this non-biological evolution is significant on a much broader timescale than the rise and fall of nations. Finding a surrogate to war means Sapiens have discovered their digital antlers – a way to continue the power projection game to establish fair pecking order; but like antlers, do it using special protrusions (ASIC infrastructure) that will not threaten our mutual extinction, like nuclear-tipped kinetic power does. With this change, life will be able to continue to do what it does best: reward its most clever and resourceful power projectors, bring order to chaos, and maximize its ability to resist the inevitable course of entropy. So our responsibility as Sapiens – life’s peak predators & abstractors – demands that we endeavor to understand this technology’s potential. That endeavor begins with having the wisdom to see why this technology is worth every watt.

    • Clearly, if “Sauron” is busily trying to figure out what Bitcoin really means in the context of diminishing levels of societal trust, national defense and monetary policy - I would expect them to prefer to do so without retail investors treating the very same protocol as just the very latests in a string of shiny new investable themes. Ideally, retail investors should be syphoned off into Bitcoin!TM before any further decisions are made about Bitcoin in general.

    So I guess what I am saying is that there is more than one way to view the actions of the US Treasury in relation to Bitcoin - versus all other cryptocurrencies/ non-proof-of-work protocols (for which I completely agree with the entirety of the note’s arguments).

  8. Avatar for bhunt bhunt says:

    Thank you for this tremendous post, Em. More evidence that the ET Forum is the best thing on the interwebs today!

  9. Avatar for Zenzei Zenzei says:


    Your post helped me understand why I don’t connect with this whole idea of non TM bitcoin.

    As long as we are all obsessed with this idiotic idea of “money” as an equalizer of “stuff”, an “asset worth of defense”, then anything that is in service of “money” will by definition end up co-opted by Sauron and becoming a TM. Sauron likes money because it’s quantifiable and thus excisable. Sauron likes money because it is a very nice carrot to motivate the peoples to produce and consume and grow the economy and feed Sauron’s appetite for money.

    And as long as we live in a world where everything is financialized and bubbly to the point where money measures nothing (trillions rise and fall easily with no real link to actual work/humanity/whatever) anything that serves Money serves Sauron.

    Bitcoin is an abstraction distraction that takes people away from the real threats facing them. Like the energy crisis that has the world in its grips right now. Bitcoin w/o energy is nothing. Blockchain w/o energy is nothing.

    The world can keep its bitcoin. Energy is Life.

  10. Rafa it seems like your comments are only addressing the idea of btc or other network-based protocols attempting to compete with centralized systems at scale. Of course this is 99% of what you read and see when it comes to crypto which is exactly the point; the power of the thought ‘this idea can be applied at scale’ is Sauron. But my focus is application of the ideas of btc not at scale. These concepts can be applied to almost anything, it is only Sauron that drives the focus towards money and scale. With that in mind do you still see bitcoin entirely as an ‘abstraction distraction’? I think the ideas that underpin crypto can be applied locally in a way that is compatible with your energy is life thoughts (e.g. Proof of Plant). More importantly, as a logical consequence of the widening gyre and the modern information sphere I don’t think this is just a way, I think it will end up as the only way.

  11. Avatar for Zenzei Zenzei says:

    Blockchain is not the same as bitcoin.

    One is an entirely new way of transparent record keeping with extraordinary abilities built in. Much of human activity is about recording who owns what where. So I see amazing potential there.

    The other is a particular implementation of blockchain technology utilizing proof of work algorithms to create something that, in my view, is a thing that belongs in and is maninly useful in the abrstact world of money. Something that is inherently dependents on energy to function. Something that is directly and definitively part of Sauron’s domain.

    So, yes, I fundamentally believe that “bitcoin” and “crypto” and {insert coin here] are a complete abstraction distraction where racoons are running wild rather than a useful thing for the real world when the winter times hit us.

  12. Hi @Zenzei, I started acquiring btc at $200. Why? Because I was sick and tired of Banks (money changers) siphoning off every cross-border transaction (e.g. CAD and EUR and USD), and it seemed like btc might make these transactions less costly. Well surprise, surprise (I was/am so naive), guess what, I’m still waiting. Meanwhile, my cryptos have varied in value by well over 6 figures. If only I had ‘cashed’ out, I could have easily covered those transaction costs with ‘money’ to spare. And so these days, I read the btc or BTC commentariat with semi-detached curiosity, hoping one day my ship will come in? And at the same time, I save my nickels for if and ‘when the winter times hit us’.

  13. agree 100% it’s this particular brand of faux libertarian manufactured outrage.

  14. Yes the onramping and offramping to fiat are a huge expensive problem still due to KYC/AML and other impediments. The dream of frictionless transfers of money is being realized via Venmo (domestic) but not crypto

  15. Hi Zenzei,

    When I first started to connect with the “idea” of Bitcoin, back in 2015, it was most definitely with the non-TMbitcoin idea. The Bitcoin abstraction if you like. It was very much the multi-faceted idea/concept that intrigued me, rather than any one specific element or use-case. It was the strangest thing. In the middle of a super-busy life (trying to work for a global investment bank and parent a 3 year old simultaneously) I clearly remember the feeling of awe it gave me. That when I read about and paid attention to the idea-of-Bitcoin it was always immersed in many different facets or areas-of-influence. Like a singular wave in the ocean, it was impossible to pay attention to them all at the same time (much less grasp the details of each wave-movement) but it was the immense nature of the concept and its ability to cause change that intrigued me. All of which is to say, trust me - I am not interested in Bitcoin simply because it’s “fancy money”.

