Blockchain

“Cryptocurrency Is Most Useful for Breaking Laws and Social Constructs”

Jill Carson, co-founder of Open Money Initiative

Opinion Piece – an interesting read:

Jill Carson is co-founder of the Open Money Initiative, a non-profit research organization working to guarantee the right to a free and open financial system, and co-host of the What Grinds My Gears podcast. She also works as an advisor and consultant for startups including Algorand, Risk Labs, dYdX, CoinList, and Tezos.

Why hasn’t cryptocurrency gone mainstream?

“It doesn’t scale.”

“It’s slow.”

“It’s expensive.”

“It’s volatile.”

“It’s hard to use.”

Or maybe it was never supposed to go mainstream.

This is not to say cryptocurrency is any less important, meaningful, or useful. Rather, I think perhaps we have been judging cryptocurrencies’ success (or lack thereof) according to a false metric. We would not judge a fish by its ability to climb a tree.

By design, cryptocurrency does not solve mainstream problems.

Scale, speed, and cost are all examples of mainstream problems within finance, from main street to Wall Street. Credit card networks go down. Stock trades take days to clear. Wire transfers are expensive. In some situations, cryptocurrencies may offer marginal improvements on any of these issues, but more often blockchain-based systems will fail when compared to more conventional, centralized solutions.

This does not represent a design flaw. In fact, this is an intentional trade off.

Decentralized systems forsake scale, speed, and cost in favor of one key feature: censorship resistance. Cryptocurrency solves problems faced by the censored who, by definition, are not the mainstream.

In particular, cryptocurrency enables individuals and organizations to make censored transactions. Procuring drugs on the internet. That’s an example of a censored transaction. Buying US dollars in Argentina is another example. Paying a sex worker. Sending money to a friend in Iran. Making an online purchase as an unbanked individual. Selling cannabis as a dispensary. Getting money out of Venezuela. Supporting dissidents in Hong Kong. The primary utility of cryptocurrency lies in engaging in financial activity that is otherwise suppressed or prohibited.

This is the stated intent of cryptocurrency. Satoshi Nakamoto, the creator of bitcoin, described cryptocurrency as a tool of freedom. He compared it to other peer to peer networks like Tor which are similarly resilient to censorship. If we look at the anecdotal evidence, we can see that this is indeed how bitcoin is being used from China to Palestine. Furthermore, what little quantitative data we have also suggests that cryptocurrency use is higher in countries with financial restrictions. These results line up with predictions around cryptocurrency adoption that have existed for years. It is time to face this potentially uncomfortable reality: cryptocurrency is most useful when breaking laws and social constructs.

I, for one, do not want to live in a world where cryptocurrency has found mainstream use.

There exists a long history of censorship resistant and privacy preserving technologies: Signal for messaging, Bittorrent for file-sharing, Tor for web browsing. Like bitcoin, these tools are not built for the mainstream. Most people would rather use faster, slicker, glossier centralized alternatives like Facebook Message, Dropbox, and Google Chrome. But for censored people and organizations, decentralized technologies have always provided an escape hatch. For as long as they have existed, these tools have brought with them a certain level of societal discomfort. This discomfort stems not from these platforms being lawless domains — regulations exist on the dark web as much as they do in any jurisdiction – but rather from the difficulty these platforms present in enforcing these government policies and social norms. These technologies render censored activities more difficult to stop.

Decentralized technologies can be used for good, for evil, and for everything in between. From Hammurabi’s Code through to the Patriot Act, the morality of laws has been a matter of debate for as long as they have existed. The laws of one jurisdiction are often deemed unethical and unacceptable by its citizens and those of other geographies. To say that cryptocurrency is used primarily to engage in illegal or socially unacceptable activities is not a normative statement. It is used by freedom fighters and terrorists, by journalists and dissidents, by scammers and black market dealers, by revolutionaries and government officials. It is used by civilians to break unjust laws and escape humanitarian crisis, and it is used by the policymakers who write those very same laws. And of course, the same statements can all be made regarding the original decentralized payment system: cash.

As an industry, we spend a lot of time considering how to drive mainstream adoption of cryptocurrency. I, for one, do not want to live in a world where cryptocurrency has found mainstream use. For if it has, that world is a very scary place indeed.

This is not to discourage or devalue any of the work that is being done to improve decentralized technologies. Many projects in the industry are working toward optimizing away shortcomings in the technology. Layer 2 protocols promise to speed things up. New consensus mechanisms and forms of sybil resistance expect to improve scalability and reduce infrastructure costs. A myriad of applications are building more user-friendly wallets, on-ramps, exchanges, and other tools. All of these developments are important but they may never result in mass adoption. Improvements in scalability, speed, cost, volatility, and user experience may, however, make the critical difference for those who are users, no matter how fringe: the young woman in Venezuela surviving on bitcoin or the Chinese businessman using Tether for cross-border trade.

To judge cryptocurrency based on mainstream adoption is to judge it on a metric it was never designed to achieve.

 

This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world.

from: https://www.coindesk.com/cryptocurrency-is-most-useful-for-breaking-laws-and-social-constructs