I have been thinking about this concept and problem for quite some time. Marxists, Communists, all believe that Capitalism is the cause of the State. I mean after all the "state" comes from the word "estate", the private territory of a sovereign king, in this case a Government. So Marxists believe that Capitalism can only exist, and it's necessary, to have a State, where the sovereign guarantees the private property of it's subjects, and enforces it through coercion.

I think this is false, and outdated. There is nothing wrong with Capitalism, and you don't need a State for Capitalism. In fact the only way you can have true Capitalism is without a state. You can have private property without a State, and certainly without a Government (I guarantee you you would have 50% more private property without a Government).

This is where cryptography comes into play. And in this article I want to specially talk about the identity problem.

---

Identity Question

Well first of all, it's not needed. Identity is not needed at all, it's a false construct. In fact there is good evidence, that in native societies, people barely gave names to eachother, so identifying people was not of importance. So anonymity is totally fine, if somebody wants to live in the woods or live without a name, that is fine by me.

However in most cases, if you want to interact in society, then identity is necessary, after all every tribe wants to know it's members, otherwise you can't trust them. In the business world, you have to be known, otherwise nobody will trust you. I mean just look at the anonymous scammers in Bitcoin, you find plenty. Well it's mostly the lack of due diligence from 16 year old hippy ICO investors, but even then, some kind of identity has to be supplied in order to gain trust.

But, actually identification is no needed. An identity could be setup without actually the need to reveal who is behind it, in order for that identity to be trusted. Or it other words, judge somebody by it's actions, not by it's person.

The first thing somebody asks others is "What's your name?", why is this information important? Why are people so invasive? Because the name actually doesn't tell anything about a person. Only it's actions and pasts can tell things about him, so why is a name important at all?

Metadata

I believe a metadata based identity is better that anything out there. So you could have a totally anonymous public identity, but only the metadata part is known. So everybody would know what a person or business does, but nobody knows who is behind it.

Sort of like a sockpuppet, but in the good sense. You make the sockpuppet do business, gain reputation, gain trust, and use that to capitalize on. But actually the behind the scenes identity is not needed.

Identity is a Liability

If you think about it the Government issued identity is a liability. I mean anybody can take your ID number and take out a loan in your name, and scam you out of money, meanwhile it's the bank that will hold you liable for that debt if you don't report it within 15 days or something like that.

• So a bank account is already a liability (heck you won't even have that much money there at all so yes it is)
• If you are rich, then all kinds of thugs, kidnappers and extorters want to hurt you, so having a known identity is a physical liability too
• Stalkers, perverts, and who knows what kind of sick people could harass women....
• Your family is in danger as well if you are in danger....

So it looks like a public identity is very very dangerous, we don't live in a paradise, there are many evil sick people out there coming after anyone going public. Especially if you talk about political stuff. I mean you already had some Neo-Nazis harassing poor old Rabbies and vandalizing Synagogues in the USA I believe...Just horrible hate crimes that these evil Nazis are doing.... Well I have pissed off a few Nazis as well with some of my articles ridiculing the Neo-Nazi movement and showing how evil and despicable it is. Who knows if some crazy Neo-Nazi would want to kidnap me and hurt me.... So I have to be careful as well not to put out too much personal info, although I have put out there already plenty but not that much, but I am not going to put out there the the address of my house or the license plate of my car or things like that....

So it's just common sense. Anonymity is a shield against liability, especially resulting from the exercise of free speech. Yeah people will hurt you if you talk about things they don't like. So when I see people taking photos of their house and the insides of their houses, I am just baffled by their carelessness. I don't think people should be that open, at least not until there are sick people out there.

Crypto Identity

So it seems to me crypto-identity can replace the "legal" identity, and thus remove totally the liability that the legal identity carries, but also the coercion that the Government uses to enforce it.

Well first of all a crypto identity is like this:

• 1HYQFULRssNDffMMYEk4DtJjAch1LmV1bS , yes it's a Bitcoin address belonging to hilariousandco, one of the moderators of Bitcointalk
• It's his identity because every transaction that he does is going through it, but nobody really knows to whom it belongs. I certainly don't, maybe his identity is known but not to me personally.
• Therefore all of his transactions, and reputation is on this address, as well as his other identity that is linked to this at Bitcointalk. So people know that he is a moderator, that he can be reasonably trusted, and that he does a somewhat good job of keeping the forum clean.

So yeah, based on this identity, now he can do business. He can trade on the forum, he could do business elsewhere because his reputation would be the asset, not the liability to him. If he loses his reputation, then he lost it, so even if he would create a new identity on the forum, he would have still lost the old identity so what does it matter, he would have to start from scratch.

So as you can see an identity is like an asset, and it doesn't have to be tied to a person, because it's value and trustworthyness is derived from the metadata related to that identity, and not from the name of the person, which is meaningless.

So who knows the identity could even be sold, people sell accounts on Bitcointalk all the time, the person that buys that identity would have to pay a lot for it, and thus he would not want to damage it's reputation, otherwise he would lose his asset.

Scams

Even if people buy accounts at Bitcointalk in order to scam people, the scam has to be higher than the cost of the account. So people either become more vigilant, which they do after being scammed many times. So the cost of scams go up, meanwhile the cost of a reputable account also goes up.

So this means that buying an identity just to scam people becomes less probable in the future, as nobody would be stupid enough to pay like say 300$ for a Legendary account just to scam 100$ out of a sucker.

And who knows a Legendary account with +100 green trust and other links to other successful businesses could be worth 30,000$, I have seen people pay more than a grand for a green account, so it's not outrageous to think this.

So what are people going to buy a 30,000$ account just to create a 1 million $ scam? Sounds profitable, but is it a smart move? Well first of all why would people give them that much money if the reputation is only worth less.

If the market is efficient, then an identity that is worth 30,000$, should only be able to raise 30,000$ from crowdfunding, that is the golden rule to avoid scams, and the market will become efficient. So later on scams like this will becomes less frequent.

So as you can see, you don't need regulation, you don't need police, you don't need Government at all. Eventually the free market sorts all things out. With cryptography we can have property without Government, and that is a new paradigm.

---

Sources:

• https://pixabay.com
• https://www.pexels.com

---

Upvote, ReSteem &