6529 (@punk6529) on X

2/ I assume we are in agreement that constitutional democracies are a good form of government or, at least, a better form of government than the other methods we have found to-date. This means that I am taking for granted the following assumptions.

3/ - People have fundamental rights to speech, assembly, religion and so on - People are innocent until proven guilty - The state cannot punish people without due process, which generally means that, in a court of law, the state has to prove you have broken some specific law

4/ If you disagree with the principles above, I guess that is fine (but weird) but probably you can safely exit this thread now because it is unlikely that we are going to agree on anything else.

5/ People who know me IRL (offchain?) know that I have been harassing them for years that "Without the freedom to transact, you have no other constitutional rights" And mostly they look at me strangely and I look at them strangely because it seems obvious to me

6/ Freedom of speech might require such activities like: ✅A website ✅A pamphlet ✅An advertisement ✅Paying a graphic designer ✅Travelling to a different location All of which "cost money"

7/ Freedom of assembly might require such activities like: ✅Taking a train to Washington DC ✅Booking a hotel room ✅Hiring a taxi ✅Buying a hot dog with mustard while you assemble All of which "cost money"

8/ Freedom of religion might require such activities like: ✅Renting a space for a facility ✅Paying the salaries of religious officials ✅Buying food and consumables All of which "cost money" I can go on, but I think the point is clear. The exercise of rights costs money.

9/ Historically, the risk of financial censorship has been much lower because for the literally whole of human history until approximately 2001, it was mostly uncontroversial that people could have decentralized non custodial mediums of exchange

10/ For hundreds of thousands of years humans used commodity money (from cowry shells to gold) and then in the last few hundred years we have had various forms of cash based instruments as well. All of these are "non custodial", "decentralized" and not "KYCed"

11/ Over the last 20 years, the institutional environment has shifted to a posture that non-custodial money is default suspicious: ✅Central banks who want the "death of cash" ✅Patriot Act and derivatives thereof ✅Geopolitical pressure points via the banking system

12/ "But 6529 the goal is preventing money laundering, stopping terrorism and reducing tax evasion" I agree that these are a) the stated goals and b) an actual subset of the actual goals. I am also against: money laundering, terrorism and tax evasion

13/ The problem however is that there is both short-term and long-term goal creep. In the United States (and EU) banks and payment processors have been pressured to cut off accounts to gun shops, adult businesses, crypto businesses and other perfectly legal businesses.

14/ I consider this to be undemocratic. If a country would like to make pornography or guns or cryptocurrency illegal, it has every right to pass laws to do so. And then the citizens can re-elect or de-elect the politicians who voted for it and/or challenge it in court.

15/ What happens instead is hidden "deep bureaucracy" type bullshit where the banks point to their regulators and say "well, they told us to close high risk accounts" and the regulators point to the banks and say "we never said that, just, you know, be careful"

16/ And the net effect is that you don't have an bank account any more and there is no recourse, no due process, not even an actual law that says "you should not have an account" It is "deep bureaucracy" running a parallel opaque unwritten legal system. Deeply undemocratic.

16/ Even in the current system, being unbanked and having to rely on cash is more or less ejecting you from the modern economy. Paying bills, getting a paycheck, paying vendors, investing in 401K, buying crypto even, all require access to traditional payment rails.

17/ But guess what? It is getting worse. Many central banks have stated goals for their CBDCs to: ✅Eliminate cash ✅Allow global transaction censorship ✅Apply deeply negative interest rates

18/ A system of this kind would be the most powerful system of centralized control the world has ever known. Even Stalin, Hitler, Mao did not have the ability to apply global transaction censorship across their empires at the touch of a button

19/ What will happen is some aspiring dictator will censor their opponents' spending during a election period and they won't be able to buy a tomato, let alone run a campaign With such power & no due process, it's a certainty. Power hungry people tend to run for office

20/ Notice that the third goal is mission creep. Nobody started this process in 2001 saying "the goal is to be able to apply negative interest rates to your savings" and yet here we are Below a certain negative rate, people will withdraw their money. So let's prevent them!

21/ The way this process has been working is that we are the frog and we are being boiled slowly. Every year, the reporting requirements get a little broader, the penalties steeper, the restrictions on cash withdrawals more severe.

22/ And most of all the presumption of innocence is turning into a presumption of guilt. "why do you want to withdraw $5K in cash" "if you have nothing to hide, why do you need non-custodial instruments" "non custodial is dangerous"

23/ I remind you that literally for the whole of human history "non custodial" was the main form of the mediums of exchange. It is a very recent concept that this is a bad thing. It is effectively a quiet power grab by the state.

24/ This is why one of the reasons that crypto has been generally disliked by central banks in particular. Here they are, closing in on the 'end of cash' and now a new form of digital cash emerges and, in their view, they need to reel that in too for the rest to work.

25/ So back to constitutional rights: ✅You have constitutional rights ✅You need money to exercise them ✅The state acquires the power to cut off funding What might happen next? I know what happens: "all of 6529 frens think he is overreacting"

26/ At which point I present to you the liberal Prime Minister of G-7 country known for its extreme good nature and general easy-goingness

27/ Prime Minister Trudeau has a political problem. The specific political problem is some truck drivers have blocked part of Canadian cities and highways to protest his COVID-19 policies. This is: a) annoying him, b) annoying his voters and c) probably bad for the economy

28/ I don't actually have a view on the substance of the trucker protests and if Canada's COVID policies are good, bad or neutral. I would further guess that the truckers are probably violating a variety of Canadian laws relating to how they can protest.

