You can't "set aside" something which a free market has chosen to accept. If you're upset about PoW, invent a superior replacement which the market would prefer over PoW.
However, I suspect you cannot. I'm doubtful that such thing can exist. Bitcoin is now an essential commodity because there is no replacement for it when it comes to saving money or evading warrantless (illegal) surveillance. The central banks and governments around the world caused this, and they aren't capable of reversing it.
You can't "set aside" something which a free market has chosen to accept.
We have set aside CFCs even though they were accepted by the free market. They were harmful to the environment, creating the ozone hole.
Similarly, PoW mining has an enormous and well-documented ecological cost.
If you're upset about PoW, invent a superior replacement which the market would prefer over PoW.
> However, I suspect you cannot. I'm doubtful that such thing can exist.
PoS exist.
Bitcoin is now an essential commodity because there is no replacement for it when it comes to saving money or evading warrantless (illegal) surveillance.
All transactions and account balances in Bitcoin are public. From meta data and corresponding networks one can figure out where and who the people are (NSA does this too). It is not very private at all.
The central banks and governments around the world caused this, and they aren't capable of reversing it.
I doubt that it is a essential commodity and suspect you are overestimating the economic importance of Bitcoin.
We have set aside CFCs even though they were accepted by the free market. They were harmful to the environment, creating the ozone hole.
Some regulations can be enforced. It's going to be a different story attempting to regulate something which can be hidden trivially with encryption, has no physical presence, and can be stored in ones head to prevent seizure.
All transactions and account balances in Bitcoin are public. From meta data and corresponding networks one can figure out where and who the people are (NSA does this too). It is not very private at all.
This is true for plain use of Bitcoin, but there are ways of evading chain analysis, and you can also swap out your Bitcoin for Monero for spending.
I doubt that it is a essential commodity and suspect you are overestimating the economic importance of Bitcoin.
It may not be essential to you, but there are plenty who consider it so, and these will only grow as people further distrust their governments and central banks.
How does regulation work for illegal drugs, prostitution, or other black markets, which can overall amount to double-digit percentages of economies?
Bitcoin only needs the black market to be a huge success. If it can avoid any surveillance ramps, that is ideal. It doesn't need to be everywhere.
IMO, the surveillance on/off ramps are going to have a hard problem ahead of them, of their own making. Black markets are only going to accept "cleaned" bitcoins because they won't put themselves at risk of being surveilled. The "cleaned" bitcoins will not be usable on AML exchanges. The "unclean" bitcoin can be cleaned through CoinJoins and such, at the risk of whoever obtained them in their unclean state, but once cleaned, they'll be back on the black markets.
Trading fiat currencies for Bitcoin will happen mainly in person, with cash, to avoid the surveillance.
You will be able to tell, to an extent, whether bitcoin are clean or unclean through their transaction history - a clean coin will be one which originates as the output of a CoinJoin. All transactions on the black markets will be a CoinJoin of some kind.
For most purposes, this won't matter because the majority of trade will be conducted over the Lightning Network, which has sender anonymity, and will very likely get receiver anonymity in the near future. Node operators can use Tor to avoid being surveilled - and the transport protocol used is fully end-to-end encrypted and authenticated.
Since the majority of trade will be happening on the black markets, exchanges which built their castles in KYC land will eventually fail. Nobody will care for "unclean" bitcoin if they are too heavily regulated. There will probably be a premium on clean bitcoin due to the risk involved in anybody who decides to wash unclean bitcoin.
Savers will not care if they have to resort to black markets to protect their wealth from theft or seizure. As long as they can find some local black market vendors who'll trade them for some other goods or fiat cash.
For governments to attempt to stamp out the black markets, the solution involved will be much worse than anything you could imagine being caused by Bitcoin - complete totalitarianism is the only way it could be enforced, and your open internet will be finished long before then. Careful what you wish for.
How does regulation work for illegal drugs, prostitution, or other black markets, which can overall amount to double-digit percentages of economies?
Very few people want bitcoin for itself, most are in it purely to get rich through speculation, and even those who use it to transact will find it less attractive if it can't easily be converted.
Your Heath-Robinson process of money laundering there is hilarious, and reads like a how-to for lengthy jail terms.
Very few people want bitcoin for itself, most are in it purely to get rich through speculation, and even those who use it to transact will find it less attractive if it can't easily be converted.
