Crypto
The Political
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“Today nothing is more modern than the onslaught against The Political. American financiers, industrial technicians, Marxist socialists unite in demanding that the biased rule of politics over unbiased economic management be done away with. There must no longer be political problems, only organizational-technical and economic-sociological tasks. The kind of economic-technical thinking that prevails today is no longer capable of perceiving a political idea.”
—Carl Schmitt, Political Theology
Politics in today’s world no longer has anything political about it. Politics as we understand it has destroyed the very nature of that which we would call The Political, and replaced it with a popularity contest between two corrupt sides of the same fiat coin. Politics then is nothing more than the changing of colors of the decaying and festering system of abuse and exploitation that we call government. Politics lacks any of the spectacular potentiality or deep empowerment that belongs to The Political which demands of itself to think beyond the meager bounds that politics has attempted to confine within it.
This is why there is no path through politics to end wars, defund the military or to create new and better political systems that are more fitting for our time. There is nothing in our day and age that is political about politics — it is just a show. A two-ringed circus to distract the multitudes into feeling like something could politically change, when politics is exactly what will ensure nothing will change. The sad hidden truth is that there is no longer any possibility of radical or revolutionary change through our forms of politics — that possibility died long ago with the death of God and its hidden meaning for the world.
However there is a secret ritual that can be performed by individuals to resurrect the specter of The Political once again. It is not for the faint of heart or those of fiat convictions, but it is possible, and only you can make that choice. It is a method in which politics must be approached in an entirely new and foreign way. A way that no longer troubles itself with the parties of the past or the ideology of state bureaucracy; but through a new and creative way that manages to cut the king’s head off in contemporary politics. This decapitation allows for the birth of an idea which is the most political of all ideas in a world that has made every attempt to destroy The Political — Bitcoin.
Bitcoin is “The Political” as opposed to just another form of politics because it activates this secret ritual that allows for the recovery of The Political. It is The Political because it exists outside and beyond the power of any and all states and it creates a form of organization that is beyond electoral politics or bureaucratic systems of any state. Bitcoin creates real and substantial political change because it has nothing to do with contemporary politics — that’s the entire point. Bitcoin does not need to elect the right leaders, get the right laws passed or even need to be understood by the majority of the population. All Bitcoin has to do is exist to present its political objective to the world.
Since the birth of bitcoin just a little more than a decade ago, it has gone from being a nascent curiosity to one of the most valuable assets on the planet. It has done this because it has accomplished a political objective that no person, institution or revolutionary movement has been able to accomplish in the last century; the creation of an independent, self-sovereign money that is loyal to no person, state or institution. Bitcoin has decrypted the most spectacular form of The Political that exists; the political nature of money itself.
Money is secretly the most political object that there is not because it is in and of itself political, but because of the way that fiat money has transformed it into a political object. Money has only been mutilated into something political through the most deceitful and cunning obfuscations of politics that has demanded, through the state of self-inflicted emergency, for money to become fiat. It is only when we start to understand that fiat money is in and of itself political that we can start to understand just why Bitcoin is more political than any form of politics that can be voted for.
The global monetary system is the most political object in our highly interdependent, digitized, globalized society, and the refusal to acknowledge that is in itself a political issue. Money is the most political ideal because it is that which involves all people everywhere and how we secure ourselves and families for the future. Bitcoin is the declaration that the time has arrived to overcome the monetary imperialism of the last century, and to throw off the last vestiges of slavery from this antiquated political system called fiat money. The time is now for each of us to perform the ritual that will exorcize the demon of fiat money and open us up to the common political dignity that is Bitcoin.
Bitcoin is our common wealth that we all share; the commonwealth that defines us.
Money is political not just because it is our medium of exchange, or even because it is the fiat legal tender that has been forced upon us, but because it is something that all people everywhere use every day. Everywhere, all the time, people are transacting with each other, primarily in fiat money, for their economic wants and needs in the world. This is what makes the commonality of money truly political — it is something that we must share if we desire to coexist peacefully and cooperatively. Bitcoin is the secret ritual that any person can perform to reopen The Political once again, where their wealth will be protected by the common bond that is consensual exchange that is Bitcoin.
