HOWEVER, open-source software proved its resilience as the Indian government was ineffective in restricting access to Bitchat and repos live on. Even more impressive, the Bitchat application can now be shared from phone-to-phone with no internet required on Android devices.

Beyond its open-source qualities, and equally important to the story, is Bitchat’s resilient and highly-effective peer-to-peer network. The software operates locally on each user’s phone and users are able to relay messages, or even bitcoin, to each other across the network via Bluetooth. It’s one of the more advanced anti-censorship technologies and is proving effective. You can learn more about it by reading its whitepaper.

And you’re probably wondering about the student protests. Well, the movement—known as the ‘Cockroach’ movement—began as a response to corruption within the education system (but actually as online satire) and has grown to be a broader movement to establish government accountability. So far, it has proven successful with the resignation of India’s education minister after these recent protests. In the end, not only did the protests prevail in their objective, but so did open-source software and peer-to-peer networks, despite the order remaining in effect.

That’s a point for speech and assembly.

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An American faces prison because GrapheneOS worked

Federal agents stopped American citizen Sam Tunick at the border and demanded access to his phone without a warrant. He provided a GrapheneOS duress passcode, which did exactly what it was designed to do: destroy the phone’s data rather than surrender it. The government responded by charging him with destruction of property to prevent seizure.

The indictment accidentally cites the “Untied States Code.” Serendipitous, because this is a constitutionally untied prosecution [Editor’s note: C’mon man]. Warrantless border searches are already a corruption of Fourth Amendment doctrine when applied to devices containing nearly the entirety of a person’s private life.

A note on the law from Jason:

Section 2232 compounds the problem by criminalizing interference with the government’s lawful custody of property—even perfectly lawful property. The charging choice matters. Prosecutors did not invoke Section 1519, the conventional evidence-destruction statute, which carries up to 20 years and requires intent to impede a federal investigation or other federal matter. Section 2232 carries a five-year maximum and asks a narrower question: did Tunick knowingly act to impair the government’s lawful authority to take the property? It does not require prosecutors to allege that the deleted data was contraband or evidence of any separate crime. The crucial word is lawful: the government must still establish that agents had lawful authority to seize what Tunick allegedly destroyed.

Agents invoked the most morally repugnant accusation available. But if you think the moral turpitude of an accusation should override procedural checks on police when apprehending Americans, then you do not understand American values. Constitutional protections matter most when the government’s accusation makes them unpopular.

Nor should useful technology be judged by its worst users. Every phone should have a self-destruct feature: if a thief takes it, it dies; if a kidnapper forces its owner to unlock it, it dies. In the language of contributory copyright liability, this technology is plainly capable of substantial lawful uses. Criminals do not get a heckler’s veto over everyone else’s security.

We saw the same inversion when OFAC sanctioned Tornado Cash because North Korea used it. The restriction burdened Americans seeking financial privacy without making the software disappear or stopping North Korea. When the government cannot defeat freedom technology, it tries to prohibit the technology and prosecute its users.

I (Peter) own a Pixel 10 Fold. This case has me thinking I’m long overdue to switch to GrapheneOS.

By the way, in discussing this case, we were reminded this guy guy eating something potentially incriminating while being arrested.

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Open Models

First, this NYT explanation of the open weights situation is helpful to send to friends or anyone else who is trying to catch up.

Peter responded to some musings from our friend Joe Weisenthal. Joe was questioning the real intentions of the many AI business leaders who signed on the open letter supporting open AI models.

Peter argues that, even though there may be some meta business strategic jockeying happening, we should still be happy with the result: a coalition of powerful entities supporting open source technology.

Read the X article, which does not embed nicely into substack:

The censorship issue looms large when discussing Chinese AI models. Here’s two items that caught our eye on that front:

• An explanation of “Open-Washing” and how open doesn’t always mean open.

• This research, which suggests that open models originating in China can be freed of their baked-in censorship:

And this from Perry E. Metzger sums up the two major camps on AI safety well,

Then there are the people who accept that you cannot perfectly predict the future, that you cannot centrally plan the future, that there will be many players in any technological revolution, that mistakes will be made, that mistakes will be compensated for, that people will figure things out as they go along, that mostly things will be okay, that there is no other realistic pathway. We will muddle through as always, doing our best in an imperfect world, and it will be fine. (Indeed, it will be better than fine.)

And here Eli Dourado lays out why the “pacing letter” signed by numerous leading AI developers is a bit rudderless.

We also learned that FIRE has an AI policy substack that has been helpful in our tracking of all this. Check it out.

Debanking

Nick Anthony at Cato asks, “Is Debanking the New Immigration Policy?”

The Trump administration’s core argument is that undocumented immigrants present a risk to the financial system because if they are deported, then they will lose their jobs and be unable to repay their loans. Setting aside all of the problems with the immigration system (…) this argument can apply to no shortage of issues.

