Why BSV is More Likely to Promote Liberty Worldwide than BCH
An Open Letter to Roger Ver
Unbounded Capital would not be where it is today without Roger Ver. When we started our fund in early 2018 managing partner money, we only had two strong convictions; that there was something to cryptocurrencies and blockchain, and that other investors were doing something wrong. Treating the space as an open question, we set out to identify where money could be made as investors long term. Bitcoin seemed simple - digital gold, an inflation hedge, a low throughput store of value, a good first attempt that had a bright, if not somewhat boring future.
Seeing Roger Ver debate the likes of Samson Mow and Charlie Lee helped break us out of that simplistic view of Bitcoin. It was all too clear that Roger was correct. Big blocks were superior. Miners, not developers, should be the ones who work towards scale. We had already determined that the technocratic approach to scale with lightning network was doomed, this realization serving as the catalyst that led us to Roger in the first place. Suddenly, we had a significant Bitcoin Cash (BCH) position.
But this was after the 2018 Bitcoin Cash split. With our recent experience being on the wrong side of the 2017 fork, it was only prudent to check again - was Bitcoin SV (BSV) just a cult of Craig Wright, or were we missing something like we had missed with Bitcoin Cash? The answer to that became clear quickly when Unbounded Capital partner Dave Mullen-Muhr attended a BSV meetup in San Francisco. BSV was not a cult of Craig. It was a vision for Bitcoin much grander and broader in scope than anything we had previously imagined.
To make a short story shorter, our continued research into the claims of BSV supporters, Craig Wright included, led us to conclude that BSV had by far the best chance of succeeding. It didn’t hurt that it was trading for $50 at the time. The only thing that felt unsettling about the decision was that we were leaving behind Roger, our initial guide to understanding the true potential of Bitcoin.
However, as we spent more time immersed in the world of BSV, the critiques of BCH became clearer. Many of these were directed towards the technocratic direction spearheaded by Amaury Sechet, BCH’s core developer equivalent, but other critiques were more political in nature. The BCH strategy seemed to be heading towards legal minefields similar to BTC. Some of these highlighted a political distinction between BCH and BSV. The former is dominated by libertarians and anarcho-capitalists (ancaps) who have demonstrated a strong interest in using Bitcoin to route around governments. BSV is populated by more pragmatic types who are far more concerned with compliance, many of whom have taken on a rhetoric explicitly critical and dismissive of ancaps.
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The line between business opportunity and political expression is blurred in the world of Bitcoin. This is largely natural, as money is integrally tied to both arenas. While the structure of money is no longer an active political topic in the mainstream discourse of the United States, our country’s history is littered with vigorous debate on the subject. That debate has been replaced by an emerging global consensus; money backed by sovereign credit managed by central banks.
The degree to which this consensus has led to worse outcomes than past, asset-backed monetary structures is an open debate, one in which libertarians and ancaps engage passionately. What is certain is that there is a market demand for commodity money that competes with consensus structures, a market segment with disproportionate ancap representation. There is also a much broader demand for cheaper, securer, more private payments. I think Roger and I would agree that Bitcoin is the leading candidate to meet all of these demands simultaneously and more. Bitcoin is therefore the leading alternative to the mainstream monetary systems and financial infrastructure.
Roger and I both self-identify as ancaps and see increasing liberty as an extremely important goal to promote human flourishing. As ancaps, we both believe that state authority is illegitimate and that the functions typically provided by the state could be better provided through voluntary cooperation in what is often called the free market. While ancaps are typically proficient in explaining the reasoning behind the illegitimacy of government authority, the question of how to proceed in a world dominated by these governments is far less defined. Thus, ancaps regularly disagree on the most ethical way to proceed in the current world and on how to bring the world closer to our ideal.
In my role at Unbounded Capital, bringing the world closer to an ideal ancap condition is not a factor in my decision-making. Rather, acting in a fiduciary capacity to maximize returns for our LPs and thus increasing the value of Unbounded Capital and the assets available to my family and myself is my only focus. That is the reason why we are focused exclusively on the BSV ecosystem - because we believe that this best aligns with our goals as a fund to maximize risk-adjusted returns for our LPs.