29/ What would be a normal constitutional democracy political response to a problem like this is either: a) let it play out if you think it is in good faith or b) encourage the local authorities to arrest them and try them in a court if you think it is not

30/ Either is fine. The right to assembly in Canada probably does not allow you to block the highway for days for everyone else. I assume Canada still has police and courts so they could presumably arrest the highway blockers & take them to court

31/ When you go to court in a democracy, the following typically apply: ✅You are innocent until proven guilty ✅The state has to be specific about which law you have violated ✅The state has to prove it usually beyond a reasonable doubt

32/ I understand that, at times, this is annoying for the state. You have to collect evidence, the defendants will get their own lawyers, there is time and expense involved and sometimes you might not win. This is the price of a free country

33/ But this is not what is happening today in Canada. The state has invoked its Emergencies Act which is defined below. It seems a bit ambitious to imagine that the protests exceed the capacity of a province to deal with it or threaten the sovereignty of Canada, but...

34/ ...I am even willing to stretch and say "OK, maybe it was correct to invoke the Act and let's see what he plans to do with it" What was done with the Act made my jaw drop however. It is my "oh this might happen in the future" scenario, but today

35/ Canada has asked every single financial system provider from banks to credit card companies to investment firms to crowdfunding platforms to crypto companies to insurance companies to: - freeze the accounts - of anyone directly or "indirectly" supporting the protests

36/ Given the powers of the Emergency Act, there is no due process on these actions and no civil liability for this freezing. In the short-term, the goal is to shut down the protests by nuking the protestors financial infrastructure.

37/ I have to say this is not the model of criminal justice I expect to see in a constitutional democracy. You can't just go around freezing people's savings instead of, I dunno, arresting them and charging them with a crime. Even worse, the "indirect supporters"

38/ The "indirect supporters" have been very fuzzily defined in the press releases. It might include the crowd funders, but it might include a family member who sends money to someone protesting in order for them to buy a meal. They are being treated as terrorist financiers

39/ "But 6529 these guys are terrorists, they are trying to overthrow the government" I dunno, I am not sure about this. I do not live in Canada, but Canada has a pretty advanced security infrastructure. I do not think it is at any real risk of being taken over

40/ But what is a real risk is that constitutional rights will be curtailed not through laws, or court cases, but through weaponization of the financial system. Today, you are on Trudeau's side and dislike the truckers. But it is not always this way...

41/ ...would you feel the same way if Donald Trump was freezing all the financial infrastructure of BLM and all their "indirect" supporters? It is a terrible precedent to set. In politics, you must always, always, always invert

42/ The way to judge an idea is not if your team in power should do it. The way to judge the idea is if you think your worst political enemy should have this power and if you feel comfortable that the team you hate won't abuse it

43/ It is a mistake to roll out the whole anti-terrorism infrastructure for political protestors and their 'indirect' supporters. The next time around the "other team" will use it against you. And this begets a cycle of political violence that ends badly.

44/ I have just been discussing the immediate term effects. The long-term effects will be worse. I suspect without explicit action, many of the people unbanked now will not be rebanked because financial institutions won't want the headache of doing so

45/ So this is not just a short-term thing, but an uncertain duration ejection from the financial system. No banking, no credit cards, no investments, no insurance (which for truckers means "no job") This type of punishment requires due process

46/ This can get so so so much worse though. If we end up with a fully custodial system: - no cash - no non custodial crypto - full control digital currency then these type of actions can happen at the push of a button, instantly, across large groups of people

47/ "oh 6529, we would never abuse this power" Right, of course not. And yet here we are with Canada, close to my least likely test case for "weaponization of the financial system against domestic dissent"

48/ Every day, every month, every year I am here to say the same thing. The internet, computers, big data, machine learning allow us to centralize information flows in a way that we could never had before. It is exciting, but it is also dangerous

49/ It is critically important that we don't sleepwalk into an economic, digital and metaverse architecture that is completely centralized. Whether it is on the corporate or state systems, it will eventually end up under state control because states control the exercise of power

50/ "but what about criminals 6529?" Do you think I do not worry about criminals? I worry about criminals more than you do. Unlike you, I think criminals are smart and can read and plan. Wait, what do you mean?

51/ If you centralize the greatest honeypot of power and money in history in the hands of a handful of companies and the state, the really smart criminals won't be running around robbing banks, they will aim for corporate or political leadership. And then they can win everything

52/ Criminals working in their private capacity have done a lot of damage and we should try to stop them. But they are minor players relative to the arch-criminals who grabbed power, launched world wars, destroyed countries, economies, cultural heritage & killed 10s of millions

53/ tl;dr ✅Financial systems underpin everything, including our constitutional rights ✅Weaponizing the financial system to resolve domestic dissent or even criminal justice issues is a terrible precedent to set ✅We must preserve non-custodial wallets at all costs

54/ Finally, I would like to thank the government of Canada for providing a sneak preview of what I have been worried about. A lot of you will still think I am a bit of a conspiracy theorist (I am not), but fewer of you than a week ago will think that

55/ I would like to end by wishing our Canadian friends good luck in resolving this issue. I do not think this is the end of democracy in Canada or anything dramatic like that. I think things will eventually resolve, but this is *not* the way to do it.

56/ Bad precedents should not be normalized! In any case, if this is your first time here, we love the open metaverse and believe in interoperable, decentralized internet architecture See more here: