The Case Against Regulation

This blog will present ideas about the regulation of digital money, especially about why it is not sensible.

Web of Laws

Tyrone Monday June 2, 2014

About 2,600 years ago, a man named Anacharsis came to Athens. He met Solon, the ancient Greek "law giver" and was told about Solon's project to create a system of laws for the people of Athens. Anacharsis reflected on this idea and disagreed with it, pointing out that the web of laws would be much like a spider's web - able to capture the weak and powerless, but ineffective against those with significant power.

In mid-May of 2014, Leonard Pitts, Jr., a columnist for the Miami Herald, published an essay about the same idea. In it, he reviewed the book The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi. Here are a few of the stories in that book, chosen by Pitts for their impact.

Patrick Jewell rolled a tobacco cigarette and smoked it outside a New York City subway station. He was thrown against a wall by an angry man, tried to escape, had his head slammed against the concrete by a gang of men in black jackets, was thrown into a van, and charged with smoking marijuana and resisting arrest. As Pitts and Taibbi describe this incident, it is "policing tactics so aggressive as to be downright fascistic." And it is certainly not the only case in the book. Any book is a limited listing of such events, so I suggest you try a news search on "police brutality" to get a sense of how many stories you would encounter if you looked for such data.

On the other hand, there are those people who were directly, personally responsible for the financial meltdown that we all experienced between 2006 and 2012. Why aren't any of them in jail? Pitts quotes Taibbi quoting a federal prosecutor who said that some people are not appropriate for jail. Then Pitts reflects on the outrageousness of such a claim, that people who wear suits and steal billions shouldn't be jailed, while someone who wears blue jeans and rolls his own tobacco cigarettes should be beaten half to death and falsely accused of crimes he did not commit.

Readers of George Orwell's classic Animal Farm will recognise the summary Pitts gives for this situation: "...some of us are more equal than others." Pitts then goes on to wonder why people aren't in an uproar.

Of course, there were people in an uproar beginning in September 2011, calling themselves Occupy Wall Street. The Occupy movement spread rapidly around the country, and involved public occupation of parks and streets in dozens of cities. People tried to express outrage, and billionaires like Michael Bloomberg used the power of their offices to have the police attack and arrest many hundreds of them. Possibly, people are expressing their outrage privately, since public demonstrations have evidently fallen on deaf ears.

It does make you wonder, though, about the people in the bitcoin industry who are calling for regulation. "Oh, please, let us show you how we are compliant," they shout. And compliant they are, of course, to whatever extent they can get away with, one presumes. They want to be regulated, just like all other financial institutions. Is that because they want to be bailed out, just like the big banks, and the insurance companies that became banks (State Farm, for example, now includes a State Farm Bank), or the auto finance companies that became banks (Ally Bank used to be General Motors Acceptance Corporation)? I suspect that the people in the bitcoin industry who clamour for regulation do want to be bailed out, do expect to engage in regulatory capture, are unethical, and do want to have a system of injustice that benefits them and screws over everyone else.

Injustice is epidemic. You see it in the Arab Spring. You see it in South Sudan. You see it in the United States, in Europe, in Russia, in China, everywhere you look. It isn't new.

Anacharsis noticed that a system of laws wasn't going to work. He made a point to say something to Solon, who ignored him and wrote a system of laws, anyway. Anacharsis was correct. For over two and a half millennia, people have been trying to make a system of laws work. During all of that time, systems of laws in various countries have produced injustice. People have been wrongly convicted. Poor people have been victimised by the police. Rich people have gotten away with theft and murder.

Maybe it is time to stop looking to governments and systems of laws to solve human problems. If you want people to be more just, don't tell them what to do with laws. Tell them why they should be more just.

If you want the bitcoin industry to be ethical, don't look to government regulators. There's zero evidence that government regulation has ever made anything more ethical. If you want to have the industry be more ethical, build tools that can be used by ethical people to secure their economic privacy.

Here at SilentVault, we've done some of that work. We think SilentVault is a useful tool for securing your economic privacy. We look forward to others doing similar work, and building even better tools.

The case against regulation is very simple. If you cannot trust people to make good choices, how can regulations written by people, imposed by people, and selectively enforced by people improve on that situation? If you cannot trust people who are not in government to choose wisely and be ethical, why do you think you can trust people who are in government?

If your answer is that you simply don't trust people in private life, but you do trust people in public life, then your answer is naive. You should do more research. If your answer is that you think that using force to make other people do what you think best is the way to go, then you should take some courses on ethics.

If your answer is mine, that you cannot trust other people to make good choices, so you choose for yourself, then you'll need to work at your own future. You will need tools like SilentVault to secure your economic privacy so you can build a future for yourself that makes sense.

When you think about it, after being advised that his web of laws wasn't going to limit the actions of the wealthy and powerful, since he went ahead and wrote them anyway, it seems clear that Solon wanted a system that harmed the weak and poor and benefited the wealthy and powerful. The idea that such a system would provide equal justice for everyone is simply false. Promoting government as a solution to injustice is deceitful.

Mankind has woven tangled webs of deceit over and over again. It might be time to try something else.

Privacy under attack

Tyrone Saturday May 31, 2014

Recently, The Guardian published a lengthy essay on the NSA scandal. We thought quite a lot of it was very good, so it is linked here:


Justin Turrell commented, "I think this is a good writeup (if a bit long) because:
1) it frankly equates surveillance with slavery;
2) it takes data mining companies like Facebook and Gmail to task equally with govt agencies; and
3) it recommends use of encryption and development of privacy-enhancing products as a solution."

Those are all very important ideas. Probably the most significant is item 3, recommending that people get and use encryption. At SilentVault, we are developing a privacy-enhancing product built on the Voucher Safe technology.

You should get a plug-in for your e-mail programme, such as the Enigmail plug-in that works with Mozilla Thunderbird. You should generate PGP keys. PGP stands for "Pretty Good Privacy" and remains the widely accepted standard. First developed by Phil Zimmerman and others, and previously available (as far back as 1991 or so) as an MS DOS command line programme, PGP is now the basis for an open source standard, Open PGP.

