79
Duvel
793b77b208bf4feab1a9f3050a2f7a5167b0db2c9e801e74a4d19b8747a40614
Bitcoin Education
Replying to Avatar Max

I finished the second version of my book!

## The Praxeology of Privacy

### Economic Logic in Cypherpunk Implementation

Austrian economists theorize but cannot build. Cypherpunks build but lack theory. This book synthesizes both traditions into a unified strategy for making the state irrelevant.

Three axioms. Twenty-one chapters. One conclusion: cheap defense defeats expensive attack. When theft becomes unprofitable, the state withers.

Public Domain. v0.2.0. Published on Nostr.

Thanks a lot to Stephan Kinsella and Eric Voskuil for their tough feedback on the first version, please join them in demolishing the logic of this second edition and help me make the arguments better!

---

Table of Contents

Preface

Austrian economists theorize but cannot build. Cypherpunks build but lack theory. This book synthesizes both to make the state irrelevant.

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Part I: Introduction

Chapter 1: The Nature of Privacy

Privacy is selective disclosure, not hiding. Breaking adversary observation through the OODA loop is strategic defense. Cheap privacy defeats expensive surveillance.

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Chapter 2: Two Traditions, One Conclusion

Austrian economics and cypherpunk practice converge independently on privacy's importance. Theory explains why; code demonstrates how. This book synthesizes both traditions.

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Part II: Philosophical Foundations

Chapter 3: The Action Axiom

The Action Axiom proves privacy is structural to human action. Deliberation is internal; preferences are subjective; information asymmetry is inherent.

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Chapter 4: The Argumentation Axiom

Argumentation ethics demonstrates self-ownership through performative contradiction. Denying it while arguing presupposes it. Privacy rights follow directly from self-ownership.

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Chapter 5: The Axiom of Resistance

The Axiom of Resistance assumes systems can resist control. Mathematics, empirical evidence, and similar systems support this well-grounded but non-self-evident assumption.

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Part III: Economic Foundations

Chapter 6: Information, Scarcity, and Property

Information is non-scarce and cannot be property. Privacy is protected through self-ownership, physical property rights, and voluntary contracts, not intellectual property.

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Chapter 7: Exchange Theory and Privacy

Privacy enhances exchange by protecting deliberation and enabling negotiation. Surveillance distorts prices and chills transactions. Better privacy means better functioning markets.

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Chapter 8: Capital Theory and Entrepreneurship

Privacy infrastructure is capital requiring present sacrifice for future capability. Entrepreneurial discovery drives innovation. Markets coordinate heterogeneous privacy tools most effectively.

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Chapter 9: Monetary Theory and Sound Money

Sound money emerges spontaneously from markets, not decrees. Bitcoin implements digital soundness with fixed supply and censorship resistance; privacy requires additional tools.

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Part IV: The Adversary

Chapter 10: Financial Surveillance and State Control

Financial surveillance enables state control through observation. CBDCs complete the architecture. Privacy breaks the OODA loop at observation, making theft unprofitable.

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Chapter 11: Corporate Surveillance and Data Extraction

Corporate surveillance extracts behavioral data for prediction products. State and corporate surveillance are deeply entangled. Markets are responding to growing privacy demand.

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Chapter 12: The Crypto Wars

The Crypto Wars pit states against privacy technology. Mathematics ignores legislation. Developers face prosecution. The fundamental conflict is permanent and intensifying.

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Part V: Technical Implementation

Chapter 13: Cryptographic Foundations

Cryptography provides mathematical privacy foundations: encryption, hashing, and digital signatures enable trustless verification. Implementation bugs and human error remain the weakest links.

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Chapter 14: Anonymous Communication Networks

The internet leaks metadata. VPNs help locally. Tor distributes trust through relays. Mixnets defeat global adversaries. Choose tools matching your threat model.

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Chapter 15: Bitcoin: Resistance Money

Bitcoin solves double-spending without trusted third parties. Sound money enforced by code. Base layer privacy requires additional tools like Lightning and coinjoin.

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Chapter 16: Zero-Knowledge Proofs

Zero-knowledge proofs enable verification without disclosure. SNARKs, STARKs, and Bulletproofs make different tradeoffs. Deployed in Zcash and rollups; broader adoption developing.

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Chapter 17: Decentralized Social Infrastructure

Nostr solves identity capture through cryptographic keys users control. Relays compete, moderation is market-driven, and the protocol extends beyond social posts.

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Part VI: Praxis

Chapter 18: Lessons from History

DigiCash, e-gold, and Silk Road failed through centralization and poor OPSEC. Bitcoin succeeded through decentralization, open source, and properly aligned economic incentives.

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Chapter 19: Operational Security

Operational security prevents adversaries from gathering compromising information. Threat modeling guides defense. Human factors are the weakest link. Perfect OPSEC is impossible.

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Chapter 20: Implementation Strategy

Start with honest assessment. Build progressively from basics to advanced. Find community. Privacy is not a destination but ongoing practice. Progress matters.

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Chapter 21: Building the Parallel Economy

The parallel economy grows through counter-economics. Cheap defense defeats expensive attack. When theft becomes unprofitable, the state withers. Build. Trade. Resist.

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Wow, a whole book on a great topic written on Nostr. Congratulations! I'm going to read this.

"Where you can, stop feeding what you oppose."

"... predatory systems survive on compliance."

"Systems that lose participants lose power."

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I knew about Lynx, but not about Dillo. Thank you for sharing! I'm currently using it to just read articles without all the tracking scripts and other nonsense involved.

Thank you for sharing. I couldn't find a link to the source code

True, the opposite is also true: in large groups, people become very stupid, no matter how smart they are.

Every hardware wallet has this issue at some point. Can your heirs use your hardware wallet in 15 years? They'll need so many firmware updates that the device will probably be unusable. So they'll need to buy a new one, anonymously, if the product still exists or it doesn't have a "feature" that "conveniently" separates your seed into 3 parts and shares it Edith3 different companies, like Ledger did.

Seems something like a SeedSigner is much more future proof and doesn't have firmware vulnerabilities issues.

Very good move!

My main concern is when you sell parts of your bitcoin, e.g. for cash, are you required to explain where and who the money went to? You can't do this when selling it for cash. I haven't heard anyone taking about this.

Let's say you've sold, that means you have less bitcoin. When doing the yearly income taxes the number of bitcoin you enter has decreased. Will that give issues, inquiries or not?

The whole thing is bullshit because when you've sent it to another address, you could have sold it or you could have sent it to your own wallet.

What is your strategy for this? Would love to haar your thoughts on this.

I would say buy bitcoin in-person for cash. Don't use the banks! Build a network of people you trust to buy and sell amongst each other.

Thanks for sharing these. This should never be forgotten and should be saved. Ideally with the full article. They could rewrite history by deleting Google cache, deleting articles and archive sites.

It's probably financial privilege and not knowing anything about Bitcoin, other than the price, that they won't buy it, except for all the crash coins.

"It's not money" is interesting. Banks hof claims on currency rather than money, where currency does not have a store of value.

It's a big tradeoff to make. You get privacy but you also get custodial, so you have to completely trust the ones running the mint. What if you run the mint with people you completely trust or it's inside a community? On the other hand, people could just join a mint and could end up losing their bitcoin because of scamming of the ones running the mint.

It would be great if we didn't need to run a cashu mint or a mixing service but just with a bitcoin transaction e.g. or another simpler development to come.

I'm not familiar with Blossom servers, but I know they're used to serve media from for Nostr. In the slide it mentions distributed blobs. Does this means it uses the bitTorrent protocol?

The development for the Linux kernel uses git and email. That is also aan option if or when Github goes rogue.

Replying to Avatar L0la L33tz

Since a fair amount of people on the Internet seem to have below average reading comprehension, here's the gist of Luke's softfork, in the author's own words.

First, to all the apologists claiming that Dashjr has nothing to do with this softfork, he’s literally credited as the original author of the proposal in the BIP, and has publicly stated that he assigned the BIP number.

Second, the softfork proposal is literally *intended* to cause a chain split by the author’s own description with the retroactive activation, describing it as “an important part of its purpose: to keep the illegal content storage out of Bitcoin.”

Third, while the softfork is described as temporary, both the author and Dashjr prodigee Bitcoin Mechanic state that if the fork is activated, there is likely consensus to prolong the fork, which would necessitate ***any other update to Bitcoin to be a hardfork*** because ***the proposal removes most softfork update hooks***.

