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It doesn't matter. Making a wire payment or paying with a card is also surveilled and archived until the end of time. BitCoin's major purpose is as a hedge to

It doesn't matter. Making a wire payment or paying with a card is also surveilled and archived until the end of time. BitCoin's major purpose is as a hedge to massive fiat printing.

hannasanarion 5y ago
No, they are recorded. The government needs a warrant after convincing a judge that there is probable cause that you have committed a crime before they can pull your bank records. When you use crypto, you're just broadcasting every transaction to the world, so they can just watch. Using bitcoin to avoid government surveillance is like saving your passport on a billboard to avoid hackers.
- dumbfoundded 5y ago
  Would a government need a warrant to pull records from an exchange to connect it to a real identity? The usual way bitcoin payments are traceable are due to crypto-fiat exchanges requiring that information (AML & KYC regulations). Wouldn't that make it effectively equivalent?
  - frollo 5y ago
    Only if they can't get you with public information. Suppose that your transactions reveal enough about you to allow the government to profile you, arrange a stake out (and thus get you in another way) or something like that. Or you could have left some trace in a direction which is not that much protected (like you bought something physical which has been delivered to you).
- schoen 5y ago
  > The government needs a warrant after convincing a judge that there is probable cause that you have committed a crime before they can pull your bank records. Unfortunately, transaction records like financial records are currently afforded a very low level of legal protection in the U.S., so the "warrant" and "probable cause" parts don't describe current practice. (That would be the case for a telephone wiretap, or a search of your home, but not for access to your financial records.) https://en.wikipedia.org/wiki/Third-party_doctrine https://en.wikipedia.org/wiki/Third-party_doctrine One thing that I don't think the press ever managed to chase down -- following the Snowden revelations -- is the rumor that there was also a "bulk financial records program" which would have involved intelligence agencies and/or law enforcement getting access to search all bank transactions, without any individualized suspicion. (Recall that one thing Snowden revealed is that there was a bulk telephone records program, in which telephone metadata was turned over to the government in bulk, without individualized suspicion, which the government justified in part due to the third-party doctrine.) In the government's view, the third-party doctrine means that it's never a fourth amendment violation if the government compels access to most kinds of transaction data in the possession of some kind of service provider or intermediary. (Some of those kinds of data may have higher levels of statutory protection but the government's position, as I understand it, has been that it's not an infringement of your fourth amendment rights even if those protections are circumvented or ignored.)
  - hannasanarion 5y ago
    The Third Party Doctrine does not apply to Bank Records since the Right to Financial Privacy Act was enacted in 1978. Cops need a warrant to pull your bank records.
    - schoen 5y ago
      Thanks, I didn't know about that and I'll have to look at that some more. (Technically the third party doctrine would still apply in any case, because this would be a statutory protection rather than a constitutional protection.)
      - hannasanarion 5y ago
        Yeah, most times the Third Party Doctrine comes up these days afaik is with location tracking services. EG, technically cops don't need a warrant or subpoena to ask Google where you were on a particular day. Though, in practice, they often still get one because they know that it's kinda unfair and judicial or statutory protections are probably coming soon and they don't want to jeopardize the prosecution should the law change during the investigation. For example, the January 6 insurrectionists are largely being caught through location data obtained under warrant from Google. Do they technically need the warrant? No. And if they were investigating, like, shoplifters, they probably wouldn't have bothered to get one. But they don't want to let thousands of insurrectionists off the hook in case this is the case where the courts decide to flip.
- singularity2001 5y ago
  >>> The government needs a warrant after convincing a judge In theory yes, after the Snowden papers do you really think the NSA didn't find a way to weasel around these restrictions? Granted, it's not for your local drug dealer but for higher level surveillance.
- DyslexicAtheist 5y ago
  > The government needs a warrant not everywhere. In some places in Europe (e.g. Germany) the IRS is able to pull up your banking history without the bank having to notify you, and they can query a subset of the info (time of account opening, current deposit, personal info) without even notifying the bank.
  - merdadicapra 5y ago
    AFAIK in Germany they can ask you to submit your banking history for tax purposes (for example they have doubts about your declaration), if you fail to submit it or refuse, they can go to the bank, but you are notified way before they go through the bank and if you comply with the request, they don't go to the bank at all. Also the request must be authorized by the state tax office, it's not like every government employee can request and obtain the list of all of your transactions.
    - DyslexicAtheist 5y ago
      quick googling would show that your knowledge on this is dated (laws changed in mid 2000). See linked article[1] (or many other articles like it - it was a huge topic at the time creating much outrage). The bank will not be informed of the invasion of privacy (the excuse is so that banking customers don't have any negative impact when they realize customers get probed - it's probably more to avoid spooking the public about the frequency of how often this happens). > Also the request must be authorized by the state tax office, it's not like every government employee can request and obtain the list of all of your transactions. you're mistaken. These are the organs which have automated access (in addition to the IRS): - social services - job center - bailiff - state attorney - customs authorities it's designed to put pressure on low income groups in society, while the HNWI's and corporate big fish can cloak themselves with an armor of impenetrable offshore tools[2]. [1] in German (just run through any translate service): https://www.vlh.de/wissen-service/steuer-nachrichten/kontenabruf-durch-das-finanzamt.html https://www.vlh.de/wissen-service/steuer-nachrichten/kontena... [2] https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_and_the_Men_Who_Stole_the_World https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...
