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@ Pablo Xannybar
2023-08-09 17:42:01Note: this is a transcript of a talk given at a local Bitcoin event.
As Bitcoiners, we are all well aware of the dangers posed to our privacy, security, and freedom by CBDCs, digital ID, vaccine passports, carbon credits, and so on. We don’t even have to theorise about these dangers because governments and central bankers are happy to boast the “benefits” of CBDCs include the ability to control what you can buy and make your money expire.
But how do these things actually work? Governments are vague on the technical details, preferring instead to use buzzwords like “blockchain”, “interopterbility”, and the most profidious of all – “programmable money.”
What we do know is most – if not all – of the current CBDC trials include partnerships with the private banking and technology sectors. Specifically, some of the big players supplying the technology for CBDC infrastructure include Amazon, Accenture, Microsoft, IBM, the Linux Foundation, and ConsenSys – a company founded and run primarily by the co-founders of Ethereum itself, and largely funded by JP Morgan.
This should come as no surprise for those familiar with the tech industry. The cloud has been a rapidly growing sector for years now, and government departments are among the big customers. Already the NHS and HMRC use AWS for instance. In the US, even the CIA uses AWS.
Likewise, we are already aware of the fact that commercial banks are in charge of all digital money production in the form of credit creation, and this commercial bank money makes up close to all the fiat in the world today. It is therefore expected that a new form of digital money is being created with the help of commercial banks.
In this talk I hope to answer the question of how these outsourced, cloud based systems work in regards to CBDCs, digital ID, and other Orwellian bollocks. If you are left with questions, feel free to ask them at the end.
The first thing to understand is although these projects are almost entirely based around EVM – the Ethereum Virtual Machine – they will not be run on the Ethereum blockchain or any other public blockchain. Instead they will make use of private deployments of an EVM based blockchain.
In fact, you can learn exactly how this works from AWS right now. They’ll let you spin up your own EVM deployment. You will be the admin. You can choose how much – if any – of the wallets or transactions are made public, but as the admin, you have full view into and control over every single one. And if that sounds suspiciously similar to E-Coin from Mr Robot, that’s because it is.
Which brings me neatly onto the next essential concept – permissioned blockchains. Private deployments of EVM do not rely on proof of stake as you might suspect. Instead they operate under so-called proof of authority. This means exactly what it sounds like.
Remember when everyone who held USDC in Tornado Cash saw it frozen overnight as the smart contract was added to the OFAC sanction list? That was possible because USDC is a permissioned ERC-20 token. Circle is able to blacklist any wallet at any time, so that any USDC currently held in any given wallet, as well as any that may be sent to it in the future, is frozen. Even if it is on a hardware wallet or another non-custodial solution, it does not matter. The tokens themselves are a smart contract, the code is upgradable and includes a blacklist, so there is nothing you can do.
If you extrapolate USDC to all tokens held across an entire blockchain, you now understand permissioned blockchains, proof of authority, and the concept of “programmable money.” Not just in concept, but also in practice. Just as USDC is a Solidity smart contract on Ethereum, a CBDC will be a Solidity smart contract on a private Ethereum fork. And once that infrastructure is deployed, and if it is widely adopted, you have a platform that any smart contract with any additional function can be deployed on in the future. Nothing technologically prevents this – you have to simply trust the state not to expand their power… I know, hilarious.
Whenever you hear the term “programmable money” thrown around, remember it means money that a central authority has full control over, including the power to arbitrarily freeze everything linked to your digital ID, such as your CBDC wallet and passport, as well as the ability to make your money expire and decide what you are permitted to spend it on, and of course the aforementioned power to add to that list at will.
Although these national CBDC deployments will all be separate, they will largely be based on EVM, which will make them interoperable – this means that, for example, you can make a GBP payment to someone in the USA and it’ll instantly settle in USD. Provisions for CBDC support are already being integrated into fast payment systems around the world, which could allow banks to give you no choice in whether you use a CBDC. There is an ongoing active push for CBDC integration into fast payments right now, driven by the World Bank and the Bill and Malinda Gates Foundation.
Additionally, you can expect discounts on purchases to be offered in return for using a CBDC, and possibly even a free airdrop ala Worldcoin – in China they already gave away free digital yuan. We may even see UBI trials conducted with the CBDC. Because hey, the first hit is free, right?
You may have also heard a lot of talk around the idea of “tokenisation.” This is where physical goods are represented by NFTs on one of these state/corporate controlled blockchains. If everything you own is logged on a blockchain and linked to a digital ID, access to those goods can be removed if your CBDC wallet is frozen. With an increasing number of internet-of-things devices, our assets can literally be frozen.
Now, these are currently all ideas being thrown around as CBDCs themselves are being piloted. Tokenisation could turn out to be vaporware. But once this infrastructure rolls out into production, it is a full EVM blockchain linked to digital IDs of every user, and the state as well as banks and other private interests will have the power to add to the scope of that blockchain whenever they want.
The implementations that are already being developed aside from CBDCs themselves include digital ID as a prerequisite for a CBDC – since everything will be KYC’d, digital ID is a certainty. Digital passports are a natural extension of digital ID, and yes there are specific proposals from the likes of the WHO, EU, and WEF, among others, to make these vaccine passports in exactly those words – and finally carbon credits, including “individual carbon tracker” projects aimed at logging where individuals travel, how they travel, what they eat, what they buy, and more – effectly creating a social credit score in all but name.
The overarching theme through all of this highlights the true danger of CBDCs. It is not simply about the government knowing what you’ve spent money on. It is about the level of overt control the state is granting itself over how you spend your money, how long you have to spend it, what you do and say, whether you your fancy new EV will let you drive in the morning, and most vitally of all, the ability to add to their powers at will simply by writing a smart contract.
With all of these invasive systems of surveillance and control being rolled out onto a single platform, or at the very least, interoperable platforms, it seems to me impossible these won’t become interconnected – after all, that’s what interoperable means.
How do you escape this? You know that already.
Thank you for listening.