You Can't Be Tough On Big Tech While Killing Off Alternatives To It

from the decentralized-tech-can-help dept

The Biden administration has been talking a big game about being “tough on Big Tech” and Silicon Valley monopolies. But right now they’re quietly defending a provision in the must-pass Infrastructure Bill that targets software developers who are building alternatives to the exact Big Tech systems the administration decries.

The administration has been pushing a “pay-for” measure in the bipartisan Infrastructure Bill that would expand US government surveillance of cryptocurrency-related or decentralized projects. The Electronic Frontier Foundation, Fight for the Future and 14 other civil society organizations have expressed grave concerns for the ?vague and dangerous? digital currency provision of the bill.

This digital currency provision has been sold as being about taxes. But it’s so poorly written that it would create reporting requirements demanding people like software developers and even volunteers within decentralized tech projects hand over data or conduct surveillance of their users. There are plenty of valid concerns around cryptocurrencies & ensuring that everyone pays their fair share of taxes. However, the provision in the Infrastructure Bill would demand data from people who don’t have it?effectively crushing a wide range of decentralized projects under misguided regulations.

Destroying decentralized projects would be a disaster for global human rights, freedom of expression, and democracy. Cryptocurrencies and decentralized tech projects are among the most promising potential solutions to address the harms of Big Tech. Decentralization could help end the era of surveillance capitalism.

If the Biden administration is serious about taking on Big Tech, it shouldn’t be actively trying to shut down communities of developers, volunteers, people who run nodes, and other participants in the very software projects that could one day help us escape the clutches of Facebook, Amazon, and Google. The original cryptocurrency provision in the Infrastructure Bill amounts to a dramatic expansion of government surveillance tacked on to a must-pass piece of legislation at the last minute. Policy that impacts human rights & the future of the Internet shouldn’t be made this way.

Fortunately, Senators Wyden, Lummis, and Toomey have introduced an amendment that would fix the problematic language in the Infrastructure Bill. This amendment is a win-win: it ensures actual crypto brokers like Coinbase pay their taxes, but clarifies the measure can’t be abused for broader surveillance or oppression of smaller decentralized projects. Now even Senator Portman, who teamed up with the White House to draft the original cryptocurrency surveillance proposal in the Infrastructure Bill, is supporting this common sense amendment. Sadly, Senator Portman, who teamed up with the White House to draft the original cryptocurrency surveillance proposal in the Infrastructure Bill, pulled his former support for this common-sense amendment and introduced his own amendment that is even worse than the original provision itself.

Weirdly, the Biden administration seems to still be pushing the original language and opposing this amendment to the law that would clarify small players won?t be targeted. The administration simultaneously claims two opposing facts:

First, that the current language doesn’t target “small players” in the decentralization ecosystem at all.

Contrarily, the administration also states that the Wyden amendment would “put a dent” in the tax revenue generated?even though the amendment would just clarify that onerous reporting requirements don’t apply to people who wouldn’t even possess the surveillance data that this law would require to be turned over.

The White House can?t have it both ways on this. Either the language only targets actual cryptocurrency brokers, in which case the Wyden amendment would have no impact on the tax revenue generated?or the admin’s “pinky swear” that it won’t use this law to go after small players like software developers making wallets is false.

We can and should have real conversations about what types of policies should be in place to protect people, especially low income folks and communities vulnerable to surveillance, from cryptocurrency scams. We also need to ensure that giant corporations and millionaires pay their fair share of taxes. But if the Biden administration really cares about holding Big Tech companies accountable and giving people alternatives to Silicon Valley giants, they need to start getting smarter about how technology actually works, and advance policies that actually accomplish stated goals.

More than 10,000 people have called the Senate because the cryptocurrency surveillance provision in the Infrastructure Bill is a huge mess and a huge threat to digital innovation and human rights. The Wyden amendment will fix it. Democratic senators and the Biden administration should back off their hypocritical stance that calls for reining in Big Tech while also stifling any innovation that could replace it.

Evan Greer is an Executive Director and Lia Holland is Campaigns and Communications Director at Fight for the Future, a digital rights organization with 3 million members celebrating 10 years of defending human rights on the internet from malicious corporate interests and ill-informed legislators.

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Comments on “You Can't Be Tough On Big Tech While Killing Off Alternatives To It”

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Bloof (profile) says:

So the amendment wants to make sure the people running crypto miners don’t pay anything, you know, the people causing the most ongoing environmental damage. Golly gee, I wonder why Cynthia ‘Not sure who the Green New Deal is good for, but I can say for certain it’s not the people of Wyoming.’ Lummis and Pat ‘Senator Toomey believes that coal is an essential part of America’s energy future, not to mention an important part of Pennsylvania’s economy.’ Toomey would support something that’s causing fossil fuel plants to be taken out of mothballs just to run crypto miners.

