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Tornado Cash a Thorny Issue – Freedom and its Cost

For anyone paying attention to the crypto universe at all a little while ago OFAC sanctioned a smart contract on Ethereum that allowed individuals to… obscured and hide their transaction… (or) to gain privacy and protect themselves from undo spying (depending on how you look at it). There are a lot of details about this that have people still talking weeks later, lots of fall out that may be more impactful than the sanctioning itself but I wanted to talk about it as a fundamental example of freedom and cost.

There is a pat saying out there, “Freedom isn’t free” which if you hear a saying enough it starts to sound dumb and meaningless, but that saying is so fundamentally true its hard to emphasize how important it is to understand and then talk about.

I think too often in our society we talk about surface level things, all the while each of us have huge underlying assumptions that make having a productive conversation almost impossible. One of these underlying conversations is how important is freedom and how important is it to you.

The first point of discussion is accepting that freedom has a price. I think all of us accept that, but it applies everywhere, not just on soldiers fighting for a country’s freedom, it applies to the fact that because your friend has freedom they may chose not to come to your important even… their freedom to do what they want causes you the pain of rejection. It applies to your relative who has chosen to take a bad path in life, and the spill over that hurts themselves and everyone around them. It applies to the car accident that you passed on the highway, the freedom to own and operate that car, the inherent freedom, despite there being laws, to chose to obey them or not. Freedom has so many profound costs, costs most people don’t realize they are due to freedom.

For some these costs are too high, and if they could they would try to force others into a world they believe would be better. We have many many many laws which attempt to control people and bring them in line with what we believe is the best compromise between freedom and control. The problem is most people don’t see these laws and restrictions as a compromise between freedom and control but just as a way of fixing the “problem” which many times is just the cost of freedom.

So how important is Freedom? Depending on your philosophy it is either the most important thing there is, or just an illusion that is maybe nice to have but secondary to almost everything else. In practice almost nobody has an overarching philosophy on this that they live by, but just proceed on gut and kind of fall between these two extremes with inconsistent application. I fall towards the side of freedom for many reasons that I won’t go into here, but given I think it is very very important it must then follow I am willing to pay a high price for it.

Let me bring this back around to Tornado Cash. This application has allowed North Korea and other not good people to hide money that they have stolen. That is bad. Tornado Cash has also allowed many individuals move money around so that, given the nature of blockchains, literally the entire world can’t see what you own. Can you imagine if everyone could see your bank account, you could have nothing embarrassing what so ever in there and I still think most people would not want that as public information. By sanctioning Tornado Cash the government has placed people’s freedom subordinate to North Korea. People’s legitimate right to not have everyone know about everything they do, their freedom, was cut off because of the actions of an outside nation.

This incident points to a much larger issue in the world and particularly in the United States. The government had determined that freedom can be sacrificed in order to make their jobs easier to fight crime and pursue international goals. The Bank Secrecy act has a very similar vibe, where at anytime your bank can report on your transactions to the government if they feel they seem suspicious, it sounds like some joke in America who supposedly values freedom and privacy so highly, but its true and is an active program. There are also plans to automate this reporting system…

If you value freedom, if you understand their is a cost to your freedom these things, and the sanctioning of Tornado Cash, the Bank Secrecy act, the anti-money Laundering rules, etc., etc., should deeply disturb you. Our freedom is slowly being eroded, not for our safety but because the government wants an easier way to do its job. Now if freedom is not that important to you then, this might be a nice victory against… countries that restrict freedom… hey wait what? 🙂

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