Enigmail is an easy-to-use PGP plug-in for Thunderbird. Encryption is therefore easy to use. If you need help with encryption, please comment here and we'll get you some help on the topic.

Whose Choice?

Tyrone Thursday May 29, 2014

Some years back, I was working with a group that was proposing to build a free port in Africa. For various reasons, the involvement of American nationals in the project made a bit of a stir among the local and regional leadership council with whom our group needed to have an agreement. Their primary liaison to our group was curious about the American form of government, so, at the suggestion of one of our team members, I gave him a booklet from the Cato Institute which contains both the Declaration of Independence and the constitution of the USA, with its amendments. I said, "These are the design documents. You should look them over and we'll talk more soon."

He did so, and said, the next morning, "That's a pretty good design. I really liked most of the things written in that booklet. But, what went wrong?"

What went wrong, indeed. It was evident that a great deal had gone wrong, and that the ideals stipulated in the declaration and the rights guaranteed in the constitution were not the basis of government in the USA. Not having a super abundance of time, I reflected briefly on how to answer. What I came up with was, "People had to be trusted to uphold the principles in those documents. It turned out that not everyone was trustworthy."

Thomas Jefferson, in his first inaugural address, calling for a return to the limited government approach that he and others in his party favoured, after a period of outrageous interference by Federalists under president John Adams, made a similar point. Jefferson said, in 1801 that "Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."

Looking backward from Jefferson's day, it was clear that kings like George III and Charles I were not angels, could not be trusted, and had to be removed from power over the people they were pretending to govern (but were in fact exploiting for financial and political gain). Jefferson clearly felt that an examination of past history would reveal that self-government was better.

Two hundred years later, another group of politicians chose to go much further than the "alien and sedition acts" had done in Jefferson's day. The Bush administration, with the enthusiastic support of Illinois senator Barack Obama, and later with his cooperation as president, undid all the rules put in place after the espionage scandals of the Nixon administration in the 1970s. Everything that was supposed to limit what spy agencies like the National Security Agency and Central Intelligence Agency could do was to be ignored or forgotten. As a result, the kind of society Americans now live in is very far from the design ideals of the Declaration, constitution, and bill of rights.

James Bamford, writing in the 15 August 2013 issue of The New York Review (in his article "They Know Much More Than You Think," which is effectively a review of 1984 by George Orwell), noted: "Within days of Snowden's documents appearing in The Guardian and The Washington Post, revealing several of the National Security Agency's extensive domestic surveillance programs, bookstores reported a sudden spike in the sales of George Orwell's classic dystopian novel 1984. 'The telescreens,' Orwell wrote, 'have hidden microphones and cameras. These devices, alongside informers, permit the Thought Police to spy upon everyone...'. Today, as the Snowden documents make clear, it is the NSA that keeps track of phone calls, monitors communications, and analyzes people's thoughts through data mining of Google searches and other online activity."

Why is that important? Of course, it is tempting to say that the importance of an individual right to privacy is that the right to privacy is implicit in the text of the fourth article of the bill of rights, "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." It is tempting to say that the importance of the right to privacy is directly indicated in the text of the ninth article of the bill of rights, securing all other non-enumerated rights to the people. While it is certainly true that every single individual who has ever served in any capacity in the United States government has sworn to uphold and defend the rights, both enumerated and non-enumerated, which are guaranteed by the constitution, we are well past the point where lamenting over a broken implementation of a nicely designed set of principles is relevant.

In short, the idea of a government with strictly limited powers is an experiment that has taken place, has been looked at from every conceivable angle, and has failed. There is no way to have a government with powers and not have that government grow out of control. I certainly disagree with the people who swore to defend and uphold the constitution failing to do what they agreed to do, but I have no illusions that any of them are angels. No one who swore to uphold the constitution and then succumbed to the temptations of going along with violations of the constitution, or, worse, wrote extensive opinions justifying such violations (John Yoo comes to mind) is any more of a monster than anyone who calls for government regulation of the crypto-currency industry. There are, obviously, not enough people like Edward Snowden, Chelsea Manning, Thomas Andrews Drake, William Binney, J. Kirk Wiebe, Ed Loomis, and Diane Roark (to name a few prominent whistleblowers and investigators) to keep the militaristic, voyeuristic slime under control.

Bamford notes, "The US intelligence agencies also seem to have adopted Orwell's idea of doublethink - 'to be conscious of complete truthfulness while telling carefully constructed lies.' For example, James Clapper, the director of national intelligence, was asked at a Senate hearing in March whether 'the NSA collects any type of data at all on millions or hundreds of millions of Americans.' Clapper's answer: 'No, sir... Not wittingly.' Three months later, following the revelations of the phone-log program in which the NSA collects telephone data — the numbers of both callers and the length of the calls — on hundreds of millions of Americans, Clapper switched to doublethink. He said that his previous answer was not a lie; he just chose to respond in the 'least untruthful manner.'"

Of course, Clapper did lie, and is a liar. He and everyone else working for the NSA in a management capacity should be held in contempt of Congress, prosecuted for malfeasance, and imprisoned for the rest of their natural lives. Their assets should be forfeit and sold off to be distributed to every individual whose information has been kept by the NSA, ever, for any reason, including all Americans and as many foreign nationals as the NSA can identify. In order to distribute the assets of everyone who has ever worked at the NSA to the victims of their fraudulent, illegal, unconstitutional, and malicious espionage programme, the records of the NSA must be made public. And, naturally, these things that should happen won't ever happen.

Bamford wrote: "For much of the next century, the solution would be the same: the NSA and its predecessors would enter into secret illegal agreements with the telecom companies to gain access to communications. Eventually codenamed Project Shamrock, the program finally came to a crashing halt in 1975 when a Senate committee that was investigating intelligence agency abuses discovered it. Senator Frank Church, the committee chairman, labeled the NSA program 'probably the largest governmental interception program affecting Americans ever undertaken.' As a result of decades of illegal surveillance by the NSA, in 1978 the Foreign Intelligence Surveillance Act (FISA) was signed into law and the Foreign Intelligence Surveillance Court (FISC) came into existence. Its purpose was, for the first time, to require the NSA to get judicial approval for eavesdropping on Americans."

