Three lightly edited excerpts from a conversation about bitcoin with some Californians.

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I actually worked for the NSA. I did a genocide-resistant biometric ID project for them. http://guptaoption.com/cheapid/ (note that it is fully public and in the public domain – those are the only conditions I work for spookland under.)

What we know, for sure, is that the NSA etc. have been 20 years ahead of civilian cryptography twice: hardening DES against differential cryptanalysis long before civilians discovered differential cryptanalysis, and discovering public key crypto (RSA) long, long before civilians got there. They’ve got two substantial assets, and two drawbacks: infinite money and huge teams of smart people, operating in a national security bureaucracy with massive internal secrecy.

It might take them a long time to get around to noticing bitcoin. It might take them a few years to resource a team to do something about it. It might take them a while to hit it. But with those resources, you can bet your bottom dollar there are vulnerabilities, mostly related to attacking bitcoin if you have 51% of the mining capacity. Let’s be clear here: the State still has teeth. Probably not a hell of a lot the government of Ghana can do about it, of course.

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As for the cable companies etc. in the US, cable companies have near-monopoly status http://www.inquisitr.com/479610/us-cable-companies-are-monopolies-expert-says/ what that means is that collectively they *can* change the way the internet works. Here’s how that plays out:

1) cable companies do “deep packet inspection” on all traffic, to block bittorrent, bitcoin and any other protocols they don’t like. Here’s some information about cable companies and DPI http://arstechnica.com/tech-policy/2009/04/cable-dpi-is-good-for-us-congressman-its-frightening/

2) the internet responds by encrypting everything to block deep packet inspection, probably using VPNs.

3) cable companies stop carrying encrypted traffic if they can detect it, except to large retailers etc. who have HTTPS certificates from big domain name registrars.

4) internet responds by moving to steganography (hiding encrypted messages in other files) but that severely limits the bandwidth of encrypted apps to maybe 1% of current levels or less.

5) Usability drops, ordinary folks stop using encryption, networks which rely on large numbers and high bandwidth collapse (bittorrent certainly, and possibly bitcoin.)

Every step on this path has been well-understood for 20 years.

Mesh will get you internet-like services inside of a single high population density area, a city. But outlawing mesh and prosecuting it in the same way that pirate radio is brought down is possible for a fraction of the effort used in the War on Drugs, and it can be substantially more effective because the mesh nodes are radio transmitters which can be triangulated down to the square meter using (say) detector vans or, in future, drones.

So let nobody doubt this is possible. The question is whether there’s the political will to do it and whether other political power groups in the US would fight back hard enough to stop it happening.

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This whole debate is colored, very badly, by cheap Californian idealism. I hit the same thing whenever the topic of “transforming consciousness” comes up. That whole meme is unconsciously rehashed Mahayana Buddhism layered on top of pre-existing Christian millenialism. The “Great Liberation” in which all sentient beings realize their Buddhahood is replaced by the Great Turning On in which all the squares simply  vanish in rainbow clouds of dope wisdom. You can say the same thing about Marxism: the Messianic Age with no Messiah.

Again, this is a domain I have substantial technical expertise in: I was formally trained as Hindu clergy, spent 14 years of my life with spiritual work as my main productive output, formally joined a Hindu lineage and was recognized as my gurus as enlightened but not best used as a teacher.

I’m going to draw a distinction here that people won’t like. Believing that consciousness can transform the world is accurate. However, the consciousness which can transform the world is not ungrounded visions of peace and love – we have tried that, and it failed, and many of its leaders (Gandhi, MLK) were assassinated. Their successes were partial, and the living conditions of modern Indians and African-Americans are testaments to the limits of these approaches. What is needed, what *can* deliver results, is an acute, technical awareness of what is wrong in the world, leading to the desire to transform it. But the awareness has to be sharp, precise knowing of the problems, not blustery generalisms about how great things are, could be, and will be.

The history of the sixties is complicated. There’s a critical split, between the New Left (say the Yippies, Saul Alinsky etc) and the Consciousness movement (Tim Leary, Alan Ginsberg, Ram Dass). In the early stages, my understanding is they were a fairly collaborative community. As time passed, the Consciousness movement went further and further into vapourspace, and the New Left was decimated by COINTELPRO and internal rivalry.

Then you look at this history in more detail. The only people with significant access to LSD in American in the early years were spooks – MK ULTRA types specifically. The biggest early proponent of LSD, who administered it to huge numbers of people and sourced it for many of the brand-name psychonauts was Al Hubbard, the “Johnny Appleseed of LSD” who appears to have been an intelligence officer.

http://en.wikipedia.org/wiki/Alfred_Matthew_Hubbard

There is a very good chance that the entire consciousness movement of the sixties was sparked by a CIA psyop. And, while that sounds like a conspiracy theory, consider:

http://en.wikipedia.org/wiki/COINTELPRO
http://en.wikipedia.org/wiki/Operation_Northwoods
http://en.wikipedia.org/wiki/Project_MKUltra

Which are government conspiracies of around that period, well sourced from Freedom of Information Act requests, that is to say confirmed by US government documents which were released. We don’t know for sure what was going on with LSD and the hippies, but there is a very real prospect the entire show was fueled by the government as a way to derail and delegitimize the New Left.

Why does this matter? Because people think that the Hippies had a chance, and that consciousness transformation was the solution that failed, and not just a swirl in the test tube of a government agency.