Blood money

Modern society has an uncomfortable, often contradictory relationship with “blood money”. Here, I use the term “blood money” to describe money that is either gained through the use of violence/ threats of violence (coercion), or comes directly from an individual or organization that employs such tactics as a matter of course. For example, money from a kidnapping ransom or money that comes from a murderous crime syndicate.

At first glance, the issue would seem to be without controversy. Most people would probably say that blood money shouldn’t be knowingly accepted by people who want to keep their conscience clean. There are even laws in place that reflect these values, such as “Know Your Customer” and “Anti-Money Laundering” laws that exist to prevent criminals from using the financial system.

And yet, upon investigation it would appear that society’s aversion to blood money is more rhetoric than reality. This is perhaps due to how deeply blood money has penetrated society, how thoroughly violence and coercion have permeated society’s customs and norms, to the point where in response to breaking the law, as Mike Gogulski has pointed out, “the penalty is always death“. Thus blood money becomes inescapable as it circulates through the economy. Nobody’s hands are completely clean.

This blog post was prompted by a tweet that came across my feed criticizing Elon Musk for suggesting that he could finance taking Tesla private again using money from Saudi Arabia.

bloodmoney2.png

Already well known for their public executions and stifling of dissent within the Kingdom, Saudi Arabia is currently under investigation for allegedly sending a “killing team” to Istanbul to murder a Washington Post journalist inside of the Saudi Consulate.

As a primarily deontological ethicist, I sympathize with the point of view expressed by the tweet’s author towards Elon Musk. Back in 2016, I myself took a similar jab at Uber:

bloodmoney3.png

And yet at the same time, I also sympathize with the Elon Musks and Ubers of the world, at least when it comes to this specific issue. It’s easy to fall into the trap of coldly calculated consequentialism when you’re making big decisions that affect millions of people and involve the cooperation of thousands of others.

How discerning can you be about the moral purity of your employees, your partners, your investors when you’re dealing with numbers that big? In a world where society runs on blood money, the only choice it appears we have is how dirty we allow our hands to get. It’s impossible to completely isolate oneself from evil, given the totality of modernity. This is evidenced by the vanishingly small number of “uncontacted peoples” left on Earth.

Thus it seems that no one can be pure, and at best we can only negotiate about how bloody we allow our hands to get before we invoke the moral judgement of our peers. As much as we want the issue of blood money to be clean and simple, black or white, it would seem that all of ours hands are dirtied by shades of gray.

Faced with such a reality, the best choice appears to be a mix of deontological ethics and consequentialism: commit to a limited number of specific values (for example, don’t murder, don’t steal, the “golden rule”) and then try to optimize for the best outcomes. Sometimes that may mean tolerating or even partnering with others whose actions run counter to those values, as in the case of Tesla taking money from Saudi Arabia. While Elon Musk might never murder a journalist with his own bare hands, he will tolerate taking money from someone who has in pursuit of a larger goal. For Musk, the ends would justify the means.

I’m reminded of a quote from philosophy professor Will MacAskill on the 80,000 Hours podcast. He says:

…[I]t seems like given the obvious analogy with decision making under empirical uncertainty, we should do something like expected value reasoning where we look at a probability that we assign to all sorts of different moral views, and then we look at how good or bad would this action be under all of those different moral views. Then, we take the best compromise among them, which seem to be given by the expected value under those different moral views.

Elon Musk might make the decision that, while he would prefer not to finance his company with blood money from an organization that murders people, he expects that the outcome will be a net improvement over the outcome if he didn’t take the blood money. He can’t do nothing – everyone has to act, action means decisions, decisions mean consequences, and so we must try to act in a way that leads to the best possible outcomes.

So Musk decides, I’m not directly harming anyone by taking the money, in fact I’m using the money to help people, and I’m not responsible for how the Saudis use the returns on their investment in Tesla, so I will take their blood money and use it to make the world a better place. (Of course, this is hypothetical; I’m not sure what Elon Musk’s real justification for taking the money would be.)

In a poll I started in response to this issue, respondents were nearly evenly split on the question of whether it is morally wrong to accept blood money in the pursuit of noble goals, with those answering “no” only narrowly coming out ahead and about a third of respondents abstaining from the question altogether:

bloodmoney.png

Written responses ranged from “Yes it is morally wrong because it legitimizes bad behavior” to “No it is not wrong to take the money but it is wrong to pay it back” and finally “The ends justify the means”; essentially samples across the whole spectrum of possible answers. And I’m not sure any one of them is the “right answer”.