Then Bamford descends into what must either be irony or naivete, saying, "For a quarter of a century, the rules were followed and the NSA stayed out of trouble, but following the September 11 attacks, the Bush administration decided to illegally bypass the court and began its program of warrantless wiretapping." It seems unlikely that Bamford never heard of ECHELON, an NSA programme that the European Parliament described as the "Technology of Political Control" in 1998. The idea that the NSA had been following the rules in the 1980s and 1990s is silly.

Bamford: "I was told by Adrienne J. Kinne, who in 2001 was a twenty-four-year-old voice intercept operator who conducted some of the eavesdropping... She or her superiors did not have to get a warrant for each interception. 'It was incredibly uncomfortable to be listening to private personal conversations of Americans,' she said. 'And it's almost like going through and stumbling and finding somebody's diary and reading it.'"

"Anytime you hear the United States government talking about a wiretap, it requires - a wiretap requires a court order," President George W. Bush told a crowd in 2004. "Nothing has changed, by the way. When we're talking about chasing down terrorists, we're talking about getting a court order before we do so."

Bush was lying. For his many crimes against humanity, Bush should be imprisoned for the rest of his life and have all of his assets seized for distribution among his very many victims. Of course, that will never happen - there is no justice in the United States, and any president can get away with mass murder and mass covert domestic espionage with complete impunity, because Americans don't do anything about these crimes. It is a reasonable defence of Americans that they may not believe they can do anything about these crimes. However, that is not a reasonable defence of Bush, nor of Obama.

Bamford: "...rather than strengthen the controls governing the NSA's spying, Congress instead voted to weaken them, largely by codifying into the amendment to FISA what had previously been illegal. At the same time, rather than calling for prosecution of the telecom officials for their role in illegally cooperating in the eavesdropping program, or at least a clear public accounting, Congress simply granted them immunity not only from prosecution but also from civil suits. Thus, for nearly a century, telecom companies have been allowed to violate the privacy of millions of Americans with impunity. In addition to the denial ... by James Clapper, General Keith Alexander, the NSA director, also blatantly denied that his agency was keeping records on millions of Americans. ... In the months afterward, General Alexander repeatedly denied Binney's charges. 'No... we don't hold data on US citizens,' he told Fox News, and at an Aspen Institute conference he said, 'To think we're collecting on every US person...that would be against the law.' He added, 'The fact is we're a foreign intelligence agency.'"

General Keith Alexander is a liar. He should be stripped of his assets which should be distributed among his many victims. Of course, that won't ever happen. What may happen is, you may catch a few clues, secure your private communications with encryption, use effective means to safeguard your economic transactions, and remove yourself from contributing to the problems.

Bamford: "But the NSA has, on a daily basis, access to virtually everyone's phone records, whether cell or landline, and can store, data-mine, and keep them indefinitely. Snowden's documents describing the PRISM program show that the agency is also accessing the Internet data of the nine major Internet companies in the US, including Google and Yahoo."

"Any analyst at any time can target anyone, any selector, anywhere," Snowden said. "Where those communications will be picked up depends on the range of the sensor networks and the authorities that that analyst is empowered with. Not all analysts have the ability to target everything. But I sitting at my desk certainly had the authorities to wiretap anyone, from you or your accountant to a federal judge to even the president, if I had a personal e-mail."

Bamford: "What Snowden ...semed to be indicating - although this remains to be officially confirmed -that while under FISA, a court order would be required to enter an American on a target list, analysts have the capability to unilaterally bypass the procedure by simply listing a name or e-mail address on the target list."

And what I believe is that such a capability did not magically arise after 11 September 2001, but was implicit in the ECHELON system and was the design ideal of the NSA from its founding year.

Here are a few passages from Bamford:
"...according to the draft of a top secret NSA inspector general's report leaked by Snowden is that approximately one third of all international telephone calls in the world enter, leave, or transit the United States. 'Most international telephone calls are routed through a small number of switches or chokepoints in the international telephone switching system en route to their final destination,' says the report. For example, the report notes that during 2002, less than one percent of worldwide Internet bandwidth ... 'was between two regions that did not include the United States.' According to a slide released by Snowden, the cable-tapping operation is codenamed 'UPSTREAM' and it is described as the 'collection of communications on fiber cables and infrastructure as data flows past.'

"According to the leaked inspector general's report, the agency has secret cooperative agreements with the top three telephone companies in the country. Although the report disguises their names, they are likely AT&T, Verizon, and Sprint: NSA determined that under the Authorization it could gain access to approximately 81% of the international calls into and out of the United States through three corporate partners: Company A had access to 39%, Company B 28%, and Company C 14%."

"The filters are placed at key junction points known as switches. For example, much of the communications - telephone and Internet - to and from the northwestern United States pass through a nearly windowless nine-story building at 611 Folsom Street in San Francisco. This is AT&T's regional switching center. In 2003, the NSA built a secret room in the facility and filled it with computers and software from a company called Narus."

"According to William Binney, the former NSA senior official, the NSA has established between ten and twenty of these secret rooms at telecom company switches around the country. It is this daily access to the telephone metadata of all Americans without FISA warrants that the nSA and the Office of National Intelligence tried to hide when they falsely denied that the agency had surveillance records on millions of Americans."

"...according to...senators Ron Wyden and Mark Udall, the real reason the program was shut down was that the NSA was 'unable' to prove the usefulness of the operation. 'We were very concerned about this program's impact on Americans' civil liberties and privacy rights,' they said, 'and we spent a significant portion of 2011 pressing intelligence officials to provide evidence of its effectiveness. They were unable to do so, and the program was shut down that year....It is also important to note that intelligence agencies made statements...that significantly exaggerated this program's effectiveness. This experience demonstrates to us that intelligence agencies' assessment of the usefulness of particular collection program - even significant ones - are not always accurate.'"