Luckily, I feel that my business priorities are well aligned with my political priorities. I believe that BSV’s promotion of liberty is inherently tied to its benefit to business and the market opportunities that its existence presents. While my involvement in Bitcoin is strictly business, I recognize that the primary goal of Bitcoin for many ancaps is to maximize liberty. Some spend most of their effort supporting BCH for this reason, and I believe Roger is among them. While the rhetoric of BCH and BSV may suggest this is the right decision for those dedicated to liberty, I believe that this is a mistake. BSV is likely to promote far more liberty worldwide than BCH
I think the reason this is missed by many is because ancaps, broadly speaking, have made fundamental errors in applying their philosophy to Bitcoin. While I am squeamish about challenging Bitcoin Jesus on this subject, I think it is a conversation that is worth having for several reasons. First, I believe that ancap philosophy and messaging can be improved by examining which of BCH or BSV will promote more liberty worldwide. Second, I believe that Bitcoin is more likely to succeed by having its supporters converge on a strategy that promotes liberty in a manner that is far more pragmatic given the obstacle of existing power sources, the BSV strategy. Third, I believe that because BSV is a better investment than BCH, having more people with a goal of increasing liberty become relatively wealthier through the appreciation of BSV is better than having liberty-minded people lose money by supporting assets with lackluster prospects.
Why BCH is Unlikely to Promote Liberty Worldwide
Anarcho-Capitalism is an Ideology of Law Enforcement
Many people associate anarchism with lawlessness. Whether or not this is broadly true, it is absolutely incorrect in the context of anarcho-capitalism. Rather, ancap philosophy is rooted in the observation that law is not enforced to a degree that is remotely satisfactory. The unenforced laws of concern to ancaps are not government legislations or decrees, but rather natural laws. The validity of natural law is not a topic worth addressing in a letter from one ancap to another, but it should be known that these are laws that have been derived from and defended on moral, logical, and utilitarian grounds and likely have been or could be derived from other value systems as well. In particular, these laws follow from the principle of self-ownership. I think they can be well summarized with two foundational rules.
The non-aggression principle (NAP) - Violence should not be initiated against peaceful people.
Enforcement of contract
It is my belief that the degree to which these two rules are adhered to is highly correlated with the degree of human flourishing. In most first-world countries, these rules are relatively well enforced. The exceptions to this are government actors who’s MO is predicated on violation of the NAP. Because governments are so heavily associated with law creation and enforcement, the anti-government stance of ancaps can be seen as lawless, yet it is actually the desire for increased enforcement of natural law that creates this anti-government stance in the first place.
Bitcoin is a Tool for Law Enforcement
To enforce laws, one needs an account of what has happened. There has to be evidence that a law was not followed for enforcement to occur, at least in the ideal sense. Bitcoin is a record keeping system, the most efficient and accurate system of this kind. The first application of this record keeping was to track the control of Bitcoin tokens. These tokens were, and continue to be, an essential part of Bitcoin.
By being the most efficient system of accurate record keeping ever devised, Bitcoin could become a foundation for accurate record keeping across the world. This is the aim of BSV’s desire for massive scale. Those familiar with economics will recognize that making accurate record keeping cheaper will result in more accurate record keeping. Because accurate records are an account of what has actually happened and law enforcement depends on an accurate account of what has happened, Bitcoin will facilitate the enforcement of laws.
The astute reader will no doubt point to a bait-and-switch here. The laws ancaps want to enforce are natural laws. Government law enforcement is often antithetical to liberty and the enforcement of natural law. Therefore, a general increase of law enforcement does not necessarily lead to more liberty. This is true, but there are a lot of reasons to be optimistic that more efficient law enforcement will lead to more liberty, and there are also reasons to suspect that a system that facilitates the ability to act outside of laws will lead to less liberty.