I ask myself if I would take the blood money. Regardless of what I’d intend to do with it, I feel certain that the answer would be “no”. But then I wonder, what about blood money two or three steps removed from the source? How faded would the blood on the money have to be for me to feel comfortable taking it?

And for that question, I don’t have a good answer.


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America Was Never Actually That Great

An Abridged Timeline of Epic Fails

1789 – 1865: Slavery is legal

Source: https://en.wikipedia.org/wiki/Slavery_in_the_United_States#The_end_of_slavery

Until 1865, the slave trade was legal and slavery enforcement was paid for by U.S. taxpayers. People, mostly of African descent, were treated worse than livestock.

1789 – 1920: Women cannot vote

Source: https://en.wikipedia.org/wiki/Women%27s_suffrage#United_States

Women were denied the right to vote until the passage of the 19th Amendment to the Constitution in 1920.

1789 – 1965: Disenfranchisement of African Americans

Source: https://en.wikipedia.org/wiki/Voting_Rights_Act_of_1965

African Americans have had their voting rights denied, curtailed, and taken from them by racist laws and intimidation by American terrorists.

1789 – Present: Discrimination against same-sex couples

Source: https://en.wikipedia.org/wiki/LGBT_rights_in_the_United_States

Same sex couples lack many of the same rights afforded to straight couples, and are not equally protected against discrimination by U.S. law.

1789 – Present: Disrespect for Native American sovereignty

Source: https://en.wikipedia.org/wiki/Native_Americans_in_the_United_States#Current_legal_status

Natives had land stolen from them en masse, had multiple treaties forced onto them and then violated, were forced onto reservations, and to this day have their tribal sovereignty interfered with by public and private American interests.

1860 – Present: Drug prohibition creates new black markets

Source: https://en.wikipedia.org/wiki/History_of_United_States_drug_prohibition

Drug prohibition has been used as a blunt instrument to oppress political and racial minorities, such as Asians in the 1800s, Mexicans and African Americans in the early 1900s, and anti-war activists in the 1960s and 70s. Today, the black market for drugs fuels gangs that use violence instead of courts to resolve disputes. Vast criminal enterprises funded by black market drug revenues have corrupted social institutions and terrorized local communities around the world. And the most vulnerable among us, the sick and dying, have had their access to lifesaving medicines restricted by prohibitionist drug policies.

1890 – Present: Military interventions and occupations

Source: https://www.veteransforpeace.org/files/3513/3227/0400/a_century_of_MILITARY_INTERVENTIONS.pdf

America has been picking winners and losers in the foreign political arena by fomenting dissent and engaging in proxy wars against disagreeable regimes. America will also send the military into foreign conflicts to “protect American interests”. Usually this translates into American taxpayers subsidizing the security costs of American corporations building factories or infrastructure in another country.

1921 – Present: Immigration restrictions prevent free movement

Source: https://en.wikipedia.org/wiki/Emergency_Quota_Act

This despite the fact that America was founded in part by undocumented immigrants.

… and many more.

This is but a small sampling of the major shortcomings that have made America “never actually that great” in its relatively short history. So when someone exclaims “make America great again!” what you really have to ask is this:

When you say ‘make America great again’, to what time period are you referring, exactly?

The time when America was funding ISIS and Al Qaeda to fight Assad in Syria?

The time when America lied about WMDs in Iraq and launched a failed occupation that has gotten thousands of people killed and is still dragging on over a decade later?

The time when America was illegally selling weapons to Iran to illegally fund Contra rebels in Nicaragua?

The time when America denied same-sex couples the right to get married or even visit their significant other when they were sick in the hospital?

The time when America was performing midnight no-knock raids and shooting dogs and children because the police thought someone in the house might be in possession of dried cannabis flowers?

The time when America lied about a ship being attacked in the Gulf of Tonkin so they could enter a war in Vietnam that got over a million people killed?

The time when America kidnapped people of Japanese descent and imprisoned them in concentration camps?