For my own part, I would put it differently. Rather than saying that the intelligence agency officials "significantly exaggerated," I would say that they deliberately, knowingly, and wilfully lied. That way, their lies are understood to be lies and not merely "significant" exaggerations. If you exaggerate about something significant in a way that is deliberately constructed to get authority to keep a program of no merit that violates the privacy of Americans and runs roughshod over the constitution, and you work for the government in any capacity, I think you should be imprisoned for the rest of your life and forfeit all your assets to be distributed among the many victims of your crimes. Of course, that won't ever happen.

More from Bamford:
"Speaking on Meet the Press, Glenn Greenwald, a lawyer and journalist...mentioned a still-secret eighty-page FISA court opinion that, he said, criticized the NSA for violation of both the Fourth Amendment and the FISA statute. According to Greenwald, 'it specifically said that they are collecting bulk transmissions, multiple conversations from millions of Americans ... and that this is illegal.'"

"According to The Economist of June 29, 'the NSA provided congressional intelligence committees with what it said were over 50 cases in which the programmes disclosed by Mr. Snowden had contributed to the ... disruption of terrorist plots in America, and over 20 other countries.' ... Kenneth Roth, director of Human Rights Watch and a former federal prosecutor commented that 'upon scrutiny' many of the plots referred to by the NSA 'appear in fact to have been uncovered not because of the mass collection of our metadata but through more traditional surveillance of particular phone numbers or e-mail addresses - the kinds of targeted inquiries that easily would have justified a judicial order allowing review of records kept by communications companies or even monitoring the content of those communications.'"

"At the AT&T facility on Folsom Street and the other locations, fiber-optic cables containing millions of communications enter the building and go into what's known as a beam-splitter. This is a prism-type device that produces a duplicate, mirror image of the original communications. The original beams, containing Internet data, continue on to wherever they were originally destined. The duplicate beam goes into Room 641A, the NSA's secret room one floor below, a discovery made by another whistleblower, AT&T technician Mark Klein."

"These claims by Snowden, and other revelations from the documents he released should be investigated by either a select committee of Congress, such as the Church Committee, or an independent body, like the 9/11 Commission."

I would be curious to know why James Bamford thinks another Church Commission is going to do any good. I remember Frank Church's work leading that commission, and the investigations done into the improper behaviour by the CIA, NSA, and other intelligence agencies, way back in the 1970s. I remember the government saying, "Now we have investigated our wrong-doing, you can trust us not to do it any longer." I remember thinking to myself that there wasn't any chance that the investigation was going to produce any change in the way the government did things, only in the extent to which it would cover up future efforts to do the same things, and the extent to which the system's worst offenders would try to buy off, or blackmail, the people charged with supervising them. Evidently, the Church Commission failed to put a leash on intelligence agencies. Why would a revived Church Commission be any better?

Whether or not the 9/11 Commission's findings of fact lead you to conclude that the 9/11 Commission was prevented, as the commissioners noted themselves, from having complete information by government agencies, including intelligence agencies, or lead you to conclude that the attacks on the World Trade Center and Pentagon were part of a vast al Qaeda conspiracy, it is clear that the sort of power consolidation that took place in late 2001 is directly comparable to the kind of power grab achieved by the Nazi Party in Germany after the notorious Reichstag fire. Does it really matter what happened on 9/11 when the result is that the freedoms Americans hold dear were eliminated in a gutless power grab by cowardly politicians and bureaucrats? Or that hundreds of billions of dollars have been spent on government employees and government contracts to military and intelligence contractor companies in an effort to spy on every American, lie about the spying to the public, to Congress, to the FISA court, and to anyone charged with overseeing those activities, making it very profitable for a great many people to destroy the Bill of Rights?

Are we to believe, as Bamford apparently does, that a government commission is going to cause the government to straighten up, abandon hundreds of billions of dollars of future opportunities for graft and corruption, and restore the constitutional guarantees for individual liberty? I think, given that we have the example of the Church Commission, that we ought not to believe in similar ideas. Put not your faith in government commissions, nor princes.

Bamford: "According to a recent slide released by Snowden, the NSA on April 5, 2013, had 117,675 active surveillance targets in the program and was able to access real-time data on live voice, text, e-mail, or Internet chat services, in addition to analyzing stored data."

"Another new document released by Snowden says that on New Year's Eve, 2012, SHELLTRUMPET, a metadata program targeting international communications had just 'processed its One Trillionth metadata record.' Started five years ago, it noted that half of that trillion was added in 2012. It also noted that two more new programs, MOONLIGHTPATH and SPINNERET, 'are planned to be added by September 2013.'"

It seems from the proliferation of these programs that it is good to be an intelligence contractor. It also seems clear that the government has no checks and balances in place and cannot be trusted to safeguard the privacy of anyone. Unless the government decides to eliminate the NSA and CIA in the same way that the Black Chamber was eliminated in the 1920s, there won't be any freedom or privacy for anyone who relies exclusively on government to keep them free and secure from snooping. Happily, there are decentralized solutions available to anti-authoritarian individuals.

Bamford: "One man who was prescient enough to see what was coming was Senator Frank Church, the first outsider to peer into the dark recesses of the NSA. In 1975, when the NSA posed merely a fraction of the threat it poses to privacy today...Church issued a start warning: 'That capability at any time could be turned around on the American people and no America would have any privacy left...There would be no place to hide. If this government ever became a tyranny, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny and there would be no way to fight back, because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within reach of the government to know. ... I don't want to see this country ever go across the bridge. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross that abyss. That is the abyss from which there is no return.' Church sounds as if he had absorbed the lessons of 1984."

Of course, that abyss has been crossed. The oligarchy has total control, and gets everything it wants from a cowardly president and a compliant congress. There is no supervision by the government of the government. No agencies that "possess this technology" operate within the law, and none ever will. Government cannot be trusted to govern.

