Bitcoin — Liberty Money or Big Brother Spy Currency?

Are you sick and tired of using of using New World Order dominated fiat currencies, run by secret councils in Geneva, Switzerland, while being continually spied upon by the Police State? Are you weary of having the value of the currency you hold destroyed by the inflationary policies of the unelected Federal Reserve Board? If so then Bitcoin, the world’s first and most significant virtual currency, just might be for you.

According to Bitcoin’s alleged creator, Satoshi Nakamoto — if that is indeed his real name, Bitcoin was created as an alternative to national currencies after the financial crisis of 2008. Bitcoin provides a mechanism for direct peer to peer transfer of money. In order to bypass the need for a trusted third party, Bitcoin uses computer generated “cryptographic proof of work” instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

There are several significant benefits of virtual currencies. Since Bitcoin facilitates transactions without a third party, it removes costly charges that accompany credit card transactions, which lowers sellers’ costs and potentially costs to customers. Also, by serving as an inexpensive funds- transfer system, Bitcoin can lower the costs of funds remittances. The need for cryptographic proof of work [RB1] in the creation of bitcoins, or bitcoin mining, restricts the money supply, preventing the nightmare Weimar Republic inflationary scenario that awaits all paper backed fiat currencies.

Bitcoin transactions are conducted in bitcoins. The price of bitcoins relative to other currencies is determined on the open market via bitcoin exchanges. So while Bitcoin is designed around the principle of decentralization, an extensive ecosystem of third party intermediaries has emerged to provide services related to Bitcoin. These services include currency exchanges to convert bitcoins to hard currency, marketplace escrow services, online wallets, mining pools, and even investment services.

So is it high time to reclaim to your God-given rights to unimpeded commerce as a Sovereign Citizen and set up a secret, untraceable business securely cloistered in a razor-wired skirted, heavily armed and fortified compound, using your computer as a high tech weapon of free exchange, executing untraceable transactions in rapid fire succession, all the while snickering to yourself at your proficiency in sticking it to the man? Maybe not so fast.

While the use of a “private key” provides some anonymity, Bitcoin has features that can reveal a great deal of information about a freedom loving Bitcoin user. Each bitcoin wallet has its own unique identifier. Once the identity of the owner is a wallet is known, it’s possible to monitor all subsequent spending by that wallet by analyzing the information built into the computer based public Bitcoin record, called the “block chain.” While it’s possible to create a new wallet for each transaction, this is inconvenient and adds to the cost of using Bitcoin. It’s expected that if Bitcoin continues to grow in usage that more research will be done on how to mine the data from the block chain. Pseudonyms linked to transactions in the public block chain ledger can be identified years after an exchange has been made, and once Bitcoin intermediaries are made fully compliant with bank secrecy regulations required of financial intermediaries, anonymity will become even less certain as these intermediaries will be required to collect personal data from their customers. Even the evil Federal Reserve also sees the loss of anonymity as a drawback of Bitcoin vs. the use of cash due to the linkage of transactions to a unique identify in the Bitcoin wallet. It’s not difficult to imagine the Bill or Rights trampling NSA data mining information from the block chain and fusing it with other information at their disposal to quickly identify a bitcoin spender.

More sinister still, US Department of Justice has noted that bitcoins can be used as a “legal means of exchange” and that “virtual currencies, in and of themselves, are not illegal.” However, businesses that are transmit funds must obtain a license to operate in 48 states and DC, and are also subject to the Bank Secrecy Act (BSA). Licensing is for consumer protection, but the purpose of the BSA is to detect money laundering and terrorist financing. Because Bitcoin isn’t a company or even a legal entity, but a global peer to peer network, Bitcoin itself can’t be called a money transmitter, but companies that are in the business of exchanging bitcoins for dollars must comply with relevant regulations, keep records of their customers, and report suspicious transactions and other data.

Tor, a web service that provides anonymity and is often used in conjunction with Bitcoin, is very difficult to hack, but interfacing with Tor requires a web browser, and this can be hacked. Both the NSA and FBI have been reported to use vulnerabilities in the version of Firefox that is in the Tor Browser Bundle to monitor the activities of Tor users. Additionally, according to documents from the Snowden leak, the NSA has the ability to impersonate Web sites that it doesn’t control in order to inject malware. This malware can embed itself deeply into the target computer, making it difficult to detect or remove, and then transmit information back to the NSA. So while the encryption of Bitcoin and Tor make them secure against the prying eyes of Big Brother, the NSA and renegade law enforcement agencies have means to monitor their use through the interfaces that are needed to connect to these systems. Also, because the use of these and other programs tend to create an electronic trail, once one part network has been identified, authorities can very quickly identify others.

In other words, Bitcoin may just be another part of the New World Order, Illuminati, Freemason, Skynet, Matrix control grid. Freedom loving patriots everywhere be warned!

[RB1]In your presentation and possibly in future papers, suggest further describing “cryptographic proof of work [RB1]“.