Extralegal Systems Facilitate Lawlessness
When one understands Bitcoin as a record keeping system, it becomes clear that Bitcoin would not be a useful tool for what current law enforcement considers to be criminal activity. However, many people understand Bitcoin as extralegal money first and foremost. Therefore, the record-keeping aspect can be seen as a bug that requires patching. Throughout Bitcoin’s history, many “improvements” have been made to Bitcoin which attempt to remedy Bitcoin’s lack of fitness for extralegal activity. Perhaps the most notable attempt to promote extralegal status was the block-size restriction to promote decentralization. A major reason to prefer decentralization at this scale is to be resilient to government influence. Other “improvements” include initiatives like P2SH, Segwit, Lightning, coin-mixing, and Schnorr signatures. Privacy coins have been created which affirm the suspicion that Bitcoin is very poor for criminal activity. These seek to start relatively fresh from a design standpoint to better ditch the records.
These “improvements” have largely come at the cost of scale. The block-size restriction is a clear hindrance to scale that both UC and Roger Ver have been on the record about extensively as a barrier to Bitcoin’s success. Further, privacy upgrades which compromise the record-keeping of Bitcoin place Bitcoin in a tenuous state at best due to the economies of scale implicit in Bitcoin (more on that in a moment). These also diminish its acceptability in existing legal frameworks. The difficulties added to compliance compromise the scalability in terms of business acceptance. Scale isn’t just throughput, it is usage. If Bitcoin is less usable because compliance is difficult, then it is less scalable. Further, the commitment to existing outside of the scope of law enforcement requires a significant amount of effort to go into replacing the security layer of law. For example, there is a significant amount of concern about things like 51% attacks. This sort of fear may not be reasonable at all, but it is certainly not a reasonable concern within the context of standard law enforcement.
I’ll soon explain why these privacy initiatives are extremely unlikely to be successful within the context of Bitcoin, but first it is worth examining whether the success of these initiatives would promote liberty or not. Is anonymous money where there is no record of transactions conducive to liberty? What is certain is that this type of money is antithetical to law enforcement. If your money is stolen, you are out of luck, and the strategy of “following the money” is no longer an option. Ancaps like to shake off the accusation that cryptocurrency has facilitated criminal activity. It is understandable why they do so. Many of the crimes facilitated are not considered to be crimes by ancaps - buying drugs, for example.
While I agree that many of these crimes are not crimes according to natural law, it is not debatable that anonymous cash would benefit criminals. While ancaps don’t recognize government authority, one of governments’ redeeming qualities is that they do have laws against a lot of natural law violations like assault, murder, theft, and slavery/human-trafficking. They also enforce legal contracts, or at least they do sometimes. If an extralegal money made it easier for criminals to transact anonymously, then the government would be impaired in their ability to enforce natural law in these scenarios.
Perhaps, given the status quo, black markets do promote liberty, but it is a worthwhile thought experiment to fast forward to the desired ancap utopia. In a world where all laws were either natural laws or had been agreed to voluntarily, law enforcement would be extremely desirable. Anonymous cash makes enforcing these laws more difficult. Therefore, I think privacy coins clearly would not promote liberty in a voluntary society. The ambiguity of anonymous money’s benefit on liberty today and anti-liberty properties of anonymous money in an ideal setting lead me to conclude that anonymous transactions do not clearly promote liberty worldwide.
Even If Extralegal Money is Desirable, Bitcoin isn’t it
I think it is unlikely that extralegal money promotes liberty worldwide, but I am not certain. What I am much more confident about is that Bitcoin is very unlikely to be able to function as extralegal money. Bitcoin has two fundamental flaws for acting as an extralegal money. First, Bitcoin is a record keeping system which facilitates law enforcement. It is unclear to what degree Bitcoin can work without this quality. However, even more important are Bitcoin’s inherent economies of scale.
Bitcoin mining benefits from economies of scale which leads mining operations to grow larger over time. Large mining operations cannot be kept secret from governments. This means that these operations will have to operate according to the laws of their local jurisdictions by paying taxes, following regulations, and adhering to court decisions. If governments decide to use their power to influence Bitcoin, the miners will have no choice but to comply. If the Bitcoin economy grows large enough, then governments will begin exercising this influence. Governments may have refrained from exercising this control on Bitcoin to this point out of temporary ignorance, or perhaps because Bitcoin serves as a honeypot to attract foolish criminals. Ultimately, I believe governments will begin using their power to influence Bitcoin through measures like freezing and reassigning funds.
