Here’s how an assassination market works. Someone runs a public book on the anticipated death dates of public figures. If I hate a particular pop star or politician, I place a bet on when they will die. When the person dies, whoever had the closest guess wins all of the money, less a cut for the house. Let’s say I bet £5 that a particular TV personality is going to die on April Fool’s Day 2014. Other people really hate this personality too and they put down bets as well. The more hated the person is, the most bets there will be.
April Fool’s Day comes around. There’s a million quid bet on this particularly personality. I pay a hit man £500K to murder the personality. Hurrah! I’ve won the bet, so I get the million quid and give half to the hit man. I don’t have to prove that I was responsible for the assassination to get the money: I’m just the lucky winner. If someone else had bet 31st March and murdered the television personality themselves the day before, then I wouldn’t get the payoff but it would only have cost me a fiver and that would have been a fiver spent in a good cause. You can see how the idea plays to, and exploits, our base human nature.
This is actually a rather old idea and, as I mentioned in the FT, the first name it brings to my mind is that of Jim Bell, whose 1995 essay on “assassination politics” was brought the concept to the mass market although, as mentioned below, he wasn’t the first person to write about it. Will it work with the current technology? I wouldn’t have thought so. Bitcoin is a poor choice of payment mechanism for an assassination market that has to have unconditional anonymity to work properly. The placing of the bets, and the collection of the winnings, must be untraceable. Completely untraceable.
But contrary to conventional wisdom, Bitcoin is not anonymous.[From Unlike Liberty Reserve, Bitcoin Is Not Anonymous — Yet – NYTimes.com]
So if you obtain your ransom in Bitcoin the trail of breadcrumbs will sooner or later lead back to you…
Of all the millions of dollars of purloined bitcoin that’s floating around out there, not one Satoshi of it has been spent. That’s because while most other stolen property becomes relatively indistinguishable from its legitimate brethren, everybody knows the identity of this particular stolen wealth, and can track it until the end of time.[From Let’s Cut Through the Bitcoin Hype: A Hacker-Entrepreneur’s Take | Wired Opinion | Wired.com]
And there are people who examine these trails in detail and this examination will get more automated and better informed in time. So you can’t spend stolen bitcoins. But in any case who says there were stolen? How do we know that the exchange operator who says that a hacker transferred out all of their bitcoins didn’t do it themselves? Who decides whether a particular bitcoin is stolen or not? And do people who have accepted bitcoins that are subsequently ruled to be stolen out of pocket? (I hate to spoil the libertarian party, but Visa and MasterCard have tens of thousands of pages of rules to deal with all of this stuff for a reason, which is that consumers, regulators, merchants and other stakeholders all want it).
When it comes down to it, I don’t think pop stars or politicians should be too worried about Kuwabatake Sanjuro’s market. For all I know, Kuwabatake Sanjuro is actually the NSA and even now they are collecting the IP addresses of lunatics who want to murder public officials. In fact, that’s a great idea for TV series! I had a similar idea after last year’s Consult Hyperion Tomorrow’s Transactions Future of Money art competition. One of the ideas was for crowdsourced crime, which was in time taken over by corporate interests. This was selected as the winner by the panel of payment industry judges and I thought that it was a great idea for my William Gibson-style movie blockbuster (I must remember to mention it to Heather Schlegel when I next see her). It was a thought-provoking idea (which is the point of the competition) and well-presented, as you can see for yourself if you go to the web site, but as Wendy Grossman pointed out at the time, the “cypherpunks” version of this meme dates back to Tim May’s 1994 “Cyphernomicon” and the row about anonymous money has been going on ever since.
The proponents of cash argue that if us e-money people are to mount a serious effort to eradicate physical money then we must replicate anonymity as it is a key property of cash. I couldn’t disagree more. Us e-money people are building something better than cash.
* I know about this because of Hawkwind, not because I am literate.
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Thanks for the explanation of assassination markets. It sounds just like the street version of longevity insurance, in which the insurer takes a larger profit if the insured dies sooner. http://trueslant.com/matttaibbi/2009/09/08/wall-street-gambles-on-old-people-dying
But this blog is only concerned with petty crime…