Tools of the Technocracy: #1 Digital Currency
Digital currency is what makes online commerce work so well. The trouble is that as the internet has invaded our lives, it has given the digital financial complex more and more power. This is the foundation of a “social credit system” that aims to control every aspect of your life. Having the “right” social attitudes or behavior will not be enough to endure this. The game is total control and the prize is all your time and assets.
The first thing to be surrendered to these digital financial tools was privacy. Having access to transaction data tells those collecting the information a great deal about you. It is trivial to glean travel patterns, interests, and all sorts of details about your life if they can catalogue your transactions. It is near impossible to keep your financial information private when operating through these services.
People assume that financial institutions will only intervene in the most egregious of circumstances. Under the guise of stopping terrorism, hate and criminal activity the financial sector has acquired the power to be the arbiter of online commerce. Large institutions are only getting started abusing this power to micro-manage more and more economic activity.
This censorship, even when used for so-called “benign” purposes, distorts market incentives. At minimum, there will be chilling effects and perverse incentives created by these interventions. As these measures accelerate, trust becomes a fading memory.
Do you have control of your money? If not, is it really “your money”? In many cases, digital currency can be frozen, blacklisted or even seized from you. In these situations you often have little-or-no recourse. The cryptocurrency space has a term “Not your keys…Not your Bitcoin”. This is doubly true for fiat-based platforms. Digital currencies linked to fiat (state) currencies also have the unfortunate side-effect of being silently seized through rising amounts of inflation.
The earliest stage financial tracking. Almost everyone is guilty of using these. They are certainly preferable to the alternatives listed below, but in all instances it is better for you to use debit cards instead of credit cards where possible.
Not all cryptocurrencies are the same. Some are more decentralized than others. Important questions to ask are:
- Can you run your own client/wallet? (a “full node”)
- Who are the developers?
- How is the protocol developed?
- Does it have a proven history?
- Does it shield you from inflation?
Unlike debit/credit cards where financial transactions are tracked by a private entity, financial analysis is open to anyone who has access to the blockchain (usually everyone). Some argue this is more “fair” and that it would be better if we transitioned our entire financial system to a public ledger.
This wouldn’t achieve the desired effects. Those with power and wealth would still have the means to conceal their activities. On top of this, they would still have the ability to have asymmetric power over individuals by developing better tools to track and analyze their financial activities.
The notable exception being Monero. While it’s privacy may be currently intact, there is no guarantee that it never will be broken. By nature of being stored on a public blockchain, once that protection is broken it is lost forever.
Custodial services (Paypal/Venmo/Stripe/ect)
These services often aim to make it easier for people, businesses and institutions to accept payments. They often come at a high cost. If financial tracking wasn’t bad enough, they also have the power to control your customers money. They can unilaterally decide to cut you off often leaving you in a very difficult financial situation.
In late 2022, Paypal instituted a policy granting them the power to fine users for so-called misinformation. After a massive wave of account cancellations, Paypal announced that the policy was included in error. At best, this policy was a “trial baloon” to get a pulse of how much tolerance the public has for financial censorship.
Centralized Cryptocurrency exchanges and services
Speaking of: “Not your keys, not your Bitcoin”, keeping cryptocurrency assets on exchanges or services exposes you to counter-party risk. You shouldn’t rely on a specific service to hold all your cryptocurrency/assets. Many of these institutions may not have a strong history to justify any level of trust.
Exchanges have been caught trading against their customers, selling information to the state, and being outright ponzi schemes. An underestimated concern is that many cryptocurrency exchanges operate as the “on-ramp” from the fiat currency system. By converting fiat currency into cryptocurrency you can be transferring value from a system that has little privacy into one with no privacy.
Where is all this headed?
A misconception people often have about cryptocurrency and blockchain projects is that they are, by their nature, decentralized. This is not an essential feature of blockchains nor cryptocurrencies.
What blockchain technology gives the technocracy is interoperability. A private distributed ledger could be used to give interoperability to CBDCs. On November 15th 2022, the New York Fed launched a 12 week digital dollar pilot.
