Oddbean

As long as the military industrial complex stays in place and KYC stays in place bitcoin could easily become an authoritarian nightmare. If you think that's not accurate please elaborate. I am working through my thought process here.

True but if we are just able to replace the base money with #bitcoin, we would at least be able to restrict the government and they would be punished by their own wrong decisions which will eventually reduce their size. Right now they can change the rules of the chessboard whenever they want.

The state could feasibly cut every service except military and remain the same size in terms of its ability to control territory and project force. This could be even easier for them with money that holds its value over time. Over time they will need less and less people to manage production. I don't see the endgame, but it seems possible unless I'm missing something.

If Western governments had any sense, they would fire up the printers and stack as much bitcoin as they can before everyone else finds out. Probably a few countries are already doing that ahhh beautiful game theory

You are saying western nations should move in the direction of becoming North Korea. US military has power because US is most free market economy and if you start killing it, you have nothing to feed on. At the core any form of money has value because of productive people.

I'm not making suggestions for the government. If I was it would simply be to fuck off, but since they are unlikely to follow my advice I am working through some possible negative scenarios 🙂 In most cases I get to the end of these exercises having realized I was worried for nothing, but this one still bothers me.

I think about this a lot. Bitcoin's open ledger means it has the potential for CBDC-style surveillance. But I think this is easily solved by using privacy protocols that already exist (lightning, cashu, fedi, Monero, coinjoins, etc). Thus the only people who might get trapped are those still holding KYC coins, and/or coins on exchanges or ETFs. Sadly I suspect that's the majority, but fortunately I believe enough people are already using these protocols that it's now trivial to hide. I think a more legitimate threat is if mining becomes too centralised, then the large pools could be forced by their nation's authorities to implement censorship which leads to whitelists or blacklists, where, for example, any "anonymous" bitcoin (such as mentioned in the previous paragraph) is deemed illegal and prevented from transacting on-chain. One counter to this is simply not transacting on-chain, but you'd need to be very well prepared in advance and would also need to be holding your stack off-chain. As far as I know, that's not really a good option just yet. A more solid counter is game theory. By which I mean that there are many big players in bitcoin, including likely some countries quietly holding, who are interested in keeping their holdings anonymous and hence would not push for such regulation. Both on an organisational and an individual level. Remember governments are all just groups of individuals and any that understand bitcoin are very likely stacking already. Another good counter is to push for more decentralising mining! Easier said than done, but at least there is growing awareness of this issue now. Some small things we can do include home mining and simply continuing to educate those around us. Orange pilling remains tough but the low-hanging fruit here is educating existing holders about non-KYC and why it's so important. Is that kind of what you were thinking about too? Very curious to hear your thoughts and what you think the risks are.

I see it the same way you do. Bitcoin that can't be settled on chain isn't really Bitcoin so if we lose the mining centralization battle it's over. Luckily I think the protocol and the game theory are robust enough to stay ahead of that, but my technical competency in mining isn't high enough to say that with meaningful certainty. There was a lot of excitement around the ocean launch, but it hasn't done much since. I'm curious to see what comes next. I used to worry about the amount of mining happening in China and that worked itself out when regulations threatened the network. I imagine the same would happen in the case of attempted censorship.

I trust in the incentives to work it all out. A jurisdiction can't stop their people using bitcoin but they can shut themselves off from it's benefits. We've seen that in a few countries already. Eventually they realize their mistake & pivot. KYC can be a threat to the individual but there are many ways to hedge this risk & the state has the odds against them. There is much chaos ahead for humanity, but there's also a lot to be excited for. The dysfunction will get louder as the system approaches collapse. Bitcoin is the least of their problems right now.

Why can they not stop thier people from using it? A 10 years prison sentence on using it will stop it immediately. It is a transparent ledger, easy to find out who transacts with whom and to prosecute it.

It is permissionless but if you risk going to jail for using it, how does that help you? Who will accept it? Whats your plan when the gov bans bitcoin? IMO the chance they are banning is relatively low. BTC is no problem for the state, it does not work as money, it is a "store of value" now. There are numerous stores of value, no problem for the system. It was a p2p currency once, that is a serious risk for the state. A store of value is not, just like Gold.

There's no way of knowing, which I assume is your point. If authorities can control internet access and surveil us in a dozen other ways it might not matter if bitcoin is permissionless. That's why I think nostr and other open source freedom tech is incredibly important

i would say as long as bitcoin is a transparent ledger, of course KYC and AML will turn it into a surveilance monster. As tainted coins are a reality, we will have to AML each other as nobody wants to receive tainted coins which will cause problems for the receiver in the future. BTC is doomed if nothing changes.

Ii am seeing the development into a future where non kyc btc transactions get harder and harder through regulation and aml/onchain analysis. You have to interact with businesses, they will comply with aml and kyc. KYC data will leak, others will know how much you have etc. - the chances of BTC turning into a nightmare are pretty high imo.

Have you never heard of the shadow economy? nostr:nevent1qqstsllgsdw9u4hxa4mc70xxqhmnlzrazewhh42lq3u2q5ze66qsyvgpr3mhxue69uhkummnw3ezucnfw33k76twv4ezuum0vd5kzmqzyzfxw4za9ytmsrms0l7mgj50l9u3sftgaaa65p8ww4437qw5ud5g5qcyqqqqqqgnzlrpr