Wendy McElroy: Privacy Prevents Violence and Crime

(Crypto) Privacy Prevents Violence and Crime

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 6: Privacy is a Prerequisite of Human Rights
by Wendy McElroy

(Crypto) Privacy Prevents Violence and Crime (Chapter 6, Segment 1)

Unlike the communities traditionally associated with the word “anarchy”, in a crypto-anarchy the government is not temporarily destroyed but permanently forbidden and permanently unnecessary. It’s a community where the threat of violence is impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations.

Wei Dai

A February 6, 2018 headline in Reason magazine warned, “Governments Hate Bitcoin and Cash for the Same Reason: They Protect People’s Privacy.” The ensuing article spun off a quote from U.S. Treasury Secretary, Steve Mnuchin, “One of the things we will be working very closely with the G-20 on is making sure that this doesn’t become the Swiss numbered bank accounts.” Mnuchin rejects decentralized crypto as payment, investment, or savings systems because it cannot be easily tracked by government.

Privacy is the battleground upon which cryptocurrency will ultimately rise or fall.  The engine of crypto, the blockchain, is founded on the premise of anonymity or pseudonymity. The blockchain was specifically designed to obsolete “trusted third parties,” such as central banks, which act as data-collection centers for government.

Wei Dai and Mnuchin may seem to be polar opposites on privacy, but they are saying much the same thing, although their conclusions are antithetical. Privacy prevents violence.

For Wei Dai, this is a good thing. Privacy is overwhelmingly positive for individuals because it empowers and protects them against government. Privacy can cloak genuine acts of violence or fraud, of course, just as free speech can promote lies; every tool can be a weapon. More often than not, however, the violence prevented is wielded by government against those who flaunt authority: tax evaders, dissenters, regulation breakers, gray or black marketeers, drug dealers and users. Government punishes scofflaws, whether or not the laws are just or despite the fact that participants consented. To cryptoanarchists, like Wei Dai, no crime has occurred unless a person is injured or property is damaged. The violence occurs when a third party forcibly intervenes between consenting adults or people minding their own business.

For Mnuchin, privacy’s role in preventing violence is a bad thing because he administers government coercion against peaceful individuals. Of course, he does not call it violence; he calls it law enforcement. That doesn’t change the fact that government agents are pointing guns at peaceful scofflaws, not at the behest of any participant, but over their objections.

Otherwise stated: Wei Dai praises privacy for promoting a society of “anything that’s peaceful.” Mnuchin excoriates privacy for the same reason.

The ongoing crack-down on privacy is legitimized to the public by the faux claim that only criminals want “concealment.” (The Satoshi Revolution debunks this claim in the segment entitled “What Do You Have to Hide? Everything!”

Defenders of privacy usually give weak-tea arguments. Instead, they should straighten their spines, stand tall, and argue from high ground. The high ground: privacy and human rights are, and always have been, intimately connected concepts that enable individual freedom. Government wants people to abandon privacy because they would be abandoning a powerful threat to its authority.

Privacy, qua privacy, is so essential to human rights that it is indistinguishable from them.

The History of Privacy and Rights

(Here, privacy means “an individual’s right to control unrevealed personal data.” If someone voluntarily fills out a government form or otherwise broadcasts personal information, then he loses the right and the power to control its future distribution. But unrevealed data can be externally demanded only through violence; people can be coerced into revealing the contents of their mind; homes can be ransacked and computers can be hacked. Crypto-privacy, as epitomized by private keys, is unrevealed information, after which the government hungers.)

History can be viewed as a long social and intellectual experiment.

Pretend you are God. You perch attentively above the time-space continuum in order to watch the flow and impact of concepts upon human development through the centuries. The American Revolution feeds into and inspires the French one. The British Empire begins in the 16th century as Britain establishes its first colonies that, in turn, encourage mercantilism; after World War II, what remains of the Empire collapses in the face of independence movements based on an anti-colonialism that favors communism. From the mid-16th century, the British drove the Transatlantic Slave Trade until confronted by anti-slavery voices that said “every human being is a self-owner.” History is a laboratory in which the social and political affect of concepts can be charted, including the effect of privacy. Admittedly, the results are not as measurable as those produced by science, but broad outlines and conclusions are clear.

Arguing from history provides powerful advantages. To those who value facts, concrete examples can be compelling and persuasive. Moreover, drawing on history allows the cryptocurrency community to correct a fatal mistake; namely, it is defensive about privacy, when it should be on the offense because crypto stands on the moral high ground.

Financial independence is not the place to begin to demonstrate the link between privacy and human rights because anything to do with money arouses immediate cynicism. Money produced by work and through merit is the root of all good; it feeds families, fuels invention, and raises prosperity for all. Wealth from honest effort is to be celebrated, emulated, and protected from looters.

