As bitcoin continues to gain ground around the world as a tool for preserving privacy and freedom, the fiat powers that be are not turning a blind eye to its expansion. To those of us who are paying attention, it’s increasingly obvious that there is a global war on bitcoin from multiple sides and it is only getting started.
The War On Bitcoin
Something as amazing and powerful as bitcoin only comes around once in history. Bitcoin possesses multiple characteristics that will completely change the global power structure. Bitcoin is decentralized, private, censorship resistant, honest, open to the entire world, and absolutely scarce. That will absolutely create some problems for monetary systems that are centralized, surveilled, censorable, corrupt, limited by borders, and can be printed on demand by politicians and bankers.
Bitcoin is truly transformative because it changes everything that is wrong with the traditional finance industry. Instead of all of the economic power being transferred thorough the banks and governments that run the world, bitcoin channels economic power through those who have control of their own private keys. Having control of your own bitcoin makes it more difficult for anyone to directly tax and inflate your money and that creates a problem for the current system which can directly seize your money and inflate the supply so that you have a smaller portion of the total.
With every unit of currency that they take from you via taxes, you have less of your own purchasing power than you did before. With each and every new unit of fiat currency that gets printed, the amount that you have is reduced in relation to the total. Bitcoin breaks the power of centralized institutions that take from you via taxation and inflation. The fiat money machine knows that bitcoin will transfer power away from centralized institutions and back to the people which is why the war on bitcoin is starting to heat up.
…Then They Fight You
Bitcoiners love to use the supposed quote from Gandhi “First they ignore you, then they laugh at you, they they fight you, then you win.” While some bitcoiners foolishly think that we are already past the “then they fight you stage”, the harsh reality is that the war on bitcoin is only getting started. Privacy tools are being attacked and developers may face fines, prosecution, or even imprisonment. Bitcoin companies may be forced by unelected bureaucrats to surrender all of your personally identifying information or face heavy fines and imprisonment. Bitcoin miners are being banned in certain jurisdictions and Bitcoin users face having their bank accounts shut down simply for buying bitcoin.
While all of this might seem intimidating, it’s evidence of the collapse of late-stage empires of the 20th century. If we all use the best tools that are available, we can not only fight back but we will absolutely win the war on bitcoin. In order to know how to fight back, you need to know all of the attack vectors and how to best protect yourself as well as other bitcoiners.
The War On Bitcoin Privacy
There’s no shortage of bitcoiners that are strong believers of freedom, sovereignty, and privacy. In fact, one of the primary reasons why Satoshi Nakamoto created bitcoin was to allow for more private transactions with our own natively digital money. With all of the new privacy tools that are being developed for bitcoin, there are always new tools being developed to break down that privacy. Here are just some of the ways that the war on Bitcoin privacy is getting worse.
Chain Analysis
The first and most obvious attack in the war on bitcoin is chain analysis of bitcoin’s public blockchain. Normal blockchain analysis is to be expected from anyone and everyone since bitcoin is open and transparent to the entire world. You can even do some of your own basic chain analysis with block explorers like KYCP and OXT. Chain analysis companies go above that and build specialized tools that are designed to break down privacy for all bitcoiners by applying heuristics to transactions in an attempt to connect Bitcoin addresses to real-world identities. Some of the more simple heuristics are analyzing address clusters like peeling chains. Some of the more complex methods require collusion amongst some of the largest governments and financial institutions in the world.
Project Atlas
Standard chain analysis practices have been around for over a decade but as the war on bitcoin intensifies, so does the methods for conducting chain analysis. Governments all around the world are going way beyond normal chain analysis with a project proposed by the Bank For International Settlements called Project Atlas which is chain analysis on steroids. It’s in international collaboration between banks for financial regulators and central banks to build a centralized analytics tool to surveil every Bitcoin transaction with public and private data from every Bitcoin exchange in the world and the blockchain.
According to the proposal, Project Atlas “fuses data gathered from crypto exchanges (off-chain data) with data from public blockchains (on-chain data) gathered from nodes.” and then “uses transactions attributed to crypto exchanges in the Bitcoin network, along with the location of those exchanges, as a proxy for cross-border capital flows.”