    Take the concept of “value”. Not the annoying term for a method of investing, but the fundamental meaning of the word. How do we determine value in this world? I agree fully with your view that the world is obsessed with money, which has in term been co-opted by Sauron etc. etc. But “value” is something different. And I like the idea of having an immutable asset to reference the value of other things in my life to.

    I am not among the many uber-libertarian (closet anarchist?) Bitcoin enthusiasts that believes above all in the freedom of sovereign individuals and cheer for the destruction of society as we know it. I am far too Scandinavian for that, and far too interested in ideas and concepts like co-operation and trust. But I do think Bitcoin will play an important role in several paradigm shifts. Not because it is perfect, not because its built-in scarcity guarantees a certain price-ascent…but because its core, inherent immutability is what is needed at this point in history when societal trust is the most scarce asset of them all.

    Two examples that come to mind to illustrate what I mean is the idea I mentioned above, where Bitcoin starts to play an important role in national defense as a proxy for war. Energy is life indeed, and imagine if we could play out humanity’s battles digitally instead of kinetically?

    And on the topic of energy, what it Bitcoin could help propel forward the creation of the renewable energy infrastructure needed to make America both self-sufficient and world-leading? Already in Texas, Bitcoin is supporting wind and solar power by creating flexible load that helps maintain the stability of the grid during a time when the state is increasingly reliant on infamously variable renewable energy generation.

    None of this is perfect, fully contemplated or yet a reality. But wow…the potential!

    And on the blockchain versus Bitcoin comment - it is true that the two are different concepts but it is also true that the blockchain technology was built to facilitate Bitcoin. I fully understand that the type of people that are out there touting Bitcoin as the best new money-making-scheme out there can very effectively turn sensible people completely off the idea…but if one is great - what makes the other terrible?

    If I had to identify one part of it that intrigued me the most, it was the importance I sensed that Bitcoin would play in the future

  16. It is good to have Em to say much of what I was trying to figure out how to say and do it much better!

    Rafa I forget exactly what your oft-used quote is on the meanings and interpretations of words or I would use it. Having said that you value blockchain, I think there is more overlap in views then we might realize between what you are saying and what, as Em made more precise, I meant by the the phrase ‘ideas of btc’. It would be better still to say ‘ideals’.

    I would take your statement to yet another higher level that not only is btc just an implementation of blockchain but that blockchain is just an implementation of certain ideals such as leaderless & distributed consensus, immutability paired with transparency, etc. When I talk about the value I see in ‘crypto’ or ‘btc’ I am using (maybe poorly & misleadingly) these terms largely as shorthand for this list of ideals and not because I think it has to be btc or ‘insert coin here’.

    I am trying to think about what motivates me to care about this and thus disagree with your take that it is an abstraction distraction. I think one answer is that I find it interesting to think about: what comes next? Being ready for when winter comes for us is certainly wise and necessary but for me it doesn’t end there. Ben’s Metaverse Pt4 had some great insight in the first paragraphs about the forces of nationalism and debt and the realization by enlightenment elites that these forces could scale, with the result being the brand-spanking new conception of the State that we are now so deeply embedded in. If we had or could build legitimate mechanisms that would strongly incentivize non-violent conflict resolution between communities/societies, could we all learn to simply not care whether the people 10 or 100 or 1000 miles away from us operated under the same systems as us? I think the answer is yes because the ideals of btc opened my eyes to the power of consensus as opposed to force, but I know it will be a very long road.

    The reason winter is coming in my reckoning is that the State cannot and will not survive the modern information sphere. This is because the information sphere creates conditions that utterly stabilize the widening gyre within systems of scale. So I’m inspired to look for what comes next rather than just prepping for the coming winter and this leads me to a fascination with btc, blockchains, and their underlying ideals in a way that Em described very well.

  17. Avatar for Btaff Btaff says:

    It is interesting to see people’s reactions once jail time is actually enforced. Imagine if the SEC found a way to convict a significant banker from 2009. Imagine if the SEC went after one of the meme crowd who pumped and dumped stocks. If the regulators do not enforce the rules then the public will lose confidence in the system. Is going after tornado an invasion of privacy, I don’t know. But it seems as if everyone is distancing themselves from it very quickly when getting thrown in jail is a real threat.

  18. Avatar for Zenzei Zenzei says:

    We agree. And we also agree that amazing things are coming and that the idea of virtualizing real world institutions (the Fed) in code also has remarkable potential (constructive and destructive).

    I love the ideals and creativity that is behind all of this. Bitcoin was the first expression of this idea that caught the public’s imagination and became a part of the Zeitgeist. But in the same way that we are all not flying around in the original planes that the Wright Brothers created, over time we will find that Bitcoin is not the future. It is the past.

    The future will be as amazing as the coming winter will be harsh. :slight_smile:

  19. Avatar for aw21m aw21m says:

    Hilarious that there’s jail time for that and not these other flagrant and far more profitable abuses of the financial system…

    I don’t believe any tornado cash developers would be jailed here in the US, as they were in “privacy friendly” Europe… freedom of speech and all that.

