Skip to main content

‘The Bitcoin-technology by itself is worth nothing’; an interview with Dark Wallet front-man Amir Taaki

Op-ed - ‘The Bitcoin-technology by itself is worth nothing’; an interview with Dark Wallet front-man Amir Taaki

If Bitcoin has its enfant terrible, Amir Taaki is it. Living on a shoestring-budget in squats throughout Europe, Taaki is leading the anarchist Bitcoin-countermovement known as unSystem, has built the alternative Bitcoin-implementation Libbitcoin, and helped to invent the peer-to-peer marketplace DarkMarket (which is taken over and re-branded as OpenBazaar). He is currently best-known as the front-man of the Dark Wallet, a Bitcoin-wallet designed to obfuscate Bitcoin users' identities.

Amir, your main focus within the Bitcoin-sphere is clearly on the anonymous features of Bitcoin, and keeping the internetcurrency that way. Why do you care about this so much?

Anonymity is important because the current financial system is rigged against us. Right now the state steals from people through taxes and inflation, which not only contributes massively to state power and war, but it enables them to control who gets to accumulate capital. Anonymity will help us to avoid paying taxes, enable us to launder money, and facilitate us to evade restrictions by the state on how to manage our resources. It will protect the small guy.

Isn't income from taxes used by the state to help the small guy as well? Through public services for instance, or subsidies, or welfare...

Yeah but these are very small things compared to the restrictions on how we live. Welfare in particular is just the by-product of a broken system. The cost of living in our society is artificially high, so if you can't afford to pay for that your only other option is to go into welfare until you can sort yourself out to be placed on that narrow path that everyone should follow, and become a small part of a large institution or superstructure: work for the man.But collecting welfare is not empowering, paying rent is not empowering, and working for the man is not empowering. What is empowering is for people to be cooperating together, to form their own businesses, to be independent and autonomous.Some people do need help of course, but this should be something we provide together within our communities. I've lived in all sorts of communities where people help each other all of the time.

The tools you are developing can also be used by arms dealers or terrorists, while there was even an alleged IS-document floating around the web which mentioned the Dark Wallet. Surely these are not things you support?

Look, we can try to always manage our world and strive to purge it of some perceived threat or evil, but I think that in the end that logic is a faulty one. The way to change things is not by trying to create some sort of system with rules and police and courts and judges. If you want to make something that's effective, it needs to be in the people’s own interest to promote that.I believe that everything is so f*d up right now because we have been abstracted from our human values. It's not natural to get up at nine o'clock in the morning only to sit in an office all day being told to fill boxes under strip lighting. When we evolved, we lived in bands of roving people who acted as an economic union. In the wild, the environment was constantly changing, continually facing us with new challenges. We're fundamentally social and creative creatures. It might seem more comforting to manage the risk to certain levels, but it's destroying us as human beings. Part of growing as a person is having these lows, these dangers, these dynamisms.And at the same time, we need to have fun, which is also something we have taken out of our lives. It's all devoid of passion. We're all utilitarian people trying to live in comfort with smiles on our faces, but how many of us are really happy beneath that veneer?

Wouldn't it be wiser to not actually promote Dark Wallet as a money laundering tool though?


Well, for one, it might get you into trouble with the law. Secondly, most people would probably not consider it the best possible PR either.

But I'm not acting through fear! I'm doing things as I think they are right. I would just be dishonest with myself if I try to play with words or cover up my intent. I want people to know what I think, and as many people as possible, because it's not just about the technology we're building. In fact, the technology by itself is worth nothing. What is important is the narrative, or the ideal that is being constructed through that narrative.Bitcoin is a decentralized and uncensored money with privacy features. As such, it has opened up a new front in the ongoing struggle for freedom.Moreover, one of the oldest artefacts in the world is the Code of Hammurabi, a Babylonian document dating back to almost 2000BC which deals with contract law. Contract law is the foundation on which civilizations are built. And it is the basis for how we – no, they – have been able to create corporate society. Through contract law, you get access to a set of legal tools in order to incorporate and scale upwards.With Bitcoin, we now have a new set of tools, that are not based on the law of the state, but based on the laws of mathematics. This enables us to create decentralized law, digital governance, and a wide scope of means for trade and business.

Then why is the narrative so important in and of itself?

Because the design of Bitcoin is not set in stone. It evolves and morphs through the actions of people. There’s this silly honey badger meme going around, like, “Bitcoin doesn’t give a f*k, Bitcoin is the honey badger of money”, but that’s false. Bitcoin is a consensus-system subject to all the different power groups acting upon it. And Bitcoin certainly can be corrupted. In very big ways.

Is Bitcoin being corrupted right now?

In some ways, yes. The Bitcoin Foundation is trying to establish itself as a central point of Bitcoin through which it can fund and steer development, while at the same time working together with the state and Wall Street. What's going to happen, is that governments will use the Foundation to pressure Bitcoin development in certain directions. Chief scientist and former lead-developer Gavin Andresen is paid by the Bitcoin Foundation, while his friends are the big Bitcoin-corporations. So, naturally, he's more favourable towards their outlook of Bitcoin. And if you look at his actions and decisions...He talks about Bitcoin as a payments-innovation, he developed the payments protocol, and now he's pushing to increase the block size limit which would raise the maximum number of transactions on the network at the cost of even further centralization of mining. That is in effect in direct opposition to the idea of Bitcoin as a decentralized, private and uncensored system.