The purpose of this is not just to do basic due diligence for AML and KYC compliance like a traditional exchange or brokerage. This is to create a global panopticon of all Bitcoin KYC data in the entire world and break down Bitcoin privacy on a global scale.
You can find an excellent write up from Sam Callahan on Twitter (or “X” or whatever we are calling it now). If you want more info straight from the source, you can find the BIS proposal here.
FinCEN Proposes Patriot Act For Bitcoin
The Patriot Act is coming to bitcoin and the entire crypto industry. On October 19th, 2023, The Financial Crimes Enforcement Network (FinCEN) published a proposal that would extend the power of the Patriot Act and grant them sweeping new power over the Bitcoin industry in the United States.
If the proposal is passed, FinCEN would have the power to essentially outlaw or even criminalize using Bitcoin privacy tools and effectively deputize Bitcoin service providers by requiring all of them to collect targeted Bitcoin data on their users. This information includes but is not limited to dates of transactions, amounts, mixers/protocols, Bitcoin addresses associated with users who used mixing services, TXID of transactions deemed suspicious, date of transactions, IP addresses associated with the transaction, ALL of the user’s KYC data, and a small report on the platforms involvement with that particular transaction.
Not only does this assume that everyone who uses Bitcoin privacy tools are doing something illicit by preserving basic privacy, it forces otherwise honest Bitcoin companies to do the dirty work of authoritarian governments. This “guilty until proven innocent” approach is the basis on which all tyrannical governments suppress freedom and destroy privacy.
The War On Bitcoin Miners
If you have been paying attention to the hashrate over the past year or so, you’ve probably noticed that it has been hitting all sorts of new highs but the price has not been doing the same. With each upward difficulty adjustment, it becomes more difficult for normal pleb miners to keep their mining operations profitable.
When you look at the parabolic rise in hashrate, you can’t help but wonder where all of that hashrate is coming from. Is this new hashrate natural market growth or is it part of a global war on Bitcoin miners in an attempt to bankrupt smaller operations and force them to shut down their mining hardware.
China’s War On Bitcoin Mining
In spring of 2021, the Chinese government made a substantial move forward in the war on bitcoin when it banned all Bitcoin mining overnight and forced multiple mining firms to cease their operations.
China’s move to ban Bitcoin mining resulted in 4 consecutive downward difficulty adjustments as mining hardware was powered down and sold off. While many miners in other parts of the world were glad to see this sort of decrease in the overall difficulty of Bitcoin mining, it shows that nation states have the power to substantially impede the development of Bitcoin mining within their own jurisdiction and cripple an entire industry within a nation’s borders.
The War On Bitcoin Exchanges
We are all too aware of the privacy invasive financial regulations as they pertain to Bitcoin exchanges and the compulsory collection of personal information known as “Know Your Customer” compliance. It’s touted as a means of protecting the consumer but the reality is that it is financial regulation that does nothing but protect the banking giants that are “too big to fail” with a regulatory moat. If you want to run your own Bitcoin business, you will have to deal with countless regulations in whatever jurisdiction you operate in, money transmitting licenses, collecting and storing sensitive information for all of your users, and whatever new regulations they push on the industry.
Not only do these regulations not protect Bitcoin users, they make it increasingly difficult for Bitcoin exchanges to stay compliant with the endless expansion of regulation.
Seizing Inbound Payments
In the UK, the Financial Conduct Authority (FCA) has been granted new powers in the war on bitcoin. New legislation was recently passed that requires bitcoin exchanges to seize inbound payments if a depositor can’t prove who sent them bitcoin and why. This new attack isn’t just limited to deposits. Bitcoin withdrawals are also covered in the new regulations. UK bitcoiners will be required to provide details about who they are sending bitcoin to and why before they are able to make any withdrawals to their own wallets.
The so called “Travel Rule” is designed to bring greater transparency to Bitcoin transfers, making it harder for criminals to use “crypto-assets” for illicit activity. Once again, we see another unelected bureau treating everyone as guilty unless they can prove they’re innocent.
