Alphabay getting shut down brings monetary anonymity into focus, especially coins like Monero. Retaining privacy in an age where everyone wants to collate your every move is an extreme challenge.
With all of the cryptocurrencies on the market, differentiation becomes paramount. What makes this alt-coin more interesting than that one? In the first phase of cryptocurrencies it was all about the Bitcoin alternatives. Those coins took what Bitcoin did and tried to make it work better.
But, this was, in effect, nothing more than competing on price. It was VHS vs. Betamax. The fact that Litecoin (LTC) or some other coin was designed to scale better than Bitcoin was unconvincing to a new entrants that were simply trying to wrap their heads around the concept in the first place.
We’re now in the next evolutionary phase, past the proof-of-concept stage and into coins developing to compete not on price but on functionality. New coins today have to be fundamentally different. Ethereum’s ability to build distributed apps on top of its ‘smart contract’ encryption could easily pave the way to the next phase of evolution of the internet itself.
That is a huge differentiator, but, Ethereum doesn’t do everything. And privacy is the big issue. Ethereum, like Bitcoin is traceable. The whole ledger is available for breakdown and can be recreated.
And that makes it no better than digital dollars from that perspective.
The Privacy’s the Thing…
For those who feel the government or anyone else for that matter shouldn’t know anything about their transactions, enter Monero. Monero was designed specifically to obfuscate the account of both the sender and the receiver of the money.
And we got our first big public test of the technology this week when the Department of Justice raided Dark Web vendor AlphaBay. The assets of AlphaBay CEO Alexandre Cazes were seized and among them were listed his cryptocurrency holdings.
This is from the DoJ’s Complaint of Asset Forfeiture for Cazes. Notice how the DoJ has no idea how much Monero he had but knew his other cryptocurrency holdings down to the sub-penny equivalent.
This is them saying they have no idea where that money is because they can’t trace it. And that brings me to the why, the how and why it’s important for you. Not the Walter White version of you, but the real, honest, everyday you.
Privacy is for Criminals
Monero uses a system called a ring signature, which, simply, merges your transaction addresses with a few other people’s inside the block as it is encrypted. Coupled with a condition transaction, this makes it impossible to trace both the accounts involved and the amounts.
Notice how neither of those pieces of information are in the DoJ’s list but they are for every other cryptocurrency listed?
Now, obviously, this technology is prized by the criminal set. Those wanting to be out of the loop for contracting murders, moving drugs, and selling children into slavery. And the government always associates those activities with privacy concerns now.
Anyone who wishes to not be catalogued by the NSA, Google, Microsoft or the FBI (but I repeat myself) is immediately branded as having something to hide.
And you know what that is right? It’s not your budding career as a contract killer they are trying to stop, it’s your not paying taxes on something you didn’t offer up on your 1040 they want to nail you for.
The Hunt for Taxes Everywhere
As governments go broke they turn on their populations looking for more ways to tax them to death for anything they can to keep from having to give up their perks. Reform is the last thing they will do.
Taxation is not only theft it is the ultimate corrupter of society at large.
Everyone who lives at the taxpayer’s expense becomes corrupted by the flow of unearned wealth (or rent in the parlance of economists) and will justify it to themselves however they have to.
And anyone not willing to virtue-signal about the necessity of their pet government project is eventually branded as carrying water for drug dealers.
It’s no more insane than Lt. Col. Ralph Peters telling Tucker Carlson that working with Russia to wipe out ISIS in Syria makes him into the reincarnation of Charles Lindbergh in 1938.
And as we enter into this new phase of America First and a resurgence of American pride under Donald Trump we have to remember at all times who the real enemy is. It’s those that make the most off the government.
It is not unpatriotic to minimize your taxes. But, that’s what’s coming from both the Left and the Right.
And we all know that patriotism is the last recourse of a scoundrel.
This is what is so pernicious about Rachel Maddow’s obsession with Trump’s tax returns. It is considered criminal by the Left to use the tax law to your advantage. You must be hiding something if you won’t tell us what you paid.
You aren’t virtuous enough.
Because in their world your labor and your life is 100% owned by them under the rubric of the Social Contract.
It’s the Bernie Sanders/Jeremy Corbyn warmed over Marxist paean for everyone to pay their fair share.
But, make no mistake, people like Attorney General Jeff Sessions are just as bad. Sessions is a moralizing thug stuck in the wrong century who never met a law that punished people for being un-virtuous he didn’t like.
And there is a dangerous trend happening among the Trump Set that cheers him on for busting pot growers or and pedophiles that can morph very quickly into supporting asset forfeiture and the elimination of cash to win the war against illegal immigrants, voter fraud (again I repeat myself), or prosecuting banksters.
And those rules are already so onerous that most Americans commit at least one felony a day without realizing it.
Sovereignty isn’t Just for Countries
The promise of cryptocurrencies and gold is in their ability to retain consumer sovereignty. Bitcoin preserves it through control of the money supply; taking new coin creation out of the hands of a central authority, The Fed for example, and handing it over a known algorithm.
Gold has a similar mechanism through the capital expenses needed to mine it. There is a natural ebb and flow to new gold production that is market driven and self-correcting.
Monero is that next step in monetary evolution. It is the money that allows the consumer to retain his privacy, the edge case of his sovereignty, when it matters most to them.
We’re staring at a societal meltdown over this issue of where and how to properly avoid people knowing what your assets are. Even writing this blog post has me worried about the legal implications of even talking about it because the reality is so dangerous.
What fascinates me is that Monero’s ring signature system can be incorporated into any number of other alt-coins or token-based cryptos to enhance their value proposition for users.
Steem is Not Hot Air
I’m a big proponent of Steem. As a platform for distributed applications it has tremendous potential. That its token generation system supports a social network and content creation platform is, for me, the perfect marriage of form and function.
Steem gives you the ability to produce content and build wealth through the direct interaction with your readers that doesn’t rely on third party advertisers and their imperatives.
It is the ultimate implementation of my motto, “Be interesting, or be ignored.”
But, even then that doesn’t make it worth anything as a currency unless it continues to differentiate itself in the marketplace. And that’s where Monero and Steem have something to be in common.
Because as part of the evolution of Steem’s platform, which undergoes regular changes voted upon by the community and its developers, it will be incorporating Monero’s ring signature and conditional transaction technologies into it over time.
Information should be free from would be oligarchs like Sergei Brin, Mark Zuckerberg, Jack Dorsey, Bill Gates and the jackass who runs Reddit. These are the people who openly advocate for the merger of state and corporate interests controlling all of our data.
Their goal is to not only create a climate of censorship but also a complete revenue collection model to ensure a flow of funds from you to them.
A Matrix from which only a criminal would want to escape.