The question before you is: whose choice should it be whether you remain free? Evidently, the scum running the NSA and operating its surveillance programmes believe that it should not be your choice. Rather, they believe that you should be watched, closely, and exposed to public humiliation if you step out of line. General Keith Alexander seriously proposed "going after not terrorists or criminals but 'radicalizers,' including innocent Americans by searching the Internet for their vulnerabilities, such as visits to porn sites. Then by secretly leaking this information, the NSA could discredit them," according to a speech James Bamford gave on the occasion of Edward Snowden winning the Ridenhour prize. So, not only should you not have any privacy, according to scumbags like General Keith Alexander, you should not be allowed to speak out against any government activity without him finding out and exposing you.

Note that Gen. Alexander had not quite gotten to the point, in the memo identified by Bamford, of suggesting that people in the government make up lies, manufacture false evidence, and plant it in the computers of people they don't like. But why should you assume that such things aren't being done by vile filth like Gen. Alexander who clearly cannot be trusted to uphold their oath to defend the constitution? Never mind, that was a rhetorical question.

Your privacy is yours to protect. Your freedom is yours to protect. If what you've read on this blog post infuriates you, good. Use that emotional energy to take action. Act to protect yourself, to protect your wealth, to protect your privacy, to protect your freedom. Act now, before a government puts you in a death camp.

Skype vs Regulation

Tyrone Thursday May 29, 2014

Not everyone agrees with the moronic march toward regulation. For example, consider Michael Jackson of Skype. As the former chief operating officer, he presumably has some sense of what they were doing as they began their product launch. And as a venture capital investor at Mangrove Capital he clearly has a sense of what money is and what it does.

At Coindesk, he writes, in part, "We, the bitcoin community, need to make these arguments better. The default position of the products and services derived from bitcoin must be that they are not to be regulated. They need not be, and the existing rules need not apply. They may apply in intent, but often the wording is poor, unsuitable and can be argued to be irrelevant.

"To put it bluntly - every bitcoin actor should be reading the law very carefully and finding the loopholes. You should all invest a great deal of time in this - it is hugely important. For example, are you really moving 'currency' or are you simply exchanging some sort of token?"

You can read the rest of the essay here: http://www.coindesk.com/bitcoin-regulation-lessons-early-days-skype/

Now, I certainly don't qualify as a fan of Skype. Proprietary encryption isn't sensible. You aren't protected by proprietary encryption. For all any of us know, every Skype conversation ever made has been recorded and submitted to half a dozen (or more) government agencies. Open source crypto, and open source software, are vitally important.

If you want to have your privacy, you have to look at the source code, or at least rely upon persons who have looked at published source code.

Closed source, proprietary operating systems (such as Windoze and Mac OS) and closed source, proprietary software, can, and probably do, things you don't know, wouldn't like, and can't stop. Open source operating systems and software do things that you can know about. You can either learn to read the code, or hire
people who can. And you don't actually need to do either of those things, since the open source community constantly publishes info about open source operating systems and software. It is very hard for an open source programme to do anything without you being able to learn about it, because so many people look very closely at all open source stuff.

The lesson Jackson is attempting to impart, however, remains valid. He wrote, "We could have decided to apply for telecoms licences all around the world and customize the product to both match and support the vagaries of different rules and directives. It would have been the logical thing to do and it is similar to the route many bitcoin actors are taking today. However, if Skype had done so, it would have been the worst strategic mistake it ever made."

Based on the various comments I've seen from members of congress, it seems clear that what is going to be done to bitcoin in the name of regulatory compliance is extremely undesirable. Or, to again quote Jackson, "Had we tried to establish Skype as a telco, rules and perversity would have appeared, driven by a dangerous combination of lack of knowledge, good intentions and political pressure."

People in the government don't know anything, and rarely care about anything but their own power, salary, and pension. They will see bitcoin as a threat to those things, and act accordingly.

Consider another industry that has seen endless, meaningless, and tedious delays. Space tourism. Back in 2004, after winning the X Prize, Richard Branson declared his intention of flying tourists by 2007. Every year since 2007 there have been plenty of reasons for the date to be further in the future. It is now 2014. Even if Virgin Galactic were to start flying tourists tomorrow, the delays have been costly.

The people in the bitcoin industry who want to pretend that they are going to comply with regulations are fools. They are asking to have the entire industry destroyed. They want to have a government regulator examining every link on the blockchain. Perhaps the regulators would be satisfied if everyone who ever makes a bitcoin spend had to pee in a cup and wait for a drug lab to analyse the contents. But the whole point of making economic privacy available to the public would be lost.

I strongly suspect that the reality is different. The people who are clamouring loudest for regulation expect to be able to buy their way into the small cartel of companies that are going to get favoured treatment from regulators. The rest of us are going to have to look forward to being screwed.

The automobile industry is heavily regulated. There are only three giant car companies in the USA, plus Tesla. Now, every single stock car racing enthusiast in the country, and there are millions to tens of millions of those, knows how to make a car run. Thousands of them know how to make cars run better. There ought to be dozens of car companies, but there are not. The regulators in Washington, DC, make sure of it.

That system won't last forever. Open source has been applies to hardware, too, for more than a decade.

The system of burdensome regulation that benefits a few in industry and many in government is broken. It is psychotic in its implementation. It has utterly failed to prevent the financial meltdown, the Madoff scam, or any other major calamity going back to the Great Depression of the 1930s. No one in government cares one whit about cartels operating in restraint of trade. So big businesses acquire big businesses, consumers are increasingly screwed, and the only people doing anything about it are developing work-arounds without considering which regulations they are violating.

You don't have to like it. I don't like the regulatory environment, and I don't pretend that I can do anything about it. You also don't have to operate your business in the United States and be subject to USA regulations. And neither do I.

Ridenhour, Snowden, and Alexander

Tyrone Tuesday May 27, 2014

Recently, Edward Snowden was awarded the Ridenhour Prize by the Nation foundation at the National Press Club in Washington, DC. During the ceremony, James Bamford said, "In a memorandum, General Keith Alexander suggested going after not terrorists or criminals but 'radicalizers,' including innocent Americans by searching the Internet for their vulnerabilities, such as visits to porn sites. Then by secretly leaking this information, the NSA could discredit them in the eyes of their followers."