The time when America fought viciously to enforce segregation and prevent African Americans and other racial minorities from gaining any political or economic power?

The time when America outlawed alcohol, spawning a new breed of organized crime led by violent mobsters like Al Capone?

The time when America denied women the right to vote or own property?

The time when America committed serial acts of genocide against native people whose ancestors had settled here centuries before Europeans?

The time that Africans were brought to America from their homelands against their will and forced to work and breed by white slavemasters?

I am really interested to know, when was this time when America was ‘great’ that you are so eager to return to?

You can’t write these events off as mistakes. These were deliberate acts by Americans who used the state to inflict enormous amounts of pain, suffering, and death upon cultural and racial outgroups with the goal of neutralizing them as economic or political threats. In some cases the targets of American anger and violence were bad people who hurt people. In too many other cases, they weren’t.

These moments cast a dark shadow on whatever perceived greatness there might have been for the beneficiaries of these injustices, the executives and financiers and middle-class employees of corporations, governments, and NGOs who made a living exploiting America’s “greatness.” In whatever ways America has ever gotten ahead to become so “great”, it has often been by forcibly keeping others down using economic or military power.

This is not greatness. This is bullying. Great leaders do not put people down, they raise them up. America – and the rest of the world – deserves better.


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Walled gardens are built to keep out the competition. Sometimes they keep out customers, too.

peabdh4o8gm-masayoshi-yanase

I recently started using a Mac for work and one of the first things I wanted to do was make sure all my software was up to date. Little did I know, this would end up being a two hour process.

First, I had to sign up for an Apple ID account to upgrade all my software. This left me scratching my head. “Please Apple, may I update my software?” I don’t know what I expected, but it wasn’t that! Next, Apple made me add a payment method to my Apple account before I could actually create the account. Now I’m really starting to get annoyed. Nothing I want to update costs money, why should Apple have to store my payment information?

When I tried connecting my PayPal account to my Apple account (since I figured that’d be at least a little more secure than adding a credit card), PayPal freaked out because I was logging in from a new IP address. This was after they blocked me from even accessing the PayPal website because I was using a VPN (I was served with a 403 error – this is becoming depressingly common).

After “confirming my identity” by entering a code they texted to my phone (!!), PayPal said “ok, now let’s secure your account” – as if my account was insecure in the first place, which it obviously wasn’t since I entered the correct password AND the code they texted to my phone – then forced me to reset my password. After resetting my password, PayPal finally let me into my account.

By this point, the cookie or whatever Apple was using to keep track of my account creation process had disappeared, and I had to start the Apple ID account creation process over and log into PayPal again to finish creating my Apple account. All in all, I had to fill out the account creation form for Apple and login to PayPal three times each just to create an Apple ID and update my software. This was a stupidly complicated process, and was a painful reminder of why I prefer open systems like Linux and Bitcoin instead of the supposedly-but-not-really more “sleek and user-friendly” proprietary systems like Apple and PayPal.

Walled gardens are built to keep out the competition. Sometimes they keep out customers, too.


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New year, new job

Yesterday I published a post on the Abra blog announcing that I have joined the company to help “extend [cash on- and off-ramps for Bitcoin] globally.” Most of the details about why I made the decision to join Abra are in that post, but for my friends who I’m sure will have more questions, I’m putting together an FAQ to answer questions about the new job and how it affects other projects I’ve been working on.

Why Abra?

I really like the team and the company’s mission. As I mentioned in the post on Abra’s blog, I started the Buttonwood SF meetup to make it easy and safe for people in my local community to get cash in and out of the Bitcoin network, and now I’m excited to work with Abra to make that possible worldwide.

What will happen to Buttonwood SF?

I actually turned over control of the meetup page to a prominent local bitcoin trader a while ago because I was traveling a lot for work and figured he’d be a better steward. Eventually he stopped paying the meetup dues and no one else in the community stepped up to take over. So right now the meetup page is inactive. But some of the folks in the community still meet to trade, and in the future we might decide to either reactivate the meetup page or create a new online community portal somewhere else so people can easily find the meetup. If you have any interest in helping with this, please get in touch!

Are you still working with Bitseed?

