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My explanation is that Bitcoin is precisely the opposite of anonymous. If everyone started to use a currency like this it would almost impossible to hide transa

by kjrose 6y ago

My explanation is that Bitcoin is precisely the opposite of anonymous. If everyone started to use a currency like this it would almost impossible to hide transactions without obviously using something like a "bitcoin laundry service" which in itself would be easy to make illegal. Essentially, you want to guarantee a way for governments to be able to track every transaction, this would be the way to do it. That being said, I am not anti bitcoin, I just don't see it as a privacy thing.

grumple 6y ago
This is the real answer. It allows governments around the world to easily track all of your transactions- without subpoenas or laws required.
- kjrose 6y ago
  I'm amazed at how many people don't get this. Like the sec would kill for this level of control.
thatswrong0 6y ago
Yeah I don't know how anyone with a cursory knowledge about how it works would think that it's about privacy. Especially when there are alternatives (such as Monero) that do explicitly try to solve that problem.
- acdha 6y ago
  Have you ever known someone who got involved in some MLM scheme and didn’t want to admit that they a) didn’t check the sales pitch and b) have no way to make more money than they put in unless they convince you to buy something? Bitcoin is the tech version of that.
  - kjrose 6y ago
    This is also true for gold, silver and any other currency. The value only exists because someone else is willing to exchange it for goods or services.
    - acdha 6y ago
      You’re leaving out a lot: gold and silver have significant industrial usage and aesthetic demand so while their rates fluctuate the floor is based on thousands of years of consistent value. You can certainly lose money buying high and selling low but there’s no equivalent to the way Bitcoin could fall below the cost of running the network if people switched to something else because only a few major holders have a significant reason to use it. Since it’s such a small fraction of a percentage of the global economy, almost nobody other than speculators would notice. That brings me to why your point is wrong: sovereign currencies are backed by governments and that means that there is some intrinsic demand because that currency is used to pay taxes and is paid to civil servants, contractors, etc. In all but the worst run countries that has a substantial anchoring effect. Bitcoin has nothing like that, which is one reason why it’s so volatile – which is great for a speculator but not anyone writing contracts with values set in BTC.
      - thatswrong0 6y ago
        Pardon my babbling - maybe I'm naive but thats why I'm way more on board with ETH over BTC because it can at least facilitate new sorts of.. financial instruments and products (call it what you will, but the fact that NFTs are currently popping off for some artists is pretty cool to see, even if it feels contrived), whereas the value of BTC is basically resting entirely on its first mover advantage. And this is to say nothing of the energy requirements and ecological costs of proof of work.. It's hard for me to just accept the fact that hype drives demand, and demand sets the price. The hype can be a meme or be seemingly ignorant of better alternatives, but it doesn't matter the speculative feedback loop can apparently irrationally sustain itself for a long time. I really wonder what the next major recession is going to look like.
        acdha 6y ago
        Basically, I’d look at the hard demand as people who _need_ to have a particular asset: if you have a contract saying you’re paying me in Bitcoin that means that you’re going to pay the fees needed to keep the network operating. Very, very few people have those and so in most cases the decision is either based in the belief that you’ll be able to sell for a greater value later or an ideological belief, neither of which is especially stable.
baobolus 6y ago
It's impossible to make coinjoins ("bitcoin laundry service") illegal as they can be run p2p and over tor. EDIT: you can of course make them illegal, however it's impossible to enforce that. You could however make "accepting" coinjoined UTXO's illegal, but the lightning network fixes this (you can use coinjoined coins to open channels, lightning payments do not know the payer). If a government decides you need to do full kyc to buy a coffee, then it might be time to emigrate :D
- acdha 6y ago
  It’s trivial to require all businesses not to touch transactions involving a list of addresses. Once that happens, all these games fall apart because trying to obscure the identity means that people will only participate in them if they intend to break the law and after the first busts they’ll learn that it’s a bad idea to publish that intention to a public ledger.
  - gruez 6y ago
    You can't say "don't touch coins from these addresses" because it would be trivial to DoS people by sending dust from a blacklisted address to other people's wallets.
    - acdha 6y ago
      If they sent more than infinitesimal amounts, it’s unsustainable; if they don’t, it’s easily filtered — and that’s assuming that they didn’t just direct you to send the amount to some dump address if you wanted to disavow it. Simply telling a few large exchanges to do that automatically would take care of the majority of users.
    - throw99c 6y ago
      You have to be loaded to consider DoSing with current transaction fees anywhere near practical. And it's not like the government couldn't fine the businesses equal to say, 1.5x the amount transferred from the blacklisted address.
- 6y ago
hypersoar 6y ago
You can actually test that regulators are doing exactly this. There are a few digital currencies which (attempt to) protect the anonymity of all transactions. Monero is the most popular such coin. Go try and exchange some directly with fiat currency. You'll find that it's quite a bit more difficult than with bitcoin. Most legitimate exchanges don't take Monero to stay within anti-money laundering regulations.
- baby 6y ago
  Looks like coinbase, kraken and binance have zcash. What do you make of that?
  - rendx 6y ago
    Only the unshielded variant.
    - baby 6y ago
      So? You unshield and transfer to the exchange.
laurent92 6y ago
Fun thing, I looked it up for banknotes. Turns out there are only 15 billion euro banknotes. Fits in a Postgres database! Most of the cycles are extremely short: Withdraw at the ATM, pay at the bakery, back to the bank. If banks took note of note numbers, it would probably be straightforward to trace 80% of the transactions. And trace banknotes that stayed 6 months offline, and those that are always withdrawn by someone and used in a specific suburb (=possible drug deal), especially when he pays everything else with credit card. Of course it is 20x less efficient than tracking Bitcoins, and requires input sources from several places, but it’s fun to know that even banknotes are quite easily traceable.

