How Bitcoin Dies by Mencius Moldbug

I encourage readers to see the whole thing, but I wished to emphasise a few points (bolded them).

Obviously, I have no inside information at all and am just speculating - as a devout student of the fascinating organism that is USG. However, my guess is that this event will happen soon - ie, probably in 2013. Why? Because of the ECB report on Bitcoin, which quoth:

*All these issues raise serious concerns regarding the legal status and security of the system, as well as the finality and irrevocability of the transactions, in a system which is not subject to any kind of public oversight. In June 2011 two US senators, Charles Schumer and Joe Manchin, wrote to the Attorney General and to the Administrator of the Drug Enforcement Administration expressing their worries about Bitcoin and its use for illegal purposes. Mr Andresen was also asked to give a presentation to the CIA about this virtual currency scheme. *

Further action from other authorities can reasonably be expected in the near future.

Neighbor, if you're at all involved with BTC, I'd advise you to heed this remarkably direct warning. You'll note that (a) the people who wrote this report do have inside information (since the ECB and our own dear "other authorities" operate, of course, in practice as a single global institution) and (b) these are people with actual power, and people with actual power tend to do what they say they're going to do - regardless of how Reddit might feel about the matter.

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And when it comes to USG, and USD - creating a successful distributed digital currency is what I call "coup-complete." Ie, as a difficult problem, it is fundamentally equivalent to the well-known difficult problem of regime change. Are coups impossible? No, of course not. What's impossible, however, is pulling a coup when you don't know you're even trying to pull a coup.

Government control (excuse me, "public oversight") of all major monetary transactions is one of the basic attributes of sovereignty in the modern world. If you can get away with "money laundering," ie, circumventing this control, you can get away with anything. If you can systematically disable it, perhaps you yourself are the new regime. You're certainly on the way.

Indeed, if we all traded in our dollars and dollar assets, and fully restandardized the global monetary system on BTC (technically a far superior design), it's quite possible that Satoshi Nakamoto himself would simply emerge as our new global overlord. I suspect he'd be richer than the Rockefellers. How do you indict that?

My guess, solely from the broad public hint above, is that the collective bureaucratic decision to unleash the full right arm of USG on BTC was almost certainly made in 2012 or even 2011. An easy decision - since it makes a lot of work for all the deciding agencies. Meanwhile, the Bitcoin economy is buzzing merrily along, as if there was nothing wrong at all with Bitcoin. Technically and economically, there is nothing wrong. It's a remarkably beautiful architecture - in fact, I would say, a genuine work of art in the field of system software. Its problems are entirely political.

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