Beautyon

@beautyon_

Bitcoin is. And that is enough.

February 20th 2017
OXYGEN BLUE

Bitcoin is not what you think it is. It is what we say it is.

There are widespread misconceptions about what Bitcoin is, and these misconceptions when peddled as the truth and mixed with people who have power to control others, makes for a toxic cocktail that can potentially hurt millions of innocent people. Rather than accept that Bitcoin has a fixed nature that has nothing to do with their pet beliefs and living with it, people substitute their inability to control Bitcoin with a worthless desire to control the way something is said, rather than the substance.

The problem here is the mistaken idea that there is a standard way for people to talk to each other, across all populations, cultures and sub-cultures. This is idea is wrong. For example, people who work for the UN have an understanding of how people should speak to each other that is the descendent of generations of international diplomacy with its roots in court manners. The language on the more brusque edges of IRC are a quite different matter, and between UN diplomacy and IRC, you find a huge spectrum of different expectations and standards, and that is just only the line between the UN and IRC in English. There are many lines stretching in all directions, and at every extreme, is the worst (or best) form of behaviour and standards. Most of the time, these constituencies never mix, but in Bitcoin they do, because the smell of money is in the air.

The idea that forms of interaction with speech should be standardized is generally the same position that the EU/UN type takes when it comes to the “regulation” of Bitcoin. These bedfellows with Luddites think government is the solution to every problem between people, and that it is an automatic stakeholder in everyone’s business and product, no matter what it is. They are completely wrong.

The discussion around Bitcoin and Segregated Witness is strong because one side is telling the absolute truth and the other is not, and real people get angry when others are trying to steal from them. There has been a lot of gentle talk, many meetings, persuasive articles and easy to understand explanations made for everyone to absorb. It’s impossible to keep up with all of it. Very few people have read the page that lists all the companies that are working on integrating SegWit, and even fewer the technical documentation. Even people who are running Bitcoin related services have not read this documentation. The only way to stay productive is to specialize and abandon trying to know everything, and everyone has this overload problem. What is not acceptable is not trying to keep up, not even running your own full node or providing a service of any kind, and then telling the people that are doing the hard specialized work that what they are doing is wrong.

First, do no harm

Bitcoin is not about free speech in the way some people describe. I make the argument that Bitcoin is speech in the software sense, to explain why it cannot be regulated in a free country:

People who are talking about harming other people are intolerable. For example It is not acceptable to call for the genocide of other people, or to call for people to be disenfranchised or robbed. There is no way the people trying to kill SegWit would accept those bad behaviours (this is an absolute certainly if they were on the receiving end of them) or claim that having their work or money stolen were, “all part of the mix” of opinions. The same goes for anyone who says that the right to develop software should be regulated. This is part of the reason why KYC/AML promoters are intolerable. There is right and wrong and there are absolutes in life. Moral relativism and nuance are not correct. KYC/AML is not, “a point of view” or “perspective” any more than it is “a point of view” or “perspective” to claim that, “murder is just another way of solving problems”. Ethics is not an à la carte affair that you can pick and choose from depending on your needs.

The root of the problem in people forcing others to call Bitcoin “money” is that it leads directly to the sorts of abuses that no decent person wants to see in society. It’s very important in the discussion of Bitcoin to not conflate different aspects of what everyone is working on, and not to apply thinking that is inapplicable. Bad thinking inevitably leads to calling for the harm of others based on a mistaken idea of what Software and Bitcoin are.

Bitcoin is not Reddit

Bitcoin is not a forum where people debate, and there are no arguments (!) in math and software, only proofs on paper and running code. People’s opinions are irrelevant in math; the idea that “everyone’s opinion counts” is a side effect of the false idea that Bitcoin is a community. It isn't. All of the people who think they should “have a say” in Bitcoin do not raise their voices on any other software matter, like email encryption, SSL, the shape of browser tabs or anything else that is done in software. They simply take what they are given and use it. This is exactly what they should do with Bitcoin.

When Apple releases an upgrade to OSX, everyone just accepts it and uses the new version. You don’t get a bunch of people believing that they have a right to demand that Apple change the way OSX works; they understand that if they don’t like the new OSX, they can simply not upgrade, buy a Windows computer or go Linux. Also, the idea that if you own Bitcoin you are a “Stakeholder” is absurd. Owning Bitcoin is no different to owning a copy of OSX and using it. Using Bitcoin grants you no rights of any kind, or any guarantees. You can only do one thing with it; transmit signed messages to be broadcast to the network for inclusion in the public record. People really need to embrace this truth. Once they do, they will not bother with the inner workings of what Bitcoin is, and instead, will concentrate on building businesses on its attributes and just using Bitcoin in whatever way they can fit it into their needs.