  20. I found this very interesting. Basel is reccomending a massive jump in capital requirements for banks that have Group 2 cryptoassets. If adopted (LOL, if…), they’ll be required to hold 1,250% (yes that’s a comma) eligible capital for the maximum absolute value of the banks cryptoassets. Source: Basel iv Cryptoasset Exposures

    Meanwhile Basel reccomendations for capital requirements for non-government backed mortgages is still what, 20%?

  21. In a related note… they also just reccomended the same RWA on banks for fossil fuels (1,250%).

    These are definitely nudges.

  22. Em, curious, about how you would envision *“if we could play out humanities battles digitally instead of kinetically?” That would certainly seem to be the Holy Grail, but I can’t grasp the details, and how you “trust” leaders/parties to ultimately accept the outcome of digital battles? My imagination goes lots of directions, but seems that those battles could be gamed and if “energy is life”, he who controls the energy, wins the battle. I’m sure I’m off here, appreciate your thoughts.

    I have a love/hate relationship with ET forum! Every damn time I come here, expecting to spend 10 minutes reading, find myself needing 4 more hours to reread, comprehend and figure out where my “failure of imagination” is.

  23. Avatar for 010101 010101 says:

    Akin to the game James Bond plays against Maximillian Largo, ‘Domination’ in Never Say Never Again, except instead of electric shocks our elderly relatives freeze, and we have to walk to the shops.

  24. Hi Carl,

    When it comes to the potential role Bitcoin can play in the history of human warfare it has to be said that the information I have digested comes from Jason Lowery, so don’t mistake any of this for personal insights of mine. The below is basically one long source-reference to him. I will try to shorten his thoughts just a little, hopefully without leaving out too much crucial detail…

    Understanding the Bitcoin protocol’s potential role in human warfare is not straight forward I must admit. Especially for someone like myself with no formal training in computer science etc. But these are the main points that got me to where I am right now. Perhaps it will resonate with you as well. I have broken it into thoughts on software, thoughts on cybersecurity and thoughts on war.

    Thoughts on “software” and its integration into the “real world”:

    “Software” is a philosophically quite profound concept, and the manner in which we perceive and behave around software is quite interesting, when it comes to the blurring lines between the “real” world and the “virtual” world. Software can be technically defined as “a set of instructions that tells a discrete state machine what to state to take”. This is relevant because software only exists because people figured out how to digitize computer programming instructions and convert them into electric signals that can be electronically stored in general-purpose computer memory. Before this, there were only physical levers, turning dials, physical wires etc.

    Most of us lack the ability to understand complex behaviour of general purpose computers, so we use metaphors. Out of pure cognitive necessity. Or in ET terms, we use narratives. Software developers tend to use object-oriented language so that people can better understand the emergent behavior of the software in question. Like, clouds, stacks, languages, etc. But the more we use these software metaphors, the less it matters that there is no “cloud” (just a massive ethereal cluster of particles) Especially to people like myself, who didn’t have the technical insight to begin with. Jason L does a better more in depth job of explaning this, but his “punch line” is this:

    “This changing perception is metacognitively rewiring society into believing and accepting that software doesn’t just behave like a language, it is a language; software doesn’t just behave like an object, it is an object. These subtle, almost imperceptible changes in the way that humans perceive computer programs represent major metacognitive leaps in society. The lines separating the real world from the virtual world are blurring. The difference between the universe and the metaverse is becoming more indistinguishable with each passing day.”

    Thoughts on cybersecurity and cyberpower and the “real” world:

    For maybe the last 10-15years I (and everyone else) have started to grasp the implications and importance of everything that falls under the umbrella of “cyber security”. It has always struck me as a frustrating game of cat and mouse, played out in the metacognitively strange place of “software”.
    Cyber security’s greatest flaw appears to be the lack of what society makes use of in every other domain to enforce rules-based systems- namely brute force physical power.

    Directly quoting Jason L again:

    Bitcoin appears to be the first operationally successful software protocol to harness brute-force physical power as a cyber defensive mechanism. Instead of relying exclusively on software patches to protect it against systemic abuse, the Bitcoin protocol uses a much different cyber security strategy. It digitizes brute-force physical power and then leverages its own power digitization process to impose a real-world, physically prohibitive cost on systemic abuse of its intermediation protocol.

    In my much more basic mind, the “magic” happens at the intersection of “decentralization” and “power-digitization”. The much-maligned energy-intensive aspect of Bitcoin mining is also its greatest strength, certainly for a protocol that could provide a very useful “bridge” between the kinnetic world and the world of metacognition. Cyberspace if you like.

    This next bit got me into the weeds I must admit…

    The Bitcoin protocol basically partitions up the supply of digitized brute-force physical power (electricity). A very basic reason for this is the fact that as the real-world physical power backing Bitcoin increases, this does not actually cause there to be an increasing supply of digitized power units/Bitcoins. As almost everyone now knows, Bitcoin has a fixed supply of “coins” regardless of the amount of energy spent on the network.

