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It is true that exchanges are a pressure point, and that anonymised transactions are a compliance risk-factor. While the article is notably lacking evidence for

It is true that exchanges are a pressure point, and that anonymised transactions are a compliance risk-factor. While the article is notably lacking evidence for the claim that we are "now" seeing this "increasingly", assuming it is not yet the case, it may well be an increasing problem going forward. Ultimately, this a civic matter; as much as we want to ensure we have the right to encrypt our communications, to not disclose our passwords to police even when being prosecuted for a crime, as activists commonly insist on, so should we fight to maintain our existing rights to financial privacy.

ClumsyPilot 5y ago
But we also have to keep the lid on fraid, mafia, tax evasion, organised crime, blood money, etc. To me the point of blockchain is to democratise access to financial technology. To other's, it's to create a currency that cannot be manipulated by central bank politics. Only to some people it's about privacy - i woupd be quite happy with a totally open and public financial system if it applies to all people equally.
- deleted 5y ago
  [deleted]
- Andrew_nenakhov 5y ago
  > But we also have to keep the lid on fraid No we don't. The dangers from allowing use of cryptocurrencies by criminals are far less than dangers to freedoms from corrupt totalitarian governments. When government can easily shut down your finances, you need some kind of way to defy it. And if you think that your government will never do such thing, think again, harder. Citizens must have a leverage against abuse. With shrinking use of cash, cryptocurrencies allow people to evade a chokehold that can instantly smother them.
  - D13Fd 5y ago
    Wow. I know this comment is old at this point, but this is an incredibly dangerous point of view. Corruption is crime. Our ability to have a non-corrupt government depends in large part on the ability of our legal system to track the movement of money and detect corrruption. If you want to create an unstoppable superhighway to absolute government corruption, untraceable currency with perfect privacy is a wonderful way to do it. People think privacy means "they'll never know I had that porn subscription or bought those legal recreational drugs." But the reality is more likely "they'll never know I took that bribe to deny that permit to that company's competitor."
  - toomuchtodo 5y ago
    I’m fine with weak financial privacy and strong KYC/AML regulations. A lot of garbage humans out there that these tools are necessary to police with.
    - howinteresting 5y ago
      What that means in practice is that rich people have financial privacy and poor people don't. Personally I think it should be the opposite: poor people should have privacy and rich people shouldn't. If you're in favor of e2ee messaging but not e2ee financial privacy, you're saying that you don't want people to do anything material with the e2ee messaging.
      - toomuchtodo 5y ago
        Highly dependent on your government and the electorate. Elect shitty people, get shitty government and policy. Technology will save you from neither.
        howinteresting 5y ago
        In what jurisdiction do rich people not have access to webs of shell companies to hide their transactions through?
        toomuchtodo 5y ago
        I don’t disagree. How does crypto solve that? It doesn’t. It’s just as harmful. Perfection doesn’t exist, only the continual efforts towards an ideal. Edit: (HN throttling), reply to below comment. I agree that there are niche use cases where crypto is bridging a gap for the disenfranchised (sex workers in this example) until policy catches up, but that it’s unsustainable to extrapolate that out as a call for wide adoption of crypto by the masses.
        howinteresting 5y ago
        Crypto (not Bitcoin or Ethereum, Zcash) gives everyone the same privacy rich people enjoy, leveling the playing field. I think crypto has a bunch of other problems, but I consider (for example) sex workers being able to transact online an unalloyed good.
  - juliette1 5y ago
  - sobkas 5y ago
    > And if you think that your government will never do such thing, think again, harder. Citizens must have a leverage against abuse. With shrinking use of cash, cryptocurrencies allow people to evade a chokehold that can instantly smother them. Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. Blockchain might keep your transactions pseudonymous, but when government already knows you, there is little you can do to keep yourself out of its reach.
    - fsflover 5y ago
      > Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. There is a large middle-ground between a government respecting your ownership and a one stealing your funds using a wrench.
    - woah 5y ago
      This is a logical fallacy. This is like arguing that because the government could hypothetically put you under 24/7 physical observation and listen to your every conversation by being in the same room and looking over your shoulder, ever using encryption technology is useless.
      - giaour 5y ago
        If your threat model includes Stas-like pervasive surveillance and a real possibility of interrogation under torture, then GP is right, traditional encryption technology will be of limited benefit.
    - CuriousCosmic 5y ago
      > Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. This is accurate however the following isn't necessarily accurate: > Blockchain might keep your transactions pseudonymous, but when government already knows you, there is little you can do to keep yourself out of its reach. There are plenty of solid privacy chains based on well understood cryptography. On top of that it is becoming increasingly easy/viable for existing networks to integrate privacy preserving Tx into their networks. Ex: Litecoin (a long standing Bitcoin software fork) integrating privacy preserving Tx via the MimbleWimble protocol and Extension Blocks (together referred to as the MWEB hard fork). Developments like the introduction of MWEB show that even if the government knows you or your Tx today, all you have to do is make an MWEB (or equivalent) transaction and all of a sudden that chain of visibility goes dark. Additionally while it may be possible for the government or any organisation to forcibly extract access or knowledge from you with force, we as a society should not be content with making that easy. Prior to the introduction of the internet and digital society, organisations had to spend far more effort to collect far less (and far less reliable) information. We should be making every push to set that pre-digital information era as a baseline or absolute minimum for privacy standards.
  - ClumsyPilot 5y ago
    "The dangers from allowing use of cryptocurrencies by criminals are far less" I think you have never come across real organised crime, we had a family friend murdered by one. Think mexican drug cartels and the amount of damage they cause. Ofcourse they operated just fine before crypto existed.
    - Andrew_nenakhov 5y ago
      From what I know about organised crime, they operated before the invention of cryptocurrencies, and will operate even if cryptocurrencies will cease to exist. Speaking of your family friend. Among my and my wife's extended families there are many victims of political purges. Deported, confiscated property, murdered, tortured, jailed for decades. State is a far more dangerous adversary then even the most violent criminal organisation .
NovemberWhiskey 5y ago
Which existing rights in particular do you mean? The real-currency world is completely filled with KYC, suspicious transaction reporting and so on.
- Waterluvian 5y ago
  Even just having a lot of cash on you is enough for American police to legally steal it from you, roadside.
  - NovemberWhiskey 5y ago
    I mean, that's a problem, but it's not a privacy problem per se. Civil forfeiture is a much larger issue than police taking cash from people with unconvincing sourcing stories.
    - Waterluvian 5y ago
      True. Though to be clear, it’s not that your story isn’t convincing. It’s that police felt like it, usually because you’re a minority.
sobkas 5y ago
> Ultimately, this a civic matter; as much as we want to ensure we have the right to encrypt our communications, to not disclose our passwords to police even when being prosecuted for a crime, as activists commonly insist on, so should we fight to maintain our existing rights to financial privacy. But you know, you are not anonymous on Blockchain, you're only pseudonymous. If someone correlate your pseudonym with your real identity, they will know your entire financial history (on Blockchain).
- olalonde 5y ago
  Not quite. You can discover one of the many addresses that are typically part of Bitcoin wallet. As for the history, you can't really tell much, especially if the person didn't re-use addresses which is the recommended mode of operation.
  - danlugo92 5y ago
    It's as if almost every crypto skeptic doesn't know how it actually works.
    - jazzyjackson 5y ago
      Call it a UX problem. I've used BTC here and there but I'm still not confident that I could keep my transactions silo'd, from a cursory look at the blockchain it seems obvious that you can "follow the money" from a de-anonymized transaction (Say, I pay you for a service in person, so you know a wallet address that belongs to me) to other wallet addresses and balances associated with me. I can't blame people for losing interest / calling bullshit on crypto before spending hours diving into the details of L2, derivative wallets and multi-sig etc etc, details that ameliorate the skepticism. Also these things change over time, so maybe Lightning was unconvincing 3 years ago and skeptics just haven't given it a second look. (This is me, but I'm slowly being convinced that L2 really does make this stuff practical, but for a long time the transaction-per-second and unrecoverability of lost keys made the whole field very uninteresting)
      - 5y ago
dabeeeenster 5y ago
The problem is that you don't currently have financial privacy, and that is what enables authorities, your government and your bank to ensure you are not laundering money for nasty people.
skybrian 5y ago
As one data point, recently some alleged criminals were caught who seem to have had lots of trouble laundering money at scale? [1] But I don't know if they could have done a better job if they were more creative. [1] https://www.nbcnews.com/politics/justice-department/two-arrested-allegedly-trying-launder-billions-stolen-bitcoin-rcna15352 https://www.nbcnews.com/politics/justice-department/two-arre...
jnwatson 5y ago
There doesn’t seem to be any financial right to privacy. It isn’t a right.
- f38zf5vdt 5y ago
  It extends, arguably, from the "Right to Property". > (1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his or her property. This right has a history of controversy and various interpretations. https://en.wikipedia.org/wiki/Right_to_property https://en.wikipedia.org/wiki/Right_to_property
  - rhn_mk1 5y ago
    How is a right to property related to a right to privacy? "Private property" is not using the same kind of "private" as "private communication".
    - kelseyfrog 5y ago
      Here is a poor construction from right to property to right to privacy. 1. Assume the right to private property. 2. Acknowledge that some property is not just a tangible object, but can include a configuration of objects. An existing example of configuration of objects as property is crypto currency as private property or database records reflecting you bank account as private property. 3. Acknowledge that property ownership represents the exclusivity of possession. 4. By 2 and 3 the ownership of intangible property is the exclusive possession of a configuration of objects. 5. Acknowledge that the configuration of objects is isomorphic to information 6. Acknowledge that communication is the transmission of information 7. By 4, 5, and 6, Private communications is the exclusive ownership of the transmission of information.
      - rhn_mk1 5y ago
        I see the reasoning, but the flaw here is already in #2: > Acknowledge that some property is not just a tangible object, but can include a configuration of objects. While there is a configuration that constitutes: > database records reflecting you bank account as private property. it's in the owner's interest that those records are as widespread as possible, lest someone challenges the ownership of the property they describe. If they are widespread, they are not exclusive, and therefore are not owned (even if there might be a right to demand the existence and accuracy of the records).
waffle_maniac 5y ago
Several years ago I bought some anti-malaria medication from an Indian pharmacy using Coinbase before my trip to India. I guess the address was on a FinCEN list because my account was immediately closed. Anyone know Brian Armstrong? I'd like to get my account reinstated as I'm not doing anything illegal and I'm not opposed to KYC. Not a terrorist AFAIK.

ClumsyPilot 5y ago

But we also have to keep the lid on fraid, mafia, tax evasion, organised crime, blood money, etc. To me the point of blockchain is to democratise access to financial technology. To other's, it's to create a currency that cannot be manipulated by central bank politics. Only to some people it's about privacy - i woupd be quite happy with a totally open and public financial system if it applies to all people equally.

deleted 5y ago
[deleted]
Andrew_nenakhov 5y ago
> But we also have to keep the lid on fraid No we don't. The dangers from allowing use of cryptocurrencies by criminals are far less than dangers to freedoms from corrupt totalitarian governments. When government can easily shut down your finances, you need some kind of way to defy it. And if you think that your government will never do such thing, think again, harder. Citizens must have a leverage against abuse. With shrinking use of cash, cryptocurrencies allow people to evade a chokehold that can instantly smother them.
- D13Fd 5y ago
  Wow. I know this comment is old at this point, but this is an incredibly dangerous point of view. Corruption is crime. Our ability to have a non-corrupt government depends in large part on the ability of our legal system to track the movement of money and detect corrruption. If you want to create an unstoppable superhighway to absolute government corruption, untraceable currency with perfect privacy is a wonderful way to do it. People think privacy means "they'll never know I had that porn subscription or bought those legal recreational drugs." But the reality is more likely "they'll never know I took that bribe to deny that permit to that company's competitor."
- toomuchtodo 5y ago
  I’m fine with weak financial privacy and strong KYC/AML regulations. A lot of garbage humans out there that these tools are necessary to police with.
  - howinteresting 5y ago
    What that means in practice is that rich people have financial privacy and poor people don't. Personally I think it should be the opposite: poor people should have privacy and rich people shouldn't. If you're in favor of e2ee messaging but not e2ee financial privacy, you're saying that you don't want people to do anything material with the e2ee messaging.
    - toomuchtodo 5y ago
      Highly dependent on your government and the electorate. Elect shitty people, get shitty government and policy. Technology will save you from neither.
      - howinteresting 5y ago
        In what jurisdiction do rich people not have access to webs of shell companies to hide their transactions through?
        toomuchtodo 5y ago
        I don’t disagree. How does crypto solve that? It doesn’t. It’s just as harmful. Perfection doesn’t exist, only the continual efforts towards an ideal. Edit: (HN throttling), reply to below comment. I agree that there are niche use cases where crypto is bridging a gap for the disenfranchised (sex workers in this example) until policy catches up, but that it’s unsustainable to extrapolate that out as a call for wide adoption of crypto by the masses.
        howinteresting 5y ago
        Crypto (not Bitcoin or Ethereum, Zcash) gives everyone the same privacy rich people enjoy, leveling the playing field. I think crypto has a bunch of other problems, but I consider (for example) sex workers being able to transact online an unalloyed good.
- juliette1 5y ago
- sobkas 5y ago
  > And if you think that your government will never do such thing, think again, harder. Citizens must have a leverage against abuse. With shrinking use of cash, cryptocurrencies allow people to evade a chokehold that can instantly smother them. Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. Blockchain might keep your transactions pseudonymous, but when government already knows you, there is little you can do to keep yourself out of its reach.
  - fsflover 5y ago
    > Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. There is a large middle-ground between a government respecting your ownership and a one stealing your funds using a wrench.
  - woah 5y ago
    This is a logical fallacy. This is like arguing that because the government could hypothetically put you under 24/7 physical observation and listen to your every conversation by being in the same room and looking over your shoulder, ever using encryption technology is useless.
    - giaour 5y ago
      If your threat model includes Stas-like pervasive surveillance and a real possibility of interrogation under torture, then GP is right, traditional encryption technology will be of limited benefit.
  - CuriousCosmic 5y ago
    > Blockchain won't save you from visit from a man with 5$ wrench, if you know what I mean. This is accurate however the following isn't necessarily accurate: > Blockchain might keep your transactions pseudonymous, but when government already knows you, there is little you can do to keep yourself out of its reach. There are plenty of solid privacy chains based on well understood cryptography. On top of that it is becoming increasingly easy/viable for existing networks to integrate privacy preserving Tx into their networks. Ex: Litecoin (a long standing Bitcoin software fork) integrating privacy preserving Tx via the MimbleWimble protocol and Extension Blocks (together referred to as the MWEB hard fork). Developments like the introduction of MWEB show that even if the government knows you or your Tx today, all you have to do is make an MWEB (or equivalent) transaction and all of a sudden that chain of visibility goes dark. Additionally while it may be possible for the government or any organisation to forcibly extract access or knowledge from you with force, we as a society should not be content with making that easy. Prior to the introduction of the internet and digital society, organisations had to spend far more effort to collect far less (and far less reliable) information. We should be making every push to set that pre-digital information era as a baseline or absolute minimum for privacy standards.
- ClumsyPilot 5y ago
  "The dangers from allowing use of cryptocurrencies by criminals are far less" I think you have never come across real organised crime, we had a family friend murdered by one. Think mexican drug cartels and the amount of damage they cause. Ofcourse they operated just fine before crypto existed.
  - Andrew_nenakhov 5y ago
    From what I know about organised crime, they operated before the invention of cryptocurrencies, and will operate even if cryptocurrencies will cease to exist. Speaking of your family friend. Among my and my wife's extended families there are many victims of political purges. Deported, confiscated property, murdered, tortured, jailed for decades. State is a far more dangerous adversary then even the most violent criminal organisation .

NovemberWhiskey 5y ago

Which existing rights in particular do you mean? The real-currency world is completely filled with KYC, suspicious transaction reporting and so on.

Waterluvian 5y ago
Even just having a lot of cash on you is enough for American police to legally steal it from you, roadside.
- NovemberWhiskey 5y ago
  I mean, that's a problem, but it's not a privacy problem per se. Civil forfeiture is a much larger issue than police taking cash from people with unconvincing sourcing stories.
  - Waterluvian 5y ago
    True. Though to be clear, it’s not that your story isn’t convincing. It’s that police felt like it, usually because you’re a minority.

sobkas 5y ago

> Ultimately, this a civic matter; as much as we want to ensure we have the right to encrypt our communications, to not disclose our passwords to police even when being prosecuted for a crime, as activists commonly insist on, so should we fight to maintain our existing rights to financial privacy. But you know, you are not anonymous on Blockchain, you're only pseudonymous. If someone correlate your pseudonym with your real identity, they will know your entire financial history (on Blockchain).

olalonde 5y ago
Not quite. You can discover one of the many addresses that are typically part of Bitcoin wallet. As for the history, you can't really tell much, especially if the person didn't re-use addresses which is the recommended mode of operation.
- danlugo92 5y ago
  It's as if almost every crypto skeptic doesn't know how it actually works.
  - jazzyjackson 5y ago
    Call it a UX problem. I've used BTC here and there but I'm still not confident that I could keep my transactions silo'd, from a cursory look at the blockchain it seems obvious that you can "follow the money" from a de-anonymized transaction (Say, I pay you for a service in person, so you know a wallet address that belongs to me) to other wallet addresses and balances associated with me. I can't blame people for losing interest / calling bullshit on crypto before spending hours diving into the details of L2, derivative wallets and multi-sig etc etc, details that ameliorate the skepticism. Also these things change over time, so maybe Lightning was unconvincing 3 years ago and skeptics just haven't given it a second look. (This is me, but I'm slowly being convinced that L2 really does make this stuff practical, but for a long time the transaction-per-second and unrecoverability of lost keys made the whole field very uninteresting)
    - 5y ago

dabeeeenster 5y ago

The problem is that you don't currently have financial privacy, and that is what enables authorities, your government and your bank to ensure you are not laundering money for nasty people.

skybrian 5y ago

As one data point, recently some alleged criminals were caught who seem to have had lots of trouble laundering money at scale? [1] But I don't know if they could have done a better job if they were more creative. [1] https://www.nbcnews.com/politics/justice-department/two-arrested-allegedly-trying-launder-billions-stolen-bitcoin-rcna15352 https://www.nbcnews.com/politics/justice-department/two-arre...

jnwatson 5y ago

There doesn’t seem to be any financial right to privacy. It isn’t a right.

f38zf5vdt 5y ago
It extends, arguably, from the "Right to Property". > (1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his or her property. This right has a history of controversy and various interpretations. https://en.wikipedia.org/wiki/Right_to_property https://en.wikipedia.org/wiki/Right_to_property
- rhn_mk1 5y ago
  How is a right to property related to a right to privacy? "Private property" is not using the same kind of "private" as "private communication".
  - kelseyfrog 5y ago
    Here is a poor construction from right to property to right to privacy. 1. Assume the right to private property. 2. Acknowledge that some property is not just a tangible object, but can include a configuration of objects. An existing example of configuration of objects as property is crypto currency as private property or database records reflecting you bank account as private property. 3. Acknowledge that property ownership represents the exclusivity of possession. 4. By 2 and 3 the ownership of intangible property is the exclusive possession of a configuration of objects. 5. Acknowledge that the configuration of objects is isomorphic to information 6. Acknowledge that communication is the transmission of information 7. By 4, 5, and 6, Private communications is the exclusive ownership of the transmission of information.
    - rhn_mk1 5y ago
      I see the reasoning, but the flaw here is already in #2: > Acknowledge that some property is not just a tangible object, but can include a configuration of objects. While there is a configuration that constitutes: > database records reflecting you bank account as private property. it's in the owner's interest that those records are as widespread as possible, lest someone challenges the ownership of the property they describe. If they are widespread, they are not exclusive, and therefore are not owned (even if there might be a right to demand the existence and accuracy of the records).

waffle_maniac 5y ago

Several years ago I bought some anti-malaria medication from an Indian pharmacy using Coinbase before my trip to India. I guess the address was on a FinCEN list because my account was immediately closed. Anyone know Brian Armstrong? I'd like to get my account reinstated as I'm not doing anything illegal and I'm not opposed to KYC. Not a terrorist AFAIK.