But money has been demonized as “the root of all evil” by those who never seem reluctant to accept it as donations, payment, taxes, or other forms of theft. The pervasiveness of plunder is a testament to the incredible power of wealth. But  plunder must be justified, or else it will be seen to be the outright money-grab it is. Thus, money and anyone who resists the theft of it are demonized as criminals or otherwise morally corrupt.

A better place to begin to link privacy and human rights is freedom of religion and due process. A pivotal insurrection in the 16th century defined the evolution of both within Western society. It revolved around a person’s right to keep his religious beliefs private so they could not be used against him in a court of law. A current version of this right is called “taking the fifth” — invoking the due process right against self-incrimination. Although this mainstay of due process is often portrayed as the last legal recourse of a guilty man, the intended and overwhelming beneficiary is the man in the street who, whether he realizes it or not, is protected against the exercise of arbitrary power.

The insurrection has background. In 1534, Henry VIII denied papal authority and established the Church of England, which maintained most of the traditional Catholic rites. Thus Protestants, called dissenters, were often tried for heresy; torture commonly accompanied trial. In the late 1530s the Protestant John Lambert was burnt alive for heresy. During his trial Lambert became the first known Englishman to proclaim it was illegal under God and the common law to compel a man to accuse himself. He appealed to the privacy of conscience.

The right to not bear witness against oneself had precedent in common law, but it was not enforced in English courts until in the late sixteenth and early seventeenth century. Its roots are deep in the history of religious persecution. Courts of the day required a defendant to answer a barrage of questions based on evidence gleaned from witnesses or informants, without informing the accused of the charges being brought. The interrogation aimed at trapping a defendant into a confession. People were tried on mere suspicion and, if found guilty, they were required to name other heretics. Silence was deemed a confession.

In 1563, John Foxe published the immensely influential Book of Martyrs, which has been called a “libertarian primer” on procedural rights. He argued for the right to remain silent. The right to keep personal information private.

Famously, the Leveller and libertarian John Lilburne employed Foxe’s procedures in 1637, when he was brought before the Court of Star Chamber for circulating Puritan books. Rather than being charged, Lilburne was asked how he pled. Refusing to take the customary oath, he declined to answer questions that bore witness against himself. Lilburne was fined, whipped, pilloried, and sentenced to prison until he complied. While in prison he penned an account of his brutal treatment entitled The Work of the Beast. In 1641, when the much-hated Star Chamber was abolished and the right to remain silent established in religious courts, Lilburne was widely credited.

Puritans who escaped religious prosecution to the New World carried Lilburne’s ideals, even though various colonial courts used torture to elicit confessions and required defendants to testify against themselves. By the time the colonies were states, however, six had clauses in their Constitutions against self-incrimination, and several others verged on including them. The right of a defendant against physical compulsion to speak was established at the national level in the Bill of Rights’ Fifth Amendment: “No person … shall be compelled in any criminal case to be a witness against himself….”

The right against self-incrimination – the privacy of personal information —  lies at the core of due process. It is historically anchored in the quest for religious freedom. It served as the strongest single protection against the use of torture by state authorities.

Privacy Under Attack Means Rights Are Under Attack

The human right against self-incrimination is currently under concerted attack by those who pit it against “security” or other governement interests, such as preventing tax evasion. The shrill demand for encryption keys and private crypto keys are two examples of government’s onslaught against privacy.

Privacy – the right to shut your front door, the right to be silent — has been protected for so long that it is taken for granted. People forget; privacy was established by those willing to be tortured and killed rather than to surrender  intimate information to enemies. The great wrongs of past governments were corrected and prevented by the blood of stubborn dissenters. The great wrongs are destined to be repeated unless privacy, like wealth, is celebrated, not demonized.

[To be continued next week, with how privacy was a core concept of the American Revolution.]

Reprints of this article should credit bitcoin.com and include a link back to the original.


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

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PR: London Blockchain Startup FarmaTrust Partners with Mongolian Government to Stop Fake Medicine

London Blockchain Startup FarmaTrust Partners with Mongolian Government

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

FarmaTrust, a UK blockchain startup and global tracking system has officially signed a partnership with the Mongolian government to pilot a one-year project aimed at preventing the creation and distribution of counterfeit medications. The project will include both governmental and non-governmental parties in Mongolia, including the Specialized Inspection Agency of Tuv Province of Mongolia and the Mongolian e-Government Center NGO.

The pilot project will kickoff in the Tuv Province, a province outside of the capital city of Ulaanbaatar. Immediate tasks include conducting feasibility reports and helping government monitoring and inspection of pharmacies, and pharmaceutical supply chains, including warehouses and retailers.

