Cryptocurrencies

Bitcoin Can Fix Financial Deplatforming of Canada's Truckers—But It Won't Be Easy

The government controls on the traditional banking system also apply to custodial cryptocurrency services.

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Things are getting pretty wild up in Canada. While other countries are removing their COVID restrictions, our neighbors to the north have decided to invoke emergency powers to seize the bank accounts of those who oppose lockdowns and mandates. Meanwhile, state media is prowling through a hacked database of convoy donors (isn't that a bannable offense on Twitter?) to dox and open targets to harassment.

Financial deplatforming has always been a threat, but it's mostly been a remote one. With these unprecedented banking punishments against the Canadian trucker convoy and its supporters, the reality of the controls baked into our financial system have become clear to the world.

Yes, "bitcoin fixes this." But it's not as simple as repeating this mantra. It is absolutely possible to transfer value directly with a peer without any bank or government being able to stop or reverse it. But it's not easy. Preparing for an explicitly politically controlled financial system means learning now about how to use cryptocurrency and what controls the government still has over certain service providers.

Our legacy financial system is controllable because it is largely operated by third party custodians—banks and payment processors—that move your money around. If we don't use cash (physical or digital), we are dependent on these financial institutions to go about our days.

Governments saw the power of financial control long ago. Banks are required to compile dossiers on customers—your identifying information, your commercial habits, your recipients—to share with governments or other institutions.

Furthermore, institutions can be directed to shut off financial access to enemies of the state. This has traditionally been "rogue" nations and terrorist outfits, but Canada decided to expand this net to include the hundreds of thousands of normal Canadians who oppose government lockdowns and mandates.

In invoking the Emergencies Act for the first time, Prime Minister Justin Trudeau has directed financial institutions—including banks, payment processors, online platforms, credit unions, loan services companies, insurance companies, securities dealers, and yes, cryptocurrency exchanges—to deplatform any "designated person" engaged in prohibited activities. Specifically, service providers must cease "dealing in any property, wherever situated," "facilitating any transaction," "making available and property," or "providing any financial or related services" to designated persons.

You got that? If you materially support the convoy, you are basically banished from Canadian commercial life. You might not be able to get cash out of the bank! Enjoy your democracy, citizen.

According to the Emergencies Act, Parliament must review and either approve or deny the invocation within seven days of its establishment. As of this writing, this still hasn't occurred. In the meantime, Finance Minister Chrystia Freeland has announced her intentions to hold onto these financial controls "permanently." Either way, this incident has made the use case for bitcoin painfully obvious.

Bitcoin provides a way to send and receive direct payments. This means that the truckers and their supporters will always have a way to transfer value even if they get cut off from the financial system.

But bitcoin is not magic. There are limitations and controls even within the bitcoin economy. We need to understand these now so that if we are ever placed in a similar situation, we will know how to navigate around them.

The first problem: many third-party bitcoin service providers are regulated, too. If you sign up for a custodial service like Coinbase or Square that holds the private keys to your bitcoins, then you could find yourself deplatformed just like if you had an account with Bank of America. These third-party services are regulated just like the legacy guys, and they collect and report information on your transactions.

The Canadian government leaned on custodial cryptocurrency exchanges to cut off access to dissidents. This doesn't just mean cutting off the Coinbase accounts of people at the protests. It means preventing any other Coinbase account from donating to the blacklisted address of a self-hosted (sovereign) account. They have that ability so it will be exercised.

There is a bit of confusion on this point. The Canadian government did not (and cannot) "freeze" any bitcoin account. All they can do is direct a regulated entity to freeze a cryptocurrency account that it controls (it holds the keys) or blacklist self-hosted accounts, which means regulated cryptocurrency platforms are compelled to prevent their accounts from engaging with those blacklisted accounts.

If you hold your own keys, no government can steal your money or prevent your transactions. All a government can do is boss regulated platforms around. Of course, a lot of people have accounts with those regulated platforms, so it's not an insignificant amount of power.

