The Back of the Envelope (a blog)

How to Build Decentralized Twitter

prestonbyrne

Elon Musk’s (apparently successful) bid to acquire Twitter has resurrected longstanding discussions in the cryptoverse regarding, at least to date, a largely theoretical product category: “decentralized social media.”

Just as Bitcoin is censorship-resistant money, the theory goes, so too can we use Bitcoin-like infrastructure to run censorship-resistant social media applications! Technically, a proof of concept at least is certainly possible. I should know; back in 2014, Casey Kuhlman, Tyler Jackson and I proposed a DAO called “Eris” that was basically a distributed version of Reddit that could run on a blockchain back-end (Ethereum POC 3, to be precise).

We built this in May of 2014 – 8 years ago. Notice the “my DAO” button in the upper right hand corner? At the time people thought we were completely insane.

Whilst that prototype went nowhere as this all happened in 2014, a time when the market couldn’t tell the difference between a smart contract and a pop tart and “DAO” was mainly something discussed among adherents of Confucianism, today a number of new entrants are having a crack at this same problem. Given my longevity in the Bitcoin/Blockchain arena I confess it is tempting to slap together a pitch deck and raise $20 million pre-seed pre-product to build the damn thing, given how much venture money is currently sloshing around. Fortunately for everyone, after my last startup I swore an oath to never attempt to develop or sell software again, so I will remain in my law office where I belong.

Designing a prototype, as we did, is admittedly a lot easier than designing something people actually want to use. Even on easier “web 2” tech, there are thousands of social media apps, yet only a handful are consequential. Creating a social media app is trivially easy, but running a successful social media business is extraordinarily hard.

Prior attempts at “decentralization” have fared poorly. The most successful attempt so far, Mastodon, is a federated service, albeit an imperfect one where individual instances do not scale well (as Donald Trump’s company, Truth Social, discovered when they forked Mastodon to try to shortcut their way to social media stardom, only to find Mastodon’s back-end couldn’t handle their traffic).

By the same token (pun intended), dumping every communication onto a blockchain and storing everything in the clear, as Bitclout does, is easy, but completely non-scalable. Facebook does not require agreement on global state and allows people to delete their data; furthermore, Facebook generates over 4 petabytes of data per day. Any system that tried to ape Bitcoin (like Bitclout) would quickly be relegated to a handful of nodes running in data centers, like Ethereum is.

There are legal problems as well. Social media companies, as it turns out, are subject to a bevy of regulations. With the exception of data privacy, these regulations are generally uniform across the United States and otherwise vary country-by-country. The rules govern the destruction and reporting of illegal content, copyright issues, data protection, and mandatory disclosure of subscriber records, among other things, in the United States. All these factors need to be accounted for in any “decentralized” social media application’s design.

Unlawful content.

The problem of unlawful material has long been identified by lawyers looking at decentralized storage solutions as a major obstacle to adoption of these services.

In the United States and across the world, the most uniformly illegal content in existence is child sexual abuse material, or CSAM, as it is referred to by law enforcement. Despite the fact that the penalties for knowingly hosting this material are extreme, ranging from heavy fines to lengthy terms of imprisonment, the crypto industry’s response to this very longstanding Internet problem has more or less been to completely ignore it.

Web2 applications which host user-generated content, such as Reddit, Twitter or Facebook, take a very proactive approach to this type of illegal material. Federal law requires “providers” – a term which means “an electronic communication service provider,” which likely would be understood by a court to describe both blockchain node operators as well as traditional, centralized service providers – to remove CSAM on discovery, securely preserve it for 90 days pending receipt of legal process, and then securely destroy it. Facebook and others use a wide range of software, including Microsoft’s PhotoDNA, to detect, remove, and report CSAM automatically.

Overseas, where there is no such thing as the First Amendment, even broader categories of “unlawful content” exist. See e.g. the German Netzwerkdurchsetzungsgesetz, or “NetzDG”, which requires operators of social media services to register with the government and, after reaching a certain scale, to abide by takedown requests; the French Law no. 2020-766 against hate-content on the Internet, which imposes fines for failing to remove unlawful content, including “terrorist” content, within one hour of posting; or Section 5 of the Defamation Act 2013 in the United Kingdom, which has a notice-and-takedown procedure for alleged defamation similar to the U.S. DMCA.

Where services like Reddit and Facebook are very responsive to all the above requests and requirements, many blockchain-based services, like StorJ or Sia, to my knowledge, have no such controls (or only very limited controls).** They permit the storage of encrypted data without the creation of a subscriber record or the means for the service provider – in this case, the node operator – being able to ascertain what data is being stored or assess the legality of storing it.

It is probable, and I would suggest even likely, that decentralized data storage services are currently being used to host unlawful content, likely without the knowledge of the node operator hosting it. This level of willful blindness would be a complete non-starter for a “decentralized” social media app, which must be designed in such a way that an otherwise law abiding user can participate in the network while being secure in the knowledge he or she is not violating local law. So far, no blockchain solution with a storage component even attempts to address this issue. It must be addressed in any design that hopes to be successful. Nobody will run a node for a decentralized service if doing so risks imprisonment.

Intellectual property.

Similarly, our intellectual property regime is not well suited to use in decentralized fashion.

Social media node operators – being entities “offering the transmission, routing or providing of connections for digital online communications… of material of the user’s choosing, without modification to the content of the material as sent or received,” are “service providers” for the purposes of the Digital Millennium Copyright Act, publishers within the meaning of the Copyright Act, and therefore will need to consider both (a) defensively, the necessity to register with the Copyright Office to avail themselves of the safe harbor protections of the DMCA and (b) consider their own exposure for hosting material which might give rise to a copyright infringement claim.

At minimum, addressing this issue might require a decentralized implementation of the DMCA’s notice-and-takedown procedure for any third party content hosted on a node (which will involve node operators needing to dox themselves with the Copyright Office if they want to benefit from this protection). Worse, we could see copyright trolls, newly emboldened by the enormous increase in possible unsophisticated defendants, ravaging node operators in repeated bad-faith attempts to extort small dollar settlements. In the alternative, the application could be designed so that users don’t host images or video – being the types of copyrightable subject matter which is most often used by vexatious copyright enforcement law firms – at all.

It is difficult to speculate what kind of infringements and enforcement one might encounter in a communications medium which does not yet exist. Judging from what we see in Web 2, however, the presence of copyright trolls in Web3 is a virtual certainty as soon as it becomes profitable for them to be there.

Data protection and disclosure.

A further issue arises when we consider that a person participating in a decentralized network may, in the course of operating his or her node, acquire large quantities of subscriber data.

Let us suppose, for sake of argument, a decentralized social media system is built where the network will allow a user to download the user profiles and posts of everyone who is two degrees remote from them. So let’s say I follow @A16Z and @marmotrecovery follows me, @A16Z would then be permitted to download and store my information and posts, as well as those of everyone who follows me, including @marmotrecovery. Judging from the sheer number of users @A16Z follows (half a million), it is safe to say that if A16Z ran a node on this hypothetical network it could be a “service provider” under the California Consumer Privacy Act or other local law and likely required to implement a compliance program.

By the same token, node operators may also become “providers of an electronic communication service” for the purposes of the Stored Communications Act (18 U.S.C. § 2701 et seq.) and therefore may be required to hand over records on their computers to the government without the government needing to obtain a warrant first – at least, to the extent that those records pertain to third parties which are within a node operator’s possession and control. Users are unlikely to want to run a network that invites this degree of intrusion into their personal lives. Applications will need to be designed so that they hold as little third-party data as possible on their nodes.

Some rough conclusions on the design of a future decentralized social media network

All of the issues identified above share one factor in common: social media does not require agreement on permanent and immutable global state. To the contrary, social media requires a degree of censorship and deletion. Decentralized tech like Bitcoin is designed in such a way as to render deletion impossible or prohibitively expensive. A decentralized Twitter will not, therefore, look anything like Bitcoin.

The need for content removal and moderation – whether due to criminal liability, civil liability, or simple usability – will be the single most important factor in the design of any decentralized social media system. The irony of the fact that perceived unfairness in content moderation in Web 2.0 is what is  driving calls for decentralized social media for Web3 does not escape me. At minimum, the centrality of content moderation to the social media user experience means that simply dumping everything on the blockchain, as Bitclout does, and then replicating it across every single node of the network, as Sam Bankman-Fried appeared to suggest, with onchain pointers to IPFS for everything else, is simply not going to work.

My hunch is that the first truly successful “decentralized” social media system will not try to be an all-singing all-dancing world computer but rather will have the participants replicate the absolute bare minimum viable information required for the network to function. In my mind, when using a social network, the only opinion I ask the social network to render is whether particular content was published by a particular person. I have no interest in practically any other opinion the social network has about the world. The “blockchain” piece, if any, should be relegated to providing a register of usernames and associated public keys, and very little else.

The first successful decentralized social media service is also likely to limit the kind of data users host to plaintext, for the most part.

First, hosting only text that you and perhaps a select group of followers wrote is a low-liability proposition from the perspective of criminal, copyright, and data protection law. It is also much lighter on bandwidth and will be easier to transmit peer to peer.

Second, video and image hosting, simply due to the sheer quantity of data involved if for no other reason, will likely be outsourced anyway, much as it is now. There are plenty of third party platforms (Bitchute, Cozy, Odysee, Gab TV) which have lax, but not non-existent, content moderation policies for video content. These could address the gap in the market currently served by establishment outfits like YouTube, as well as removing responsibility from node operators to police that content – something which will be especially useful if copyright trolls are to be kept off of users’ backs. All the decentralized system would need to do to serve that content is not block links to those services (link blocking being a practice that both Facebook and Twitter engage in), or allow users to control what content they see by operating their own whitelist/blacklist of third party content providers (libs could block all the right-leaning sites, and the cons could block all of the lib media, for example). The decentralized system would then become just another source of referral traffic to these websites.

I could be wrong, of course. Some wunderkind somewhere could, as we speak, be writing a 6,000-word-long blog post on a “Zk-Dork proof of shark sharding” social media proposal to be built on some all-singing, all-dancing, Ethereum-like Rube Goldberg machine which promises to solve all scaling problems by ConsenSys simply running the entire thing on AWS magic. My hunch, however, is that for this problem, simpler answers are more likely to be the right ones. “Decentralized social media” is likely to be more like RSS than Ethereum.

Whilst this sketch describes an imperfect solution to the censorship debate, an imperfect solution might nonetheless be a sufficient one. Most of the politically motivated “censorship” which occurs on Twitter and Facebook is not of images and videos, but of links to third party websites, the plain-text expression of wrongthink, and of digital identities themselves (see e.g. the unpersoning of Alex Jones).

An effective “decentralized” solution to the social media censorship problem likely needs to ensure only that text, links, and identity are uncensorable – the text and links by being self-hosted, and the identity by being ineradicable. If we frame the problem to address that limited set of issues I think a usable version of decentralized Twitter with a half-decent UX is achievable in the very near future.

Postscript

* A lawyer friend asks: “Wouldn’t someone who wants like deTwitter have the design goal of undermining censorship laws by making the network keep running despite the fact that it stores illegal content?”

It depends on what you’re trying to design for. A network that allows all lawful speech will have the exact same design characteristics, in terms of censorship-resistance against third parties, as one which allows all unlawful speech. A user should not be able to shut down any other user.

However, censorship resistance against third parties does not require censorship resistance against yourself. This is where a decentralized social media solution will differ most sharply from systems like Eth and Bitcoin, where censorship-resistance against the world includes censorship-resistance against yourself (you cannot erase your own transactions). Users will need to be more or less absolute dictators over their own hardware and their own speech, consistent with the First Amendment and the legal obligations of anyone who hooks a server up to the public Internet. If a user chooses to host illegal content, law enforcement should be able to take down that user without taking down the network as a whole. This will allow high-value speech constituting protected speech to flourish network-wide by being hosted from places like the United States while allowing, for example, threats of violence and other zero-value speech to be responded to by law enforcement.

While governments can hold people accountable for their speech in such a system, they will not, however, be able to “unperson” someone from it, either through the use of legal process or by applying unofficial pressure on private businesses – the type of pressure, I suspect, which was behind blanket bans of right-wing figures like Alex Jones or Milo Yiannopoulos from practically every mainstream tech offering which, for those of us who remember, were implemented practically internet-wide in the space of 24-48 hours across dozens of firms. This is why the only real ineradicable component of the system will be decentralized identity – as far as I can tell, there is nothing illegal about having a copy of an address book, even if some of the addresses belong to bad actors.

** After publishing this post a reader pointed out that decentralized blockchain service Sia has, in fact, begun introducing such controls, although it appears to be in a limited fashion. The controls do not attempt to tame the entire decentralized protocol but rather split the protocol into two parts – a paid service (SiaPro) and an unregulated, free service (SiaSky) utilizing separate domains, with the paid service playing by the rules and the unregulated service remaining, well, unregulated. See this post from David Vorick on Sia’s approach.

Minting the “Trillion Dollar Coin” is illegal

prestonbyrne2 Comments

…and the legal analysis claiming otherwise is so amateurish it can be refuted with a dictionary

Much has been made lately of the possibility of minting a trillion dollar coin to avoid Congressional gridlock surrounding the increase of the debt ceiling.

To be blunt, this claim is horse puckey and pseudo-legal in nature. Below I explain why.

The statute doesn’t authorize a trillion dollar coin

Congress grants authority to the Executive Branch all the time to do certain acts and promulgate certain regulations. It does this through Acts of Congress which delegate that authority to the Executive Branch.

Understanding what authority is granted, and its extent, requires us to read carefully the terms – the text – of the legal rules which govern the conduct of the Executive Branch. For example, in 2020-2021 the U.S. Centers for Disease Control and Prevention, or CDC, instituted an eviction moratorium which barred landlords of property subject to federally insured mortgages from evicting their tenants. It did so in reliance of a grant of authority from Congress.

As statutory authority for the moratorium, the CDC relied exclusively on Section 361 of the Public Health Service Act. See id. at 55,297. Enacted in 1944, this provision delegates to the Secretary of Health and Human Services the authority to “make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases” across States or from foreign lands, 42 U.S.C. § 264(a), who in turn has delegated this power to the CDC, 42 C.F.R. § 70.2.

Section 361 reads in relevant part:

The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession. For purposes of carrying out and enforcing such regulations, the Surgeon General may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.

In a similar way, Congress also delegates authority to the Secretary of the Treasury to mint coins. The relevant provision for the “Mint the Coin” movement is sub-section (k) of 31 U.S. Code § 5112, which states in relevant part:

The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

A number of adherents of an expansionary monetary ideology called “Modern Monetary Theory,” or “MMT,” and some of their friends in the media, including a pet legal academic of the movement who wrote a 75-page paper on the subject, appear to think that this statute authorizes the Treasury to mint a $1 trillion coin.

On a very cursory reading it certainly seems possible that this statute could authorize minting a $1 trillion coin, as long as the coin were a platinum proof coin. If this were the case, the Treasury could then sell to a prospective buyer and book the profits as general revenue, as indeed the Treasury does for all manner of proof coins and bullion that it issues and sells directly to the public on a regular basis.

Words have meaning, though, and I suspect the MMT crowd reading 5112(k) simply isn’t reading it carefully enough. This means that if someone “Minted the Coin” and that act were challenged, I don’t think a court would agree with them.

Let’s bounce back to Alabama Ass’n of Realtors (the CDC case) government claims of sweeping authority. In that case the CDC sought to argue that the language authorizing the Surgeon General to “make and enforce such regulations” as were necessary for the prevention of disease to authorize a nationwide eviction moratorium.

The District Court (with which the Supreme Court eventually agreed) found for the plaintiffs. Applying Chevron deference, the court first asked whether Congress had “spoken directly to the precise question at issue” – i.e., does the law in dispute do what the government says it does.

The Court found that it did not. The use of a list which governed the scope of the regulation the statute permitted – “inspection, fumigation, disinfection, destruction… and other measures” – limited the “other measures” that were allowable: such measures were “controlled and defined by reference to the enumerated categories before it,” an application of the so-called ejusdem generis canon of textual construction. The court therefore held that “[t]hese ‘other measures’ must therefore be similar in nature to those listed'”.

Put another way, the court looked to the actual text of the law and found that “[t]he national moratorium satsifies none of these textual limitations. Plainly, imposing a moratorium on evictions is different in nature” than inspections, fumigations, disinfections, etc.; and “[m]oreover, interpreting the term ‘articles’ to include eviction would stretch the term beyond its plain meaning.”

The second Chevron step is for the court to decide whether the agency’s interpretation of the statute is permissible. The CDC argued – as the “Mint the Coiners” do – that

“the grant of rulemaking authority…. is not limited in any way by the specific measures… Congress granted the Secretary the ‘broad authority to make and enforce’ any regulations that ‘in his judgment are necessary to prevent the spread of disease.'”

The court disagreed because, among other things,”[a]n overly expansive reading…that extends a nearly unlimited grant of legislative power to the Secretary would raise serious constitutional concerns,” and further that “courts ‘expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance[.]”

Put another way, the doctrine that “Congress does not hide elephants in mouseholes.”

The Court concluded:

Accepting the Department’s expansive interpretation of the Act would mean that Congress delegated to the Secretary the authority to resolve not only this important question, but endless others that are also subject to “earnest and profound debate across the country.” Gonzales, 546 U.S. at 267 (internal quotation marks omitted). Under its reading, so long as the Secretary can make a determination that a given measure is “necessary” to combat the interstate or international spread of disease, there is no limit to the reach of his authority.

“Congress could not have intended to delegate” such extraordinary power “to an agency in so cryptic a fashion.” Brown & Williamson Tobacco Corp., 529 U.S. at 159. To be sure, COVID-19 is a novel disease that poses unique and substantial public health challenges, see Def.’s Cross-Mot. at 14, but the Court is “confident that the enacting Congress did not intend to grow such a large elephant in such a small mousehole.”

So as we we can see, even where the plain language of a law would appear to authorize the nearly unlimited exercise of power, the claim of unlimited power invites us to take – as the courts would take – a closer look.

This brings us to the question of what might happen if the Secretary of the Treasury decided to read Section 5112(k), the Platinum Coin rule, as granting a similarly broad authority to mint a $1 trillion coin, as the “Mint the Coin” crowd claims it does.

How that would end is anybody’s guess, but we can have some idea about how it would play out. First, a radical Treasury Secretary, likely with the support of a radical President, would decide that it’s no longer worth his or her time to deal with an uncooperative Congress on a debt ceiling increase. Then, the Secretary, listening to some MMT-schooled special advisers in the new administration, would mint the coin and dare someone with standing – whomever that might be – to sue.

Pleadings would follow, in which the government would get cute like the CDC did in Alabama Association of Realtors. In the meantime, the challenger would argue:

  1. 5112(k) is a law which enables the Mint to mint and sell two types, and two types only, of platinum curios: “platinum bullion” and “proof platinum” coins.
  2. Trillion dollar coiners’ legal argument is that they believe 5112(k) allows them to mint, and circulate, proof coins to redeem U.S. outstanding debt.
  3. The statute does not define “proof platinum” so we have to go with the term’s plain and ordinary meaning. The dictionary definition of “proof coin” in Merriam-Webster and the OED – means a collectible, a decorative thing, means a “coin not intended for circulation but struck from a new, highly-polished die on a polished planchet and sometimes in a metal different from a coin of identical denomination struck for circulation.” In the OED it means “special coins struck from highly polished dies mainly for collectors“, with one definition dating to 1949 pointing out that “Proof coins were never struck for circulation… Proofs were first used as presentation pieces.”
  4. There is a definition of “proof coin” in 31 CFR § 92.3, but it isn’t expressed to govern the interpretation of Section 5112(k).
  5. Applying the plain and ordinary meaning of “proof coin” to the statute, 5112(k) does not authorize the issuance of proof coins for circulation, even if it such coins are made of 100% pure platinum (although if valued by weight they could be sold as “bullion” – more on that below). The use of the term “Proof Coin” requires for proof coins to be sold with the intent of being curios or collectibles, not circulating currency.
  6. “Circulation” means, in relation to currency, “the passing of something, such as money or news, from place to place or person to person.”
  7. The Trillion Dollar Coin is clearly made with the intent of being placed into circulation, even if that circulation is initially very limited (to the Fed). It, or its series, is also not made with the intent of being produced mainly for collectors, if we want to use the English dictionary instead of the American one. There is nothing preventing the Fed from selling it to someone else for $1 trillion, and so on, in the same manner as any other coinage. This is especially the case if the money bears the inscription “this money is legal tender for all debts public and private,” as some prominent MMT promoters claim it should. To describe the “Trillion Dollar Coin” as a proof coin, to borrow from Alabama Ass’n of Realtors, would be to “stretch the meaning” of “proof coin” beyond recognition.
  8. Using two of the most authoritative plain language definitions of “proof coin,” the Trillion Dollar Coin cannot be described as a “proof coin.” Therefore its production as a proof coin is not authorized by 5112(k).
  9. Additionally, even if the Trillion Dollar Coin could be described as a “proof coin” (and, to be clear, it cannot, at least if two of the leading English-language dictionaries are to be relied upon), the fact that Trillion Dollar Coiners seem to think that the power is infinite – quadrillion, quintillion, whatever-illion are all in play, they claim – is problematic. Congress does not hide elephants in mouseholes, much as was the case with the CDC and the Public Health Act. If we look at the fullness of 5112(k) (enacted in 1996) and go through the Chevron two-step, it’s clear that Congress was authorizing the Mint to produce collectibles, and not authorizing the Treasury Secretary to assume wholesale control of U.S. fiscal and monetary policy, or create unlimited money for the government’s use in such a way as to arrogate to itself the power to singlehandedly resolve “earnest and profound debate across the country” over the statutory debt limit.

A reader asks:


On the subject of bullion: as I mentioned above, 5112(k) authorizes the manufacture and sale of two types of collectible – “platinum bullion” and “platinum proof.” Because the statute does not give us a definition of “platinum bullion,” we have to take the term at its plain and ordinary meaning. As a result, the “platinum bullion” language in 5112(k) isn’t readily cooperative with MMT funny business, which is why the MMT crowd’s argument is that the trillion dollar coin they want to strike is to be a platinum proof.

There are alternative price-setting regulations for gold bullion. MMT people think that these other regulations permit platinum bullion to be given a face value higher than the price of the metal used in the coin.

They are wrong.

The issue is that the regulations governing the sale of gold bullion aren’t expressed to apply to platinum bullion under 5112(k). They do not provide a definition of “bullion” for the purposes of 5112(k). .Indeed, they don’t define “bullion” at all – they just regulate its manner of sale, if it’s gold.

We are not entitled to read these provisions as saying things that they do not say. Absent a statutory definition of “platinum bullion” we must fall back to plain language. Bullion’s dictionary definition is “[precious metals] in bulk before coining, or valued by weight [after coining].” If the Mint could rustle up $1 trillion in platinum 5112(k) authorizes it to issue a (very large) $1 trillion coin, or more likely lots of smaller-denomination platinum coins. If it’s not valued by weight, and not substantially made up of platinum, I submit that it cannot be platinum “bullion” and would not be authorized by the “platinum bullion” language in Section 5112(k).

Moving away from “platinum bullion,” and before wrapping up the discussion of “platinum proof”I note, before MMT fanbois chime in that Rohan Grey’s paper on this subject refers to a “circulation critique,” that this critique does not apply to this conclusion as his argument pertains to Section 5136 whereas my objection says that the Trillion Dollar Coiners are simply misreading Section 5112(k) without regard to any other statutory provision.

MMT proponents contend the platinum coin statute’s grant of authority is essentially unlimited:

This view is incorrect and, in any case, logically inconsistent. If we want to put 5112(k) in its wider cultural context, the so-called intentionalist approach, then we get to talk about what Congress meant when they drafted Section 5112(k) – and it’s clear Congress didn’t intend to grant the Treasury a power to mint a trillion-dollar-coin.

This is why folks like the MMTers point to, and rely upon, the plain language of the text, a literal reading which yields (in my view an absurd) result. That invites us, as it would invite a court going through the Chevron two-step, to ask whether the plain language grants the power claimed.

Lib law profs like Larry Tribe have cut corners on this analysis and reached the same conclusion as the MMT crowd:

Using the statute this way doesn’t entail exploiting a loophole; it entails just reading the plain language that Congress used. The statute clearly does authorize the issuance of trillion-dollar coins.

As we know, this view is wrong. The statute does not authorize the Treasury Secretary to have the Mint strike any or all coins. It authorizes the Treasury Secretary to strike bullion coins and proof coins, a necessarily narrower definition which, per the inclusio unius canon of statutory construction, necessarily excludes any coin which is not bullion or a proof coin from its scope.

Conclusion: the Trillion Dollar Coin, being neither “bullion” nor a “proof,” cannot be lawfully made

In order for a trillion dollar coin to be lawfully struck under the power granted in 5112(k), it must either be bullion (i.e., contain $1 trillion of platinum) or it must be a proof coin. MMT shitcoiners’ proposal requires a “proof coin” in order to work (and if they had $1 trillion in platinum to spare they would have long since sold it to pay for state expenditures).

But as we have seen, just as not all that glitters is gold, not every coin is a proof coin. MMT types are not free to supply “proof coin” with whatever meaning they want. That is the mistake the MMT crowd has made for seven years on the trot in (mis)reading 5112(k), and which they continue to make today.

Since 5112(k) doesn’t supply a definition of “proof coin,” we have to look to the plain and ordinary meaning of “proof coin” – as found in a dictionary – to provide that limiting definition, the thing that tells us what makes a proof coin different from any other coin used as money. The definition we find there – “never struck for circulation” and made for collectors in the OED, “not intended for circulation” in Merriam-Webster – tells us that Section 5112(k) authorizes the creation of a collectible which will not enter into circulation. This expressly contradicts the “Mint the Coin” plan, which requires, and therefore intends, circulation, and is not made to pass into the hands of collectors but is made as a fiscal policy trump card.

Long story short: a shiny object made with the intent of being a Trillion Dollar Coin is, definitionally, not a “proof coin.” If it’s not a proof coin (as it needs to be for the MMT crowd’s legal argument to work), 5112(k) doesn’t give the Treasury Secretary legal authority to mint it as a proof coin in platinum and sell it for $1, let alone $1 trillion.

The doctrine of absurdity

There is also a canon of statutory construction which in England we call the Golden Rule and in America they call the “Doctrine of Absurdity.” Generally stated, the Doctrine of Absurdity holds that when interpreting a statute, it is to be given its plain and ordinary meaning unless the meaning of the statute would be absurd.

The American formulation of that rule takes the following form:

The principle sought to be applied is that followed by this court in Holy Trinity Church v. United States, 143 U. S. 457, 12 S. Ct. 511, 36 L. Ed. 226; but a consideration of what is there said will disclose that the principle is to be applied to override the literal terms of a statute only under rare and exceptional circumstances. The illustrative cases cited in the opinion demonstrate that, to justify a departure from the letter of the law upon that ground, the absurdity must be so gross as to shock the general moral or common sense.

To that end, I asked the MintTheCoiners what limits, if any, they placed on the power of the Treasury Secretary here – could he or she mint a quadrillion dollar coin, quintillion dollar coin, sextillion dollar coin under 5112(k)?

Not realizing I was teeing their responses up for this blog post, they responded. Rohan Grey, a first year contracts lecturer at Willamette Law, said he thought they could:

The absurdity doctrine is generally disfavored by U.S. courts. It takes a fairly extreme example to trip it and the Supreme Court has only dealt with the matter a handful of times. Quite apart from the textual analysis we saw in the Alabama Ass’n of Realtors to one outrageous example of government overreach, which gives us some hints as to how a well-informed district judge might approach the MintTheCoiners’ textual arguments and claims of sweeping authority, I submit that claiming “proof coins” – keeping in mind this term means they are not for circulation – to justify the implementation of an MMT policy with seemingly no limitation, infinite money, which expressly places new money into circulation (a) fails for textual grounds, (b) shocks the conscience and (c) is, in every conceivable way, thus an absurd interpretation of a statute designed to authorize the manufacture and sale of numismatic curios.

At the end of the day, “MINT THE COIN!” strikes me as bad, pseudo-legal analysis of a law which very clearly does not authorize “minting the coin” – at least, if we don’t stretch the meaning of “proof coin” beyond recognition. Fortunately the matter also appears to be moot, as it seems Congress will be raising the debt limit and we can safely ignore “minting the coin” – at least for now. The danger behind this idea, however, is that one day we will be faced with an administration more stacked with Marxist radicals than the current one, who will have few qualms at sweeping Congress aside to carry out their own policy agendas.

The danger there is not loss in the courts, but rather what will happen between the time that the coin is minted and a final judgment is entered in a challenger’s favor. When trillions of dollars and the full faith and credit of the United States are on the line, a Mint-the-Coiner could simply mint $trillions to fund its operations or redeem Treasuries and then dare the courts to unwind the transaction – forcing a default – after the fact. Even if the Executive Branch should lose, it could put the courts in an impossible dilemma where restoring constitutional order would force a default.

That – the act of norm- and constitution-breaking unilateral executive action – must be forestalled as a matter of urgency. As soon as Republicans reclaim power they must introduce legislation to amend Section 5112(k) to ensure that no administration can misconstrue its meaning ever again.

Congressman: Yes, We Did In Fact Lose Afghanistan Because of Big Tech

prestonbyrne

Following my piece over the weekend, Did America Just Lose Afghanistan Because of WhatsApp? – a lot of other people have been asking the same question. Motherboard linked to the piece, the Free Beacon published its own article agreeing with its conclusions and Facebook itself pivoted hard, announcing it would – a day late and a dogecoin short – begin aggressively banning Taliban content.

Congressman James Comer apparently agrees with the thesis:

Noting that Section 230 comes up, I would encourage the Congressman to not touch Section 230.

Section 230 is what immunizes platforms like Facebook and Twitter for legal liability for hosting user generated content including terrorist content. It is a good thing that they benefit from this protection because it means that they adopt policies which tend to promote the free speech of Americans (even though FB and Twitter do censor conservative viewpoints) and moreover it protects companies which host conservative viewpoints too, which could not exist without Section 230.

The best thing anyone can do is vote with their wallets. Congresspeople should lead a charge to stop providing content to, stop using and stop spending ad dollars with websites which host America’s enemies and start using websites which don’t host America’s enemies. The next best thing they could do is start looking at how other laws like antitrust law might be used to break up the conglomerates which are responsible for the delivery of communications services to the enemy – app stores, social conglomerates, and device makers. The next best thing after that would be to enact something like former OCC Commissioner Brian Brooks’ Fair Access Rule to banking services, which was spiked by the Biden Administration, to ensure that challenger services which cater to patriots – or anyone else, for that matter – can’t get banned from the financial system because of their politics.

Even if these companies made a serious effort to deny their services to our enemies (and to be clear, it appears at the moment that they are not doing so), law reform of Section 230 would be throwing the baby out with the bathwater. It is proper that our laws (Section 230 and the First Amendment) and the requirement that consumer tech requires strong privacy protections like E2E encryption means that these companies are unable to guarantee that their services won’t be provided to our enemies.

It is clear, however, that these companies’ continued treatment of American citizens as domestic enemies at the same time as they give America’s actual enemies what amounts to a free pass cannot go unanswered.

There are ways to do this without trampling on the First Amendment or compromising American users’ privacy and rights. Breaking up these firms’ stranglehold on the marketplace, such as Google and Apple’s app store oligopoly (which makes sideloading apps impractical, in Google’s case, and impossible, in Apple’s), and ending financial censorship, means that challengers to Big Tech dominance, many of whom are banned or threatened with bans simply because of their politics, will finally be afforded the chance to rise and displace their unpatriotic competition.

Did America just lose Afghanistan because of WhatsApp?

prestonbyrne28 Comments

In the middle of a conflict, good analysis is hard to come by. Because adversaries do not telegraph their plans to one another, plans depend greatly on the fact patterns surrounding their execution, and no human mind can possibly observe, much less comprehend, the movements of all players on the battlefield, the course of a war, no matter how meticulously planned and no matter how eminently credentialed the planners, frequently defies the plan.

This phenomenon is known as the “Fog of War,” a phrase which originated with Prussian military theorist Carl von Clausewitz in his magnum opus, On War:

War is the realm of uncertainty; three quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty. A sensitive and discriminating judgment is called for; a skilled intelligence to scent out the truth.

Such intelligence is evidently completely lacking in the U.S. political, military, diplomatic, and “intelligence” apparatuses. A little over a month ago, President Biden – presumably echoing the advice he was getting from the permanent bureaucracy – said the following:

How wrong this assessment was is now clear for everyone to see. A week ago, the U.S. said Afghanistan could withstand the Taliban for 90 days. Today, the (70,000-strong) Taliban is in control of the capital, the much-vaunted Afghan army has disintegrated, and tens of thousands of Afghans – whose collective force could stop the Taliban, if only it had the organization to do so – are fleeing to any place and by any means they can.

Conventionally, the United States did everything right; it installed a government, equipped and trained an army with four times the Taliban’s manpower, an air force, and top of the line American military materiel, and even now is apparently flying sorties against Taliban targets. Yet everywhere the Taliban is in control, and they did so, in many places, apparently without firing a shot.

So what the hell happened?

I’m a tech guy, not a military guy. And in terms of the kind of tech I’m into it’s that weird decentralized crypto tech like Bitcoin, not SaaS.

I do know enough about the war to know that when the Taliban went toe to toe with American and NATO soldiers, the Taliban got its ass kicked basically every single time. No air force, no navy, and no artillery meant that whenever the Taliban revealed themselves on the battlefield they were guaranteed to be cut to pieces by various pieces of intimidating American hardware like A-10 Warthogs or .50-caliber rifles.

It appears the Taliban tried something different this time around. Open source reporting shows that rather than rocking up and going toe to toe with the Afghan national army, they appear to have simply called everyone in the entire country, instead, told them they were in control, and began assuming the functions of government as they went:

See this from 2018:

Or this from June:

Or this from today:

The fact that WhatsApp is so good that it beats any homegrown communications alternative is not new or unknown. This story in the New York Times in 2019 discussed the use of the app by both groups of belligerents in detail:

WhatsApp has unique benefits in the fight against the Taliban, who also rely on the app to update their superiors and check in with their fighters. The battle has become a war of small, quick tactical gains — a district here, a village there — and for this, the advantages of the app, they say, far outweigh the potential vulnerability.

Mainly, it’s quick and flexible. Urgent decisions on an imminent attack no longer must wait for ministers and commanders to get to a secure operation center. WhatsApp groups have become virtual operation centers, with ministers and commanders sending decisions from their bedroom, in between meetings or even from an airport lounge.

What I think has not been considered enough is the degree to which WhatsApp DMs were a strategic blind spot for the United States.

The Fog of War obviously makes it impossible to know what’s happening on the ground, right now, in Afghanistan, even for observers from the military and the D.C. political apparatus who do this for a living. Recalling, however, that the U.S.’ longtime strategy for crippling an opponent begins with decapitation strikes on radar and communications infrastructure, it is fairly obvious to anyone that as far as the Taliban were concerned, this never took place. The Taliban is setting up a government fairly expeditiously. Its propaganda circulates on Twitter in plain view.

The Taliban are thus free, and have been free for a number of years, to take their fight not to American soldiers (where they always lose) but directly to the hearts and minds of the Afghan people, all using free-to-use American internet infrastructure like Facebook and Twitter (where they have now won).

