Source: Golden Finance
Author: Alex Gladstein
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This article argues the importance of bitcoin, starting from a science fiction world of "2040 without bitcoin," the science fiction world begins to push back the benefits of bitcoin. It further draws six areas that are more important for the promotion of Bitcoin: Education, Usability, Privacy, Scaling. Liquidity. Minimum ID. The author is Alex Gladstein, chief strategy officer of the Human Rights Foundation, and the original article is unchained. enjoy it.
By 2040, there will be no cash. The currency that people use every day has been completely transformed into a monitoring and control tool.
In Midtown Manhattan, you can reward street artists by scanning wearables, faces or fingerprints. Now, coins and dollar bills have caused people's curiosity. They are all fossils of old times.
In many countries, government issued currencies have long been digitized into the ubiquitous DCEP. Holding old-style paper money is illegal, all payments are contactless or biometric, and all transactions are directly linked to your overall identity stack. Every time you buy an item, your digital data will be updated at the same time.
Transaction privacy was eventually taken away. Billions of cameras, real-time monitoring streams from wearables, massive micro drone recorders, and powerful algorithms to track your interactions with other citizens.
In Caracas, Venezuela, the recovery of the economy depends on digital dollars. Of course, there are some barter trades on the street, but a few years ago the U.S. dollar bill was finally obsolete, while other bearer assets such as gold are still extremely scarce. If you want to buy something, you must do it electronically, and the transaction will be tracked and linked to your citizen profile.
In Lagos (the largest city in Nigeria), as in many African capitals, all trade is done on Chinese fintech, and everyone communicates seamlessly with the latest version of WeChat. Nigeria's economy relies on DCEP, and the government and its 300 million citizens are basically China's satellite states.
At some point in the 2030s, governments around the world illegalized cash. They initially achieved this feat through a process of non-monetization, in which public officials announced a new digital economy that they claimed would not miss anyone, would improve economic stability, and capture The job of arresting criminals and money launderers has become easier. Most citizens believe in them.
Encourage all citizens, even in countries where most people never have a physical bank account, and then force them to create identity-related digital currency accounts that can be accessed through wearables or biometrics. Then, give them a time window of several years, during which they can redeem cash, but at the cost of reduced digital credit. Almost everyone can deposit cash and get the most credit, encouraging people to go full digital early. After the window period, carrying a banknote or metal currency becomes a punishable offence.
By 2040, there are two major currencies in the world: the digital dollar and China's DCEP. The world is roughly divided into two parts: some major allies in North America, Europe, and the United States using digital dollars, and the rest of the world using DCEP. There are few other currencies.
Some rogue countries are still producing their own currency, but this currency will not exist for a long time and is not of much value to anyone. These countries tend to increase their money supply very quickly, severely devalue their currencies, and force the authorities to create new currencies. This cycle undermines trust between the state and citizens. In the end, these governments gave up their sovereign currencies in order to survive and switched to digital dollars or DCEP. Ordinary people are virtually incapable of saving in ways that the United States or China cannot control.
There is no meaningful innovation in savings technology. Most citizens can simply hold their digital credit lines, but their credit lines depreciate relatively quickly relative to real goods. Then there is automatic tax collection. Taxes are now automatically deducted from your credit balance, and tax rates always rise unpredictably.
As in previous decades, some poor people and the middle class are still buying products such as cattle or metal plates to prevent inflation, but all of them are excluded from high-level assets such as real estate, art, wine and other scarce goods Outside.
Financial privacy has actually disappeared, not just in China and DCEP countries. With the rise of ubiquitous surveillance cameras in public places, all linked to AI-driven real-time analytics, all transactions are immediately linked to individuals. In the post-cash era, it is very difficult to buy a disposable mobile phone or SIM card. The fines for trying to manipulate your credit wallet are severe, and no one has invented an alternative digital currency that can maintain value.
Big data analytics are not always so powerful. But it's powerful now. Although people have been using credit cards for decades, the government can now filter all financial data at the touch of a button.
To get credit, you need to provide an ID. To use credit, you need loyalty. In order to get the best treatment, you need to be a perfect patriot. Worldwide, digital currencies provide governments with unprecedented control over their citizens. If your digital data doesn't get the highest ratings, you won't get many public services and benefits. Under some dictatorships, if you dare to criticize the government, you will immediately lose your financial capacity. It has been said that being imprisoned in a financial prison is worse than being imprisoned.
Companies do create their own currency. Libra is just the beginning. But all of these credits are inevitably linked to digital dollars or DCEPs and are therefore monitorable, reviewable and expropriable. They also cannot escape.