by kjrose 6y ago

grumple 6y ago

This is the real answer. It allows governments around the world to easily track all of your transactions- without subpoenas or laws required.

kjrose 6y ago
I'm amazed at how many people don't get this. Like the sec would kill for this level of control.

thatswrong0 6y ago

Yeah I don't know how anyone with a cursory knowledge about how it works would think that it's about privacy. Especially when there are alternatives (such as Monero) that do explicitly try to solve that problem.

acdha 6y ago
Have you ever known someone who got involved in some MLM scheme and didn’t want to admit that they a) didn’t check the sales pitch and b) have no way to make more money than they put in unless they convince you to buy something? Bitcoin is the tech version of that.
- kjrose 6y ago
  This is also true for gold, silver and any other currency. The value only exists because someone else is willing to exchange it for goods or services.
  - acdha 6y ago
    You’re leaving out a lot: gold and silver have significant industrial usage and aesthetic demand so while their rates fluctuate the floor is based on thousands of years of consistent value. You can certainly lose money buying high and selling low but there’s no equivalent to the way Bitcoin could fall below the cost of running the network if people switched to something else because only a few major holders have a significant reason to use it. Since it’s such a small fraction of a percentage of the global economy, almost nobody other than speculators would notice. That brings me to why your point is wrong: sovereign currencies are backed by governments and that means that there is some intrinsic demand because that currency is used to pay taxes and is paid to civil servants, contractors, etc. In all but the worst run countries that has a substantial anchoring effect. Bitcoin has nothing like that, which is one reason why it’s so volatile – which is great for a speculator but not anyone writing contracts with values set in BTC.
    - thatswrong0 6y ago
      Pardon my babbling - maybe I'm naive but thats why I'm way more on board with ETH over BTC because it can at least facilitate new sorts of.. financial instruments and products (call it what you will, but the fact that NFTs are currently popping off for some artists is pretty cool to see, even if it feels contrived), whereas the value of BTC is basically resting entirely on its first mover advantage. And this is to say nothing of the energy requirements and ecological costs of proof of work.. It's hard for me to just accept the fact that hype drives demand, and demand sets the price. The hype can be a meme or be seemingly ignorant of better alternatives, but it doesn't matter the speculative feedback loop can apparently irrationally sustain itself for a long time. I really wonder what the next major recession is going to look like.
      - acdha 6y ago
        Basically, I’d look at the hard demand as people who _need_ to have a particular asset: if you have a contract saying you’re paying me in Bitcoin that means that you’re going to pay the fees needed to keep the network operating. Very, very few people have those and so in most cases the decision is either based in the belief that you’ll be able to sell for a greater value later or an ideological belief, neither of which is especially stable.

baobolus 6y ago

It's impossible to make coinjoins ("bitcoin laundry service") illegal as they can be run p2p and over tor. EDIT: you can of course make them illegal, however it's impossible to enforce that. You could however make "accepting" coinjoined UTXO's illegal, but the lightning network fixes this (you can use coinjoined coins to open channels, lightning payments do not know the payer). If a government decides you need to do full kyc to buy a coffee, then it might be time to emigrate :D

acdha 6y ago
It’s trivial to require all businesses not to touch transactions involving a list of addresses. Once that happens, all these games fall apart because trying to obscure the identity means that people will only participate in them if they intend to break the law and after the first busts they’ll learn that it’s a bad idea to publish that intention to a public ledger.
- gruez 6y ago
  You can't say "don't touch coins from these addresses" because it would be trivial to DoS people by sending dust from a blacklisted address to other people's wallets.
  - acdha 6y ago
    If they sent more than infinitesimal amounts, it’s unsustainable; if they don’t, it’s easily filtered — and that’s assuming that they didn’t just direct you to send the amount to some dump address if you wanted to disavow it. Simply telling a few large exchanges to do that automatically would take care of the majority of users.
  - throw99c 6y ago
    You have to be loaded to consider DoSing with current transaction fees anywhere near practical. And it's not like the government couldn't fine the businesses equal to say, 1.5x the amount transferred from the blacklisted address.
6y ago

hypersoar 6y ago

You can actually test that regulators are doing exactly this. There are a few digital currencies which (attempt to) protect the anonymity of all transactions. Monero is the most popular such coin. Go try and exchange some directly with fiat currency. You'll find that it's quite a bit more difficult than with bitcoin. Most legitimate exchanges don't take Monero to stay within anti-money laundering regulations.

baby 6y ago
Looks like coinbase, kraken and binance have zcash. What do you make of that?
- rendx 6y ago
  Only the unshielded variant.
  - baby 6y ago
    So? You unshield and transfer to the exchange.

laurent92 6y ago

Fun thing, I looked it up for banknotes. Turns out there are only 15 billion euro banknotes. Fits in a Postgres database! Most of the cycles are extremely short: Withdraw at the ATM, pay at the bakery, back to the bank. If banks took note of note numbers, it would probably be straightforward to trace 80% of the transactions. And trace banknotes that stayed 6 months offline, and those that are always withdrawn by someone and used in a specific suburb (=possible drug deal), especially when he pays everything else with credit card. Of course it is 20x less efficient than tracking Bitcoins, and requires input sources from several places, but it’s fun to know that even banknotes are quite easily traceable.