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The Future of Bitcoin

by David Veksler David Veksler 2 Comments

This is not a prediction, but one plausible timeline out of the many I can imagine:

  • Late 2013: The media reports that organized crime, tax evaders, and “terrorists” are using Bitcoin.
  • Early 2014: Politicians call for investigation of claims that Bitcoin is being used to facilitate illegal activities. The rhetoric is ratcheted up over the course of the year.
  • Late 2014: Bitcoin transactions have grown exponentially for several years. The world’s established financial institutions cannot compete with the lower costs of unregulated financial markets and pressure governments to act.
  • 2015: Western governments raid and shut down all the major BitCoin exchangers and effectively kill the currency. Operators are put away for lengthy sentences, while others are found to have cooperated with authorities for some time.
  • 2020’s: Bitcoin (or something very much like it) revives on a small scale as an underground currency and slowly grows over the next two decades.
  • 2020-2030: The US empire collapses. The EU has already fallen.
    China tries, but fails to replace the dollar as the world’s reserve currency. People hoard gold, but governments prevent it from being effectively used as money.
  • 2030’s: 3D printing takes off. Established industries attack unlicensed home printing as a violation of their IP. The major non-affiliated (“pirate”) pattern markets are blocked from handling financial transactions, and for a while, a pirate industry matures.
  • Late 2030’s: Something very much like BitCoin resurges. This time, it has a killer app: micro payments for 3D printing patterns. Ubiquitous encryption prevents governments and corporations from monitoring transactions and hoarded gold provides the base for monetary exchange.
  • 2040’s: With much of the economy being conducted in unregulated 3D pattern markers and most transactions being conducted over BitCoin, the tax base collapses.
  • Late 2040’s: Governments seize fiat-denominated savings in a desperate power grab, but fiat money is now worthless compared to an untraceable currency like Bitcoin. Governments attempt to seize real assets to replace lost income, but are met by large-scale protests backed by homemade 3D printed weapons. Mass chaos and violence follows.
  • 2050’s: Stability re-emerges, as new judicial systems evolve backed by anonymous transactions. Large states become increasingly irrelevant.
  • Late 2050’s: The last stand of centralized governments: politicians call in the military in an attempt to rebuild the surveillance state and kill digital currencies for good. Assassination markets, long used in organized crime, are turned against politicians, as the populace fights back.

 

See also:

“….IT security specialist David Veksler and writer Tim Swanson discuss alternative digital currencies currently being developed and deployed including cryptocurriencies like Bitcoin and Litecoin. In addition, cyber security and hacking issues in China are reviewed.”

Support Tor: fight Internet censorship

by David Veksler David Veksler No Comments

Unless you are utterly ignorant of the outside world, you have heard that the government of China actively monitors and censors its citizen’s access to the Internet.  Its tight grip on Internet services is part of an overall policy of brutal suppression of free expression and human rights in China, including organ harvesting, mass murder, forced sterilization, and all the other assorted atrocities that go along with a totalitarian socialist regime.  As brutal as China is, the state of human rights in Putin’s Russia may be even worse. 

Besides their oppressive governments, China and Russia also share a large number of Internet users.  Being a highly decentralized network, the Internet is a critical link for citizens in these countries to connect to each other and the outside world.  Unfortunately American companies have eagerly provided technology that the Chinese government uses to block access to banned content and track down and shut down users and content publishers.

Fortunately, the technologies that allow the creation of ubiquitous surveillance also make possible ubiquitous secrecy.  One particular tool for circumventing state censorship is the Tor anonymity network.  For some time now, I’ve been running a node on the Tor network, which allows users to communicate anonymously on the Net.  Tor is an “onion routing” network, which means that I can see the (unencrypted) traffic leaving my node, but I cannot know where it originates. 

A common concern with anonymity networks is that they can be used for malicious purposes, such as identity theft, piracy, or child pornography.  I was curious to see how my node was being used, so I used some network sniffing software to monitor the sessions leaving my own node.  Since my snooping sessions occurred around 1AM, I was not surprised to find that most of the traffic went to Russian (which I speak) and Chinese (which I can translate) sites.  As far as I could tell, none of the content was illegal.  I found users browsing websites for gaming, online forums, photography, and health information.  (A health information blog might seem innocuous in the West, but such information is closely controlled in China.)  It only took a few minutes however to find traffic to Secret China.com, a site in Chinese devoted to “promoting freedom of the press, a connecting bridge between the Western culture.”  Now as a statistical survey, this is a small sample, but it seems likely to me that at the very least, a substantial part of Tor traffic is being used by people who have legitimate reasons to hide their online activity from their governments.

If you wish to support freedom and privacy, consider visiting the Tor website, downloading the software, and running a Tor node.  You can read some reasons to run Tor on the project’s site, but here are mine:

  • I want to protect the rights of all people to communicate without interference or punishment from their governments.
  • I am concerned about the U.S. government’s policy of warrantless and unconstitutional surveillance, and want to protect myself against the consequences of its continued progress towards a totalitarian regime.
  • I believe that like the right to bear arms, my rights may become useless if they are not exercised.

Some tips for using Tor:

  • I am using the “unstable” version just fine.
  • You must configure Tor as a relay if you want to run a Tor node.
  • Tor will use a lot of traffic if you let it (slowing down your internet access and potentially reaching monthly bandwidth limits if you have any), and may expose you to legal investigation.  You should familiarize yourself with its options, as Tor makes it easy to control both the type and volume of traffic is relays. 
  • If you disable all the exit policies or enable the “help censored users reach the Tor network”, you can run a node without exposing yourself to liability.
  • The bandwidth graph will show total usage, so you can adjust the bandwidth limits appropriately.  For reference, Comcast has a limit of 250 GB per month.