Amir Taaki's Ongoing Crypto Revolution

This post is part of CoinDesk's 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Amir Taaki created libbitcoin, the first alternative bitcoin implementation, and has worked on the wallets Electrum and Darkwallet as well as privacy markets and decentralized technologies. He founded the Autonomous Polytechnics.

Amir Taaki thinks crypto has lost its way. But this isn’t exactly new.

One of the first programmers to work on the bitcoin source code, Taaki split from the group of core developers to build the first independent implementation of bitcoin. Libbitcoin was intended as a springboard for a new community of cryptographers organized around a set of ideals.

He moved to Calafou, an autonomous post-capitalist colony in Catalonia, Spain, and started a hacklab. It’s here Taaki incubated a number of projects, including Bitcoin Magazine, and upstart coders, like ethereum’s creator Vitalik Buterin.

Taaki has been saying for years technology can only succeed if guided by ideology. This was the principle behind Darkwallet, an attempt to anonymize bitcoin. Likewise, political revolutions need a technical arm. In 2015, Taaki travelled to Syria as a freedom-fighter with the Rojavan militia, where he spent time on the battlefield and working on civilian projects.

The crypto scene Taaki returned to a year later was flooded with cash. Though the real affront was 2017’s bull run, which saw billions of dollars come into the industry. Watching this misallocation of capital has informed Taaki’s thinking today.

“People say we’re going to change the world, get a million dollars and have fun while we’re doing it,” Taaki said. “No. Making money, changing the world and having fun are separate things. You must make a decision about your priorities.”

Alternatively defined as an anarchist or democratic confederalist, Taaki has put politics at the center of his life. In a sense, this word is too large and too small to define his vision. His political aims include the dismantling of nation-states as well as organizing local, self-sovereign communities.

For CoinDesk's Year in Review series, we called Taaki in his Barcelona-based bunker, where he’s establishing the Autonomous Polytechnics academy. The project is envisioned as a training center for revolutionary technologists, where ascetic hackers will learn philosophy alongside python. Announced in 2018, Taaki is still looking for more funding.

How has the Autonomous Polytechnics project progressed?

Slowly, but it’s been going. We’re now nearly finished. I need another $40,000. I’m trying to find the right people to put [it] down. We have a whole bunch of projects and events next year to prepare for.

Do you currently have pupils?

Just a few people around in general. But we don't have the capacity to start on-boarding people onto projects or have interns. I have a few projects that we’re doing and I need to get them to the prototype stage. But my capacity is limited right now, and I have a lot of pressure because I’m invested in a lot of things.

Your fundraising has been going on for a while.

It’s difficult to make people invest. The problem with crypto is there is no wider level of organization. There are a lot of provincial companies that are short-term focused, so it’s been difficult to get people to invest in things that have a macro advantage. That’s why I have to start businesses to bring in income to fund things that matter.

Having come back from Asia, and seeing the huge amount of capital flowing around, made me realize how insane resources allocation is here. It’s massively inefficient. There are projects with too much money that don’t produce anything of value. And there are people with talent without business acumen, who are getting fucked by the ecosystem.

This touches on something I wanted to ask. You originally wanted to set up Autonomous Polytechnics in Greece, but you had issues with the culture. How can decentralized projects thrive when there are such great differences between communities and countries?

Well, the main reason I moved from Greece was because I needed to be in Western Europe to be able to do projects and interact with people. Greece is too out of the way, you might as well be in the Middle East. Long term, we want to open up places in Latin America and Asia. And after a while, Russia and the Middle East.

Why would you start with Latin America and Asia?

There is a huge amount of opportunity in Asia, so it’s important to be embedded in that market. And Latin America, simply because it’s a political gold mine. We have to be prepared in order to take advantage of that. There’s also a lot of talent there. There needs to be a systematic organization. It’s no good doing things ad hoc.

What do you make of the recent events in Bolivia.

It was a coup. When news like this happens, I think there is interest by people who say crypto is growing. But a lot of times, I think they are trying to manifest it through news. There are journalists whose shtick is to write about these things and are constantly searching for them, so it becomes a self fulfilling prophecy.

But I think these events were a big missed opportunity, that no one was prepared with analysis beforehand or an organized group to take advantage of the events.

Let’s say you were on the ground in Bolivia when the coup happened, how would you achieve your political aims?

