I read James Altucher’s book “Choose Yourself” early on last year. It was written somewhere around 2013 - 2014. In that text he said that he invested 1% in bitcoin because he thought it had about a 1% chance for success. I actually agree with the vast majority of what he writes in that book. Ironically for me, the suggestions he made in that text I had already done more than 10 years before that book came out. He’s absolutely right about higher education, that your boss hates you, etc…

But when he says that regulations are good for bitcoin, he apparently missed the Satoshi Nakamoto staff meeting that happened on January 3, 2009… I’ve been studying the underlying Python code in Mastering Bitcoin by Andreas Antonopoulos and I haven’t seen any KYC (Know Your Customer) code in there. The Bitcoin white paper makes it quite clear that the whole point of bitcoin was the creation of a direct P2P network that completely eliminates the need for a central authority.

(credit - CNBC)

Therefore, adding a central authority to a protocol that doesn’t need one to operate misses the whole point. Centralization is a problem that has afflicted humanity for millennia, since the first warlords said “give us 1/10th of your crops or your first born son, or else”. The Church was among the earliest of authorities and they have something called a “tithe”. It literally means one tenth of something. This is the origin of taxation and the cause of centralization of power.

Why Regulation Cannot Work

At the present time, it’s impossible to regulate bitcoin itself (unlike Ripple which does have KYC code). It's important not to confuse what’s happening with the exchanges and the ICO’s with the protocol itself. First of all, exchanges like Coinbase are no better than a bank and they can be regulated. These exchanges are probably worse than banks because they don’t have as many regulations as banks do making them even more likely to gox you.

When James talks about regulation being good for bitcoin because it will give it “legitimacy”, he has adopted a world view that authority has done no wrong without realizing it. It’s the idea that regulation will somehow make it “safer”. The question you have to ask yourself is whether you’re a child or an adult. I’m going to prove to you that authority actually makes it worse. When it comes to investment regulation, no amount of regulation is ever going to work. Andreas explains why…

(credit - Andreas Antonopoulos)

Andreas Antonopoulos sometimes starts off his talks by asking if anyone in his audience has money in the bank. The correct answer he gives is that nobody has money in any bank. When you open a bank account, what you actually have is a legal instrument where you give the bank an unsecured loan of your money that they then lend out at high interest to make profits. Then maybe, if you’re not living in Greece, Cyprus, etc, you may be able to get out a small amount, at the rate they allow, if you ask politely.

Bitcoin is completely different because it puts complete responsibility for handling your funds in your own hands. It elevates you to the status of banker. For those of us living in western democracies, it isn’t obvious why you need bitcoin. Many of you probably don’t, yet. But the vast majority of government fiat is managed as a criminal cartel where a few at the top are allowed to print up all the currency they want for their own needs and pass off the inflation onto everyone else held captive by that national fiat.

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The rest of us realize that authority is probably the greatest problem humanity has ever faced. That middle position in PPP has been exploited for millennia and is the main reason terrorism has existed for millennia. That middle position centralizes power so that you trade terrorists wearing turbans and wielding guns for terrorists wearing business suits and wielding nukes. There is nobody in the world who is worthy of a “nuclear football”. Nobody has that right. They only have an extremely unrighteous power, that will, given enough time, cause planet wide extinction.

How Bitcoin can Reduce Terrorism

Most governments of the world operate under the paradigm of unlimited money. This is what allows terrorists to go from ISIS black flag waving, Toyota Truck driving funded with USD maniacs, to eventually being given their own sister government with control over nukes (like Pakistan did recently). Without unlimited money, the costs of war become too great and the public would not allow it. So what does government do? They print up all the money they want for their black budget programs which steals value from every single dollar out there. It is fundamentally a stealth tax.

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Bitcoin is a direct threat to unlimited money because it has a superior store of value being limited to 21 million coins. This means that the value of coins will go up as more people use and adopt the currency by pouring their dollars into the currency. The result is an equity drain from all national fiat that attempts to print up too much for its own purposes. This will drain war budgets world wide and create hyper-inflation.

It’s 1.5 billion of the Worlds Banked against 5.5 billion Under-Banked

When it comes to regulation, that regulation really only applies to 1.5 billion of the world's population. The other 5.5 billion people of the world cannot do the things necessary to become part of the club of privileged banking. This is why KYC and AML don’t work. Because they are outside of the system of international banking and have access to a cheap cell phone and free Mycelium wallet, they can do remittances and put Western Union out of business. They will simply accept bitcoin for their services instead of buying bitcoin.

(credit - Andreas Antonopoulos)

Bitcoin doesn’t require centralized exchanges to work. The right way to be involved in crypto is to use your own hardware wallet such as Trezor or Ledger S Nano. Andreas has a simple rule: "Your keys, your coins. Not your keys, not your coins". When you hold coins on an exchange, you don't hold your coins, the exchange does. That means that they can seize them in the same way that the bank can freeze your bank account.

But when you have a hardware wallet, know the security procedures (which aren't difficult), then nobody can seize your funds. They can try the $5 wrench attack, but because these devices have duress passwords, as long as you've never divulged your store and move the coins around never reusing addresses, nobody can tell if the amount stayed on the same wallet or it was a payment to someone else.

What Really Happens in this Situation

Authority can't regulate bitcoin unless it can turn off the internet world wide. They can however beat up users within their own borders. Eventually when they get really scared, they will ban cryptocurrencies and make them illegal. This is the scenario that then plays out...

(credit - Andreas Antonopoulos)

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