Today however, the real basis of our commonality of wealth is that of tyranny represented through fiat money. Fiat money is not accountable to our laws and systems of politics, but comes from jurisdictions that are outside and beyond our power as common people to impact, direct or change. No matter what political system you live under, there is no possibility to directly change how money is issued, directed, credited, placed or created. Whether you are from communist China, capitalist America, socialist Europe, or the Global South; all monetary systems are part of the same bureaucracy that exists for the elite and powerful alone. It is a commonwealth of poverty and it is the most defining political feature of our age.
We have been told that we are free people that have democratic processes available for us to change the systems as we need to, but when we attempt such audacious goals we cannot even enter the door. Like Kafka’s man “Before The Law,” we too find ourselves waiting before the law pleading to access the only way that we can see. We have waited for countless lifetimes before the law only to realize right before we die that we will never be given access to it by the guard; only deprived of it. The secret key to understanding this parable and decrypting the secret of how to access the law comes from the hint given at the very end. The watchman who waits before the door of law who has been refusing entry to the man states, “Here no one else can gain entry, since this entrance was assigned only to you. I’m going now to close it.”
The key is that the law is not something to be “accessed”; it is something to be entered into. Just as we enter into a contract or an agreement with another, so, too, do we enter the law. State actors do not provide access to the law; they can only at best facilitate its entrance. We must understand before it is too late that the state cannot and will not ever create an entrance to a form of money that is fair and unbiased. It cannot do that because the state itself is unfair and biased — it does not have the capacity to ever move beyond that, and we should not expect that of it. There will never be a time that the state will want to liberate us from its shackles of fiat money and the bondage of debt slavery, because it has no incentive in doing that. The only interest the state has is in continuing itself at all cost and expenses — in the most real monetary, economic, social and biological cost that are entailed within that. The state literally cannot exist without fiat money, which means that it cannot exist by providing access to sound money. As Daniel Webster warned us nearly two centuries ago, “There are men, in all ages, who mean to exercise power usefully; but who mean to exercise it. They mean to govern well; but they mean to govern. They promise to be kind masters; but they mean to be masters.” Let us heed that warning as we move forward in seeking to differentiate what sets Bitcoin apart from the politics of the past.
Bitcoin is The Political because it has the real possibility of creating radical change to our respective political systems through our personal choice to use and hodl bitcoin as our main form of wealth. It is political because it can change the entire affair of politics through the personal decision that is bitcoin upending the entire criminal ponzi that we call politics. Bitcoin is democracy taken to its most extreme place and in the most serious way possible by going beyond politics and into The Political itself. This is not because Bitcoin is another tool of politics to be contorted and mutilated to serve one ruler, or another, as all prior tools have been used; but because it unilaterally and unapologetically ends the need for there to be any masters to rule on the commonality that is our wealth. In our world, within an advanced global digital economy where our shared idea of “what is money” is greater than our shared idea of who is the correct god. Bitcoin has the power to reactivate The Political and vanquish politics forever. We know that God is Dead, and he has been dead for a long while now — long enough that we can understand that he is not coming to save us. In fact, it has been long enough that we now know it is we who need to save him.
We must rescue God from the nihilistic abyss he has been sacrificed into because to rescue God is to save value itself. In a valueless age, the age of nihilism, recovering a value that cannot be corrupted or contorted by politics is to reactivate that which is the most powerful, the most austere, the most political. To fix the money is to fix the world, and not because money is the root of all evil, but because the misunderstanding of what money is is the root of evil. Evil in the deepest sense of the word; it cannot think but only be — it is us who must do the thinking. And if we are to think of money as we understand it today, as fiat money, then money is nothing more than an authoritarian decree. This decree that creates money “ex nihilo” is a fundamental error in the truth and magnanimity inside the idea of wealth. It is a decree of the stake of authority over the truth of work and the meaning that it gives to value. But in a world where we have recovered the meaning of value and wealth once again, we also understand the truth of real risk and work that must go into building wealth. There is no declaration that can create value — only destroy it through the most guileful and deceitful obfuscations of what the truth is. It is this same obfuscation of the nature of value itself that has corrupted our forms of politics.