Yep! Bitseed has been a passion project of mine since we first started, and I don’t intend to change that any time soon. We’re working on the next iteration of the Bitseed node now, mostly focused on finding new hardware that can increase the power of the node and new use-cases that can be served by having a personal server self-hosted at home. If you have any ideas or want to help out in any way, please get in touch! We’re especially looking for software devs who are interested in helping us with the Bitseed Web UI and working on new software for Bitseed 3. To stay up-to-date with all Bitseed developments, you can subscribe to our newsletter.

When is the next edition of Bitcoin: Be Your Own Bank coming out?

I can’t say for sure! I plan to re-write a lot of it and add a couple new chapters. I am waiting for a couple of projects to do their first public releases before adding them to the book. After that, it should only be a month or two before the Second Edition is ready to be published. So I anticipate it will be ready by the end of the year, at the latest. Subscribe to the BYOB blog for updates.

Are you still working with Blockstack?

Yep! I’m not as active in the community as I used to be, but I still hang out in the forum and Slack and eagerly await all the software releases that the Blockstack community is working on. There’s a lot of really cool stuff happening there and I encourage everyone to at least follow the Blockstack blog and Twitter account to get alerts for important Blockstack announcements – you won’t want to miss it!

Will you still be working with the okTurtles Foundation?

Yep! I plan to publish a follow-up to my blog post about open-source Slack alternatives, and am also looking forward to helping them test the first public release of the Group Income app. If you would like to help support the Foundation’s mission to support beneficial decentralized technology, we appreciate all donations and volunteers!

Fin

I think that answers all of the important questions I can think of. If you have any others, let me know!


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Ringing in the New Year

Welcome to 2017! I hope you and yours had a good time celebrating the arrival of the new year – I know I did! In keeping with the age-old tradition of using this arbitrary landmark as an excuse to institute new changes, I’m putting in writing here a few changes that I plan to make in 2017. I’ve read that when you tell others about the changes you want to make, you’re more likely to follow through, so we’ll see how this holds up at the end of 2017.

IndieWeb

First, I’m planning to experiment further with IndieWeb technologies so that I can maintain control over the content I create. I already POSSE my blog by posting here first and syndicating out to Medium. But I haven’t yet taken time to figure out how to keep control of content on Twitter, a platform that I spend more time on than perhaps any other online. I want to figure out a way of not only preserving my own posts on Twitter, but also those of others that I’ve retweeted or liked, in a way that preserves both the original content and context/ aesthetic of the content. Twitter provides a way to export user data, but I haven’t figured out how to display that data in a well-structured way. So I plan to spend time figuring that out this year. Please share any ideas you have in the comment section below!

A related thing that I plan to do is to start posting regularly on one or more of the decentralized social media platforms that are out there. I’ve experimented with Diaspora and Mastodon before, but neither of those platforms “stuck” for me. I might give those a try again, or I might give others like ZeroNet or Blockstack more attention. Stay tuned to see what ends up working best for me.

Daily posts

This is pretty ambitious, but I’d like to start posting at least once daily to this blog. Hat tip to Fred Wilson for the inspiration. Right now, most of my posting is done on Twitter. On a good day, I probably generate enough content on Twitter to write a proper blog post. So expect to see more posts on this blog. The content will be similar to what I’ve already been posting here and on Twitter: bitcoin, crypto, decentralized web + p2p tech, radical abundance / sustainability, futurism, book highlights, some art and music, some politics, some startup insights, and whatever else I find interesting. If you are interested in reading Bitcoin content exclusively, you should subscribe to the blog for my book, Bitcoin: Be Your Own Bank, here. I plan on updating that at least monthly, if not weekly or even more frequently depending on how the Bitcoin landscape evolves this year.

To make this change more realistic, I’m only going to post on weekdays at first. Maybe I’ll step it up to weekends too, maybe not. We’ll see how it goes!

New job

This is a change that I actually already made, so it’s kind of cheating, but I’m going to be starting a new job. I’ll share more about it soon in a “new job FAQ”. This is going to require a slight shifting of priorities, but is all for the better. I’m really excited about what I’m going to be working on and can’t wait to tell you more about it 🙂

That’s it for today. Once again, happy new year – I’ll see you back here tomorrow!


