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Libra is going down the same rabbit hole as Liberty Reserve. Designing a private currency always leads to insurmountable regulatory pressure. There is nothing

Libra is going down the same rabbit hole as Liberty Reserve. Designing a private currency always leads to insurmountable regulatory pressure. There is nothing moral about agencies such as the FATF. They are products of geopolitics, not user interests. Expect compliance requirements to get more and more byzantine with no end in sight. You can either comply (a losing battle) or you immunize (a-la Bitcoin).

JumpCrisscross 6y ago
> you immunize (a-la Bitcoin) Honest question: do Bitcoin proponents honestly believe it “immunises” them against the law?
- mathiasrw 6y ago
  Some might, but it is really a misunderstanding. What it "immunises" against is some of the consequences of monetary policy - like interest rates and (hyper)inflation from adjusting the money supply.
- brazzy 6y ago
  I'm fairly sure GP meant that Bitcoin itself is designe to be immune to legal interference. Individual users are not, although by employing a very strict security regime, they can in principle stay completely anonymous.
  - ac29 6y ago
    > by employing a very strict security regime, they can in principle stay completely anonymous Doesn't that necessarily require avoiding legitimate financial institutions at all costs?
    - lmm 6y ago
      You can interact with legitimate financial institutions in the normal way under your public identity. You've just got to make sure you don't share that identity with your bitcoin counterparties, which will limit your ability to exchange bitcoin for things of value such as fiat currency.
    - garmaine 6y ago
      Bitcoin isn’t meant to interface with existing financial institutions.
      - fidelramos 6y ago
        Correct. It's actually in the first line of the Bitcoin whitepaper's abstract: > A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
      - ac29 6y ago
        Sure, but effectively 100% of the world's economy takes place via fiat currencies. One could remain anonymous by accumulating a bunch of cash (or gold, or some commodity, etc) and never spending it as well.
- garmaine 6y ago
  No. It means regulator’s tools are ineffective against the bitcoin network.
- fidelramos 6y ago
  I understand it and agree with it in the same meaning that BitTorrent bypasses copyright laws: you cannot prevent people from sharing and downloading a torrent, you can only prosecute them after the fact. Enough people do that and you cannot go against millions of people. I think the same concepts apply to Bitcoin and cryptocurrencies.
- Mengkudulangsat 6y ago
  The immunity that Bitcoin pursues isn't on the user-level. People still need to expect being responsible for the consequences of their transactions. The immunity that Bitcoin pursues is on the infrastructure / development level, in that the project contributors take great pains to prevent themselves from being subject to regulatory compulsion.
Hermel 6y ago
Also, the FATF seems utterly incompetent at writing well-designed regulation. It is for example very hard to make sense of their definitions. Here is their definition of "virtual asset": "A virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations." [1] Some nitpicking: Taken literally, Bitcoin falls through this definition, because a Bitcoin is not a "digital representation of value", it is a "digital value". It does not represent anything, it is the value itself. But that's the least problem of all. The FATF commits the sin of providing a negative definition, basically saying every digital representation of value is a virtual asset except for those already covered elsewhere. No biologist would ever define "tree" as every plant not already described elsewhere. It is not something you can meaningfully work with. But let's see what they already covered elsewhere. For example, they cover "funds" elsewhere. Funds is defined as "every kind of asset". But if "virtual assets" are "assets" and therefore also "funds", they are already covered elsewhere and thus no "virtual asset" anymore. One should also note that FATF frequently uses the term "funds or other assets", indicating that they don't really know the meaning of the word "every". Edit, just to add another point: you would think that the 134-page strong document "INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION" in which the expression "money laundering" is used 284 times would somehow provide a clear definition of what money laundering is? You would be wrong. "Money laundering offense" is tautologically defined as "References (except in Recommendation 3) to a money laundering offence refer not only to the primary offence or offences, but also to ancillary offences." That's all. No further specification about what money laundering actually is. [1]: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf https://www.fatf-gafi.org/media/fatf/documents/recommendatio...

JumpCrisscross 6y ago

> you immunize (a-la Bitcoin) Honest question: do Bitcoin proponents honestly believe it “immunises” them against the law?

mathiasrw 6y ago
Some might, but it is really a misunderstanding. What it "immunises" against is some of the consequences of monetary policy - like interest rates and (hyper)inflation from adjusting the money supply.
brazzy 6y ago
I'm fairly sure GP meant that Bitcoin itself is designe to be immune to legal interference. Individual users are not, although by employing a very strict security regime, they can in principle stay completely anonymous.
- ac29 6y ago
  > by employing a very strict security regime, they can in principle stay completely anonymous Doesn't that necessarily require avoiding legitimate financial institutions at all costs?
  - lmm 6y ago
    You can interact with legitimate financial institutions in the normal way under your public identity. You've just got to make sure you don't share that identity with your bitcoin counterparties, which will limit your ability to exchange bitcoin for things of value such as fiat currency.
  - garmaine 6y ago
    Bitcoin isn’t meant to interface with existing financial institutions.
    - fidelramos 6y ago
      Correct. It's actually in the first line of the Bitcoin whitepaper's abstract: > A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
    - ac29 6y ago
      Sure, but effectively 100% of the world's economy takes place via fiat currencies. One could remain anonymous by accumulating a bunch of cash (or gold, or some commodity, etc) and never spending it as well.
garmaine 6y ago
No. It means regulator’s tools are ineffective against the bitcoin network.
fidelramos 6y ago
I understand it and agree with it in the same meaning that BitTorrent bypasses copyright laws: you cannot prevent people from sharing and downloading a torrent, you can only prosecute them after the fact. Enough people do that and you cannot go against millions of people. I think the same concepts apply to Bitcoin and cryptocurrencies.
Mengkudulangsat 6y ago
The immunity that Bitcoin pursues isn't on the user-level. People still need to expect being responsible for the consequences of their transactions. The immunity that Bitcoin pursues is on the infrastructure / development level, in that the project contributors take great pains to prevent themselves from being subject to regulatory compulsion.

Hermel 6y ago

Also, the FATF seems utterly incompetent at writing well-designed regulation. It is for example very hard to make sense of their definitions. Here is their definition of "virtual asset": "A virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations." [1] Some nitpicking: Taken literally, Bitcoin falls through this definition, because a Bitcoin is not a "digital representation of value", it is a "digital value". It does not represent anything, it is the value itself. But that's the least problem of all. The FATF commits the sin of providing a negative definition, basically saying every digital representation of value is a virtual asset except for those already covered elsewhere. No biologist would ever define "tree" as every plant not already described elsewhere. It is not something you can meaningfully work with. But let's see what they already covered elsewhere. For example, they cover "funds" elsewhere. Funds is defined as "every kind of asset". But if "virtual assets" are "assets" and therefore also "funds", they are already covered elsewhere and thus no "virtual asset" anymore. One should also note that FATF frequently uses the term "funds or other assets", indicating that they don't really know the meaning of the word "every". Edit, just to add another point: you would think that the 134-page strong document "INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION" in which the expression "money laundering" is used 284 times would somehow provide a clear definition of what money laundering is? You would be wrong. "Money laundering offense" is tautologically defined as "References (except in Recommendation 3) to a money laundering offence refer not only to the primary offence or offences, but also to ancillary offences." That's all. No further specification about what money laundering actually is. [1]: https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf https://www.fatf-gafi.org/media/fatf/documents/recommendatio...