If we want to escape the night that is politics and reactivate the light that is The Political, we must heed the secret that the watchman in “Before The Law” has offered us. The entrance to the law is a door that is assigned only to you. I cannot access it, just as your private key is something only you can know in order to remain potent; I cannot. It is within this ritual that creates the private key where we find the key that opens the door of law only accessible by you. A private door assigned to only your key. The Political is not something that the watchman will give you access to, but rather an entrance that only you may enter. It is through knowing that this door is only for you to access that you may be able to reactivate The Political, meant only for you, once again.
El Salvador’s Minister of the Economy Maria Luisa Hayem Brevé submitted a digital assets issuance bill to the country’s legislative assembly, paving the way for the launch of its bitcoin-backed “volcano” bonds.
First announced one year ago today, the pioneering initiative seeks to attract capital and investors to El Salvador. It was revealed at the time the plans to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain, with the proceedings of the bonds being split between a $500 million direct allocation to bitcoin and an investment of the same amount in building out energy and bitcoin mining infrastructure in the region.
A sidechain is an independent blockchain that runs parallel to another blockchain, allowing for tokens from that blockchain to be used securely in the sidechain while abiding by a different set of rules, performance requirements, and security mechanisms. Liquid is a sidechain of Bitcoin that allows bitcoin to flow between the Liquid and Bitcoin networks with a two-way peg. A representation of bitcoin used in the Liquid network is referred to as L-BTC. Its verifiably equivalent amount of BTC is managed and secured by the network’s members, called functionaries.
“Digital securities law will enable El Salvador to be the financial center of central and south America,” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.
Bitfinex is set to be granted a license in order to be able to process and list the bond issuance in El Salvador.
The bonds will pay a 6.5% yield and enable fast-tracked citizenship for investors. The government will share half the additional gains with investors as a Bitcoin Dividend once the original $500 million has been monetized. These dividends will be dispersed annually using Blockstream’s asset management platform.
The act of submitting the bill, which was hinted at earlier this year, kickstarts the first major milestone before the bonds can see the light of day. The next is getting it approved, which is expected to happen before Christmas, a source close to President Nayib Bukele told Bitcoin Magazine. The bill was submitted on November 17 and presented to the country’s Congress today. It is embedded in full below.
This is an opinion editorial by Joakim Book, a Research Fellow at the American Institute for Economic Research, contributor and copy editor for Bitcoin Magazine and a writer on all things money and financial history.
I don’t.
That’s it. That’s the article.
In all sincerity, that is the full message: Just don’t do it. It’s not worth it.
You’re not an excited teenager anymore, in desperate need of bragging credits or trying out your newfound wisdom. You’re not a preaching priestess with lost souls to save right before some imminent arrival of the day of reckoning. We have time.
Instead: just leave people alone. Seriously. They came to Thanksgiving dinner to relax and rejoice with family, laugh, tell stories and zone out for a day — not to be ambushed with what to them will sound like a deranged rant in some obscure topic they couldn’t care less about. Even if it’s the monetary system, which nobody understands anyway.
Get real.
If you’re not convinced of this Dale Carnegie-esque social approach, and you still naively think that your meager words in between bites can change anybody’s view on anything, here are some more serious reasons for why you don’t talk to friends and family about Bitcoin the protocol — but most certainly not bitcoin, the asset:
- Your family and friends don’t want to hear it. Move on.
- For op-sec reasons, you don’t want to draw unnecessary attention to the fact that you probably have a decent bitcoin stack. Hopefully, family and close friends should be safe enough to confide in, but people talk and that gossip can only hurt you.
