You can’t be for Bitcoin and against it at the same time. It’s not rational to implement Know Your Customer (KYC) and Anti Money Laundering (AML) and also to expect Bitcoin adoption to go viral.

Lets start with the definitions of “fungibility” and “irrationality”:

Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are “capable of being substituted in place of one another”.

and…

Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate use of reason, or through emotional distress or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful, or more illogical than other more rational alternatives.

Bearing these definitions in mind, lets look at the current irrational practices of a handful of Bitcoin market participants and startups whose effect is to slow Bitcoin’s growth in their jurisdictions. Remember also; every properly run Bitcoin business wants Bitcoin adoption to go viral, so their fees can shoot through the roof and they can profit.

Anyone who wants Bitcoin to succeed needs to understand that Bitcoin must flow between users without any impediments beyond owning a device or downloading an app, in the same way WhatsApp messages flow from person to person through an app on a device. That means anything that stops or slows Bitcoin acquisition or flow between wallets is bad for Bitcoin or “Anti Bitcoin”. Here are four examples of Anti Bitcoin practices:

Asking users to “Sign Up” to your service with usernames and passwords

Requiring KYC/AML as a condition of service

Arbitrary limits on the amount of Bitcoin your service will transfer

Bitcoin Blacklists

One of Bitcoin’s powerful features is that you don’t need to collect any information about the user in order to offer them service. You can even use The Bitcoin Network as a secure and anonymous means of identifying users and managing their accounts.

All of the Anti Bitcoin practices in the bullet list above are in place at some Bitcoin businesses. These Anti Bitcoin practices are not only highly damaging and risk enlarging to the businesses that implement them, but they are completely irrational to boot.

Bitcoin Surveillance Companies are Anti Bitcoin.

Imagine a company that has pivoted from the ethical business model of “Bitcoin Storage” to becoming a Surveillance Service (SS) provider to the State. They understand how the Bitcoin of today works, and made a calculation that leverages the ignorance of the State and public paranoia; bridging the experience gap is a valuable service, and allows businesses to act as specialist contractors. It was always inevitable that a company like this would pivot to an unethical business model; Bitcoin doesn't require safes and banks for it to be stored safely, and the sort of “thinking” that produces Bitcoin Banks as a business model can only come up with bad business models and bad faith pivots to crony capitalism.

Cash is a natural form of exchange. When you use it, you don’t have to think about anything other than the parameters of your exchange; are you getting your money’s worth? When surveillance is added to cash, you have to think about the purchase and whether or not what you are doing could land you in arbitrary trouble in the future after the purchase.

Bitcoin transactions related to acts classified as crimes in some jurisdictions.

People who are otherwise perfectly innocent worry about spending cash because it “looks suspicious” by dint of an arbitrary, chance connection to another person’s transaction. This damaging psychological effect interferes with the free flow of commerce, dampening its efficiency and is anti Praxeological. Companies providing SS to the State introduce negative, anti market effects into Bitcoin, and because Bitcoin’s records are forever, the increase of these ill effects over time is infinite, eventually encompassing all transactions.

You don’t know when the purchase history of your Bitcoin may be used against you (guilt by association), or if the Bitcoin you are having signed to your private key (not “receiving” since Bitcoin never actually moves anywhere) has been used in the commission of a crime. Quite rationally, you will be less likely to adopt, receive or spend Bitcoin because its less private than cash, and in the case of accepting Bitcoin in return for goods or services, less likely to do so because you don’t know the provenance of the Bitcoin you are receiving in advance. Why take the risk?

Therefore, we can say categorically…

Anyone who helps foster and solidify Bitcoin surveillance, or runs a company that provides that service, is an irrational, self harming enemy of Bitcoin.

KYC/AML is Anti Bitcoin.

At least two currently operating companies block accounts that receive Bitcoin that appear on an arbitrary blacklist of addresses maintained by them. These blacklists are not mandated by law, nor are they offered by the State; this is something bad market actors have come up with themselves, and is voluntarily implemented. These Anti Bitcoin companies will close your account (in themselves accounts linked to real world identities are Anti Bitcoin by default) if you receive Bitcoin that has passed through a wallet of a blacklisted address.

This is pure Anti Bitcoin. It means that if you use one of the two companies described here to receive Bitcoin and unbeknownst to you that Bitcoin has passed through addresses on their blacklist, you will be judged as guilty of the crime the Bitcoin you are receiving was involved in, and your account will be frozen and shut down. For the sake of removing any doubt, these companies have every right to write whatever lists and blocking software they choose. They can run whatever software they want and try to make a success of what they are doing, and they are under no obligation whatsoever to serve anyone. What they cannot claim is that they are pro Bitcoin, because blacklists are pure Anti Bitcoin. They actively destroy the necessary condition of one Bitcoin being equivalent to every other Bitcoin, essentially rendering Bitcoin almost useless in their services and even de facto destroying some Bitcoin. Much is made of “the community” of Bitcoin; these policies are clearly against the community’s best interests, since they spoil Bitcoin’s fungibility.

Not only is blacklisting Bitcoin incredibly stupid, it is in total opposition to trying to foster Bitcoin adoption, and reality. Since the number of Bitcoin in existence is permanently fixed, eventually all Bitcoin on Earth will have been used in every possible human activity. Eventually there will be no “Clean Bitcoin” anywhere at any price; in fact the US Dollar is in exactly this position right now. 90% of all dollars in circulation are tainted with cocaine residue.

Bitcoin can never be put in a G-String.

If retailers were to take the stance of the two Bitcoin companies I do not mention here, 90% of all money would be unspendable and worthless. Clearly everyone simply ignores that most cash has been involved in “crime” because the utility of money is more important than crime committed with it. There is legal precedent too for the provenance of money to never be taken into account when it is presented for a transaction by an owner of it; see Crawfurd v. The Royal Bank. This caselaw is well understood and its shocking that the law firms advising these companies didn't hold it up as iron clad proof that blacklists were not needed and indeed were suicidal and inappropriate. There are reasons why an extralegal recommendation like this might have been made of course. One thing is for certain; Bitcoin businesses who don’t adopt the legal precedents, especially when they are mischaracterizing Bitcoin as money, are, to be generous, amazingly, astoundingly dumb.

Therefore, without a shadow of doubt, we can assert that…

Anyone who implements, shares, promotes and or sells the service of Bitcoin Blacklists is an irrational enemy of Bitcoin.

Opposing Bitcoin Anonymity is Anti Bitcoin

Anonymity is central to fungibility. If you know you are being watched while your’e using money, your calculations are not solely Catalactic. Any company therefore, that opposes anonymity in Bitcoin is anti fungibility and Anti Bitcoin, as I have already described.

KYC/AML is different to Bitcoin anonymity. When you are “verified” with arbitrary and irrelevant biographical information at a Bitcoin business, you are allowed to transact without explicit surveillance up to a limit of fiat or Bitcoin. Anonymity in the case of Bitcoin on the other hand, means the entire network and all transactions across it going dark at the protocol level. In other words, the network itself becoming anonymous as opposed to parasitic service providers at the edges violating your privacy under contract or not, or opting for an exiting and ethical device like OpenDime or not.

You have a right to speak in private. Bitcoin is speech. Combining these two tells us that anyone against Bitcoin anonymity is Anti Bitcoin. The only arguments that can be made against this are fallacious, and are arguments that don’t take Bitcoin’s true nature into account. When you accept what the true nature of Bitcoin is, it is inescapable that State mandated KYC/AML, blacklists, withdrawal limits and other nonsense are clear rights violations.

It should therefore, be abundantly clear that…