Today, we all know who global hero Edward Snowden is and what he revealed about the evil and malicious vipers at the Nationalist Socialist Security Agency (NSA). But who was Ridenhour to be identified with a prize? And who is this Alexander character who purports to be a general? In our ongoing inquiry into government regulation, whether it is really a terrible idea or just a very bad one, and whether the failed experiment in "limited government" might ever be admitted a failure by those dedicated to more government, we thought we should find out.

Ronald Ridenhour was drafted to do some very bad things in Vietnam many decades ago for a bad organization filled with bad people. He learned that some of those people had committed a particularly heinous massacre at a place called My Lai. He gathered information from eyewitnesses, returned home after his time in the service was up, and sent letters to about 30 different congress critters and Pentagon apparatchikisti. So he broke the story. An investigation ensued, and a few went to prison.

Ridenhour said, "...Some people — most, it seems — will, under some circumstances, do anything someone in authority tells them to.... Government institutions, like most humans, have a reflexive reaction to the exposure of internal corruption and wrongdoing: No matter how transparent the effort, their first response is to lie, conceal and cover up. Also like human beings, once an institution has embraced a particular lie in support of a particular coverup, it will forever proclaim its innocence." (Ron Ridenhour, Los Angeles Times, March 16, 1993)

Evidently, Snowden gets it. Snowden understands what he had to do for people all over the world, what was the right thing to do, and he did it. Ridenhour got it. He knew that what had been done at My Lai was wrong and that it was the right thing for him to tell the world about it. You get a sense of Ridenhour's purpose and sensitivity from his 1969 letter to Congress http://law2.umkc.edu/faculty/projects/ftrials/mylai/ridenhour_ltr.html and from his other writing on the topic. http://www2.iath.virginia.edu/sixties/HTML_docs/Texts/Narrative/Ridenhour_Jesus_01.html

So, who the hell is Keith Alexander, what bone head made him a "general," and how does he purport to uphold his personally sworn oath to defend the constitution (which includes extensive guarantees in a bill of rights) against all enemies foreign and domestic when he's convinced that he has to rape the individual liberty of millions of people he's never met? Or am I asking the wrong question....?

You can read the public pabulum about this guy at his wikipedia page. http://en.wikipedia.org/wiki/Keith_B._Alexander He was made a general some decades ago and allowed to "retire" in March 2014 at the age of 62. Although he allegedly offered to resign in October 2013, the Obama administration was apparently so enthusiastic about his work, the main body of which seems to have involved invading the privacy and violating the civil liberties of not only every single American alive, but also billions of people worldwide. More importantly, as can be seen from a series of statements he made to the public and to Congress, Keith Alexander was evidently lying, over and over again, in what seems to have been a pathological attempt to get away with mass surveillance, oath breaking, and the deliberate, malicious, deceitful destruction of reputations of anyone who disagreed with his apparent militarism and enthusiasm for the butchery of human beings in the name of preserving a system of command, control, regulation, and domination.

In other words, he doesn't get it. Nor does the Obama administration. Nor does Congress. Those in power seek more power. For those in power to even look at what is being done to individual liberty in the name of control seems vanishingly unlikely. Although, for his crimes against humanity as a general officer in the military, for his crimes against the American people and the constitution as director of the NSA, and for his sundry other high crimes and misdemeanours, Alexander should, in my opinion, be impeached, convicted of treason, stripped of his titles, honours, medals, awards, assets, and pensions, and spend the rest of his life at labour to compensate his victims with whatever he has kept of his past (ill-gotten) earnings and whatever he gets in future earnings under extremely close supervision, we all know that no such consequences will be transpire. Criminals in government offices get away with murder, often.

These facts ought to give those who want government regulation of bitcoin in particular and the crypto-currency industry pause. But my experience of such people is that they always want to believe that they are in the right, that they are clever, that they have friends in high places, and that they, too, will be able to get away with creating cartels in restraint of trade, engaging in economic piracy under colour of law, and won't ever learn. They won't learn that government regulation is a bad idea because they think that they can ride the tiger.

The tiger is, of course, big government. In terms of annual budget, there is no bigger government than the United States government. And the kind of people who want regulation of the finance industry for their own benefit think that they can ride that tiger, and tigers just like it, without ever getting thrown off, mauled, and eaten. People like Bernie Madoff thought that, too, and were willing to engage in fraud, deceit, and flim-flam to gather in billions of dollars, mismanage those funds, and, for a time, get away with doing so. When a few prominent scapegoats were needed, a very few were found, including Madoff.

Lt. Calley presumably thought he could ride the tiger, just as Alexander seems to be thinking. Ron Ridenhour proved that thinking wrong. Ed Snowden may do the same for Alexander and a host of other vermin infesting the nationalist socialist (Nazi, fascist, police state, militaristic) government of the United States.

Ridenhour and Snowden have honour, decency, and humanity. They should be regarded as heroes by everyone on Earth who has a conscience. Alexander is a monster. And if you favour government regulation of any industry, you are no better.

Why a Shoe?

Tyrone Saturday May 17, 2014

Since 2008, when Muntadhar al-Zaidi threw two shoes at then-president George W. Bush, there have been a number of similar incidents. http://en.wikipedia.org/wiki/List_of_shoe_throwing_incidents One cannot blame al-Zaidi for choosing to throw a shoe and shout, "This is a farewell kiss from the Iraqi people, you dog!" and "This is for the widows and orphans and all those killed in Iraq." In his culture, throwing a shoe at someone is a very significant choice.

One wonders, though, whether it would (hypothetically) be more appropriate for people worldwide to throw cell phones at individuals like George W. Bush who have been instrumental in the warrantless wiretapping scandal. One might choose to include sundry current and former members of Congress who voted for the FISA amendment law which pretends to make it lawful for the government to spy on anyone in the world, without probable cause, without due process, and without end. One might include current government officials, including the current president, given his vote as former Senator from Illinois and his ongoing enthusiasm for everything espionage and unconstitutional. One might even include former secretary of state Hillary Clinton, who was recently the target of yet another thrown shoe, and who has been frequently an enthusiast of big government programs, including ones that evidently involve mass espionage. Or one might not, since throwing shoes apparently is a crime, and throwing cell phones might be regarded the same. No matter how many people in government were stoned to death, it seems unlikely to change what government is and what it does, so why bother? How you choose to behave is your responsibility, of course.