Bitcoin is Software

Bitcoin is a software project like any other, save that it has uniquely caused widespread confusion about the nature of this software in the minds of people who don’t have any experience in it, and who can’t make the connection between the software that is given to them in their phones and laptops and Bitcoin. The illusion of money has made them think differently® and inappropriately when it comes to Bitcoin, and some of these people are very dangerous (CoinCenter, DCG, EU/UN types) because they use their misunderstanding as the basis for approaches and recommendations to the legislature, with consequences that are very negative for everyone.

SegWit is a perfect example of how dangerous these people are, and why everyone gets so upset when they try to “help” by going to law makers to “explain” Bitcoin. The payment channels in SegWit, from their perspective, will probably be categorized as “money transmission lines” where anyone who opens a SegWit channel becomes a de facto “money transmitter”, exposing them to all sorts of legal problems. Clearly this categorization is not correct, but this is exactly what we can expect from these people, who by their own admission have no direct experience in any of the new software or thinking at all.

PREDATOR

No one appointed these people as representatives of Bitcoin, indeed, no one can, and they have no right whatsoever to go to any legislature as self appointed representatives and help draft toxic laws that poison everyone, everywhere, who have no contract or part in the DCG or CoinCenter. These people are acting 100% ultra vires and to anyone trying to build a business that runs Bitcoin by its nature, they are a threat. Thanks to BitLicense, anyone unfortunate enough to live in New York and who wants to work with Bitcoin there, has to find millions of dollars to apply for and maybe be granted a license. Look what just happened to GDAX with their appeal to the SEC to create a new product. They were rebuffed with an illogical screed, fuelled by submissions by foreigners and anonymous submitters. Shocking. These are the real world corrosive and destructive effects of the DCG, CoinCenter, SEC and all people who don’t understand Bitcoin, software, or the processes in entrepreneurialism and who are entirely unethical and damaging.

From what we read, CoinCenter is running on one million dollars per year. That money could have been put to Public Relations to dampen down PR fires and steer correct perception of what Bitcoin is and what it can do. If Edward Bernays could convince women to smoke cigarettes, modern PR with a million dollar per year budget can convince the public that Bitcoin is good for them. Or that its ledger is maintained by an army of chocolate mice storing blocks in the holes of Swiss cheese in racks. That is the correct way to influence the public and steer perception, not by lobbying the State. If you are working in Bitcoin, you should watch the documentary I just linked to very, very carefully.

There is History in Permissionless Innovation

Uber and Skype both started their software products and released them without permission. They captured the market and changed everyone’s lives for the better.

Had Skype gone to the legislatures and explained what they were planning to do, the eyes of the legislatures would have glazed over, they would have intoned, “You sound like a telephone to me. It even rings like a phone!”and Skype would never have succeeded.

This is the explicit account of Skype’s founder, when he explains why they did not seek permission to launch. Also, all the descendants of Skype, from FaceTime to Jitsi to AppearIn would suffer from the precedent Skype set that you have to get permission to launch a telephony service. All of them, and all future VOIP apps, would have been burdened from being mischaracterised by a single act of snivelling, lickspittle cowardice by Skype. But Skype didn't do that. Skype released their app without permission. It went viral, and became a hit and a fact of life. The Skype network relied on the users for the infrastructure, meaning they didn't have to build huge data centers to handle all the calls. Does that sound…familiar? It should. Bitcoin’s architecture is distributed in the same way, with no single point of control. The legislatures didn't consider that Skype was telephony, and it just “was”. Now it never even enters the mind of anyone wanting to start a chat app, or video call app that they should seek a “license” before releasing their app for free. The idea would be laughed out of the room. This is exactly what should happen with Bitcoin.

This is why the market needs Azteco; to correct and shape the perception of Bitcoin. It is a service which treats Bitcoin by its nature, and removes all friction from providing access to Bitcoin, through a process that is familiar and simple. In fact it is so simple, removing any part of it would cause it not to function.