A smart contract is an incentive system built on top of a blockchain ledger. None of the currently existing smart contract platforms are private. This means that all the data in a given smart contract is public. They could potentially encrypt data with a wallet’s private-key but that does make it difficult to share that data with others.
Smart contracts build systems that can create ways for humans and non-human systems to be rewarded by specific activities. For instance, Helium is attempting to incentivize people to provide data connectivity to systems built to track-and-trace activity in the real world. This is a powerful way to re-engineer society.
A Non-Fungible-Token is a blockchain asset that can be assigned to a specific entity. Notably, for now, people are selling “digital ownership” of pieces of art. It is not difficult to imagine a scenario where all property ‘rights’ are regulated by a system that temporarily assigns NFTs to those who are “authorized” to access that particular item or property.
NFTs have even more potential. These systems can be much more flexible and opaque in very unintuitive ways. Everything is determined by the smart contract. It would be trivial to create individualized rules to limit who gets to use their ‘rights’ to the fullest…if at all.
Web3 is the encroachment of the cryptocurrency space into the entire internet. By building experiences on top of smart contracts, which have no privacy, every activity online can feed into algorithms that are used to tailor the totality of the online experience to each individual.
In many ways Web3 allows for much of Silicon Valley to be automated away with blockchain systems. While this may sound like a good thing, you are merely changing one bad system for another. Without a truly decentralized, private and secure blockchain Web3 will only work to the detriment of it’s users.
Internet of Things
By connecting more and more ‘things’ to the internet it exposes them to being dominated by the systems discussed here. A ‘thing’ doesn’t need to be a trivial device such as a “smart speaker” or a fridge. It would very well be the car you drive or the door you enter to get to your office.
Do you think everything outlined above sounds awful and dystopian? The following will take it into overdrive:
Central bank digital currencies are the final form of repressive fiat currencies. Instead of your central bank simply devaluing your labour and wages for fiscal stimulus, they can now control the demand side of the equation by limiting what you are allowed to buy (or sell) and when. The system has no desire to use prices as a mechanism to allocate resources because of the belief that the technology now exists to run everything.
NFTs could be used to determine permissions in the ‘internet of things’. In that case, it will become near impossible to act outside the wishes of the system. Eventually the system will want to have every gram, ounce, or milliliter of resources accounted for. In the name of ‘efficiency’, they will attempt to track and control every atom on the planet.
Once people are denied all mobility rights and determination it becomes a lot easier to sell virtual experiences for data and profit.
This is the endgame of control. After seizing all the resources and property, they will also control the people by having direct control of their perception. When the physical world becomes much to harsh to bear those who remain will be psychologically herded into a virtual farm that’s entire purpose is to keep them ‘out of the way’.
#CashEveryday is an initiative to keep cash alive, by using cash transactions wherever possible. While fiat currency has its problems, cash is an anonymous and untraceable way to transfer value. You really should be using cash in every possible transaction. This reduces the amount of control third-parties have over transactions, and promotes keeping things local. Regardless of what new innovations take place, there should always be a private, physical component to the financial system.
Volunteer / “Buy nothing”
There are two other highly underestimated commodities that are drained by the technocracy: your time and attention. By giving your time to support people and causes in your community, you can often have a huge impact with very little financial input. Your contributions won’t be able to as easily be frozen or tracked by third parties.
Often you may be able to find local “Buy nothing” groups on social media. Donating items you don’t need anymore can help restore locked wealth in your community and help those who may need those items. You may find something useful yourself!
Understand that wealth is more than just currency
I highly recommend you watch though the Peak Prosperity Crash Course. Updated in 2018, it has aged frighteningly well. While the main take away is the role of energy in our society there are many other vital insights. The most valuable tip in leaving the rat race is to realize that there are many things much more vital to your well-being than currency.
Work to break away from the all-digital financial system
There is a fantastic series by Children’s Health Defense called Financial Rebellion which is a treasure-trove of great advice in this series.