Thread by @Santiag78758327

Digital Asset Encryption is Not a Panacea for Society

1/ As a proponent of digital assets, personal privacy, encryption, and value as information, I hold in high regard the privileges afforded by digital assets. However, I don't view that regard as superseding human institutions

2/ Often times you will hear that digital encryption is an essential component on the path towards "self-sovereignty", or the ability to choose the direction of one’s own life, & being the exclusive authority over one’s own body & mind. Synonymous w/ personal freedom & liberty.

3/ In general I whole-heartedly agree w/ the principles of self-sovereignty in the context of a larger society. What does self-sovereignty mean in the context of digital assets? To me it means expressing the intrinsic human right to determine contextual value w/out being coerced.

4/ Like most philosophical principles they are less truths with a capital "T" than ideals that we aspire to, simplified abstractions that require continuous improvement. As always, the devil is in the details & real life is more complex than simple ideals.

5/ Be cautious of those who speak in absolutes because everything has caveats, exceptions, edge-cases along a spectrum of possibilities. Let's explore the specific case of self-sovereignty in the expression of value using encrypted digital assets.

6/ Definitions: Sovereignty is the full right & power of a governing body over itself (en.wikipedia.org/wiki/Sovereign…)

In this case the human mind, ones will & expectations about when & where to express value assessments, transactability, & choice over the instruments of expression.

7/ I often encounter those who proudly proclaim their self-sovereignty over any external influence, no matter how powerful/established, flaunting the power of cryptography in that exertion as child would a gun. The etymology of sovereignty is "superanus": the joke writes itself.

8/ This is especially true in ecosystems around nascent proto-money, often framed as a vote of "no-confidence" against fiat, a claim that I support & respect, but one immature in the same way a warrior brave fights battles recklessly w/out truly understanding the consequences.

9/ Reckless flaunting is compounded by the "normalization of deviants" principle. The idea that because a behavior has been successful thus far w/out severe consequences it will continue to be so into the future. This type of backward looking risk assessment usually ends badly.

10/ Do I respect the courage of the young braves hoping to challenge the status quo in the hopes of approaching the idealization of self-sovereignty? Without a doubt, of course. Do I think they are guaranteed success without a long & bloody battle without a trail of tears? No.

11/ Self-sovereignty in digital asset management boils down to private keys. Some believe private keys to be a magical antidote against the excesses of the state, somehow magically shielding them from the most intrinsic power the state has, coercion through physical force.

12/ The idea is simple. If the keys are hidden, or retained in the mind, the value those keys are privy to are shielded from seizure by the state. I'm sorry to disappoint but this arrangement is simply naïve as a proper counter-measure for all cases, particularly the most extreme

13/ Do I think private keys are more than an incremental step towards our path to true self-sovereignty, of course! Any technology can be leveraged to amplify and/or focus the will of humans towards better ends, including protecting symbolic abstractions.

14/ Now let's get back to reality, the real world in which we are not just self-sovereign but have to balance our will with that of others in a society. The state is an institutional abstraction of our collective will that often times gets captured by elites.

15/ Enter Bitcoin. The institutions responsible for issuing fiat money have obviously acted irresponsibly on behalf of their nation-states all around the world, more now than ever. This is a gambit in which they try and steer the winners/losers of the economy in a grand game.

16/ As with most power, it corrupts. That corruption stems from the hubris that the path is righteous, but turns out to be self-serving. Servants that think themselves kings now have to contend with an alternative, Bitcoin, and with many alternatives beyond even that! ETH, XRP,..

17/ So the inevitable confrontation is framed. As some point if the elite face systemic collapse the last act of desperation may be to lash out as a wounded animal would, to try & oppress the new forms of value expression afforded by the technology. They will first use the law.

18/ Then they will turn violent and we will see the lengths humans will go to preserve power at the expense of human justice. This is the scenario that I anticipate will bring to light the illusion of monetary self-sovereignty because it will burst the reality bubble.

19/ The attack will come on many fronts, exchanges will be forced to comply with transaction history, banks / institutions to "custody" others private keys as a "service", judges will pass orders to compel disclosure (imprisonment, punishment, violence). This will be the test.

20/ The little sovereignty some of us enjoy in our democracies (myself included) was earned through massive struggles over long periods of time. To think that same privilege is easily earned w/ a cryptographic key is frankly insulting.

21/ Privilege like that is earned via blood & sacrifice & it's maintained with constant vigilance. What frustrates me so much about the immaturity of the culture behind the digital asset movement is the idea that this cost doesn't have to be paid. /End Thread

Examples of how it's already begun:
lexology.com/library/detail…

United Nations Office on Drugs and Crime (‘UNODC’) published a ‘Basic Manual on the Detection and Investigation of the Laundering of Crime Proceeds Using Virtual Currencies’ (hereinafter ‘Manual’)
unodc.org/unodc/en/front…