It is well known that many governments around the world seek to impose increasing regulations on financial privacy, and have powerful tools at their disposal to exercise their will. At the forefront of this fight against privacy is the United States and their powerful, wide-reaching intelligence apparatus.

This is not new. They've fought this battle before — and lost.

Protocols and Gateways

Lessons from the BitTorrent Protocol

The infamous BitTorrent network operates in a largely decentralized fashion. Data is not stored on a central server. Rather, a user downloads the file in segments from many different users who send data directly to one another. While torrent trackers coordinate and assist peers in locating the file they wish to download, the tracker itself is not involved in the acts of seeding and leeching themselves.

This makes BitTorrent an extremely efficient mechanism for transferring large files and at the same time, it insulates the protocol itself from anti-piracy efforts, as there are no central servers to enjoin from unlawfully distributing copyrighted content. A tracker, in that sense, becomes a sort of access gateway to the BitTorrent protocol

The Pirate Bay is the most popular, and most infamous BitTorrent tracker in history.

On 31 May 2006 the Swedish police organized a raid on The Pirate Bay in 12 different locations, confiscating over a hundred servers, and causing it to go offline for three whole days. Upon reopening, the site's number of visitors more than doubled, the increased popularity attributed to greater exposure through the media coverage. The raid, alleged by The Pirate Bay to be politically motivated and under pressure from the Motion Picture Association of America (MPAA), is an example of the considerable legal pressure that even a relatively minor political entity like the MPAA can exercise outside of America’s borders.

Four people associated with the tracker were arrested and prosecuted for "promoting other people's infringements of copyright laws". After a heavily-publicized trial lasting 9 days, the four operators of the site were convicted by Stockholm district court on 17 April 2009 and sentenced to one year imprisonment each and 30 million Swedish kronor (approximately US$3.5 million) in fines.

Amazingly, The Pirate Bay remained online during the entirety of the trial and beyond, still operating to this day.

Fifteen years later, after learning from their experience and iterating many times on their OpSec and network security, The Pirate Bay doesn't own any physical servers. Rather, the site is spread across different commercial cloud hosting providers through 21 "virtual machines" scattered around the world. There are no physical servers to seize, and the underlying servers powering the virtual servers don't know they're hosting Pirate Bay. As such, it is incredibly difficult for police to actually take the site down.

The Nuclear Option: Tornado Cash

On August 8, 2022, Tornado Cash was sanctioned by the U.S. Treasury for allegedly failing to install sufficient controls to prevent it from laundering cash for harmful cyber actors.

To that end, the U.S. Department of the Treasury blacklisted the service, making it illegal for US citizens, residents and companies to use. The project's web domain and GitHub accounts, including the accounts of the creators of Tornado Cash, were also shut down, and one of the developers arrested.

Because Tornado Cash is first and foremost a decentralized protocol, its smart contracts will always be operational and accessible, and its website is still to this day hosted on decentralized storage systems and cannot be removed. However, the current anti-terrorism measures weaponized against the dissemination and mere usage of Tornado Cash means that users have to be extremely careful, especially if they are operating within a country within the United State's sphere of influence.

Of course, to completely stop Tornado Cash, a government would have to shut down the entire blockchain and the hundreds of thousands of servers supporting it. In this instance, wielding the most extreme and far-reaching “anti-terrorism” measures on Earth, they get close - but no cigar.

So, what can we learn from this?

It is clear that a protocol or an application that wishes to be truly private and resilient must learn from those incidents. On one hand, just how far the justice system is willing to go to crush dissent — and the attribution of such a title is, by definition, very subjective — is something that must be taken seriously. On the other hand, the fact that even the most extreme measures were simply not enough to fully extinguish Tornado Cash also gives us a concrete example and model to achieve levels of resilience high enough to face the total onslaught of the world’s most powerful centralized powers.

This is especially true if the entity in question seeks to disrupt the status quo and uphold uncompromising and unapologetic standards of financial freedom and anti-regulatory resilience. Here, both BasicSwap and the Particl Marketplace are prime examples.

For both the Marketplace and BSX, an analogy can be made between the way they disseminate offers, and how torrent trackers handle theirs. In the case of the Pirate Bay, while the contents of the torrents are obviously a matter of peer-to-peer sharing, the simple act of indexing has proven very litigious, and a potential threat to the well-being of the (now anonymous) site operators. To counteract this and in the spirit of resilience, they now use cloud services to host a number of private virtual machines exclusively delegated to the torrent database.

While a combination of cloud computing and encryption can be attractive and has proven effective for some purposes, it is possible to bring decentralization to a higher level. To that end, mixnets like the SecureMessaging network provide an elegant and powerful solution.

Used by both the Particl Marketplace and BasicSwap, the SMSG network can store almost any type of data and transfer it from one user to another, or to the entirety of the network, in a completely end-to-end encrypted and decentralized manner. SMSG messages, relayed continuously by all nodes on the mixnet, are stripped of all metadata, therefore it is impossible for anyone to extract information such as IP addresses, sender or receiver. The only metadata not stripped from SMSG messages are the hash, the encryption payload, and a temporary public key.

The identities of the sender and receiver(s) of that data therefore remain anonymous at every point in time, and unlike sophisticated cloud hosting solutions, there are no servers involved at any point of the process and none of the peers have explicit knowledge of the content of the messages they are relying, providing complete and total plausible deniability. This allows both the Marketplace and BasicSwap to provide an index, acting as “rendezvous” points of sorts, to match interested offerers and takers with no need for cloud computing and no possibility of server shutdown. Like Tornado, a government would have to shut down the entire blockchain and the thousands of servers supporting it in order to achieve their censorship goals. This brings decentralized resilience to unmatched levels, and should be embraced by privacy and free speech advocates around the world.

What remains is the human element — as an example, while the Tornado Cash protocol is still live, it is imperative for all potential users to preserve their anonymity, through VPN connections, private, privacy-preserving operating systems like Tails, and formidable discipline and online hygiene. Failure to do so can be met with dire consequences

While we don't particularly advocate the use of Tornado Cash in this current climate, the fact it still endures to this day gives much food for thought and highlights the true use-case for decentralized, censorship-proof systems.

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