- People find bitcoin interesting only when they’re ready to; everyone gets the price they deserve. Like Gigi says in “21 Lessons:”
“Bitcoin will be understood by you as soon as you are ready, and I also believe that the first fractions of a bitcoin will find you as soon as you are ready to receive them. In essence, everyone will get ₿itcoin at exactly the right time.”
It’s highly unlikely that your uncle or mother-in-law just happens to be at that stage, just when you’re about to sit down for dinner.
- Unless you can claim youth, old age or extreme poverty, there are very few people who genuinely haven’t heard of bitcoin. That means your evangelizing wouldn’t be preaching to lost, ignorant souls ready to be saved but the tired, huddled and jaded masses who could care less about the discovery that will change their societies more than the internal combustion engine, internet and Big Government combined. Big deal.
- What is the case, however, is that everyone in your prospective audience has already had a couple of touchpoints and rejected bitcoin for this or that standard FUD. It’s a scam; seems weird; it’s dead; let’s trust the central bankers, who have our best interest at heart.
No amount of FUD busting changes that impression, because nobody holds uninformed and fringe convictions for rational reasons, reasons that can be flipped by your enthusiastic arguments in-between wiping off cranberry sauce and grabbing another turkey slice. - It really is bad form to talk about money — and bitcoin is the best money there is. Be classy.
Now, I’m not saying to never ever talk about Bitcoin. We love to talk Bitcoin — that’s why we go to meetups, join Twitter Spaces, write, code, run nodes, listen to podcasts, attend conferences. People there get something about this monetary rebellion and have opted in to be part of it. Your unsuspecting family members have not; ambushing them with the wonders of multisig, the magically fast Lightning transactions or how they too really need to get on this hype train, like, yesterday, is unlikely to go down well.
However, if in the post-dinner lull on the porch someone comes to you one-on-one, whisky in hand and of an inquisitive mind, that’s a very different story. That’s personal rather than public, and it’s without the time constraints that so usually trouble us. It involves clarifying questions or doubts for somebody who is both expressively curious about the topic and available for the talk. That’s rare — cherish it, and nurture it.
Last year I wrote something about the proper role of political conversations in social settings. Since November was also election month, it’s appropriate to cite here:
“Politics, I’m starting to believe, best belongs in the closet — rebranded and brought out for the specific occasion. Or perhaps the bedroom, with those you most trust, love, and respect. Not in public, not with strangers, not with friends, and most certainly not with other people in your community. Purge it from your being as much as you possibly could, and refuse to let political issues invade the areas of our lives that we cherish; politics and political disagreements don’t belong there, and our lives are too important to let them be ruled by (mostly contrived) political disagreements.”
If anything, those words seem more true today than they even did then. And I posit to you that the same applies for bitcoin.
Everyone has some sort of impression or opinion of bitcoin — and most of them are plain wrong. But there’s nothing people love more than a savior in white armor, riding in to dispel their errors about some thing they are freshly out of fucks for. Just like politics, nobody really cares.
Leave them alone. They will find bitcoin in their own time, just like all of us did.
This is a guest post by Joakim Book. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
This is an opinion editorial by Federico Tenga, a long time contributor to Bitcoin projects with experience as start-up founder, consultant and educator.
The term “smart contracts” predates the invention of the blockchain and Bitcoin itself. Its first mention is in a 1994 article by Nick Szabo, who defined smart contracts as a “computerized transaction protocol that executes the terms of a contract.” While by this definition Bitcoin, thanks to its scripting language, supported smart contracts from the very first block, the term was popularized only later by Ethereum promoters, who twisted the original definition as “code that is redundantly executed by all nodes in a global consensus network”
While delegating code execution to a global consensus network has advantages (e.g. it is easy to deploy unowed contracts, such as the popularly automated market makers), this design has one major flaw: lack of scalability (and privacy). If every node in a network must redundantly run the same code, the amount of code that can actually be executed without excessively increasing the cost of running a node (and thus preserving decentralization) remains scarce, meaning that only a small number of contracts can be executed.
