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I thought the whole idea of Bitcoin was to get out of the financial system that Mastercard is a central piece of.

neals 6y ago
Can't really call it freedom if you're not going to allow specific companies to join and use it though...
PretzelPirate 6y ago
The original idea of Bitcoin was to have a currency that wasn’t in government control - not to keep the government and big banks away from it. The current world of cryptocurrency gives you a choice of trusting big banks or not, and having the same economic opportunities regardless of the level of trust you are comfortable with.
- the_local_host 6y ago
  > The original idea of Bitcoin was to have a currency that wasn’t in government control I've never understood this. With an immutable ledger of all transactions, governments simply have to make it illegal to transact anonymously (or pseudonymously), watch the blockchain, and investigate any un-attributed transactions. It would actually enhance governments' surveillance capabilities against anyone not willing to run the risk of trying to obscure their identity, which I expect would be most people. If you can intimidate the participants, the inescapable math of the whole thing becomes a tool that can be used against those participants. You don't need to control a currency if you can control anyone who holds it.
  - solosoyokaze 6y ago
    1. It would be prohibitively expensive for the government to track down every blockchain transaction IRL to find the identity behind the wallet (if even possible). This cost rises with adoption. 2. Different crypto currencies have different roles. If you want to avoid traceability altogether, use zCash.
    - 3np 6y ago
      Some countries have explicitly put restrictions on dealing with privacy-preserving currencies like Monero and ZCash. Japanese exchanges and service providers, for example, are not allowed to touch them.
      - solosoyokaze 6y ago
        This is why the DeFi work on Ethereum is exciting, so you can have exchanges and other financial services not tied to restrictive legislation.
    - the_local_host 6y ago
      1) Why would it be prohibitively expensive? In the face of severe enough penalties, most people would simply report their transactions as required, and report who they transacted with. The number of transactions that needed to be investigated would be a small percentage of the total, and possibly traceable through means other than cracking keys. 2) Regardless of whatever zCash is, my point is that Bitcoin's immutable and complete ledger lends itself to complete surveillance. The math may be uncrackable, but the users are not, and privacy would go out the window if they're forced to transact with registered IDs.
      - solosoyokaze 6y ago
        > forced to transact with registered IDs. It's prohibitively expensive precisely because being forced to transact with registered IDs is going to be less and less of a requirement moving forward. With DeFi exchanges, we'll see more transactions that stay out of state surveillance. You're correct that BTC isn't ideal for privacy though. That's why zCash and Monero will also be important currencies.
    - PragmaticPulp 6y ago
      You don't need to track down every transaction. You just need to flag the fraudulent/stolen/illegal coins on the blockchain and require exchanges to confiscate those coins as they come through the system. Blockchain is a public ledger of every Bitcoin transaction ever. It's trivial to track these things. It's trivial to identify downstream coins from upstream illegal activity. Far easier than with traditional currency. The exchanges will play ball because they want to continue exchanging (making money). The Bitcoin hodlers will play ball because it makes their investment more legitimate and reduces the supply of coins, increasing the value of their stash.
  - 3np 6y ago
    You're absolutely right - it's a very double-edged sword. Pure on-chain bitcoin in its current form is the perfect tool for totalitarian control - guess why the CCP is hyped about their CBDC? I think that the question of if we end up being caught without an exit or not comes down to if privacy-preserving technology (on-chain like Monero and/or off-chain like Lightning) gets adopted by businesses and individuals enough for it to be too late to pull back once powers that be have the understanding, capabilities and intention to do so.
  - rokhayakebe 6y ago
    governments simply have to make it illegal to transact anonymously Making something illegal does not give a government control over it. Many websites/apps are illegal in many countries. Yet governments have near zero control over their citizens using those products. VPN.
    - hammock 6y ago
      What is the VPN for bitcoin?
    - PragmaticPulp 6y ago
      VPN hides activity. Bitcoin makes it public record. Regulating Bitcoin transactions is extremely easy due to the public ledger. You simply make it illegal for exchanges to transact with coins that are known to be stolen or otherwise flagged. Then all exchanges are forced to blacklist coins on that list, as well as descendant transactions from those blacklisted coins. Now there are two classes of addresses on the blockchain: Those that are clean, and those that are tainted with illegal activity transactions. The tainted coins are worth less than untainted coins as fewer and fewer exchanges will touch them. Ironically, Bitcoin speculators will support this move because it reduces the supply of Bitcoin. Reducing the supply of Bitcoin increases the relative value of their clean Bitcoin.
      - RhodoGSA 6y ago
        I can exchange my coins on a DEX - No third party required.
        _jjkk 6y ago
        Whether or not it's a DEX doesn't matter at all. In this hypothetical world of regulation which has made some BTC "tainted" through surveillance, it will always be in the BTC receiver's best interest to verify the coins are "clean". Only a fool (or fellow criminal) would transact with tainted coins; most people would probably not use a DEX, or else use one which verified clean coins anyway without being regulated to do so.
  - tshaddox 6y ago
    Copyright infringement was also always illegal (and still is). That doesn't mean that Napster, BitTorrent, etc. didn't massively increase access to music outside the control of the copyright system.
    - bob33212 6y ago
      Perfect analogy. From 1998-2006 it was easier to get pirated music than pay for it. Once the music industry realized that the days of people paying $20 per CD that they may only listen to a few times were over, the streamers took over and now 90+% of music is listened to with permission of the centralized gate keepers. Regulators and other parties will catch up eventually. When there is a 500% tax on homes/cars you purchase with BTC the whole "decentralization/permissionless" idea will fade away.
  - stale2002 6y ago
    > governments simply have to make it illegal to transact anonymously How? Are you suggesting that every single government in the world would collude together to ban crypto? What if, at least one of those probably western, countries chooses to make the simple decision of not being a parody of a distopian government? Then other governments who have chosen to be a storybook parody of distopian would be unable to tell the different between these legally anonymous transactions that are in the normal country that is allowing these transaction, and between illegal transactions that are not in that country. They couldn't simply watch the blockchain, as 1 country is defecting by not acting like an absurd example of a totalitarian government that is in no way similar to how modern day western countries act. > You don't need to control a currency if you can control anyone who holds it. But multiple absurd totalitarian governments that pop up overnight wouldn't be able to control everyone who owns crypto, as there would certain be countries that decide to make the simple decision of not acting like a story book parody of an evil government.
  - averynicepen 6y ago
    For the record, currently recommended best practice is to create a new Bitcoin address for every transaction. Although the ledger is public, using it on a regular basis would mean you have hundreds of addresses per user. For targeted investigations, blockchain crypto is already being a hugely useful tool for 3 letter agencies. But for dragnet policies of mass de-anonymized transactions, I currently can't think of a way for this to actually work with limited resources. Currently, anonymization is being defeated at the source by requiring registration with all major crypto exchanges. But once the coins start to circulate like cash, wallet to wallet, you would need to force registration on the wallets (in order to match identity to the addresses) - but there are many options that are either heavily security focused or free and open-source, so it would be difficult to find a single choke point to regulate. Depends on what the future of crypto wallet adoption looks like, I suppose. Monopolization does tend to happen...
PragmaticPulp 6y ago
Bitcoin transactions cost $8 each and that’s exactly what the Bitcoin miners want The idea that Bitcoin was going to become a new currency was never true with the low transaction limit and Hugh transaction cost.
- mshumi 6y ago
  A hardfork to algorand consensus would solve this
runeks 6y ago
No, the idea of Bitcoin is to have an asset that you can withdraw from the financial system. This is only possible in our current financial system if you want to take delivery of physical bank notes.
BitwiseFool 6y ago
I see where you are coming from. I see bitcoin as a tool that can be used both inside and outside of the traditional financial system. It's ultimately up to you, the bitcoin holder, to decide if you want it transacted through the bitcoin client or if you want Mastercard to be a middleman.
paulpan 6y ago
Right, I view this announcement as a ploy by Mastercard to stay relevant and probably appease their investors. One of the key selling points of bitcoin and other cryptocurrencies is removing the middleman from transactions. Arguably miners in the proof of work consensus are a middleman but not as much as the 2.5-3.5% charged by the likes of Visa and Mastercard. The other one, as OP mentioned, is permissionless or decentralization - the freedom from the whims of governments and traditional banking systems. I don't see how Mastercard can straddle between the two without some deception.

Can't really call it freedom if you're not going to allow specific companies to join and use it though...

The original idea of Bitcoin was to have a currency that wasn’t in government control - not to keep the government and big banks away from it. The current world of cryptocurrency gives you a choice of trusting big banks or not, and having the same economic opportunities regardless of the level of trust you are comfortable with.

the_local_host 6y ago
> The original idea of Bitcoin was to have a currency that wasn’t in government control I've never understood this. With an immutable ledger of all transactions, governments simply have to make it illegal to transact anonymously (or pseudonymously), watch the blockchain, and investigate any un-attributed transactions. It would actually enhance governments' surveillance capabilities against anyone not willing to run the risk of trying to obscure their identity, which I expect would be most people. If you can intimidate the participants, the inescapable math of the whole thing becomes a tool that can be used against those participants. You don't need to control a currency if you can control anyone who holds it.
- solosoyokaze 6y ago
  1. It would be prohibitively expensive for the government to track down every blockchain transaction IRL to find the identity behind the wallet (if even possible). This cost rises with adoption. 2. Different crypto currencies have different roles. If you want to avoid traceability altogether, use zCash.
  - 3np 6y ago
    Some countries have explicitly put restrictions on dealing with privacy-preserving currencies like Monero and ZCash. Japanese exchanges and service providers, for example, are not allowed to touch them.
    - solosoyokaze 6y ago
      This is why the DeFi work on Ethereum is exciting, so you can have exchanges and other financial services not tied to restrictive legislation.
  - the_local_host 6y ago
    1) Why would it be prohibitively expensive? In the face of severe enough penalties, most people would simply report their transactions as required, and report who they transacted with. The number of transactions that needed to be investigated would be a small percentage of the total, and possibly traceable through means other than cracking keys. 2) Regardless of whatever zCash is, my point is that Bitcoin's immutable and complete ledger lends itself to complete surveillance. The math may be uncrackable, but the users are not, and privacy would go out the window if they're forced to transact with registered IDs.
    - solosoyokaze 6y ago
      > forced to transact with registered IDs. It's prohibitively expensive precisely because being forced to transact with registered IDs is going to be less and less of a requirement moving forward. With DeFi exchanges, we'll see more transactions that stay out of state surveillance. You're correct that BTC isn't ideal for privacy though. That's why zCash and Monero will also be important currencies.
  - PragmaticPulp 6y ago
    You don't need to track down every transaction. You just need to flag the fraudulent/stolen/illegal coins on the blockchain and require exchanges to confiscate those coins as they come through the system. Blockchain is a public ledger of every Bitcoin transaction ever. It's trivial to track these things. It's trivial to identify downstream coins from upstream illegal activity. Far easier than with traditional currency. The exchanges will play ball because they want to continue exchanging (making money). The Bitcoin hodlers will play ball because it makes their investment more legitimate and reduces the supply of coins, increasing the value of their stash.
- 3np 6y ago
  You're absolutely right - it's a very double-edged sword. Pure on-chain bitcoin in its current form is the perfect tool for totalitarian control - guess why the CCP is hyped about their CBDC? I think that the question of if we end up being caught without an exit or not comes down to if privacy-preserving technology (on-chain like Monero and/or off-chain like Lightning) gets adopted by businesses and individuals enough for it to be too late to pull back once powers that be have the understanding, capabilities and intention to do so.
- rokhayakebe 6y ago
  governments simply have to make it illegal to transact anonymously Making something illegal does not give a government control over it. Many websites/apps are illegal in many countries. Yet governments have near zero control over their citizens using those products. VPN.
  - hammock 6y ago
    What is the VPN for bitcoin?
  - PragmaticPulp 6y ago
    VPN hides activity. Bitcoin makes it public record. Regulating Bitcoin transactions is extremely easy due to the public ledger. You simply make it illegal for exchanges to transact with coins that are known to be stolen or otherwise flagged. Then all exchanges are forced to blacklist coins on that list, as well as descendant transactions from those blacklisted coins. Now there are two classes of addresses on the blockchain: Those that are clean, and those that are tainted with illegal activity transactions. The tainted coins are worth less than untainted coins as fewer and fewer exchanges will touch them. Ironically, Bitcoin speculators will support this move because it reduces the supply of Bitcoin. Reducing the supply of Bitcoin increases the relative value of their clean Bitcoin.