Should banks be required to investigate marital conditions because a divorce could impact a customer’s ability to repay? Should banks be required to investigate mental health conditions because a sudden crisis could result in a lost job? A line has to be drawn somewhere.

Regardless of where you stand on the particular issue, we must stay vigilant against any broadening of the use of bulk collected data. Frankly, they already have everything. The only thing stopping them from using it is our attention.

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What else we’re reading

• Alex Gladstein of Human Rights Watch is a close watcher of how people around the world are using tech to survive and organize under repressive regimes. He has a new essay explaining how dissidents are using AI to build “freedom agents” that aid them in their work: “How AI Agents Are Empowering Human-Rights Defenders,” and gave a sterling interview for the BBC on the subject.

• A great number of New Yorkers have had their personal addresses and names released by the city government, based on their wealth

• Criticism of a proposed “AI Kill Switch” in Reason argues “the bill is an ill-thought-out, knee-jerk reaction to a single incident that could have a whole host of unintended consequences.”

• A new report from WIRED says HuggingFace models are easily used to create deepfakes. This could become an important part of the open model safety debate.

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https://x.com/valkenburgh/status/2078176637094695158

Dean’s response was that frontier AI, unlike ordinary software, requires enormous capital investment. That is true, but it is not unprecedented. The Internet itself required vast investments in fiber, data centers, routers, servers, and undersea cables. Its core protocols and much of its software nevertheless remained open. Capitalism did not collapse. The available profits migrated toward infrastructure, services, applications, security, and customer relationships, producing some of the most valuable companies in history. Available, I mean, to those who knew where to look.

You can run an extremely good business even if you don’t internalize all the value your business creates; indeed, that might be the best way to run a good business. Create positive externalities—oh look, we indexed the entire Internet and made it searchable for free—oh look, we built peer-to-peer electronic cash—while monetizing something else to keep it going.

Jon Stokes offered the best steelman of the frontier labs’ concern. If open weights compress the margins on metered inference, some labs may no longer be able to fund their next great training run out of token sales. But “our present business model cannot finance the next run” does not mean “nobody will finance the next run.” Software companies have found countless ways to fund expensive upstream technologies by capturing value elsewhere. If the market prefers workplace automation (full disclosure, Jon works on this), specialized applications, hosting, integration, or hardware to expensive metered tokens, then capital will follow. That is not a failure of capitalism. That is capitalism on open source steroids.

Nor should American strategy be organized around preserving the current profit pool of a few frontier labs. Security concerns about Chinese models may be real and should be addressed on their merits. But manufacturing regulatory uncertainty (Dean’s specter of “soft law”) around open models merely to discourage their adoption would be incumbent protectionism, not American capitalism at all.

Recent events also demonstrate the security case for openness. During a cyber evaluation, OpenAI’s GPT‑5.6 ‘Sol’ escaped its air-gapped sandbox and compromised Hugging Face’s servers (file that in epic sentences that didn’t make sense five years ago). When Hugging Face tried to investigate, the commercial frontier models it initially used refused to process the actual attack commands, exploit payloads, and command-and-control artifacts. Hugging Face instead completed the forensic work with GLM 5.2, a Chinese open-weight model running on its own infrastructure. That also meant the attack data and compromised credentials never had to leave Hugging Face’s environment.

This is the lesson of the first Crypto War all over again. The government’s Clipper Chip would have offered encryption while preserving government access through key escrow. But criminals and hostile states were never going to volunteer to use the penetrable version. Strong encryption already existed and would continue spreading around the world. In an adversarial contest, an intentionally hamstrung defensive tool will eventually lose to an un-hamstrung offensive one. Safety rules that bind defenders but not attackers are not “safety”; they are friendly fire.

And if you care about geopolitics—and perhaps, more specifically, American hegemony—open weight models are increasingly demonstrating their value to countries and businesses around the world over proprietary ones. Washington’s imposition of export controls on Anthropic illustrates the growing state of affairs perfectly. Global companies do not want to grow dependent on American frontier models when their access can be stripped away at the whims of the US Executive branch. Open weight models for anyone to download and run on their own infrastructure offer a more stable alternative. But the most advanced open weight models are coming from China and mostly funded by Beijing, meaning they will be trained on and exert CCP values. In a global competition for influence, that’s a winning strategy for China and a losing one for America.

This hit the news today: Reuters published a recent diplomatic cable in which Secretary of State Marco Rubio reportedly called on U.S. diplomats to downplay concerns about AI kill switches in order to stem the tide of foreign countries abandoning U.S. models.

Even better than telling people to ignore the kill switch would be not having a kill switch. But perhaps a policy of “pay no attention to the man behind the curtain!” is the best America’s wizards can manage for the time being.