- hellow0rldz 5y ago
  "Presumably". In truth they are filtered and data mined on the spot. A cross-country wire payment visits multiple jurisdictions already with the US getting first dibs via SWIFT. My local IRS can also read them. So they are effectively public for all major actors. > Using bitcoin to avoid government surveillance is like saving your passport on a billboard to avoid hackers. And I'm saying its main purpose is not to avoid surveillance but at as an inflation hedge. The fact that the governments also see in real time should count as a vote of no confidence.
jrek 5y ago
Fiat is money not backed by a commodity. What commodity was it again that backs Bitcoin?
- beaner 5y ago
  Fiat means "by decree," I don't think it means anything about being backed by a commodity. Dollars used to be backed by gold and it was still fiat money. Bitcoin is backed by its own scarcity.
  - ghostwriter 5y ago
    Fiat money means exactly a government-issued currency not backed by a commodity such as gold. https://www.investopedia.com/terms/f/fiatmoney.asp https://www.investopedia.com/terms/f/fiatmoney.asp
    - beaner 5y ago
      By which definition Bitcoin is still not a "fiat" currency, since it is not government-issued.
    - cblconfederate 5y ago
      That definition is wrong. "by fiat" does not imply a commodity, it was just one of the many alternatives
    - dredmorbius 5y ago
      I'm questioning Investopedia here. Fiat is typically contrasted with commodity or representational currencies. The key element is that fiat has no intrinsic value. It's usually issued by a government, but need not be. The value comes from faith. Bitcoin meets all the qualifications save government issuance. The bits themselves have no value. The currency's value is based on faith in both the underlying computations and in the existence of a market for trading bitcoin. Wikipedia gives the definition "often by government regulation" (implying not necessarily) citing Goldberg, Dror (2005). "Famous Myths of "Fiat Money"". Journal of Money, Credit and Banking. 37 (5): 957–967. doi:10.1353/mcb.2005.0052. JSTOR 3839155. S2CID 54713138.
seppin 5y ago
Bitcoin isn't a currency. No one buys BC with the idea of using it to pay for something else.
baby 5y ago
What do you have against fiat printing?
- jtms 5y ago
  probably the potential of rampant inflation. When a government summons trillions of dollars into existence (like most governments have been doing throughout the pandemic) it dilutes the underlying value of every single unit of currency in circulation. Its not nearly as simple as "double the money supply == halve your current cash's value", but some amount of dilution and inflation are definitely happening. BTC is theoretically a good hedge against this as it is deflationary by design.
  - lottin 5y ago
    There is potential for hyperinflation, just like having a police force means there is a potential for extrajudicial killings and all sorts of nasty stuff. The thing is when was the last time a western country experienced hyperinflation? I think Germany in the 1930s. Hyperinflation is a made-up problem.
    - yxhuvud 5y ago
      Hyperinflation can happen in any society if the productive capability of the society goes to the shitters. Printing money does not trigger such a collapse though. So if anyone is scared of hyperinflation, look at how industries and services in the country do instead of at how the money supply change.
    - jtms 5y ago
      Who said anything about hyperinflation? Regular inflation occurs constantly (and by design) and must be compensated for. If you just leave your cash in a checking account and walk away for 10 years you will come back to radically less buying power than when you left it - the number might be the same, but the total money supply will have grown tremendously thus reducing that money's buying power. According to inflation estimates $1 USD in 1970 was equivalent to almost $7 USD in 2021 value. The point of an investment portfolio is to outpace this dilution so that your wealth grows and you are not diluted into ruin by the printing of new money. A balanced portfolio that has some percentage allocated to instruments that tend to hold a steady value or grow inversely to inflation are critical. BTC is shaping up to be a good choice to add alongside of gold and other precious metals which have historically been used for this purpose. It is short term VERY volatile, but long term it has consistently WAY outpaced inflation.
throwawayzRUU6f 5y ago
> BitCoin's major purpose is as a hedge to massive fiat printing Do you know what else is a great inflation hedge? An index of stocks. Unlike BTC, the stocks also pay dividends, are backed by real economic activity, enjoy massively lower volatility, don't suffer from large fees, are never going to be banned, aren't tainted by endemic fraud and scam, and even produce a tiny bit of societal good. Stocks are objectively a better inflation hedge than BTC in just about every aspect, apart from not being a novel tech bro toy.
- CameronNemo 5y ago
  I like to think of it like this: am I going to give my money to a network of computers that will make heat and burn coal just to maintain a small global ledger, or will I give my money to an organization of people who will presumably try to build a better life for themselves and others, and maybe accidentally burn some funds along the way? I'm giving my money to people.
  - _ink_ 5y ago
    So you only participate in IPOs? Otherwise you probably buying your shares from a market maker, which runs computers that make heat and burn coal to take advantage of a small difference between buy and ask price.
    - toss1 5y ago
      Comparing apples vs container ships. With bank ledgers, the computation energy is a minimized side effect that does not even show up as a rounding error in the financial reports of companies, and they do tens of thousands of transactions per second. For cryptocurrencies, burning the energy is a key feature - 100% correlated to the proof of work and increasing by design. This achieves handfuls of transactions per second with energy burn exceeding that of nations. Children's cartoons make better representations of the real world than that post.
- anticristi 5y ago
  I can't help add a cynical comment: BTC is also backed by real economic activity, it's "just" the legality that makes it different.
chartpath 5y ago
I know nothing of BTC but how would you stack it against gold, real estate, other traditional stores of value as a hedge against hyperinflation?
- dragonelite 5y ago
  You want to own all of those if possible, but for normal working people bitcoin is easy way to convert fiat into a asset. Given each bitcoin breaks down into 100 million sathosis you can always buy/sell parts of a bitcoin. Doing the same with other assets classes is harder or not even possible.

