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> My BTC can't be frozen Governments can make it a felony (jail time, fines) to interact with your wallet, effectively freezing it. And because bitcoins are in

> My BTC can't be frozen Governments can make it a felony (jail time, fines) to interact with your wallet, effectively freezing it. And because bitcoins are infinitely traceable, governments can make any bitcoins that at any time originated from your wallet property of the state (i.e. any wallet held in an exchange that comes in possession of one of your coins can have those coins confiscated). Your bitcoins become frozen and/or worthless to 3rd parties. Yes, you can try and operate outside that system by only transacting with wallets that are also frozen (or that are happy being frozen, transitively). Good luck with that. Bitcoin's key functionality (all transactions are infinitely traceable) is the main reason it is so easy to regulate in the real world. (The simplest approach for regulators implementing this system is to declare ALL wallets frozen, and to require public registration of wallets to unfreeze them, e.g. by being on an exchange with existing KYC laws. This makes all new private wallets useless prior to registration, and makes it a felony to transact with unregistered wallets. Exchanges would then literally prevent people from transacting with unregistered bitcoin wallets. Existing KYC laws are sufficient for governments to regulate bitcoins in this way.)

yellowapple 5y ago
> Governments can make it a felony (jail time, fines) to interact with your wallet, effectively freezing it. Governments already make it a felony to possess various illicit substances above a certain quantity. That hasn't done much to curtail the drug trade. More to the point: if a government attempted this, it would open up every other Bitcoin user to a DoS attack; I would just need to send some money around to well-known addresses to "freeze" those wallets, too. > And because bitcoins are infinitely traceable, governments can make any bitcoins that at any time originated from your wallet property of the state (i.e. any wallet held in an exchange that comes in possession of one of your coins can have those coins confiscated). They would need to control the private keys in order to actually perform that confiscation. Tokens are the property of whomever actually controls the wallet; the feds can "freeze" however much they like, but there ain't really much they can do outside of a very targeted attack (i.e. one such that the costs of performing that attack vastly outweigh the benefit unless I'm some Bitcoin millionaire and I'm careless enough to keep everything in a single wallet). > (The simplest approach for regulators implementing this system is to declare ALL wallets frozen, and to require public registration of wallets to unfreeze them, e.g. by being on an exchange with existing KYC laws. This makes all new private wallets useless prior to registration, and makes it a felony to transact with unregistered wallets. Exchanges would then literally prevent people from transacting with unregistered bitcoin wallets. Existing KYC laws are sufficient for governments to regulate bitcoins in this way.) All that would accomplish would be to shift traffic to exchanges that operate outside KYC (which was always possible, given that there's nothing stopping two people from exchanging cryptocurrency for other things in meatspace, including fiat currency or actual goods/services). It would also, again, open up the KYC wallets to a DoS; if even so much as a single transaction from an unregistered wallet is enough to feloniously taint a registered wallet, then a malicious actor with even a tiny amount of money to burn could do so pretty easily and turn all sorts of innocent people into felons overnight - rendering such a regulation useless.
- erichocean 5y ago
  > I would just need to send some money around to well-known addresses to "freeze" those wallets, too. Easily solved by sending illicitly obtained bitcoins to the government—which they can trivially ask you to do, or automate on the exchange that you're on. Note: people can already deposit illicit funds into your regular bank account without your permission, and it causes no difficulties. > They would need to control the private keys in order to actually perform that confiscation. They're not confiscating them except from private citizens complying with the law, they're freezing those wallets and the bitcoins they contain out of the legal bitcoin system entirely. The government has no need to confiscate bitcoins when it can prevent their legal use without confiscation.
  - yellowapple 5y ago
    > Easily solved by sending illicitly obtained bitcoins to the government—which they can trivially ask you to do, or automate on the exchange that you're on. Which means I can easily launder my own money by claiming that "someone" sent frozen cryptocurrency to me "maliciously". > The government has no need to confiscate bitcoins when it can prevent their legal use without confiscation. The government has no more ability to prevent use of Bitcoins than it does to prevent use of cash or gold. Again, making something illegal doesn't prevent it from happening anyway.
max51 5y ago
>Governments can make it a felony (jail time, fines) to interact with your wallet BTC >> Monero >> BTC. I take take <10 minutes for small amount and a few hours if you need to wait for multiple confirmations. There is plenty of reliable exchange platform that do not require IDs or even creating an account because they do not deal with fiat. Bitcoin is NOT anonymous by default if you don't know/care how to use it, but it is extremely easy to get full anonymity if you need it. It would also be very hard to prove that you own a BTC wallet in a court of law.
- erichocean 5y ago
  > It would also be very hard to prove that you own a BTC wallet in a court of law. Regulation regimes will work on a whitelist system: only wallets that are "approved" are allowed. All other wallets ("anonymous") are preemptively frozen/tainted until they are approved. Result? No more private/anonymous wallets in the "legal" bitcoin system. > There is plenty of reliable exchange platform that do not require IDs or even creating an account because they do not deal with fiat. Sure, and regulators would make them illegal under pre-existing KYC laws.
  - max51 5y ago
    >Sure, and regulators would make them illegal under pre-existing KYC laws. There is no such thing as KYC for exchanges that don't deal with fiat. In some cases, you don't even need to create an account at all.

yellowapple 5y ago

> Governments can make it a felony (jail time, fines) to interact with your wallet, effectively freezing it. Governments already make it a felony to possess various illicit substances above a certain quantity. That hasn't done much to curtail the drug trade. More to the point: if a government attempted this, it would open up every other Bitcoin user to a DoS attack; I would just need to send some money around to well-known addresses to "freeze" those wallets, too. > And because bitcoins are infinitely traceable, governments can make any bitcoins that at any time originated from your wallet property of the state (i.e. any wallet held in an exchange that comes in possession of one of your coins can have those coins confiscated). They would need to control the private keys in order to actually perform that confiscation. Tokens are the property of whomever actually controls the wallet; the feds can "freeze" however much they like, but there ain't really much they can do outside of a very targeted attack (i.e. one such that the costs of performing that attack vastly outweigh the benefit unless I'm some Bitcoin millionaire and I'm careless enough to keep everything in a single wallet). > (The simplest approach for regulators implementing this system is to declare ALL wallets frozen, and to require public registration of wallets to unfreeze them, e.g. by being on an exchange with existing KYC laws. This makes all new private wallets useless prior to registration, and makes it a felony to transact with unregistered wallets. Exchanges would then literally prevent people from transacting with unregistered bitcoin wallets. Existing KYC laws are sufficient for governments to regulate bitcoins in this way.) All that would accomplish would be to shift traffic to exchanges that operate outside KYC (which was always possible, given that there's nothing stopping two people from exchanging cryptocurrency for other things in meatspace, including fiat currency or actual goods/services). It would also, again, open up the KYC wallets to a DoS; if even so much as a single transaction from an unregistered wallet is enough to feloniously taint a registered wallet, then a malicious actor with even a tiny amount of money to burn could do so pretty easily and turn all sorts of innocent people into felons overnight - rendering such a regulation useless.

erichocean 5y ago
> I would just need to send some money around to well-known addresses to "freeze" those wallets, too. Easily solved by sending illicitly obtained bitcoins to the government—which they can trivially ask you to do, or automate on the exchange that you're on. Note: people can already deposit illicit funds into your regular bank account without your permission, and it causes no difficulties. > They would need to control the private keys in order to actually perform that confiscation. They're not confiscating them except from private citizens complying with the law, they're freezing those wallets and the bitcoins they contain out of the legal bitcoin system entirely. The government has no need to confiscate bitcoins when it can prevent their legal use without confiscation.
- yellowapple 5y ago
  > Easily solved by sending illicitly obtained bitcoins to the government—which they can trivially ask you to do, or automate on the exchange that you're on. Which means I can easily launder my own money by claiming that "someone" sent frozen cryptocurrency to me "maliciously". > The government has no need to confiscate bitcoins when it can prevent their legal use without confiscation. The government has no more ability to prevent use of Bitcoins than it does to prevent use of cash or gold. Again, making something illegal doesn't prevent it from happening anyway.

max51 5y ago

>Governments can make it a felony (jail time, fines) to interact with your wallet BTC >> Monero >> BTC. I take take <10 minutes for small amount and a few hours if you need to wait for multiple confirmations. There is plenty of reliable exchange platform that do not require IDs or even creating an account because they do not deal with fiat. Bitcoin is NOT anonymous by default if you don't know/care how to use it, but it is extremely easy to get full anonymity if you need it. It would also be very hard to prove that you own a BTC wallet in a court of law.

erichocean 5y ago
> It would also be very hard to prove that you own a BTC wallet in a court of law. Regulation regimes will work on a whitelist system: only wallets that are "approved" are allowed. All other wallets ("anonymous") are preemptively frozen/tainted until they are approved. Result? No more private/anonymous wallets in the "legal" bitcoin system. > There is plenty of reliable exchange platform that do not require IDs or even creating an account because they do not deal with fiat. Sure, and regulators would make them illegal under pre-existing KYC laws.
- max51 5y ago
  >Sure, and regulators would make them illegal under pre-existing KYC laws. There is no such thing as KYC for exchanges that don't deal with fiat. In some cases, you don't even need to create an account at all.