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Laws can be made very broad and can generally lay out a ban and leave it up to those impacted to figure out how to comply with the law. A hypothetical law could

Laws can be made very broad and can generally lay out a ban and leave it up to those impacted to figure out how to comply with the law. A hypothetical law could criminalize possession of all cryptocurrency wallet keys for all US citizens and all corporations that operate in the United States, with a regulatory agency tasked with adding to the list of “cryptocurrencies” each time someone launches a new one. There’s no reason in principle that a law couldn’t treat cryptocurrency wallet keys the same way that the law currently treats child porn, i.e. destroy all of your keys by X date or go to jail if you are discovered to still be in possession of them after the date the law goes into effect. This would immediately destroy the entire cryptocurrency industry, and mining power in most or all networks would collapse to the point that the networks would essentially be defunct. Transaction volume and coin price on surviving networks could collapse to the point that it would be infeasible to pay an $XX million ransom, and ransomware developers would be back to where they were circa 8 years ago, with no real mechanism to untraceably receive millions of dollars.

greyface- 5y ago
What constitutes "possession" of a key? How do we treat multi-signature arrangements? What differentiates a cryptocurrency key from a non-cryptocurrency key? Would this criminalize the holding of any private key at all, even if intended for non-cryptocurrency applications? What happens if I generate a key for non-cryptocurrency use and then someone later sends cryptocurrency to it? Am I going to jail? Do I need to rekey immediately? Is it my duty to monitor for this situation? If I'm evil, can I cause trouble by "spoiling" an enemy's known public keys in this way? Here's an exhaustive list of all bitcoin keys; you're now in possession of all bitcoin in circulation: https://lbc.cryptoguru.org/dio/ https://lbc.cryptoguru.org/dio/
- dodobirdlord 5y ago
  > What constitutes "possession" of a key? How do we treat multi-signature arrangements? These are solved legal problems. Cryptographic possession is a well understood legal concept that comes up all the time in contexts like custody of financial instruments or digital evidence. > What differentiates a cryptocurrency key from a non-cryptocurrency key? Would this criminalize the holding of any private key at all, even if intended for non-cryptocurrency applications? Intent, primarily, so no. The applicability of intent to the criminality of an action is also a well understood legal principle. > What happens if I generate a key for non-cryptocurrency use and then someone later sends cryptocurrency to it? Am I going to jail? Do I need to rekey immediately? Is it my duty to monitor for this situation? If I'm evil, can I cause trouble by "spoiling" an enemy's known public keys in this way? In this thought experiment with this hypothetical ban, this feels analogous to mailing cocaine to someone's house. Again, well-understood legal principles around intent cover this without issue. Based on relevant precedent for physical contraband, you'd presumably have no obligation to monitor for it, but you would have an obligation to report it if you discovered it and turn it over to authorities. Blockchain ledger technology makes relinquishing contraband very straightforward. Once you discover that you are in possession of cryptocurrency, you can simply send it directly to a government-controlled blackhole address, and investigators will be able to trivially verify that this transaction is the only one you initiated while in possession of the cryptocurrency. > Here's an exhaustive list of all bitcoin keys; you're now in possession of all bitcoin in circulation: https://lbc.cryptoguru.org/dio/ https://lbc.cryptoguru.org/dio/ The legal system has been around the block on this one. The concept of criminalization of the possession of certain bit sequences when they correspond to some meaningful embedding is well understood. Child pornography is the classic example. Any arbitrary sequence of bits could in principle be child porn expressed in some highly unusual binary format, and yet somehow the legal system has successfully avoided criminalizing the possession of arbitrary random numbers. But if you happen to have a decoder for said highly unusual binary format, then you are going to jail. Likewise if you happen to know that your "random numbers" are in fact cryptocurrency-controlling key pairs and you harbor an intent to traffic in cryptocurrencies, lo and behold, those "random numbers" suddenly transmute into a cognizable thing that can be criminalized. Intent matters in law.
  - greyface- 5y ago
    > Once you discover that you are in possession of cryptocurrency, you can simply send it directly to a government-controlled blackhole address Previously you said I had to destroy the key. When is key destruction necessary and when is transfer to government necessary? What if the transaction to my address is timelocked to 5 years in the future? Does that create any custody responsibilities on my end between now and 5 years from now when it becomes spendable and I can surrender it to the government? What if I'm sent $50,000 worth of "dust" outputs that are only spendable by paying a $49,500 miner fee? Do I really need to pay miners to incur $49,500 worth of carbon emissions in order to cleanse my secp256k1 private key of $500 worth of bitcoin-ness so that I may continue using it in peace? > Child pornography is the classic example. Any arbitrary sequence of bits could in principle be child porn expressed in some highly unusual binary format, and yet somehow the legal system has successfully avoided criminalizing the possession of arbitrary random numbers This is true only because the "child pornography-ness" of the data is a property of the data itself, even if it's in an obscure format. Any arbitrary cryptographic key can be imbued with "cryptocurrency-ness" by anyone else, which means that revealing your non-cryptocurrency public keys now exposes you to risk, as long as some cryptocurrency out there uses the same type of public key. If we're dead-set on banning it, why ban "possession" instead of use? If it's illegal to send cryptocurrency, but still legal to "possess" it, a lot of these problems go away. Making it illegal to sign a bitcoin transaction is a lot simpler than creating a new class of illegal number, and seems like it would be just as effective at ending the behavior it's trying to end. Maybe even better at it, since it would not incentivize additional "surrendering coins to government" transactions.
sanderjd 5y ago
It is wise to consider enforceability when passing laws. The law you have proposed is not enforceable.