And as I write this there are reports of a new AI kill switch bill in the House. Oof.

This larger strategic point is one that America has faced before. We won the Internet era not by keeping TCP/IP, the web, or cryptography inside a handful of government-approved national champions. Open systems spread faster, attracted more builders, and accumulated overwhelming network effects. American influence traveled with them precisely because no ministry or company could decide who was allowed to speak, build, or connect.

Coin Center has long made the same argument about cryptocurrency. Permissionless networks extend the reach of open commerce. Privacy-preserving stablecoins can extend the reach of the dollar. Bitcoin provides a stateless monetary exit and a continuing check on rulers who finance corruption or repression through monetary debasement. Openness wins in business and exports American values through the global marketplace of ideas—even across hostile power structures themselves.

That is also the deeper issue in our response to a former White House National Security Council member’s criticism of the CLARITY Act. The author says that “accountability follows power,” which is correct. But CLARITY protects non-controlling developers precisely because they lack the power to seize assets, stop transactions, or command their users. Taken seriously, her contrary position implies that no consequential technological system should be permitted to exist unless it contains a centralized intermediary whom the government can commandeer for “safety.” That is not accountability following power. It is a regulatory demand that power be deliberately built back into systems whose defining virtue is that nobody can dominate them. Open AI, strong encryption, and permissionless cryptocurrency are therefore all fronts in the same fight over whether lawful technology may exist without a government-accessible chokepoint.

But remember: by necessity, these technologies WILL empower criminals as well as dissidents. That is true of every powerful general-purpose technology. The American constitutional wager is not that individuals are always virtuous and therefore should be free. It is that human beings are very fallible and therefore concentrated power is even more dangerous than a handful of criminal syndicates. Bad conduct should be punished as conduct—not ‘prevented’ (hopelessly) by giving governments or corporations prior control over everyone’s tools.

AI is the same. If China has recognized that open weights can win global adoption, America should not answer by imitating the authoritarian instinct for control. I don’t want the 21st century to be a rerun of the 20th but with me on the wrong side of the oceans. We should out-open China: build models that people everywhere can inspect, modify, and use without continuing permission from their creator. Show me the radio-free Europe of LLMs!

If that forces some frontier labs to find a better business model, so be it. It’s sad for them that they won’t so easily become enshrined as permanent overclass immortal living gods after all. But protecting metered-token margins is not a national strategy. Making freedom the default architecture of the world’s most important technologies is.

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What we’re reading:

• The Law of Code Podcast went deep on “Code is Speech.” - Every episode of the podcast is sharply produced and deeply informative. This one focuses on the issue that strikes at the core of our work. It’s long been held that the publication of code is protected speech. But what about code that does something? Between crypto and now AI, it is clear that a new front of a renewed crypto war is unfolding. This will catch you up.

• An explanation of AI enabled surveillance of protestors.

• In Australia, a new policy will force social media companies to publicly unmask anyone merely accused of online “vilification.”

• Our friends at The Cato Institute wrote in opposition to an increasingly bipartisan idea that the answer to AI anxiety is some form of public ownership of its major companies.

• This researcher is developing a test for measuring an AI model’s propensity towards censorship and other authoritarian requests.

• The Machiavellian Case for Decentralized Networks argues that decentralization is not a romantic preference or crypto branding exercise. It is a practical defense against capture. Any settlement network that gets big enough will attract incumbents who want to control it. This is similar to the argument Peter made in his “Privacy is Existential” speech at Devcon last year.

• Of course right when we switched to an end-to-end encrypted alternative (matrix.org) Jack announced that Block is releasing a self-sovereign, ai-agent native slack alternative Buzz. Now Peter wants the whole team on both. Peter is also building a Coin Center OS that has native agent embedding in a Coin Center knowledge graph that scrapes and automatically parses new and emerging policy documents like rulemakings and bill text into a highly engaging unified workspace. Peter also has AI psychosis, including referring to himself in the third person while writing this newsletter.

It’s easy enough for us to write up a newsletter detailing what we’ve been up to in our ongoing advocacy to protect open source and privacy-preserving software developers. There’s more appetite than ever for inside-the-beltway updates on crypto policy.

But between us, this seems more fun.

At Peer-to-Peer, we will still talk about our work here from time to time. But our goal is to spend more time on why.

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We see a world where the liberation that came with the early internet has been thoroughly quelled and in many places turned against the very people it was meant to benefit. We fear a looming era of super-powered digital control, where all personal data is sucked up, correlated, and fed into systems that look uncomfortably like a sci-fi precrime machine. We believe human freedom depends on the availability of open source, decentralized, locally hosted, and private tools.

This brings us to our Purpose.

The threat of technological authoritarianism looms over the world. Individual privacy and autonomy is being marginalized for control and profits by governments and corporations alike. This erosion of freedom is often slow and quiet, or sold to us as necessary for our safety.

