The BPI took on the U.S. Division of Treasury’s problem. Treasury requested public touch upon digital property’ nationwide safety implications, and the Bitcoin Coverage Institute answered with a bomb of a doc. It explains the general worth of bitcoin as a device for freedom. It compares bitcoin to basic US-funded initiatives like Radio Free Europe and the Tor community. It touches the heartstrings and exposes the case in a convincing manner.
Today, @USTreasury requested public touch upon the nationwide safety implications of digital property.
— David Zell (@DavidZell_) November 3, 2022
To persuade folks to learn it, the BPI summarizes it like this:
“Open digital assets that empower individuals can help advance the cause of freedom, stymie the objectives of authoritarian adversaries, and help advance a core national security interest. Peer-to-peer systems like Bitcoin represent the essence of autonomy, voluntary cooperation, and liberal values that our country was built on.”
Over at Twitter, one of many authors took a special strategy. David Zell wrote:
“Today, the US Department of the Treasury requested public comment on the national security implications of digital assets. In response, Matthew Pines and I submitted this report, detailing how bitcoin promotes American interests and values abroad.”
We now know what we’re coping with. Let’s analyze the BPI’s case to see if they will persuade us.
The BPI Compares Bitcoin To Tor
The BPI units the stage by making the case for bitcoin as a complete:
“Bitcoin allows anyone in the world with an internet connection to store and send value in a manner that cannot be reversed, frozen, or seized. It is open and permissionless. It is distinct from other cryptocurrencies in that it is credibly neutral, widely-decentralized, uncontrolled by any leadership or founding team, and optimized for resisting censorship.”
The bitcoin/ Tor comparability may sound bizarre at first, however the BPI brings it residence with these examples:
“Just as Tor enabled tens of millions of people to see and access the freedom of open societies, Bitcoin enables tens of millions to escape the capital controls of authoritarian states and connect to the western financial system. Just as Tor digitally enshrines and exports the right to communicate freely across the globe, Bitcoin digitally enshrines and exports free trade and the right to transact.”
BTC value chart for 11/04/2022 on Gemini | Supply: BTC/USD on TradingView.com
The BPI Acknowledges The Dangers
Within the dangers part, the BPI appears to throw some altcoin initiatives below the bus. They acknowledge that “criminal groups (some state-sponsored) have dramatically increased the scale, sophistication, and severity of ransomware operations.” Then, the BPI says that criminals are more and more utilizing Monero increasingly more.
The BPI additionally admits that “revenue from hacking and theft are on the rise,” however they are saying its “principally driven by the dramatic increase in funds stolen from decentralized finance (“DeFi”) protocols.” That is true, however did the BPI have to write down the next? “This portion of the crypto-ecosystem inherits the “move fast and break things” ethos of silicon valley and their open supply code is a ripe goal for hackers to use and reap very giant bounties.”
Final however not least, they deal with the elephant within the room, “The Lazarus Group (a hacking group controlled by the North Korean intelligence service) is the dominant exploiter of DeFi protocols.” However then, the BPI blames “their use of the Ethereum-based mixer Tornado Cash to launder their stolen assets.” They don’t rejoice the OFAC’s resolution to sanction the sensible contract, although. The BPI wrote that the act “precipitated widespread consternation in the crypto-community and will likely be challenged in U.S. court.”
To shut the chance part, the BPI brings up sanctions and Russia:
“It has been a common refrain that Bitcoin is a useful tool for rogue nations and entities to evade U.S. sanctions. This concern was raised in the immediate aftermath of Russia’s invasion of Ukraine, but thus far, no significant use of Bitcoin to evade sanctions has materialized.”
Actionable Gadgets AKA Strategic Rules
The BPI left Treasury with some easy actionable objects that they known as “strategic principles,” to “mitigate risk, while maximizing the promise of these emerging technologies.” These have been:
“A balanced, net assessment of the broad implications of Bitcoin and other digital assets networks.” This know-how continues to be pretty new, it’s complicated and it requires mastery of all kinds of matters to even start to understand it.
“Policy should not be narrowly drawn to address a particular risk (e.g., illicit finance) without considering the larger strategic interests at stake.” Bitcoin is a fancy topic, it touches all of it.
The BPI warns in opposition to “making premature, heavyhanded policy decisions that overweight apparent national security interests at the expense of open innovation and technology leadership.”
They usually urge the Treasury to acknowledge that “decentralized digital asset networks by definition have no leader or governing body and are likely to be underrepresented in the political process.” Which is a particularly vital level to make.
To shut it off, the BPI provides Treasury the most effective recommendation. “Our cross-border tax policies and accounting rules should make it easier for US entities to receive Bitcoin as investment and as payment for exports.”
This report shouldn’t be solely vital to the US. Each nation’s management ought to research it and adapt it to its realities. Bitcoin is that vital.
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