16.10.1. "What are some implications of crypto anarchy?" + A return to contracts - whiners can't go outside contracts and complain - relates to: workers, terms of employment, actions, hurt feelings - with untraceable communication, virtual networks.... + Espionage + Spying is already changing dramatically. + Steele's (or Steeler?) "open sources" - collecting info from thousands of Internet sources - Well, this cuts both ways.. + Will allow: - BlackNet-type solicitations for military secrets ("Will pay $300,000 for xxxx") + Digital Dead Drops - totally secure, untraceable (pools, BlackNet mode) - no Coke cans near the base of oak trees out on Route 42 - no chalk marks on mailboxes to signal a message is ready - no "burning" of spies by following them to dead drops - No wonder the spooks are freaked out! - Strong crypto will also have a major effect on NSA, CIA, and FBI abilities to wiretap, to conduct surveillance, and to do domestic and foreign counterintelligence - This is not altogether a great thing, as there may be _some_ counterintelligence work that is useful (I'm perhaps betraying my lingering biases), but there's really only one thing to say about it: get used to it. Nothing short of a totalitarian police state (and probably not even that, given the spread of strong crypto) can stop these trends. - + Bypassing sanctions and boycotts - Just because Bill Clinton doesn't like the rulers of Haiti is no reason for me to honor his "sanctions" - Individual choice, made possible by strong crypto (untraceable transactions, pseudonyms, black markets) + Information Markets and Data Havens - medical - scientific - corporate knowledge - dossiers + credit reports - without the absurd rules limiting what people can store on their computers (e.g., if Alice keeps records going back more than 7 years, blah blah, can be thrown in jail for violating the "Fair Credit Reporting Act") - bypassing such laws - true, governments can attempt to force disclosure of "reasons" for all decisions (a popular trend, where even one's maid cannot be dismissed without the "reasons" being called into question!); this means that anyone accessing such offshore (or in cyberspace...same difference) data bases must find some acceptable reason for the actions they take...shouldn't be too hard - (as with so many of these ideas, the beauty is that the using of such services is voluntary....) + Consulting - increased liquidity of information + illegal transactions + untraceability and digital money means many "dark" possibilities - markets for assassinations - stolen property - copyright infringement + Espionage - information markets (a la AMIX) - "digital dead drops" - Offshore accounts - Money-laundering + Markets for Assassinations - This is one of the more disturbing implications of crypto anarchy. Actually, it arises immediately out of strong, unbreakable and untraceable communication and some form of untraceable digital cash. Distrurbing it may be, but the implications are also interesting to consider...and inevitable. - And not all of the implications are wholly negative. + should put the fear of God into politicians - "Day of the Jackal" made electronic - any interest group that can (anonymously) gather money can have a politician zapped. Positive and negative implications, of course. - The fact is, some people simply need killing. Shocking as that may sound to many, surely everyone would agree that Hitler deserved killing. The "rule of law" sounds noble, but when despicable people control the law, other measures are called for. - Personally, I hold that anyone who threatens what I think of as basic rights may need killing. I am held back by the repercussions, the dangers. With liquid markets for liquidations, things may change dramatically. 16.10.2. The Negative Side of Crypto Anarchy + Comment: - There are some very real negative implications; outweighed on the whole by the benefits. After all, free speech has negatives. Poronography has negatives. (This may not be very convincing to many....I can't do it here- -the gestalt has to be absorbed and considered.) + Abhorrent markets - contract killings - can collect money anonymously to have someone whacked...nearly anyone who is controversial can generate enough "contributions" - kidnapping, extortion + Contracts and assassinations - "Will kill for $5000" + provides a more "liquid" market (pun intended) - sellers and buyers more efficiently matched - FBI stings (which are common in hiring hit men) are made almost impossible - the canonical "dark side" example--Eric Drexler, when told of this in 1988, was aghast and claimed I was immoral to even continue working on the implications of crypto anarchy! - made much easier by the inability to trace payments, the lack of physical meetings, etc. + Potential for lawlessness - bribery, abuse, blackmail - cynicism about who can manipulate the system + Solicitation of Crimes - untraceably, as we have seen + Bribery of Officials and Influencing of Elections - and direct contact with officials is not even needed...what if someone "lets it be known" that a council vote in favor of some desired project will result in campaign contributions? + Child molestors, pederasts, and rapists - encrypting their diaries with PGP (a real case, says the FBI) - this raises the privacy issue in all its glory...privacy protects illegality...it always has and it always will + Espionage is much easier - from the guy watching ships leave a harbor to the actual theft of defense secrets - job of defending against spies becomes much more difficult: and end to microdots and invisible ink, what with the LSB method and the like that even hides the very existence of encrypted messages! + Theft of information - from corporations and individuals - corporations as we know them today will have to change - liquidity of information - selling of corporate secrets, or personal information + Digilantes and Star Chambers - a risk of justice running amok? + Some killers are not rehabilitated and need to be disposed of through more direct means + Price, Rhode Island, 21, 4 brutal killings - stabbings of children, mother, another + for animals like this, vigilantism...discreet execution...is justified... - or, at least some of us will consider it justified - which I consider to be a good thing - this relates to an important theme: untraceable communication and markets means the ability to "opt out" of conventional morality + Loss of trust + even in