Posted 2 months ago | by Catoshi Nakamoto
Bitcoin. It might be the only thing more censorship-resistant than our channel. What doesn’t kill us makes us stronger. No matter how hard they try, governments and banks around the world have been unable to take down the Bitcoin network, and millions of people around the world continue to use it, even though politicians and reporters are desperately warning them to stay away. The fight is far from over though, and it’s up to us to make sure that Bitcoin remains the currency of the people.Read More
Let’s get it.
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In this video we’re going to discuss one of Bitcoin’s most important and overlooked properties, censorship resistance.
Censorship Resistance is basically the idea that anyone can send and receive funds on the Bitcoin blockchain without any restrictions from state or corporate authority. The concept of Immutability plays into this as well. This means that the information on the Bitcoin ledger can’t be altered or replaced, it’s stored on the blockchain forever. This is important because banks and governments are able to alter their records to hide corruption or downplay insolvency. This isn’t possible with the Bitcoin blockchain. This side of Bitcoin doesn’t get much attention from institutional investors or traditional media sources because most of them would be happy to see banks and governments controlling everything that happens in crypto, just like they do with the rest of the economy.
We’re told that this control is for our own good, that it protects us from thieves and helps track down bad guys, but all this surveillance doesn’t seem to slow down crime and it comes with some serious risks. It may not seem like such a big deal that overlords are deciding who is allowed to participate in the economy, but history has shown that authority figures and bureaucracies make mistakes, and often they even abuse their power for personal gain. It’s not hard to imagine how dangerous this type of power can become, just look at what’s happening in China. The county’s government is in the process of rolling out a Central Bank Digital Currency or CBDC, that will give it full control to change or censor transactions. So if the government doesn’t like you, you could have trouble buying an airplane ticket or even groceries, and there is a good chance it would be difficult to find housing too. This Black Mirror scenario will be made possible through a social credit system that gives people rankings based on the type of citizen they are. Low rankings are given to people who have bad driving records, attend protests or play too many video games, and if their ranking gets low enough they can have money taken from their bank accounts or be entirely cut off from the economy.
You might think that you’re safe from this dystopian future because you don’t live in China, but similar systems are being considered in other parts of the world as well. In 2019, The Wall Street Journal reported that similar social credit programs could be coming to the United States. Last month, details were leaked about a social credit system that is being considered by officials in the UK. The new program is expected to monitor the purchases that citizens are making at the grocery store, and reward them for eating healthy. This doesn’t seem as scary as what is happening in China because they are promising rewards instead of punishments, but once the infrastructure for this type of system is in place, it can easily transform into something much more dangerous. Give the government an inch, and they take a mile. What would stop them from policing everything health related? One word. Nothing.
This is sadly the direction that the world is headed, but luckily we have the tools to create a better future. This is one of the problems that Bitcoin was created to solve. The pioneers of the crypto industry knew that we would face these challenges one day, and they started working on solutions long before anyone else realized that this would be a problem. These pioneers called themselves the cypherpunks, and they gathered in online forums to discuss cryptography. Even back in those days, cryptocurrency was one of the most popular topics. There were some early projects at the time, like DigiCash, HashCash and Bitgold that would lay the foundation for the crypto industry that we know today. These projects never caught on for a variety of different reasons, but they introduced concepts like proof-of-work mining and digital signatures, which were later adopted and improved by Satoshi Nakamoto, the anonymous creator of Bitcoin.
Satoshi’s decision to remain anonymous is one of the main reasons that the Bitcoin network has been so resistant to censorship all these years. Many of the first Bitcoin exchanges and applications were forced to shut down because governments identified the founders, and some of them even did serious jail time. The industry is still facing this problem today. Arthur Hayes of Bitmex was arrested earlier this year for failing to collect information on his customers, and we’re starting to get a little bit worried about CZ from Binance as well.
Governments are always cracking down on crypto, but after all these years they still haven’t been able to figure out who was actually behind the creation of Bitcoin, and in this time, an international network of traders, developers and holders have started to use the network. There are now millions of people contributing to this network, which is going to make it very hard to shut down. The cat, as they say, is out of the bag.
If miners or developers are banned in one country, they will move to another jurisdiction that is more welcoming to the industry. At this point, it seems like a total ban in most parts of the world wouldn’t even be possible. Too many people have made too much money in these markets to let that happen. The people who were able to improve their lives and achieve financial freedom through Bitcoin will fight for it with everything they got, and after living through a bull market or two, some of them will have plenty of resources for that fight.
Even if Bitcoin is somehow banned in your region, you will still be able to access the network as long as you have an internet connection. However, there are a few things that can be done to strengthen Bitcoin’s censorship-resistant properties.
In areas where Bitcoin has come under attack, regulators have made it more difficult to exchange crypto for fiat. They’re basically guarding the on and off ramps. This is why you may have seen such a heavy push for KYC restrictions from your government if you live in one of these places. This is definitely a major area of weakness that needs to be worked on, but this industry is still very new, and opposing forces with different ideas are fighting for the future of this technology.
The institutions, banks and governments want these markets to run just like the old ones, with them in control, but the nerds and dreamers have other plans. For example, there have been increasing demands for more privacy in Bitcoin. The network’s Taproot upgrade will improve the level of privacy that users have by a little bit, and developers are expected to keep pushing in that direction. There are even some developers out there who are hoping to bring DeFi to Bitcoin. This is not a matter of competing with Ethereum or other smart contract platforms, they will always offer more functionality in this area because that’s what they’re built for. This is about decentralizing the central points of failure in the Bitcoin ecosystem, like the exchanges and wallet providers.
Once we get to a point of mass adoption with this technology, merchants and retailers will be able to accept Bitcoin and other cryptocurrencies as payment in the same way that they accept cash, eliminating the need to go through the traditional banking system entirely. Until then, the bridges to the old financial system and the centralized exchanges will still be heavily guarded, and this presents a real threat to Bitcoin’s censorship-resistant properties.
But I believe in the builders behind this industry. I think that Bitcoin will become even more resilient over the next decade, and grow stronger with each battle it faces. That’s what we’ve seen happen so far, and as the network grows and becomes adopted by more people it will be even harder to stop. These regulators might have all the firepower in the world but they can’t catch up with the pace of this technology. Here in the US, regulators are still fumbling around trying to figure out whether or not XRP is security, and they think that Blockfi is Decentralized Finance. There is no way that they are going to be able to wrap their minds around the innovation that we are going to see in the next few years.
But that’s all I got, be blessed. BitBoy Out!