Bitcoin, Law & KYC coins

There has long been a viewpoint that institutional money and legacy finance houses becoming invested and offering Bitcoin services would be a positive for the network. I was previously also of this view but time and personal experience has shown me that this is false. Bitcoin is fundamentally incompatible with regulated financial services and users should avoid these services in order to fully utilise and benefit from bitcoin.

The Purpose of Law

Law attempts to describe and define reality with discrete abstractions – words to describe events. Society needs very few laws to function well. The 10 commandments do a pretty thorough job. So when a governing power introduces reams and reams of complex, ambiguous and unnecessary laws there must be an ulterior motive at play other than “for the good of the people”. And so it must be understood that the legal system is the main weapon in the State’s armoury which they utilise to control and manipulate their subjects.

What is a Hammer?

hammer | ˈhamə | 


1. a tool with a heavy metal head mounted at right angles at the end of a handle, used for jobs such as breaking things and driving in nails. 
• a machine with a metal block for giving a heavy blow to something. 
• an auctioneer’s gavel, tapped to indicate a sale. 
• a part of a mechanism that hits another part to make it work, such as one exploding the charge in a gun or one striking the strings of a piano. 

The average person should no more require a definition for a hammer than they should for bitcoin. We should no more require laws to govern what the proper usage of a hammer is than we require laws to tell us what the proper usage for bitcoin is.

So we must ask why regulators, the world over, are trying to elbow in definitions for bitcoin and attempting to bring it under the umbrella of their financial surveillance apparatus? See general notice 1350 as an example.

They are doing so as an attempt to co-opt, control and surveil the use of a neutral messaging network. Rulers fear free speech and free markets and thus do all in their power to limit both. They use language and law to bastardize the truth of things, thereby manipulating our behaviour.

If seems absurd that a government would introduce legislation explicitly defining the legal usage of a hammer, why then is it seen as reasonable that laws should be introduced to limit the legal usage of bitcoin?

The only effect of legislation serves to turn ordinary people into outlaws, unless they actively limit themselves to the legally defined usage, and to compel businesses to act as henchmen of the State – complaint services are obligated to gather data, spy on and report customer activity to the government.

I repeat: if you think it is absurd that governments regulate things against your best interest recall how Big Pharma, in collusion with government and the media, made a concerted effort to define Ivermectin as “Horse tranquilizer”. Definitions, regulations and laws are equally arbitrary whether they are applied to medicines, weapons, money, bitcoin or hammers.

Must Bitcoin be Defined and Regulated?

No. Each users gets to define their purpose for using Bitcoin. You want to send money across borders to your family? Bitcoin is a remittance and settlement network. You want to save money? Bitcoin is a savings account. You want to trade on price fluctuations? Bitcoin is high risk asset. You want to commit arbitrary data into the timechain? Bitcoin is a Library.

Anyone on earth can interact with the bitcoin network for whatever reasons they so choose. Now, if the State comes along and says Bitcoin is “x” therefore you can only use it for “y” then they are manipulating the law in order to control how individuals may legally use bitcoin. If we accept any false definition then bitcoin is no longer a tool for the user but a tool for the State, thus bitcoin is and always will be incompatible with regulated financial services.

Any user that chooses a regulated service is implicitly accepting three things:

  1. To only use the instrument as legally defined.
  2. To have all their transactional and personal data captured, stored and surveilled indefinitely.
  3. Counter-party risk.

If this is accepted by the user, bitcoin’s utility diminishes into merely a speculative tool. And worse, a speculative tool where the State gains upside exposure, via taxes, while the individual bears all of the downside risk. Users can no longer reap the benefits of using bitcoin as a purely peer-to-peer electronic cash. You cannot remit value across borders, you cannot purchase other goods and services directly, you cannot frictionlessly bequeath wealth to your heirs. The regulated user becomes completely limited by whatever arbitrary definitions the regulators impose. This scenario must of course be resisted and avoided.

Users must empower themselves to use bitcoin independently and privately. In doing so they can enjoy the permissionless, trustless, bearer-asset benefits that bitcoin enables, instead of allowing law to turn a freedom enabling tool into a trusted, surveilled and risky instrument.

How to escape the Panopticon?

This is the hard part. Humans are creatures of comfort and convenience. The digital age can be surmised as humanity sacrificing our basic rights for a little extra convenience. Fight this trend.

The tools and the guides are all out there, it merely requires some work and effort on the users’ part. For anyone who is curious or would like to be pointed in the right direction feel free to enquire.

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