2013-05-18 Economic Policy Journal: 3-Part Report from Bitcoin Conference

[aigeezer]

Privacy is a tool to restrict government power...

Your post got me thinking about various FOIA requests for government documents I've seen over the years and how they always tend to have the useful bits blacked out (redacted) in the interest of privacy of government, as interpreted by government. (Hehe - to anticipate an obvious question - I know the missing bits were useful because I have sometimes seen documents produced from separate FOIA requests, in which different bits were redacted).

I casually searched online now for an example of such a document and found plenty, but this one takes the cake.

Introduction: http://www.businessinsider.com/aclu-fbi-warrantless-foia-redacted-2013-5
and its embedded link: http://www.scribd.com/doc/141222327/Totally-Redacted-FOIA-response

Anyway, I grant your point that privacy can be used as a tool to restrict government power, but in practice it seems to be used frequently to extend government power.

As you say, "Big money/power will find a way to stay in the shadows" and government is nothing if not big money/power.

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[SylTi]

I do not find those arguments compelling at any deep level - they are arguments from expedience. The embarrassment issue should be dealt with at source, imho - the possibility of pregnancy, HIV, whatever is the underlying truth that must be handled and covering it up (briefly) is not the optimal way to handle it.  Similarly, "the authorities" will do what 'the authorities" will do, and sometimes they will harass the wrong citizen and the citizen will have to explain and defend himself as best he can. Reducing the number of such events by use of anonymous transactions helps, but does not solve the underlying problem - and of course "the authorities" would point out that it provides a window of opportunity for "bad guys" to exploit.

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." -- Benjamin Franklin

[oakpacific]

The idea that you can build an alternative currency whilst ignoring these rules is absurd, the graveyard of previous attempts should be enough to persuade anyone of that. eGold got whacked just months before the Bitcoin white paper was released. If you do try and build an entirely underground currency, how would you convert fiat into it? Street traders? How would you know if the person sitting opposite you was not a government agent? There are no examples of such a thing ever working at scale and I don't anticipate seeing one anytime soon.

That something has never worked before is not the reason to not work on it. The criteria for the worthiness of a goal is not feasibility alone but the ratio of merits/feasibility. As for the fiat conversion problem you mentioned, the number of government informants is always small compared to the honest participants even if you are living under the reign of Stasi, so as long as transactions can be carried out from person to person without passing through a middleman, the information that can be gathered by the authorities is limited, banks cannot monitor every account everyday.

I am not saying something like that should go mainstream, but for those who need it utter-mostly, there should be an option.

[aigeezer]

banks cannot monitor every account everyday.

That was certainly true historically, but it is not true with all-electronic systems. Whether "the state" has the will to have the banks monitor "everything" will probably depend of the geopolitics of the moment, indefinitely into the future.

I think the underlying question is the state's assumed right to know the financial doings of all people, all the time, in all places. In my opinion, society has come to accept the notion that it is OK when the state cannot catch a crime being committed (say child porn), for them to sift through the minutia of peoples' lives looking for crumbs that might lead to post hoc evidence of the crime. My instinct is that this is a very bad development and that it leads to a huge intrusion of the state in everyone's life in exchange for a very small overall benefit to society. This is not to say stopping child porn is wrong (example only), but rather that the methods are inappropriate. To apply a reductio, the state could stop child porn completely by seizing every child at birth and slaughtering it for its own protection. Most people would think that was "going too far." I think that watching everyone's financial transactions is also "going too far". The ends do not justify the means.

Lest you think I'm venturing too far into hypotheticals - the Canadian government recently tried to enact "watch everything on the Net" legislation, and the government line was "... either stand with us or with the child pornographers—Vic Toews, Minister of Public Safety" The government withdrew (for now) after public outcry.

http://www.cbc.ca/news/technology/story/2012/02/13/technology-lawful-access-toews-pornographers.html

Similar drama is starting to play out in the financial arena, and BTC will inevitably be a political football.