There is a solution: hold your own bitcoin keys and avoid using third party custodians. Don't put yourself in a situation where you can be cut off from your own coins, or one where your service provider can limit where you can send money. This means we need to learn about safe storage and make transactions directly from wallets we control. That way, banks and governments can never prevent you from transferring value as they have done in Canada.

But this leads us to the second problem: getting money in and out of bitcoin. The most convenient on-ramps and off-ramps—bridges in and out of the fiat economy—are also regulated.

Let's say you have learned about self-sovereign finance, manage all your keys and coins on your own, and even run a bitcoin node for extra security. You can easily send bitcoins to an address for the trucker convoy, as has been set up. Well, what do the truckers do after they have received the bitcoin?

Bitcoin is far from universally accepted at stores. It's not like the truckers can spend bitcoins directly to get all the resources that they need.

Okay, so you need to get dollars. Exchanges like Coinbase are the most common way that people trade bitcoins for dollars. Those dollars are then usually sent to a traditional bank account or app. That's a no-go if you find yourself on the underdog side of an anti-government movement.

There is also a solution here, but it's not easy, either. Bitcoin owners can try to find someone to buy their coins for cash. It is best if you can do this with someone you know and trust, but there are forums and marketplaces that can connect you with a buyer. Unfortunately, some of the most popular ones, like LocalBitcoins and Paxful, must submit to financial surveillance requirements (AML/KYC) as well, so this will leave a trail.

Alternatively, you can use bitcoins to purchase gift cards that you can then either sell or use to buy needed resources. There are risks here, too: the colorful characters involved with the $4.5 billion Bitfinex hack were partially foiled by the purchase of a Walmart gift card. And if you're managing the millions of dollars' worth of bitcoins that the truckers received, spending $500 at a time on random gift cards is not the most efficient way to convert your money.

The longer-term solution is to encourage more businesses to accept cryptocurrency so there is no need to bridge into government-controlled money at all. If the financial system does continue to become more politicized, we may see more people wanting to get paid in bitcoin so they have an exit option should they need it. This means more businesses may become comfortable with the idea of accepting cryptocurrency if enough people want to use it. After all, multinational corporations like McDonalds already accept bitcoin in El Salvador to comply with that country's bitcoin law. They could easily do the same elsewhere.

This brings us to the third and final problem: chain forensics. Let's say you have become a totally self-sovereign bitcoin user that is 100 percent in the bitcoin economy with no need to obtain dollars. If you're not careful, you could trivially leak your identity and therefore all the politically sensitive donations that you've made.

Victims of the GiveSendGo breach who donated to the truckers have found themselves hounded out of their jobs and harassed by enemies. If bitcoin users aren't careful, they could expose themselves to similar attacks.

The bitcoin ledger of all transactions is radically transparent: it is public, viewable, and unchangeable, for all time. You can create as many addresses, kind of like an account, as you want, but there are techniques to try to identify associated addresses. The threat isn't just a super data scientist, either: if you put a public wallet on your social media profile, that can be tied to your identity. If you then use that wallet to send money to a politically disfavored cause, then you can be easily targeted.

There are tools to preserve privacy with bitcoin. You can structure your transactions in a way that frustrates the heuristics that chain forensics companies use to associate addresses and determine identity. One potent tool is called a CoinJoin, which obfuscates senders and recipients to outside parties. Bitcoin developers are including new privacy features into the protocol all the time; the recent Taproot upgrade makes complex kinds of transactions indistinguishable from normal transactions to chain analysis, for instance.

There are other cryptocurrencies that were purpose-built to bake privacy into the protocol layer. Two popular options are Zcash and Monero, which employ techniques called zero knowledge proofs and ring signatures to partially or fully shield the addresses of senders and receivers on the blockchain.

There are downsides here, too. Privacycoins are supposed to give the user confidence that transactions are still valid, but there have been bugs before. There are also fewer developers working on these projects and therefore fewer eyes to find issues in the code. Finally, privacycoins face the on-ramp and off-ramp problem with the fiat economy even moreso than bitcoin because there are fewer bridges to begin with.