    This introduced me to a brand new fascinating concept - something called “Gabriel’s horn” - a mythical object that allows its surface area to expand, while its volume remains constant. It is mathematically possible, but can’t be observed in the real world as there is no known material out there that can be stretched infinitely while retaining its volume…

    In short, most of us tend to picture a growing sphere when we picture the growing supply of any matter. Jason Lowery uses the widely known example of astronauts in space creating floating spheres of water in zero gravity. So it’s natural that we struggle to picture something that can retain its fixed volume while stretching its surface area infinitely. But our failure of imagination in this instance is not technically a problem. Digitial objects within the realm of “software” has no limitations like this. It is plenty possible to design a digital object to behave like Gabriel’s horn - it’s just that it’s quite difficult to wrap your head around it. Metacognitavely.

    Anyway. The digital horn of Bitcoin has been partitioned into 2,100 trillion equal segments of “satoshis” and Jason L likens this to the way earth has been arbitrarily partitioned into 5,100 trillian equal segments referred to as square meters. The “surface” area of both can be further partitioned to any scale- 100 million satoshis is a Bitcoin, a bit like 2.6 million square meters is called a square mile.

    Jason L believes that this dynamic (digitally converting real-world brute-force physical power into equally-partitioned surface area on the expanding surface area of a Gabriel’s Horn) is not only revolutionary from a cyber security point of view, but it’s also extraodrinary from a security dynamics perspective. By being a digital representation of unlimited real-world brute-force physical power (as in all the power spent defending the network in the past and all the power that will be used in the future) the Bitcoin protocol empowers people, countries etc. to wield digital power as a mechanism to impose real-world, physically prohibitive costs on bad actors in cyberspace.

    Put even more simply, it links the kinnetic world to the digital world - the current arena for our cybersecurity struggles.

    So, finally, to the point of your question:

    Thoughts on Bitcoin and War:

    Jason L quotes Carl Von Clausewitz as having defined war as

    “War is merely the continuation of policy via other means”.

    I have not read this, but he quite literally wrote the book about war called “On War”, on the philosophy of war.

    If I were to try to distill some of Jason L’s thoughts on this down I would say that he makes the point that even though humans are to a degree inherently violent, humans do not go to war merely to demonstrate their capacity for violence. Instead, humans tend to resort to violence as an alternative way to settle legitimate political disputes.

    When do we cross the line of violence over more peaceful and less destructive means?

    When we do not trust the judge and we do not trust the judgement.* In this circumstance, war becomes the impartial courtroom with an impartial judge. War is basically the judge of last resort. “Based on the indiscriminate and systemically independent phenomenon of brute-force physical power.”

    How can we harest the utility of indiscrimate brute force physical power, but filter out the death and destruction?

    1. capture brute force physical power electronically
    2. build an arena in which power producers can compete against each other in a zero trust and egalitarian game of chance that does not require “judgement”.
    3. start using it as a calculated instrument of national policy to start solving political disputes.

    And the “money quote” from Jason to finish this off:

    Have you ever considered that Bitcoin isn’t merely a new form of money? Maybe Bitcoin represents the invention of non-lethal, digital warfare, and the first legal dispute for which it is being used as another means to settle policy… is monetary policy.

    Energy is life indeed…



    Gronager and his colleagues contend they’re engaged in the good fight, saying that cracking down on criminal use of crypto would bring credibility and growth to the industry. Not everyone involved in crypto agrees. Some people “think Chainalysis is the devil,” says Josh Olszewicz, head of research at Valkyrie Investments, a crypto fund manager headquartered in Nashville.
    Ver clearly falls in the first camp. “George Orwell would be proud,” he says. “I guess the NSA”—National Security Agency—“could claim they’re increasing trust in the internet because they’re spying on everybody.”
    Gronager dismisses such criticism as “echoes of the anarchists from the early days.” But he does acknowledge the power of Chainalysis’ software and says the company is sensitive about which governments it works with. It doesn’t do business with sanctioned states such as Iran or Russia, and doesn’t work with China, though it does have private-sector customers in Hong Kong. It has an ethics committee that weighs in on cases it considers to be more complicated, Gronager says, and sometimes seeks the input of “US partners” in the public sector before deciding which clients to take on.

    “Yes, we are working with world governments to track your transactions, and if you don’t think that’s a Good Thing :tm: it’s probably because you’re one of those early days anarchists who just don’t get what crypto is and instead are thinking about what you thought it was supposed to be.”

    Even Sauron needs collaborators.

  26. Avatar for bhunt bhunt says:

    Especially Sauron needs collaborators.

  27. How would you ever draw the line here? If DY or Neb Tnuh were charged with balancing privacy vs illicit activities in crypto… Where would you even start? I think I’d end up like the judge in the porn case years ago… “I know it when I see it”. which defines nothing.

    What’s worse than Sauron? No Sauron.

  28. The only hope that sauron doesnt win is if crypto organically developes around the world irregardless of regulations. Sort of how the drug war has largely been a failure. Not saying drugs are good or whatever, just the war against drugs has become a failure.

    At least as it has not stopped people using drugs and that it has funded large criminal networks which has led to even more major crimes like murder etc.

    In the same vein, I don’t see that Sauron will win forever. Eventually they’ll lose control of the narrative globally and eventually domestically. Crypto as an idea will survive imo and hopefully lead to a better financial system. But as Ben has highlighted, it may just be crypto^TM.

  29. That’s quite simple: the line does not exist. It’s a figment of your imagination. You only think it should be somewhere because you have been told by people who draw lines for a living that it should be there.

