Financial Cryptography

More surreal events in the Crypto Cold War - the BitCoin blockade of Iran

There is a popular view that the crypto wars of the 1990s were won when President Clinton signed the order making open source free of export controls. An alternative theory is that, on retiring in 2000, he allowed the intelligence community to defang the crypto-geeks by handing them a victory - colourful, public but empty of strategic significance. Meanwhile, the war is carried on by other means. Here's some evidence that suggests that the other means are still well in force - Sourceforge has blocked Iranian users from accessing BitCoin software. Jon Matonis writes:

The original and official Bitcoin client is hosted in the United States on GeekNet’s SourceForge.net who explained their denial of site access policy on their blog:

The specific list of sanctions that affect our users concern the transfer and export of certain technology to foreign persons and governments on the sanctions list. This means users residing in countries on the United States Office of Foreign Assets Control (OFAC) sanction list, including Cuba, Iran, North Korea, Sudan, and Syria, may not post content to, or access content available through, SourceForge.net. Last week, SourceForge.net began automatic blocking of certain IP addresses to enforce those conditions of use.

This is mightily curious. One assumes the US State Department has put pressure on Sourceforge by denial means. In that, if it isn't them or one of their many proxies, why would SourceForge care? Only if there were serious messages brought to bear would any Internet business really respond.

If so, I think the US State Department may very well have shot itself in the foot.

By forcing an open community actor to go public with the export controls, it adds more emphasis to the message that the international crypto community was duped, yet again -- we remain in a crypto cold war, whether we choose to recognise it or not. And, do not forget that this war delivers substantial collatoral damage. A large part of our problem with defending our own corporate and utility infrastructure from enemies, financial and statal, derives directly from the US Government's war on defensive crypto.

Back to BitCoin. Worse, the Bitcoiners have little truck with US policy, by their nature. The are more likely see an Iran blockade as a an opportunity to test their blockade running skills, rather than a call to play their part in the responsible policing of the world.

Even perversely, it gets worse. The State Department has now endorsed BitCoin as a tool of choice. Which message will certainly not go unheard by the Iranians, and even the rest of the US government will be scratching its head over this antithetical marketing.

It's somewhat curious as to where the US State Department is getting its advice from, if this is for real. What is the department or desk responsible for such strategy? How do they top this? Do they issue guidelines for placing one foot above the other, and trying to get both in one shot next time?

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Ob-Bitcoin:

• a good explanation on BitCoin from Morgen Peck in Scientific American.
• An article penned by Philipp Güring and myself entitled "Bitcoin & Gresham's Law - the economic inevitability of Collapse.

Posted by iang at October 14, 2012 03:40 AM | TrackBack