I don't want to undersell bitcoin's promise as a tool for liberation. The future of cryptocurrency is a potential environment where these technologies can give the greatest amount of financial freedom to the greatest number of people. It's something of a miracle, and it's well worth learning about.

But it's also time to realize that we're already having to contend with a politically controlled financial system. We can't wait until we find ourselves in a similar situation to the Canadian truckers and expect bitcoin to work perfectly like magic.

It's time to learn about cryptocurrencies like bitcoin, Monero, and  Zcash to understand how they work and how to get more control over our finances. Businesses should be encouraged to start accepting cryptocurrency. More people need to learn about chain forensics and how to protect privacy. And for heaven's sake—people need to learn about the risks with regulated exchanges! Even the CEOs of these platforms are telling customers to get money off these exchanges if they are worried about deplatforming.

Winning liberty is rarely, if ever, easy. We are fortunate enough to have a powerful tool to protect our finances against political control and monetary mismanagement. The choice to capably use it is ours.

NEXT: Pandemic Restrictions Extra Painful for Businesses Owned by Minorities, Women, and Veterans

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  1. Bitcoin Can Fix Financial Deplatforming of Canada's Truckers

    "Financial deplatforming", is a bullshit term for "bankrupting people who disagree with me".

    Financial deplatforming...almost as bad as social distancing.

    1. I've been calling it "financial depersoning" instead. Since being forced to deal exclusively in cash (how many people's employers are going to be willing to pay in cash, these days?) pretty much makes someone an unperson.

      So maybe "financial dalit" would be more appropriate.

    2. I like to think of it as Financial Masking.

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  2. "As of this writing, this still hasn't occurred."

    Happened last night, actually.

  3. Winning liberty is rarely, if ever, easy.

    Cryptocurrencies are a tool, not a solution. The solution is head's on a pike, ultimately. Until the ruling elites personally suffer, nothing will change. As long as they are safe, nothing will change.

    That's just the reality of the situation. It has always been the reality. The founding generation took their freedom. It was not given.

    1. That's just the reality of the situation. It has always been the reality. The founding generation took their freedom. It was not given.

      You're just a Luddite conservative who doesn't understand how my computational engineering final solution will fix a social problem without itself being social engineering.

      And even if you do find numerous examples where my final solution, somehow, turns out to be no-shit social engineering that kills millions of people, well, that wasn't my *real* final solution and you're a Luddite conservative to doubt whether we should keep trying.

      1. Let's see how much transacting in _______coin will happen when Trudeau cuts off electricity.

        1. Much easier to cut off internet instead.

          1. Or cut off Trudeau’s oxygen supply.

        2. No need to cut off the electricity broadly. FINTRAC already reports every transaction over $10K to an electric company. Just lower it to $500 and all your BTC miners report themselves. If you're lucky, you push a few onto independent solar or wind.

          1. Yellen said helpfully that it would be easy to drop the reporting requirement to 600 dollars, so no problem on the implementation front.

    2. The elites, and their supporters.

  4. "You got that? If you materially support the convoy, you are basically banished from Canadian commercial life. You might not be able to get cash out of the bank! Enjoy your democracy, citizen."

    This is the kind of pants on head stupidity I've come to expect from reason. Generally I think we agree that if you are supporting criminal activities then maybe that is not a good thing yes? How is this the worst thing?

    Should other countries be allowed to plow money into the US and finance insurrection attempts? Should those same people be allowed to use this money to commit crimes without redress?

    The problem with this stupid freedom convoy, besides being made up of complete idiots and a few white supremacists, was that they were breaking the law while protesting. I don't think anyone would've given two shits had they had their protest while staying within the confines of the law. But no, they had to go block a major trade route and break numerous laws while doing so.