FarmaTrust CEO, Raja Sharif, explains, “This project is a great multinational collaboration to mix blockchain and other emerging technologies to secure and optimize the pharmaceutical supply chain. Mongolia is a great starting point. With a population of just 3 million, tracking and implementation can quickly scale on the national level. Mongolia is also important as a strategic middle point between Russia and China, two countries that have experienced large amounts of counterfeit medicine in the past.”

FarmaTrust is providing the knowledge and experience in blockchain supply chain tracking with the goal of creating an immutable ledger that can track and secure pharmaceutical supply chains using big data and artificial intelligence. FarmaTrust has received widespread support from major media and organizations interested in helping eliminate the counterfeit pharmaceutical industry that results in over 120,000 deaths per year.

About FarmaTrust:
FarmaTrust is the most efficient global tracking system which provides security to the pharmaceutical companies, governments, regulators and the public, that counterfeit drugs do not enter the supply chain. Our Blockchain based system utilizes Artificial Intelligence and big data analysis to provide the pharmaceutical industry with value added services which allow for more efficient processes and methods as well as a more transparent supply chain. Our system is safe, secure, encrypted and immutable.

Website and Social Media
Web: https://www.farmatrust.io/
Whitepaper: https://farmatrust.io/sites/default/files/whitepaper/FarmaTrust_Whitepaper_v10.pdf
Telegram: https://t.me/farmatrust
Media Contact: bohuse@farmatrust.com

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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SEC Suspends Trading of Three Companies With Ties to Cryptocurrency

SEC Suspends Trading of Three Companies With Ties to Cryptocurrency

The U.S. Securities and Exchange Commission (SEC) has suspended trading in the stocks of three companies with ties to cryptocurrency. One of the three is also planning an initial coin offering. The SEC says it is concerned about the nature of the companies’ business operations and the value of their assets.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

SEC Suspends Trading of Three Stocks

The SEC has “suspended trading in three companies amid questions surrounding similar statements they made about the acquisition of cryptocurrency and blockchain technology-related assets,” the agency announced on Thursday. They are Cherubim Interests, PDX Partners, and Victura Construction Group. The three stocks are traded over-the-counter, with a market capitalization of less than $5 million each, according to Factset. The suspension is temporary, beginning on February 16 and ending on March 2.

SEC Suspends Trading of Three Companies With Ties to CryptocurrencyThe agency stated that the three companies issued press releases claiming that they have “acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology, among other things.” However, the SEC says there are questions regarding the nature of the companies’ business operations and the value of their assets.

In addition, Cherubim Interests also announced that it will launch an initial coin offering (ICO). The trading suspension of this company’s shares is also due to its delinquency in filing annual and quarterly reports with the Commission.

Acquisitions and ICO

The three companies’ press releases list the same chief executive officer, Patrick J. Johnson, “who played for the Oregon Ducks and the Baltimore Ravens in the NFL,” wrote the Oregonian.

SEC Suspends Trading of Three Companies With Ties to CryptocurrencyJohnson told the publication that PDX Partners makes iPhone apps, adding that last month the company “acquired $350 million in assets belonging to a private equity firm called NVC Fund Holding Trust, whose portfolio includes ‘cryptocurrency and business financial services’.”

Cherubim Interests and Victura Construction Group have also made similar acquisitions. Furthermore, the former announced on January 3 that it has “executed a financing commitment of $100,000,000 to launch [an] initial coin offering for The Self Sustaining Intentional Communities Coin (Symbol SJT),” adding that “The sale of the coins will generate the capital to create self-sustaining intentional communities across the US and across 57 nations.”

Regulators’ Warnings

In August of last year, the SEC issued an Investor Alert about public companies making ICO-related claims. “The SEC’s Office of Investor Education and Advocacy is warning investors about potential scams involving stock of companies claiming to be related to, or asserting they are engaging in, Initial Coin Offerings (or ICOs),” the agency wrote, adding that “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams.”

The SEC’s action against the three companies come at the same time another US regulator, the Commodity Futures Trading Commission (CFTC), issued a warning about dump-and-pump schemes involving “thinly traded or new ‘alternative’ virtual currencies, digital coins or tokens.”

What do you think of the SEC’s action? Let us know in the comments section below.


Images courtesy of Shutterstock and SEC.


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Bitcoin’s Correlation With Wall Street Continues to Prove Itself

It is extremely clear that there is a high level of correlation between bitcoin and the stock market on Wall Street. According to a new report “On a 90-day basis, the correlation between the daily percent returns of the cryptocurrency and the S&P 500 is 33 percent, the highest since the cryptocurrency started gaining public attention in January 2016.” The previous high of the last two years was only at around 19%, which is much lower.