The situation of selling your data and behavior to third parties in real time has also greatly increased. Without the knowledge of the government and certain companies, you can hardly buy anything. And immediately after buying, you will receive a variety of ads. Many have upgraded to smart sun visors and retinal implants, and there are also advertisements there. Unless they can pay for the upgrade to the premium version.
The public has been worried about the rise of the Orwell-style police state, and it is now true, but they have also encountered the dystopian state of Sahli. In this brave new world, the complex carrots and sticks built into the financial system encourage and reinforce compliance with national regulations with impressive efficiency. Patriotism is fascinating.
China's social credit system was widely mocked in the early 2020s, but was implemented by governments around the world in the following decade. And with the transition to a fully digital economy, it has become extremely effective at eliminating objections.
Governments have launched extensive campaigns to find every citizen in their territory and link it to the national identity system. India's Aadhaar is the first of many products and was initially hailed as a miracle serving unbanked, vulnerable and stateless people. But later, it became clear that these ID networks were just surveillance and exploitation machines.
Fairer for some people. Very few people control everyone else in ways previously unthinkable. The idea of "obeying the law" eventually led to slavery. This is the evil of mediocrity in the digital age.
Even now, the government continues to innovate its surveillance technology. Some benefits are provided to certain citizens as they agree to install their credit wallet on their wrist or retina. They say it's the ultimate contactless convenience. The program is very popular. Some analysts say that by 2050, everyone will have one.
This may be our world.
But thankfully, this is a fantasy. In our world now, we have choices to escape.
In 2009, a programmer under the pseudonym Satoshi Nakamoto invented Bitcoin, an independent financial system.
Over the next few years, this decentralized currency project grew gradually. A global community has made it strong and developed its outstanding initial design into an unstoppable force. As time goes by, there are more nodes, more miners, more users, and more applications.
By 2020, the separation of money from state has begun.
The original curiosity became a powerful global phenomenon. Once people learn that they can conduct digital transactions in a parallel economy beyond the authority's control, they want to learn more and participate. Satoshi Nakamoto pioneered a way to escape from the panopticon with proof of work and established a non-governmental financial system.
The next 2040 will still be a very imperfect place, but it is difficult for the government to achieve omniscient tracking and surveillance because Bitcoin has enabled digital cash to exist.
So let's look back and let's imagine again 2040, when it looks like not only digital currencies issued by the government, but also Bitcoin.
In the future of Bitcoin, privacy has actually improved in some ways. With the improvement of bitcoin software technology, it is actually difficult for governments or companies to track the use of bitcoin by citizens. Citizens have a better security in applying bitcoin. Like email in the early 1990s, Bitcoin was hard to access at some point and it was awkward to use standing up, but things got much easier in the 2020s.
Governments have claimed that if citizens dare to use a currency outside the control of the state, there will be waves of crime and terrorist attacks. But those never happened. By 2040, the crime rate will be essentially the same as in the last century. But in a world with bitcoin, it is more difficult for bankers to steal your money and the government to devalue your savings.
Back in 2020, few people used Bitcoin and even fewer knew its potential. A long and arduous road to education is coming. But in the late 2020s, universities began offering Bitcoin courses and degrees. In the end, people can get a bachelor's degree or even a PhD in bitcoin engineering at any of the top universities.
By 2020, tax authorities began asking citizens how much bitcoin they held or sold, further raising citizenship. But by 2030, most people don't need to know how Bitcoin works when they use it, just like thousands of young people used email without knowing how it works.
The government tried to prevent its citizens from using Bitcoin, but most measures and bans failed or could not be enforced. Bitcoin's permissionless nature turns it into a virus that infects those countries that monitor it, preventing the country from reaching its maximum surveillance potential.
Even in the most restrictive countries, citizens have come up with ways to send Bitcoins that are virtually impossible to monitor on a large scale. Yes, the government can still monitor the country and the community. Investigators can detect most major crimes, but extensive financial surveillance is no longer possible.
From this point, the Bitcoin network is already protected by geopolitics. Part of Satoshi's talent is to create an asset that adds value due to scarcity. Even authoritarian governments have begun to get involved in Bitcoin because of their greed. But over time, their reliance on Bitcoin will turn the local economy to Bitcoin, which in turn damages their ability to control the money supply and financial system, and ultimately weakens their control of citizens.
A much more democratic government will adapt to the life of Bitcoin. For example, many democracies will change the way they tax their citizens and switch to income-based taxation. Business tax, value added tax and "citizen" tax will all become more and more important. Just like the 20th century, tax and fiscal relations between citizens and states continued to develop in the 21st century.
In democracies, people make laws that allow for the complete anonymization of everyday small transactions. You can buy groceries, perform small medical procedures or buy e-books or podcasts without revealing your identity. Compared to tracking all these events, your digital footprint ends up being much smaller. The government still makes sure that large purchases such as cars, weapons, and homes require sellers to know their customers, but for most sales, your transactions won't be uploaded to a national database, just like the cash age.