While this particular bill has been signed into law the UK, other countries that have opted-in to these sorts of regulations include The US, Germany, Japan, Singapore, Switzerland, Canada, South Africa, The Netherlands, Estonia, and more to surely follow.
The War On Bitcoin Users
Not only have there been a substantial number of attacks on the Bitcoin industry at the larger chokepoints like exchanges and large centralized mining operations, the war on Bitcoin users is also ramping up. From politicians looking to pass onerous legislation to the banking institutions that are in bed with government making moves to slow Bitcoin adoption in order to grant themselves a legal monopoly via a regulation.
Here is how the war on bitcoin is being waged against individual users like you and me.
Chase UK Prohibits Bitcoin Purchases
While a good number of attacks in the war on bitcoin happen at the political level, some are being launched by banks themselves. In September of 2023, Chase UK sent a notice out to all of their users that they are prohibiting their users from purchasing bitcoin using their Chase UK bank accounts. In a simple email stating that it was all about protecting their users from fraud, Brits are now unable to buy bitcoin through Chase Bank.
Cutting UK citizens off from bitcoin didn’t require passing any new regulations. Banks as big as Chase already have immense power and all they needed to do was prevent their existing users from buying bitcoin with their Chase bank account. With limited options to buy bitcoin in the UK, Brits are essentially prohibited from buying bitcoin in the UK via Chase and now have to find alternative means to stack sats.
What’s interesting to take note of is that Chase Bank is one of the banks that has announced that they will offer a Bitcoin ETF. So, while Chase prohibits their users from buying actual bitcoin, they will gladly allow you to help them to buy bitcoin while they issue you some worthless Bitcoin IUO in form of an ETF.
Seizing Bitcoin From Canadian Truckers
In 2022, the Canadian government used Covid hysteria to invoke the Emergency Act to seize more power to violate the rights of the Canadian people. In response, Canadian truckers organized a protest by occupying the streets of the capital city, Ottawa. Since truckers are the lifeblood of the shipping lines that provide all of the resources that keep an economy running, they have the power to shut down an economy. This trucker protest resulted in donations pouring in to support the truckers from across the world.
The Canadian government fought back by shutting down the bank accounts of all of the truck drivers as well as anyone who made donations to the trucker convoy. There was even a GoFundMe page that was shut down to prevent money going to the truckers.
As a response to bank deplatforming, bitcoiners around the world united by donating 20.73743237 bitcoin in a successful crowdfunding campaign to this Bitcoin address.
The Canadian government didn’t like that and took things to the next level and issued a search warrant to physically raid the house of one of the protest organizers. They were able to seize ~6 of the ~21 bitcoin by gaining physical access to the wallet where the bitcoin was held. While this shows the levels that governments will go to in order to seize bitcoin, it also shows that bitcoin is incredibly resistant to confiscation because the Canadian authorities were unable to confiscate all ~21 coins.
If the Canadian government can issue a warrant to seize bitcoin that helped to fund a peaceful protest, they can do it anywhere. How long until the war on bitcoin escalates to this level in your country or state?
Prohibiting Self Custody
Not your keys not your coins is one of the most commonly touted sayings in bitcoin and for good reason. If you don’t actually have your own private keys, then you don’t actually have any bitcoin and you are actually channelling all of bitcoin’s economic power through the custodian that holds your bitcoin. When the war on bitcoin escalates to any sort of 6102 level event, the very first place that bitcoin will be seized will be third-party custodians that hold the most bitcoin.
After the centralized bitcoin repositories have all been raided, the next step will be to hunt down all of the KYC bitcoin which will naturally begin with threatening letters and end up as physical raids by some sort of secret police with the specific task of hunting bitcoiners down like animals, robbing them of their Bitcoin holdings, and prosecuting them for using an open source math equation.
In The United States, shadowy super senator Elizabeth Warren is working with big banks to ban self-custody Bitcoin wallets and she is not going to stop until all money flows are under the control of centralized entities.
