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Issue #674: Bitcoin is a communications protocol

Issue #674: Bitcoin is a communications protocol

Feb 14, 2020
Marty's Ƀent

Issue #674: Bitcoin is a communications protocol

If you haven't done so already, go read this incredible piece from Zane Pocock of KN0X on the nature of Bitcoin. In it, Zane clearly and succinctly explains that Bitcoin is simply a communications protocol that transfers messages between recipients. When you get down to the essence of Bitcoin at its most granular level, it is speech. The network enables individuals to send messages, in the form of UTXOs, between each other.

From KN0X's Zane Pocock

In the wake of the week of news we've witnessed here in the states - the IRS changing the definition of "virtual currency", which they deem as property; the CFTC adding to their definition of "virtual currency", which they deem a commodity; and the Trump administration announcing their intentions to release new guidelines for FinCen in regards to "virtual currencies", which they deem as enabling "illicit activities" - this essay is extremely timely. All of these government agencies and regulators severely misunderstand the nature of Bitcoin.

When someone "sends a bitcoin transaction" what they are really doing is sending a message, in the form of a UTXO, within the ledger. The protocol isn't issuing money at all. It is keeping track of text that lives in a scarce information space. We humans have imbued value on this scarce information space and the vehicle through which information is transferred. As Zane points out, if government agencies want to define bitcoin as a commodity they would also have to define the information living in Amazon's web servers as a commodity too, which is patently absurd. Amazon's servers consume a lot of energy and people pay for space within their hardware.

At the end of the day, when you really get down to it, Bitcoin is a protocol that enables speech. Yes, we have put and will continue to put monetary value on the information space this speech lives within but, by definition, it is nothing more than text. Moving forward, we should put in as much effort as possible to get Bitcoin defined as free speech by the US governments and other governments around the world. No more pushing for bitcoin to be defined as a currency, even though it can be leveraged by people who want to use it as a currency, it needs to be defined as free speech. Because that's what it is.

Make your local representative aware. Send them Zane's essay.

Final thought...

Liking the new Tame Impala so far.

Enjoy your weekend, freaks.


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