Crucially, Bitcoin enables dissidents to survive in an increasingly digital age. Even in the most difficult environments, independent media organizations and NGOs can still get funding from their supporters. In big cities, people can use bitcoin-based payments to pay for public transportation, making it impossible for authorities to understand every step of your life.
Ubiquitous surveillance cameras and data collection from the next generation of social media often remain difficult to protect privacy. But at least it protects payments. Bitcoin has become a native payment channel for anonymous social media platforms, on which citizens can still enjoy virtual images online and practice digital freedom. None of this is possible without a decentralized currency.
I drew two visions here.
One is Orwellian dystopia.
The other is an overly optimistic technological utopia.
None of them will happen.
What we do in the Bitcoin ecosystem in 2020 and beyond will determine how close we are to a more proactive and open financial future.
In this article, I propose six priority areas for your participation. Of course, there are many more aspects of Bitcoin, but these aspects I have listed here will be the most critical for our response in the coming years.
The first priority area is global education . Only a small number of people on this planet use Bitcoin, and fewer people can understand its power correctly. The latest estimates show that the total number of Bitcoin users does not exceed 45 million, accounting for only about 0.058% of the world's population. From executives to journalists to investors, I have personally interacted with the broader cryptocurrency and blockchain industry executives. My estimation is that up to 25% of people understand the basic principles of Bitcoin and why digital scarcity is the key to its success. It is safe to say that this estimate is not very reliable. But even within the industry, few people understand that Bitcoin can have a huge impact on the world. Insufficient non-technical interpreters; insufficient university-level courses; lack of (or almost no) adequate understanding of journalists by mainstream media; few attempts to bring this topic to the attention of policy makers, philanthropists, and the public; and There is no good Bitcoin movie or video content on platforms like Netflix. There is a lot of work to do.
The second priority area is usability. Just as mobile phones and emails were difficult to use in the beginning and were only popular among scientific or financial elites, Bitcoin was also born in a small technology community. We should work to break this bubble. To do this, the average user needs to be able to send and receive Bitcoin with a few clicks and swipes. But this will take time because all users should be able to easily control their own keys without relying on a third party. There is a need to simplify the use of Bitcoin without having to make major compromises in terms of decentralization, privacy or control. Technological complexity must also be minimized, because the people who need it most in the world, have the worst functioning devices and the most discontinuous internet access, they should also be able to use Bitcoin. Fortunately, things are moving in the right direction. Even in the past two years, Bitcoin wallets have become increasingly easy to use. Just as sending emails has changed from complex tasks to swiping on an iPad, Bitcoin will eventually be simplified. For example, Signal has made private communications easier and wider to spread than previous clumsy tools like PGP, which has gradually hidden unnecessary details from end users.
This will take us to a third priority area: privacy. Encouraging, regulating, and integrating privacy into the Bitcoin ecosystem is essential. Crucially, we want the Bitcoin access channel, wallet and payment network to be open source, decentralized and relatively private. For example, BTCPay Server is probably one of the most important technologies in Bitcoin today. It was originally a cloned version of Bitpay, and today it allows anyone to set up their own hosted payment server so that they can receive Bitcoin donations or payments in a more privacy-friendly way. Each transaction is completed through a unique invoice, which can be dumped into a wallet that is not attached to the ID. This is equally important for mom-and-pop shops and non-profit organizations operating under authoritarian regimes. Other key innovations in this area include the upcoming Taproot upgrade, which will help reduce the amount of information leaked on bitcoin transactions on the blockchain; innovations in coin technology such as CoinJoin can help users disguise; and of course, the Lightning Network , Lightning Network transfers transactions from a monitorable chain to a second-tier network.
This will take us to the fourth priority area: scalability . All base currencies need to be expanded through a secondary network to have a global impact. Consider a gold-based economy. We invented paper money to help expand trade. Or a dollar-based economy, companies like Visa have helped drive their global growth. For Bitcoin, the most promising expansion solution is Lightning Network: an open source, decentralized payment system. You can think of Lightning Network as digital cash for digital gold, Bitcoin. Currently, the Bitcoin network can only support about 7 transactions per second. With the Lightning Network, there are no technical barriers to how many transactions can be completed per second using Bitcoin. This technology is still in its infancy, but it is essential to make Bitcoin unusable for hundreds of millions of people. If we want to extend Bitcoin to the general public without them trusting third parties, the Lightning Network seems to be the way forward. Large companies like Square also seem to agree, with its CEO, Jack Dorsey, creating Square Crypto, a research group that is building Lightning Network Toolkit for developers. It is vital that other companies and universities follow and expand this exploration in the coming years.