    We shouldn't tolerate BLM protests blocking highways and shit and we shouldn't tolerate this crap either. Go protest, go cheer for your idea of freedom. But don't go being an asshole breaking the law in the process and then act like you shouldn't face any consequences for breaking said law.

    All these dipshits wanted was a megaphone to air whatever grievances they had, do whatever they wanted, and face zero consequences for their actions. If you believe in it so bad, put on your big boy pants and own up to the consequences of your actions.

    1. What crimes? Conspiracy to commit parking violations? Noise ordinance violations?
      You and you ilk are really revealing what kind of authoritarian shits you are.

    2. Leftist talking points 101:

      "insurrection attempts"
      "this stupid freedom convoy"
      "being made up of complete idiots and a few white supremacists"
      "go cheer for your idea of freedom"

      Do any of you have an original idea?

      1. They're a hivemind

    3. LOL everything the truckers did was legal until last week.

      But I'm sure the 'leaders' will NEVER decide what YOU are doing is illegal.

      1. " LOL everything the truckers did was legal until last week. "

        How could parking trucks in traffic lanes for extended periods be lawful?

        1. It was 9/11 all over again!

    4. Should other countries be allowed to plow money into the US and finance insurrection attempts? Should those same people be allowed to use this money to commit crimes without redress?

      This is the kind of pants on head stupidity I've come to expect from raspy, since apparently he doesn't even fucking know that the sentence he quoted is about Canadians who supported the protest and are now banished from Canadian life.

      So you're effectively actually asking if Americans should be allowed to plow money into the US and finance protests in America, with an analogy that's been corrected to actually match the situation.

      Yeah, I kinda do think just exactly that. Fucktard.

      1. Also, people in other countries, as long as they aren't acting as agents of the state, are absolutely allowed to pour money into any protest on US soil. Interestingly, the First Amendment doesn't protect only American citizens. As long as the underlying activity is legal and is a protest, they should feel free to finance as much as they want.

        And this is necessary, by the way. Americans are allowed to have financial holdings overseas. There's nothing illegal about that and there should not be. If the US stops foreign individuals from spending money on political and charitable causes in the US, it prevents anyone from building a free clinic in Tennessee if they're partially using funds from a business holding in Brazil. George Soros wouldn't be able to fund ANY political campaign because his money comes from all over the globe.

        1. "Mexicans should be able to cross the Southern border freely, but their money shouldn't. We need slaves." - raspberrydinners

    5. and a few white supremacists

      What white supremacists, you lying fuck?
      Do you mean the Liberal Party astroturfer in a ski mask with the flag, that the protesters promptly told to fuck off and leave?
      https://twitter.com/VigilantFox/status/1487834109678395392

      "supporting criminal activities"

      Picketing is protected by ss.2 of the Canadian Charter of Rights and Freedoms. Trudeau and his Staasi are the criminals breaking the law.

      I can't believe you're simping for the actual imposition of a war act and marshal law on an entire country.

      1. I can believe it.
        In fact, it's not even surprising.

    6. This is the kind of pants on head stupidity I've come to expect from reason. Generally I think we agree that if you are supporting criminal activities then maybe that is not a good thing yes? How is this the worst thin

      Well, we don't agree that this is a criminal activity. So we're done with the rest of your comment because it's built on a foundation of retard.

    7. So you'd be ok with taking all the money of BLM protestors for blocking the freeway.

      I mean, not even I'd go that far - and I would have been ok with running them over if they got in your way!

    8. Now define "criminal activity" vs. "mostly peaceful protesting". Who gets to decide which protests are encourage and which ones result in losing access to your own money?

  5. Financial deplatforming has always been a threat, but it's mostly been a remote one.

    Aparently she never heard of operation choke point

  6. Again, I would strongly encourage people to check out sending MobileCoin through Signal. MobileCoin is based on Monero, rather than Bitcoin, which makes it much harder to trace, and being able to send it to people through Signal on your phone means you may not need to go through an exchange. Just got to the settings on your Signal app and look for "Payments".

