4 ms·

Banning... how?

yyyk 6y ago
The entire thing relies on several things: nearly always-on connectivity, ability to convert to USD, crummy UX, and legit cover. A ban would do serious harm to 2, 3 and 4. If no one could pay legitimately and it would become (ever more) difficult to launder, the ransomware demands would die. The first (connectivity) could be impacted as well. What would happen when traffic shaping makes sync take longer and when every LN transaction risks losing money due to disconnections?
- melq 6y ago
  I think the person you're responding to is how you would go about banning it in the first place, not necessarily why you would ban it.
  - garmaine 6y ago
    Yes that's what I meant (not sure why you were down-voted). Banning banks from doing business with bitcoin exchanges is not banning bitcoin. Banning use of bitcoin entirely is legally plausible, but technically impossible to implement without draconian internet censorship on the scale of China. It's a 100x harder to ban bitcoin than, say, bittorrent, and banning that in a free society ended up not being possible.
    - yyyk 6y ago
      Well, ensuring that no one sets up a Bitcoin network from their retrofitted computers in the privacy of their home is not banning Bitcoin, at least not a useful ban that we should care to enforce. If we can disrupt the network so that even criminals can't get ordinary people to 'pay' via the network, than it's for all practical purposes a ban. I don't agree that banning it is harder than bittorrent. It's dramatically easier. Bittorrent doesn't have global state, so there's no one place to strike. The entire Bitcoin network depends on global consensus, and therefore there is one place to strike. If it is weakened so that it shrinks enough (how many miners will want to mine for an illegal activity?), than 50%+1 attack will be trivial for a state actor.
- zenexer 6y ago
  This isn’t a defense of Bitcoin. I’m often quite critical of cryptocurrency and believe the world would be better off without it. However, “banning” it won’t have the effects you’ve described, and you seem have some misunderstandings about how Bitcoin works, especially as it pertains to the criminal world. 1. Bitcoin transactions don’t require access to the internet at the time the transaction takes place. There have been solutions for performing offline transactions, though none have really taken off. Nevertheless, it’s not hard to do, though it’s riskier for the recipient than an online transaction. I won’t go into the technical details, but it’s nothing fancy. The idea is that you can place money in any number of accounts ahead of time, then simply pay people by handing them the keys to those accounts. There’s little overhead for creating new accounts; often merchants will use a fresh account for every transaction. Of course, the recipient has to be able to trust that they’re actually receiving keys to an account with the right amount of currency, which is a harder problem to solve. 2. This isn’t necessary. Bitcoin was popular in certain criminal communities long before there was any easy way to convert between Bitcoin and fiat. Cashing out dirty Bitcoin to USD remains risky. 3. The UX is already terrible. The UX that criminals experience isn’t the same UX that investors experience. They can’t use services like Coinbase to cash out. 4. Prior to Bitcoin going mainstream, the cover was that you could exchange your Bitcoin for various illegal products and services. (Want to buy a stolen car?) When there’s a whole underground economy whose participants are thoroughly convinced they are outside the reach of the law, any currency will work, as long as there’s a consensus within that community. Banning cryptocurrency would have some interesting effects, but it would be nearly impossible to enforce, and it wouldn’t have the impact you’re seeking.
  - yyyk 6y ago
    1. Passing keys around risks the original sender (or anyone listening in) grabbing the money after 'payment', and voids any guarantees Bitcoin etc. might be able to make - the transaction isn't even listed on the chain. This would turn a 'trustless blockchain' to a 'non-blockchain relying on trust'. Assuming this transition can even be done (what would be the point of cryptocurrency in that case?), the result would be like the known hawala networks, which at least do not enable so much criminal activity and have some decent uses. 2,4. Bitcoin had an aura around it. Something experimental not really concerned with money or big crime, maybe a way to buy light drugs. Later on as a magnet for speculation. Remove the official cover, and laundering would become way more difficult. 3. There's terrible UX, and there's 'terrible horrible UX when one could easily lose money because the ISP closes your lightening connection'. So I think this is possible to enforce, not completely, but there's no need for 100% enforcement to have a positive effect.
Larrikin 6y ago
Bitcoin is only useful currently when it can be turned into cash. There are no real businesses that don't turn their payments into a taxable national currency at the end. If you just ban exchanges in a few dominant countries btc is effectively useless as a hold of value and you're back to convincing the pizza guy to accept 30 coins for one pizza and other one off transactions
- garmaine 6y ago
  That doesn't really have any impact on the situation being discussed, though. Criminals are still more than happy to accept bitcoin.
- albuic 6y ago
  If you give me 30 bitcoins I will even give you a free pizza and deliver them almost anywhere. Joke appart, it is effectively useless for now but some places are now accepting it which means that the usefulness might change sooner than we expect. It doesn't mean the seller won't be able to locate you with the address for the delivery though. Real problem will be if they use Monero or some real anonymous cryptocurrency where fungability is respected.
deleted 6y ago
[deleted]