This is a well understood issue in crypto. BTC has the block-size restriction. Other cryptocurrencies have made similar attempts to solve the economies of scale problem. So far, it doesn’t appear that any of these solutions will work. Rather, attempts to do so have been catastrophic to scalability. BSV is unique in that it fully embraces economies of scale as unavoidable and focuses on the numerous benefits rather than the potential drawbacks of existing in the world of laws. Because of this, BSV and BSV companies waste far fewer resources trying to duplicate the features of law, a key benefit of accepting the consequences of scale.
If I had to draw a major distinction between BCH and BSV that explains many of the differences between the networks, it is this; BSV is fully focused on scale above all other concerns while BCH wants to scale as much as possible within the context of facilitating extralegal activity. It should be clear that BCH cannot remain like Bitcoin and expect to scale to a significant degree within this context. The economies of scale of mining and the traceability of Bitcoin make this an unreasonable goal. It is possible that there are ways to change Bitcoin into something that could accommodate this goal or that other projects like Monero can achieve what Bitcoin could not. However, given the untenability of a Bitcoin-like technology as an extralegal money and the ambiguity of an extralegal money as a net benefit to liberty, I believe if it can be shown that BSV is likely to promote liberty at all, then it is clearly likely to promote more liberty worldwide than BCH.
Why BSV is Likely to Promote Liberty Worldwide
The first step to showing how BSV promotes liberty worldwide is to show how it doesn’t drastically reduce liberty worldwide. BSV describes a scaled Bitcoin as a universal source of truth - an accurate record keeping system that can be used globally, across industries, by all people. Since accurate records promote law enforcement, why wouldn’t this vision of a massively scaled Bitcoin lead to a panopticon where governments oppress their subjects with extreme precision and scope. I believe that the answer to this question, like most in Bitcoin, is economic in nature.
A massively scaled Bitcoin isn’t something that current blockchain tracking technology like Chainalysis is equipped for. By massively scaled, I mean terabyte sized blocks or larger. That is about 1 million times more activity than is currently on BSV and an even greater factor larger than BCH. There is no theoretical barrier to this scale, but it will take investment, innovation, and a serious increase in demand for using BSV. At this scale, keeping tabs on the activities of everyone across the world is likely impossible and certainly is not cost effective. This means that small crimes like paying for marijuana with BSV are not likely to be tracked or pursued. This just isn’t enough of a threat to power to justify the cost. On the other hand, extremely large criminal networks may be hurting the bottom line of governments enough to warrant using BSV to aid in tracking. For the most part, large criminal networks are not friends of liberty, so this usage would likely have a pro-liberty impact.
To further help individuals retain their privacy, extremely simple measures can be taken which are not accommodated by other blockchains including BTC. These include breaking transactions into smaller sizes and not re-using keys. Instead of using BSV like an account-based system where one has an address where they send and receive payments, one can treat BSV like cash and store their cash in dollar, penny, or whatever-else sized increments. A $50 transaction could be 50 $1 dollar transactions to 50 unique addresses from 50 unique addresses which will never be reused. With current BSV fees this would result in a 50x increase in cost, up from about 1/100th of a cent to ½ of a cent, a worthy cost to increase one’s privacy. On the plus side, it is easy to keep track of one’s own records with BSV in order to prove the contents of one’s financial life if one needs to, perhaps if one is being audited. This asymmetry is an essential quality of BSV. It allows private usage that is verifiable, a valuable feature for any record-keeping.