Lastly, the author uses the notion of legal threats to node operators to coerce activation, stating that “this BIP specifically targets forms of spam that are so legally toxic that having even a single instance in the chain represents a significant legal liability for users who run nodes”.

This notion has been publicly endorsed by Dashjr, who claims that “a counter-fork to reject BIP 444 would mean explicitly protecting and enforcing the distribution of child p**n.”

Note that none of this is even getting into the coin confiscation risks which we touch on in the article, the incentives for a 51% attack, or the fact that arbitrary data can *still* be stored on Bitcoin even with the softfork, which other people have raised in response.

Anyone who writes that ***”there is no time for careful deployment”*** when wanting to push an upgrade to software that secures a Trillion Dollar asset cannot honestly be taken seriously.

Any Knots apologist responding to this post will be called a liar.

Fork your mother if you want to fork.

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When discussing the Bitcoin blockchain and its implementation, the terms legal, government or compliance are to be ignored completely, in my opinion. It was created to operate outside government control. Seems an attack to me.

How does that work? Let's say you have an internet connection and bluetooth on in a country that is not Jamaica, how would you be able to connect with people in Jamaica with Bitchat?

i want each meetup to run their own mining pool

And I see the path to get us there.

Sv2 - https://github.com/stratum-mining/stratum

nostr:nprofile1q9z8wue69uhnvmr9dp58jernwf6xsct8d45hxdn4w5m8gatrdej8v7nhxa3h2cnsw94ksanc09unw6n0d9hkxdp4d44hxu35v4skgtn0de5k7m30qy88wumn8ghj7mn0wvhxcmmv9uqzq44xkafh8j8hhy79809wsmv0lw46nu4pkwqjyp20ekml80mytde8phfu08 - https://github.com/Start9Labs/

Iroh - https://www.iroh.computer/

BitAxe - https://bitaxe.org (256 Foundation!)

Exergy Heating - https://exergyheat.com/

I love it!

How does Iroh fit into this?

This is too funny because it's so true.

Replying to Avatar Beautyon

You are conflating terms and misusing English. You even do it in the question itself when you say “possession of the seed phrase”.

You can understand that if you steal a car, you don’t own that car; similarly knowing a secret doesn’t mean you own it.

The problem here is that if you start using the correct language, and accurately, your whole mental framework that’s been handed to you to contextualise bitcoin is destroyed.

No Bitcoin user owns UTXOs. UTXOs are database entries that your private key can be used on to make a signature using someone else’s public key. All UTXO’s are copied in tens of thousands of places; by no stretch of the imagination does anyone own them.

This is like saying because you have a copy of “The Godfather” on your hard drive that you own the copy. You have a copy, you don’t own the film. It’s exactly the same with Bitcoin. You control your private keys that are strings of characters. That string can be used in a mathematical function to produce a mathematical result. Information works differently to physical matter.

No one “owns” math or any string of characters; exclusive use of a secret string of characters is not “ownership”.

https://medium.com/@beautyon_/the-bitlicense-is-a-bad-idea-that-must-die-cb413c076d85

Bitcoin is special because it makes it trivially easy to conflate and superimpose ownership analogies on mathematically generated strings that have utility in a single context. Normal people need analogies to interface with almost everything in modern life, especially where software is concerned.

“Self Custody” is a multi layered analogy set, designed to help you understand how a Private Key works in the Bitcoin context without referring at any time to math or signing processes or the chain of blocks, or databases other people’s Public Keys or anything to do with the actual processes involved with who gets to sign messages and their in context meaning.

Bitcoin is never owned; it’s an entry in a massively replicated public database.

Bitcoin is never sent or received. It is reflected in the public database.

Bitcoin is not money. It is a database.

None of these absolute facts have any bearing on Bitcoin’s utility; analogies are used to help you understand and accept bitcoin as a full replacement for fiat currency and banking services.

Without this contextual help, no member of the public would accept Bitcoin, and in the end, if people can’t use Bitcoin without the need to understand it, it will never change the world at scale.

Thank you very much for taking the time to write such a comprehensive answer. Your examples has made it clear to me that you indeed can't own bitcoin. If you can't own it, how can you take self-custody of it?

Maybe you can say that you have access to a specific set of UTXOs and nobody else has.

Replying to Avatar Joyce Dawn

Want to start a #Bitcoin circular economy in your town?

Here are the biggest lessons I learned building one in mine.

The hidden obstacle that stalls adoption:

🌱

The hardest part of building a Bitcoin circular economy isn’t technical.

It’s social.

Wallets and Lightning are easy.

Making business owners feel safe? That’s the challenge.

🌱

Many business owners aren’t against Bitcoin. Many are curious. Many even like it personally.

But hesitation sets in when they think about going public and associating their business with it. They worry about how it will look - if they’ll face backlash, if people will label them unfairly.

This is the obstacle that quietly stalls adoption.

🌱

They worry:

• “What will my regulars think?”

• “Will people assume I’m political or extreme?”

• “Will there be backlash in the community?”

• “What if there are risks I don’t even know about yet?”

Even if they like Bitcoin personally, that mix of social pressure and uncertainty often keeps them hesitant.

🌱

The story you tell matters.

The narrative matters.

If Bitcoin is framed as “radical,” “political,” or “anti-system,” most merchants back away.

If it’s framed as local money that keeps value in the community and strengthens small business they lean in.

Adoption feels cooperative and positive, even patriotic.

🌱

In the Comox Valley I took action to overcome this hurdle by making adoption feel safe, friendly, and local.

Merchants aren’t “taking a risk,” they are joining the Comox Valley circular economy - a supportive network that celebrates local businesses.

• Branding is friendly and familiar, which softened Bitcoin’s image. Builds a familiar community brand people learn to trust, and are proud to be a part of.

• Merchants join as part of a circular economy - no one feels alone.

• I lead with community-first language (“keeping value local”) (“circular economy”) before saying Bitcoin.

• Merchants can start privately, then go public when confident.

• And when they do, celebrate them - so visibility feels like support, not exposure. And it shows others it is safe to join.

With friendly branding and positive language, Bitcoin doesn’t feel political or foreign, it starts feeling like community.

🌱

Celebrating new merchants isn’t just recognition - it’s visibility.

Most businesses aren’t waiting for better wallets. They’re waiting for proof it’s safe. Proof that others like them are already doing it.

When a familiar business accepts Bitcoin, two things click:

Normalization - Bitcoin stops feeling fringe and starts feeling ordinary.

Social proof - “If they can do it, so can I.”

This flips psychology fast. Even a town that feels against it can swing almost overnight - if just one or two respected businesses lead the way.

Visibility doesn’t just spread the word.

It turns hesitation into confidence.

That’s how circular economies begin.

Create a local group to proudly share and promote businesses accepting!

Give these businesses even more value for joining!

🌱

One thing I found crucial:

When talking with merchants and community members, I never frame Bitcoin as “against” anything.

Not against banks.

Not against inflation.

Not against the system.

I always speak in the positive:

• Local value staying local

• New customers walking in the door

• Community loyalty and pride

• Networking and community cooperation.

Bitcoin adoption grows fastest when it feels like an opportunity - not a confrontation.

🌱

The Takeaway.

If you ignore this obstacle, adoption stalls. If you plan for it, you can make merchants feel safe, supported, and even proud to go public in your community.

The way to do that is simple: step back and observe your community. Every town has its own barriers and dynamics - address those first. Don’t try to “get everyone to use Bitcoin.” Instead, focus on creating a circular economy that genuinely benefits the people around you. Pour value into that, and let Bitcoin be the tool that beautifully facilitates it.

🌱

These are the dynamics I observed in the Comox Valley.

Other towns will be different, but these principles are universal.

Bitcoin isn’t just software.

It’s social infrastructure.

🌱

Remember the real objective, center and align yourself and your approach with it often.

It isn’t just to get businesses to say yes to Bitcoin.

What is your goal? Get clear on that.

My goal: building communities and people that embody what Bitcoin teaches - patience, responsibility, truth, abundance, and voluntary cooperation. Giving people the tools to learn the deeper lessons Bitcoin teaches.

Each circular economy is a living node in the greater Bitcoin network.

I want to support you in your town!

Circular economies are where Bitcoin stops being theory and starts shaping the world with hard money.

-Joyce Dawn

Fantastic insights! Thank you for sharing :-)

I downloaded it, installed and opened it, but the location sharing is holding me back. I thought only Bluetooth was necessary.

The link refers to a 404. Is there another link?