    "To avoid that blockchain-based tracing of user finances, MobileCoin deploys techniques that have been pioneered in older "privacy coins" such as Monero and Zcash. Those include a protocol called CryptoNote and a feature called Ring Confidential Transactions, which hides the amount of payments and makes them hard to trace by mixing them up. MobileCoin also uses a form of mathematical proof known as Bulletproofs that can guarantee a transaction has occurred without revealing its value.

    ----Wired, January 6, 2022

    https://www.wired.com/story/signal-mobilecoin-cryptocurrency-payments/

    1. If the Wired editorial staff figured out these technologies could help truckers, they'd print a series of... um, "quick and devastating takedowns" of the technology.

    2. In order for any of this to be useful someone's gotta be willing to sell for crypto. Once that becomes illegal it's gonna be hard to buy food.

      1. If you have access to an ATM and a Signal account, you can hand cash to someone in exchange for them sending you crypto on Signal.

        Isn't that right?

        You might be able to walk through a crowd of protesters and hand people cash for crypto one after the other--after someone or a lot of people have donated the crypto to the protesters' wallet.

        1. Circumventing banking laws may be illegal, and no one should do anything illegal. If you think what you want to do might be illegal, you should consult a lawyer before you do it. I am not a lawyer.

          1. That is a lucid, intelligent, well-thought-out point.

        2. This is kinda getting to be a Monty Python sketch.
          If you have access to an ATM and a Signal account, you can hand cash to someone in exchange for them sending you crypto on Signal.

          RCMP: We'll arrest anyone not in uniform taking money or sandwiches from or giving money or sandwiches to these men.
          Crypto Fans: What if we hand them sandwiches but accept cash in return?
          RCMP: You'll... be arrested.
          Crypto Fans: What if we don't accept any form of payment and we still hand them the sandwiches?
          RCMP: You'll be arrested.
          Crypto Fans: OK. OK. OK. OK. I got it. OK. What if... we hand them the sandwiches but only accept small secret codes via SMS or MMS on our phones?
          RCMP: Just stay here and guard the prince until we get back.

  7. This is the biggest story of this hemisphere since the COVID outbreak started. Canada's PM not only instituted emergency war powers, Parliament fucking voted to uphold it. This isn't the equivalent of the US or any US state simply declaring a state of emergency. It's basically Martial Law, declared in a Western Liberal democracy, and it passed legislative muster.

    If you wonder why there's some weirdos suddenly discussing the virtues of monarchy, it's because democracy apparently is unable to uncheck THIS. A bare 55% of lawmakers were able to grant themselves nearly unlimited power over the objections of the other 45%.

    1. The other 45% understand what they have to do. You don't need a Second Amendment written on old paper. It is a right that exists whether it is codified or not and the despots of Canada are going to find that out the hard way, sooner or later.

    2. A bare 55% of lawmakers were able to grant themselves nearly unlimited power over the objections of the other 45%.

      And call them Jewish Nazis without a mask while doing so. It's not like they were down to the last 20 members of parliament and 11 said, "We have to enact these measures to preserve the last 20 members of our government." and the other 9 said, "At this point, there is no parliament to save." It was "You stand with peaceful protestors who fly a Nazi flag." (inverting the symbolic message the flag actually represented), "I'm the descendant of Holocaust survivors, WTF are you talking about?", and "We need martial law to fix this issue."

      1. While lying about the protesters. "Violence, destruction" none of which is true. If Trudeau could declare martial law over what the Truckers (and farmers, and regular folks) were engaging in, Trump would have been well within his rights to send in B1 bombers to stop BLM and Antifa.

  8. Bitcoin Can Fix Financial Deplatforming of Canada's Truckers—But It Won't Be Easy

    But, once completed, it will be comparatively easy to identify all the wallets associated with all the truckers and anyone who did business with them. So, correct, cutting off your nose to spite your enemies' faces won't be easy.

    1. It's not that easy at all. It's simple to wash coins and obliterate all traces from A to B.

      1. Just to be clear, what you're saying is, I can spend a BTC that doesn't currently exist on the blockchain.

        It must suck to be duped so hard.