WhatsApp is an American product. It can be switched off by its parent, Facebook, Inc, at any time and for any reason. The fact that the Taliban were able to use it at all, quite apart from the fact that they continue to use it to coordinate their activities even now as American citizens’ lives are imperiled by the Taliban advance which is being coordinated on that app, suggests that U.S. military intelligence never bothered to monitor Taliban numbers and never bothered to ask Facebook to ban them.

They probably still haven’t even asked Facebook to do this, judging from the fact that the Taliban continues to use the app with impunity.

This might explain why Afghanistan collapsed as quickly as it did.

The Afghan government was built, by the Americans, in the style of a late 20th-century, western, neoliberal state with a credulous and compliant electorate, able to effectively convey its messaging to its people via press conferences, carefully-tailored public statements, and newspaper articles. See e.g. the below:

Cringey, exceptionalist, Beltway langue de bois is hackneyed and even in the United States is widely disbelieved, as it has been ever since Nixon. This is the case whether it be Nancy Pelosi tut-tutting a conquering army or the State Department extolling the merits of American-style democracy.

It is especially rancid when it emanates from the permanent bureaucracy that runs the Executive Branch.

Culturally speaking, the U.S.’ messaging in the region is rather out of step with what we know about Afghanistan specifically, and the Middle East more generally, and is likely ineffective and unpersuasive communication to most Middle Eastern listeners.

There are numerous such examples of milquetoast, tone-deaf messaging directed towards Afghanistan in the run-up to this calamity. Scroll down the US Embassy’s Twitter feed for more examples. The U.S. was trying to convince the Afghan people of the omnipotence of American power through the use of language better suited to talking to a C student from Barnard at a career fair.

The United States thought it was fighting an army. I suspect the reason we lost is because we were fighting a meme.

The Taliban is a decentralized, insurgent force. In many cases they live where they fight. They know the soldiers on the other side. And they have spent years engaged in a public dialogue with each individual Afghan on cell phones using messaging apps. They appear to have leveraged this dialogue to attempt to convince every Afghan before fighting even started that despite having a fighting force on par with the NYPD, they would have the ability to take on a fighting force twice the size of the British Army. They have been DMing soldiers for months inviting them to individually surrender. When they arrived in the cities they accepted those surrenders. After the surrenders they quickly pivoted to assume the roles and responsibilities of government.

Two decades of getting annihilated by U.S. infantrymen showed the Taliban that asymmetric application of force could not overcome American power. So instead of going after the boots, they went after the suits, betting that asymmetric application of tailored persuasion and propaganda could overcome weak, “woke,” politically correct American propaganda.

And it did.

As a result, the Taliban took Afghanistan with almost no formal resistance. I suspect this is because they convinced everyone they would win before they showed up.

Imagine if the U.S. were in the throes of state failure and you received a personalized message from your local Antifa/Proud Boy/[insert_boogeyman_here] branch, right on your cell phone, explaining there would be a nationwide offensive, following which your boogeyman of choice – backed by millions of supporters – would install a totalitarian regime. Imagine they offered you the chance to surrender ahead of time. Then, one day, the proposed offensive happens, with boogeymen Zerg rushing the state everywhere at once; how would you feel?

What would you do if your leadership showed even the slightest weakness in the face of this assault, their public statements limited to sophomoric platitudes about pluralism? Would you surrender? Would you run? Would you fight?

Most people I know would surrender or run. This may explain why Afghan divisions cut bait, and thousands of people in Kabul who could pick up rifles and fight, and if they chose to do so would present a substantial obstacle to the Taliban closing in on the city, didn’t, choosing to flee instead.

Whether the Taliban can hold all of the territory it has just taken is a very different matter. If indeed U.S. intelligence is correct, then their 70,000 men have rather a lot of territory to manage. There is no reason, however, to permit further use of any encrypted American communications technology, app stores, and devices by the terror state for at least as long as American citizens are in jeopardy.

There can and should be recriminations for what happened here. It is not solely the Biden Administration’s fault; the military should have been considering how to decapitate Taliban communications for years, which it clearly has not done. The fact that the Taliban is using US-based servers to run its terror state and nobody in the Biden Administration has thought to disconnect it, even as U.S. forces retreat in disarray, is a strategic blunder on par with Pearl Harbor.

In terms of our collective future, we should expect the government to push for more surveillance and control over internet communications, with governments closing off websites and ports or effectuating internet blackouts in crises real, imagined or feigned. It’s a dark future, and one which I hope decentralized technology will be able to circumvent and defeat.

The Free Net Project: a brief proposal

prestonbyrne3 Comments

One of my hobbies is that I am a libertarian. Not just any libertarian, but a particular brand of libertarian – a free stater, or part of the Free State Project in New Hampshire.

The Free State Project was created by a Yale academic, Jason Sorens, back in 2012 with a simple premise: if one could assemble enough politically active people with a common, minority belief system – in this case, libertarians – and concentrate them in a small area, one could achieve meaningful political change that would be impossible through a traditional, nationwide strategy due to the predominance of the two-party system.

The Free State Project’s logo. The critter is a porcupine, the official animal of libertarianism.

The project selected New Hampshire as its target state. The Project set up a website which allowed people – of which I am one – to pledge that they would move to New Hampshire within five years of 20,000 people signing the pledge. In 2016, the threshold was met and the timer started.

Thousands of people have moved during that time. As to the results, well, it’s been pretty successful:

The Executive Branch is actively seeking to censor the viewpoints of American citizens

Today we learned that the Democrat administration is actively colluding with Facebook and other major technology companies to censor American internet users.

Responses from conservatives, moderates and libertarians alike have mainly consisted of calls to regulate Big Tech so that this sort of interference can’t happen, or some other kind of Beltway-compliant political resolution.

For an ordinary Internet user, taking on Big Government and Big Tech on their own terms, via their institutions and in accordance with their rules means the deck is stacked against you. You will certainly fail.

