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I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? I don’t mea

I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? I don’t mean “ideologically, I am upset that the government can see I buy too many pastries”. When we look at cryptocurrency, it is used for a small collection of things: - Speculation on a high volatility, unregulated market - Money laundering - Distribution of illegal material These all seem like things Im fine with the government having visibility into. Perhaps this is ignorance on my part, but all legitimate uses I’ve ever heard of seem like rounding error next to the above. No one is buying pizza with bitcoin in 2020. The uptake for real transactions seems like it’s near zero. About the best I can come up with is that financial privacy permits low level lawbreaking for laws generally regarded as stupid or unethical (e.g., marijuana). I think it’s safe to say that people who want to feed their drug habits will find other anonymous ways to to pay, e.g. barter or proxy goods. The types of folks who are deeply affected by large governments having logs of their transactions are not the downtrodden masses. They’re the moderately wealthy engaged in corruption and trafficking. Cry me a river.

darawk 6y ago
What are the legitimate use cases for privacy from the authorities in other domains? What are the legitimate use cases for being allowed to speak to other humans without your voice being recorded in case the authorities want to know what you said later? Fundamentally financial privacy is just privacy. People desire financial privacy for all the reasons they desire any other kind of privacy. It's certainly fine to make the collectivist argument that individual privacy is not worth the social cost of opacity, but the idea that this is true only in finance seems odd and difficult to justify.
pfortuny 6y ago
Yours is not the right question. The use of money has always been assumed anonymous (not the property owned, that is a different thing). Governments have a duty to collect taxes but do not have a duty to know anything about how people use their money. Governments exist as a need not as something which has “rights”.
scandox 6y ago
I think the issue we all dance around is that ultimately financial privacy provides the only reasonable means of funding anti state violence. Of course this is always immediately labelled terrorism, but at many times in history has been the only means of major social change. So in essence if you can't secretly buy weapons you can't have an IRA etc...
- cycomanic 6y ago
  I have to say this has been the only satisfactory answer in this thread.
- gabcoh 6y ago
  Has crypto ever been used for this purpose? And haven’t many other forms of currency effectively been used for this purpose in the past?
  - scandox 6y ago
    As far as I knew we were talking not about Crypto but about the need for financial privacy.
auganov 6y ago
> I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? I don’t mean “ideologically, I am upset that the government can see I buy too many pastries”. And the vast majority of people have very little to gain from all other kinds of privacy. The government wouldn't find anything interesting in my IM messages either. Most people who really need it are probably up to no good too. I'm on both sides of this debate. I think most privacy issues are overblown by a small set of zealots. But at the same time I don't see much difference between financial privacy and whichever other kind.
tluyben2 6y ago
> The types of folks who are deeply affected by large governments having logs of their transactions are not the downtrodden masses Those same masses don't care about cameras everywhere, they don't care about websites tracking them etc; they have no privacy concerns at all outside 'hope they cannot see me naked when in the shower' (which i'm not sure about with all the camera devices either though), so that's not a very good example imho. I don't want the gov to see every transaction I make, but i'm not into trafficking, corruption or money laundering or whatever. It is not the govs business; it is their business to see how much money I get in and for me to pay taxes over that. They do not need details of anything unless i'm a suspected criminal. But there is the rub, in my opinion, they would need to prove I did something to warrant that, not blanket rules like AML over everything financial. > The uptake for real transactions seems like it’s near zero. Not sure, most my work (and many people I know, especially since covid) these days gets paid in crypto because it's international, fast, easy and there are no limits (unlike banks who start AML freezing stuff willy-nilly). I declare everything as income and outgoing business income/expenses. Works fine. It's fast and convenient for non-crime payments; I pay people with it as well. Especially for large amounts. Also; I do not work in or with blockchain tech generally, but my clients started asking if they could pay in it this year (they also don't work in blockchain, but it's just far more convenient and faster and cheaper than SWIFT payments internationally). I also see no use for it vs local banks; most banking transactions locally here are instant and simple, but international money is still very annoying and can take a long time (and, as we have seen, often bounces or stalls for no visible reason at all).
nootropicat 6y ago
Politicians and bureaucrats try to maximize their _relative_ power over everyone else. Power ultimately comes from resources - as security apparatus requires resources to function. What this means is that states try to maximize effective real level of taxes. Only two forces prevent taxes from going to ~100%: tax evasion and military risk from other states. As taxes become higher, more people start evading, reducing the real effective tax rate, which reduces real relative power of bureaucrats and politicians. Smart governments reduce taxes in that situation. If evasion becomes impossible, taxes are going to approach 100%: everything over resources needed for survival goes to the ruling class (slavery), which is historically the dominant arrangement (eg. serfdom). It wouldn't be a fundamentally new situation even in modern times - in the Soviet Union everyone, officially, made roughly the same regardless of what they did, and that amount was barely enough for survival. Which wasn't smart, because tax evasion was enormous (in the form of bribes and black market), which created a new ruling class (now called oligarchs). Military risk is another force acting against high taxes, as states that kill its economic activity (due to people having weak motivation) risk being conquered eventually by wealthier and stronger states. However, looking at North Korea in particular, it appears as long as some form of MAD is in place (in the case of NK - destruction of Seoul for decades, lately also nuclear missiles) that doesn't matter that much today. To sum it up: I'm convinced total financial surveillance inevitably means a return to slavery. Physical money is going to disappear in decades. Anonymous crypto appears to be the only force that can prevent this future.
- cycomanic 6y ago
  Your statements need some serious evidence to back them up. Even if one concedes that the goal of "the ruling class" is serfdom, you have brought no evidence that this is related to the amount of taxes and that taxes somehow would grow to 100%. In fact looking at the history of the US, inequality has grown as tax rates have reduced. Similarly in worldwide comparisons countries with higher tax rates are generally more equal, in other words they are less likely to have an underclass of "serfs". "Financial privacy" and ways to hide your financial transactions almost exclusively benefits those with capital, what I would already call the ruling class, as evidenced by e.g. the Panama papers.
DennisP 6y ago
Corporations are not going to put transactions on blockchains without strong privacy, for competitive reasons. It's probably not practical to do that while also leaving a backdoor for the authorities, but even if it were, it'd just be a tweaked version of the same technology.
seibelj 6y ago
Others have basically made the same argument, but to me it comes down to power. Does the government need to know every financial transaction you make? For hundreds of years they couldn’t for technology reasons. Now they deeply desire it and have the means to do so. Would you want the government to have direct access to your brain and thoughts? I assume not. But if you have nothing to hide, is this really a problem? Why are you so worried? It’s why I don’t want the government to have instant access to everyone’s google searches. People use google as a quick extension to thinking, and if the government could see everything I’ve googled in my entire life I’m sure they could paint a picture of a crazy person. Transacting in commerce is equal to freedom. I don’t want the government to instantly know everything I have ever bought in my life. And if you accept that under some threshold ($100? $1000?) the government should not instantly be informed, you’ve opened the door to (insert terrible thing here)! So either we give the government access to everything instantly or we restrict it for some reason. I am in favor of restricting.
npongratz 6y ago
> I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? One might perform an action today that is legal and considered moral or amoral. When the authoritarian regime changes tomorrow, I would not want those legal/(a)moral actions to be retroactively criminalized.

