Freedom Money – Bitcoin and the First Amendment

The Declaration of Independence was first made public in the Pennsylvania Evening Post

Living in 2020 means witnessing a revolution in our tools of communication. The last time this kind of shift happened was with the invention of the printing press, where individuals were empowered to freely communicate, share ideas, and organize with each other. The press put the power of the written word, from the Bible to the Federalist Papers, into the hands of ordinary people, and lead to both the Reformation and the American Revolution. The farmers of the Constitution understood this deeply, and enshrined these ideals atop our most important legal framework.

Freedom of the (Printing) Press

As the cornerstone to the Bill of Rights, the First Amendment lays out the core freedoms central to the idea of America. Our rights to speech, assembly, and religion are fundamental to our humanity. Recognizing this is a prerequisite to to sustain a government of the people, by the people, and for the people.

Freedom of the press is critically important as well, and it relies on technology for their realization. Freedom of speech empowers anyone to ask hard questions of their elected officials and powerful institutions, but we need technology to make their answers available to the public. Freedom of the press ensures that information can be published on a blog or in a newspaper, and broadcast over TV, radio, and streaming services.

At their core, the freedom of speech relies on the right to leverage technology to coordinate ideas and actions among individuals at scale. The printing press granted us ability to economically copy and distribute the written word at massive scale. Ideas from the Gutenberg Bible to the Common Sense were widely distributed, and could be interpreted by anyone who could read. The soft technology of the written word was turbocharged by the hard technology of mechanical innovation, and led to the revolutions that lifted the world into modernity.

Digital Speech

With the advent of the internet, we have exponentially improved on the power of the printing press. Overhead costs to reproduce ideas have again fallen to fractions of their previous levels. More importantly, instantaneous world-wide distribution of anything that can expressed on a screen went from impossible at any cost to practically free. For a brief period of time, speech was freed at global scale for anyone with access to the internet.

Unfortunately, freedom of speech that transcends borders has come at a cost. Our traditional methods for filtering quality ideas from gossip have broken down. Worse still, they have been replaced with algorithms trained to optimize for our attention at any cost. Competition for advertising revenue has driven an arms race for our time, leading to sensational headlines, click-bait, and constant ‘nudges’ from our pockets. The reason for this battle is that the world of networks, power accrues to scale, creating winner-take-all markets in information. In the wake of the Web 2.0 wars, we are left with a few large companies in nearly complete control of our tools of communication.

In the process of winning their respective networks, these companies have accrued an incredible set of data about our daily lives, enabling levels of surveillance and potential censorship unimaginable in the wildest dreams of a Stasi or SS officer. Google has recognized this growing responsibility since the early days of 2000 and 2001 when their “Don’t Be Evil” motto was introduced. Their decision to remove this language from their core message is troubling.

Overtime the risk that these tools will threaten liberty compound. Legal pressure from governments, political pressure from the mob, and economic pressure from advertisers and investors could push Facebook, Google, and others to decisions that threaten our freedoms. Today we are protected only by promises. America’s founders deeply feared the monopolist’s power, but they could not have imagined that the biggest threat to freedom would come from companies that can monopolize communications, rather than a government that monopolizes force.

A Revolution in Privacy

The Internet scaled our tools of communication over the past 30 years at an unprecedented clip and has dominated our popular understanding of computers. At the same time, another technology revolution has been quietly playing out in parallel. The development of strong public key cryptography began in secrecy in the 1970s at GHCQ, the NSA’s British cousin, and was made public in 1976.

The importance of cryptography for everyday use is increasingly clear. We can now arm ourselves with tools to protect our ideas and our data at minimal cost, exposing them only to who we chose. In the era of mass communication and mass surveillance, free expression but automated censorship, strong and open cryptography returns power to individuals. We have the ability to restore the freedoms defined in the First Amendment to their full potential, but this time in an even more connected, open, and inclusive world.

The role of Bitcoin

While public key cryptography protects our ideas and information, it doesn’t help with the content filtering problem that led to data monopolists in the first place. Markets and prices are the most effective tools for discovering value and quality, but only when the underlying money using to measure economic reality is stable and predictable.

Bitcoin solved this by creating a kind of money that operates on the same infrastructure and protocols as the internet itself, but cannot be freely printed like dollars or copied like click-bait. While technical limitations of ensuring trust in the system have prevented rapid integration at scale, steady progress is happening every day. Centuries after the invention of the printing press, we have finally found a method to store and exchange value using the same tools we use to store and exchange ideas.

Internet money will enable us to use markets to discover and filter valuable new ideas, without relying on a central authority or algorithm with its own motives. Bitcoin is fully open, ensuring the system that can be trusted by people with radically different ideas and cultures. It has the ability to serve as a common language that facilitates both trade and communication around the world.