Federal Judge Claire Eagan seems to be an especially interesting candidate for future protests of all kinds. We'll assume for the time being that such future protests would be non-violent in character. Eagan was outed in a recent issue of The New York Times (Thursday 15 May 2014) as having evidently lied in an August 2013 opinion about the National Security Agency's warrantless wiretapping. Eagan issued her false statements as part of her official opinion for the Foreign Intelligence Surveillance Court, which pretends to provide some sort of legal process in an attempt to give the fig leaf of constitutional cover to what remains a violation of individual liberty and an outrage to every human being on Earth.

Eagan said, in a particularly smarmy way, that "To date, no holder of records who has received an order to produce bulk telephony metadata has challenged the legality of such an order. Indeed, no recipient of any Section 215 order has challenged the legality of such an order, despite explicit statutory mechanisms for doing so." That was a lie, Judge Eagan.

In fact, as far back as March 2001, the telecommunications company QWest refused to participate in the NSA's warrantless wiretapping programme. Wikipedia reports, "In an unusual related legal development, on October 13, 2007, The Washington Post reported that Joseph P. Nacchio, the former CEO of Qwest Communications, is appealing an April 2007 conviction on 19 counts of insider trading by alleging that the government withdrew opportunities for contracts worth hundreds of millions of dollars after Qwest refused to participate in an unidentified National Security Agency program that the company thought might be illegal. According to court documents unsealed in Denver in early October as part of Nacchio's appeal, the NSA approached Qwest about participating in a warrantless surveillance program more than six months before the Sep 11, 2001, attacks which have been cited by the government as the main impetus for its efforts. Nacchio is using the allegation to try to show why his stock sale should not have been considered improper. According to a lawsuit filed against other telecommunications companies for violating customer privacy, AT&T began preparing facilities for the NSA to monitor "phone call information and Internet traffic" seven months before 9/11." http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_%282001%E2%80%9307%29#Developments

In a more recent incident reported in the New York Times on 14 May 2014, a phone company, probably Sprint, raised legal questions about the metadata collection programme in July 2009. The company "was apparently on the verge of filing a formal legal challenge in January 2010, provoking a significant response by the Justice Department and the court to head off such a step." The department asked the court to unseal certain records about the programme, "and a related NSA program that collects bulk records about Americans' emails" so that the company could be more fully briefed about its intended complaint. On 8 January 2010, the company and the Justice Department petitioned the court "to extend the time period for the company to challenge the order requiring it to turn over its customers' records. It noted that the carrier had been raising questions about the legality of the program since July 2009."

In January 2014, Verizon seems to have challenged the FISA court on the legality of the programme, and Judge Rosemary M. Collyer, in what appears to be an even bigger lie, portrayed the challenge as the first by a carrier, and cited Judge Eagan's evidently false statements in the earlier opinion. So, one judge makes false statements in rejecting a request based on the false statements of another judge.

It bears mentioning that QWest was well-known for several years as a company that was resisting the NSA's warrantless wiretapping. How did the government respond? By treating its former CEO to what appear to be false charges and trumped-up evidence for improper convictions, which may have involved prosecutor misconduct. In other words, the government destroyed the lives of the people it could identify as being behind any resistance by phone companies to the government running roughshod over the freedoms of Americans. Little wonder that Sprint executives thought long and hard about whether to make their legal challenge in January 2010. I wonder how many Sprint executives were called by people in the Obama administration and told what to expect, how many charges would be filed against them, how many of their children would be attacked in various ways, how many of them would be imprisoned, tortured, or financially ruined?

The government plays hard ball. That isn't news. But idiots in the crypto currency industry seem to think that government regulation of Bitcoin would be a good idea. Why is that? It isn't as though there are any protections within the government's system. You either obey, or you are destroyed. And if some government regulator wants money, or a job after leaving their government office, or anything, how are you going to stop them?

The simple fact is that the government has been lying for decades about its domestic espionage programmes, about its foreign wars, about its military, and about everything that it wants to lie about. Every time I start writing more of the definitive review of the NSA warrantless wiretap scandal, someone sends me a news clipping or a link to yet another story making it clear that there is no end to the violence, malicious falsehood, and betrayals involved in the government's behaviour in this area.

You would do well not to trust the government. Encrypt your e-mail. Keep your computer systems secure. Stay as private as possible. The life you save may be your own.

Bitcoin fraud versus US dollar fraud

Tyrone Thursday May 15, 2014

The vaunted and highly regarded United States government's extremely well recognized Securities and Exchange Commission has spoken, and they assert, with all the authority they have, that Bitcoin is "ripe for fraud and Ponzi schemes," according to CNET. http://www.cnet.com/news/bitcoin-is-ripe-for-fraud-and-ponzi-schemes-warns-sec/

Of course, not everyone, including this author, regards the USA government very highly. And while I recognize the SEC, I don't recognize it as being very effective. For example, an extremely casual and momentary search on the term "fraudulent investment scheme bitcoin" brings up only about 101,000 results for me. A search on the very similar phrase "fraudulent investment schemes US dollar" generates 1.4 million hits.

Now that is anecdotal evidence, and it isn't certain that search results indicate a strong relationship. I wouldn't be especially surprised if the ratio of US dollar fraudulent schemes to bitcoin fraudulent schemes is much greater than 14:1. For one thing, simply modifying the search term to remove "US" and leaving only "fraudulent investment schemes dollar" gets me 3.15 million hits.