darawk 6y ago

What are the legitimate use cases for privacy from the authorities in other domains? What are the legitimate use cases for being allowed to speak to other humans without your voice being recorded in case the authorities want to know what you said later? Fundamentally financial privacy is just privacy. People desire financial privacy for all the reasons they desire any other kind of privacy. It's certainly fine to make the collectivist argument that individual privacy is not worth the social cost of opacity, but the idea that this is true only in finance seems odd and difficult to justify.

pfortuny 6y ago

Yours is not the right question. The use of money has always been assumed anonymous (not the property owned, that is a different thing). Governments have a duty to collect taxes but do not have a duty to know anything about how people use their money. Governments exist as a need not as something which has “rights”.

scandox 6y ago

I think the issue we all dance around is that ultimately financial privacy provides the only reasonable means of funding anti state violence. Of course this is always immediately labelled terrorism, but at many times in history has been the only means of major social change. So in essence if you can't secretly buy weapons you can't have an IRA etc...

cycomanic 6y ago
I have to say this has been the only satisfactory answer in this thread.
gabcoh 6y ago
Has crypto ever been used for this purpose? And haven’t many other forms of currency effectively been used for this purpose in the past?
- scandox 6y ago
  As far as I knew we were talking not about Crypto but about the need for financial privacy.

auganov 6y ago

> I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? I don’t mean “ideologically, I am upset that the government can see I buy too many pastries”. And the vast majority of people have very little to gain from all other kinds of privacy. The government wouldn't find anything interesting in my IM messages either. Most people who really need it are probably up to no good too. I'm on both sides of this debate. I think most privacy issues are overblown by a small set of zealots. But at the same time I don't see much difference between financial privacy and whichever other kind.

