PrefaceWhilst previewing this post, I realized that it came off as too negative. The Roosevelt gold seizure is a relatively recent historical precedent of a worst-case scenario. A discussion thereof perforce will invoke our worst fears of what could
actually happen, because it
has happened in an allegedly civilized country that claims to be “free”. A cold examination of reality is not only warranted, but necessary. However, it does sound too much like “gloom and doom”.
To provide appropriate balance, I should thus add here up-top a bird’s-eye view of what can be done
in the big picture: Not only to protect oneself individually against the potential of such a seizure, but to help make such a seizure less likely by raising the cost to governments.
- Grow the Bitcoin social phenomenon. It is depressing to realize that Bitcoin adoption must surely still be a fraction of what individual gold ownership was in America in on 30 April, 1934. The more you push adoption to as many people in as many places as you can, the more difficult it becomes for any major government to try to ban Bitcoin.
- Keep privacy socially acceptable. If Bitcoin achieves mass-“adoption”, but 99% of users only “use” Bitcoin on some Paypal 2.0 centralized KYC exchange, then that achieves relatively little to protect Bitcoin from adverse state interference; indeed, it may actually damage Bitcoin. Get average people using reputable mixers (not the ones that smell like “darkweb”), and ultimately, get people onto Lightning. Explain privacy in terms that don’t look like the sleazy mirror-image of mass-media smears against privacy. (I myself am good for this: I don’t do drugs; I have never bought anything off the “darkweb”; I just want privacy, because it is my right to keep my money stuffed under my virtual mattress!)
Observe that this strategy has a unifying element:
Helping people! If you want to best protect your own money, Bitcoin coerces you to make the world a better place: Protect others’ financial freedom, to build a mass-effect protecting your own financial freedom. I think that’s a feature. :-)
Technically, if you transfer crypto to the cold wallet, you can always "forget" access details to such a wallet. And good luck to anyone trying to brute force hack BTC cold wallet!
...cold storage is a great wallet to start if your hoarding lots on Bitcoin, and just keep a minimum amount on your online wallet for fast transaction,
Well, you can be imprisoned and/or otherwise coerced to make you give up your cold wallet.
XKCD #538 The only real, effective protection is
privacy: Nobody can coerce you to give up what nobody knows you have.
So unlike gold, I have a clear working plan if bitcoin gets banned. I can immediately send all my bitcoins into hiding using mixers. I can even sell them in disguise.
Horse, barn door. —
Cat, bag. — Methinks it’s time for a new metaphor.
Nullian Rule of Privacy: Losing your privacy is like contracting HIV. It is irreparable—there is no going back—and it will ruin your life, even if you may take some measures to mitigate the damage and/or put off your demise.
Sending your coins into mixers
after a ban is way too late! Do you suppose that the government will just say, “Um, we can’t trace what happened to your coins; so, case closed!” In case of a ban (or tantamount to a ban: a legal requirement of registering all crypto assets with a KYC service), any coins that you can’t prove you sold to a KYC-traceable entity will probably get you in trouble, on the presumption that you are just trying to hide them.
And before anybody says it:
No, “plausible deniability” is not privacy.https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2018-January/015547.htmlThere is no joke.
I talked recently with a lawyer friend, who told me about the situation (about traders being chased by Romanian govern).
[...]
Max Nicula, the owner if the defunct BTCxChange stated recently that even today, 1.5 years after closing the exchange's site, he is unable to fully shut down the firm because ANAF (the Romanian version of IRS) started an investigation when he requested to close the operations. What is very important, he was requested to provide to the authorities all his customers names and data, which is also what happened at Coinbase. In that case, the company was requested forced to release the clients' data in order to function, while in this case the company has (still) to give out this data in order to be shut down.
[...]
What is important is that Coinbase history repeats and I suspect there are hundreds of other similar cases worlwide.
Again, that’s what they do when Bitcoin is
legal, and the government is just looking for a slice of your pie instead of seizing the whole thing!
The historical precedent of the Roosevelt gold seizure invokes a threat model involving state-level actors,
i.e., you need to hide your from your government any money that you would not willingly give up on demand. Thus,
now—no,
yesterday is the time to make sure that nobody can
ever in the future trace it to you, or even
suspect that you have it.
Tips:
https://en.bitcoin.it/wiki/PrivacyFor the 99% of people who will never even read that long wiki article, let alone
do something about it,
ChipMixer is a fast and easy way to at least help break up the
publicly available money-trail that you are leaving all over the blockchain.
I am not paid to say that; and I am warning you that it is only the beginning, not the end of achieving strong privacy.
The Effect of the Ban Never EndedBanned for more or less 41 years..
The substantial effect of the gold ban is
still in full force. The government simply no longer needs to maintain a
legal ban, when individual ownership of gold is restricted to only relatively few wealthy investors (
most of whom never take delivery—thus leaving possession, “nine-tenths of the law”, in control of banks), plus economically negligible amounts in the hands of socioeconomically and politically marginal goldbugs and “preppers”. Seriously. The system
does not care if you and a few others have a few coins of an ounce or less.
“Mission accomplished:” The American people have been bled of their gold; and via American economic and military dominance, so has the rest of the world. Observe that
American domestic law made gold “legal” again a few years after Nixon unilaterally wrecked the Bretton Woods Agreement, thus effectually doing to foreign governments something roughly analogous to what Roosevelt had done to the American people. (
Hmmm...) As such was the United States Dollar fully transitioned into a fiat currency.