By reducing a Bitcoin transaction to a 16 digit number in the user perspective, all the complexity is distilled into something that anyone can understand and transmit. It’s like taking a large text file, and zipping it so it’s small and transportable. It means that you don’t have to manage your own wallet to send Bitcoin, or interact in any way other than to pay, and then receive a voucher number.

By breaking up all the steps involved in Bitcoin and not making any assumptions about what Bitcoin is, including needing a wallet, dealing with it only by its nature, it’s possible to design services that are totally frictionless, and utterly consumer-centric.

Now that SegWit is in the process of being activated, and yes, it will be activated, billions of tiny transactions will be made, and all manner of new business models will be possible and viable, like the beautiful SatoshiPay, which will wipe out all advertising on the web. Paying for your daily newspaper with Bitcoin topped up by Azteco is easy to understand, and no risk for the user, who will no longer need to be exposed to identity fraud to buy a news article.

Azteco and other Ethical Bitcoin Companies are going to change the perception of Bitcoin and help spread it to every corner of the earth. The benefits we will bring to millions will cascade everywhere and for years to come, and there is no downside; this is exactly like the early days of the internet, and every bit as important and transformative. The internet is not, “The world’s Library” and Bitcoin is not money.

There is no Conflict

To say that the debate over SegWit is a “conflict” is to give too much importance to things non developers say. There is no “conflict” that requires conflict resolution specialists, managers or as the incredible Primavera De Filippi and others suggest, a board of EU appointees to manage Bitcoin. And this question must always be posed whenever someone tries to assert their influence over Bitcoin; “Who are you?” Who are you to say that “we” need to settle on anything? Do you write any software? And if you have, why are you not listed in the Bitcoin Core developer’s page? The only people that matter in Bitcoin are the people who are writing software. If you have no software, you have no say. You can start your own business that uses Bitcoin, or just use it as a private user, and you are warmly welcomed to do that, but you have no right to have your wishes implemented, and even if you do manage to write software, you have no right to have your changes integrated and imposed on everyone.

Over 130 companies are working on integrating SegWit right now. All most onlookers are seeing is the surface of what is happening, because they're not software developers and don’t run a company where they employ developers who make everything happen. Bitcoin doesn't need the DCG or CoinCenter or the EU/UN. They produce no software, no useful analysis, and can’t even be bothered to run a single full Bitcoin node themselves, yet, they think they have the right to tell others that SegWit is a “niche project” and to go to the legislature to have laws drafted that control others. It’s absolutely outrageous, and if anyone tried this with the Linux Kernel, half the world would be deafened by the howls of outrage. These people are taking advantage of everyone’s patience and good manners, and everyone is patient with them because we know what is going to happen next, and we know just how powerless they really are.

Bitcoin Core and all people in Bitcoin have been extraordinarily restrained and respectful, given the reckless behaviour of these people and the vicious thugs who have acted like Crony Capitalists by calling for progress killing legislation to control others. Their actions have been violent and anti human, with a direct effect, in the case of New York, on people writing software, who have had to remove New York from the places where they operate. These are not the acts of respectful, peaceful, thoughtful people who show restraint; these are the acts of ruthless killers, who will do anything to capture and dominate the market and exclude new market entrants, including underhanded, dirty things like advocating for BitLicense.

Thankfully, now there is a chance that BitLicense and all other un-American legislation that touches Bitcoin will be repealed. Under the new, “Two laws out for every new law in”, Executive Order the low hanging legislative fruit will be first for the chop as the Congress sits. And a Texas representative has just announced new legislation to protect Bitcoin from reckless legislators:

BitLicense and all other anti-American nonsense is sure not to survive. Once it is explained to any American that foreign countries are ahead of the USA in Bitcoin (the second internet, and final piece of “The Transformation”) they should instantly understand that BitLicense and all variants of it are extremely dangerous to American prosperity on a fundamental level once Bitcoin takes off. They should go out of their way to ensure that all Bitcoin touching laws never make it onto the statutes, so that mining, trading and ordinary commerce can flourish, begin and end in the USA, along with the consumer innovation that is needed to cause Bitcoin to completely replace credit cards globally. And yes, that is now possible with SegWit, which will boost Bitcoin’s transaction per second rate to exceed both VISA and MasterCard combined.

