Bitcoin Not Bombs

December 4th, 2012   Submitted by Davi Barker

A handful of articles have entered my head this week, and as we speak they are mixing together like volatile chemicals about to explode. I’ve been on the Bitcoin bandwagon for less than a year, but I am constantly blown away by the innovations made possible by what is fundamentally a very simple idea. In the beginning I pretty much only used it to buy baklava. Now I’m buying gold and silver bullion with Bitcoin, and accepting it as payment for the various things that I sell. So, I have a pretty good sense of how the system works and I’m just starting to really get the economic ramifications of a digital peer-to-peer currency. I theoretically understand the impact it could have politically, at least domestically, but I’m just starting to get the first inkling of what the international political ramifications of Bitcoin might be.

This rabbit hole begins with US sanctions against Iran.

The people who argue in favor of sanctions against Iran usually strike me as economic buffoons. The same person who tells me the US needs to prevent Iran from engaging in international trade to weaken their economy will usually also tell me the US needs to stop engaging in international trade to strengthen its own economy. So this is where our journey begins.

Last month Turkey’s Deputy Prime Minister and top economic policy maker Ali Babacan confirmed that Turkey was circumventing sanctions by trading Iranian crude oil for Turkish gold instead of dollars. In fact, in the last nine months Turkey, ostensibly a strong ally of the US, has tripled its pre-sanctions exports to Iran. It’s essentially a thumb in the eye to US legitimacy, and the global banking system.

Good for them, I thought. It’s a powerful proof of concept for the efficacy of alternative currency. But then I remembered another recent story about gold in Iran. In October hundreds of currency protesters gathered in Tehran’s historic Grand Bazaar outraged over the plunging Iranian rial. In response hundreds of riot police stormed Tehran’s currency exchange district arresting “illegal money changers.” Imagine that. It is a crime for honest merchants to exchange one baseless paper note for another baseless paper note because the sociocrats that issue those notes don’t get along. What’s interesting is that the 80% drop in the rial’s value was largely blamed on sanctions, but the head of the national police said that people holding stashes of gold was “perturbing the currency market.”

So, it’s perfectly fine for States to use gold to protect themselves from economic sanctions, but not for the lowly civilians. But more importantly, holding stashes of precious metals may be an adequate protection against foreign sanctions, but not against your own State. Well, what are the Iranian people to do? I found the answer. Iranian Musician Mohammad Rafigh has translated some Bitcoin software into Farsi and is talking up Bitcoin in Iran. Rafigh accepted Bitcoin for his latest album. He wrote “I wish the culture of using digital money spreads all over the world, because it does not have any dependency on anything like politics.”

Using Bitcoin Iranians living abroad can send money to their families, or exchange them for rials or dollars. It allows them to store their wealth digitally where the currency police can’t seize it, and most importantly it allows the people of Iran, at the individual level, to skirt US sanctions and maintain an economic connection to the outside world. When US sanction against Iraq killed an estimated 1 million innocent civilians in the 90s it’s easy to see how important that is.

All the pieces came together when I read that AntiWar.com now accepts Bitcoin donations. PayPal and many credit card companies block access in over 60 countries for largely political reasons. Bitcoin offers what no other currency can. Access to everyone, everywhere.

AntiWar.com was launched in 1995, to oppose the Bosnian war under the Clinton administration, but as wars have escalated so has opposition to war. Today the site is the leading hub of anti-war news and activism in the liberty movement, devoted not only to opposing war, but also the assaults on freedom that result from it. Bitcoin was created in 2009 by an infamous programmer names Satoshi Nakamoto, but it is unlike any other currency in the world in that it is not issued by any central bank or ruling State. In fact, it’s incredibly difficult if not impossible to track, regulate or block.

What this means is that right now, in the world we live in, it is possible for civilians living in Iran to donate to the anti-war movement in the US, and it is possible for civilians in the US to donate to the relief efforts in the countries the US bombs. People can now cooperate across national boundaries, and there is virtually nothing that States can do to prevent it.