It doesn't matter. Making a wire payment or paying with a card is also surveilled and archived until the end of time. BitCoin's major purpose is as a hedge to massive fiat printing.

hannasanarion 5y ago

No, they are recorded. The government needs a warrant after convincing a judge that there is probable cause that you have committed a crime before they can pull your bank records. When you use crypto, you're just broadcasting every transaction to the world, so they can just watch. Using bitcoin to avoid government surveillance is like saving your passport on a billboard to avoid hackers.

dumbfoundded 5y ago
Would a government need a warrant to pull records from an exchange to connect it to a real identity? The usual way bitcoin payments are traceable are due to crypto-fiat exchanges requiring that information (AML & KYC regulations). Wouldn't that make it effectively equivalent?
- frollo 5y ago
  Only if they can't get you with public information. Suppose that your transactions reveal enough about you to allow the government to profile you, arrange a stake out (and thus get you in another way) or something like that. Or you could have left some trace in a direction which is not that much protected (like you bought something physical which has been delivered to you).
schoen 5y ago
> The government needs a warrant after convincing a judge that there is probable cause that you have committed a crime before they can pull your bank records. Unfortunately, transaction records like financial records are currently afforded a very low level of legal protection in the U.S., so the "warrant" and "probable cause" parts don't describe current practice. (That would be the case for a telephone wiretap, or a search of your home, but not for access to your financial records.) https://en.wikipedia.org/wiki/Third-party_doctrine https://en.wikipedia.org/wiki/Third-party_doctrine One thing that I don't think the press ever managed to chase down -- following the Snowden revelations -- is the rumor that there was also a "bulk financial records program" which would have involved intelligence agencies and/or law enforcement getting access to search all bank transactions, without any individualized suspicion. (Recall that one thing Snowden revealed is that there was a bulk telephone records program, in which telephone metadata was turned over to the government in bulk, without individualized suspicion, which the government justified in part due to the third-party doctrine.) In the government's view, the third-party doctrine means that it's never a fourth amendment violation if the government compels access to most kinds of transaction data in the possession of some kind of service provider or intermediary. (Some of those kinds of data may have higher levels of statutory protection but the government's position, as I understand it, has been that it's not an infringement of your fourth amendment rights even if those protections are circumvented or ignored.)
- hannasanarion 5y ago
  The Third Party Doctrine does not apply to Bank Records since the Right to Financial Privacy Act was enacted in 1978. Cops need a warrant to pull your bank records.
  - schoen 5y ago
    Thanks, I didn't know about that and I'll have to look at that some more. (Technically the third party doctrine would still apply in any case, because this would be a statutory protection rather than a constitutional protection.)
    - hannasanarion 5y ago
      Yeah, most times the Third Party Doctrine comes up these days afaik is with location tracking services. EG, technically cops don't need a warrant or subpoena to ask Google where you were on a particular day. Though, in practice, they often still get one because they know that it's kinda unfair and judicial or statutory protections are probably coming soon and they don't want to jeopardize the prosecution should the law change during the investigation. For example, the January 6 insurrectionists are largely being caught through location data obtained under warrant from Google. Do they technically need the warrant? No. And if they were investigating, like, shoplifters, they probably wouldn't have bothered to get one. But they don't want to let thousands of insurrectionists off the hook in case this is the case where the courts decide to flip.
singularity2001 5y ago
>>> The government needs a warrant after convincing a judge In theory yes, after the Snowden papers do you really think the NSA didn't find a way to weasel around these restrictions? Granted, it's not for your local drug dealer but for higher level surveillance.