The fifth priority area is liquidity. Once ordinary people have access to Bitcoin, at least for the next few decades, the next step is to ensure that they can easily convert Bitcoin to local fiat currency when necessary. We are far from the world that uses bitcoin-based systems to pay for everything, even most things, and may never even appear. Right now, people in distressed or oppressed places need an ability to exchange bitcoin for fiat money to cover daily expenses and bills. Fortunately, this is getting easier. Most major urban areas on the planet, Bitcoin ATMs, peer-to-peer markets, Bitcoin brokers and physical exchange points exist. Expansion of Bitcoin's access to gold will be the key to popularizing it in the future. The website UsefulTulips.org provides a good analysis of the increasing use of Bitcoin worldwide. More such innovations are necessary so that we can understand how and why people use Bitcoin.
The sixth priority area is the minimum ID , which may actually drive things forward. There is an urgent need for a platform like Twitter, which still allows a certain degree of pseudonym to adopt a Bitcoin-based payment system, which requires only minimal user information. If online avatars are needed in the future, we must be able to manipulate them securely without having to worry about our real identity being compromised. Therefore, attaching a bank account or credit card with a full ID stack to our social media account will not do us any good. We need to use digital assets that do not need to know your customers (KYC) or anti-money laundering (AML). Lightning Network seems to be able to play this function well. The less information we disclose to ourselves in transactions, the harder it is for "big brother" or surveillance capitalism to develop. Even in the near future, our future will be like this, a person can walk into a coffee shop, buy things online, send money to friends, donate for a certain business, and only need to give up his minimal information.
education. Usability. privacy. Scalability. fluidity. The minimum ID.
If developers and investors can focus on these six areas; if consumer protection advocates can lobby them to grow in society; if users can use bitcoin more easily, then we are moving towards a world of more privacy and freedom Go forward.
Let's summarize again, if Bitcoin's technology ecosystem develops in the way we describe, it may have an impact on human rights.
First, independent journalists and NGOs need to maintain financial independence. With Bitcoin, they are able to raise funds from around the world in ways that are difficult to monitor and cannot stop. They can then convert it to local fiat currency as needed to pay the fee.
Second, billions of refugees and stateless persons who currently do not have access to the banking system. They need to prove their identity in order to open a bank account or use an application from the old financial system. All you need is a smartphone and internet access. You don't need an ID or passport to use Bitcoin. This is a great tool for equality, and everyone has equal opportunity regardless of class, education, background or race.
Third, those who are experiencing high inflation or hyperinflation. Recently, many countries have been hit by double-digit inflation, and some have suffered from hyperinflation. Ask any Argentinian, Syrian, Turkish, Iranian, Zimbabwean or Venezuelan, and they will tell how violent inflation is overwhelming the economy and evaporating lower and middle class savings. With Bitcoin, anyone can use a license-free savings technology, and they won't be devalued by government-issued banknotes.
Fourth, more and more people are subject to strict financial surveillance every day. More and more citizens are monitored not only by billions of surveillance cameras, but also by their text, phone calls and social behavior. Transactions are an important part and will continue to be monitored more and more. Bitcoin provides the infrastructure for the underground economy. In the underground economy, financial transactions have no natural connection with identity.
Fifth, and finally, those who have suffered sanctions. The tragic fact is that individuals living in sanctioned countries such as North Korea and Iran have not voted for the government in free and fair elections and should not be held responsible for the crimes of dictators. For example, with Bitcoin, individuals in Iran can earn income abroad by engaging in open source software projects, or they can earn income from foreign families to pay for basic domestic living or medical expenses.
If the bitcoin project stalls or slows down, the hopes of billions of people in the world in the above circumstances will not be too great, especially as cash use decreases. Private payments are virtually impossible. All daily transactions will be the focus of monitoring and control. The currency itself will monitor and control you-you will not be able to do anything about it.
Another thing to keep in mind is that the Davos elite who currently dominate the world are being threatened by a technology that separates currency from power and provides permissionless access to savings. These elites have been operating currencies in the dark. They want to create barriers to entry into the financial system. Bitcoin frustrates them because anyone can access and use it, no matter who it is. When the global banking elite treats bitcoin, they first ignore bitcoin, then laugh at bitcoin, fight against bitcoin, and then give up. We are nearing the end of the mocking phase. A big war is coming.
The good news is that in the areas mentioned in this article, Bitcoin has a strong momentum of development and its global adoption rate is constantly increasing. Despite obstacles, the road to freedom remains clear.
In an age of growing concern about how companies and national technologies are stealing our rights and freedoms, we thank Satoshi Nakamoto, we will never live in a world without Bitcoin.