Bitcoin offers far more than a break from the legacy financial system. It’s a protocol enabling digitally native value. For America, breaking away from England was just the first step, she had to prove to the world that she could effectively govern herself and honor her professed values. Building trust is a massive challenge that takes time and patience, most people are happy to subject themselves to the convenience of central authorities an go about their lives. But when they work, open ideas offer a blank slate build a better world.

Bitcoin and Justice (Part I)

Pictures of historical documents are boring, so here are a bunch of redcoats surrendering at Yorktown

Bitcoin is good. Its ideas are derived from the same ones that underpin classical values of freedom, equality, and personal liberty. In this post I’ll dive into my views on how technology should be though of from an ethical perspective, and why I disagree with the idea that Bitcoin is best used to break the law.

(Spoiler alert – there is a higher law)

The Ethics of Technology

We need to consider what Bitcoin actually achieves from an ethical perspective. Technology can be used for both good and evil, but it often has a bias. Hearing aids are designed to lift up someone with a disability to a higher level of functioning, while nuclear weapons are designed to grant an individual the power to wipe out cities. So the test for the value of a technology is simple – in the hands of a capable sociopath, how will the technology impact the rest of society?

The Volksempfänger, "people's receiver") was a range of radio receivers developed by engineer Otto Griessing at the request of Propaganda Minister Joseph Goebbels.

The purpose of the Volksempfänger-program was to make radio reception technology affordable to the general public. Joseph Goebbels realized the great propaganda potential of this relatively new medium and thus considered widespread availability of receivers highly important. 

https://en.wikipedia.org/wiki/Volksempf%C3%A4nger
“All of Germany hears the Führer
with the People’s Receiver.”

The key distinction is relative power. We know that in fact, all men are not created equal. But certain technologies help level the playing field, while others grant power disproportionately. Give Hitler control of a one-to-many medium like radio where he can propagandize directly without competition, and you get Kristallnacht. Give him a Twitter account and he’s just another troll, whose horrible ideas will get ratio’d to hell as soon as they’re exposed to the light of day.

As a many-to-many platform, Twitter gives a voice to the voiceless who may otherwise be censored by centralized technology. That includes women abused by powerful men, minorities harassed by law enforcement, and middle class Americans disgusted by the excess of the elite.

Like Twitter, Bitcoin is designed for freedom. The trade-offs that limit transaction throughput are made to ensure it remains a tool available to empower individuals, no matter their circumstance. Anyone in the world with an internet connection and a Raspberry Pi can hold Bitcoin, run a node, and verify their transactions.

The end result is monetary security – protection against direct theft, as well as protection against debasement risk that plagues centrally controlled currencies. In this way, Bitcoin is an extension of our natural, unalienable rights, and a powerful force for good in the world.

Natural Law vs the Laws of Men

Bitcoin’s design makes it clear – this stuff is made to function in a hostile environment, and enable “breaking laws and social constructs”. It’s useful however to ask specifically what kinds of laws Bitcoin can break. At the core, Bitcoin supports two natural rights – the right to save for the future, and the right to transact freely. Centralizing technology has restricted these rights in practice, and even made possible laws that codify those restrictions.

Those laws are fundamentally in opposition to natural rights. They are man made, and out of harmony with moral law. Bitcoin is a weapon, built to fix this.

“A just law is a man made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law.

The Bill of Rights was designed to enshrine natural law into the DNA of an embryonic nation. While the rest of the Constitution laid out the government’s legal powers, the first ten amendments aggressively curtailed their scope in relation to the people.

America’s founding documents were far from perfect. They failed miserably in granting those natural rights to every human within the 13 colonies, and by definition they can only apply to Americans. The beauty of Bitcoin is that through the internet and open source code, today anyone can claim those rights, anywhere in the world. Unjust legal authorities can still prosecute or persecute Bitcoiners, but for the first time in decades if not centuries, they are fighting a losing battle.

Bitcoin is a tool that strengthens moral and civic principles rooted deep in western civilization. To the extent that Bitcoin violates an ordinance, we examine the underlying issue with strict scrutiny and a healthy dose of skepticism.


In Part Two I will discuss Bitcoin and to crime, and explore its relationship with law enforcement and international relations.

A letter to Brad Sherman

Dear Congressman,

I am a veteran, a patriot, and a Bitcoiner. Yesterday, you called for legislation to ban cryptocurrencies in the United States. This would not only be a strategic disaster for our foreign and economic policy, but more importantly, it would cut directly against the laws and values that have propelled our great nation to its unique position in the first place.

The Bitcoin Network, like the U.S. federal government, is a system of checks and balances. It relies on freedom of choice, individual incentives, and transparency to achieve this new form of value. In the same way that our Constitution allowed the people to break free from the centralized control of monarchy, Bitcoin leverages modern communications and cryptography to grant people the power to choose their own forms of value.