You don't really see Bitcoin as a payments-innovation, do you?

No, it's not very good for that. The Bitcoin-network is currently subsidized through inflation, meaning transactions cost about thirty dollars each. This vision of Bitcoin as a faster, cheaper and better payments-network is simply not tied to any technological grounding of what Bitcoin is really about. If we want to make Bitcoin a competitor to Visa or MasterCard, we would need to increase the blocksize and centralize mining so much that it is basically the same as existing payments networks. And even then, at some point, we'll reach a limit where Bitcoin is just not cost-efficient. We don't need to have all these miners crunching numbers just so people can buy a coffee. That's insane.

If we do not increase the blocksize, however, Bitcoin would merely be able to handle seven transactions per second, meaning its scalability is rather limited...

Scalability, be very careful with that word. If we increase the blocksize limit, the bloated blockchain would make it harder for people to run full nodes. You'd need bigger hardware to store all of the required data, so in that sense it wouldn't scale nicely at all.But if we keep the blocksize limited people can always use Bitcoin for payments, they'd just have to pay a bigger fee. This doesn't need to be a problem, in particular for the functionality of Bitcoin as an instrument to settle debts. The way banks work today is not that every transaction done between two parties is sent directly from one bank account to the other. Instead, they add up all transactions between the different banks, and settle the debts at the end of the day.In a similar way, Bitcoin could grow to become the backbone of a whole new financial paradigm, as opposed to a payments network that merely papers over the cracks of the existing monetary infrastructure.

And yet, the general public will probably not care about any of this all that much. They just want cheap and fast transactions...

Well, a lot of people within the Bitcoin-community care about mass adoption way too much. They want to reach it at any and all cost. It doesn't matter to them how much compromise we need to make, because they think Bitcoin will hit some critical point where – BAM – everything is revolutionized. This kind of quick fix mentality is very easy for people to grasp, but is not based around real social change. It's an illusion.It reminds me of the Esperanto movement, which had a split in the community. The Fina Venko aimed to one day reach this pivotal point where suddenly there would be some global revolution of people speaking Esperanto. This idea was later rejected by the Raŭmismos. The Raŭmismos appreciate Esperanto as a cultural movement, as a social movement, and as a language in and of itself.I reject the Fina Venko of Bitcoin. That's not to say some kind of global revolution can't happen, but this focus on it is a diversionary tactic from the real thing that matters. Lots of consumers using bitcoin in their day to day lives doesn't benefit Bitcoin. It might benefit the price, but the two are not the same.

So how would you suggest we move forward on a protocol-level?

I would actually suggest we step back for a second. Let’s really fix the fundamentals of the software, and make resilient and well written Bitcoin-implementations rather than trying to stuff everything into the protocol. I'm very conservative in that regard, because Bitcoin works as it is now.There are problems, but I think that meddling with it by opening up the protocol is more of a risk than it is a benefit. Especially because a lot of developers don't see the consequences of their actions. They're just looking one step ahead when trying to fix problems, while totally ignoring all of the social implications and how it changes the politics. Bitcoinj- and Lighthouse-developer Mike Hearn, for instance, was just pushing for an extension to the protocol in order to eliminate possible double-spend transactions in point-of-sale situations. He proposed a system in which miners can vote to steal the block reward from other miners if they accept double spends. The problem is that this opens up the possibility for large mining pools to collude against smaller miners, and use this power to blacklist transactions.And this is just one example, there are many more like it. But it really is insane, it's ludicrous. Just to be able to buy coffee with our Bitcoin-creditcards, and make it a little bit more convenient, we want to destroy all of the freedom it provides? Lose out on the opportunity to enable people to economically organize themselves over wide geographical areas, between different communities, and different organizations with different financial instruments, with tools we have never before seen in the history of humanity? Do we really want to give that up for a silly dream of a few corporations that want to sell a product to consumers, to pump the price? Come on... We're really losing a big thing if we sacrifice Bitcoin for that.

You're obviously very passionate about these issues, and you don't hold back in voicing your opinions. As a result, you've berated some of the Bitcoin-developers before, and in particular because of their cooperation with regulators. Can you understand why they'd be annoyed with your attitude at all?

I'll explain the mindset of these people. Some of them are just dumb-asses who actually believe we need the government to protect us and all that. But most of them really think of themselves as some kind of libertarian ninja going through the shadows to sabotage the system from within. They believe something in private, but act something else in public in order to build support for Bitcoin, not realizing that Bitcoin itself is subject to change.And then people who oppose that façade suddenly become a threat, because it doesn't conform to the front they're putting on. So the libertarian view now all of a sudden becomes something they have to push out and censor, thinking we need to gain support from powerful actors. But this mindset slowly leads to the corrosion of their ethics, because they start to think that it's OK to do one evil for a greater good, and somehow rationalize their own actions through this construct.This is the real path to corruption. It's not these big decisions, but small day-to-day things. If you compromise once, it becomes easier to compromise again. So you keep going and going and going until you end up with govcoin or corpcoin. We need to be guarded against this.