But what if we could design a system where the terms of the contract are executed and validated only by the parties involved, rather than by all members of the network? Let us imagine the example of a company that wants to issue shares. Instead of publishing the issuance contract publicly on a global ledger and using that ledger to track all future transfers of ownership, it could simply issue the shares privately and pass to the buyers the right to further transfer them. Then, the right to transfer ownership can be passed on to each new owner as if it were an amendment to the original issuance contract. In this way, each owner can independently verify that the shares he or she received are genuine by reading the original contract and validating that all the history of amendments that moved the shares conform to the rules set forth in the original contract.
This is actually nothing new, it is indeed the same mechanism that was used to transfer property before public registers became popular. In the U.K., for example, it was not compulsory to register a property when its ownership was transferred until the ‘90s. This means that still today over 15% of land in England and Wales is unregistered. If you are buying an unregistered property, instead of checking on a registry if the seller is the true owner, you would have to verify an unbroken chain of ownership going back at least 15 years (a period considered long enough to assume that the seller has sufficient title to the property). In doing so, you must ensure that any transfer of ownership has been carried out correctly and that any mortgages used for previous transactions have been paid off in full. This model has the advantage of improved privacy over ownership, and you do not have to rely on the maintainer of the public land register. On the other hand, it makes the verification of the seller’s ownership much more complicated for the buyer.
Source: Title deed of unregistered real estate propriety
How can the transfer of unregistered properties be improved? First of all, by making it a digitized process. If there is code that can be run by a computer to verify that all the history of ownership transfers is in compliance with the original contract rules, buying and selling becomes much faster and cheaper.
Secondly, to avoid the risk of the seller double-spending their asset, a system of proof of publication must be implemented. For example, we could implement a rule that every transfer of ownership must be committed on a predefined spot of a well-known newspaper (e.g. put the hash of the transfer of ownership in the upper-right corner of the first page of the New York Times). Since you cannot place the hash of a transfer in the same place twice, this prevents double-spending attempts. However, using a famous newspaper for this purpose has some disadvantages:
- You have to buy a lot of newspapers for the verification process. Not very practical.
- Each contract needs its own space in the newspaper. Not very scalable.
- The newspaper editor can easily censor or, even worse, simulate double-spending by putting a random hash in your slot, making any potential buyer of your asset think it has been sold before, and discouraging them from buying it. Not very trustless.
For these reasons, a better place to post proof of ownership transfers needs to be found. And what better option than the Bitcoin blockchain, an already established trusted public ledger with strong incentives to keep it censorship-resistant and decentralized?
If we use Bitcoin, we should not specify a fixed place in the block where the commitment to transfer ownership must occur (e.g. in the first transaction) because, just like with the editor of the New York Times, the miner could mess with it. A better approach is to place the commitment in a predefined Bitcoin transaction, more specifically in a transaction that originates from an unspent transaction output (UTXO) to which the ownership of the asset to be issued is linked. The link between an asset and a bitcoin UTXO can occur either in the contract that issues the asset or in a subsequent transfer of ownership, each time making the target UTXO the controller of the transferred asset. In this way, we have clearly defined where the obligation to transfer ownership should be (i.e in the Bitcoin transaction originating from a particular UTXO). Anyone running a Bitcoin node can independently verify the commitments and neither the miners nor any other entity are able to censor or interfere with the asset transfer in any way.
Since on the Bitcoin blockchain we only publish a commitment of an ownership transfer, not the content of the transfer itself, the seller needs a dedicated communication channel to provide the buyer with all the proofs that the ownership transfer is valid. This could be done in a number of ways, potentially even by printing out the proofs and shipping them with a carrier pigeon, which, while a bit impractical, would still do the job. But the best option to avoid the censorship and privacy violations is establish a direct peer-to-peer encrypted communication, which compared to the pigeons also has the advantage of being easy to integrate with a software to verify the proofs received from the counterparty.
