So Canada is freezing bank accounts.
Look, it happens sometimes. What do you want?
Even absent nefarious political machinations you can bet on a good ol’ run a’the banks and subsequent account freezing every generation or so. Personally, I’ve always been more of a gold and silver guy. “If you can’t hold it, it’s not yours,” the old time goldbugs like to say. True. Wisdom.
So the money in your bank account isn’t actually yours. Not really. You’ve got access to it and can move it around from place to place sure… so long as they let you. But! Donate to a cause the powers that be don’t like? Zap! Access revoked. Say something they don’t appreciate on Facebook? Zap! You’re penniless. They can do it at any time. All of it perfectly “legal.” If you live in the U.S. you might think you have greater legal protections in this regard than those in Canada but you don’t. After 9/11 all sorts of laws were passed. All they have to do is accuse you of being a terrorist and they can swoop in and grab you out of the line at Starbucks and put you in a hole in Gitmo for a half dozen years. To say nothing of the more minor actions they can take, like freezing your accounts. This was done to people semi regularly in the post 9/11 era. People cheered it. Hey chickens. Welcome home.
In response to said dilemma many are now touting the virtues of Bitcoin. Hey. Great. Fine and good. I’m not hating on it. Bitcoin is cool and has some really interesting features that can, in principle, make it a useful tool for trade and commerce. Sure, yes, I do find it a little sus that Satoshi Nakamoto roughly translates to “Central Intelligence Agency” but whatevs. Leave that aside for now and let’s all agree that Bitcoin has some unique and powerful virtues. Those notwithstanding, the primary and forever enemy of censorship and political tyranny is not and will never be Bitcoin.
It’s cash.
Governments hate cash. No paper trail. Imagine the audacity! People, actual real life people, out there in the real, physical world… exchanging goods and services without producing any traceable documentation… Insane! Can’t be permitted. How will we tax it!? A stop must be put to that sort of thing at all costs. The governments of the world would much, MUCH, rather you use Bitcoin than trade like that.
Why?
Because all the virtues of Bitcoin admitted, censorship proof, it ain’t.
Bitcoin is a public ledger. This is a flaw. Because of the public nature of its ledger Bitcoin is not and can never be truly fungible. Because of that, using Bitcoin means you are still in their sandbox. No matter how rebellious using it makes you feel. Any given Satoshi can be traced across its entire lifespan from the time it was originally mined. Every transaction can be looked up, wallet to wallet to wallet, back to the original genesis block. Anybody who cares to look can tell if the Bitcoin in Wallet A was ever held by Wallet B. And, look, if Wallet B is considered a “bad actor” for whatever reason… maybe the owner of Wallet A can be forced to give that Bitcoin up.
“But it’s anonymous!” I hear you say.
Again, true. Sort of.
But if Bitcoin ever succeeds in becoming a widely adopted currency all this anonymity will rapidly breakdown. It would be the easiest thing in the world, for example, to cross reference a Bitcoin wallet which bought toilet paper off Amazon with the physical address said toilet paper was being shipped to. Any suspicious Bitcoin wallet could be tracked and traced indefinitely, as well as all the wallets it interacts with. Eventually, if somebody used any of the Bitcoin in any of those wallets to buy anything IRL, boom. Anonymity busted. Even if you just used it to by a coffee at Starbucks the Feds would see it. “Hey, Suspicious Wallet A was just used to by a mocha latte in Buffalo, NY. Let’s get the security camera footage and see who used it.”
Public ledgers are a fatal flaw to any claims of anonymity, and therefore any claims of being censorship proof. To be able to see, forever and at any time, ever transaction that ever happens down to the finest detail and trace every cent from owner to owner back to its minting…
This is an IRS agent’s wet dream. One that Bitcoin gives them.
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