greyface- 5y ago

What constitutes "possession" of a key? How do we treat multi-signature arrangements? What differentiates a cryptocurrency key from a non-cryptocurrency key? Would this criminalize the holding of any private key at all, even if intended for non-cryptocurrency applications? What happens if I generate a key for non-cryptocurrency use and then someone later sends cryptocurrency to it? Am I going to jail? Do I need to rekey immediately? Is it my duty to monitor for this situation? If I'm evil, can I cause trouble by "spoiling" an enemy's known public keys in this way? Here's an exhaustive list of all bitcoin keys; you're now in possession of all bitcoin in circulation: https://lbc.cryptoguru.org/dio/ https://lbc.cryptoguru.org/dio/

dodobirdlord 5y ago
> What constitutes "possession" of a key? How do we treat multi-signature arrangements? These are solved legal problems. Cryptographic possession is a well understood legal concept that comes up all the time in contexts like custody of financial instruments or digital evidence. > What differentiates a cryptocurrency key from a non-cryptocurrency key? Would this criminalize the holding of any private key at all, even if intended for non-cryptocurrency applications? Intent, primarily, so no. The applicability of intent to the criminality of an action is also a well understood legal principle. > What happens if I generate a key for non-cryptocurrency use and then someone later sends cryptocurrency to it? Am I going to jail? Do I need to rekey immediately? Is it my duty to monitor for this situation? If I'm evil, can I cause trouble by "spoiling" an enemy's known public keys in this way? In this thought experiment with this hypothetical ban, this feels analogous to mailing cocaine to someone's house. Again, well-understood legal principles around intent cover this without issue. Based on relevant precedent for physical contraband, you'd presumably have no obligation to monitor for it, but you would have an obligation to report it if you discovered it and turn it over to authorities. Blockchain ledger technology makes relinquishing contraband very straightforward. Once you discover that you are in possession of cryptocurrency, you can simply send it directly to a government-controlled blackhole address, and investigators will be able to trivially verify that this transaction is the only one you initiated while in possession of the cryptocurrency. > Here's an exhaustive list of all bitcoin keys; you're now in possession of all bitcoin in circulation: https://lbc.cryptoguru.org/dio/ https://lbc.cryptoguru.org/dio/ The legal system has been around the block on this one. The concept of criminalization of the possession of certain bit sequences when they correspond to some meaningful embedding is well understood. Child pornography is the classic example. Any arbitrary sequence of bits could in principle be child porn expressed in some highly unusual binary format, and yet somehow the legal system has successfully avoided criminalizing the possession of arbitrary random numbers. But if you happen to have a decoder for said highly unusual binary format, then you are going to jail. Likewise if you happen to know that your "random numbers" are in fact cryptocurrency-controlling key pairs and you harbor an intent to traffic in cryptocurrencies, lo and behold, those "random numbers" suddenly transmute into a cognizable thing that can be criminalized. Intent matters in law.
- greyface- 5y ago
  > Once you discover that you are in possession of cryptocurrency, you can simply send it directly to a government-controlled blackhole address Previously you said I had to destroy the key. When is key destruction necessary and when is transfer to government necessary? What if the transaction to my address is timelocked to 5 years in the future? Does that create any custody responsibilities on my end between now and 5 years from now when it becomes spendable and I can surrender it to the government? What if I'm sent $50,000 worth of "dust" outputs that are only spendable by paying a $49,500 miner fee? Do I really need to pay miners to incur $49,500 worth of carbon emissions in order to cleanse my secp256k1 private key of $500 worth of bitcoin-ness so that I may continue using it in peace? > Child pornography is the classic example. Any arbitrary sequence of bits could in principle be child porn expressed in some highly unusual binary format, and yet somehow the legal system has successfully avoided criminalizing the possession of arbitrary random numbers This is true only because the "child pornography-ness" of the data is a property of the data itself, even if it's in an obscure format. Any arbitrary cryptographic key can be imbued with "cryptocurrency-ness" by anyone else, which means that revealing your non-cryptocurrency public keys now exposes you to risk, as long as some cryptocurrency out there uses the same type of public key. If we're dead-set on banning it, why ban "possession" instead of use? If it's illegal to send cryptocurrency, but still legal to "possess" it, a lot of these problems go away. Making it illegal to sign a bitcoin transaction is a lot simpler than creating a new class of illegal number, and seems like it would be just as effective at ending the behavior it's trying to end. Maybe even better at it, since it would not incentivize additional "surrendering coins to government" transactions.

sanderjd 5y ago

It is wise to consider enforceability when passing laws. The law you have proposed is not enforceable.