This model just described for client-side validated contracts and ownership transfers is exactly what has been implemented with the RGB protocol. With RGB, it is possible to create a contract that defines rights, assigns them to one or more existing bitcoin UTXO and specifies how their ownership can be transferred. The contract can be created starting from a template, called a “schema,” in which the creator of the contract only adjusts the parameters and ownership rights, as is done with traditional legal contracts. Currently, there are two types of schemas in RGB: one for issuing fungible tokens (RGB20) and a second for issuing collectibles (RGB21), but in the future, more schemas can be developed by anyone in a permissionless fashion without requiring changes at the protocol level.
To use a more practical example, an issuer of fungible assets (e.g. company shares, stablecoins, etc.) can use the RGB20 schema template and create a contract defining how many tokens it will issue, the name of the asset and some additional metadata associated with it. It can then define which bitcoin UTXO has the right to transfer ownership of the created tokens and assign other rights to other UTXOs, such as the right to make a secondary issuance or to renominate the asset. Each client receiving tokens created by this contract will be able to verify the content of the Genesis contract and validate that any transfer of ownership in the history of the token received has complied with the rules set out therein.
So what can we do with RGB in practice today? First and foremost, it enables the issuance and the transfer of tokenized assets with better scalability and privacy compared to any existing alternative. On the privacy side, RGB benefits from the fact that all transfer-related data is kept client-side, so a blockchain observer cannot extract any information about the user’s financial activities (it is not even possible to distinguish a bitcoin transaction containing an RGB commitment from a regular one), moreover, the receiver shares with the sender only blinded UTXO (i. e. the hash of the concatenation between the UTXO in which she wish to receive the assets and a random number) instead of the UTXO itself, so it is not possible for the payer to monitor future activities of the receiver. To further increase the privacy of users, RGB also adopts the bulletproof cryptographic mechanism to hide the amounts in the history of asset transfers, so that even future owners of assets have an obfuscated view of the financial behavior of previous holders.
In terms of scalability, RGB offers some advantages as well. First of all, most of the data is kept off-chain, as the blockchain is only used as a commitment layer, reducing the fees that need to be paid and meaning that each client only validates the transfers it is interested in instead of all the activity of a global network. Since an RGB transfer still requires a Bitcoin transaction, the fee saving may seem minimal, but when you start introducing transaction batching they can quickly become massive. Indeed, it is possible to transfer all the tokens (or, more generally, “rights”) associated with a UTXO towards an arbitrary amount of recipients with a single commitment in a single bitcoin transaction. Let’s assume you are a service provider making payouts to several users at once. With RGB, you can commit in a single Bitcoin transaction thousands of transfers to thousands of users requesting different types of assets, making the marginal cost of each single payout absolutely negligible.
Another fee-saving mechanism for issuers of low value assets is that in RGB the issuance of an asset does not require paying fees. This happens because the creation of an issuance contract does not need to be committed on the blockchain. A contract simply defines to which already existing UTXO the newly issued assets will be allocated to. So if you are an artist interested in creating collectible tokens, you can issue as many as you want for free and then only pay the bitcoin transaction fee when a buyer shows up and requests the token to be assigned to their UTXO.
Furthermore, because RGB is built on top of bitcoin transactions, it is also compatible with the Lightning Network. While it is not yet implemented at the time of writing, it will be possible to create asset-specific Lightning channels and route payments through them, similar to how it works with normal Lightning transactions.
Conclusion
RGB is a groundbreaking innovation that opens up to new use cases using a completely new paradigm, but which tools are available to use it? If you want to experiment with the core of the technology itself, you should directly try out the RGB node. If you want to build applications on top of RGB without having to deep dive into the complexity of the protocol, you can use the rgb-lib library, which provides a simple interface for developers. If you just want to try to issue and transfer assets, you can play with Iris Wallet for Android, whose code is also open source on GitHub. If you just want to learn more about RGB you can check out this list of resources.
This is a guest post by Federico Tenga. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