Banning... how?

yyyk 6y ago

The entire thing relies on several things: nearly always-on connectivity, ability to convert to USD, crummy UX, and legit cover. A ban would do serious harm to 2, 3 and 4. If no one could pay legitimately and it would become (ever more) difficult to launder, the ransomware demands would die. The first (connectivity) could be impacted as well. What would happen when traffic shaping makes sync take longer and when every LN transaction risks losing money due to disconnections?

melq 6y ago
I think the person you're responding to is how you would go about banning it in the first place, not necessarily why you would ban it.
- garmaine 6y ago
  Yes that's what I meant (not sure why you were down-voted). Banning banks from doing business with bitcoin exchanges is not banning bitcoin. Banning use of bitcoin entirely is legally plausible, but technically impossible to implement without draconian internet censorship on the scale of China. It's a 100x harder to ban bitcoin than, say, bittorrent, and banning that in a free society ended up not being possible.
  - yyyk 6y ago
    Well, ensuring that no one sets up a Bitcoin network from their retrofitted computers in the privacy of their home is not banning Bitcoin, at least not a useful ban that we should care to enforce. If we can disrupt the network so that even criminals can't get ordinary people to 'pay' via the network, than it's for all practical purposes a ban. I don't agree that banning it is harder than bittorrent. It's dramatically easier. Bittorrent doesn't have global state, so there's no one place to strike. The entire Bitcoin network depends on global consensus, and therefore there is one place to strike. If it is weakened so that it shrinks enough (how many miners will want to mine for an illegal activity?), than 50%+1 attack will be trivial for a state actor.
zenexer 6y ago
This isn’t a defense of Bitcoin. I’m often quite critical of cryptocurrency and believe the world would be better off without it. However, “banning” it won’t have the effects you’ve described, and you seem have some misunderstandings about how Bitcoin works, especially as it pertains to the criminal world. 1. Bitcoin transactions don’t require access to the internet at the time the transaction takes place. There have been solutions for performing offline transactions, though none have really taken off. Nevertheless, it’s not hard to do, though it’s riskier for the recipient than an online transaction. I won’t go into the technical details, but it’s nothing fancy. The idea is that you can place money in any number of accounts ahead of time, then simply pay people by handing them the keys to those accounts. There’s little overhead for creating new accounts; often merchants will use a fresh account for every transaction. Of course, the recipient has to be able to trust that they’re actually receiving keys to an account with the right amount of currency, which is a harder problem to solve. 2. This isn’t necessary. Bitcoin was popular in certain criminal communities long before there was any easy way to convert between Bitcoin and fiat. Cashing out dirty Bitcoin to USD remains risky. 3. The UX is already terrible. The UX that criminals experience isn’t the same UX that investors experience. They can’t use services like Coinbase to cash out. 4. Prior to Bitcoin going mainstream, the cover was that you could exchange your Bitcoin for various illegal products and services. (Want to buy a stolen car?) When there’s a whole underground economy whose participants are thoroughly convinced they are outside the reach of the law, any currency will work, as long as there’s a consensus within that community. Banning cryptocurrency would have some interesting effects, but it would be nearly impossible to enforce, and it wouldn’t have the impact you’re seeking.
- yyyk 6y ago
  1. Passing keys around risks the original sender (or anyone listening in) grabbing the money after 'payment', and voids any guarantees Bitcoin etc. might be able to make - the transaction isn't even listed on the chain. This would turn a 'trustless blockchain' to a 'non-blockchain relying on trust'. Assuming this transition can even be done (what would be the point of cryptocurrency in that case?), the result would be like the known hawala networks, which at least do not enable so much criminal activity and have some decent uses. 2,4. Bitcoin had an aura around it. Something experimental not really concerned with money or big crime, maybe a way to buy light drugs. Later on as a magnet for speculation. Remove the official cover, and laundering would become way more difficult. 3. There's terrible UX, and there's 'terrible horrible UX when one could easily lose money because the ISP closes your lightening connection'. So I think this is possible to enforce, not completely, but there's no need for 100% enforcement to have a positive effect.

Larrikin 6y ago

Bitcoin is only useful currently when it can be turned into cash. There are no real businesses that don't turn their payments into a taxable national currency at the end. If you just ban exchanges in a few dominant countries btc is effectively useless as a hold of value and you're back to convincing the pizza guy to accept 30 coins for one pizza and other one off transactions

garmaine 6y ago
That doesn't really have any impact on the situation being discussed, though. Criminals are still more than happy to accept bitcoin.
albuic 6y ago
If you give me 30 bitcoins I will even give you a free pizza and deliver them almost anywhere. Joke appart, it is effectively useless for now but some places are now accepting it which means that the usefulness might change sooner than we expect. It doesn't mean the seller won't be able to locate you with the address for the delivery though. Real problem will be if they use Monero or some real anonymous cryptocurrency where fungability is respected.

deleted 6y ago

[deleted]