“If you Strike me down…”

I said that we know what is going to happen next, and we know just how powerless they really are. Nothing exemplifies this better than the following chart:

This is a chart showing weekly LocalBitcoins volume in China. The spike is a direct result of the People’s Bank of China “cracking down” on Bitcoin exchanges there, putting arbitrary restrictions on how Bitcoin can move through companies facilitating easy access to the Bitcoin Network.

All the people impacted by this rule have simply stopped using the restricted services, and switched to using their own phone wallets on a person to person basis, mediated by the LocalBitcoins service. This activity cannot be stopped, and is also not just a local phenomenon; these people can send and receive Bitcoin from anywhere on Earth. China may try to block the LocalBitcoins website, but that will not stop them networking informally and moving Bitcoin between themselves.

This spike is a signal. It is an indication of how the market will react to any attempt to control or restrict Bitcoin anywhere in the world. Before the irrational Chinese crack down, LocalBitcoins volume was growing slowly, and everyone was happy with the government sanctioned Bitcoin Businesses. I say “sanctioned” because these businesses have to report to the State, and operate with their permission. People were satisfied with the way things were, but obviously they are not willing to put up with having their money in a service that can be arbitrarily restricted at any time without notice. This is completely rational and logical and an expected behaviour.

What is irrational is what the Chinese government is doing. If it were rational, it would look at the graph above, and realise that its regulations are pushing Bitcoin into a use mode that they can never control. If they were rational, they would remove all restrictions on Bitcoin Businesses in China, and watch that spike plummet. No ordinary user looks for a service with the complexity of LocalBitcoins; they want the implicit guarantees and user experience that the registered businesses offer. And realise also, that this spike represents a loss in sales for the Bitcoin businesses in China, and an increase in sales of LocalBitcoins, a foreign company. LocalBitcoins is draining money from China.

If it carries on like this, China is going to lose its Bitcoin first mover advantage. Its bureaucrats still don’t understand that they can’t control Bitcoin without fully embracing Bitcoin on Bitcoin’s terms, and anything other than embracing it on its terms will make them a vassal colony in the new economy. They had a head start in the mining business and have very good exchanges and super talented developers to work them. It’s their’s to lose, and no one cares if they lose it. Entrepreneurs in Bitcoin who are Chinese are now seriously considering pulling up stakes and moving to another jurisdiction. They are not irrational or stupid. At all.

There is Cream Tea

No normal man sits quietly and lets his business, work and opportunities be destroyed with a smile on his face. This is true for the Chinese facing obliteration and anyone who want Bitcoin to scale. People who want everyone to discuss Bitcoin scaling and SegWit as if they are having a cream tea in Vienna are not being realistic. And it is for the people trying to regulate software to show restraint and not run to legislators to spoil the market before it even exists, not developers and entrepreneurs, who create the markets, who concentrate on bringing new services to it and who harm no one; we are not doing anything harmful to other people they are. We are the ethical ones, not them. And anyone who makes excuses for them, and tells the people who are exposing their naked corruption to “be nice”…has some thinking to do.

If you want to participate in Bitcoin, you are most welcome, and you have many opportunities and choices, and everyone can bring their expertise to the table; but you can only do so through software. If you want to bring Bitcoin to remote parts of the world, you need to write software and create a service to do that. You do not have endless meetings and go to the State for its blessing; you write software and create a service that people need. Google didn’t ask permission to enter every country on earth with its search and email products, it just did it by virtue of the nature of the Internet. Bitcoin is no different to this in any way, and no one should be running to legislatures and lying to say that it is.

Everyone needs to understand that the new way of mediating between people is software, not going to the State to ask it to do things for them. Buyer and seller conflicts on eBay are resolved internally to everyone’s satisfaction, without ever invoking the law. Eventually, everyone will understand this, as The Transformation begins to take root, and all the market actors who are not in software begin to understand that their actions are producing nothing. The Chinese LocalBitcoins spike is a signal of this.

All entrepreneurs will be like Skype and Uber; they will release their products and services and they will succeed or fail by the market. Bitcoin, because it replaces money as the thing everyone exchanges for goods and services, will be the biggest software project in the history of the world,

touching more people than television did, and spreading prosperity everywhere at the speed of light, eliminating payer and identity fraud, opening the third world to e-commerce, and saving everyone billions. Anything that stops this, slows it down, increases friction, and seeks to prevent its spread is against humanity.

If you found this article stimulating, feel free to send me some Bitcoin. I like Bitcoin. A lot. In both senses!

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