Are anarcho-capitalist digital currencies a threat to society? Some London financial technology start-ups have been selling the idea, that the web can be "fixed" by offering a distributed alternative to cloud computing. Developers of secushare would agree, as they are working on the same thing, but there is a dramatic difference: The anarcho-capitalist incentive method is a bypass of societal payment systems. It allows bitcoin billionaires to make a fortune with crime and speculation on crime, or alternatively speculation on speculation on crime.
Update 2018: Cryptocurrency supporters say the blockchain is the most transparent ledger ever invented, where each transaction can be traced to the point when somebody tries to exchange the crypto into real-world money. Soon after I wrote this piece, China, South Korea and now also India started banning the Bitcoin. I thought I was breaking a taboo, but legislators have been worried about this longer than I. The exchanges are one of the point where they enact their bans on Bitcoin by inhibiting bank transactions with the exchange bureaus. Other countries are merely applying banking rules on the exchange bureaus, which may not be enough. We'll see. As long as unregulated exchange bureaus however exist, somewhere on the planet, the traces to criminal activity can be eliminated. Frequently, the actual criminal interaction isn't visible in the blockchain at all: whenever the agents meet on anonymous platforms, agree on a deal to make, whatever the product or service acquired, the blockchain only knows of the money flow. So, under these preconditions, Bitcoin crime can still happen without being traced (except
maybeby the NSA but the NSA isn't interested in actual crime), let alone taxed.
Update: 2018 Added link to theIntercept report on how NSA is monitoring Bitcoin users.
All of the societally harmless uses of Bitcoin and Ethereum can be implemented in a safer manner using TALER, without bypassing the tax system which is, as flawed as it may be, the only instrument society has to redistribute from the wealthy to the poor. Without such a redistribution, the capitalist architecture collapses and humanity's ability to exist on the planet dies with it. If everyone just cares about themselves, a future comes when the rich get chased by pitchforks while global challenges such as pollution and climate change would not be tackled by anyone. Redistribution is a fundamental part of capitalism. A market that only generates super-rich individuals stops working.
Blockchain supporters have been promoting the idea of implementing some sort of basic income over Ethereum, putting aside the crucial detail that all the superwealth, which is absolutely needed to finance a cumulative unconditional basic income, is simply going to opt out from it leaving all the needy among themselves. In an age when wealth is exponentially collapsing onto a handful of white males, redistributing the money of a collapsing middle class, as suggested by Götz Werner and Milton Friedman, is no solution at all. A UBI can only work if the plutocrats, the lords of globalization and automation, are treated as a part of the equation.
So, the fix of the web being proposed by our best-intended blockchain enthusiasts, to become available in some more or less distant future, appears already to be a lame duck:
A logical deduction of this reasoning would also be, that anyone who speculates on Bitcoin or other anarcho-capitalist "currencies" is effectively speculating on crime or speculating on speculation in a Ponzi scheme style. You may be successful with it, but stop making yourself believe it is okay to do so, let alone that you are on some bright path to the future.
Does this mean that the entire blockchain-oriented FinTech industry is just a speculation bubble? No, because crime will continue to strive on these peer-to-peer payment systems until explicitly declared illegal. Is it moral? Certainly not.
Update 2018: In the original piece I didn't even mention the main ethical reason to object against Bitcoin, Ethereum and the inappropriate use of proof-of-work, because enough people have done so already. Also, I can't keep up with the comparisons: First they said the Bitcoin uses up an American household of energy per transaction, then they started comparing Bitcoin to the energy consumption of Iceland, Ireland, Denmark. How much more nuts can humanity be?
Are all blockchain systems affected? Not necessarily, if you consider blockchains just a special case of Merkle trees, they solve a tiny problem space in distributed computing. If you stop using them for illegal financial transaction, you can still use them for first-come-first-served naming services, although that isn't real-world practical: No legal entity will accept that their name, for example "Nike", belongs to the first random spammer that registered the name on the blockchain. So what other use can the blockchain have? Honestly, we haven't found any, yet.
Update 2018: A distributed liquid democracy voting system might actually work, although it needs to solve the problem of guaranteeing the uniqueness of voters, which boils down to having some trusted third-party authorities one of the goals the blockchain was supposed to achieve. Also, I wonder whether the blockchain allows for all the important features of Liquid Feedback to be re-implemented in a distributed fashion, or will it just be a plain voting system, more suitable for demagogy than collective rationality?
The distributed Internet needs a lot of advanced cryptographic primitives, yet the blockchain is not among the terribly important ones. Even the examples made by those London Fintech founders regarding the authenticity of certificates and fair-trade products actually depend on trusted third parties (as they admit in the Q&A at the end of the talk).
A distributed social network such as secushare is actually better than that, as it leverages the social consensus of people. If all of your social network agrees who Nike is, or that a certain fair-trade institution is trustworthy, only then you have a basis on which to build your trust. If your social network recommends a home owner to rent a home from, that is safer than either AirBnB or any blockchain imitation of it. If your social neighborhood recommends a car driver, that is a better choice than some shady Uber or any of its copycats. secushare provides social consensus rather than first-come-first-served squatting.
This is similar to what a decent search engine does: When you search for cat food, it will not just send you to catfood.com that got registered by whoever came first it sends you to what "the web" (and its search engine optimization agents) think is a decent cat food provider, or simply who paid the most to be at the top of the search result list.
secushare is actually slightly better than that: It will show you cat food offerings that cat owners in your social neighborhood think are recommendable. While a centralized search engine can manipulate what it shows to you according to its political or economic agenda, secushare as a search engine would not be able to manipulate you. It is the unfiltered digital replication of the network of humans that surround your life.
So, while the blockchain is attempting to replace the domain name system, and failing at it as it cannot implement legal necessities, secushare is actually offering an alternative to Google and Facebook. It should be the better blockchain than the blockchain we know today.
So, if you are looking for a way to fix the Internet, not just the web, have a closer look at what secushare is doing. For absolutely incomprehensible reasons, it is quite unique in trying to do the right thing a problem space that should be populated by thousands of projects, well financed, with all scientific and political interest focused on it but the Internet does not foster rationality and logic, so anything that sounds more exciting than the uncomfortable reality will get more attention. And anything that legitimizes speculation is more than welcome.
The technology itself is a rather meager and humble amatorial kind of distributed system. As a side note, if Bitcoin is illegal and it becomes difficult to buy any, then there is much less motivation to use the "dark web" for criminal purposes. Instead, the "dark web" turns into what it was intended to be, a space of privacy for human beings.
Go have a chat.