The High Cost of Valuable Information

TLDR; Sign the EFF petition to stop the BitLicense!

“Knowledge is power.”

“The more you know…”

These messages have been drilled in to generations of children, and have shaped the modern world. At the same time, laws are being written to punish people for knowing things, and sharing knowledge with each other. Bitcoin transactions are information, first and foremost. Therefore, the BitLicense proposal is a gross infringement on the freedom of speech.

Knowledge is simply stored information. Knowing scientific laws allows researchers to create better machines and other products. Lives, economies, and societies shift with the leak of a secret to the wrong person, or the public at large. Billions of dollars are stolen from everyday people because their credit card or ID number got into the wrong hands. Google, Facebook, and others make billions of dollars selling our information.

Your name has value. Your age does too. Chances are that right now, someone is selling both of those data. You probably know hundreds of secrets with varying personal and economic value. You hide your pin number at the ATM. You require good reasons before giving someone your social security or bank account number.

What about an email to your mother? Or a text message to your girlfriend? Did you mention bicycling, skiing or some other product you might enjoy? Your email has value, is being digested, and is being sold in real time
as information to advertisers.
Your data habits have become the currency
of big businesses and state agencies. Of course, people don’t want their information to be sold. It is only natural to seek and cherish privacy.

In this context, Bitcoin doesn’t look so unprecedented, after all. We are very familiar with the value of information, and the need to keep it private. If the data in an email to your mother is worth $0.005 to an advertiser, and your credit card number is worth thousands of dollars, a secret bitcoin number called a key can have similar value.

The primary difference between Bitcoin keys and other valuable information is market acceptance. There is not very broad demand for your email to your mom. If you’d been sending sexy selfies with a celeb, more people would care, and newspaper editors would be calling to help you discover the right price for the pictures. Bitcoin is accepted as valuable by yet more people, with millions of market participants, allowing people to easily know its price.

A bitcoin key can represent a very wide variety of values. You can store an “email to your mom” worth of bitcoin in an address by sending 1310 satoshis to it. The average vapid tweet? Perhaps only 20 satoshis. Bigfoot playing tag? That’s gotta be worth at least a bitcoin!

Here is the rub, though: the more valuable information is, the more some powerful people insist that your right to privacy is void. Services like Google can read your email for advertising clues because you have voluntarily agreed to this low-value data scraping. Since the values are low enough, and the market for the data is illiquid, this is treated as speech.

What if your emails were worth significantly more? What if you primarily used email to send bitcoin transactions back and forth with your friends, or high value paparazzi pics? Of course, you could use the Bitcoin network to send either of these, but you don’t have to. Email works pretty well, as would a physical letter. Would your email provider be a financial service? What is their fiduciary duty? Presumably, if they are hacked or otherwise leak your information, you could suffer monetary losses. Most lawyers would tell you that gmail doesn’t have to apply for a money services license or BitLicense just yet, though.

The value of information isn’t simply a philosophical question or an educational slogan for kids. With legislators and regulators writing rules for Bitcoin, this is now the front line of public discourse. Many of these people would like to treat Bitcoin like money, because they have less power to control speech than money. Freedom of speech is widely popular and defended, while financial rights and privacy have been continuously chipped away through legislation.

This is dangerous, however, as bitcoin is simply valuable information. If valuable information can be treated like money, then where do these regulations and rules end? If you send your letter to your mother through Bitmessage, will your wallet provider have to take down your name and address? How long before email providers like Google have to start doing the same with people sending each other bitcoin transactions in email? Payment requests? Love letters?

Did you file an SAR report on that email, Google? Jennifer Lawrence is so hot right now! Clearly those pics are worth more than $10,000.

Grandma’s chocolate chip cookie recipe? Priceless. Since grandma lives in New York, you’d better be on the safe side and file a report, Yahoo.

If you want to protect your freedom of speech, no matter who or where you are, please join us in protesting the BitLicense. Information knows no borders. Sign the EFF petition here:

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