"}This is important because the longstanding economic argument against bitcoin as an effective store of value has always been that fiat money is ultimately stabilised by the state\u2019s capacity to demand taxes in its own currency. As was noted by Dealbook in 2013, \u201cmoney is inevitably a tool of the state\u201d and \u201cno private power can raise taxes or pass laws to unwind monetary excesses\u201d.\n\n
In 2020, however, that doesn\u2019t seem quite right. Private \n\u201chackers\u201d routinely raise revenue from stealing private information and \nthen demanding cryptocurrency in return. The process is known as a \nransom attack. It might not be legal. It might even be classified as \nextortion or theft. But to the mindset of those who oppose \u201cbig \ngovernment\u201d or claim that \u201ctax is theft\u201d, it doesn\u2019t appear all that \ndifferent.
\u00a0A more important consideration is which of these entities \u2014 \nthe hacker or a government \u2014 is more effective at enforcing their form \nof \u201ctax collection\u201d upon the system. The government, naturally, has \nforce, imprisonment and the law on its side. And yet, in recent decades,\n that hasn\u2019t been quite enough to guarantee effective tax collection \nfrom many types of individuals or corporations. Hackers, at a minimum, \nseem at least comparably effective at extracting funds from rich \nindividuals or multinational organisations. In many cases, they also \nappear less willing to negotiate or to cut deals.
\u00a0 In an increasingly \npolarised world where a near majority of people don\u2019t recognise the \nlegitimacy of their governments, a bitcoin enthusiast might legitimately\n question what really constitutes legal extortion anyway? \u00a0When \nestablished norms are in flux, everything becomes a matter of \nperspective and it would be irresponsible for fiduciary agents to bet on\n only one horse.