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In the foreground
The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the world through anarchism
Chapter 11, Part 8
Avoid fraud by going from the crypto-anarchist
A transfer on the blockchain is a simplistic peer-to-peer contract, which stores terms for the people involved and is seen as valid by the surrounding community through transparency. It is a voluntary exchange. The blockchain is also an execution tool that includes the terms of execution, such as irreversibility, to which both parties have agreed; their agreement is expressed through the will to use the blockchain. Thus the blockchain expresses both the requirements of libertarian law; facilitates voluntary interaction and serves as an instrument of application.
-Wendy McElroy, "Do not break the state, bypass the state"
The late Samuel E. Konkin III (SEK3), the father of agorism and an old drinking buddy, answered the phone with the greeting "Smash the State". Yet his lifestyle did not include direct confrontation with authority. When possible, SEK3 avoided or replaced the state in its daily life, because it knew that the most effective way to destroy the state was to make it irrelevant. Its lasting legacy to the anarchist theory: agorism is a peaceful revolution that is achieved by the counter-economy, which the SEK3 defines "the study or practice of any peaceful human action prohibited by the state". The counter-economy is a version of the black market of the praxology of Ludwig von Mises: the study of human action that flaunts the state.
SEK3 would have appreciated the audacity of the cryptocurrency, which avoids and replaces the fiat state because being a better currency is the safest way to destroy the fiat. He would have said that the crypt was the "counter-economic currency," the currency of agorism. But more than this. In a flash, SEK3 would have recognized the implications of cryptography for justice, because it avoids and also replaces state law as the default position for contracts. The default position becomes the free market or the agorism. I can see SEK3 drinking a sip of black beer and a breath on his constantly present pipe, before announcing that anarchy had arrived.
The message of anarchism should never have "annihilated the state" or "convinced everyone to become anarchist". These are impossible ends. The message should be "liberated" by decentralizing the power expressed by every decision in their hands. To the extent that you can act as if the state did not exist, it is not.
The basis of a free society
The contract is the basis of anarchist law because it is a tangible proof of the consent of individuals, on which a free society rests. This is why it is essential to decentralize contracts under the direct control of the participants. The blockchain is a self-executable transfer, with immutable and transparent terms dictated by users rather than by the jurisdiction of a state; it can become a self-executive agreement through the addition of an intelligent contract. (Note: Smart contracts are still a developing technology, but proof of principle is certainly there.) The blockchain is its defense against fraud and theft, largely because it ignores trusted third parties, which are overwhelming causes of corruption.
An article by Brookings Institute asks: "Can Cryptovalute and Blockchain help fight corruption?" Indicating responsibility and transparency, presents a practical example of how blockchain prevents fraud. "If a government decides to build a road, it can now track how every dollar is spent, identify all users of the funds and make sure that only those authorized to spend money do it on the expenses originally scheduled within the time allowed. fraud and corruption that now require an average of 15 months could be performed at the touch of a button and at a fraction of the cost. "
The blockchain is part of a growing push to minimize the need for lawyers and courtrooms. An article on Futurism, entitled "An AI law firm wants to automate the entire legal world", explains another aspect of the trend: an automated service called LawGeex. "On LawGeex, users upload a contract and, within a short period of time (on average one hour), receive a report stating that the clauses do not meet common legal standards. vital clauses that may be missing and where existing clauses may require revision.All this is calculated by algorithms. "With a modest fee, algorithms can detect clauses that allow fraud or provide inadequate protection. It can check smart contracts before they are coded.
The indefinite reality of fraud
Fraud is like violence. Both will always be present because some people will always choose them as options. As for violence, the goal of the fight against fraud is not to eliminate it, because it is utopian. The goal is to reduce it drastically and keep it away from your life.
What is fraud? It is not simply "dishonesty", a word that is sometimes used as a synonym. Nor is it a violation of the contract, which can occur between well-meaning people who then usually come to an agreement. In an anarchic context, aggression is defined as the usurpation of property, regardless of whether it is a body or a person's property, without the owner's consent. In crypts, aggression is committed against property or wealth. If it is taken through violence, as in a robbery or a robbery, then it is a direct theft. If it is taken through deception or stealth, then it is the type of theft called fraud. In fraud facilitated by a contract, there may be a fictitious exchange of value; a person is assured that an expensive watch is a Rolex, for example, when it is an economic knock-off. Or the exchange can take place in falsely declared terms; the real Rolex is a stolen property to which the seller has no title. The seller lies; the buyer believes; the sales contract, explicit or implicit, is not valid because the values or terms have not been agreed by both parties.