Another reason why BSV isn’t likely to result in a panopticon is that governments are decentralized and BSV is a worldwide system. Even if some aspects of government are creepily converging towards a “one-world government”, things are still quite decentralized. Anyone who has studied the progressive era, perhaps through Murray Rothbard, will see how difficult it is to create a monopoly, especially at that scale (see diseconomies of scale). Because of this and the worldwide nature of BSV, government influence on the blockchain is likely to come at the international level. This adds a huge amount of cost to any sort of intervention and limits the types of interventions possible, since many interventions an individual government would like to make could not rally the quorum of governments necessary for enforcement. In other words, if one simultaneously pisses off the USA, EU, and China, then they should expect their funds to be frozen. If someone disobeys North Korean law, their money will be fine. This is important given the fact that governments acting in coordination could freeze or reassign on-chain property including BSV, BCH, or BTC.
Hopefully you are reassured that BSV won’t be a tool that helps governments across the world oppress their people. So, if BSV isn’t a huge negative for liberty, why is it a positive and not a neutral? I think there are 5 main reasons. 1) BSV decreases the cost of law enforcement and contract enforcement which should result in less theft and fraud. 2) BSV makes it less convenient for governments to act dishonestly. 3) BSV accelerates economic growth. 4) BSV disrupts existing payment processors and internet giants who have business practices opposed to liberty. 5) Because of BSV’s utility as a record keeping system, it provides the best chance for a return to hard, commodity money.
Decreased Cost of Law Enforcement
Ancaps love to point out that taxation is theft. Implicit in this statement is that theft is bad. As advocates for the enforcement of natural law, ancaps would like to see theft, fraud, and breach of contract each responded to appropriately by law enforcement. BSV is an excellent tool towards achieving these ends. In a world where most records are kept on BSV, the cost of fraud is much higher. Further, the traceability of BSV makes stealing BSV a very poor idea. Some, Satoshi included, have compared BSV to gold which turns to lead when stolen and back into gold when returned. As I pointed out earlier in this letter, BSV is particularly bad for large criminal operations who’s activities justify the tracking expense of law enforcement. Because these large criminal operations are disproportionately anti-liberal compared to small agorist crimes, these large organization’s loss of effectiveness is a positive for liberty.
BSV Increases the Cost of Government Dishonesty
It may seem like wishful thinking to expect governments to opt into a system which increases the transparency of their activity. However, in the context of a world that is largely moving to a transparent system like BSV, the request that governments follow suit is extremely reasonable. If the world begins to use BSV heavily, then one of two things will happen - either the government will operate in a highly contrasting way to the rest of society that is extremely visible and difficult to justify, or they will adopt BSV and face increased accountability. Each of these promotes liberty.
BSV Accelerates Economic Growth
BSV is the most efficient record keeping system created to date. This is why BSV transactions are so cheap. Record keeping is an extremely important component of the economy. Having a cheap, accurate, public record system will decrease the cost of record keeping and increase the quantity of records kept. These will both facilitate economic growth. A simple example is the high cost of transactions in our current financial system. Cheaper payments, facilitated largely by lower record keeping costs, will free up resources worldwide. In countries where record keeping is particularly costly, many African countries for example, the results could be dramatic.
Fraud is also a significant cost to the economy. Having accurate records makes fraud more difficult, so we should expect less of it in a world where BSV is more prevalent. This will also increase economic growth.Economic growth is not necessarily anti-state, but it is pro-liberty, liberty from the elements in particular. If one forays out into the wilderness, one may be freer from governments, but one doesn’t necessarily have more liberty. One’s range of options is narrow since one must spend all of one’s effort on staying alive. There are many definitions of liberty. One of these is “the power or scope to act as one pleases”. To the degree that acting as one pleases involves access to goods and services at cheap prices, economic growth facilitates this form of liberty.
BSV Disrupts Anti-liberty Business Practices
In 2020, it is clear that the actions of many large tech companies and financial institutions are antithetical to liberty. By engaging in activities like deplatforming, shadowbanning, and removal from the financial system, these companies increase the cost of spreading ideas that are unpopular to the powerful. BSV can alleviate this through its effectiveness as a payment system. This is very clear from the standpoint of financial institutions like Paypal. Peer-to-peer electronic cash can bypass these payment intermediaries who are more controllable by the government or other power centers. More explicit exercises of power would be necessary to replace these controls, and those may be untenable.