    There is no argument I’ve heard with respect to the potential for illicit use of crypto that doesn’t also apply to art, diamonds, cars, guns, gold, silver, or physical currency. I fully understand why the US government wants to control it, but appreciating their motivation is by no means an endorsement of their specific desires. Governments will use Chainalysis because their stated goal is to be able to see these transactions and eliminate privacy. Developers will constantly try to build a better system to subvert governments. This dance will go on for as long as there are computers.

  30. I can’t upvote @Desperate_Yuppie enough. I was in AML/CFT for a few years for a crypto-firm. I’m Chainalysis certified in two of their products (although I think one may have lapsed as they’re only good for 1 year). If anyone thinks the blockchain is a benefit to illicit activity, well… they don’t understand DLT at all. Chainalysis is a really good company, with amazing products, and God I wish I could invest in them.

    Also the comment about the “line does not exist” is a phenomenal point. When you take your continuing eds in AML (ACAMS is the trade organization) you’re frequently paired up with counterparts in foreign jurisdictions. Those counterparts are always blown away by what US regulators attitudes and assumptions are vs their home organizations and regulatory agencies. And I’m not talking about Zimbawean monetary regulators. I’m talking western countries that are thought leadership countries in Egmont Group and Basel are way more laissez faire than their US counterparts. The “line” is very different depending on your jurisdiction, and you would find it shocking how anti-privacy and free-speech the US truly is on this.

    If you really want to blow your mind, in the US the regulators are all passing regulations (not laws) on cryptocurrencies based on the authority given to them by the Bank Secrecy Act and other laws. Those laws supposedly give them the authority to pass regulations, but those laws do not once, ever, mention bitcoin or cryptocurrency or anything similar they only reference actual money/currency. Nevermind the Constitutionality of those laws to begin with (4th? 6th?).

  31. In my first reply to the Sauron article above, I made a point towards the end which I’d like to expand on a little. Reason being that there seems to be a fairly strong narrative developing internally, among all of us here at ET, that Sauron and Bitcoin/Bitcoin!TM are in a fight against each other. I’m not sure that is what’s going on at all.

    For the sake of clarity, I suspect that the main question is not whether Sauron will “win” against Bitcoin/Bitcoin!TM, but whether Sauron will co-opt Bitcoin towards its own purpose, and that purpose is not necessarily merely an exercise in surveilance. I guess what I am saying is that Sauron’s interest in Bitcoin may end up being about more than mere AML…

    I mention this because I think there is an unhelpful duality narrative developing when we talk about Bitcoin. That those who have an interest in Bitcoin are either of the uber-libertiarian/closet-anarchist variety OR or the number-go-up/just-make-me-rich kind. True, you probably do capture a large part of the Bitcoin-enthusiasts with these two categories, but there is a third intriguing opinion worth mentioning, and I don’t mind holding my hand up as the token representative for this (possibly small) group.

    I think I have mentioned many times before that I am far too Scandinavian to ever gain full membership in any ultra-libertarian group. On some fundamental level I believe in the importance of taxes as a base layer of civilisation. So bringing down governments, or even central banks, is not something I aspire to. I actually find the current lack of trust in our societal “institutions” to be a separate and serious cause of despair…

    When I say that Governments have an additional interest in co-opting Bitcoin for their own purposes, I mean this quite literally. When I bought my initial Bitcoin holding back in 2015, I remember thinking that “this is big”. But I didn’t think it would replace the current system. Rather I hoped it would help usher in a new non-fiat era of central banking. As time has gone by, I have honed the thoughts in my head a little bit better and today I think it is more than possible that the United States will adopt Bitcoin as a reserve asset. Maybe others as well, but particularly the US.

    Why? Well…for all the reasons major governments continue to hold gold:

    • it’s a de facto safe asset
    • it is viewed as “nobody’s liability”
    • it is independent of monetary and economic policies while also having a “fixed” supply.

    All of the the above (and more) means that having more gold than anyone else is a good thing.

    I won’t go into all of Bitcoin’s attributes, but suffice to say that I personally believe that Bitcoin is in the early trajectory of gold’s prominence. And having more of it than anyone else will be similarly a very good thing. I realise that many disagree, but hold onto all your scepticism just for a minute.

    I personally suspect that the public efforts by sovereign countries and their central banks to lump Bitcoin in with crypto (and discredit the collective term across the board) is part of the economic games that are currently playing out to settle a new order of global importance/influence in our current tech-focussed paradigm.

    On the face of it, these efforts look like a straight-forward protection game. In a basic sense for the protection of the existing fiat-currency regimes, but a second layer protection game is probably limiting competition within various planned central bank digital currencies.

    But the point is, I don’t think protection of the current fiat-currency system and preparation for competition between central bank digital currencies is the full picture.

    I realise that I am wide open to well-founded scepticism when I type this, but my main reason for thinking so boils down to old fashioned economic incentives. As highlighted by someone else somewhere (apologies for the lack of source referencing) but it seems to me that a massive arbitrage opportunity currently exists, for a country/countries to silently accumulate a Bitcoin position to be announced at a later stage. Over the longer term, Bitcoin looks to me (and many others with more impressive credentials) like a sovereign wealth building opportunity, with a classic asymmetric risk reward profile. And the US, with its current global positioning, has more to lose on the downside than most others.

    As an aside, this is how I viewed my own modest investment in Bitcoin in 2015. It was an asymmetrical bet to me. With a limited down side in my own mind, but a fairly large and interesting upside.

