Waiting for Dark: Inside Two Anarchists' Quest for Untraceable Money
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It is already (somewhat) difficult to have untraceable property, which is sort of a prerequisite for the dark economy to be interesting. For example, money laundering exists because people with, roughly speaking, dark money, want to use it to purchase legitimate goods.
Right now, bitcoin is like a country with a minuscule GDP ( * ) and absolutely no currency controls (and no possibility of such, ever). As many small countries have learned the hard way, the worst thing for your economy's and currency's stability is US and Euro-based foreign currency traders deciding that your currency is a "hot" one to trade in.
When history looks back on why bitcoin failed, I suspect a big part of it will be the SEC's decision to allow large Wall Street firms to speculate in BTC as much as they wanted to.
Now, a robustly anonymous exchange network with value pegged to something external - say, a cryptocurrency backed by EUR, USD, or actual grams of gold - that would be something different. That would likely be made illegal, either explicitly or by having nearly every transaction run the risk of a federal money laundering charge.
( * ) The GDP of bitcoin-land would be the sum total of all goods and services bought and sold with bitcoins in the course of a year.
I don't buy the idea that it would flourish without them.
This statement demonstrates that you have no idea how cryptocurrency works. As such everything else you say on the subject is pretty suspect.
Also, complaining about speculation-caused instability and then claiming that pegging the value of Bitcoin to gold would solve it is hilarious. You do realize that people speculate with gold, right?
And finally, cryptocurrency isn't currency. Making assertions by analogy is at best an educated guess.
If you're comparing cryptocurrencies and currencies issued by nations you're comparing apples to oranges. You can't make realistic assertions about bitcoins based on currency--they're just too different.
But most nations use electronic currency with digital ledgers and new currency is generated whenever a certain cryptographic function is made - namely, a messaged signed with the key of the central bank.
Can you show me any graph of the value of a nationally-issued currency that behaves like Bitcoin's? The most stable currencies show <10% volatility, while Bitcoin shows volatility of >100% over a given year. The most volatile currencies are almost entirely inflationary, while Bitcoin can be deflationary a great deal of the time (even counting the drop from $1000+/coin, I'd be still up more than 1000% from when I originally bought Bitcoins). Not a single government-issued currency in the world behaves like Bitcoin.
If you want to talk about the technical implementation details, fine, there are some vague similarities, but those are not by any means the defining characteristics of a currency. Currencies predate computers, so computer implementation arguments about what a currency is are pretty obviously bunk.
You were describing an idea for minimizing the role of speculation on the value of cryptocurrency, and your proposal was to peg the value of cryptocurrency to something which is valued largely on speculation. If you wanted to say that tying the value of cryptocurrency to gold would stabilize it, then you should have said that instead of saying the stupid thing you actually said.
...and much like the other things they make illegal, use of it will continue and the abuse will grow.
Now, two developers defending their software against the NSA: possible if they are good enough. But two developers defending a large number of decentralized, very paranoid, and pretty shady users against the NSA? Ehhh
The NSA has alot of bodies and money to throw at a problem if they want it gone. Too many to resist effectively unless you are a national actor. It is why them being effectively off the leash is scary.
Considering BTC isn't exactly "untraceable", Gold makes far more sense in terms of an untraceable commodity with far less fluctuations than BTC. It already has value, is widely held by people, and can be easily converted to virtually any kind of currency much easier and without less tracks than BTC.
Bits traversing networks are more traceable, but they are less identifiable. An encrypted packet passing through my home router could be a fraction of a family photo, or it could be a transfer of $1M worth of dark currency. You don't know unless you can decrypt it.
That's one of the often overlooked reasons why a cryptocurrency is so radically different (and such a good fit for the XXIst century).
Imagine a world where every transaction, every penny spent or received by anyone, corporation, state, person, is open and transparent. No way to hide that corruption, that drug money or whatever else corporations and states are up to. No way to just make up money on the spot if you are rich and have a printer. No way to hide inequalities, at the workplace, between classes in a country.
Why should anyone feel shamed for buying anything?
Condoms, oh wow, birth control, what is this the middle ages?
Exactly because another party, not just you, is concerned every time you buy something, is the reason why its not private and should not be.
Pretty sure anybody involved in any kind of criminal activity (Mexican cartels, organized crime families come to mind) will probably disagree with you.
Take a gold coin for example. You can test it's indeed made of gold without needing to know where it's from.
Same is true for good money as a general rule. Say you get a US dollar bill. What you want to know is if it's genuine, not who's been using it.
> "Imagine a world where every transaction (...) is open and transparent. No way to hide that corruption, that drug money or whatever else corporations and states are up to. No way to just make up money on the spot if you are rich and have a printer. No way to hide inequalities, at the workplace, between classes in a country."
That's just wishful thinking. Most corruption and inequalities are in plain sight, wrapped in a web of social power and blackmailing. You think the farmers will stop getting subsidies? Or military industrial complex will grind to a halt? And what if you consider that drug money is legit? Plenty of markets are legit but don't have the support of the government.
What you are talking about is not a way to remove corruption; it's a way to insure those in power will have even more power. It's also making sure the politically correct dominates everything. Better not buy something that could go against the will of the Church, because they'll know it...
No, really, traceable money is it's own kind of hell.
Was it mined and forged by payed workers, or was it stolen and forged by slaves?
I, for one, wouldnt accept a random gold coin given to me by some stranger.
I would like to know that the stranger didnt steal the coin. It doesnt matter if the gold is real itself.
Its the token of what the gold is supposed to represent, some value, that is of interest, and that value is not in the gold itself, its like yeah man you can give me your phone thanks - but barter is not a good foundation to base your currency and economy on.
Do you live by this standard?
In other words, you never accept a dollar bill unless it comes directly from the printing press or if you can retrace its entire history?
Quick someone tell the federal reserve / ecb that QEs can't be used because they are an oxymoron (sorry can't resist).
That said it is possible to have an open ledger used to avoid duble spends without revealing anything about someone finance, just look for monero (xmr) or zerocash.
This is trivially disprovable. Gold.
> Imagine a world where every transaction, every penny spent or received by anyone, corporation, state, person, is open and transparent. No way to hide that corruption, that drug money or whatever else corporations and states are up to. No way to just make up money on the spot if you are rich and have a printer. No way to hide inequalities, at the workplace, between classes in a country.
The inequalities already aren't hidden and little is done about it. I'm not sure what you're thinking I'm going to imagine here.
The other side to this is transparency of finances. Of people seeing every time anyone bought condoms--that can be spun politically. Unmarried women are already shamed publicly for being on birth control: do you want to expose every time someone goes to the pharmacy? More people going to jail for non-violent drug posession due to unjust laws?
You seem to have a naive belief that more information is better. It's only better if that information is in the right hands.