In the dollar-related searches, among the top three hits in each case are links to the Bernard Madoff fraud. That's the top link under the "US dollar" variation on the search. Madoff seems to have defrauded investors of about $64.8 billion (according to a wikipedia entry on the subject) in a vast Ponzi scheme, second only in scope to the social security "system" which the USA government has operated since 1935. The Madoff "investment scandal" seems appropriate to mention in this context for a few reasons.

First, questions about Madoff's company had been raised as early as 1999, but it was not until 2008 that an investigation ultimately led to criminal charges. During the time that Madoff was ignored by the Securities and Exchange Commission (SEC), his company was able to rip off a large number of investors and became, for a time, the sixth-largest market maker on Wall Street.

A brief summary of the SEC's failure is found here: http://en.wikipedia.org/wiki/Madoff_investment_scandal

"In September 2009, the SEC released a 477-page report on how the SEC missed these red flags and identifies repeated opportunities for SEC examiners to find the fraud and how ineffective their efforts were. In response to the recommendations in that report, eight SEC employees were disciplined; none were fired."

Apparently, government regulation of dollar-based fraudulent investment schemes is minimal, faint-hearted, and incompetent. Presumably all the enthusiasts for government regulation of bitcoin are aware that the government can't seem to find its way out of a paper sack with both hands and a road map, which is why they trumpet regulation as a "good" thing for bitcoin.

Second, the size of the Madoff fraud has been estimated at about $64.8 billion, making it more than 11 times the current notional value of all bitcoin ever mined, and roughly ten times the current market value of all block-chain type crypto-currencies in circulation. And that's just one dollar fraud that the SEC failed to notice, failed to prosecute for about nine years, and for which failures the SEC refused to fire any of its regulators.

It is entirely laughable that the SEC thinks it ought to be warning investors that Bitcoin is "ripe for fraud." Why isn't the SEC ignoring Bitcoin for nine years, in keeping with their track record with Madoff?

Responding to the tempest-in-a-teapot sized furore over the SEC's statement, a Colorado Congress critter has issued his own statement. http://www.cnet.com/news/congressman-if-we-ban-bitcoin-lets-ban-dollar-bills-too/

Jared Polis (D-CO) writes, in part, "The dollar bill market has been extremely susceptible to forgers, tax fraud, criminal cartels, and armed robbers stealing millions of dollars from their legitimate owners." Actually, the dollar bill has probably seen tens of billions of dollars of fraud and theft by private parties since it broke the last link to gold in 1971. If we count government-related fraud, the dollar has been involved in tens of trillions in disreputable claims and false promises.

Or, briefly, with regard to the SEC, what "authority" do they really have? Not much.

They Knew It Could Be Done

Tyrone Wednesday May 14, 2014

For a couple of weeks, I have been reviewing materials and preparing a blog entry on the Nationalist Socialist Security Agency, also known as the NSA. Yes, obviously, I am saying that the American agency that spies on everyone in the world is a fascist organization which is evil in ways very similar to the Nazis. Earlier, I broke off a blog post about the predecessor to the NSA known as "https://silentvault.com/tiki-view_blog_post.php?postId=8" class="wiki wikinew text-danger tips">The Black Chamber," and reviewed its connection to war monger, racist, and fascist Woodrow Wilson's brown shirts, "The American Protective League."

Tonight, I'm still composing that more-than-complete essay on the NSA, and our chief of technology development, Justin, sent along http://www.theguardian.com/books/2014/may/12/glenn-greenwald-nsa-tampers-us-internet-routers-snowden" class="wiki wikinew text-danger tips">a link to Glenn Greenwald. I couldn't resist commenting right away on this paragraph:

"For years, the US government loudly warned the world that Chinese routers and other internet devices pose a 'threat' because they are built with backdoor surveillance functionality that gives the Chinese government the ability to spy on anyone using them. Yet what the NSA's documents show is that Americans have been engaged in precisely the activity that the US accused the Chinese of doing."

Really, the USA government had every reason to know that it was possible to build back-door surveillance functions into routers and servers BECAUSE THEY WERE DOING SO.

The reasons why Greenwald and every other decent human being on the planet object to everything the NSA does in the name of State Security are covered very well by him in his essay. And, of course, the reasons I object are shared by other pro-decentralization individualist anarchists. We simply don't trust giant organizations with our privacy, which is why we use encryption. We don't trust every possible viewer of the block chains, which is why we are developing SilentVault as a layer of indirection to allow for exchanges among SilentVault wallets of assets such as Bitcoin and Litecoin without involving the respective block chains.

For those who still think government regulation is a good idea, here are a few other thoughts on what it is to be governed.

"To be governed is to be watched over, inspected, spied on, directed, legislated at, regulated, docketed, indoctrinated, preached at, controlled, assessed, weighed, censored, ordered about, by men who have neither the right, nor the knowledge, nor the virtue. ... To be governed is to be at every operation, at every transaction, noted, registered, enrolled, taxed, stamped, measured, numbered, assessed, licensed, authorized, admonished, forbidden, reformed, corrected, punished. It is, under the pretext of public utility, and in the name of the general interest, to be placed under contribution, trained, ransomed, exploited, monopolized, extorted, squeezed, mystified, robbed; then, at the slightest resistance, the first word of complaint, to be repressed, fined, despised, harassed, tracked, abused, clubbed, disarmed, choked, imprisoned, judged, condemned, shot, deported, sacrificed, sold, betrayed; and, to crown all, mocked, ridiculed, outraged, dishonoured. That is government; that is its justice; that is its morality." ~ Pierre-Joseph Proudhon, Idée Générale de la Révolution au XIXe Siècle The General Idea of the Revolution of the 19th Century (1851); quoted in The Anarchists (1964) by James Joll, Ch. 3, p. 78

Of course, today, both men and women control and order people about. So, we've come "a long way."

Proudhon, and I, are sceptical of the notion that it is in the public interest or for the general welfare, or general utility that all these things are done. Obviously, those with economic power want more, and they use political power to gain more economic power. Naturally, they use economic power to gain more political power. Power itself corrupts, and the more power, the more corruption. Lord Acton understood these facts. Apparently the people who want to have government agencies regulate every bitcoin in existence do not.