    What’s at stake if the US decided to take a small position in Bitcoin as a Treasury reserve asset? Well if Bitcoin never rises to the prominence being hinted at today, then I guess it’s a bit of a bad look and it would need to be managed out of the balance sheet. But what if Bitcoin does continue its rise towards being a global reserve asset? Well then any late adopter country would see its sovereign wealth depleted relative to early adopters. And the downside for the US would be greater than for most other countries, given its starting point. You don’t have to be a Bitcoin evangelist to see the importance of this asymmetrical risk/opportunity… All the focus is on Bitcoin’s price volatility, but personally I am focussed on its mere survival during this current period. And I have seen nothing that concerns me yet.

    Luckily (depending on how you look at it), the US has a pretty good starting point. I believe that it is still true that most of the world’s Bitcoin is still custodied in the US. And US corporations dominate in its adoption of Bitcoin as a reserve asset.

    You can view the situation from several angles: to preserve a leading position of power and wealth, or to simply manage the risk of adversaries gaining a geopolitical and economic edge, but the asymmetric arbitrage opportunity remains. And I don’t think this is completely lost on “Sauron”…

    Clearly, this is all conjecture so take the above as it is intended. Just an additional narrative that one can use to view developments between “Sauron” and Bitcoin. It certainly makes for an interesting filter to view “Sauron’s” attempts to “defeat” Bitcoin through. I would be really interested in hearing thoughts about this from those of you with a better grasp of game theory than I personally have.

    On the topic of crypto in general, I tend to agree with everyone else. Compliance is coming for them, and it’s unlikely to be pretty.

  32. Avatar for aw21m aw21m says:

    Agree with this point of view. “Bitcoin game theory” has said this for awhile… nations will need to adopt it early or will be left in the dust when everyone else gets a head start.

    This is probably 1-2 cycles away from beginning in earnest. Already started this cycle with El Salvador. If they get fantastically rich and pay off all their debts in the next cycle I can guarantee that 3rd world countries everywhere will be dying to get in on the action.

    Regarding regulations, it’s always a cat and mouse game. At the end of the day you cannot stop decentralized applications built on Ethereum. Developers will craft better ways to decentralize their apps further, with decentralized frontend and URLs coming shortly. Tornado cash was sanctioned, but Ethereum DGAF (I wouldn’t recommend using it tho).

    Now that you can write unstoppable applications and make unstoppable currencies, the cat is out of the bag. It’s going to be up-only for human freedom and privacy. Nation states will need to work with it, or get left behind by the ones that do. Bullish.

  33. Thanks for your thoughts on this.
    In general, I always appreciate others input and thoughts - even as I think that perhaps you and I are making slightly different points on this particular topic. I tend to agree with Ben H (and others’ view on this forum) that governments may not technically be able to shut down a decentralised application, but they can make it so difficult to use as to make that a technicality.

    I make a clear distinction between Bitcoin/proof of work and all other proof of stake cryptocurrencies.
    ETH is technologically super-interesting, but it is a different beast all together - and I personally think that Bitcoin and its proof of work protocol is on a very different journey than all proof of stake protocols.

    Anyway, thanks again for your thoughts.


  34. Avatar for aw21m aw21m says:

    Harder than you think to shut it down. Governments were not able to shutdown file sharing or torrenting sites, even tho there’s a lot of money in stopping people from having free access to songs/movies/software.

    China banned BTC and BTC mining. After an initial exodus, it’s estimated that 10-20% of hash rate is back in China. Also Chinese have not stopped trading and buying BTC on offshore exchanges. This is the most un-free and locked down society in the world and they are having major issues preventing BTC from touching their shores.

    It’s highly unlikely that USA bans Bitcoin peer to peer transfers, politically it will be hard and getting harder. There are many publicly traded Bitcoin and Bitcoin mining companies, so sabotaging them hurts the general public. Furthermore, a ban on peer to peer transaction will be very difficult constitutionally.

    EVEN IF everything else gets banned, ETH, stable coins, any smart contracts, etc, it doesn’t matter. There will always be permissionless ways to transfer and trade your BTC into ETH in order to interact with the largest smart contract and decentralized finance platform. BTC is a Trojan horse, once you accept BTC is here to stay, all other innovation and decentralized finance apps come along with it.

    As a crypto dev, I’m making sure this happens. I’m not gonna roll over and say “ahh well Sauron is too strong, let’s not even try”. It’s a revolution, and it’s here to say. Instead of being defeatist, let’s change the world and make our childrens life’s better. Fuck fiat and fuck the banking cartel.

  35. I agree that it is highly unlikely that the US bans transfers. But death by a thousand cuts?


  36. Avatar for aw21m aw21m says:

    Sure, but when an outright strict ban doesn’t even work in China, how well is a “thousand cut” sort of ban going to work in the USA? They can try but at some point the regulations are toothless, weak, and impotent. The blockchain DGAF and privacy tech is improving daily.

    This entire mentality (the Ben Hunt Bitcoin! :tm: ) seems extremely defeatist. Are we really this beat down by our government?

  37. Avatar for jrs jrs says:

    Personally, I have nothing against Bitcoin. I think the technology is incredibly cool and as a card-carrying nerd, I wish I had known about it a decade ago.