Bitcoin has already changed the world, and it will continue to do so in fantastic and unpredictable ways. Given that wars must be funded by taxes, national debt or currency debasement, all of which can be protected against with Bitcoin, it’s going to be increasingly difficult for imperial powers to fund their military budgets.

French economist Frederic Bastiat once said, “If goods don t cross borders, armies will.” I suggest that when States can no longer prevent goods from crossing borders, armies won’t.

The AntiWar.com donation address is: 1M87hiTAa49enJKVeT9gzLjYmJoYh9V98

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31 Responses to “Bitcoin Not Bombs”

  1. RJ MillerNo Gravatar says:

    Very optimistic about what bitcoin has led to so far. The role this plays in system D will only continue to grow!

    By the way Davi, did you used to blog on Fr33 Agents at some point? Were you active on Bureaucrash social before that?

  2. Zell FazeNo Gravatar says:

    “In fact, it’s incredibly difficult if not impossible to track, regulate or block.”

    You make a mistake here. Bitcoin is actually quite easy to track if you don’t actively take steps to hide your identity. If you do take steps to hide you trail though, Bitcoin can become much more difficult to track. It is not anonymous by default though.

    • Erik VoorheesNo Gravatar says:

      The steps needed to make bitcoin essentially anonymous are trivial. Case in point: I dare anyone to try to figure out how many Bitcoins I sent yesterday, and to where. You will not be able to figure it out, and I didn’t even try to hide myself =)

      Great article!

    • Davi BarkerNo Gravatar says:

      Would it satisfy you if I changed it to “incredibly difficult and potentially impossible”?

      I suspect it is possible. Not having the technical knowledge, I imagine it would require the State to both dissect the blockchain, and acquire records from my personal computer and compare them. Not impossible. But not simple either. And certainly not convenient if they’re trying to track a transaction across national boundaries in a country that isn’t cooperating.

      This would require the State to have the technical knowledge of how it could be tracked, the resources to capture the necessary data, and the competence to bring it all together. I suspect they currently have none of these things.

  3. BrodieNo Gravatar says:

    I cannot find on antiwar.com anywhere that it says they accept bitcoins. Can anyone find on there where it says they accept bitcoins?

  4. EdNo Gravatar says:

    It should be obvious to all of us if there is any way Bitcoin can be destroyed and there is, corporate states are already working on it. This is not to say its champions cannot keep several steps ahead of all attempts at sabotage but there is always the risk of someone switching allegiance.

    • JohnathanNo Gravatar says:

      The bitcoin network is somewhat fragile today only due to its relatively small size and capitalization. However, these issues go down in direct proportion to the number of users, as the resources needed to either subvert the block chain or to manipulate the exchange rates then increase as well.

      Bitcoin feels like the Internet circa 1993. People first tried replicating traditional business models but “online”. Then people discovered businesses and applications that were only possible through the fast, global interconnectivity of the Internet. Imagine what new things Bitcoin will enable when people begin to explore more advanced transaction types beyond “transfer XX BTC from address A to address B”.

      • BrodieNo Gravatar says:

        If bitcoin could be destroyed, I believe it would have been already.

        • EdNo Gravatar says:

          Like the planet?

          • MAMNo Gravatar says:

            Bitcoin has weaknesses true. But it has strengths that traditional money doesn’t. If you want to rail against Bitcoin fine but you should also rail against gold and silver as these things can be stolen from you just as assuredly as anything else. In fact the FBI director a few years ago said “The minting of alternative currencies could be considered an act of terrorism” If you’re worried about what actions the State is going to take to stop you you will only be paralysed.

  5. Rick DiMareNo Gravatar says:

    Why not simply object to Federal Reserve notes at your local U.S. incorporated bank? Doing so doesn’t mean you have to take physical possession of the (real) coin, not to mention that it’s legal and enforceable by law (though, admittedly, it’s difficult to find lawyers who will understand what you’re trying to do, and who will support you).

