Thread by @SamuelPatt

Lots of Bitcoiners are scoffing at the US government issuing blacklisted addresses, pointing out (correctly) that this cannot stop people from sending to those addresses.

They know that, and that's not why they did it.

Nation-states are enormously powerful compared to any given citizen. Individuals only have the power to meaningfully oppose state action in aggregate.

The state knows this. They are always trying to use their powers against individuals in a way that won't anger the aggregate.

One of the most effective ways of doing this is creating a new law or regulation but not enforcing it broadly. Lack of enforcement means the aggregate isn't usually bothered, but it also gives the state the tool they need to selectively enforce against any particular individual.

They know that they cannot enforce a Bitcoin blacklist broadly and won't even try. But to do now have a new weapon in their selective enforcement arsenal.

They will slowly expand this blacklist over time, never enforcing the rule, until ...

... they bring a trial against a crypto advocate or business owner doing something they don't like.

With a large enough blacklist they can use chain analysis to find a link, and suddenly they're able to add OFAC violations and label him or her as "supporting enemies abroad."

Nation-states are in the business of accumulating power and they have long time-horizons.

We scoff at their seemingly-impotent rules at our own risk. Just because Bitcoiners can envision a future without nation-states doesn't mean that they don't currently have enormous power.