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What’s at stake in the Bitcoin block size debate

What Bitcoin Is and How It Works

First described by Satoshi Nakamoto in a whitepaper released in late 2008, Bitcoin is a “P2P electronic cash system” that enables two people on the Internet to transact with each other without having to go through a traditional payment processor such as a bank or credit card network. Bitcoin was invented by combining several previously existing technologies, including digital signatures, peer-to-peer networking, and cryptographic proof of work, into a single application.

In Bitcoin, digital signatures are used to transfer the bitcoin digital currency from one account to another, peer-to-peer networking is used to broadcast transactions to the network for verification, and proof of work is used to determine which transactions get confirmed by the network. This process of determining which transactions are confirmed has come to be known as “Nakamoto consensus,” and it enables computers on the Bitcoin network to come to agreement on the current record of all transactions that have been accepted by the Bitcoin network. This Nakamoto consensus process produced a key innovation that did not exist before Bitcoin: a decentralized solution to the double-spending problem.

The Nakamoto consensus process confirms new transactions on the network by batching them into “blocks” which are produced and verified by the network approximately every ten minutes. Anyone can participate in the Nakamoto consensus process and make blocks by adding their computational power to the network. This decentralized network of block makers competes to collect a block reward consisting of new bitcoins and any transaction fees by racing to solve a complex math puzzle. The number of new bitcoins that are produced with every block is programmed to get smaller over time until the block reward disappears completely. At that point, block makers will be competing to earn only the transaction fees from all of the transactions that are included in the blocks they produce.

Each block is mathematically linked to all previous blocks, forming a “chain” that stretches back to the very first block produced by the network. This chain of blocks is referred to as “the blockchain,” and the network is designed to always refer to the longest blockchain when disputing the legitimacy of a transaction. As more blocks are built on top of a transaction that has been confirmed by the network, it becomes less likely that the transaction will be removed from the record, reducing the risk of a double-spend attack. An attacker trying to double-spend the network would have to be able to solve Bitcoin’s complex math puzzles faster than the rest of the network, which would require more than half of all the computing resources securing the network at the time of the attack. It is essential to the security of Bitcoin that no one party gains such a concentration of power in the network.

Preserving Bitcoin

The pursuit of a decentralized solution to the double-spending problem was the primary motivator that led Satoshi Nakamoto to invent Bitcoin. In the Bitcoin whitepaper, Nakamoto wrote:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution… What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

Trusted third parties, Nakamoto pointed out, introduce “inherent weaknesses of the trust based model” into payment systems, including “the possibility of reversal” by the trusted third party or an attacker who is able to compromise the trusted third party. It was this understanding that led Nakamoto to come up with the Nakamoto consensus process to solve the double-spending problem using a decentralized network of computers instead of a trusted third party.

Nakamoto designed Bitcoin so that the more computational power there is securing the Bitcoin network, and the more widely that computational power is distributed, the more difficult it would be for an attacker to launch a double-spending attack. With the number of people using the network growing larger every day, the requirement that the distribution of computational power remains decentralized has led to debates about how the Bitcoin software should evolve to accommodate higher transaction volumes. Both change and inaction could disrupt the equilibrium that allows the Bitcoin network to function today and deliver on its key innovation by providing a decentralized solution to the double-spending problem. Increase transaction capacity too much, and fewer computers will have the resources required to participate in the network, concentrating power in the computers that remain. Increase transaction capacity too little, and people may lose interest in Bitcoin as the cost of using it goes up, causing the system to collapse under the weight of its own success.

This is the challenge for Bitcoin developers: to engineer a way to scale bitcoin transaction volume while preserving Bitcoin’s key innovation, for to lose Bitcoin’s key innovation would be to lose Bitcoin itself. This will be no easy feat, and it may require taking risks that would be considered unacceptable or even impossible in other systems, but it is necessary for Bitcoin to scale if it is to continue to grow and become the world’s standard for “peer-to-peer electronic cash.”

When Bitcoin’s key innovation is used as the guiding principle for deciding which scalability proposal to implement, the decision chart looks like this:

Proposal 1 Proposal 2 Proposal 3 …etc
Preserves Bitcoin’s
key innovation
Doesn’t preserve Bitcoin’s key innovation

It is up to the community of Bitcoin developers, miners, and users to experiment with each proposal and fill in the blanks. The proposal that increases transaction capacity the most while preserving Bitcoin’s key innovation is the one that should be adopted.


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