The goal of Bitcoin is to build a new form of money, one that can be protected from unwarranted surveillance and seizure by any entity. This is deeply American idea, enshrined in our 4th Amendment protections under the bill of rights. Bitcoin does not disrupt the rule of law, it only helps ensure that law enforcement living up to its obligations of due process before depriving anyone of their rights. We are blessed with a legal system that is far more just than in many other parts of the world, but we can always do better. I agree that Bitcoin represents a major problem for governments that are more concerned with controlling their citizens than protecting their rights, but that is not the America that I know.

The founders said “Life, Liberty, and the Pursuit of Happiness” was the goal of the American project. With life and liberty secured, Americans are free to ask “Why Not?”, and our history is filled with innovators who thrive on a culture that encourages pushing the envelope.

Chuck Yaegar strapped himself to a rocket, lit the fuse over the Mojave desert, and broke the sound barrier, setting the stage for America’s leadership in aviation and space exploration for decades to come.

In 1958, Chuck Berry picked up his Gibson guitar and brought an entirely new energy to American music. Johnny B. Goode brought Rock and Roll to the masses, and has shaped nearly a century of pop culture around the world. 

This spirit of innovation is uniquely American. It why our institutions from Hollywood to Wall Street dominate their competitors overseas. It is even deeply rooted in our military, where a German WWII commander in lamented that Americans were so hard to fight because we routinely ignore our own doctrine.

Bitcoin is a global project, but its values are the same ones that built this country. If we ban it, we will be sending a signal to our adversaries that we fear its power, while at the same time ceding our technical leadership to the totalitarians. More importantly though, we will stifle the creative spirit of innovation that has gotten us where we are today. In America, we don’t believe that anything should be decided by government fiat alone. Why should money be any different?

Very Respectfully,

Hector S. Rosekrans

Bitcoin is a Weapon

One of my most vivid memories from active duty is standing in the middle of the command center on my billion dollar warship, watching a Somali pirate take a piss in grainy infrared. It was around 4AM, I was sipping coffee in dark room lit by a few dozen radar screens, and counting his sleeping colleagues that my team would need to detain at first light.

Through its command of high tech violence, the U.S. Navy can influence anything on, under, above, or near the sea. As a Surface Warfare Officer, my job was the day-to-day maintenance of American hegemony, that power that has ensured free trade and capitalism dominates the global economy. Our closest competitor, China, is at best decades behind.

At the same time, in Iraq and Afghanistan my brothers and sisters were struggling against an enemy who could leverage the power of low tech distributed violence, enabled by the AK-47 and the improvised explosive device. America had forgotten the lessons of Vietnam and was re-learning them in the streets of Fallujah, the Somali pirates were just the latest group to tap into this trend.

The Navy was a practical education in global economics, distributed systems, and high stakes game theory. It taught me that civilization is shaped by the powers that master commerce. Today, that power is the carrier strike group. Tomorrow it will be a Bitcoin node.

The Fleet

Everything you hear about the Navy is true. Sailors like to drink when they hit a port and we aren’t overly picky. Yet about halfway through my first deployment I had developed a taste for Newcastle, thanks to the English-style pubs my fellow officers managed to find in every port from Bahrain to Hong Kong. I was literally following in the staggering footsteps of Royal Navy officers who carried the British Empire around the world centuries before. The Brits were never known for their cuisine however, and fortunately most nights ended with a late night stop at McDonalds. In 10,000 years, archeologists will probably use the Super Value Menu as their Rosetta Stone to unlock the mysteries of 21st century language.

Brits do pubs, Americans do burgers, and it’s no accident that you can find both in every major port around the world. For a few centuries, the ships flying the Union Jack let that tiny island mold the entire world in its image. And they weren’t the first. Spanish galleons ensured that Catholic missionaries sailed to the Americas, and Aztec gold sailed them back. The lesson is simple – control of the commons means control of the commerce, and there is no greater commons than the high seas.

Naval power lies in its connection to trade. An army can take and hold important resources, but its reach is limited by the constraints of geography. A fleet on the other hand can establish blockades, occupy choke points, and interdict smugglers around the world. It can rapidly project power across time and space, linger indefinitely, and retreat without cost. The British used these tools to build their empire. McDonalds, Apple, Hollywood, and the rest of American-style capitalism ride in the wake of carrier strike groups today.

Vacuums and Violence

On the opposite end of the economic spectrum, the pirates got started as disgruntled fishermen. Somalia’s government collapsed in 1991 and the coast guard packed up and went home, leaving the rich local fisheries open for foreign factory trawlers. The stocks were decimated, and the local economies that relied on them collapsed.