A less obvious way in which BSV promotes liberty is by disrupting the ad-model. Ads are the only way to pay for some services because of how inefficient our payments are. With more efficient payments, paying directly for services rather than through ads becomes possible, unlocking markets that can’t currently exist because of payment friction. Not only is this an economic benefit, but it also increases the power of the consumer relative to the advertiser. Advertisers have demonstrated a desire to disassociate with dissident content. This is rational, but it presents a challenge to the producers of dissident content, since advertisements are one of the more effective ways to monetize content today. Accordingly, the ability to monetize content through direct payments should facilitate the creation of dissident content. Since pro-liberty content is dissident content and has been effective in converting people to a pro-liberty mindset, BSV promotes liberty by aiding the creation of dissident content.
Furthermore, the ad-model has resulted in a copious amount of data collection. It is difficult to use the internet without being tracked by giant tech companies. These companies have shown some willingness to work with governments and provide access to this data. When services and content can be monetized directly, data collection to help maximize ad effectiveness is much less necessary. This should result in less data collection and greater privacy for individuals.
BSV Can Be Hard Money
The Holy Grail for many ancaps is the return of hard money. In one fell swoop, government power is lessened and economic growth is accelerated. What could be better? Unfortunately, because hard money opposes government power, I don’t think it will be accepted without a big carrot attached. I think BSV has that potential to provide that carrot.
Because BSV is such an efficient record-keeping system, an individual government is making a huge sacrifice in potential tax revenue and popularity to prohibit BSV’s use. BSV will ultimately favor countries who allow its use because of its benefits to economic growth. With the BSV ledger in widespread use, it becomes much more plausible that the native currency on this system becomes widely used. If BSV is more effective as a money than fiat money, then individuals will begin to use it. Individual countries will have a difficult time preventing this. Ultimately, this could lead to individual countries and perhaps eventually the whole world being dominated by hard money, rather than fiat monies. I don’t think this would be possible without BSV being extremely useful independent of its role as money. If BSV were only hard money, then there would be a strong disincentive to letting it succeed. Because BSV is much more than hard money, then it becomes more challenging to ban its use.
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BCH has the potential to benefit liberty in these manners as well. However, these require scale to a massive degree. BCH has not displayed the urgency to scale that is necessary to promote liberty in these fashions. Further, BCH promotes features which are antagonistic to governments. These inhibit usability to businesses which much seek to remain compliant, and thus inhibits scale. As BCH continues to tinker with the protocol in a manner which hinders stability and the ability to be compliant, BSV becomes more and more likely to be the only version of Bitcoin with a chance to deliver this pro-liberty opportunity.
The Elephant in the Room: Craig Wright
I hope I have convinced you that BSV is more likely to promote liberty worldwide than BCH. Still, BSV is not necessarily a welcoming environment for ancaps. This is largely because of the rhetoric and action of Craig Wright, an influential figure in BSV regardless of whether or not he is Satoshi Nakamoto. I think this is a good occasion to not let the perfect be the enemy of the good. Even though the rhetoric of CSW is unkind to ancaps and anarchists generally, CSW profiles as a pro-liberty minarchist who is largely aligned with ancap philosophy. He is more Mises than Rothbard, but has read each (he is a Mises Institute donor for God’s sake). In his defense, self-proclaimed ancaps have really dropped the ball in the context of crypto. Many ancaps promote BTC and BCH which both promote lawlessness to varying degrees. See “not your keys, not your crypto” as an example of blatant disregard towards centuries of advancement in property rights. This is antithetical to the ancap philosophy which we have established is a philosophy of increased law enforcement. In other words, ancaps in crypto have done a poor job of representing ancap philosophy, and some of them royally fucked up Bitcoin in the form of BTC.