Before discussing fraud in the crypt, it is important to note that the phenomenon may not be as common as many assume. The Australian Competition Commission and the consumer published a report on the level and types of scams that took place in 2017. Cryptographic fraud constituted 0.6% of the total. Every instance seems to attract the attention of the media, however, because the powerful forces use the accusation of fraud to demand regulation. Or, as recently stated by Panda Security, "fraud in cryptocurrency is the exception, not the rule".
I also know that for every scam there are countless examples of cryptocurrency and blockchain technology used responsibly to create opportunities, grow economies and do good in the world. We must remember that cryptocurrency fraud is the exception, not the rule.
Attention to fraud is justified, but the conclusion of a need for state involvement is not. Inviting into the state – the biggest existing trusted third-party scam – is dangerous madness. Instead, people must focus on correcting unsecure user practices revealed by every scam. They should stop opening their wallets and crypts to thieves, statists or individuals.
Consider the 2017 scam "mybtgwallet.com". The website claimed to be an online web portfolio for Bitcoin Gold, which was considered legitimate. Mybtgwallet.com offered users free Bitcoin Gold wallets through which they could check their balances and use the website for one day for free transactions. The scam link was lent credibility by appearing briefly on the official Bitcoin Gold website, an act of incredible nonchalance on the part of the site, to say the least. To take mybtgwallet.com on its offer, users had to send their private keys or semi recovery. Of course, after doing so, the encryption in their wallets was forwarded to other addresses.
Nobody should have fallen in love with this scam, but also some veterans of the crypt. Coindesk reported that "more than $ 3.3 million was stolen as part of an elaborate scam that took advantage of the bitcoin users who were trying to claim their newly created bitcoin cryptocurrency piece of gold at least $ 30,000 in ethereum, $ 72,000 in litecoin, $ 107,000 in bitcoin gold and more than $ 3 million in bitcoins were confiscated. "
What are the lessons of mybtgwallet.com debacle?
- Always assume that a strange site may try to steal encryption. Extend trust only after due diligence.
- Due diligence or not, never trust anyone with private keys or recovery seeds. This is tantamount to revealing the combination of a safe title or delivery to your wealth. The keys and the seeds of recovery are the proof and control of the property.
- Immediately warn anyone who requires keys or seeds for recovery.
- Never insert your keys or seeds anywhere that are vulnerable to copying or archiving.
- Always keep a paper version of both in a safe place.
- Basically, maintain privacy. Thieves demand personal data in order to steal.
If the previous lessons are repetitive, it is because they endure repetition. Remember: when the crypto leaves your wallet, it is gone forever. This should at least be assumed. The transaction can not be canceled, and there is no insurance company to make you whole (even if the crypto community should sell this service). So how it is, victims rarely receive back even cents on the dollar, like Mt. Gox victims have done after years and years of strenuous efforts.
The biggest message from mybtgwallet.com
Avoid trusted third parties, however convenient or attractive they may seem. They are the main point of vulnerability for fraud and other thefts.
Third parties may be necessary for some purposes, such as converting from criptos. In this case, use exchanges or other services that require the least possible trust. Many decentralized exchanges do not require personal keys or information beyond the absolute minimum of an e-mail address and user name; prefer them in centralized units that remove all privacy. In your account, keep as little encryption as possible for the short period needed to reach your goal.
The third part of trust to avoid more is the state. Unfortunately, when mass fraud occurs, even people who should take on some responsibility for the call to theft, instead, for government regulation. There is an irony here. One of the reasons fraud occurs is the statist mentality with which people approach investment and all monetary things. They are used to the security guarantees of the state and many believe that the guarantees are real. Fiat's money is backed by the state and, by law, must be accepted as a payment. Bank deposits are insured; in the United States, the Federal Deposit Insurance Corporation guarantees up to $ 250,000. The forces of order operate divisions of fraud that record reports of theft. In short, the state makes people feel more secure than they should, and they neglect the due diligence that is the responsibility of every individual. Protecting your property is part of self-defense. The third most fraudulent trusted part of the world, the state, is not a remedy. It is not a reason to renounce self-defense. It is a reason to learn how to be comfortable and able to practice it.
[To be continued next week.]Reprints of this article should credit bitcoin.com and include a link to the original links of all previous chapters
Wendy McElroy has agreed to "publish live" her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you will find another episode in a series of posts that are expected to end after about 18 months. Altogether they will compose his new book "The Satoshi Revolution". Read here first.