In response to this, a few enterprising fishermen realized that while they didn’t have fish, there were plenty of guns around. They built a naval militia and would board trawlers to demand payment for the stolen fish. Their plan worked far better than expected, ransom money began pouring in, and the pirates expanded their operations to the narrow commercial shipping packed with ships heading to Europe, Asia, and the Middle East.

Best of all, no one really cared.

The Gulf of Aden runs from the southern tip of the Red Sea to the western Indian Ocean. It connects oil from the Persian Gulf and electronics from Asia to ports on the Black Sea, the Mediterranean, and Europe’s Atlantic seaboard. A few million dollar insurance payouts is a drop in the ocean against a quarter of all global trade. Voyage insurance premiums didn’t even move until the media picked up the story, and Lloyd’s of London realized they could make a quick buck on the attention.

On top of this, the U.S. Navy isn’t built for small scale operations. Pirates might get press coverage, but the Pentagon cares a lot more about Chinese submarines and Russian bombers.

Kalashnikovonomics

The real problems started when other groups began to capitalize on Somalia’s collapse. Al Qaeda’s East African offshoot Al Shabbab was building a foothold in anarchy, and started pressuring the pirates for tribute to boost their own revenue. Ten million dollars of ransom money might not mean much to the global economy, but it will buy a lot of guns for the holy war.

Forget nukes. The AK-47 was the most important weapon of the 20th century and shows no signs of giving up that crown in the 21st. It is rugged, user-friendly, and will kill you just as dead as a stealth bomber.

The reason is straightforward – death is a fixed cost for the individual. Complex weapon systems are expensive to build and difficult to operate. A single bomb might cost $25,000, but that doesn’t include the plane that carries it, the larger plane that refuels that plane, the pilots that fly them, the maintenance crews that repair them, the HR department that manages training, payroll, and career advancement. The list keeps going. The U.S. military is extremely capable but not very flexible, and everything costs an arm and a leg.

Rifles on the other hand are cheap, effective, and highly distributed. Anyone with standard issue human equipment can learn to operate one in an afternoon, and basic infantry tactics aren’t rocket science. The AK-47 is to warfare what the iPhone is to computers – user friendly power in the hands of the people. This kind of scalability allowed rice farmers and goat herders to defeat the world’s two most powerful militaries in the 1970s and 1980s. Vietnam and Russia’s war in Afghanistan are classic studies of low-end disruption.

AK = RSA

Cheap and scalable can defeat large and centralized when the conditions are right. Diffe and Hellman took Kalashnikov’s ideas to information warfare.

Prior to asymmetric cryptography, the business of secure communications was a massive headache. Key management for large organizations was so complex that it was only practical for massive bureaucracies with an existential need for secrecy. This excluded everyone outside of the military and intelligence services. Even when you have those kinds of resources, security is never guaranteed, just ask Admiral Yamamoto.

RSA changed everything. The simple idea that certain math problems are hard to solve but easy to check (think a jigsaw puzzle) meant that anyone with a computer could communicate securely at a trivial cost.

Of course, a motivated adversary can still hack your laptop if they really want to, most likely by applying a wrench to your skull until you provide your private keys. That wrench-wielder however needs to be motivated, compensated, and willing and able to keep a secret. They are certainly a threat to any one individual, but at scale the dynamics change. One whistle-blower or viral video and the political benefit of this type of coercion can be swamped by blowback.

Asymmetric Money

Cypherpunks have been building tools for individual liberty, freedom to communicate, and the right to privacy for decades, but the rest of the world moved faster. Netscape and Oracle built the new digital commons, Google and Facebook mastered it. They poured in capital until their product could dominate network choke points, and now any would-be competitor is better off joining their regime than competing. As long as commercial power was in the hands of centralized entities, the digital commons would function much like the maritime commons – dominated by monopolists who had the up-front capital to win early.

The problem for incumbents is that the terrain isn’t fixed. Digital scarcity is a tectonic shift for the architecture of the internet, and a potential threat to business models that make their money curating infinite reams data.

Digital commons are like the sea. They move ideas across borders seamlessly, and expose us to the best (and the worst) that the world has to offer. With the rise of Bitcoin, real economic value is beginning to run through these pipes as well. No one can occupy any one position for long. Choke points spring up, flourish briefly, and die out as traffic finds a better route.

Unlike at sea however, the balance of power in the digital realm is shifting to individuals. The power of asymmetric cryptography is similar to asymmetric warfare. State cyber security organizations are incredibly capable and well funded, but like the militaries of the 20th century they cannot match the scale of new technologies with their inherent centralization.

Alfred Thayer Mahan was the naval equivalent of Sun Tzu, and he developed the core idea that the goal of any navy should be to control of the commons. Control of the commons means controlling commerce, and the gears of commerce move the world.

Satoshi built all of humanity a weapon to take that power for ourselves.