        1. No. What I'm saying is that I have coins in Wallet A and can transfer them to Wallet B without you knowing where they went. Once they are in Wallet B I can spend them without you knowing.

          1. Once they are in Wallet B I can spend them without you knowing.

            Not without transferring them to wallet C and/or converting them to cash. At which point, I know wallet C is (or wallets C, D, and E are) (unwittingly) an accomplice in your scheme.

            1. Except you have no idea that Wallet B belongs to me. I can do this right now and you'd have no clue.

        1. “In a methodical and calculated scheme, the defendants allegedly laundered and disguised their vast fortune,” said Chief Jim Lee of IRS-Criminal Investigation (IRS-CI). “IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion.”

          “Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead,” said FBI Deputy Director Paul M. Abbate. “Thanks to the persistent and dedicated work of our FBI Investigative teams and law enforcement partners, we're able to uncover the source of even the most sophisticated schemes and bring justice to those who try to exploit the security of our financial infrastructure.”

          1. Antisocial misfits who figure they have identified a method to flout society's rules (while, no doubt, expecting society to provide a remedy if something goes wrong, like theft of cryptocurrency) are customarily wrong, often suprised and disappointed, sometimes imprisoned.

            1. Antisocial misfits who figure they have identified a method to flout society's rules

              Well, I'm sure you would have gone right along with society's rules like "gas all the Jews" and "kill all the kulaks". Because that's what civilized, educated, rational people like you do, every time.

              1. Not to defend the Rev. but "while, no doubt, expecting society to provide a remedy if something goes wrong, like theft of cryptocurrency" is the crux. BTC can't prevent Californians from co-opting it any more than TX can. See above, it's a technical solution to a social problem and the more it strives to become a social solution, the more it becomes just another social/technocratic solution.

        2. Yes, you have a good chance of tracing $1 billion in Bitcoin transfers, simply because of the volume. The usual anonymization methods don't work at that scale, since they rely on mixing similar transactions. Even then, it took a massive investigative effort to trace the money, and they could only actually prove it once they got access to the private keys. This is of no relevance to normal uses of Bitcoin.

          1. More COVID cases after vaccines than before :: more oppressive government pretty much everywhere after BTC than before

            Not to say that people can't/shouldn't use BTC but that you aren't going to win freedom of the economy or more broadly moving $10K at a time every 6s from one traceable wallet to another.

            Venezuela's economy was going into the toilet so they switched to cryptocurrencies including BTC. So, how's that working out for the average Venezuelan? FEB 07, 2022 - Venezuelans reportedly hit by new Bitcoin tax of up to 20%.

            Ouch!

        3. Stupid criminals get caught. News at 11.

          Not your keys not your coins. News at 11.

  9. Just call Trudeau a vacuous fascist twink. It's not that hard.

  10. What happens when Amazon, et al, stop taking Bitcoin as payment due to pressure from government? Similar to how governments are debanking marijuana and sex work businesses. Or the pressure to silence true-but-inconvenient facts on social media that cause problems for the approved narrative pushers.

    Bitcoin - crypto in general - does nothing to address the problems with the existing banking system and government control of it. At best it simply exchanges some of those problems for worse ones.

    You would be better protected with a stack of Dollars (or even Pesos!) stuffed in a mattress than with a cryptocurrency.

    1. Yeah, hand carrying duffle bags full of cash to the protesters is probably your best option at this point.

  11. The longer-term solution is to encourage more businesses to accept cryptocurrency so there is no need to bridge into government-controlled money at all.

    Good luck with that.

    Governments will be trotting out their own crypto-coins, and making it illegal to do business in the others.

  12. The longer-term solution is to encourage more businesses to accept cryptocurrency so there is no need to bridge into government-controlled money at all.

    Yeah, like that's going to happen under the Biden regime, a regime I might add that Reason supported.

    So, stop talking out of both sides of your mouth.

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