DyslexicAtheist 5y ago
> The government needs a warrant not everywhere. In some places in Europe (e.g. Germany) the IRS is able to pull up your banking history without the bank having to notify you, and they can query a subset of the info (time of account opening, current deposit, personal info) without even notifying the bank.
- merdadicapra 5y ago
  AFAIK in Germany they can ask you to submit your banking history for tax purposes (for example they have doubts about your declaration), if you fail to submit it or refuse, they can go to the bank, but you are notified way before they go through the bank and if you comply with the request, they don't go to the bank at all. Also the request must be authorized by the state tax office, it's not like every government employee can request and obtain the list of all of your transactions.
  - DyslexicAtheist 5y ago
    quick googling would show that your knowledge on this is dated (laws changed in mid 2000). See linked article[1] (or many other articles like it - it was a huge topic at the time creating much outrage). The bank will not be informed of the invasion of privacy (the excuse is so that banking customers don't have any negative impact when they realize customers get probed - it's probably more to avoid spooking the public about the frequency of how often this happens). > Also the request must be authorized by the state tax office, it's not like every government employee can request and obtain the list of all of your transactions. you're mistaken. These are the organs which have automated access (in addition to the IRS): - social services - job center - bailiff - state attorney - customs authorities it's designed to put pressure on low income groups in society, while the HNWI's and corporate big fish can cloak themselves with an armor of impenetrable offshore tools[2]. [1] in German (just run through any translate service): https://www.vlh.de/wissen-service/steuer-nachrichten/kontenabruf-durch-das-finanzamt.html https://www.vlh.de/wissen-service/steuer-nachrichten/kontena... [2] https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_and_the_Men_Who_Stole_the_World https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...
hellow0rldz 5y ago
"Presumably". In truth they are filtered and data mined on the spot. A cross-country wire payment visits multiple jurisdictions already with the US getting first dibs via SWIFT. My local IRS can also read them. So they are effectively public for all major actors. > Using bitcoin to avoid government surveillance is like saving your passport on a billboard to avoid hackers. And I'm saying its main purpose is not to avoid surveillance but at as an inflation hedge. The fact that the governments also see in real time should count as a vote of no confidence.

jrek 5y ago

Fiat is money not backed by a commodity. What commodity was it again that backs Bitcoin?

beaner 5y ago
Fiat means "by decree," I don't think it means anything about being backed by a commodity. Dollars used to be backed by gold and it was still fiat money. Bitcoin is backed by its own scarcity.
- ghostwriter 5y ago
  Fiat money means exactly a government-issued currency not backed by a commodity such as gold. https://www.investopedia.com/terms/f/fiatmoney.asp https://www.investopedia.com/terms/f/fiatmoney.asp
  - beaner 5y ago
    By which definition Bitcoin is still not a "fiat" currency, since it is not government-issued.
  - cblconfederate 5y ago
    That definition is wrong. "by fiat" does not imply a commodity, it was just one of the many alternatives
  - dredmorbius 5y ago
    I'm questioning Investopedia here. Fiat is typically contrasted with commodity or representational currencies. The key element is that fiat has no intrinsic value. It's usually issued by a government, but need not be. The value comes from faith. Bitcoin meets all the qualifications save government issuance. The bits themselves have no value. The currency's value is based on faith in both the underlying computations and in the existence of a market for trading bitcoin. Wikipedia gives the definition "often by government regulation" (implying not necessarily) citing Goldberg, Dror (2005). "Famous Myths of "Fiat Money"". Journal of Money, Credit and Banking. 37 (5): 957–967. doi:10.1353/mcb.2005.0052. JSTOR 3839155. S2CID 54713138.

