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I certainly agree that crypto doesn’t provide perfect immunity, but I disagree strongly with the implication that the protections it offers aren’t extremely significant. When it comes to protecting oneself against government overreach, one can’t let the perfect become the enemy of the merely great. And crypto (or certain types at least, like bitcoin) is indeed great.

In our present system, and as Canada is showing, if governments want to seize or freeze the money or funds of large groups of protestors, dissidents, or political enemies, all they need do is send a list of social security or other ID numbers to every bank or other licensed financial intermediary in the country along with instructions to freeze the account or to remit the balances in those accounts to the government. Refusal can mean loss of license.

Some cases

The Canadian government actually did this with hundreds of thousands of dollars donated to the protesting convoy truckers via GoFundMe, and then they announced that they plan to do the same to the bank accounts of anyone participating in or aiding the truck convoy protestors.

As another example, if the banks start to fail, governments can seize the money in everyone’s bank account and give it to the banks to keep them alive (as was done with the “bail-ins” in Cypress a few years ago, and as will be done in many other places when the need arises).

And so, with the stroke of a pen, governments in our present system can deprive thousands or millions of people of access to their cash all at once. It’s a breeze. It could hardly be any simpler or more cost-effective.

Not so with blockchains. No sooner had the GoFundMe account for the truckers been frozen (thus depriving the truckers not just of those funds but also of the ability to raise future funds via the crowdfunding site) than their supporters responded by sending crypto instead. Last I saw the truckers had raised nearly $700,000 (double what was seized from GoFundMe, and still growing) via these crypto transactions, all over the course of a few days.

Importantly the government cannot with the mere stroke of a pen prevent people from sending these funds to the truckers, nor can it prevent the truckers from sending/spending these funds, nor can it easily seize these funds for itself, at least not without expending great effort.

And so crypto most definitely has given these truckers and their supporters some level of “immunity from being controlled and stripped of their hard-earned cash.”

To be fair, that immunity is not perfect. With enough manpower and money and resources devoted for long enough time periods (months or years)—such as was devoted to arresting the couple who stole $4.5 billion in crypto—, and if the target is stupid (as this couple was) and so fails to adequately protect/secure the private key that controls its crypto by, for example, storing it unencrypted on a cloud server (as this couple did), then yes, governments can sometimes still manage to seize the crypto.

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This also happened to Ross Ulbricht, the guy who operated the famous Silk Road website. After many, many months of focused effort by a team of law enforcement officers, they were able to track him down and secretly monitor his comings and goings. By physically following him for a long time they were able to know when he was on his computer in a public place. And this eventually allowed them to tackle him in a public library at just the right moment—when he was logged onto his computer and it and his private crypto keys thereon were unencrypted. Had he managed to close his laptop before/while being tackled, they never would have been able to seize his keys/crypto, but…he didn’t and they did.

So again, it is entirely possible for governments to sometimes (as opposed to all the time in our present financial system) successfully seize crypto assets, but doing so generally requires it to (1) target specific individuals rather than merely centralized intermediaries, (2) expend extraordinary amounts of resources pursuing those individuals, and (3) somehow manage to seize that individual’s private key (which can be stored in his head if desired).

Unlike in our present system, step (3) is extraordinarily difficult when the individual observes reasonable levels of operational security—e.g., having multiple crypto wallets with different private keys, encrypting every private key with a strong password, storing the private keys in your head or on a dedicated hardware wallet and never online or on an Internet-connected device, never using the private key that controls the bulk of your funds in a public place (like a public library, etc.).

Can governments still manage to seize/freeze funds on a secure blockchain if reasonable operational security is observed?

 Only sometimes, and then only if it gets very lucky and if it devotes extraordinary levels of resources (time, money, and manpower) to the effort. While governments may be able to devote that level of resources to recover large amounts of money on a case-by-case basis, such as with Ross Ulbricht or the couple that stole $4.5 billion, this is not something that scales well for law enforcement.

In short, our present system allows governments to seize the money of thousands or millions simply by sending a few letters to a few hundred large licensed financial intermediaries. It might choose to do that to help bail out those intermediaries (as it did in Cypress), or to stifle a tax revolt, or to silence its political enemies, or because the leader is a dictator or…for any or no reason at all. This gives government ENORMOUS power and leverage over its people.

The key part

But the same cannot be done in a blockchain world where almost everyone keeps their own private keys and uses reasonable levels of operational security. In that world, the government must pursue tens of thousands or millions of people individually and all at the same time in order to seize their funds in masse. It must devote extraordinary levels of resources to each pursuit. It must be prepared to spend months or years in the pursuit of each person. And it must yet still get lucky. That’s a relatively unappealing proposition even for the most devious and motivated of governments. It makes tyranny orders of magnitude more difficult to achieve.

You’re way, way, way off when you say that blockchains are “nothing but lines of code that can be accessed, edited and changed via simple keystrokes.” This more accurately describes precisely what blockchains are not. As has been proven over the course of more than a decade with bitcoin, nobody is capable of unilaterally rewriting or editing the code, and thus changing the rules, that govern a reasonably decentralized blockchain. That is, in fact, the innovation that makes a blockchain a blockchain. Any such changes require the overwhelming consensus of blockchain users—users who are scattered all over the world and beyond the reach of any single or small group of jurisdictions—or else the changes are largely moot and irrelevant (as an example, witness the bitcoin block size wars of the 2016 to 2017 time frame).

There are no examples —zero, nada—of bitcoin or any other reasonably distributed and secure blockchain with a track record of more than a few years being hacked. Yes, so-called “smart contracts” (separate computer programs running on top of the blockchain) have been hacked, and yes the improperly secured private keys controlled by centralized exchanges have been hacked, but not the blockchain itself. If that concerns you, then simply avoid placing your coins into these smart contracts or storing them on centralized exchanges, or at least limit the percentage you allocate to them.

[If you want to think and see more clearly; discern more accurately; predict more reliably and live, love, and understand yourself and the world more fully; or if you just want to watch people who do; then please continue to follow me here.]