From an outside perspective, it might seem that way. There is a plentiful, and growing crowd who understand Bitcoin as a means of saving and avoiding state interference in their finances. Conversion of fiat to Bitcoin is highly desirable because people want to save over long periods. The conversion of Bitcoin back to Fiat is less desirable because it is trading good money for bad money. People only do the latter when they have a liquidity crisis. The bulk of bitcoin users are HODLers, as can be seen through the UTXO ages on the blockchain. Market speculators are a minor subset of bitcoiners.
Your Heath-Robinson process of money laundering there is hilarious, and reads like a how-to for lengthy jail terms.
I wasn't talking about money laundering at all. What are you reading? Not sure you know what money laundering means. I'm referring to people taking their legitimate earnings and storing them in Bitcoin for the purpose of avoiding devaulation by inflation and illegal surveillance without warrant.
People pay their income taxes when they earn (Usually with no choice because it will be deducted fromn their wage via a PAYE scheme). They also pay their sales taxes when the purchase any items from outside of the black markets. The Bitcoin saver who merely interacts with this black market as a means of exchanging fiat money for bitcoin is not engaging in illegal activity. It is the black market vendors who provide the services who are.
Consider this: You go to a shop and purchase an item which costs $0.99 (inc. sales tax). The owner of that shop decides to pocket the sales tax and does not pass it on to the tax authority. Have you engaged in illegal activity by purchasing this item? It has nothing to do with you whether the shop owner pays his sales tax - you paid yours.
Ok, it might be possible to dodge sales taxes by purchasing within black markets, but the black market doesn't necessarily provide all the commodities one would want. The most common use case will be converting back to fiat cash to use at local stores, where every purchase has a sales tax.
If money laundering is a concern, then a government would really want to deregulate bitcoin and encourage its use in paying taxes. By utilizing the blockchain and its auditability, they could largely automate the process of tax collection and save significant amounts of money. People will still be paying their income taxes via PAYE, but the process can be fully automated by every participant involved (employer, employee and tax authority).
By attempting to overregulate, they push most of the activity underground, where they are no longer collecting sales taxes on the transactions.
All that stuff about clean coins, joins and mixers. Money laundering.
The use of a CoinJoin does not imply money laundering. Launderers can and do use these tools. Merely using the tool does not make you a launderer. If you are suspected of laundering, you can prove your money movements to a law enforcement body which offers a warrant to search them. This is how things should be. Innocent until proven guilty.
CoinJoins are necessary to evade warrantless surveillance, because transactions on the blockchain can be linked to your person when the state obtains parts of that information from KYC exchanges. Since you have a right to secure against unreasonable searches, you have a right to thwart these efforts to illegally monitor your financial activity.
Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that.
They expect the price to go up because they understand the subjective value of commodities, Gresham's law, and human self-interest. It has nothing to do with regulation. Bitcoin will grow with or without state involvement because it solves real problems that governments and others have created. More people are becoming aware of this, and Bitcoin has propelled some of the issues into the spotlight. The role of the state could slow down or accelerate Bitcoin adoption, but it cannot stop the inevitable - particularly when their own policy of infinite inflation is the major driver of Bitcoin adoption.
As said above, a government would be unwise to attempt to push the activity underground, where they can no longer monitor and collect taxes on it. If the regulatory burden on exchanges ends up making it more difficult for me to obtain bitcoin through a KYC exchange than via the black market, then I will end up doing the latter, and by doing the latter, I might then potentially increase my interaction with the black market (reduced sales tax), hide my earnings (less income tax), hide my profits (less capital gains tax), hide my wealth (bye bye inheritance tax). Isn't going well for the government, who will see a reduced tax income.
The government just wants people to pay taxes. It shouldn't really care much about whether people are using dollars or bitcoin - only that Bitcoin can potentially make it easier for people to dodge tax. The best option for a government is to make it easier to use bitcoin for legitimate services than the black market so as to discourage black market involvement.
A government should be working on ways for it to utilize Bitcoin for the purpose of tax collection, and then encourage its widespread use in retail and in PAYE, such that it can have an almost live view of the economy and can see who is paying their taxes. Any delays in mobilizing such systems will ensure that superior, more privacy preserving systems will instead be adopted, and will give limited benefits to the government.
The use of a CoinJoin does not imply money laundering.
Cleaning coins and obscuring their origins between black market and AML compliant exchanges does though. You described a great way to get jail time.
you have a right to thwart these efforts to illegally monitor your financial activity.
Good luck with that, but it seems that you actually don't, nearly every country now has a variety of monetary controls and monitors flows of cash with a warrant or otherwise. Merely disguising money flows is often enough to get you investigated. See also things like "structuring", a crime involving moving money in such a way as to avoid checks, which is illegal even if no other crime is committed.