    But the important choice at this point in my life seems not between Bitcoin and other abstract media of exchange. Rather, it’s between abstract media of exchange and more concrete things like land, energy, and food.

    I can’t eat Bitcoin (or dollars). I can’t live in Bitcoin (or dollars). I can’t use Bitcoin (or dollars) for power, unless I burn them I guess? But if the power goes out, I can give dollars to other people in exchange for these things, and I can’t do that with Bitcoin, because accessing my Bitcoin wallet would require power. Unless there’s some new technology I’m missing here that obviates that?

    Don’t get me wrong, I’m an optimist. I think the power probably won’t go out this winter. But Bitcoin just has little value-add for my family and me on a concrete level right now.

    So, I’m not sure about “we” or “us”, but my concerns about crytocurrency seem pretty independent of the federales’ FUD. Except that, insomuch as I can control my own means of production as much as possible, I am maximally independent of my government and other big institutions, and thus not beat down by them… relatively speaking.

  38. The biggest enemy of the bitcoin community has been the bitcoin community. I don’t have a long-term view of BTC/crypto, intrigued by well-thought-out views here, but there’s too much leverage and too many Charles Ponzi’s eroding trust for it to be credible today. Crypto will not be the first or last market, that’s been reset because of leverage, but every major BTC proponent is/was leveraged to the hilt. Why are SBF, Saylor, Novogratz, and every major player asking for regulation, because they need Saurons endorsement of “we’re watching” to regain credibility. They need BitcoinTM.

    I won’t pretend to understand all the plumbing of crypto, but it’s pretty easy to see that today’s crypto markets are only as good as the on-ramp/off ramps. If “safeguarding liabilities” were to be enforced on Coinbase, there is a huge hole in their balance sheet and they need a major cash infusion just to survive. SBF isn’t bailing everyone out for investment purposes, he’s trying to save his ass. And then there’s Saylor, who has leveraged his company, stockholders and the BTC community on pretty much a roulette wheel wager. Again, I’m no crypto expert, but the worst enemy of the crypto community has been the crypto community in 2022.

  39. Avatar for naiguy naiguy says:

    This has always been my biggest issue with Bitcoin (and the internet in general as a way of backing up all human knowledge but that’s another conversation).

    If pockets of the population lose power for even a few days or weeks in rolling blackouts, how would they make Bitcoin transactions? How would miners mine? Update the ledger? What would happen if overnight 50% of the miners lost power? How much would transactions cost if only a fraction of miners were online? Would this scenario make for a huge increase in fees to conduct transactions? Would a huge increase in transaction fees (and big delay in getting transaction consensus) be seen as a type of inflation which would increase the overall cost of a goods and service?

    For the record I’ve held Bitcoin (and other cryptocurrencies/tokens/coins/1’s and 0’s on a hard-drive) since the early 2017 boom. I’m not a defeatist nor am I an optimistic evangelist. It’s just a tool to transact for me. I love the idea of decentralized peer-to-peer transactions and I use it when I can.

    However, I feel the energy issue (though I agree with the idea of Proof-of-Work over Proof-of-Stake) is it’s biggest hurdle. The energy consumption that miners require to mine Bitcoin and record blocks to the ledger, IMHO, are it’s biggest drawbacks for me.

    For me to really push all my chips in and join the Bitcoin revolution (or some other Bitcoin like proof-of-work protocol) wholeheartedly, I’d need some kind a low power, non-Internet reliant communication system to mine blocks and conduct transactions.

    An off-the-cuff example would be something like a Raspberry Pi type embedded system that can contribute to mining(?!); as well as use something like Packet Radio to transmit digital data via a radio communication link to conduct transactions.

    I’m not oblivious to the massive technical challenges of making something like this a reality. However, a popular Twitter influencer may end up sending humans to Mars one day. So I’m not going to say it’s out of the realm of possibility either.

    Energy is life. How much energy can humanity afford to use, and should they really use that energy, to simply record transactions to a publicly distributed ledger?

    Are any miners proposing to purchase/build and use Nuclear power plant as an energy source to power their mining business? Would regulations even allow for something like this if by some chance it would even be affordable to do? Again, crazy ideas like this don’t seem so crazy when you look at what a polarizing Twitter influencer has achieved in the past few decades.

  40. Avatar for aw21m aw21m says:

    Here is a nuclear plant adding a 200MW Bitcoin mine into their operations:

    Being able to use a low power, low compute device like a raspberry pi doesn’t make sense for Proof of Work. Any better computers will be able to do more “work” than a Raspberry Pi, so these tiny devices will be outcompeted. Perhaps you are looking for proof of stake, which can be validated with a tiny computer like that, however a more powerful device is recommended.

    There has been work on using packet radios to transmit blocks and transactions. Also Blockstream has launched a public Bitcoin node satellite which anyone can stream Bitcoin blocks from space.

    If a large portion of miners are taken offline, then yes Bitcoin transactions will temporarily become slower and likely higher transaction fees. However the network will adjust to this new hash rate and eventually 10 minutes / block will resume. Other networks like Lightning Network, commonly used for point-of-sale transactions and smaller transactions, would stay online even with slower block-times without a hiccup.

    In short, yes, if the internet goes down you’re pretty screwed with Bitcoin. But also your credit cards won’t be working too well, nor your online banking or your local bank branch. Better have some physical cash or gold, or better yet, solar panels and satellite internet at your house.

