I am quite confident that private payment technology will fundamentally reshape our future. When you look at the convergence of cryptographic tools, economic incentives, and historical precedents, the shift toward financial anonymity feels less like a possibility and more like an inevitability.
I have the strange feeling, however, that not many other people see this coming. It can feel quite isolating to look at these trends and realize how much they deviate from the mainstream narrative. I’ve recently engaged with the discussion on the Principles of the New World, which explored possible consequences of widespread adoption of cryptocurrencies like bitcoin. I’m posting this draft here because this forum seems like one of the few places where I can either find confirmation of these ideas or receive high-quality counterarguments that I might have missed.
Technical Situation
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Privacy Coins: There exist currencies like Monero which provide true anonymity, moving beyond the mere pseudonymity of Bitcoin.
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A Gradient of Adoption: Privacy isn’t an all-or-nothing leap. There is a smooth path of intermediate steps—from transparent central bank money to Bitcoin, and then into layers like the Lightning Network. This creates a “low-friction migration” where users can gradually adopt more private rails as the tools become more accessible and the need for privacy grows.
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Trustless Interoperability: Atomic swaps (e.g., Bitcoin ↔ Monero via Eigenwallet) enable seamless movement between public and private assets without needing intermediaries.
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Defensive Advantage: The current state of technology gives a structural advantage to the defender (the user) over the regulator or prosecutor.
Private Actors & Incentives
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Shadow Markets: These technologies are ideal for the shadow economies we already see emerging today.
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The Obfuscation Model: We already see big official institutions like banks using money-flow obfuscation as a business model (e.g., Cum-Ex and Cum-Cum). Private payment tech simply scales this capability for everyone.
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The Drive for Tax Fraud: High taxes on goods and services create a powerful incentive for tax fraud via anonymous transactions.
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The Burden on Laggards: As more people move to the shadow economy, the state—seeking the path of least resistance—will intensify tax pressure on technological laggards (the “non-movers” who stay within the legacy system).
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The Wealth Incentive: Rich people often face jealousy or reputational risks from visible wealth, giving them a strong incentive to hide their money.
The Role of the State
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Adaptation over Prosecution: States won’t be motivated to treat this as an existential crisis. Instead, they will likely adapt by taxing what cannot be hidden or moved, such as land.
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Economic Efficiency: States that attempt hypersurveillance risk economic weakness. The Soviet Union serves as a historical example of how excessive centralized economic control leads to collapse.
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The Streisand Effect: Prohibitions often backfire. The Nigeria “Ban” of 2021 shows how attempts to restrict crypto can actually increase its popularity.
Morality and Norms
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Victimless Crimes: It is hard to argue that anonymous transactions should be illegal. Money laundering itself is a victimless crime; the associated crimes can still be prosecuted.
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Expansion of the Shadow Sector: As seen with the US Alcohol Prohibition, banning a market only ensures its expansion.
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Societal Acceptance: Gradual acceptance of these tools—both in daily trade and voting behavior—will eventually undermine the state’s motivation to regulate.
Outlook
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The End of “Money Laundering”: Historically, “usury” went from a grave crime to a standard practice. Money laundering will likely follow the same path and eventually cease to be a crime.
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Tax Pivot: States will fundamentally pivot their tax models toward immobile and visible assets.