This is an opinion editorial by Interstellar Bitcoin, a bitcoin plebs.
In a hypothetical world, imagine we are trying to stop Bitcoin. Why could we do it? How would we do? What actions should we take? Where would that take us? To answer these questions, we first need to talk about bitcoin in a bit more depth.
“If you know yourself and your enemy, you can win a hundred battles without a single loss.” —Sun Tzu
Bitcoin is an idea. It is technology that provides property rights, the rule of law, economic freedom, free markets and ultimately sound money to the individual.
Bitcoin is a fixed supply ledger, defining who owns what and allowing people to transact between peers. Its ledger is bolstered by proof-of-work, a consensus mechanism that uses energy in ways that eliminate inefficiencies and create abundance.
Basically, Bitcoin is information and math, so banning it would have wide implications.
We have described what Bitcoin is. So why ban it?
Control of the ability to print money and the resulting Cantillon effect. Control what energy consumption is “morally acceptable” and what is not, for example through “ESG” (environmental, social and governance) mandates. Control over a population. Total authoritarianism.[embedhttps://wwwyoutubecom/watch?v=nOh-7SzI6gM[embedhttps://wwwyoutubecom/watch?v=nOh-7SzI6gM[intégrerhttps://wwwyoutubecom/watch?v=nOh-7SzI6gM[embedhttps://wwwyoutubecom/watch?v=nOh-7SzI6gM
We have a few reasons why someone might ban Bitcoin, but how would they do it?
Unfavorable tax status for bitcoin.
Unfavorable regulation, banning the use of bitcoin technology (i.e. making math and information illegal), internet censorship.
Or: promote centrally controlled shitcoins that use proof-of-stake and disallow proof-of-work. This is an alternative to trying to subvert Bitcoin by promoting software that can be controlled by insiders.
Another alternative is Bitcoin block censorship and network spam. This is a direct attack on the Bitcoin network that affects usability.
Energy shortages, internet blackouts, food shortages.
Mass genocide of bitcoins.
You think that can’t happen?
Learn about political theory and history. Leaders do whatever they have to do to stay in power. Don’t rule out power and food shortages, whether intentional or caused by mismanagement of the fiduciary policy. Don’t rule out intentional targeting of Bitcoiners.
It is important to remember that Bitcoiners have deeply held beliefs, usually summarized as follows: Bitcoin is good for humanity and money should be outside the control of the state. Bitcoin’s idea of a hard-capped supply goes against orthodox economics, political structures, and the status quo.
Bitcoiners are burning ships, and there is no turning back.
Only El Salvador and the Central African Republic have given Bitcoin legal tender. Most countries are already at the first stage: unfavorable tax laws.
Nine countries, mostly the most authoritarian, have moved to stage two with a partial or complete ban on bitcoin: Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia.
Imagine a world where the G20 global coordination completely banned bitcoin using mass media to promote propaganda against it. Adoption would slow overnight. Countries would promise “stability” and “security” if only we implemented another measure or used their central bank digital currency (CBDC).
At the same time, authorities could promote centrally controlled proof-of-stake shitcoins to divide and conquer “crypto” people who also hold bitcoins. This is why it is important to be bitcoin only.
This could be associated with a direct attack on the Bitcoin network via block censorship and network spam.
An example of block censorship was when Marathon Digital Holdings mined an OFAC-compliant block in 2021. Marathon only included transactions they deemed “clean” or “compliant”, ignoring other transactions at their own expense (Marathon stopped its attempt to censor transactions only a few months later).
Similarly, in 2017, the network resisted ongoing spam attacks by mining pools to flood the network with low-value spam transactions, increasing network fees to push their blocking program wider.
Now imagine a state actor – with effectively unlimited money – heavily subsidizing compliant bitcoin miners and spamming the network. This would harm bitcoin’s fungibility and use as money.
However, game theory is on Bitcoin’s side. Eventually, state actors will face growing problems subsidizing censorship and spamming the network. Assuming the attackers have to print money to fund the attack, this devalues their currency against bitcoin. This is a short-term attack that can only be effective if combined with interdiction, propaganda and other measures.
The network will remain usable. People are willing to pay higher fees. There will always be miners who will be economically incentivized to include any transaction.
If this attack did not work, then countries could try to create additional uncertainty with electricity shortages, internet blackouts and food shortages – stage three.
This is already happening in the fiat world due to horrible fiat policies.
Taken to extremes, some countries with the most effective propaganda might even start rounding up the Bitcoiners – Step 4. The government wouldn’t even need to do anything; citizens would do it for them out of fear.
To some extent, tagging of Bitcoiners is already happening with overly burdensome know-your-customer (KYC) policies. Regulated financial institutions are required by law to keep a detailed list of personal and financial information (name, address, age, trading volume, bitcoin addresses, etc.). This list would make it trivial for the state to find everyone who has ever traded, owned, or used bitcoin through a centralized exchange.
Finally, the absolute worst option: government-sanctioned murder (i.e., democide). This, and the lesser extreme of forced imprisonment, can and does happen in history. A hypothetical bitcoin democide would cause irrevocable damage to humanity and ultimately the adoption of bitcoin.
Fortunately, bitcoin is information, with no physical location. Everywhere and nowhere.
This poses a unique challenge for bitcoin banning: geographic arbitrage.
As countries crack down on bitcoin, the incentive for other countries to adopt bitcoin as legal tender is growing.
“The plan is simple: as the world descends into tyranny, we will create a haven of freedom.” — Nayib Bukele, President of El Salvador
This is a perfect example of game theory.
Two countries banning bitcoin cause significant damage to both.
Two countries letting bitcoin exist make both economies prosper.
One country defecting and banning bitcoin while the other does nothing, only harms one country.
The unique Nash equilibrium in pure strategies is down, right (no ban, no ban).
What does it mean? Bitcoiners have an obligation to resist immoral and unjust laws. It will take civil disobedience and/or entering politics to ensure we win. The next best alternative is to retreat to bitcoin-friendly geographies like El Salvador.
The question people considering banning bitcoin need to ask themselves is: are they willing to jail and kill permanently to do so? The only way to stop an idea is to physically stop the people who have an idea. Imagine George Orwell’s concept of doublethink in 1984.
It is up to the people to decide which path they will choose: freedom or tyranny.
So how do you defend against these attacks?
- Shill to as many people as possible; the more people who hold bitcoins, the better.
- Teach the importance of self-guarding and managing your own full node. There are great resources by Bitcoin Magazine and many others.
- Support individuals, businesses, and countries that only use bitcoin.
- Improve underlying network and scaling technologies. For instance, BIP324 (a bitcoin enhancement proposal for P2P encryption) and Layer 2 such as the Lightning Network.
- Build resilient communities and circular bitcoin economies.
- Become a Bitcoiner who is a beacon of hope in an abyss of darkness.
In conclusion, it is possible to temporarily cripple the adoption of bitcoin, but at an exorbitant cost: large-scale fascism, unseen since World War II.
The key word here is “adoption”. It is impossible to kill the bitcoin network, an unstoppable sound money idea.
This article was based on a Twitter feed.
This is a guest post by Interstellar Bitcoin. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.