Bitcoin ETF
In more recent months, it’s been impossible to avoid discussion surrounding all of the Spot Bitcoin ETFs that the SEC just recently approved. On the surface, they all seem great and many bitcoiners are all too eager for them to become a reality so that hundreds of billions of dollars of boomer wealth can come pouring into the Bitcoin ecosystem. It doesn’t matter if you think Bitcoin ETFs are good or bad for bitcoin, they are a substantial attack in the war on bitcoin. While they have the potential to pump the price well over $200k per coin, they also incentivize centralized custody and are completely antithetical to peer-to-peer electronic cash that Satoshi outlined in the Bitcoin whitepaper..
Bitcoin ETFs are completely centralized and drive all of bitcoin’s economic power away from the end user and into the hands of the very system that bitcoin was designed to obsolete.
Bitcoiners Fight Back
The fact that the war on bitcoin has risen to this level already only proves that the establishment is scared of bitcoin. They obviously view it as a serious threat to the rule of the almighty dollar and every other fiat currency in the world. Attempts to slow and stop bitcoin growth reek of desperation as banks and governments attempt to stay relevant in an increasingly peer-to-peer world. If you compare bitcoin to fiat currencies, it’s easy to see that bitcoin is already larger than most of them and continues to grow as more people learn about bitcoin and use it. Any attempts to stop or hinder Bitcoin adoption only reveal the the imminent collapse of the late-stage empires of the 20th century.
The war on bitcoin has only just begun. In order to win, we all need to do our part to push back in every way we possibly can. With the coming inflows to the Bitcoin Spot ETF, the price of bitcoin is likely to pump like never before as hundreds of billions of dollars become exposed to bitcoin. This will give us all a lot of new purchasing power that we can use to further invest in new Bitcoin privacy tools, build new infrastructure, get more Bitcoin nodes running, and expand our own local Bitcoin networks.
- Buying bitcoin privately is one of the first and most important steps to protecting yourself as well as other bitcoiners from the increasingly authoritarian regulations around the world. Whenever you buy bitcoin privately, not only are you preserving your own privacy by a large margin but you are also helping someone else to increase their own privacy by a small margin. Strength in numbers is an important part of protecting the Bitcoin network and the more people that own private Bitcoin, the stronger we are as a network of users. You can find a full list or privacy tools here as well as all of the best places to buy non-KYC bitcoin here.
- Backing up your seed phrase on metal is a great way to protect your bitcoin from damage and ensure that it will last for decades into the future. You can also use a passphrase to make it even more difficult to seize your bitcoin in the event that your actual seed phrase is compromised.
- Run Your Own Bitcoin Node to preserve as much of your own transaction privacy as possible. The more of us who run nodes, the less likely that anyone will be able to censor the network or prevent transactions from being relayed.
- Practice Good Privacy for normal everyday transactions. Some of the easiest ways to preserve your privacy is to just use coin control, use open source Bitcoin wallets that don’t collect any of your personal information, spend bitcoin with merchants who accept bitcoin directly, avoid KYC on-ramps and off-ramps as much as possible.
- We can all be taking steps within our own lives to build our own Bitcoin standard. Do whatever you can to avoid using any fiat currency at all. Grow your local community of bitcoiners who do whatever they can to grow the Bitcoin circular economy
The more of these that you can do in your own life and circle of influence, the more secure your own bitcoin becomes as well as the people in your local Bitcoin network.
…Then You Win
The war on bitcoin has only just begun and it’s not going to slow down anytime soon. There will be more chain analysis. There will be more Bitcoin mining bans. There will be more legislation. There will be more de-platforming. There will be more incentives that push bitcoin into the hands of the central banks and the corporations that have grown up around them.
If we are all doing whatever we can to fight back against the banks that run the world, then it’s only a matter of time until Bitcoin adoption will be too great to be hindered and the relationship between the people and their governments will be restored. On a Bitcoin standard, governments will exist to serve us; not the other way around.
In order to win the war on bitcoin, all you need to do is buy bitcoin privately, control your private keys, secure your seed phrase (with metal!), run your own node, practice good privacy, grow the circular economy within your own community and don’t let them scare or intimidate you.
As long as we don’t give up, we can’t lose. Stay the course, plebs. Bitcoin is worth fighting for.
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