Does Star Wars Indicate the End of Crypto Anarchism?
Guest article by Crystal Stranger, co-founder of PeaCounts
In a galaxy far, far away, terrorists were trying to infiltrate and overthrow a well-organized society. That’s one way of viewing the plot of Star Wars, aside from the film’s one-sided propaganda which glorifies the Rebel Alliance as champions for freedom. I now see both points of view. One, through the punk rock idealism of my youth and another through the libertarian business logic I have gravitated towards over the years. Similarly, understanding the future of crypto requires viewing from an objective standpoint, detached from any of the rhetoric.
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Declaration of War
A few weeks ago when John McAfee released his “Crypto Declaration of Independence” there was a media blitz and talk at conferences that we are at war against the government for keeping our cryptocurrencies. But this is far from the truth. Over the last year, governments around the world have been lightening their stance on cryptocurrencies and token issuance. Simultaneously, many of the largest corporations and investment consortiums are looking for an entry into the blockchain and crypto spaces.
Regulation is good for investors in the crypto space. You may disagree, since the market surely drops whenever regulation is mentioned, but until we have regulation that allows the big investment players to participate in the market, we will not see substantial gains over where we are at now. The play money is already in the market.
The big gains in bitcoin last summer and fall made it a household concept, and now the mom and pop investors down the street who were willing to buy into something risky are already in the market, but the more conservative investors still remain on the sidelines. Sure there are a few individuals who keep intelligently buying in every week with dollar cost averaging, and the total market cap keeps growing with ICOs; but this isn’t enough to move the market for the top-10 coins that will signal a recovery.
History of the Cypherpunk Movement
In the late 1980s Tim May wrote the “Crypto Anarchist Manifesto” which he read to a group in Silicon Valley in 1992. This was the impetus for developing cryptographic keys which obviously paved the way for the creation of cryptocurrencies. In this short manifesto he succinctly explained the pros and cons of this type of digital currency, describing how cryptocurrencies were like barbed wire:
“So too will the seemingly minor discovery out of an arcane branch of mathematics come to be the wire clippers which dismantle the barbed wire around intellectual property.”
Tim May was right on some points, but off on others. He stated that “crypto anarchy will create a liquid market for any and all material which can be put into words and pictures,” and this could truly be affirmed for a project like CryptoKitties to have become the most successful project on the Ethereum network. But he was a bit off the mark predicting the tax and secrecy aspects. While there is some anonymity with “trustless” transactions, all records are traceable.
On privacy coins such as Monero you can truly have a traceless transaction. But blockchain also allows for better tracking of people and makes possible social credit rating systems, like the terrifying Black Mirror episode that is becoming a reality in China. Thus the same technology that allowed for a highly functional black market also has the power to eliminate the black market by replacing cash and potentially penalizing those who own black market coins.
By 1994 the Cypherpunk group had become more organized, and paved the way for Eric Hughes’ “A Cypherpunk’s Manifesto“, which further espoused the importance of privacy, and added in ideas about making all software open source. Hughes borrowed from “The Sovereign Individual” about the limitations of government power through violence saying: “laws against cryptography reach only so far as a nation’s border and the arm of its violence.”
Again though, this statement has proved to be less of a reality and more anarchistic fantasy. Idealism is wonderful as it tends to drive innovation. But history has shown us that these ideals tend to fade away once true profits are made. If the investors in the market today truly cared about ideals, a cryptocurrency invented to help the banking system, XRP, would never have reached the valuations it attained earlier this year.
Bitcoin as Anti-Banking Tool
Many people assume that in the original Bitcoin whitepaper the pseudonymous Satoshi Nakamoto described the purpose of Bitcoin as to undermine financial authorities. However, this is not true. Nakamoto described everything from a pro-business standpoint, referring frequently to the benefits for merchants in transacting without a trusted party.
A reference was made to the 2009 U.K. bank bailout in the Bitcoin genesis block, which means the first ever block hashed on the Bitcoin network. This combined with the timeline leads to reasonable speculation that Bitcoin was developed in response to distrust in banks related to the subprime mortgage crisis.
While again this is nice in theory, in reality bitcoin is not a scalable replacement for fiat currency. It is an excellent store of value for now, as it is the most tested and consensually agreed upon store of digital value. But it is unlikely to ever be a realistic substitute for daily life transactions, although some cryptocurrency, or a combination of a few, likely will.
Crypto Futurists Unite
We do not want to start a war against the governments and banks. Will that buy you a Lamborghini or fund your startup? With wars, the people on the ground lose. The only winners are the few who control at the end, and the companies that manufacture the guns.
Rather than calling for war and living out Star Wars-esque dreams of rebel forces fighting against a grand evil, let us find common ground and build with the banks and governments tools that help level the playing field and give all people an advantage. We have an opportunity now where many industries can be disrupted and many lives changed for the best. But this comes from focusing our energy on building companies that help, not waging war against the Empire.
About Crystal Stranger
Crystal Stranger, EA, author of The Small Business Tax Guide (Clear Advantage, 2014), wanted to help her tax clients who struggled when it came to bookkeeping. Looking to help entrepreneurs focus on business instead of finances, she co-founded PeaCounts, an accounting software using AI and blockchain. PeaCounts was created to be the easiest automated accounting platform for small businesses by providing a simple and intuitive bookkeeping system that improves the financial system of any small business, helping to save time and money. PeaCounts is tokenizing their payroll system using the token PEA with a token sale starting in July.
In Star Wars and Bitcoin, do you side more with the Empire or Rebel Alliance? Let’s hear your thoughts in the comments.
Images via Lucasfilm, Pixabay, Bitsonline