I think before we get on the ground we need to think about the steps we need to take. An interesting segue into this is to talk about crypto.

I don’t buy the institutional money narrative: that big money will come into crypto and that’s when it’ll take off. Crypto already exists. There is a huge market where huge amounts of money are being moved around. It’s relatively small compared to traditional finance, but it exists. Most of that is gray or black money and is diametrically opposed to traditional financial markets.

Traditional finance is a giant cartel, where people own different niches of the market, and they all collude.

Traditional finance is a giant cartel, where people own different niches of the market, and they all collude. These people use offshore havens to hide their wealth. States are putting pressure on the practice and audits are happening, but people are finding smarter ways to hide their money. They’re setting up financial infrastructure, and moving from the realm of finance into politics.

We [in crypto] have to think, not in terms of markets or money, but holistically, in terms of power. What is the nature of power? It has a physical coercive aspect. A financial aspect. An organizational aspect. A technological aspect. Even a philosophical or socio-cultural aspect.

Right now, the political consciousness within blockchain is so low, it’s unable to respond to the challenges or opportunities it faces. Yeah, ok, there are a few crypto rich with yachts and lambos. But it’s limited in its vision. The old money, the old wealth, have the entire systems to protect their wealth. We have to think at that level, how to maintain and secure power.

Before our call you sent a report by MEMRI about how terrorists are using cryptocurrencies. Should we be worried?

Terrorist groups are making use of bitcoin, ethereum, monero and zcash to raise donations. Any militant group across the world can send money to their hubs. No state can stop that. That's the reality. It's a kind of fantasy we’re living in that the crypto market will bring peace. We’re in a period of transition in global humanity that will be incredibly violent. America is losing its hegemonic status. Russia and China are working together in the arctic to lay claim. In between will be proxy wars and new frontiers. Those will be opportunities if we’re prepared. We already have the financial and technological power to leverage.

What does this mean for privacy coins?

The delisting of monero off exchanges and the deanonymization of mimblewimble are another big story this year. I've argued for a long time that monero and mimblewimble are not anonymous. On Twitter there’s a whole thread with Fluffypony. These are the first generation of crypto coins. At some point there will be a crypto that is purely anonymous, fast and scalable (where you can run a whole node on a mobile). That’s the holy grail of crypto and we’re getting closer every day.

Bitcoin is a legacy system. There is no good alternative at this point, but it will be replaced.

You also wanted to talk about Libra.

People don’t realize how much of a threat Libra actually was. I’ve read their technical specs, and it’s a well-designed system. We almost lost the narrative. We’re actually very lucky the U.S. Congress responded with a resounding no. We have to start organizing, our communities are too passive and think they don’t have to do anything because crypto is an inevitability. Technologically speaking, we need to develop.

It’s like Linux, the promise of an "operating system made by people for the people." There was a time when free software was a principle, and everyone knew that Microsoft was shitty. What happened was MacOS came out of left field and took over the market. We missed the opportunity. This happens across history, where idealists have an idea, are unable to organize effectively and some organized group comes along and takes the initiative from them.

If you look inside the ethereum community, it’s entirely captured. It’s because the Ethereum Foundation has no foresight. The project will probably fail. It’s certainly not going to live up to expectations.

Have you heard of the tyranny of structurelessness?

They say it’s decentralized and nobody is in charge, but really there are people in charge. If you don’t create a system for people to acknowledge or challenge power, or a system to onboard people to create new leaders of the future, then what happens is people invade your open community and seize the narrative. They use their greater resources to attract talent into their silos. That’s basically happened to ethereum. They don't know how to respond except by becoming more authoritarian.

Your relationship with Vitalik has been widely reported. Have you voiced your concerns to him?

To be honest, Vitalik has low social intelligence, so he surrounds himself with sycophants. He hasn’t stepped up to his leadership role.

That’s the consequence of a poorly thought-out system of organization. The first generation of blockchain organizations will die off in an extinction event. There was a period that opened and a group quickly grabbed the mic and threw code together. But they’re bumping up against their own limitations because they didn’t invest any time or energy or resource into developing their thought or vision.

Any technology requires huge amounts of organization between many people to create complex system. It’s not just individuals in a marketplace throwing together random code. It requires planning and strategy. There's a window opening. Do we want to be minor players? Do we want to be a joke? Or do we want to be a global power?