seppin 5y ago

Bitcoin isn't a currency. No one buys BC with the idea of using it to pay for something else.

baby 5y ago

What do you have against fiat printing?

jtms 5y ago
probably the potential of rampant inflation. When a government summons trillions of dollars into existence (like most governments have been doing throughout the pandemic) it dilutes the underlying value of every single unit of currency in circulation. Its not nearly as simple as "double the money supply == halve your current cash's value", but some amount of dilution and inflation are definitely happening. BTC is theoretically a good hedge against this as it is deflationary by design.
- lottin 5y ago
  There is potential for hyperinflation, just like having a police force means there is a potential for extrajudicial killings and all sorts of nasty stuff. The thing is when was the last time a western country experienced hyperinflation? I think Germany in the 1930s. Hyperinflation is a made-up problem.
  - yxhuvud 5y ago
    Hyperinflation can happen in any society if the productive capability of the society goes to the shitters. Printing money does not trigger such a collapse though. So if anyone is scared of hyperinflation, look at how industries and services in the country do instead of at how the money supply change.
  - jtms 5y ago
    Who said anything about hyperinflation? Regular inflation occurs constantly (and by design) and must be compensated for. If you just leave your cash in a checking account and walk away for 10 years you will come back to radically less buying power than when you left it - the number might be the same, but the total money supply will have grown tremendously thus reducing that money's buying power. According to inflation estimates $1 USD in 1970 was equivalent to almost $7 USD in 2021 value. The point of an investment portfolio is to outpace this dilution so that your wealth grows and you are not diluted into ruin by the printing of new money. A balanced portfolio that has some percentage allocated to instruments that tend to hold a steady value or grow inversely to inflation are critical. BTC is shaping up to be a good choice to add alongside of gold and other precious metals which have historically been used for this purpose. It is short term VERY volatile, but long term it has consistently WAY outpaced inflation.

throwawayzRUU6f 5y ago

> BitCoin's major purpose is as a hedge to massive fiat printing Do you know what else is a great inflation hedge? An index of stocks. Unlike BTC, the stocks also pay dividends, are backed by real economic activity, enjoy massively lower volatility, don't suffer from large fees, are never going to be banned, aren't tainted by endemic fraud and scam, and even produce a tiny bit of societal good. Stocks are objectively a better inflation hedge than BTC in just about every aspect, apart from not being a novel tech bro toy.

CameronNemo 5y ago
I like to think of it like this: am I going to give my money to a network of computers that will make heat and burn coal just to maintain a small global ledger, or will I give my money to an organization of people who will presumably try to build a better life for themselves and others, and maybe accidentally burn some funds along the way? I'm giving my money to people.
- _ink_ 5y ago
  So you only participate in IPOs? Otherwise you probably buying your shares from a market maker, which runs computers that make heat and burn coal to take advantage of a small difference between buy and ask price.
  - toss1 5y ago
    Comparing apples vs container ships. With bank ledgers, the computation energy is a minimized side effect that does not even show up as a rounding error in the financial reports of companies, and they do tens of thousands of transactions per second. For cryptocurrencies, burning the energy is a key feature - 100% correlated to the proof of work and increasing by design. This achieves handfuls of transactions per second with energy burn exceeding that of nations. Children's cartoons make better representations of the real world than that post.
anticristi 5y ago
I can't help add a cynical comment: BTC is also backed by real economic activity, it's "just" the legality that makes it different.

chartpath 5y ago

I know nothing of BTC but how would you stack it against gold, real estate, other traditional stores of value as a hedge against hyperinflation?

dragonelite 5y ago
You want to own all of those if possible, but for normal working people bitcoin is easy way to convert fiat into a asset. Given each bitcoin breaks down into 100 million sathosis you can always buy/sell parts of a bitcoin. Doing the same with other assets classes is harder or not even possible.