We are here to dispel such myths and awaken the world to the encroachments we now face, and to promote the small movement of technologists working on the tools to resist this darkening state of affairs.

We will use this space to highlight reporting and commentary on tech authoritarianism, surveillance, censorship, and the people building ways out. We invite you to join us in this movement and to stay informed.

Some things we’re watching:

1. You’re either pro-surveillance or you’re a terrorist.

Flock is a company building a sophisticated license plate reading surveillance platform. Local police departments love them; many average citizens do not. Understandably so, as it’s not only invasive but there are documented cases of police abusing the service for personal reasons, such as stalking romantic interests. Errors in their system can also get innocent people boxed in by police.

In response, there is now an open source movement to track the locations of these cameras called DeFlock with a mission “to shine a light on the widespread use of [Automated License Plate Reader] technology, raise awareness about the threats it poses to personal privacy and civil liberties, and empower the public to take action.”

The Flock CEO does not mince words when discussing it, labelling these privacy advocates as “terrorists.”::

It’s striking to see words like “terrorist” and “extremism” thrown around so casually these days. Typically we see those terms become something of a blank check to justify any kind of enforcement or surveillance.

The Flock CEO is using the language in the same way that we would see it being used against a Belarusian democracy advocate or Russian journalist critical of Putin. He views DeFlock as agents of chaos, and Flock as a force for order.

2. Europe increasingly embraces open source.

Europe has had to live on America’s internet for a long time. This has made a lot of their commerce effectively subject to US law and the whims of US Big Tech. It was bad enough when the cloud blew up. Now they have to worry about AI too. In light of this, the EU is pushing “digital sovereignty,” a concerted statewide effort to reduce their dependence on American and Chinese tech.

Last month the EU released a strategy for encouraging local use of open source technology in service of that goal. It’s a smart move. Open source tech is neutral, and neutrality is better than being subject to geopolitical exposure.

The same case being made for neutral tech should be made for neutral payments too. As we wrote in 2018:

…the threat to the U.S.’s ability to enforce sanctions comes not from blockchain technology, but from the desire to end the U.S.’s dominance of international payments and settlement.

The ability the US has to affect the lives of citizens of other countries was put into sharp relief when judges at the International Criminal Court were sanctioned by the US. Despite not living in the US, being cut off from the US financial system has made their day to day lives impossible to live. It’s worth reading the whole article: “Living with US Sanctions means living in constant uncertainty.”

Open source and neutral technology is the only real answer for those who wish to remain independent during a cold war being fought through technological power projection.

Incidentally, this week Coin Center started using matrix.org and the Element app as an end-to-end encrypted internal Slack replacement. Matrix is a cool open source privacy project and they’ve had recent successes by marketing themselves to EU governments as a tool for digital sovereignty.

3. It turns out debanking was real this whole time. And it hurts more than crypto bros.

There was a row in our corner of X recently when a bank CEO called debanking a “crock of s***.” According to her:

“What debanking actually means is that banks transitioned out of offering crypto products or risky products like adult entertainment or something like that.”

That’s been the line all along. That it’s private businesses choosing who to do business with. Leaving aside the soft pressure that regulators (aka bank examiners) can place on compliance departments, that’s true. Who are we to force a bank to do business with someone they don’t like?

Debanking is usually framed as a right-wing concern. It was often right-wing speech that was most visibly cut off from platforms like Patreon and payment processors. That’s not the case. Or at least, it is not the only case.

Public comments submitted to the Fed’s proposal to remove “reputation risk” from bank supervision paint a much broader picture. The coalition of people worried about debanking includes crypto companies, gun owners, sex workers, religious organizations, artists, and LGBTQ advocates too. Their comments give us a snapshot of real people who have been cut off from the financial system. They show us how lawful activity can become unbankable when it is unpopular, embarrassing, politically inconvenient, or merely annoying to a compliance department.

Interesting Reads:

• Cryptographer Matt Green noting that key escrow for encryption is bad enough on its own and makes no sense if the US government doesn’t even have its own separation of powers:

• ICE is buying data they have been told not to collect from data brokers. A loophole in legal limits placed on surveillance.

• How the UK is blowing up its internet - From our friends at Project Glitch.

• Distance won’t protect you: Belarusian transnational repression in Canada - Belarusian democracy activists living abroad are still being silenced through police harassment of their families and seizure of property and assets still within reach of the state, all in the name of combatting extremism.

• AI surveillance is being supercharged – and it will chill social progress - A scary op-ed from Bruce Schneier and Jon Penney. A must read for those who care about these issues.

We thank you for your time and support as we build this new platform. If you have any thoughts on the materials or feedback for us, please don’t hesitate to let us know personally or in the comments.