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The long run shows a negative 1% correlation, which means that these industries are highly correlated. The correlation factor has been increasing substantially, which means that many investors have possibly switched investments between crypto and the stock market. Towards the end of December, bitcoin managed to surge above $19,000, leading it to the highest the price had been since the coins inception. After the announcement of futures contracts from CME and its competitor CBOE, bitcoin managed to drop substantially, which many see as a fraudulent drop in the price, controlled by a select few individuals.

The issue with this lies in the fact that many got into the crypto industry only so that they could find an alternative to the stock market. If bitcoin is following that same price action, it essentially defeats the purpose of investing in bitcoin instead of stocks. As the stock market took its most recent dip, bitcoin also dipped below $6,000. This price action scared many investors, which led to quite a large selloff across both industries. As the industry on cryptocurrency is still relatively in its infant stages, many investors are hoping that this tight correlation will slow down slightly, so both markets can continue to grow independently of one another. Only time will tell what happens to the industry on crypto.

Trending Now: Bitcoin Price & Blockchain Technology Have Investors Hungry For Opportunity

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Bitcoin (BTC) Hits Key Level Of $10,000 As Recovery Continues

On Thursday Bitcoin (BTC) rose above the key psychological price level of $10,000 after having plunged to a low of $6,000 a week ago. The appreciation of the virtual currency is believed to be driven by various statements from regulators which have alleviated fears that there will be a heavy-handed crackdown on digital coins. Having hit the key level analysts expect new buyers to troop into the market raising the prospect that the current price has more headroom.

“For most of December and all of January investors were focused on a regulatory crackdown, mostly in Asia. That all changed when CFTC Commissioner Giancarlo spoke at the Senate Banking Committee and changed the regulatory tone,” Brian Kelly, the head of BKCM and a CNBC contributor said.

New buyers

When Bitcoin first hit the $10,000 mark in November last, leading U.S. virtual currency exchange, Coinbase, saw an increase of approximately 300,000 users around that time. These new users were credited for causing the price of the virtual currency to nearly double in the ensuing weeks.

The appreciation in price of the most popular virtual currency in the world coincides with a decision by Coinbase to disable the addition of new credit cards by customers as a method of payment in the United States. The cryptocurrency startup however revealed that debit cards would not be affected by the move.

Credit card losses

According to Coinbase the decision was driven by the fact that it was impossible to guarantee a smooth and successful experience for customers buying virtual currencies using credit cards. Some credit card firms have banned the purchase of digital coins use their products.

While the change does not currently apply to customers of Coinbase in Singapore, Australia, Canada, European Union and the United Kingdom, Coinbase is currently evaluating the situation with a view to making a decision. The ban does not also affect those who have already linked a credit card to their account on Coinbase. However their credit card issuer has to allow it in order to continue making purchases.

In the recent past some banks have announced that they will not allow their customers to buy virtual currencies using credit cards issued in their name. It is understood that banks are worried about credit card losses due to the volatile nature of cryptos.

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Crypto Lending Firm BlockFi Gets $1.55m In Fundraising Round

BlockFi, a startup based in New York which offers loans to owners of virtual currencies using their ether (ETH) and bitcoin (BTC) digital coins as collateral has received $1.55 million in funding from firms such as Lumenary, Purple Arch Ventures, SoFi, PJC, Kenetic Capital and ConsenSys Ventures. The New York-based startup intends to use to capital injected in bridging the gap that exists between the cryptoasset ecosystem and traditional lending markets.

“By bringing institutional quality technology infrastructure, data science, risk management and operations to the cryptoasset market, we aim to be the leading lender in the cryptoasset market and a leading provider of low cost credit globally,” the founder and chief executive officer of BlockFi, Zac Prince, said.

Secured lender

Being a secured lender, BlockFi holds the cryptoassets of a client with a custodian who is registered and then issues the loans in U.S. dollars to the bank accounts of customers. The startup is at the moment in beta launch and is lending in a total of 35 states in the U.S. BlockFi lends not just to individuals but also to institutions and companies. And just like traditional lenders BlockFi transmits a client’s loan performance data to major credit bureaus and this can serve to vouch for an individual if they generate good credit scores.

Currently the market for cryptoassets is growing at an exponential rate and in the last one tear has reached a total market capitalization of more than $400 billion from $10 billion.

ConsenSys Ventures

Before founding BlockFi, Prince had started a lending platform geared towards the underbanked known as Cognical. In most of the startups or projects that BlockVentures invests in the VC firm takes particular interest in those blockchain projects which possess environmental and social inclinations. The VC firm also has a particular affinity for startups that have seasoned entrepreneurs as their leaders.

At the moment ConsenSys Ventures has a fund worth $50 million and is led by Kavita Gupta, an investment specialist and the 2015 recipient of UN Social Finance Innovator Award. Besides BlockFi other startups that ConsenSys Ventures has invested in in the blockchain space include sweepstakes firm Pryze and esports betting firm Unikm.

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