The following is a direct excerpt from Marty’s Bent Issue # 1260: “They use debit and credit card purchases to make lists.” Sign up for the newsletter here.
Nothing highlights the need for bitcoin more poignantly than attacks on transactional privacy. Last week, a Geneva-based global standardization body approved the ability for payment processors to issue a new commercial code for companies that sell firearms to consumers. The idea behind the Commercial Code is that it will give law enforcement the ability to more easily track down criminals who use those firearms to commit crimes, but you can be sure that making such a list sets the stage for abuses by despots in the future.
The fiat system that has been erected over the past five decades makes this kind of unrestricted surveillance possible. The nature of the injection of KYC / AML (know your customer / anti-money laundering) into every level of the financial stack that people are forced to interact with on a daily basis has made the individual unable to escape Sauron’s eye. There is no way to solve this problem from the inside. The possibility that governments and their business partners will wake up one day and decide they have a moral obligation to stop spying on people is pegged at 0%. The only way out is to build an entirely new financial system that doesn’t allow this kind of general surveillance to be imposed on the public and that’s exactly what Bitcoin provides.
Yes, bitcoin’s privacy guarantees are poor and most people acquire bitcoins by interacting with trusted third parties who engage in KYC / AML surveillance. However, I think these poor warranties and user behaviors will change over time. As tools improve, people will become smarter bitcoin users. Creating a culture of non-reuse of addresses, checking coins and using tools like Samourai’s Whirlpool will make the ability of chain surveillance companies to identify end users much more difficult, if not impossible. As bitcoin adoption increases and people start shifting their UTXOs into the wallets they control because it’s easier and they understand this is where their bitcoin is most powerful, the circular economy of bitcoin transactions they never have. affected the departments establishing KYC / AML surveillance will increase significantly. Exacerbating the problems for chain surveillance companies.
Imagine a world where it has become completely normalized for traders to accept bitcoins using the BTCPay servers they control from customers using Samourai Wallet, BlueWallet, Muun Wallet, or any other non-custodial solution on the market. The amount of transactions that will be facilitated that are completely released from the yoke of KYC / AML will, at some point, reach a tipping point and the type of labeling that current payment processors are attaching to arms purchases will be impractical.
This is the future we should work towards. This is why it is extremely important to educate current and future bitcoin users on best practices when it comes to receiving and sending bitcoins in the most private way possible. While it is relatively easy today to track certain chain transactions due to the people linking their UTXOs to KYC’s services, I am confident that the spread and normalization of this type of bitcoin usage will go a long way towards combating the evils that the KYC- linked usage has worked to date.
Financial privacy is not a bad thing, no matter how much the powers that be want you to think otherwise. Fortunately, we have the ability to build a future where financial privacy is possible. The only thing that stands between humanity and that future that materializes is action. Go ahead and educate, start accepting and sending bitcoins using the proper tools, and work to improve those tools so that they are as easy as possible for others to use.