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Ethereum clients run the code automatically alongside all the other code on the Ethereum network, impartial to what it is or does. There are estimated to be nea

Ethereum clients run the code automatically alongside all the other code on the Ethereum network, impartial to what it is or does. There are estimated to be nearly 10,000 Ethereum clients in operation, distributed globally. Identifying all of their operators, trying to prove intent, and convicting them all of money laundering seems to be a tall ask, even for the US government.

tonyarkles 4y ago
I admittedly haven’t looked at Ethereum in a while, but I’m having a hard time grokking this logic: > Ethereum clients run the code automatically alongside all the other code on the Ethereum network, impartial to what it is or does. That can’t be true on its own. If I write the code in Notepad and share it with friends, the Ethereum client isn’t running it. From what I recall, the way to get it to actually run is to spend gas? Isn’t that the step where it changes from published code to executing code? I 100% agree that the code behind this all should be free speech. But to try to call “spending money to have a global network execute the code” “publishing” is a pretty big stretch. In the same way that your ISP isn’t going to get shut down for transmitting the bits that initiated the money laundering transaction, the end node operators are not the proposed target here but rather the people picking up the phone and asking the system to launder money, as well as those responsible for the specific instances of the code that are doing the laundering.
- everfree 4y ago
  There are a few steps to running code on Ethereum: 1. A person writes the source code and shares it 2. A person pays a flat amount of ETH to compile/instantiate the source code on the Ethereum network. The code is not "running" yet (aside from its constructor function, if it has one). Now the code is instantiated at an Ethereum address. 3. A person invokes a function of the code, paying ETH proportional to the amount of execution steps taken before the function returns. 4. A swarm of computers acting as block producers, some with identifiable operating persons and some without, produce a block that officially timestamps that function execution into the chain and applies it to the chain's state. 5. A swarm of computers acting as network observers, some with identifiable operating persons and some without, re-execute the transaction locally to verify that the state change was valid. > the people picking up the phone and asking the system to launder money Of course, culpability there goes without saying. That's not relevant to the question of whether Tornado Cash is illegal, it's a question of whether crime itself is illegal; in essence a tautology. > as well as those responsible for the specific instances of the code that are doing the laundering It looks like you may be talking about the second step of the five I've laid out. That step, the instantiation of the code, can be done anonymously from anywhere in the world by anyone who can follow the compilation instructions in the readme. If that's the step where legislators try to enforce culpability, it's a lost cause due to the anonymity. Hypothetically, even if law enforcement were able to perfectly determine the legal owner of every Ethereum address and punish them when they illegally instantiate code, they still can't cause the code to be un-instantiated.
JumpCrisscross 4y ago
> identifying all of their operators, trying to prove intent, and convicting them all of money laundering seems to be a tall ask Sort by known wallet size. Those efforts should more than pay for the enforcement costs. This is AML 101. Except with a public ledger. Cash transactions don't afford law enforcement that luxury.
- everfree 4y ago
  I doubt that law enforcement is going to be successful if they try to force staking outfits to fork the Ethereum network (by actively censoring transactions that other stakers try to publish on the network). For example, Coinbase CEO Brian Armstrong says that he would wind down Coinbase's staking program before trying to impose a regulation-required fork on the protocol. I suspect that other outfits would follow suit until the only outfits left would be outside the jurisdiction of the regulators. https://twitter.com/brian_armstrong/status/1560016827253551104 https://twitter.com/brian_armstrong/status/15600168272535511...

tonyarkles 4y ago

I admittedly haven’t looked at Ethereum in a while, but I’m having a hard time grokking this logic: > Ethereum clients run the code automatically alongside all the other code on the Ethereum network, impartial to what it is or does. That can’t be true on its own. If I write the code in Notepad and share it with friends, the Ethereum client isn’t running it. From what I recall, the way to get it to actually run is to spend gas? Isn’t that the step where it changes from published code to executing code? I 100% agree that the code behind this all should be free speech. But to try to call “spending money to have a global network execute the code” “publishing” is a pretty big stretch. In the same way that your ISP isn’t going to get shut down for transmitting the bits that initiated the money laundering transaction, the end node operators are not the proposed target here but rather the people picking up the phone and asking the system to launder money, as well as those responsible for the specific instances of the code that are doing the laundering.

everfree 4y ago
There are a few steps to running code on Ethereum: 1. A person writes the source code and shares it 2. A person pays a flat amount of ETH to compile/instantiate the source code on the Ethereum network. The code is not "running" yet (aside from its constructor function, if it has one). Now the code is instantiated at an Ethereum address. 3. A person invokes a function of the code, paying ETH proportional to the amount of execution steps taken before the function returns. 4. A swarm of computers acting as block producers, some with identifiable operating persons and some without, produce a block that officially timestamps that function execution into the chain and applies it to the chain's state. 5. A swarm of computers acting as network observers, some with identifiable operating persons and some without, re-execute the transaction locally to verify that the state change was valid. > the people picking up the phone and asking the system to launder money Of course, culpability there goes without saying. That's not relevant to the question of whether Tornado Cash is illegal, it's a question of whether crime itself is illegal; in essence a tautology. > as well as those responsible for the specific instances of the code that are doing the laundering It looks like you may be talking about the second step of the five I've laid out. That step, the instantiation of the code, can be done anonymously from anywhere in the world by anyone who can follow the compilation instructions in the readme. If that's the step where legislators try to enforce culpability, it's a lost cause due to the anonymity. Hypothetically, even if law enforcement were able to perfectly determine the legal owner of every Ethereum address and punish them when they illegally instantiate code, they still can't cause the code to be un-instantiated.

JumpCrisscross 4y ago

> identifying all of their operators, trying to prove intent, and convicting them all of money laundering seems to be a tall ask Sort by known wallet size. Those efforts should more than pay for the enforcement costs. This is AML 101. Except with a public ledger. Cash transactions don't afford law enforcement that luxury.

everfree 4y ago
I doubt that law enforcement is going to be successful if they try to force staking outfits to fork the Ethereum network (by actively censoring transactions that other stakers try to publish on the network). For example, Coinbase CEO Brian Armstrong says that he would wind down Coinbase's staking program before trying to impose a regulation-required fork on the protocol. I suspect that other outfits would follow suit until the only outfits left would be outside the jurisdiction of the regulators. https://twitter.com/brian_armstrong/status/1560016827253551104 https://twitter.com/brian_armstrong/status/15600168272535511...