For example:

  • The government is now actively involved in censoring dissident viewpoints in the United States. If you give the government the power to regulate speech online – as many proposals call for – the government will use this power against any viewpoint which challenges the ruling class.
  • Facebook and Twitter are private property. Giving the power to the government to force them to host their philosophical opponents’ speech will necessarily involve giving government power to force us to host our philosophical opponents’ speech.
  • Even if we could secure passage of a law forcing social media companies to grant minority viewpoints equal access (and to be clear, I don’t think that outcome (a) is possible for at least four years, during which time many elections will be swayed by Big Tech’s influence, or (b) constitutionally permissible thereafter), such a rule would likely be limited in its effect, and enforcement would entail years of expensive litigation. Big Tech can afford legal fees. You cannot.
  • Censorship problems are not limited to social media. PayPal, Amazon, Uber, numerous banks, credit card companies and payment processors also engage in politically motivated censorship and/or denial of service which is not connected with terms of service violations. We need to address this, too.

Your arms are not long enough to box with God. You cannot beat the regime at its own game.

But what if we stopped playing the game entirely?

“There’s nothing more blue-pilled than thinking there is a path to liberty that isn’t physical concentration or a form of exit”

That line is from Jeremy Kauffman, of the LPNH and the Free State Project. The Free Staters have met with a considerable amount of political success using this formula. We may wish to try it ourselves.

The Free State Project recognizes that in order to achieve political change at scale as a minority, the effectiveness of one’s resources must be maximized to the fullest possible extent. This is achieved by removing your members from regions where their votes are and will always be ineffective and placing them in localities where their votes have an effect.

So it is online. The issue is that at the moment there is not a definite, pro-freedom ecosystem in place – a group of businesses which pledge their fealty to libertarian ideas much as corporate America seems to lately pledge its fealty to post-Marxist ones – where freedom-loving people can go and know, as a matter of certainty, that as long as they don’t break the law, their access to a full range of financial and network infrastructure is guaranteed, regardless of their political viewpoints.

An equally significant problem is that there is no coordination. Because Big Tech essentially controls the entire information space unchallenged, it is in a good position to prevent competitors from proliferating (app store bans) and keeping existing influencers reliant on its ecosystem for the engagement which is responsible for their income. Big Tech has scale; its users do not.

The problem is one which requires scale. Even if we could “fix” Twitter and Facebook, political censorship affects far more than just these two companies.

What is required in order to fully defeat the merger of state and corporate power represented by today’s announcement by the Biden Administration is a root-and-branch replacement of practically every business essential to American life.

A central aim of the project is to attract censorship resistant service providers. It will do this by verifying businesses’ ideological alignment to the aims of the Project, and directing Project members to those businesses. As the number of Project signatories increases, this will demonstrate to potential first-movers in each of these fields (to the extent that these businesses do not currently exist) that, if they pledge their loyalty to political neutrality and refuse to engage in state-suggested, but not legally mandated (thanks, First Amendment!) censorship, they will acquire millions of users overnight.

The Project should identify businesses in key sectors as targets for the migration and provide information about these businesses to prospective movers. Strategic categories of business should include:

  • Retail banking.
  • Acquiring banks for merchant credit card accounts.
  • Credit card rails.
  • Payment gateways and apps.
  • Cryptocurrency exchanges and fiat on/offramps.
  • Online video.
  • ISPs.
  • Mobile telephony.
  • Microblogging.
  • Social audio.
  • E-mail.
  • Hosting and DNS hosting.
  • Ridesharing.
  • Etc.

For each of these categories we will not need the entire marketplace to be pro-freedom to circumvent informal censorship. We just need a handful of companies in each category, who Project members could turn into instant category leaders.

The Free Net Project registry and pledge

The Free Net Project would look a lot like the Free State Project, but with a difference: instead of a mass migration across lines on a map, this would be a mass migration away from Big Tech. People would sign a pledge that upon a predetermined number of signatures being obtained, say 10 million, signatories of the pledge would, on or around the same date and time, delete their Big Tech accounts and solely do business with pro-freedom businesses.

The pledge would be modeled after that of the Free State Project and would read something like this:

  1. I pledge my solemn intent to only use the services of pro-freedom businesses with the Free Net Project.
  2. I pledge my solemn intent to cease using the services of companies which are complicit in the systematic censorship of law abiding people.
  3. I will work towards the creation of a society in which the maximum role of government is the protection of the individual rights to life, liberty, and property.

The project would maintain a registry of pro-freedom businesses and decentralized protocol systems, and links to their signup pages or download portals.

The principal objective of this exercise is to prove the naysayers wrong and show that a withdrawal from Big Tech is feasible:

  • Any business signing the pledge would be able to see how big their potential pool of customers would be. As that pool grew larger, so would there be a greater incentive for businesses to make the pledge, including existing businesses which may not have a pro-freedom ethos but want to get their hands on libertarian dollars.
  • For online influencers, as the number of signatories rises, they will acquire greater certainty that their influence will also survive the move. Applications could be built which could show Twitter and Facebook users how many of their followers have decided to make the pledge.
  • As numbers approach the 10 million target, naysayers who say it is impossible to make the move, and those calling for government regulation, will be silenced as it becomes apparent that a legal but non-legislative and non-litigious solution is the more viable approach.

And that’s that. Beating “Big Tech” doesn’t require us to get every person in the world, or even in the United States, to quit. It only requires a critical mass of the most interesting people and of ordinary users.

The Internet gives us all the ability to, at the click of a button, withdraw our business and our money from any business we choose. It also gives us the ability to advertise to entrepreneurs who would provide services on a nonpartisan basis that there are millions of us willing to bring about their success with our wallets. There is no law which says we cannot coordinate our activities to only give our business to businesses which share our politics. All we need is for that coordination to take place.

We’re never going to get Big Tech to change. Its value system, derived from the West Coast liberals who created it, is too entrenched. It’s high time that we stopped begging the government to save us and saved ourselves instead.

To that end,  to quote FSP founder Jason Sorens, “I’m hoping this project really becomes a decentralized affair – I don’t want to be a dictator of my own little club, and I don’t want your money.” If you’re the right person to run with this proposal, then by all means, run with it.

Postscript: