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I think that's the point that the author is trying to make. If the federal government disagrees with the bitcoin blockchain, then the blockchain is wrong. It d

I think that's the point that the author is trying to make. If the federal government disagrees with the bitcoin blockchain, then the blockchain is wrong. It doesn't really matter what the code says, or what bits are inscribed somewhere. Finance and ownership are ultimately enforced by armies, not computer programs. This is one reason why some people think that cryptocurrencies are playing with fire. It's also why major exchanges won't make it easy to cash out laundered bitcoins to USD.

beaned 5y ago
> If the federal government disagrees with the bitcoin blockchain, then the blockchain is wrong It isn't, though. The record is kept, and in fact the government needs to submit to the blockchain's laws to move any coin around.
- lxgr 5y ago
  > The record is kept It is kept in the same sense that you can draft a contract declaring you the owner and supreme ruler of the moon. > in fact the government needs to submit to the blockchain's laws to move any coin around No, it's the opposite: Everybody moving around coins has to submit to applicable laws – or face the consequences of violating them.
  - beaned 5y ago
    I don't think you understand how the Blockchain works or what the proper concept of a finalized payment is. The government cannot undo a Bitcoin transaction. If the keys are accessible, they can seize the coin and create a new transaction to redistribute according to the law. If the keys are not accessible, then they are totally powerless to do anything at all. The government submits to the blockchain's rules the same way everyone else does. That's kind of the point.
    - deleted 5y ago
      [deleted]
    - vageli 5y ago
      This becomes obvious when you consider that the government auctions the coins they seize. They either have to give the keys to the buyer or create a new transaction on the chain. The interesting thing in this whole conversation is assuming the person holding the key is the custodian of the funds, when it is more the key itself that is the custodian. The keys hold the funds, the person holding the keys can change but that is entirely outside the system but so is getting robbed on the side of the street of the cash in your pocket.
    - lxgr 5y ago
      > If the keys are not accessible, then they are totally powerless to do anything at all. If you truly believe that, I don't think you understand how law enforcement works.
      - panqueque 5y ago
        What do you think a government would do if the private key was forgotten and not backed up?
        lxgr 5y ago
        The same thing it would do if stolen physical cash turns out to have burned up in a fire or lost at the bottom of the ocean.
      - beaned 5y ago
        I think you need to elaborate on this. Law enforcement can enforce the things they have power over, like putting someone in jail. But they do not have power over the blockchain and they cannot reverse a transaction.
        lxgr 5y ago
        Governments can put a blockchain account/UTXO on a sanctions list and make it a crime to accept payments directly or indirectly funded from that account. To my knowledge, this hasn't happened yet, but I strongly suspect that it's only a question of time. Embargoes/sanction lists are one of the most powerful mechanisms of law enforcement for governments – I doubt that they will continue to let cryptocurrencies undermine that for too long.
        beaned 5y ago
        It's a tool, but not a silver bullet. Mixers exist, for example. But that's not even the main point. The key holder has the ultimate power to simply throw away the key. There is no recourse for that.
outworlder 5y ago
Yes, but even the federal government has no power to move the -original amount- if you throw away the key. They can make you cough up an equivalent amount in fines, of course. But the original amount is gone.
- ska 5y ago
  You can make the same point about cash, but it's not very interesting. The point the article was making is that transactions can and will be deemed illegitimate, both in the sense that mistakes are made, and in the sense that the legal framework will decide you have to reverse the payment. If you've buried cash and refuse to tell people where it is, you are in roughly the same place as refusing to reveal keys. You can be held accountable of course, in various ways. I think the article was more making the point that any payment system that doesn't recognize this reality will have inherently limited uptake, which is probably true.
  - yanmaani 5y ago
    It's true for cash, but not for cards. If a merchant incorrectly gets my $1000, and I charge him back, I will get my money, even if he spent $1000 on coke and hookers.
    - ska 5y ago
      You'll get different cash back, sure. Which was sort of the point; it's part of what makes CC useful. I was noting that there is nothing fundamentally different between say you accepting a payment in bitcoin and refusing to cough up the key when told to reverse it, or accepting a payment in cash and burying it then refusing to tell police where. Fundamentally there are mechanisms to reverse this, or punish/constrain you for obstructing the process. Some payment systems have them built in at a very low level (CC chargebacks), some rely on professional standard (hold harmelss), etc. Some rely on court systems. That's a trade off of convenience vs. risk, but doesn't change the fundamental point that a payment system without a standard reversal mechanism is going to have limited use.
panqueque 5y ago
Yeah, there's a certain irony to the fact that crypto currencies will remain subordinate to the powers that be until they themselves become the powers that be (at which point, of course, any elements of crypto-anarchy and cypherpunk would be long gone).

beaned 5y ago

> If the federal government disagrees with the bitcoin blockchain, then the blockchain is wrong It isn't, though. The record is kept, and in fact the government needs to submit to the blockchain's laws to move any coin around.

lxgr 5y ago
> The record is kept It is kept in the same sense that you can draft a contract declaring you the owner and supreme ruler of the moon. > in fact the government needs to submit to the blockchain's laws to move any coin around No, it's the opposite: Everybody moving around coins has to submit to applicable laws – or face the consequences of violating them.
- beaned 5y ago
  I don't think you understand how the Blockchain works or what the proper concept of a finalized payment is. The government cannot undo a Bitcoin transaction. If the keys are accessible, they can seize the coin and create a new transaction to redistribute according to the law. If the keys are not accessible, then they are totally powerless to do anything at all. The government submits to the blockchain's rules the same way everyone else does. That's kind of the point.
  - deleted 5y ago
    [deleted]
  - vageli 5y ago
    This becomes obvious when you consider that the government auctions the coins they seize. They either have to give the keys to the buyer or create a new transaction on the chain. The interesting thing in this whole conversation is assuming the person holding the key is the custodian of the funds, when it is more the key itself that is the custodian. The keys hold the funds, the person holding the keys can change but that is entirely outside the system but so is getting robbed on the side of the street of the cash in your pocket.
  - lxgr 5y ago
    > If the keys are not accessible, then they are totally powerless to do anything at all. If you truly believe that, I don't think you understand how law enforcement works.
    - panqueque 5y ago
      What do you think a government would do if the private key was forgotten and not backed up?
      - lxgr 5y ago
        The same thing it would do if stolen physical cash turns out to have burned up in a fire or lost at the bottom of the ocean.
    - beaned 5y ago
      I think you need to elaborate on this. Law enforcement can enforce the things they have power over, like putting someone in jail. But they do not have power over the blockchain and they cannot reverse a transaction.
      - lxgr 5y ago
        Governments can put a blockchain account/UTXO on a sanctions list and make it a crime to accept payments directly or indirectly funded from that account. To my knowledge, this hasn't happened yet, but I strongly suspect that it's only a question of time. Embargoes/sanction lists are one of the most powerful mechanisms of law enforcement for governments – I doubt that they will continue to let cryptocurrencies undermine that for too long.
        beaned 5y ago
        It's a tool, but not a silver bullet. Mixers exist, for example. But that's not even the main point. The key holder has the ultimate power to simply throw away the key. There is no recourse for that.

outworlder 5y ago

Yes, but even the federal government has no power to move the -original amount- if you throw away the key. They can make you cough up an equivalent amount in fines, of course. But the original amount is gone.

ska 5y ago
You can make the same point about cash, but it's not very interesting. The point the article was making is that transactions can and will be deemed illegitimate, both in the sense that mistakes are made, and in the sense that the legal framework will decide you have to reverse the payment. If you've buried cash and refuse to tell people where it is, you are in roughly the same place as refusing to reveal keys. You can be held accountable of course, in various ways. I think the article was more making the point that any payment system that doesn't recognize this reality will have inherently limited uptake, which is probably true.
- yanmaani 5y ago
  It's true for cash, but not for cards. If a merchant incorrectly gets my $1000, and I charge him back, I will get my money, even if he spent $1000 on coke and hookers.
  - ska 5y ago
    You'll get different cash back, sure. Which was sort of the point; it's part of what makes CC useful. I was noting that there is nothing fundamentally different between say you accepting a payment in bitcoin and refusing to cough up the key when told to reverse it, or accepting a payment in cash and burying it then refusing to tell police where. Fundamentally there are mechanisms to reverse this, or punish/constrain you for obstructing the process. Some payment systems have them built in at a very low level (CC chargebacks), some rely on professional standard (hold harmelss), etc. Some rely on court systems. That's a trade off of convenience vs. risk, but doesn't change the fundamental point that a payment system without a standard reversal mechanism is going to have limited use.

panqueque 5y ago

Yeah, there's a certain irony to the fact that crypto currencies will remain subordinate to the powers that be until they themselves become the powers that be (at which point, of course, any elements of crypto-anarchy and cypherpunk would be long gone).