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James Burkhardt (profile) says:

Re: Re:

Not only is your point confusing, your premise is false.

"So the amendment wants to make sure the people running crypto miners don’t pay anything, you know, the people causing the most ongoing environmental damage"

Bolded for emphasis. The amendment exempts miners from broker reporting requirements. Because a miner isn’t a broker. Miners do not generate or have the information the bill is looking for. The bill would not require them to report how many coins they mined (what you want), they would be reporting on the transactions they added to the ledger (that would be how they facilitated the transfer of a digital asset). Meaning, examining each transaction to fill out paperwork about it. Not a typical desire, and not solving the issue you claim to be concerned about. Because its a smokescreen for your valid concerns about the environmental impact. Unfortunately, in the capitalist system its really hard to say "you are using too much electricity" and force change in the behavior so long as its paid for.

Tax liability only occurs when a trade happens. The amendment assumes that eventually, a coin will have to be traded with a broker. The amendment might be making bad assumptions about what percentage of the volume of trades happen through brokers, but I rather expect the assumption is that, eventually, the point of bitcoin is to cash out. That is much more difficult without a broker, and because the ledger allows for traceability, a coin with high cost basis, low profit, and/or spotty transaction history can see heavy scrutiny for taxes. As a tax professional I have seen the current reporting requirements, and I have seen people get hit by this back tracing in the past year when someone reported bitcoin purchases on their taxes, and it turned out the seller hadn’t. Under new rules that would be much more likely.

Then of course, like weed, crypto miners can be spotted by the huge energy bill and heat generated. And if authorities aren’t seeing the owners reported trading with that crypto, thats now the basis of an investigation.

This amendment does nothing to prevent collection of income taxes from miners, which you claimed. It will make crypto tax cheats more vulnerable, not less. This bill wan’t going to ban mining or regulate mining energy usage. Those are hard to pass, hard to draft constitutionally, and hard to enforce. This improves tools to identify and punish cheats using brokers like they did with money laundering and banks as a means of improving revenue collection.

There are plenty of criticisms, such as that these rules are meaningless without enforcement and strong spending on investigations to find the cheats. But your criticism while understandable definitely coming from the right place, completely miscategorizes how the pay-for provision works, what the amendment would do, and tries to kitchen sink a legally complicated issue into an already contentious bill that is barely holding support together as-is, which is almost always a bad idea.

Anonymous Coward says:

Re: Re:

Agreed. Cryptocurrencies and the blockchain had their chance over the last decade but all it’s amounted to is the resurgence of fossil fuels in some areas and another speculative investment commodity for the rich to get richer. I’m up for anything that disadvantages crypto, makes it less profitable to use fossil fuels, and discourages the overall use of cryptocurrency.

Evan Greer, one of the authors of this article, also made the stupid take “I refuse to take your “ban cryptocurrency” take seriously unless you are also in favor of banning cash (in which case I take it even less seriously)” which is some major Mr. Gotcha style bullshit which really throws into question whether or not she actually cares about how much of a bullshit financialized pollution-encouraging scam that cryptocurrencies have become.

One person, in reply to one of Greer’s rants about crypto and decentralized tech, pointed out that the argument is bullshit:

You don’t need cryptocurrencies or blockchains to do those things, or anything "decentralized". Bittorrent, matrix, etc don’t need a fucked up ponzi scheme for ancaps to operate, and in a decade have never seen the fucked up ponzi actually build one of these "useful tools"

Greer’s arguments about surveillance of the blockchain are also quite dumb in that the currencies and transactions are supposed to be easily traceable as a feature.

I don’t know about anybody else, but “Ending the era of surveillance capitalism by protecting climate-killing speculative investment tools that are primarily being used by capitalists to enrich themselves and are also easily surveillable as a feature” is hilariously contradictory and way off the mark.

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Anonymous Coward says:

Re: Re: Re:

Also, Greer seems to try to make the argument that cryptocurrency can lead to an “uncensorable private Twitter” and warning that Big Tech, Big Banks and governments would love to co-opt it.

This ignores how “uncensorable Twitter” turns into a nazi shitfest or places where terrorist propaganda gets posted, or replete with porn, as multiple Techdirt articles have pointed out.