Right now, the community is a bunch of kids.

Why do you suspect that is?

It’s like an army. You have foot soldiers, a commander working on the tactical and operational level and a layer above that, a general, thinking in macroscale movements. When developing a company the CEO is a visionary, he doesn’t need to micromanage because it doesn’t scale. That way of thinking is not being nurtured in the crypto industry. Especially not in bitcoin or ethereum. That’s why they’re failing to efficiently allocate resources. It’s easy to work on many things, but if you’re not able to discriminate what’s higher priority you’ll get sucked into lower hanging fruit.

Like at crypto conferences: It’s unprofessional. You have to hang around for hours and go to parties to talk to one guy. They should just be having meetings where we can directly discuss things we need to do. But there’s this bleeding between public and private life. People say we’re going to change the world, and get a million dollars, and have fun while we’re doing it.

Making money, changing the world, and having fun are separate things. Make a decision about your priorities.

No. Making money, changing the world, and having fun are separate things. Make a decision about your priorities. It’s a fantasy.

Are there any people in the industry you’re inspired by?

I don’t know if they want to be named. Outside of crypto, to be honest, politically, all the interesting things are happening in the right wing. Steve Bannon [former head of Breitbart News] is really interesting. How he got Trump elected, and then went to Europe to meet with [Nigel] Farage about Brexit. I think Brexit is a good thing. It could lead to the breakup of the United Kingdom. Scotland is saying it wants a referendum. I think that’s a great result: the balkanization of power.

We’re on a precipice, and Bannon knows where to push strategically and tactically to create a change. The biggest problem in Europe is not about redistribution of wealth, or more welfare or benefits. People are sick of benefits and welfare. People want dignity. People want to be a part of a community. And doing meaningful work and providing for people. There is a deficit of democracy and local power. People don’t have sovereignty or destiny over their lives. That’s not being addressed by the left. The rightwing is coming in with a moralistic message.

I think there’s a risk of you being misunderstood here. Can you create a system of strong nations or support balkanization while preventing a resurgence of fascism?

On the one hand, there’s nationalism. Then there’s patriotism, or the right to be culturally different. In my opinion, there’s nothing wrong with culture or community or the concept of a nation that’s bonded by a culture, language or a way of life. That’s what creates social bonds. Someone that doesn’t have a patriotism feels a kind of estrangement from society. Nationalism is different, chauvinist, like a football team organized around a flag. It’s about domination and exclusion. Nationalism is a caricature of the nation.

There may be another contradiction we should address. You’re supportive of dark markets that remain outside state control, but are fearful of terrorists financing themselves with crypto. How can you have one without the other?

I’m not fearful, I’m saying this is a reality the world has to face. Making an omelette you crack a few eggs. I think the state is one of the most harmful things to human dignity. The western idea of the nation-state has outlived its moment. It’s the construct that’s enforcing order on the world right now. And when it is eroded, you’re taking the lid off a pressure cooker. There are things that will emerge that are unimaginable for us to deal with right now. The longer it's out of sight, the worse it gets. You can kick the football 20 years down the line, but something will happen. Some of this will be forced by upstart geopolitical powers like Russia, Hindu nationalists in India, Islamic terrorists, neo-fascists in Ukraine, unrest in Chile, financial disorder in Venezuela, coups in Bolivia. We’re living in unstable times.

That’s why I'm talking about crypto-communities.

What are you working on?

I’m really interested in anonymous crypto-systems and systems for anonymizing cryptocurrencies. I have a cryptographic scheme for an anonymous cryptocurrency. The thing is, we don’t have the money to hire cryptographers to revue the math, that’s why I’m starting a smaller project on how to anonymize currencies before developing one. Longer term, we’re looking to anonymize cryptosystems in general and creating a platform for apps to apply the tech towards that.

Right now, my main focus is the academies. It’s a two-part system. The first is polytechnics to train people in philosophy and technology to solve problems and do research. The second is the business component, focused on dark tech. We’re creating an incubator and trying to find people to onboard and fund the training.

There are so many young people in crypto who understand blockchain’s role in the future, but don’t have space where they can explore ideas or develop. They end up doing slave work for companies. A lot of crypto projects have a start-up mentality to get loads of money to pay for the best developers, which is inverted. What you should be doing is developing communities, filtering people from your communities and developing and nurturing people within.