  6. tristan kleinNo Gravatar says:

    Pamphlets on “Islam & anarchism” …feel free to print/share and distribute them…Found here:
    Single-sided to be read online:
    http://www.alpineanarchist.org/miscell/Islamic_Anarchism_Zine.pdf

    Double-sided zine/pamphlet version:
    http://www.alpineanarchist.org/miscell/Islamic_Anarchism_Zine_Pri nt.pdf

  7. joshNo Gravatar says:

    I’m a fan and proud owner of a small amount of Bitcoin. I have a question for the other users out there to explain to me.

    What will happen to the purchaing power of Bitcoin when an indefinate amount of digital decentralized currencies come to market copying exactly what Bitcoin has done. If/When Bitcoin gains traction, competitors WILL come along. I see Bitcoins purchasing power diminishing when you have over 100 accepted Bitcoin copy-cats.

    It’s also more likely that some of these competitors will be able to provide the same service that Bitcoin does but more efficiently, i.e., less electricity required and better software for the masses to use.

    FYI – I’d take Bitcoin and it’s copy-cats any day when compared to gov. issued currency.

    Any thoughts???

    • BrodieNo Gravatar says:

      I don’t think there will be Bitcoin competitors anytime soon Anyone can mine bitcoins. I don’t really foresee competition until bitcoins have been completely mined.

    • Davi BarkerNo Gravatar says:

      For one thing, the market will not bear an indefinite amount of digital currencies. Competitors would need to differentiate themselves somehow to earn market share. If someone comes to market copying exactly what Bitcoin has done, no one would want it because Bitcoin already provides it for free and is more widely accepted. To compete they’ll need to innovate and improve upon it. It’ll happen. But it won’t happen as 100 copy cats all at once. Markets accept currencies slowly. We’ll all see it coming. But the purchasing power of Bitcoin will do what the subjective value of all products does… track demand.

    • Seth KingNo Gravatar says:

      You don’t need to wonder what would happen, because it already has. Litecoin is the biggest competitor to Bitcoin. You’re unaware of it because that’s how good of a job it’s done competing with Bitcoin.

      The nice thing about Bitcoin is that if a competitor cryptocurrency innovates, Bitcoin can always copy the innovation if it chooses.

      The truth of the matter is that converting the world to Bitcoin is difficult enough. Once you get a large traction you’re not likely to want to have to do the process all over again with a new cryptocurrency.

  8. MichaelNo Gravatar says:

    I clocked into bit coin about 18 months ago… I read an article about converting ps3 gaming systems into bit coin generators using Linux…. Genius.

    How are you going about gaining bitcoins, generators seem to take a fucking age to create even one bitcoin…. And trading currencies seems a tad pointless, as essentially you are still engaging in consumerism and effectively weakening your own buying power into bitcoin (I think… Not that well versed in economics).

    I stopped listening to bitcoin about a year ago… It doesn’t seem strong enough to me to create a viable alternative to the current economic system… Although I would still like to hear about how you are gaining them…

    • Robert SmithNo Gravatar says:

      It’s quite clear that you’re not well-versed in economics. Educate yourself before trying to criticize something you obviously know surprisingly little about.

      First of all, all your talk about weakening your buying power is a pile of steaming feces. You know when you said, “I think…” – well buddy, you thought wrong. It does not weaken your buying power (unless you’re talking about the amount of institutions that accept Bitcoin) – in terms of currency exchange, though Bitcoin fluctuates, it is quite a strong currency, and will get stronger (planned deflation – there is a hard limit of something like 21 million Bitcoins).

      You talked about mining Bitcoins. Mining Bitcoins is not a viable way to get them. You need some serious computing power, and in the end, you’ll spend more money on electricity than you will gain in Bitcoins. This is by deliberate design – if you could just produce a ridiculous amount of Bitcoins, there would be lots of inflation and Bitcoins would be worth virtually nothing. The only viable way to gain Bitcoins (for a consumer) is to exchange currency currently in your possession for Bitcoins. There is a lot of information on the internet on how to do just that.

      Go forth and be thou educated.

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