Greer also ignores the contradictions in her arguments that cryptocurrency is needed to take on Big Tech and Big Banks, but is also currently imperiled of being co-opted by them, so how useful of a tool can it actually be in that regard?

Scary Devil Monastery (profile) says:

Re: Re:

"So the amendment wants to make sure the people running crypto miners don’t pay anything, you know, the people causing the most ongoing environmental damage."

The major mining farms will eventually pay simply because they use the most energy, and as the effects of global warming hash out, energy hogs are going to take the fall.

Even so, the bitcoin miners are, where global warming is concerned, johhny-come-latelies, and the main reason they’re making an impact is that they often operate with the cheapest available power – fossils. Once fossil power plants become unwelcome anywhere, that too will fall in line.

"Pat ‘Senator Toomey believes that coal is an essential part of America’s energy future…"

Let’s be real. It really doesn’t matter where the power is used. Bitcoin mining, heavy industry, EV charging…it only matters where the power comes from. And Toomey is blatantly selling out the future generation and the world as a whole to cater to his coal miner base.

I get that you don’t like cryptocurrencies, but arguing about the energy aspect just keeps missing the point – that once we shut down fossil fuel plants hard and energy comes at a premium, bitcoin mining will no longer pay off and will shutter on its own.

Seriously, when you’ve got an axe in your skull, complaining about the headache isn’t productive or proportional.

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James Burkhardt (profile) says:

Re: Written Law

That said, you are right to not trust the administration. None of us should. If it is not in the text of the law, the next administration wont care about the promises Biden made even if Biden really means it. Thats as far as you needed to go. But since you went further, I will address your facts.

I don’t remember promises that the ACA wouldn’t be a tax, but the ACA did have a number of provisions intended to prevent tax increases to pay for the bill, with the promise that because of these provisions we wouldn’t need to increase taxes to pay for it. Slight difference. The ACA non-coverage tax doesn’t pay for the increased spending, so id call that a promise kept. (I’d also contest the courtroom arguments as ‘begging’, but that’s not a factual claim so I won’t fight that battle).

There are much better comparisons you could make that better match the fact pattern, like "if you like your plan you can keep your plan", a horribly phrased promise that, on its face, was obviously not going to survive in the face of the draft legislation as it already existed.

Worse there are better, more recent non-partisan examples that don’t go out of their way to suggest the issue is only seen from Democrat administrations: "FOSTA/SESTA won’t affect legal content" being a common example that keeps getting highlighted by Techdirt as being a blind spot on every side in the government.

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James Burkhardt (profile) says:

Re: Re:

A quote cited in the first article on this:

“It says any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person – which can mean anything. If I transfer bitcoin for you, then it can mean I become a broker.”

The issue is the language is super broad. We don’t actually know what the courts will make of it. It might be that the contents of the block chain that federated sites like Mastodon use would be considered digital assets. From the discussions, it doesn’t seem to be a large consideration right now, "Asset" might have a well established definition in law that there is no ambiguity.

But even if Mastodon or similar are not under threat right now, further development might trip them up without the law being clarified now.

Scary Devil Monastery (profile) says:

Re: Re: Re:

The legal argument required to cover torrent files would also somehow making a written price tag an "asset".

Which is, of course, also something the copyright cult has tried a few times.

"You mentioned an asset with sufficient accuracy to identify it! Give us money for the asset you mentioned!"

  • Every copyright cultist evar.
ECA (profile) says:

would like

to see a comparison of bills from the past, and those recently created.
Lets see the differences. Because these bills seem abit loosey goosey.
There is no enforcement agency listed? Who gets to run around and catch everyone?
The gov. has created this economy. They keep adding more money to the system (for some odd reason) to cover what the rich take out? An open money system, that keeps adding to the system REALLY HURTS those paying for the system, esp when most of them are the poor and wages dont go up, and the rich arnt paying into the system.

ECA (profile) says:

Re: Re:

Its unfortunate that people only vote for those people with faces on the TV, and dont realize over 1000 people Ran for president.
That we dont look for the most educated.
We dont look for the person with abit more intelligence, experience or JUST basic knowledge. We HIRE, Lawyers that Couldnt get a job being a lawyer.
We have 2 groups that Pick and Back, 1 person to run for office and then spend a fortune, keepign that Face on your TV.

DNY (profile) says:


I think the notion that the Biden administration wants there to be alternatives to Big Tech is ill-founded. "Being tough on Big Tech" in this context should be understood as bending Big Tech to the will of the State, not breaking up Big Tech, fostering competing "small Tech", engendering transparency or anything else which would be salutary to the internet as a modern agora. Remember who cheered the destruction of Parler.

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