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The Satoshi Revolution – Chapter 4: Is Privacy Possible in the Digital Era? (Part 3)

January 20, 2018 |

Is Privacy Possible in the Digital Era?

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 4: When Privacy is Criminalized, Only Criminals will be Private
by Wendy McElroy

Is Privacy Possible in the Digital Era? (Chapter 4, Part 3)

Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual … the right “to be let alone” … Numerous mechanical devices threaten to make good the prediction that “what is whispered in the closet shall be proclaimed from the house-tops.”

— Louis Brandeis

What is privacy? Simple images come to mind, like slamming a door in the face of a census taker, but the question unlocks a complex issue.

Perhaps the most famous answer comes from an article by the American attorneys Samuel Warren and Louis Brandeis, which appeared in a 1890 issue of the Harvard Law Review. It was one of the most influential articles in the history of legal theory. “The Right to Privacy” is considered to be the first prominent call for privacy as a concept to be cemented into law. It opened: “THAT the individual shall have full protection in person and in property is a principle as old as the common law; but it has been found necessary from time to time to define anew the exact nature and extent of such protection.” Elsewhere, privacy is defined as the right to be left alone.

The article argued for privacy as a “foundational” or basic human right, upon which all other rights depended. “The right of property in its widest sense… including all rights and privileges, and hence embracing the right to an inviolate personality, affords alone that broad basis upon which the protection which the individual demands can be rested.” No right is more basic than privacy; freedom of speech, sexuality, freedom of conscience, and financial security depend upon it because none could exist in the presence of storm troopers smashing through your bedroom door. The right to close your door is paramount.

Interestingly, the Brandeis-Warren article was in response to technological developments that were seen to threaten personal privacy, much as the internet and blockchain are seen to threaten it today. One of those developments was the portable camera with which journalists photographed prominent people in venues that were formerly private, such as restaurants, weddings, and funerals. Today, the focus of privacy rights has shifted from rude journalists to the rude government for which “privacy” is a synonym for “secrecy.” The government regards privacy as a smoke-screen for criminal acts, especially tax evasion. The shift is probably a function of how powerful and massive government has become, compared to the 1890s.

Although privacy rights have been a theme in common law and, so, a strong theme within Anglo-American societies, their legal status has been vague. Indeed, before “The Right to Privacy,” the legal expression of the right was splintered. There were laws against trespassing, for example, but being safe from the invasion of property and home is only one aspect of privacy. The codifying of the broad concept of privacy is more difficult.

After all, what does the “right to be left alone” mean? Everyone knows a woman’s purse should not be snatched or a house broken into. But these are easy cases, and not the ones cryptocurrency users will confront; they must deal with their personal information being mined, and then being used against them.

The blockchain’s ledger of transfers allows uninvited parties to eavesdrop on financial and other information that has been voluntarily made public — at least, to some degree. What should the legal status of eavesdropping be? If someone overhears a personal conversation in a public place and he repeats the content, does the act infringe anyone’s right to “be left alone?” What if the eavesdropper uses the information to advantage, for example, by acting on a stock tip? What if he uses the data to blackmail? Is there a right to legally restrain the eavesdropper?


The Bottom Line of Privacy

The iconic libertarian Murray Rothbard argued that all human rights devolve to property rights; that is, they come down to the question of who properly controls the use of something, anything: a widget, an idea, information, your body. It is always possible to use force and usurp control, of course, but who is the proper owner in a peaceful society? It is the individual who acquires valid title through production, trade, or other peaceful means. There is no more clear or valid title than the one individuals have to the use and protection of their own bodies, which includes their personal information.

This right is under concerted attack by the biggest eavesdropper in human history–and one that intends to use the data against you with extreme prejudice. Government wants to access and control personal information in order to own the power of its content–that is, to use the power of your identity against you. It registers babies at birth; it pathologically chronicles everyone’s financial, medical, and educational status; it requires official paperwork at all junctures of life, including death. It does not matter if the person has done no harm and he is accused of no crime. The government’s purpose is control. Individuals who do not meekly acquiesce to being controlled are criminals.

One reason government succeeds at stealing information is that privacy is an ill-defined concept that people do not understand; if they did, they might value it more. Privacy hinges on two questions. As a place to start asking them, consider the right to control of your own thoughts and their expression. (Privacy consists of more than this ability, of course, but it is a springboard point.)

Question #1: Who owns what is in your mind? Most people would loudly declare “no one owns what’s in my mind!” Your thoughts are yours for the same reason that you own your fingers and eyes; they are part of your body; they are an integral part of who you are. But what if the thought in your mind is a chemical formula that you accidentally glimpsed? The instant you glimpsed the formula, it began to change by integrating with every other thought you have on chemistry and life. Do you own the altered formula that is now in your mind? If you do, then can you market it over the protest of the chemist who perfected it? If not, why not?

The parallel to financial information: if someone has financial assets, such as a sack of gold, then the information is properly private, but only as long as it is unrevealed. The problem with cryptocurrencies — at least, for this paradigm of privacy — is that all transactions are revealed.

Question #2: Who owns information that is now part of another person’s mind? Who owns information that has been made public? The 19th century libertarian James Walker stated, “My thoughts are my property as the air in my lungs is my property…” But what if you exhale? What if you willingly throw ideas or information into a public realm, like the internet or the blockchain?

If information sharing comes with a nondisclosure contract, then there is no problem; the originator retains rightful possession. But reality isn’t usually like that. Most violations of personal information are involuntary, such as being registered at birth and assigned a government tracking number for life. Some result from a transaction in which a naive person exchanges data with a corporation for a free subscription or the like.

The glut of personal information in the public sphere returns to the title of this article: Is Privacy Possible in the Digital Era? The answer is “yes.”


The Solution

As long as the old paradigm of privacy is used — that is, privacy = concealment — then the transparency of the blockchain is a death knell. But what if privacy now equals transparency, and the focus of protection is not on the transaction but on the identities of actors? This is a new and purer paradigm of privacy. For the sake of honesty and equitable trade, do not hide any transaction. For the sake of privacy, do not require the identities of actors anymore than grocery stores require ID of those who buy milk with cash. Then, let everyone see; let everyone verify. Both honesty and privacy can be preserved. The key is to keep your identity private—own what is in your mind, and in no one else’s—while allowing the information to be public as a proof of honesty.

Of course, there is a catch. How does anyone protect identity while making an open transaction? The solution to privacy is often painted as the problem. “Technology destroys privacy” is a common sentiment. The opposite is true.

Consider a small aspect of how to preserve privacy: encryption. Encryption is the process of coding and decoding information.

The idea and its importance to privacy is not new. It played a key role in the founding of America. Before Confederation, the Founding Fathers attacked the existing post office because the British used it as a censorship machine. After Confederation, some Founders did much the same thing. The Continental Congress wanted to declare some political material “unmailable” because it was deemed to be dangerous. A prime target was anti-Federalist letters and periodicals; the anti-Federalists fought many aspects of the Constitution, and they effectively blocked ratification unless the document included a Bill of Rights. During the intense debates, they simply could not circulate their material through the Federalist-controlled post office. Many of them, including Thomas Jefferson, resorted to corresponding in code.

The American government has always realized the political importance of controlling the flow of information. In the 1770s, communication may have occurred through postal routes maintained by horseback riders, while today, we communicate through packets of data beamed across optical cables. This difference is irrelevant to the principles involved. The key questions are: “Who owns your words and ideas?”; “Who has the right to read them?”; “Who owns your personal information?”


Conclusion

Few rights are as important as financial privacy because wealth is the way people feed themselves. The attacks on privacy are intensifying because government realizes the stakes; after all, your wealth is also the way government feeds itself.

The new paradigm of privacy is transparency without identity. But it works only if people protect their identities at every turn. Never willingly give personal data to government, to exchanges, or to the corporations that are government proxies.

Privacy is a human right, but it is a right you can surrender in the much the same manner as you can surrender your claim to a pile of cash by throwing it into the wind. In a word: don’t.

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post The Satoshi Revolution – Chapter 4: Is Privacy Possible in the Digital Era? (Part 3) appeared first on Bitcoin News.

Bitcoin News

The Satoshi Revolution – Chapter 4: Crypto. A New Paradigm of Privacy and ID (Part 2)

January 13, 2018 |

Crypto. A New Paradigm of Privacy and ID

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 4: When Privacy is Criminalized, Only Criminals will be Private
by Wendy McElroy

Crypto. A New Paradigm of Privacy and ID (Chapter 4, Part 2)

[A]ll those who used their knowledge in a bid to enact social change saw cryptography as a tool to enhance individual privacy and to shift power from big, central institutions to the human beings who live in their orbit.

–Paul Vigna, Business Reporter at Wall Street Journal

Cryptocurrencies bypass central banks by privatizing the issuance of money and  its transfer across borders. The globe should erupt in applause at the return of financial control to the individuals who produce wealth. Finally, financial justice.   

But a global party over currency freedom would be inadequate because it would overlook another revolutionary aspect of crypto. Cryptocurrencies and the blockchain are a new paradigm of privacy that will replace the old one as surely as the new currency broke the death grip of central banks. Revolutionary forms of “identity” verification, like blind signatures, have redefined the concept of privacy and returned it to the free market where sharing information advances individuals…but only when and if the individual consents. (See earlier discussion of blind signatures.)  They forge a vision that is uniquely suited to the preservation of freedom in the digital age.

The focus on crypto as a remedy for government surveillance is understandable. Privacy has been nationalized by governments that twist the definition of “identification” to serve their own elitist goals. Government documentation is now the only way most people can prove their identities in order to access the basic necessities of modern life. In most Western nations, undocumented people cannot board a plane or train, or drive a car. They cannot open a bank account, acquire a credit card, access medical care, cash a check, take a regular job, attend school, get married, rent a video (let alone an apartment), or buy a house. They are second-class citizens to whom the government denies the opportunity to advance through labor, education, entrepreneurship, or other merit. Government has made identification into a prerequisite of modern life.

Meanwhile, those who are “identified” become vulnerable. Their bank accounts are frozen, health care denied, credit cards canceled, wages garnished, records subpoenaed, and get arrested. In a fully nationalized ID  and reporting system, the government knows who everyone is, what everyone thinks and possesses, and where to find them. The nationalization of privacy is a lynchpin of totalitarianism. No wonder the government’s appetite is so voracious. No wonder  those who resist the onslaught on privacy are presumed to be criminals on that basis alone. As Phil Zimmermann, the creator of Pretty Good Privacy, stated, “If privacy is outlawed, only outlaws will have privacy.”

Society was not always this way. It does not need to be so in the future. Just as cryptocurrencies allow individuals to bypass central banks, they provide a path to shape entirely non-governmental identification systems.

The need is urgent. It is not merely that nationalized privacy is a powerful tool of government oppression, there is also a crying free-market need for privacy and identification systems.


Free-Market ID

Most people flatly accept the government’s narrow, antiquated and self-serving view of what constitutes privacy; it is the ability to protect of personal data – an ability and “protection” of which the government lays an absolute claim of jurisdiction. Free-market ID is the antithesis of government or social control, as its very definition indicates. It goes far beyond the verification of an individual’s identity or address. Indeed, it may not even include a traditionally-valid name or address.

To appreciate the new paradigm of privacy offered by cryptocurrencies, a tour of the past benefits of free-market ID is valuable.

When commerce was conducted on the barter level, people personally knew or had reliable information about the individuals with whom they directly traded. Then commerce expanded to include complex exchanges with total strangers; direct barter was replaced by indirect exchange, which often required some trust. A bedrock of trust has always been the ability to answer the question, “Who am I dealing with?” Past a primitive organization of society, therefore, there has always been a need for identification.

To appreciate the scope and the advantages free-market ID, consider a widespread method of identification from centuries ago that is making a comeback: letters of introduction and recommendation. The dynamic: Person A carried letters of identification to Person C, to whom he or she is a stranger. The letters had been written by Person B, whom Person C knew and respected. In short, Person B vouched for the identity of the letter bearer.  

This is the first and most basic service rendered by free-market ID: authentication. There are a myriad of reasons that would make people want to verify their identities. They could be picking up packages, confirming a reservation, joining a club, voting, or applying for a job.

The free-market function of authenticating identities can be easily provided by  businesses that run background checks and issue their own ID cards. Market incentives would make those businesses meticulously careful about the accuracy of documents. If nothing else, someone who was defrauded by accepting a fraudulent or careless one could sue. Even if the business prevailed in court, its reputation would be damaged or ruined. And free-market ID companies would live or die on the basis of reputation.

Governments have monopolized the authentication function of ID and distorted it to serve the purposes of authority alone. That is, the people being IDed do not request the “service”; it is required of them and, then, it is used as a weapon against them. Private ID still exists in bastardized form. Employers issue private ID to employees, financial institutions give customers cards that access their accounts. But such privatization is illusory. Before an employer or a financial institution can issue any ID, the “beneficiary” must be screened by government requirements, such as the provision of a tax number. The recipients of “private” ID  are monitored through reporting requirements.

 Second, free-market IDs offered certification. Letters of introduction were often letters of recommendation, as well. They attested to the character, the station, and the specific abilities or talents of the bearer. Other forms of ID performed the same function: university degrees, endorsements from employers, membership in professional organizations, and financial statements from banks. The certifications allowed strangers to assess whether a bearer was qualified to occupy a job or to perform a particular task. Reputation offered a similar ID.

Today, government licensing and regulation have replaced the formerly free-market process of verifying credentials. Everything from neurosurgery to braiding dreadlocks requires a government license that substitutes for reputation and other forms of verifying worth. Those who believe no contradiction exists between government sanction and free-market reputation should consider: however impeccable a caregiver’s reputation may be, he or she cannot practice medicine without government permission. The two are incompatible. Indeed, those with licenses are the most vocal critics of free-market practitioners with whom they would be forced to compete.  

Third, in some cases, free-market IDs authorized specific actions. Letters of recommendation often assigned limited rights to the bearer. For example, an attorney’s firm might assign a limited power to a representative so that he or she could settle a case on the behalf of a client. Today, the tasks that can be authorized on the “free market” are strictly defined by government. The latter controls the process of implementing tasks, and it demands that results be filed with appropriate agencies. Indeed, government controls the most common form of assigning limited rights through ID. Law enforcement acquires the “right” to aggress against peaceful people by virtue of wearing badges.


Objections to Free-Market IDs.

Common objections to the free-market IDs arise. They are antiquated and unsuited to the modern world; they are not anonymous; as a means of  establishing widespread trust or reputation, they can be slow; and, they are not uniform. If examined, however, these objections turn into advantages.

Antiquated. Examples from the 19th and early 20th century may seem antiquated. Or, rather, some do and some do not. Letters of recommendation, in one form of another, have been updated and are still in widespread use; a job application that includes contact information for former employers is an example. The relevant point: the free market responds amazingly well to a surrounding society’s need for identification. It did so centuries ago, for centuries before that, and it will do so today; this is evidenced by blockchains that automatically verify digital transactions by accepting them. Bitcoin exemplifies the free-market’s adaptation on stilts.

No Anonymity. The primary purpose of early IDs was to verify identity, not to render anonymity. The sharing of information occurred at the request of the bearer and, to my knowledge, the data was not disclosed to other parties, such as government agencies. The current drive for anonymity derives from a desire not to share information because it will be disclosed to unwanted others, especially to government.

The defining feature of free-market privacy is the same as that of free-market currency: control is in the hands of the individual. Each person decides their own comfort levels on questions such as “privacy versus convenience.”  Even  decentralized exchanges now offer a sliding scale of choice to users, from open identification to anonymity.  

Slow to Establish Trust or Reputation. This may have been true in the past, when mail and people took weeks or months to travel. Everything moved slowly. But it is now a fast-moving world. Nevertheless, establishing a reputation on the basis of personal dealings and real-world achievements can be more gradual than waving a government piece of paper or badge in the air. Which is more real? Once established, which is the more resilient? The fact that establishing a reputation or a business may take time is hardly a criticism.

No uniformity. Another word for this condition is “diversity,” and it is an extreme advantage of free-market ID. Government ID is homogenized because the goal is to force everyone into the same mold, to enforce conformity to the same laws and reporting requirements. Uniformity furthers the goals of government and social control. When ID furthers the needs of individuals, then the form it takes is dictated by those needs. A driver may require a certification of competence in order to obtain a desired insurance policy. But he or she should not need to provide a tax number. Diversity indicates nothing so much as flexibility in the light of what is appropriate.


Conclusion

Cryptocurrencies offer a revolutionary approach to privacy, which gives control of personal data back to individuals. This aspect of the Satoshi Revolution is often overlooked: a paradigm shift is occurring.

The old paradigm is for authorities to coerce and to centralize vast quantities of data on and, then, to make a great flap over the security of that data. “Privacy” becomes a matter of how diligently the centralized authority guards the information that it warehouses and employs. Privacy is nationalized and becomes a matter of national security.

The new paradigm of privacy: individuals control their own personal data and use it for their own benefit. Consider what happens in the transfer of bitcoin. The participants decide if wish to identify publicly or to remain pseudonymous; they choose to go through an anonymizer, or not, and to use a different address for each transaction, or not. The blockchain doesn’t care. It authenticates the transaction, rather than the individuals, in much the same manner that vendors used to authenticate a gold coin without caring who handed it to them. In short, peer-to-peer crypto verifies transactions, not individuals. It is the privatization of privacy.

Cryptocurrencies are on the cusp of changing the landscape of personal transactions. When smart contracts become common practice, then verification of contracts and the authorization of their terms will be increasingly a matter of algorithms, not of bureaucratic permission. Technology will lead the way to freedom.

 

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.
Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post The Satoshi Revolution – Chapter 4: Crypto. A New Paradigm of Privacy and ID (Part 2) appeared first on Bitcoin News.

Bitcoin News

Bitcoin Enthusiast Finds Undiscovered Cave and Names It Satoshi

January 13, 2018 |

Italian Explorer Finds Undiscovered Cave and Names It Satoshi

Few people will ever encounter an undiscovered natural wonder, and then have the pleasure of naming it. That’s what happened to Guido Turricchia and his intrepid band of explorers deep within the Papua New Guinean jungle and deep beneath the earth. The speleologist found a new cave and had the honor of christening it. The epithet the environmental engineer and bitcoin enthusiast chose? Why, Satoshi.

Also read: Chinese Bitcoin Mining Giant Bitmain Establishes Branch in Zug, Switzerland

Blockchain meets Rockchain

For the past month, Guido Turricchia, Andrea Felici, and Maurizio Buttinelli have been AFK and thus divorced from bitcoin price moves and cryptocurrency drama. On December 10, the trio of experienced explorers left Italy to embark on their most ambitious trip yet through the dense rainforest of Papua New Guinea. The southwest Pacific nation, which lies north of Australia and to the east of Indonesia, is famed for its biological diversity.

Italian Explorer Finds Undiscovered Cave and Names It Satoshi

Guido and his group witnessed many enchanting sights as they trekked through the jungle, but they were saving themselves for the beauty that lay within the earth. From Guatemala to Costa Rica, the speleologists have traveled the world, frequenting some of the most remote and exquisite underground caverns, caves, and rock formations these territories have to offer. After journeying for days, the group, led by a local guide, came to a cave formation in the heart of the Papua New Guinea jungle.

Italian Explorer Finds Undiscovered Cave and Names It Satoshi

Guido explained to news.Bitcoin.com how locals used the entrance to hunt flying foxes, but hadn’t forayed any further. The explorers roamed deeper into the caves, descending a total of 2km, before coming to a huge cave system comprising a series of vaults, the greatest of which measured 120 x 80 x 50 metres, with extensive concretions and an underground river flowing through it. Due to the rocky formations, Guido dubbed it Blockchain Valley.

Italian Explorer Finds Undiscovered Cave and Names It Satoshi

Enter the Cave of Satoshi

The trio, who now found themselves in one of the remotest places on earth and confronted by sights that had never been seen with the human eye, went deeper into the earth. After passing through Blockchain Valley, they came to the largest cave of all. “It’s common practice to name new caves after important people,” explained Guido, “but there was nothing for Satoshi”. There was only one name on his lips, and thus the cave of Satoshi was born.

Guido first learned about bitcoin and blockchain in 2013 and, like many people, was instantly hooked. In the years since, he’s balanced an interest in the technology with operating a crowdfunding platform, which provided relief to victims of last year’s Italian earthquake, and exploring with Circolo Speleologico Romano, a caving organization founded in 1904. The Papua New Guinea trip, aided by sponsors such as Powerfilm Solar, was the group’s most ambitious yet.

Italian Explorer Finds Undiscovered Cave and Names It SatoshiAll told, they spent one month in the Folopa territory, hiked for 60km into the rainforest, and explored 4km of caves, discovering 25 new entrances in the process. The blockchain created by Satoshi Nakamoto has now been into space and, thanks to the efforts of an Italian caving group, his name has resonated in the depths of the earth. Satoshi Cave will now live on for millennia.

How do you think Satoshi would feel about having a cave named after them? Let us know in the comments section below.


Images courtesy of Guido Turricchia.


Tired of those other forums on the subject of Bitcoin? Check forum.Bitcoin.com.

The post Bitcoin Enthusiast Finds Undiscovered Cave and Names It Satoshi appeared first on Bitcoin News.

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The Satoshi Revolution – Chapter 4: What Do You Have to Hide? Everything! (Part 1)

January 6, 2018 |

The Satoshi Revolution – Chapter 4: What Do You Have to Hide? Everything! (Part 1)

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2: The Moral Imperative of Privacy
Chapter 4: When Privacy Is Criminalized. Only Criminals Will Be Private
by Wendy McElroy

What Do You Have to Hide? Everything! (Chapter 4, Part 1)

I grew up with the understanding that the world I lived in was one where people enjoyed a sort of freedom to communicate with each other in privacy, without it being monitored, without it being measured or analyzed or sort of judged by these shadowy figures or systems, any time they mention anything that travels across public lines.
– Edward Snowden

I want my tombstone to read: “I lived. I died. Now mind your own damned business.” What do I have to hide? Everything! Which is to say, any information I am required to reveal is data I decline to disclose.

Privacy is the single most effective way to preserve freedom against encroaching government. In his book Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, the political scientist James C. Scott commented on the role of one form of data inventory played in the rise of the modern state: the census. Scott wrote, “If we imagine a state that has no reliable means of enumerating and locating its population, gauging its wealth, and mapping its land, resources, and settlements, we are imagining a state whose interventions in that society are necessarily crude.” Data is power, both for individuals and for governments.

The privacy of cryptocurrency offers the brightest hope for individuals to preserve their financial autonomy. And the need for privacy has never been more urgent; with the digital age, the collection of data has become a bonanza of which past governments could only dream. But crypto-users who want to control their own wealth confront cultural assumptions that strongly favor government control rather than individual freedom.

Some of the strongest assumptions include:

• The presumption of innocence belongs to government, not to individuals;
• a double standard of morality is applied to government and to individuals;
• the political meaning of “privacy” is inverted by a sleight of hand; and
• Orwellian doublespeak has become normal discourse.

The Presumption of Innocence

The legal term “presumption of innocence” is sometimes expressed by the Latin phrase “ei incumbit probatio qui dicit, non qui negat,” which means the burden of proof is on the accuser and not on the accused. The accused is presumed to be innocent until he or she is proven guilty. The legal doctrine rests on the belief that most people are not criminals and, so, criminality cannot be presumed; it must be demonstrated. The doctrine also acknowledges a fundamental principle of logic: namely, since it is impossible to prove a negative, the burden of proof correctly rests with whomever makes a positive assertion.

The presumption of innocence is a cornerstone of individual rights and a wall against arbitrary prosecution by governments. It is a defining feature of a free society rather than a totalitarian one. The renowned British barrister Sir John Clifford Mortimer-best known as creator of the beloved fictional character, defense barrister Horace Rumpole — was far from alone in viewing the presumption as “the golden thread” that wove justice together.

The golden thread has unraveled.

The government has been handed a “right” to surveil and to demand information from the masses, who no longer have a presumption of innocence even though they are accused of no crime. Border guards fingerprint, physically molest, interrogate, and bark out, “Your papers!” to the passing hordes; those who refuse are viewed as obviously guilty because they must have something to hide. Police officers arrest people for refusing to produce ID, whether that arrest is legal or not. After all, police officers are “the good guys,” which means only “the bad guys” will not comply. The violation of rights is justified or even encouraged by the allegedly noble motives of government agents, who are said to provide security or enforce the peace. The presumption of innocence has been transferred from individuals to government agents.

The underlying assumptions of innocence have also been reversed. Instead of considering most people to be non-criminal, everyone is suspected of being guilty until their innocence is established. How? Government-issued ID and compliance with reporting requirements are the bedrock of evidence demanded. As well, the logical principle of being unable to prove a negative has been reversed; the logical fallacy known as “the argument or appeal from ignorance” has taken its place (Here, “ignorance” refers to a lack of contrary evidence). Stated over-simplistically, one part of the fallacy asserts “that a proposition is true because it has not yet been proven false.” And, so, the possible criminality of an individual is true because it has not yet been disproven.

Again, the presumption of innocence has been transferred to the government and away from the individual. It is difficult to overstate the importance of this. It is not only the death knell of justice, which cannot exist without due process, it is also a direct slide into totalitarianism. That’s the political meaning and consequence of the question “What do you have to hide?” People are no longer innocent and allowed to mind their own business in peace.

Double Standard of Morality

The presumption of innocence of government and its agents is enabled by the fact that a double standard of morality is at work in society—one for individuals, and one for government.

No voice rang out more clearly against a double standard of morality than that of the libertarian-publishing giant, Raymond Cyrus Hoiles, who began creating the media chain known as Freedom Communications in the 1950s. Hoiles believed the double standard was more destructive to society than any other concept, and his attacks upon it were a common theme in his newspapers.

In an editorial entitled “The Most Harmful Error Most Honest People Make” (December 17, 1956), which appeared in his flagship newspaper, the Santa Ana Register, Hoiles explained the error. It “is the belief that a group or a government can do things that would be harmful and wicked if done by an individual and produce results that are not harmful, unjust and wicked. It is the belief that a number of people doing a thing that is wrong for an individual to do, can make it right and just.” Hoiles most often critiqued the error in terms of taxation. If it was wrong for a neighbor to steal your goods, then it was equally wrong for a group of neighbors or their appointed representative (government) to do the same.

The critique of double standards did not start with Hoiles, of course. A 1657 pamphlet (ascribed to the rebel Colonel Titan) argued, “What can be more absurd in nature and contrary to all common sense than to call him Thief and kill him that comes alone… and to call him Lord Protector and obey him that robs me with regiments and troops? as if to rove with two or three ships were to be a pirate, but with fifty an admiral?” And, yet, this absurdity is what the state enforces when it acts in a manner that would not be tolerated from individuals.

What applies to taxation applies no less to the violation of privacy. If it is wrong for a neighbor to pat down your naked body and that of your child, then it is wrong for a government agent to do so. If it is wrong for a neighbor to tap your phone, to record your financial transactions, and to peek through your windows, then it is equally wrong for the government to do so. A group does not relinquish personal responsibility by acting in someone else’s name because actions are always the personal responsibility of the acting party. Gang rape is no less rape even if it serves a cause that a particular society applauds, such as ethnic cleansing.

A key reason government remains an engine of coercion is because so many people buy into a double standard that exempts it from moral responsibility. If government agents, from the president to post-office workers, were bound to the same standards of decency and legal responsibility as other individuals, then the current government would crumble.

A Sleight of Hand on Privacy

“Privacy” has been redefined as “concealment,” which is a sleight of hand. In his excellent essay, “’I’ve Got Nothing to Hide’ and Other Misunderstandings of Privacy,” Professor Daniel J. Solove explained the metamorphosis of privacy into concealment: “The argument that no privacy problem exists if a person has nothing to hide is frequently made… When the government engages in surveillance, many people believe that there is no threat to privacy unless the government uncovers unlawful activity, in which case a person has no legitimate justification to claim that it remain private.” Oddly enough, people who make the “nothing to hide” argument also hang curtains on their windows. They do not give their wallets or purses to strangers to rummage through. They close the door before having sex, and they object to naked photos being posted online. What are they hiding? As Solove commented, privacy is “not about anything to hide, it’s about things not being any one else’s business.”

The “nothing to hide” position trivializes and criminalizes the right to privacy. It also destroys the incredible value true privacy provides to society and to individuals. Consider just one example of each benefit:

The value of privacy to society: When a government monitors general communication, people do not interact freely. This is especially true of dissenters, the aberrant (however innocuously so), writers, whistleblowers, critics of government, skeptics, defense attorneys, artists… The bleak, gray society in the Soviet Union and other communist states provide cautionary tales of how fear and caution crush creativity and discussion.

The value of privacy to individuals: Privacy is part of a healthy, creative and self-reflecting life. Since childhood, for example, I’ve kept a diary into which I pour hopes, confusion, disappointments, and desires. When I read pages from the past, I viscerally feel who I was at ten years old, which makes me understand far better the person I am today. These diaries are private, not because I am ashamed of them, but because they are very personal.

Everyone has areas of privacy to protect. Some wear lockets with photos of dead relatives; others harbor a forbidden love; some lock the door to luxuriate in a hot bubble bath; or, they hide a sexual preference that confuses them. These are lines. No other human being can properly cross them without an invitation. Slam the door in the face of anyone who says differently!

We Are Orwell

In his dystopian novel 1984, George Orwell introduced the concept of doublespeak. This refers to the reconstruction of language in order to deliberately distort or reverse the meaning of words for political gain. For example, “war is peace” justifies the invasion of nations that have initiated no force due to a noble goal–peace. “Liberty is obedience” allows authority to compel the compliance of peaceful people for “their own good” in the name of security. “Questioning is violence” means censorship is justified to preserve social order. Now, “privacy is concealment.”

Cryptocurrencies face a steep cultural climb to take their place as a privacy tool. Fortunately, they already occupy the high ground of freedom.

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.
Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post The Satoshi Revolution – Chapter 4: What Do You Have to Hide? Everything! (Part 1) appeared first on Bitcoin News.

Bitcoin News

The Satoshi Revolution – Chapter 3: Exchanges – Exchanging Liberty for Convenience? (Part 6)

December 31, 2017 |

Exchanging Liberty for Convenience?

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 1 : The Trusted Third Party Problem
Chapter 3: Trying to Undo Satoshi
by Wendy McElroy

Exchanges – Exchanging Liberty for Convenience? (Chapter 3, Part 6)

The best “TTP” of all is one that does not exist, but the necessity for which has been eliminated by the protocol design, or which has been automated and distributed amongst the parties to a protocol. The latter strategy has given rise to the most promising areas of security protocol research including digital mixes, multiparty private computations, and Byzantine resiliant [sic] databases. These and similar implementations will be used to radically reduce the cost of current TTPs and to solve the many outstanding problems in privacy, integrity, property rights, and contract enforcement while minimizing the very high costs of creating and operating new TTP institutions.

Nick Szabo

The utter brilliance of Satoshi Nakamoto’s insight into the “trusted third party” problem is not obvious. Nor is its importance to freedom. It is not merely an economic insight or a clever sidestepping of government; it is a key to human progress that is as pivotal as the concept of property rights, freedom of speech, and freedom of religion.

First, it is necessary to seemingly disagree with Satoshi in order to arrive at a point of total agreement.

Trusted third parties (TTPs) are intermediaries between two parties who wish to transact business but require someone to administer the exchange, as in the case of the escrow on a house. TTPs can be an unadulterated good because they are a natural and valuable evolution within a complex human society. As society grows beyond barter, people need representatives whom they can trust on the basis of personal knowledge, reputation, or the vested interest of the TTP. International transfers of money, guarantees on loans, investment in start-ups…these are the stuff that allows businesses to establish and flourish.

There is a personal aspect, as well. A trusted other can act as a guardian for parents who are distant and incapacitated. This is part and parcel of human beings needing each other.

The required third party may be a financial institution, a family member, an attorney, a friend, or a recommended stranger. It is not be too strong a statement to say that a sophisticated economy could not exist without their presence.

But that’s not what Satoshi meant by a TTP. He decried an obscene perversion. TTPs have been usurped by government and converted into a grotesque mirror image of themselves. Instead of being freely chosen by individuals based on their own self interest, they are “choices” mandated by government based on its needs. In other words, TTPs such as central banks serve the government at the expense of people who are allegedly their customers who are reported, investigated, and prosecuted for conducting business with their own money.

Central banks, and other forms of finance, have converted the immense value of TTPs into a form of oppression. Years ago, I spoke to a friend who was visiting from a communist country. He said no one opened a business there because the process could take years and it required volumes of paperwork merely to sell a loaf of bread to someone. Loaves of bread still circulated, of course, because the black market flourished outside of “official” channels; the selling and buying of goods is the basis of life itself. It cannot be extinguished. It can only be criminalized. That’s what government does to wealth and the flow of community when it mandates who or what can be a TTP.

Cryptocurrency has thrown government for a loop. At first, it did not understand crypto and, so, it did not take the phenomenon seriously. Finally, a glimmer of understanding occurred. Not of the technical dynamics, of course, but of the political and social implications. It was and is a threat. Governments no longer controlled the issuance of money, and the mandated TTPs into which it forced people were being obsoleted.

Governments want to regain control. Some ban cryptocurrency; others issue their own statist versions of it; many scramble to come up with a combination of legal solutions. Mostly, politicians are just scrambling. They are trying to wrap their fists around the micromanagement of currency, which is the key to social control.

How? It was inevitable that a new form of free-market money would be used as something more than a form of direct exchange, and it would assume the many other roles money performs, such as speculation and currency exchange. Decentralized exchanges evolved to permit the role of crypto to expand without destroying its initial value of privacy, anonymity and control by the individual. But, unlike the individuals who use them, these exchanges were and are visible. They are vulnerable to attack by authorities.

There are two ways to quash this expression of economic freedom, and both are being used. Decentralized exchanges that operate without the permission of government are prosecuted. Centralized exchanges that are licensed and regulated in much the same manner as banks are encouraged. Eventually, the time will come when all peer-to-peer transactions will be viewed as criminally suspect, whether or not they occur through exchanges.

It is the incredible contribution of Satoshi that he combined the importance of issuing money with the trusted third party “problem”. There has never been a more profound acknowledgement of the TTP problem to personal freedom. It was a missing link that no one else connected.

Current TTPs endanger people’s freedom because they are now an arm of government, which Satoshi’s vision originated to avoid.

The fundamental feature of free-market third parties is that they facilitate the individuals who voluntarily use them and are considered to be customers. They provide a service on the free market. A crude and simplified test of whether a TTP is a service or a threat is to ask a few questions. Does the TTP make an individual’s personal property safer, or does it constitute a risk to it in any manner? Are there a range of free-market options among which to choose or are there monopoly institutions with which people are forced to deal in order to perform necessary financial matters, such an international transfer? Does the TTP serve the needs of individuals or of the government?

Many people have become so used to central banks and other government TTPs that they forget that “services” provided are supposed to be “services,” rather than vehicles of oppression. True services do not confiscate or freeze accounts in the absence of theft or fraud. They do not report transactions to hostile others, such as rapacious governments. They do not demand intrusive information or refuse transfers to unapproved traders.

A valid trusted third party is like a money-changer in the idealized olden days. He counts your currency with honesty; he checks the current conversion rate; he hands you the bills, and you walk away. All parties, who have any business being parties to a transaction, are satisfied. The foregoing example is simplistic, of course. But it captures something.

If government cannot control the issuance of money, it needs to control its circulation. Governments realize they have lost their monopoly over currency. Their best move is to control the circulation of every unit of wealth in society, whether or not it is created by them. And exchanges are the choke point at which they can do so. Unfortunately, most exchanges are more than happy to become ersatz bureaucracies in return for the official privileges they receive.

Prosperity is independence and freedom. I wish wealth, privacy, and protection from authority to everyone in 2018.

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post The Satoshi Revolution – Chapter 3: Exchanges – Exchanging Liberty for Convenience? (Part 6) appeared first on Bitcoin News.

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People Keep Sending Satoshi Nakamoto Bitcoin

December 24, 2017 |

People Keep Sending Satoshi Nakamoto Bitcoin

Satoshi Nakamoto is the original hodler, having left the bulk of his coins unmoved since day one. The theoretical wealth of bitcoin’s pseudonymous creator is a hot topic, and one that the mainstream media are especially fond of pondering. In recent weeks, bitcoin’s record highs have propelled Satoshi into the billionaire league, making him one of the world’s 50 richest people. There’s another reason why Satoshi’s digital wealth is growing however: people keep sending him bitcoin.

Also read: It Came from the East: How Asia Bolstered Cryptocurrencies in 2017

The World’s Most Reclusive Billionaire

The number of bitcoins owned by Satoshi Nakamoto is widely regarded as being 1,148,800, based on a detailed analysis that was published in 2013. Evidence shows that the bulk of the first 36,000 blocks was mined by one computer, which can only have been Satoshi. At the time, the reward per block was 50 BTC and of the 1,814,400 awarded, 63% was never spent, leaving Satoshi with a fortune of over 1.1 million BTC.

People Keep Sending Satoshi Nakamoto Bitcoin
Bill Gates: currently worth four times as much as Satoshi.

Today, that would mean Satoshi Nakamoto is worth around $ 16.8 billion. Add in another $ 3.4 billion in bitcoin cash, $ 370 million in bitcoin gold, ignore every fork after that and you wind up with total assets of $ 20.5 billion. This is all hypothetical of course, since most people believe that Satoshi’s coins will never move for various reasons. Nevertheless, on paper at least, Satoshi Nakamoto’s unclaimed billions place him 37th in the world’s rich list, above Microsoft founder Paul Allen and just $ 5 billion behind George Soros.

The only Satoshi to officially make Forbes’ billionaires list, incidentally, is cosmetics titan Satoshi Suzuki. With a fortune of ‘just’ $ 1.3 billion however, he ranks a distant 1,567th. If or when bitcoin hits $ 60,000, Satoshi will become the world’s richest man, overtaking Warren Buffett and Bill Gates, who have $ 75.6 and $ 86 billion respectively.

Satoshis for Satoshi

If Satoshi Nakamoto is one guy, and is still alive, it’s safe to assume he has no desire to touch his cryptocurrency stash. Based on what little is known of bitcoin’s creator, it’s hard to imagine him developing a sudden urge for the high life. Whatever Satoshi’s aspirations, becoming a billionaire playboy is not one. Given that Satoshi Nakamoto owns more bitcoin than anyone else in the world, the last thing he needs is more bitcoin. But that’s exactly what’s been happening, every week, for the past eight years. Not only has the value of Satoshi’s holdings been increasing, but so has their number.

People Keep Sending Satoshi Nakamoto Bitcoin

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa is the address associated with the genesis block. It was here that the first 50 bitcoins ever issued were sent on 3rd January 2009. The transaction is marked as “No Inputs (Newly Generated Coins)”. The 50 BTC this address contains, like that in most of the addresses attributed to Satoshi, have never been moved. As a consequence, one would expect its balance today to read 50 BTC. In actual fact, bitcoin’s genesis address currently contains more than 66.7 BTC, sent over the course of 1,140 transactions.

Keep the Tip

From bitcoin’s earliest days, right up until this week, a steady stream of bitcoin has been winding its way to the blockchain’s original wallet. Most of the transactions are tiny, though there are a few larger ones in there. In June 2012, for example, the Mt Gox wallet – which is currently empty, but previously received a total of 5.7 million bitcoin – sent 1.23 BTC to the genesis address. To date, bitcoin’s maiden address has received 16.7 BTC in tips, worth around a quarter of a million dollars.

Other addresses associated with Satoshi have also benefited from anonymous donations, though it is bitcoin’s earliest and most famous address that has attracted the most transactions. Ironically, the 50 coins that were awarded after the genesis block was mined are unspendable. Due to the way bitcoin’s maiden block has been coded, block 0, as it is known, was not added to the blockchain. It is not known whether Satoshi did this deliberately or not. Every time someone sends bitcoin to Satoshi, they’re effectively consigning those coins to spend eternity as an unspent transaction in the genesis address.

People Keep Sending Satoshi Nakamoto Bitcoin

One final intriguing fact about the genesis block is that it took six days to mine. As speculated in an old Bitcointalk forum thread, this may have been yet another deliberate trick on the part of Satoshi, to mimic the biblical account of creation. As we read in Genesis 2:2, “And on the seventh day God ended his work which he had made; and he rested.”

Sending bitcoins to an unspendable address might seem nonsensical, and yet each of these donors would beg to differ. It’s not the value of each transaction that counts – it’s the gesture. In the absence of a Twitter account to @ or a real world address to mail, sending bitcoin to the genesis address is people’s way of saying thank you. Thank you, Satoshi, for making all this possible.

Do you think Satoshi will ever move any of his 1 million+ bitcoins? Let us know in the comments section below.


Images courtesy of Shutterstock and Zambian Astronaut.


Need to know the price of bitcoin? Check this chart.

The post People Keep Sending Satoshi Nakamoto Bitcoin appeared first on Bitcoin News.

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The Satoshi Revolution – Chapter 3: Wall Streeting Bitcoin (Part 5)

December 24, 2017 |

The Satoshi Revolution - Chapter 3: Wall Streeting Bitcoin (Part 5)

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 1 : The Trusted Third Party Problem
Chapter 3: Trying to Undo Satoshi
by Wendy McElroy

Wall Streeting Bitcoin (Chapter 3, Part 5)

Bitcoin was supposed to demonstrate the power of a true free market. Instead it’s full of scams, rent-seekers, theft, useless for real purchases…. Mission accomplished.

Adam Chalmers

Blaming the free market is a tried-and-true excuse for government wedging itself into situations that would normally resolve themselves. The free market is also a reliable scapegoat for messes created by government and its crony capitalists.  Many people believe in the turpitude of the market place because the accusation is so often repeated and because it has a surface credibility. Financially awful things happen to people in the free market. It cannot be denied. But who or what is to blame?

The free market is nothing more than individuals exchanging with each other in the absence of the state and other forms of force, including fraud. Some individuals will act badly because that is a choice human beings make on occasion. Not all bad behavior will involve force or fraud. For example, opportunists may prey on the vulnerable and convince them to make poor investments without necessarily misrepresenting them; the investor does not perform due diligence because some individual will behave foolishly.

If force (theft) or fraud does occur, then no real true exchange is present, and the interaction ceases to be a free market act; it becomes a criminal one. The free market corrects for criminal behavior in many ways, including a court system for redress and ruination of the criminal’s reputation. The faux exchange is often one-on-one, which further limits damage because the injured party can refuse further contact and proceed with greater caution.

This is not a market failure; it is a reflection of human nature, which would haunt any economic system. Otherwise stated: human beings are fallible, and some are given to vicious behavior. The free market is a massive collection of individual choices that are driven by an almost infinite number of motives upon which no ban is passed as long as the expression is peaceful and not fraudulent. Overwhelmingly, people will act in their own rational self-interest. But a significant minority will act like fools or like rogues. The free market is not to blame; they are.

The question is not whether the free market is perfect; it is not. No human arrangement is utopia. The question is whether any other system is better. More pointedly, does a centralized system under government control contain more or less force and fraud than a free market one? Consider only one issue. The free market allows individuals to assess situations and decide the best course for themselves. It allows them to learn from experience and mistakes. It allows individuals to take control of their own lives.

The Argument for Exchanges

There are good reasons to use exchanges. And good reasons to decry their use.

The good reasons: modern finance leaves little option for those who wish to conduct complicated exchanges, like futures trading or currency exchange. But everyone should be clear. This is the anti-Satoshi because it drives people back to trusted third parties, who are the government or its equivalent. The smartest among us hold as little wealth with trusted third parties as possible for as short a period as possible. They achieve their goals, and leave.

But it is important to note that centralized exchanges that report to governments and function as banks, albeit under a different name, are the reverse of the freedom promised by Sataoshi.

Choose for yourself. Stories abound about exchanges confiscating accounts, being hacked, turning people into the government, collapsing into oblivion, and generally screwing their customers. They are the “trusted” third party Bitcoin was designed to avoid. A return to them is the death of community, which the crypto-economity evolved to provide; it is the antithesis of individuals supporting each other in pursuit of the knowledge and independence. Satoshi and core developers knew that centralization and government control were the cause of economic injustice, and that the central banking system was its engine. If people wish to be part of that system, if they don’t believe in the promise of Bitcoin…then, so be it. But those who still have the vision will not join you.

Allow me to sketch how we arrived at a juncture at which an immense tool of personal freedom is being converted into an immense tool of government control. It cannot happen without the complicity of average people. Caveat: crypto is still the best community I’ve found, with many people committed to helping others for nothing other than the ideal of helping others. I salute everyone who does so, and I thank you for the benefit to my life.

The Argument Against Exchanges

Forget government. Government will always want to control. It produces nothing but control; it consumes productivity and freedom, impoverishes all it touches. Government succeeds because people cooperate. Some do so because they believe in social control. Not for themselves, of course. No one you ask says that they personally need a gun pointed at their head to keep them from raping, stealing, murdering, plundering. It is everyone else they wish to point the gun at.

Satoshi’s game-changing brilliance lay in his understanding that the trusted third party was the control mechanism by which the individual was owned by the system. Again, how did this occur? In a word, convenience. And this weight of decision is on the people who make it. Or, rather, it would be on them if their decision did not, ultimately, fall upon the rest of us through force of law. Ultimately, their choice – your choice – becomes law under which those who wish to trade freely become outlawed, arrested, persecuted. And you don’t escape responsibility for that.

Satoshi and Bitcoin’s core developers argued that centralization and government control were the overwhelming cause of economic injustice, especially theft through the central banking system; inflation is only one form of theft. Unlike the free market, however, there were no corrective mechanisms: no court of redress, no reputations to ruin, no chance of avoiding the thieves in the future because government and central banks are monopolies.

Chalmers’ assessment of cryptocurrency’s dangers has some merit, but little of the risk should be ascribed to the free market. Some is due to cryptocurrency straying from the decentralized, peer-to-peer path of Satoshi Nakamoto and returning to trusted third parties, like centralized exchanges that retain private keys. Another risk factor is the panic or recklessness with which people dive into crypto, with no knowledge of what it is.

Satoshi expressed the essence of Bitcoin when he wrote, “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” The trusted third party in question was the collective financial system that was highly regulated by governments in order to benefit politicians and the elite. By establishing “peer-to-peer” electronic cash, individuals could bypass the financial system and still make long-distance transactions for which cash was cumbersome or unfeasible. By sidestepping trusted third parties, individuals maintained considerable privacy and control of their own wealth. They were freed. But, apparently, many people love their shackles.

With that sentence, Satoshi announced a gift to mankind. He didn’t ask for payment, he didn’t seek patents or copyrights, he didn’t want personal recognition. It was a gift. His one sentence embodies what Bitcoin was meant to be. It expresses the essence that made people so excited that they devoted their lives to a cause. The words to focus upon are “peer-to-peer,” and “no trusted third party.”

The next column will deal with how exchanges are a huge threat to economic freedom and a betrayal of all that Satoshi offered the world.

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post The Satoshi Revolution – Chapter 3: Wall Streeting Bitcoin (Part 5) appeared first on Bitcoin News.

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“Fake Satoshi” Dorian Nakamoto is Probably $273,000 Richer After Selling His Bitcoins

December 19, 2017 |

“Fake Satoshi” Dorian Nakamoto is $  273,000 Richer After Selling His Bitcoins

In 2014, Dorian Nakamoto was wrongly identified as being the inventor of bitcoin. In the aftermath of Newsweek’s faulty dox, a compensatory fund set up for Dorian raised over 67 BTC. Like his namesake, the faux Satoshi has exercised remarkable restraint, leaving his haul of coins untouched until this year – when he finally cashed out.

Also read: How Dorian Nakamoto Became Satoshi Nakamoto

From Bitcoin Hater to Bitcoin Rater

When Dorian S. Nakamoto was misidentified as the creator of bitcoin, an inevitable media scrum followed. The 64-year-old was less than enamored with the digital currency at the time, which had caused him nothing but grief. His stance softened, however, after a fundraiser spearheaded by bitcoin evangelist Andreas Antonopoulos raised over 67 BTC for the slighted Japanese-American.

As Andreas explained at the time:

I have no idea if this person is Satoshi, though it seems increasingly unlikely. However, it doesn’t matter either way. If this person is Satoshi, then the funds are a small “thanks” and won’t make much of a difference. However, if this person is not Satoshi, then these funds will serve as a “sorry for what happened to you”.

He continued: “Most of all, it serves to soften the damage caused by irresponsible journalism and to demonstrate the generosity and empathy of the community, which I know is huge”.

“Fake Satoshi” Dorian Nakamoto is $  273,000 Richer After Selling His Bitcoins

The community, which was significantly smaller back then, duly rallied and did Dorian proud. 2,000 contributors sent a total of 48 BTC, then worth $ 23,000, before Andreas Antonopoulos presented the sum to Dorian in a bitcoin wallet. The donations didn’t stop pouring in, and in the following years almost 20 BTC was sent to Dorian, leaving him with a total of 63.4 BTC.

The Curious Path of Dorian Nakamoto’s Bitcoins

Warmly thanking the community for their support, Dorian promised: “I’ll keep my bitcoin account for many, many years.” He was as good as his word, leaving the contents of his wallet untouched until June 17 of this year, when the first 21.5 BTC was moved. Another 15 BTC was moved the same day over the course of five separate transactions. Then, on July 12, the wallet was emptied in a single transaction of 52 BTC.

“Fake Satoshi” Dorian Nakamoto is $  273,000 Richer After Selling His BitcoinsOver the next three weeks, these coins moved through almost a dozen different bitcoin addresses before seemingly being reunited, on August 7, in a single address. This address has only ever conducted two transactions, one to receive 67.8 BTC and another, three minutes layer, to move those BTC to what looks like an exchange wallet, where they were presumably cashed out. This number is significant, for it’s exactly 0.5 BTC more than the 67.4 BTC sent to Dorian’s original account, allowing for transaction fees.

Why so much analysis of a harmless old man’s bitcoin holdings? Aside from acknowledging Dorian’s patience in waiting three years to cash out, the elaborate route the coins took to their final destination raises a few questions. For a guy who was a self-confessed bitcoin virgin in 2014, and who had apparently never sent a bitcoin transaction until five months ago, Dorian seems to have become proficient at coin mixing.

A more benign explanation is that Dorian’s bitcoins were sent to an exchange wallet on July 12, and that the subsequent blockchain activity, while he awaited verification, was unrelated. Alternatively, he may have sold his coins directly to a third party back in June, and their circuitous route through the blockchain afterward was none of Dorian’s doing. There are a few holes in both these explanations, however, going by the transactional data.

What Did He Mean By This?

Coupled with his attendance at a Colombian bitcoin conference two weeks ago, Dorian S. Nakamoto seems to have become very active in all things bitcoin recently. If it was Dorian who sold his coins to an exchange on August 7, he will have netted $ 273,000 for them. Not a bad return for three years patiently hodling, even if he could have made four times as much if those coins had been sold today.

In all likelihood, Dorian S. Nakamoto is neither Satoshi nor a new-found coin mixing kingpin: he’s just a guy whose misfortune of sharing a name with bitcoin’s creator eventually turned into his good fortune.

How Dorian Nakamoto Became Satoshi Nakamoto
Dorian Nakamoto faces the press at Bitconf

One Last Thing…

Armchair detectives who’ve been following the mystery of Satoshi for years will be aware of this unexplained quirk: for a decade, Dorian S. Nakamoto lived a couple of blocks away from Hal Finney’s house in Temple City, a town of just 36,000. (Hal being the first person, after Satoshi, to have ever used bitcoin.)

That bitcoin’s earliest adopter should live within a stone’s throw of a man who shares the same unusual name as its creator is bizarre to say the least. Then again, there are many things about bitcoin’s origins that don’t quite make sense. The reappearance of Dorian Nakamoto as a celebrity impersonator of the world’s most reclusive billionaire is merely the latest twist in a saga that keeps on giving.

Do you think it matters who invented bitcoin, or should the mystery of Satoshi Nakamoto be laid to rest? Let us know in the comments section below.


Images courtesy of Shutterstock, and Reuters.


Need to calculate your bitcoin holdings? Check our tools section.

The post “Fake Satoshi” Dorian Nakamoto is Probably $ 273,000 Richer After Selling His Bitcoins appeared first on Bitcoin News.

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How Dorian Nakamoto Became Satoshi Nakamoto

December 18, 2017 |

How Dorian Nakamoto Became Satoshi Nakamoto

In 2014, Newsweek doxxed Dorian Nakamoto, an unassuming senior, as the creator of bitcoin. The bumbling Dorian, who claimed never to have heard of the digital currency, was besieged by journalists for days, prompting him to plot a harassment lawsuit. As introductions to bitcoin go, Dorian’s was hellish. And yet, three years on from the false dox, something strange has happened: Dorian Satoshi Nakamoto has embraced the bitcoin life and assumed the persona of his faceless namesake.

Also read: “There Will Only Be One” – an Interview With Viabtc Founder Yang Haipo

Would the Real Satoshi Please Stand Up

How Dorian Nakamoto Became Satoshi NakamotoAt Bitconf 2017, a gathering of bitcoin luminaries and blockchain startups held on December 4-5 in Colombia, there were the usual faces including veteran cryptographer Nick Szabo. Also in attendance was an elderly Japanese-American whose hobbies include model trains and who has struggled to find work for the past decade, save for brief stints as a laborer, poll-taker, and substitute teach. Dorian S. Nakamoto.

How did the man once misidentified as the creator of bitcoin wind up thousands of miles from home at a bitcoin conference? A man who was once forced to issue a statement through his lawyer noting:

Newsweek’s false report has been the source of a great deal of confusion and stress for myself, my 93-year old mother, my siblings, and their families.

In the three years since Dorian was misidentified as Satoshi, a lot has happened to bitcoin. And a lot has happened in the life of the now 67-year-old who got off on the wrong foot with bitcoin. In the intervening years, Dorian’s stance on the cryptocurrency has softened. At the fifth annual Bitconf in Bogotá, Dorian Nakamoto looked relaxed. He seemed to be relishing his role as the fake Satoshi, and even attended a press conference with the event’s organizers.

How Dorian Nakamoto Became Satoshi Nakamoto
Dorian Nakamoto faces the press at Bitconf

There, he shared his perspective on winding up unexpectedly as the face of the world’s hottest digital currency. Dorian recalled the first time he learned of bitcoin, after son Erick contacted him to report that a journalist had been digging into his background. He added:

[They] approached my wife and asked her personal things. And I did not like it when they approached my children later. Why would I involve my children? I am not a superstar, I am not a public person…I believe in freedom of expression, but I do not believe that the media should take a person from his private life and wash his dirty laundry, including my medical history, including my recent battle with cancer.

A Self-Fulfilling Prophecy

How Dorian Nakamoto Became Satoshi Nakamoto
The two Satoshis: part of Telegram’s “Blockchain” sticker pack

Dorian Nakamoto wasn’t Satoshi Nakamoto in 2014 and yet, to all intents and purposes, that’s effectively what he’s become. Being identified as the creator of bitcoin, despite the scrutiny it invites, can also be lucrative, as Craig Wright, “the other Satoshi” can attest. Despite Wright’s claims to have invented bitcoin being disproved, the Australian seems to have had no trouble securing funding since then for his work on blockchain scaling.

Few would begrudge Dorian Nakamoto, “the original Satoshi”, a chance to cash in on his e-fame and have a little fun in the process. Even without the elderly man’s say-so, he’s become the face of bitcoin, his “Nope” reaction face having been memed hard and purposed for everything from Telegram stickers to t-shirts.

Memed Into Being

At Bitconf, Dorian S. Nakamoto spoke of his discomfort at being doxxed as Satoshi and the protracted legal battle that ensued. Unemployed and strapped for cash, Dorian confessed: “I had to make a big decision. Should I fight Newsweek or not? And finally I said no.”

How Dorian Nakamoto Became Satoshi Nakamoto

The former teacher hasn’t warmed to the publication in the years since, but the bitcoin community has warmed to Dorian – and the occasionally cantankerous grandfather has reciprocated. It’s a happy end to an unhappy story.

For conspiracy theorists, the sight of Dorian Nakamoto rubbing shoulders with the likes of Nick Szabo at bitcoin conferences is evidence that perhaps Newsweek were onto something after all. Could Dorian have found a way to become the face of his creation, whilst dissuading attempts to steal his multi-billion dollar fortune? If so, it would have to go down as Satoshi’s smartest trick yet. We will likely never know the true identity of Satoshi Nakamoto, who now may rank among the 50 richest people in the world. In his absence, substitute teacher Dorian S. Nakamoto seems a fitting choice to become the substitute face of bitcoin.

Do you think Dorian Nakamoto has been treated harshly by the press? Let us know in the comments section below.


Images courtesy of Digitaltrends.


Keep track of the bitcoin exchange rate in real-time.

The post How Dorian Nakamoto Became Satoshi Nakamoto appeared first on Bitcoin News.

Bitcoin News

How Dorian Nakamoto Became Satoshi Nakamoto

December 18, 2017 |

How Dorian Nakamoto Became Satoshi Nakamoto

In 2014, Newsweek doxxed Dorian Nakamoto, an unassuming senior, as the creator of bitcoin. The bumbling Dorian, who claimed never to have heard of the digital currency, was besieged by journalists for days, prompting him to plot a harassment lawsuit. As introductions to bitcoin go, Dorian’s was hellish. And yet, three years on from the false dox, something strange has happened: Dorian Satoshi Nakamoto has embraced the bitcoin life and assumed the persona of his faceless namesake.

Also read: “There Will Only Be One” – an Interview With Viabtc Founder Yang Haipo

Would the Real Satoshi Please Stand Up

How Dorian Nakamoto Became Satoshi NakamotoAt Bitconf 2017, a gathering of bitcoin luminaries and blockchain startups held on December 4-5 in Colombia, there were the usual faces including veteran cryptographer Nick Szabo. Also in attendance was an elderly Japanese-American whose hobbies include model trains and who has struggled to find work for the past decade, save for brief stints as a laborer, poll-taker, and substitute teach. Dorian S. Nakamoto.

How did the man once misidentified as the creator of bitcoin wind up thousands of miles from home at a bitcoin conference? A man who was once forced to issue a statement through his lawyer noting:

Newsweek’s false report has been the source of a great deal of confusion and stress for myself, my 93-year old mother, my siblings, and their families.

In the three years since Dorian was misidentified as Satoshi, a lot has happened to bitcoin. And a lot has happened in the life of the now 67-year-old who got off on the wrong foot with bitcoin. In the intervening years, Dorian’s stance on the cryptocurrency has softened. At the fifth annual Bitconf in Bogotá, Dorian Nakamoto looked relaxed. He seemed to be relishing his role as the fake Satoshi, and even attended a press conference with the event’s organizers.

How Dorian Nakamoto Became Satoshi Nakamoto
Dorian Nakamoto faces the press at Bitconf

There, he shared his perspective on winding up unexpectedly as the face of the world’s hottest digital currency. Dorian recalled the first time he learned of bitcoin, after son Erick contacted him to report that a journalist had been digging into his background. He added:

[They] approached my wife and asked her personal things. And I did not like it when they approached my children later. Why would I involve my children? I am not a superstar, I am not a public person…I believe in freedom of expression, but I do not believe that the media should take a person from his private life and wash his dirty laundry, including my medical history, including my recent battle with cancer.

A Self-Fulfilling Prophecy

How Dorian Nakamoto Became Satoshi Nakamoto
The two Satoshis: part of Telegram’s “Blockchain” sticker pack

Dorian Nakamoto wasn’t Satoshi Nakamoto in 2014 and yet, to all intents and purposes, that’s effectively what he’s become. Being identified as the creator of bitcoin, despite the scrutiny it invites, can also be lucrative, as Craig Wright, “the other Satoshi” can attest. Despite Wright’s claims to have invented bitcoin being disproved, the Australian seems to have had no trouble securing funding since then for his work on blockchain scaling.

Few would begrudge Dorian Nakamoto, “the original Satoshi”, a chance to cash in on his e-fame and have a little fun in the process. Even without the elderly man’s say-so, he’s become the face of bitcoin, his “Nope” reaction face having been memed hard and purposed for everything from Telegram stickers to t-shirts.

Memed Into Being

At Bitconf, Dorian S. Nakamoto spoke of his discomfort at being doxxed as Satoshi and the protracted legal battle that ensued. Unemployed and strapped for cash, Dorian confessed: “I had to make a big decision. Should I fight Newsweek or not? And finally I said no.”

How Dorian Nakamoto Became Satoshi Nakamoto

The former teacher hasn’t warmed to the publication in the years since, but the bitcoin community has warmed to Dorian – and the occasionally cantankerous grandfather has reciprocated. It’s a happy end to an unhappy story.

For conspiracy theorists, the sight of Dorian Nakamoto rubbing shoulders with the likes of Nick Szabo at bitcoin conferences is evidence that perhaps Newsweek were onto something after all. Could Dorian have found a way to become the face of his creation, whilst dissuading attempts to steal his multi-billion dollar fortune? If so, it would have to go down as Satoshi’s smartest trick yet. We will likely never know the true identity of Satoshi Nakamoto, who now may rank among the 50 richest people in the world. In his absence, substitute teacher Dorian S. Nakamoto seems a fitting choice to become the substitute face of bitcoin.

Do you think Dorian Nakamoto has been treated harshly by the press? Let us know in the comments section below.


Images courtesy of Digitaltrends.


Keep track of the bitcoin exchange rate in real-time.

The post How Dorian Nakamoto Became Satoshi Nakamoto appeared first on Bitcoin News.

Bitcoin News