Another criticism of Craig Wright is his growing IP portfolio through the company nChain at which he is the chief scientist. IP is a complicated subject for ancaps looking to live in a non-ancap world. On the one hand, IP clearly isn’t covered by the NAP. On the other hand, systems of IP could clearly be constructed through voluntary contract in a voluntary society. Ancaps typically refrain from dictating the self-interest of others, so arguments against the effectiveness of IP for an individual ring hollow. One is certainly wielding the force of the state through an IP strategy, but this is in the context of a world where that same force can be wielded against you. I see IP as a damned if you do, damned if you don’t situation building a tech business in the real world as an ancap. There are no easy answers, and I don’t think the fact that nChain is pursuing IP is a reason to disassociate from BSV which could ultimately mean giving up on Bitcoin. I am personally glad that these patents are in the hands of a minarchist instead of an organization like Facebook, even if an argument can be made that their existence retards economic growth. It is reasonable to suspect that using patents to drive users to BSV when the alternative may have been for a platform like Libra to receive these advantages is a positive for liberty.
The legacy of The Silk Road is another point of contention between Craig Wright and many ancaps. For ancaps, The Silk Road is often seen as a successful application of Bitcoin which shows the power of Bitcoin as an extralegal money. Craig Wright has been far less charitable to the project and those involved, often to a point that seems cruel considering the fate of silk road associates like Ross Ulbricht.
I can’t speak to The Silk Road in terms of damage it may have caused or the benefits it brought people. However, I do think it is a mistake to consider it a positive from an ancap perspective. The Silk Road was a black market where buyers and sellers lacked legal protection. It may have promoted a form of economic freedom in reducing the friction of selling and purchasing illegal goods and services, but it is far from a solution to the problems of prohibition. Consider the legalization of prostitution as an illustrative parallel. Whether or not one considers prostitution to be moral, the major hazard of prohibition is that prostitutes lose access to legal protection and are thrown into a lawless environment. This is an environment where NAP and contract violations are routine and difficult to stop. An anonymous currency may make prostitution easier to buy and sell, but it doesn’t help bring it into the scope of law, and therefore it can’t fully alleviate the major problems of prohibition.The Silk Road is not an adequate substitute to legalization, and to the degree it is successful, it facilitates all criminal activity. In the long run, black markets are not a friend of liberty. It is possible for black markets to facilitate a degree of economic freedom, but it comes at a significant cost. To truly bring about economic freedom, we need legalization, not black markets. It is also notable that Bitcoin proved to be a very poor medium of exchange for The Silk Road because of its inherent traceability.
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If I have convinced you that BSV is more likely than BCH to promote liberty worldwide, then the question emerges - how can one support BSV and make its success more likely? To do this, I think ancaps need to focus more on the capitalism and less on the anarchism.
Promoting an ideology and promoting a technology are fundamentally different endeavors. To promote the ancap ideology, taking a very direct, principled stand with one’s rhetoric makes sense. When promoting a technology that one wants to see adopted by billions of people and millions of businesses, extreme rhetoric may be counterproductive. Curtis Yarvin, one of the more learned critics of libertarianism and anarcho-capitalism, warns political dissidents that they can end up playing into the hands of power by embodying what it is from which the powerful defend the masses. If one rebels against political correctness by becoming a Nazi, is that more likely to reenforce PC culture or dismantle it? I think associating Bitcoin with anarchism is a tactical error, and associating Bitcoin with lawlessness, something done very explicitly at times, is an extreme tactical error not consistent with anarcho-capitalism in the first place. As some in Bitcoin have said, “you don’t kick the gorilla in the fucking nuts”.
I believe Bitcoin can promote liberty worldwide while not being inherently anti-state. Part of ancaps superior understanding of the state is the recognition that the state is composed of individuals. It is possible for those individuals to receive a net benefit from Bitcoin even if Bitcoin detracts from the power of the state. I believe this was the case with the internet and is also the case with Bitcoin. Had the internet been more heavily associated with lawlessness, there may have been a stronger effort to quash or delay it. We have already seen this to a degree with Bitcoin. To accelerate the success of Bitcoin, necessarily in the form of BSV, I believe that focusing on scaling Bitcoin via profit-seeking endeavors is the logical path forward. I am personally hopeful that many ancaps currently supporting BCH, perhaps Roger included, will agree with me and turn their efforts towards utilizing BSV through capitalist aims.
Jack Laskey
Partner at Unbounded Capital