  41. Sorry. My original reply was too pithy and didn’t fully explain what I meant.
    I don’t think the US will try to ban (outright permanently make illegal) the use of bitcoin. Nor do I think that they are going to make it so onerous that it’s use is 0%.
    I think they are going to make it extremely onerous that the vast majority (like over 90%) only use extremely well-regulated exchanges and custodial wallets to enact in BitcoinTM. Just like how about 95% of the US population have a bank account.

    How America Banks: Household Use of Banking and Financial Services, 2019 FDIC Survey.

    Between scaring people with IRS requirements for redemptions/profit/loss (and the necessary accounting that requires) to reinforcing narratives that only criminals have need of financial privacy, to straight up audits of “random” crypto owners (hello newly funded IRS); Sauron is going to nudge, push and do everything they can to make it easier, “safer” and less onerous to use an exchange and custodial wallet. And then once they do, they’ll just enforce the normal patriot act, KYC and utilize their “public/private partnerships”

    to satisfy themselves that they can see and have thwarted the anonymity of Bitcoin, just like they have essentially thwarted the anonymity of a bank account (assuming it’s over the newly instituted $600 transaction reporting requirement).

  42. Avatar for aw21m aw21m says:

    Not gonna disagree here. I would say that 90% of crypto activity is already concentrated on CEX/regulated platforms. Bitcoin is also not anonymous, the pitfalls of the Bitcoin transparency have been known for years now. All transactions are public and traceable.

    However, the simple fact that you can withdraw to a Bitcoin wallet, and then transact in a self-sovereign way is the “Trojan horse”. Power users can take steps to increase their privacy, or bridge their Bitcoin to another blockchain that allows them decentralized financial services (like collateralized loans or decentralized trading services). Having the option to “be your own bank” and escape from Sauron’s eye will be hard to stop, and savvy users will do this. You can too! Now us broke plebs can have offshore bank accounts like the wealthy and privileged members of our society.

    Side note, $600 tx reporting is hilarious given that it is ~$200 for a family of 4 grocery run these days.

  43. The key difference here is that unless I keep it fully outside of the banking system (which is going to be virtually impossible for real world use cases) I don’t have the army of lawyers and accountants (like those wealthy & privileged) that will be necessary if I’m “randomly” chosen for an audit because I needed to deposit my crypto earnings or loan proceeds into my bank (who then disclose to Sauron a large unknown origin money deposit) but I didn’t disclose my holdings or gain/loss on my most recent tax form (or I did disclose to be compliant but that no longer acts like an offshore bank account). If an inquiry letter gets generated for someone who’s 1099 and 5498 don’t match up (which I have seen happen plenty) then I find it perfectly logical that someone who doesn’t report their crypto profit/loss (every time a conversion/sale/burn/gas tax occurs) is going to get a similar inquiry.
    And once the inquiry begins, Sauron’s got you.
    It all comes down to the following, if a crypto owner can keep themselves wholly removed from bitcoinTM (including not buying or engaging with those on the blockchain who are using bitcoinTM), then sure, you can avoid Sauron (although this person is admittedly engaging in fraud/tax evasion - just like the wealthy with offshore bank accounts). But unless they’re willing to jump through a lot of whoops to do that, Sauron is going to catch them in his gaze.

  44. I haven’t quite figured out what I think about the following, but I thought it might be of interest for anyone that found my post about Jason Lowery’s thesis on the Bitcoin protocol’s potential role in the history of human warfare interesting.

    I am not sure if I am succumbing to the allure of conspiratorial thinking OR simply practicing ET’s mantra of asking myself “Why am I reading this now?” So I will refrain from connecting any dots and simply link to a few stories and papers I have come across recently.

    First of all, Jason Lowery posted this on Twitter a couple of days ago:

    Happy to announce that I've been invited to advise the White House Executive Office of the President on the national strategic security benefits of #Bitcoin . This is the biggest honor of my career so far & I'd like to thank the BT community for giving me a voice. 🙏

    — Jason Lowery (@JasonPLowery) November 20, 2022

    Also advising OSECDEF. For obvious reasons I'll not be disclosing anything more. Cheers guys, and thanks again. 🙏 See you on the flip side.

    — Jason Lowery (@JasonPLowery) November 20, 2022

    From Harvard, a paper on the merits of Bitcoin as protection against sanctions:

    On US government Bitcoin holdings:

    The story above seems to suggest that the government has auctioned off other cryptocurrencies in the last year or two, but that it might be “waiting for the price to rebound” before selling any of its Bitcoin - which is now roughly 1% of all Bitcoin in existence…

    I don’t have a clear theory about what is happening. Or not happening. But I do think that something is happening, and that Bitcoin and “crypto” has permanently parted ways for in-depth narratives.

    I am worried about CBDCs…I don’t like them at all, and I worry about Government decisions on this topic on either side of the Atlantic…

  45. Avatar for aw21m aw21m says:

    CDBCs will be a hellscape. Imagine money hyper politicized where Team Red or Team Blue can vote in new “rules” or regulations about when/where/how/to whom you can spend your money.

    Thank god for Bitcoin, and the fact that we now have a chance to opt-out of the incoming CDBC. There will be a fight but at the end of the day how can you fight open source software? They’ve tried and never been successful

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