tluyben2 6y ago

> The types of folks who are deeply affected by large governments having logs of their transactions are not the downtrodden masses Those same masses don't care about cameras everywhere, they don't care about websites tracking them etc; they have no privacy concerns at all outside 'hope they cannot see me naked when in the shower' (which i'm not sure about with all the camera devices either though), so that's not a very good example imho. I don't want the gov to see every transaction I make, but i'm not into trafficking, corruption or money laundering or whatever. It is not the govs business; it is their business to see how much money I get in and for me to pay taxes over that. They do not need details of anything unless i'm a suspected criminal. But there is the rub, in my opinion, they would need to prove I did something to warrant that, not blanket rules like AML over everything financial. > The uptake for real transactions seems like it’s near zero. Not sure, most my work (and many people I know, especially since covid) these days gets paid in crypto because it's international, fast, easy and there are no limits (unlike banks who start AML freezing stuff willy-nilly). I declare everything as income and outgoing business income/expenses. Works fine. It's fast and convenient for non-crime payments; I pay people with it as well. Especially for large amounts. Also; I do not work in or with blockchain tech generally, but my clients started asking if they could pay in it this year (they also don't work in blockchain, but it's just far more convenient and faster and cheaper than SWIFT payments internationally). I also see no use for it vs local banks; most banking transactions locally here are instant and simple, but international money is still very annoying and can take a long time (and, as we have seen, often bounces or stalls for no visible reason at all).

nootropicat 6y ago

Politicians and bureaucrats try to maximize their _relative_ power over everyone else. Power ultimately comes from resources - as security apparatus requires resources to function. What this means is that states try to maximize effective real level of taxes. Only two forces prevent taxes from going to ~100%: tax evasion and military risk from other states. As taxes become higher, more people start evading, reducing the real effective tax rate, which reduces real relative power of bureaucrats and politicians. Smart governments reduce taxes in that situation. If evasion becomes impossible, taxes are going to approach 100%: everything over resources needed for survival goes to the ruling class (slavery), which is historically the dominant arrangement (eg. serfdom). It wouldn't be a fundamentally new situation even in modern times - in the Soviet Union everyone, officially, made roughly the same regardless of what they did, and that amount was barely enough for survival. Which wasn't smart, because tax evasion was enormous (in the form of bribes and black market), which created a new ruling class (now called oligarchs). Military risk is another force acting against high taxes, as states that kill its economic activity (due to people having weak motivation) risk being conquered eventually by wealthier and stronger states. However, looking at North Korea in particular, it appears as long as some form of MAD is in place (in the case of NK - destruction of Seoul for decades, lately also nuclear missiles) that doesn't matter that much today. To sum it up: I'm convinced total financial surveillance inevitably means a return to slavery. Physical money is going to disappear in decades. Anonymous crypto appears to be the only force that can prevent this future.

cycomanic 6y ago
Your statements need some serious evidence to back them up. Even if one concedes that the goal of "the ruling class" is serfdom, you have brought no evidence that this is related to the amount of taxes and that taxes somehow would grow to 100%. In fact looking at the history of the US, inequality has grown as tax rates have reduced. Similarly in worldwide comparisons countries with higher tax rates are generally more equal, in other words they are less likely to have an underclass of "serfs". "Financial privacy" and ways to hide your financial transactions almost exclusively benefits those with capital, what I would already call the ruling class, as evidenced by e.g. the Panama papers.

DennisP 6y ago

Corporations are not going to put transactions on blockchains without strong privacy, for competitive reasons. It's probably not practical to do that while also leaving a backdoor for the authorities, but even if it were, it'd just be a tweaked version of the same technology.

seibelj 6y ago

Others have basically made the same argument, but to me it comes down to power. Does the government need to know every financial transaction you make? For hundreds of years they couldn’t for technology reasons. Now they deeply desire it and have the means to do so. Would you want the government to have direct access to your brain and thoughts? I assume not. But if you have nothing to hide, is this really a problem? Why are you so worried? It’s why I don’t want the government to have instant access to everyone’s google searches. People use google as a quick extension to thinking, and if the government could see everything I’ve googled in my entire life I’m sure they could paint a picture of a crazy person. Transacting in commerce is equal to freedom. I don’t want the government to instantly know everything I have ever bought in my life. And if you accept that under some threshold ($100? $1000?) the government should not instantly be informed, you’ve opened the door to (insert terrible thing here)! So either we give the government access to everything instantly or we restrict it for some reason. I am in favor of restricting.

npongratz 6y ago

> I am generally a very privacy-minded person, but serious question here: is there any legitimate use case for financial privacy from the authorities? One might perform an action today that is legal and considered moral or amoral. When the authoritarian regime changes tomorrow, I would not want those legal/(a)moral actions to be retroactively criminalized.