families, especially if the government offers bounties and rewards - recall Pavel Morozov in USSR, DARE-type programs (informing on parents) - more than 50% of all IRS suits involve one spouse informing to the IRS + how will taxes be affected by the increased black market? - a kind of Laffer curve, in which some threshold of taxation triggers disgust and efforts to evade the taxes - not clear how large the current underground economy is....authorities are motivated to misstate the size (depending on their agenda) + Tax Evasion (I'm not defending taxation, just pointing out what most would call a dark side of CA) + By conducting business secretly, using barter systems, alternative currencies or credit systems, etc. - a la the lawyers who use AMIX-like systems to avoid being taxed on mutual consultations + By doing it offshore - so that the "products" are all offshore, even though many or most of the workers are telecommuting or using CA schemes - recall that many musicians left Europe to avoid 90% tax rates + the "nest egg" scam: drawing on a lump sum not reported + Scenario: Alice sells something very valuable-perhaps the specs on a new product-to Bob. She deposits the fee, which is, say, a million dollars, in a series of accounts. This fee is not reported to the IRS or anyone else. - the fee could be in cash or in a "promise" - in multiple accounts, or just one + regardless, the idea is that she is now paid, say, $70,000 a year for the next 20 years (what with interest) as a "consultant" to the company which represents her funds - this of course does not CA of any form, merely some discreet lawyers - and of course Alice reports the income to the IRS-they never challenge the taxpayer to "justify" work done (and would be incapable of "disallowing" the work, as Alice could call it a "retainer," or as pay for Board of Directors duties, or whatever...in practice, it's easiest to call it consulting) + these scams are closely related to similar scams for laundering money, e.g., by selling company assets at artificially low (or high) prices - an owner, Charles, could sell assets to a foreign company at low prices and then be rewarded in tax- free, under the table, cash deposited in a foreign account, and we're back to the situation above + Collusion already is common; crypto methods will make some such collusions easier - antique dealers at an auction + espionage and trading of national secrets (this has positive aspects as well) - "information markets" and anonymous digital cash - (This realization, in late 1987, was the inspiration for the ideas behind crypto anarchy.) - mistrust - widening gap between rich and poor, or those who can use the tools of the age and those who can't 16.10.3. The Positive Side of Crypto Anarchy - (other positive reasons are implicitly scattered throughout this outline) + a pure kind of libertarianism - those who are afraid of CA can stay away (not strictly true, as the effects will ripple) - a way to bypass the erosion of morals, contracts, and committments (via the central role of reputations and the exclusion of distorting governments) - individual responsibility - protecting privacy when using hypertext and cyberspace services (many issues here) - "it's neat" (the imp of the perverse that likes to see radical ideas) + A return to 4th Amendment protections (or better) - Under the current system, if the government suspects a person of hiding assets, of conspiracy, of illegal acts, of tax evasion, etc., they can easily seize bank accounts, stock accounts, boats, cars, ec. In particular, the owner has little opportunity to protect these assets. - increased liquidity in markets + undermining of central states - loss of tax revenues - reduction of control - freedom, personal liberty - data havens, to bypass local restrictive laws + Anonymous markets for assassinations will have some good aspects - the liquidation of politicians and other thieves, the killing of those who have assisted in the communalization of private property - a terrible swift sword 16.10.4. Will I be sad if anonymous methods allow untraceable markets for assassinations? It depends. In many cases, people deserve death--those who have escaped justice, those who have broken solemn commitments, etc. Gun grabbing politicians, for example should be killed out of hand. Anonymous rodent removal services will be a tool of liberty. The BATF agents who murdered Randy Weaver's wife and son should be shot. If the courts won't do it, a market for hits will do it. - (Imagine for a moment an "anonymous fund" to collect the money for such a hit. Interesting possibilities.) - "Crypto Star Chambers," or what might be called "digilantes," may be formed on-line, and untraceably, to mete out justice to those let off on technicalities. Not altogether a bad thing. 16.10.5. on interference in business as justified by "society supports you" arguments (and "opting out) + It has been traditionally argued that society/government has a right to regulate businesses, impose rules of behavior, etc., for a couple of reasons: - "to promote the general welfare" (a nebulous reason) + because government builds the infrastructure that makes business possible - the roads, transportation systems, etc. (actually, most are privately built...only the roads and canal are publically built, and they certainly don't _have_ to be) - the police forces, courts, enforcement of contracts, disputes, etc. - protection from foreign countries, tariff negotiations, etc., even to the *physical* protection against invading countries + But with crypto anarchy, *all* of these reasons vanish! - society isn't "enabling" the business being transacted (after all, the parties don't even necessarily know what countries the other is in!) - no national or local courts are being used, so this set of reasons goes out the window - no threat of invasion...or if there is, it isn't something governments can address + So, in addition to the basic unenforceability of outlawing crypto anarchy--short of outlawing encryption--there is also no viable argument for having governments interfere on these traditional grounds. - (The reasons for them to interfere based on fears for their own future and fears about unsavory and abominable markets being developed (body parts, assassinations, trade secrets, tax evasion, etc.) are of course still "valid," viewed from their perspective, but the other reasons just aren't.)
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