Could an Inside Sneak Attack on Bitcoin Destroy It?

attack on bitcoinThis is important.

I’ve been warning about an outside attack on Bitcoin for some time, but the biggest threat may come from inside: from people who profess to love Bitcoin.

The people I’m talking about don’t love Bitcoin itself, and they don’t love the freedom it brings, no matter what they say. Instead they love the money they hope to make by becoming the new techno-riche: successors to Zuckerberg, Gates and the rest. (Yes, that’s an unfair thing for me to say, but I’d also be willing to bet large on it.)

The people I refer to are a neo-plutocracy – insiders who wish to institutionalise Bitcoin, making billions for themselves while turning it into just another version of PayPal.

The Attack on Bitcoin begins…

One long-time bitcoiner has been warning for some time that this group controls the Bitcoin Foundation. He describes them as “regulatory statists.” He has analyzed their backtalks since their beginning and has been telling anyone who would listen that they wished to politically co-opt the Bitcoin market.

At last weekend’s Bitcoin conference, he was proved correct.

Robert Wenzel of reported this, directly from the conference:

The most important vibe I am picking up at the event is that there are many money players who want to get Bitcoin up and running and are willing to play by government rules, that is, register all accounts they open and take down the name, DOB and social security number of Bitcoin buyers and sellers… Many of these players argue that it is impossible to battle the government, [one developer] told me that “It is a period to build the baby and not send it to war.”

No sooner than that passed my screen, I got an article entitled Winklevoss twins on Bitcoin: Time to work with the Feds. The article quotes Cameron Winklevoss (one of the Facebook twins) saying this at the conference:

I don’t think anyone wants a fight – I think everyone here wants to build Bitcoin, to work with regulators, cooperation is really the way forward.

Let’s be clear about this:

Bitcoin is a new thing. If it is forced into the old mold of politics, regulation and control, it will become just another tool of an oligarchy. And the prospective Bitcoin oligarchy are precisely those people who wish to shove Bitcoin, against its nature, into the same old statist, plutocratic mold. The result would be a few dozen insiders getting very rich and leaving the rest of us back where we started.

Regardless of the new plutocracy’s creative justifications and their fear-based scenarios, Bitcoin will be neutered and co-opted by governments and bankers if they get their way.

This is the largest single threat facing Bitcoin at the present time. Fear and greed work, and corruption follows with them.

I am not alone in this, by the way. Bitcoin expert Mike Gogulski has come to the same conclusion, writing “the Bitcoin Foundation is TOXIC and must dissolve.”

An unnamed “old radical” warned about precisely this in 2012.

The inside threat to Bitcoin and therefore an insider attack on Bitcoin is real, and was on open display over this past weekend.

What do to

If bitcoiners are serious about human liberty – as opposed to the same old crap in a new wrapper – they must turn hard against this neo-Plutocracy and their promises of an easy way out. Nothing great comes easy, and important things are more often killed by their supposed friends than by their enemies.

I will close with a comment Martin Luther once made to a young assistant who was asking God to save them from their enemies. Please take it to heart:

We can handle our enemies. God save us from our friends.

Paul Rosenberg

16 thoughts on “Could an Inside Sneak Attack on Bitcoin Destroy It?”

  1. Like you, I’m horrified by these developments. The good news is that liberty-minded people won’t sit still while Bitcoin sells out to government thugs. There will be new wrappers developed to circumvent privacy-destroying attempts, and of course there will be new alternatives to Bitcoin developed.

    The Winklevoss twins come off as spineless, government ass-kissing bozos, but they’re not capable of stopping the movement to anonymous digital currency.

  2. The funny thing about BTC and regulations – is the future of a cashless society depends on our acceptance of all these soon to be new regulations.

    Just another step in their grand scheme.

    1. cashless is infeasible, different money systems are to coexist. you can’t eliminate gold or local fiat notes from the culture.

  3. If regulated bitcoins become widespread then people will already understand about cryptocurrency, wallets, exchanges and all that, along with the advantages of a non-deflating currency. That’s a huge win already – and it primes the pump for introducing either a more private coin, be it changing the current protocol or creating a new coin.

  4. If Bitcoin is really as good as some people say it is, it should be fairly immune to such attempts. Is one group playing by government rules? Just do business with another group. Problem solved.

    The state took literally millennia attempting to co-opt gold, and in the end was only able to deal with it by breaking out the ban stick. Before that, any attempt to co-opt the money system would ultimately fail because people could (and often did) just refuse to deal in bank notes and insist on the real thing.

    I was under the impression the point to BitCoin was that it was technically impossible for any particular institution to get a lock on it. Was I wrong in that impression?

    1. you’re right… as a foundation member i have to say that all of the regulations are pretty much voluntarily if look under the surface, and only apply to users who switch large amount of $fdrn… players who want to use banks located in the usa as their hosts will register, the ones who want to continue freely in other currencies will use malta, japan, cyprus or uae…

  5. You can make rules but not enfore them

    I look at this like the silkroad , Yes drugs is iligal bit still silroad can be reaced , while bing online for years and plice hunting it for years it is still active as of today it was still online , yes rules can be made but can not be enforced , poeple who know that will understand is that the main goal of bitcoin is to get it mainstream 🙂 , If rules In the US are to strict this country will silmply be left out losing al bitcoin economy to countrys with no rules.

  6. So all the Bitcoiners had an “open” meeting. Funny thing about meetings is their purpose more often than not creates unforeseen new problems. – When I first understood what Bitcoin was I immediately asked myself: Has this thing been co-opted yet?

  7. What do you care if some bitcoin businesses work with their governments? If you don’t like them, use other bitcoin businesses – you know, the ones that are likely to have their assets seized for violations of money transmitter laws or failing to pay taxes.

  8. I think you make a logical fallacy. Participating in lobbying does not require you to act legally. Similarly as a mobster hiring a lawyer does not require that he closes down his illegal business. Agorism does not require that you do not lobby and lobbying does not require that you participate in “legal” businesses.

    Anti-Bitcoin legislation already indirectly exists, and will exist irrespective of whether Bitcoin businesses participate in the the process of creating laws or regulations.

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