    - RhodoGSA 6y ago
      I can exchange my coins on a DEX - No third party required.
      - _jjkk 6y ago
        Whether or not it's a DEX doesn't matter at all. In this hypothetical world of regulation which has made some BTC "tainted" through surveillance, it will always be in the BTC receiver's best interest to verify the coins are "clean". Only a fool (or fellow criminal) would transact with tainted coins; most people would probably not use a DEX, or else use one which verified clean coins anyway without being regulated to do so.
- tshaddox 6y ago
  Copyright infringement was also always illegal (and still is). That doesn't mean that Napster, BitTorrent, etc. didn't massively increase access to music outside the control of the copyright system.
  - bob33212 6y ago
    Perfect analogy. From 1998-2006 it was easier to get pirated music than pay for it. Once the music industry realized that the days of people paying $20 per CD that they may only listen to a few times were over, the streamers took over and now 90+% of music is listened to with permission of the centralized gate keepers. Regulators and other parties will catch up eventually. When there is a 500% tax on homes/cars you purchase with BTC the whole "decentralization/permissionless" idea will fade away.
- stale2002 6y ago
  > governments simply have to make it illegal to transact anonymously How? Are you suggesting that every single government in the world would collude together to ban crypto? What if, at least one of those probably western, countries chooses to make the simple decision of not being a parody of a distopian government? Then other governments who have chosen to be a storybook parody of distopian would be unable to tell the different between these legally anonymous transactions that are in the normal country that is allowing these transaction, and between illegal transactions that are not in that country. They couldn't simply watch the blockchain, as 1 country is defecting by not acting like an absurd example of a totalitarian government that is in no way similar to how modern day western countries act. > You don't need to control a currency if you can control anyone who holds it. But multiple absurd totalitarian governments that pop up overnight wouldn't be able to control everyone who owns crypto, as there would certain be countries that decide to make the simple decision of not acting like a story book parody of an evil government.
- averynicepen 6y ago
  For the record, currently recommended best practice is to create a new Bitcoin address for every transaction. Although the ledger is public, using it on a regular basis would mean you have hundreds of addresses per user. For targeted investigations, blockchain crypto is already being a hugely useful tool for 3 letter agencies. But for dragnet policies of mass de-anonymized transactions, I currently can't think of a way for this to actually work with limited resources. Currently, anonymization is being defeated at the source by requiring registration with all major crypto exchanges. But once the coins start to circulate like cash, wallet to wallet, you would need to force registration on the wallets (in order to match identity to the addresses) - but there are many options that are either heavily security focused or free and open-source, so it would be difficult to find a single choke point to regulate. Depends on what the future of crypto wallet adoption looks like, I suppose. Monopolization does tend to happen...

PragmaticPulp 6y ago

Bitcoin transactions cost $8 each and that’s exactly what the Bitcoin miners want The idea that Bitcoin was going to become a new currency was never true with the low transaction limit and Hugh transaction cost.

mshumi 6y ago
A hardfork to algorand consensus would solve this

runeks 6y ago

No, the idea of Bitcoin is to have an asset that you can withdraw from the financial system. This is only possible in our current financial system if you want to take delivery of physical bank notes.

BitwiseFool 6y ago

I see where you are coming from. I see bitcoin as a tool that can be used both inside and outside of the traditional financial system. It's ultimately up to you, the bitcoin holder, to decide if you want it transacted through the bitcoin client or if you want Mastercard to be a middleman.

paulpan 6y ago

Right, I view this announcement as a ploy by Mastercard to stay relevant and probably appease their investors. One of the key selling points of bitcoin and other cryptocurrencies is removing the middleman from transactions. Arguably miners in the proof of work consensus are a middleman but not as much as the 2.5-3.5% charged by the likes of Visa and Mastercard. The other one, as OP mentioned, is permissionless or decentralization - the freedom from the whims of governments and traditional banking systems. I don't see how Mastercard can straddle between the two without some deception.