At that point, from the U.S. government’s perspective—yeah, sure, ok, let some right-wing nut in Flyover Country stash a few little gold coins.*
Whatever. He can keep them between the ARs which he thinks he can use to “defend freedom” militia-style against a régime that twice steamrolled the most powerful Arab military without even blinking, among other exemplary demonstrations of military superpower,
and subsequently used Iraq as a testbed for new technologies in asymmetric “counterinsurgency”—hey!
American “patriots”, did you notice that “your” military was busy perfecting unopposable “counterinsurgency” at exactly the same time as “your” domestic police forces suddenly became even more extremely militarized due to “post-911”? Hmmm? Anyway, sorry, a few bullion coins at the margins are meaningless in the big picture of the global financial system.
(* I say this without disrespect to the people thus insulted; I am stating the USG perspective on it, and urging would-be American freedom-fighters to be strategically realistic. Don’t give up your AR, but don’t delude yourself into believing that this is 1774.)Call me when most of the American middle-class again has gold (or at least
actually redeemable gold certificates), and
when the gold-clause business contract terms legally invalidated by the Roosevelt gold ban are again a custom in American business—another extremely important point missed by most “goldbugs”. Personal money is small, except for the very wealthy. Business money is big. The customary use of gold in at least some significant fraction of business-to-business contractual payments was a lynchpin keeping the American domestic monetary system dependent on gold.
Roosevelt nullified gold-payment contract clauses by operation of law, forcing business owners to accept paper instead.* Quick poll: How many on this thread even knew that, or thought about it?
(* Such contractual clauses were made to explicitly override the legal-tender status of paper notes. It is perfectly legal to agree that a contract is only payable in gold bullion, or in bitcoins, or in chocolate-dipped coffee beans, or in bouquets of fresh roses. You are only required by law to accept legal tender for a debt if the counterparty has not already agreed to provide a different form of payment. Roosevelt not only trampled property rights, but also repudiated the right of contract to force business owners to accept paper dollars in lieu of the suddenly-illegal gold bullion that they had expected in payment when they signed their contracts.)And contra popular perceptions, the U.S. government never thereafter changed its underlying policy. The individual possession of gold bullion was only decriminalized after individual gold ownership had been made negligible, and a new generation had grown up being accustomed to this as the status quo. The marginal possession of a few ounces of gold by some insignificant number of people is just that: Marginal, and therefore irrelevant to pragmatic tyrants. The mass-draining of the American people’s gold, and the denormalization of gold ownership, are accomplished facts even truer today than they were in 1935.
The prime difference between now and then it that people and capital are infinitely more mobile.
Speak for yourself.
If the same were to be attempted today they would be able to go straight to my door. They would also find it empty as I'd be in the nearest country that wasn't pulling crap like that.
That is not an option for people with:
- Immovable assets, e.g., a home of one’s own.
- Family, most of all family with children.
- Deep ties to a local community—a thing once upon a time considered part of being a normal, decent human being.
- A non-cypherpunk job.
- Difficult-to-move assets, such as any non-negligible amount of gold. I am not only saying that gold is heavy: Good luck crossing the border with a 400 oz. Good Delivery bar in your carry-on! —Or family heirlooms. Or a personal library. Or...
- Issues of advanced age, ill health, or state of disability that make travel difficult or impossible—and/or family members who have such issues, such as parents/grandparents. (Cf. the above point about children.)
- The personal attachment to a certain location that is, again, a part of being a normal human being, and has led people throughout the ages to proclaim that “there is no place like home”.
“So what, you can run” is tantamount to declaring that
freedom is only available to people who are willing to live on the run, like criminal fugitives—legally,
as criminal fugitives. I myself already dislike hiding half my life behind Tor. Should I now prepare to live like a hunted animal!?
A longtime Nullian aphorism:
When freedom is outlawed, only outlaws will have freedom.
I bet more than one American buried their gold and had to wait all these years before ever seeing it again. And there was probably a black market too...
Of course, there was a gold black market; and there was gold
smuggling, because gold bullion was “contraband” for anybody who did not have a special licence to handle gold for uses approved by the régime.
But one of the most disturbing parts of this history is how willingly most Americans gave up their gold. In a misguided attempt to be extra-“law-abiding”, some people even turned in gold jewellery that was exempted from the ban. Of course, this was publicized for propaganda purposes.
Cf. Voltaire’s famous observation about slaves who love their chains.
Thus in a country founded by men who rose up in violent armed revolution against their legal government over some taxes that were quite small by today’s standards, masses of people
voluntarily complied with the seizure of their real money, and its replacement with scrip as “payment” for the gold that they surrendered. Then, they promptly proceeded to re-elect the American Kerensky. An act of naked tyranny that would have been difficult to enforce against mass
passive resistance, and by historical standards should have immediately incited
active resistance,* was so smoothly carried off that it has been all but forgotten by Americans today—who, as aforementioned,
still have economically negligible rates of individual gold ownership.
(* I observe that the first-ever significant Federal legislation restricting firearms, the National Firearms Act of 1934, was passed almost simultaneously with the gold ban. Does no one else notice such things?)
(More replies some other time, especially to JollyGood and amishmanish. Thanks for the fine discussion of this important issue! I think it is not merely a story from the past, but a key issue of continuing relevance to Bitcoiners, and to anybody who cares about sound money and financial freedom. That is why I opened this topic when I was a forum Newbie who had been actively posting for less than nine days.)