The rest of your post is just more nonsense. If people found they couldn't exchange cryptocurrencies for fiat, HODL would be a thing of the past, and black market uses would also drop because people don't want bitcoin for itself. BTC is dead without conversion being available.
There is nothing illegal about keeping your own money private, and requiring that a lawful warrant be issued for you to reveal your full financial activity. The warrant must also be issued with probable cause. It's questionable whether merely using a CoinJoin is probable cause - and given how prolific CoinJoins will be for perfectly legal uses, I can see many magistrates requiring more than just a CoinJoin to issue warrants. Different jurisdictions may have a different opinion, and will see their economies suffer as a result.
In the USA, you are protected from government overreach of your possessions by the fourth amendment. Some places have already declared bitcoin to be property.
The rest of your post is just more nonsense. If people found they couldn't exchange cryptocurrencies for fiat, HODL would be a thing of the past, and black market uses would also drop because people don't want bitcoin for itself. BTC is dead without conversion being available.
If you have no background in Austrian economics it may sound like nonsense. Mainstream economics thinks that economies are influenced top-down. The outside perspective ignores that the majority of hodlers have a very low time preference and treat Bitcoin as a long term saving, perhaps even a pension strategy. No early adopters ever expected Bitcoin to grow as rapidly as it did, but many held on anyway. They don't intend to convert back to fiat because they have a firm belief that they won't need to - enough people will desire Bitcoin in the long run that they won't have much trouble acquiring services or goods in exchange for Bitcoin in future, and their purchasing power may be increased too. (So far, has increased beyond their wildest imagination, before governments have even decided what they want to classify it as. Regulation never had anything to do with it.)
Your belief that Bitcoiners can't wait to convert back to dollars is absurd. If you take a look at the value of a dollar relative to Bitcoin[1], then it's quite clear that HODLers aren't merely investing in bitcoin, they're divesting in dollars. Bitcoin is the escape route from a failing fiat system, and some are just ahead of the curve.
While there is a market for exchange, the market will be filled, whether it is KYC exchanges or black markets. People will mostly chose the one which is cheapest, which is currently the KYC exchanges. Increased red tape will increase the costs of exchange, and the black market will fill the gap.
In the USA you are under constant financial scrutiny, and yes, subject to enforcement on things like structuring. You're a fool if you think otherwise
I am familiar with Austrian economics. It's widely regarded as bullshit, and its adherents generally immature financial larpers with bizarre, extreme views like "inflation is theft".
The market can set aside things (un)perfectly well if they turn out not to be adequately useful or worth it, in whatever sense of those words. Driving opinion by means of internet comments can be a perfectly valid, if rather useless, part of such consensus forming.
Whatever your ideology surely you can agree on the basic fact that most active use of BTC is still of a rather transient nature. In and out. This means participants generally (outside of passive saving-speculating) have little inherent need for high prices and the astronomical energy use that goes along.
Coiners of course want practically useful solutions, just not quite as much as they want to get richer.
Glad you purport to speak on everyone's behalf. The misuse of the pronoun "we" is so prevalent that it affects the way people understand the world. "We" is a collective pronoun, but the collective it refers to must have a boundary. In this case, the boundary must be, at maximum, the people reading this thread. At minimum, you are using the plural pronoun when you should be using the singular, because "We" just means "I".
Whatever your ideology surely you can agree on the basic fact that most active use of BTC is still of a rather transient nature. In and out. This means participants generally (outside of passive saving-speculating) have little inherent need for high prices and the astronomical energy use that goes along.
Saving isn't transient. It's a long term goal. The speculating that goes along with it is just a natural market phenomenon. People want to earn by betting on short term future demand.
Coiners of course want practically useful solutions, just not quite as much as they want to get richer.
I'm not all that fussed about getting richer. I'd rather not get poorer though, which is the effect which will be achieved by storing my earnings in dollars, because there is a deliberate and permanent policy of dollar devaluation outside of my control.
Saving is a practical solution, and the only one that Bitcoin needs. People will develop other practical solutions for spending and trading bitcoin because they themselves want to increase their bitcoin holdings, and they want to incentivize others to spend their Bitcoin so that they have the opportunity to obtain more.
Ah yes, the tired old free-marketeer. You're the reason we need regulations over self-destructive things. Society gets to make that call sometimes.
Or, if you really think not, would you instead be interested in buying some of this oil that will cure not only your aging but also your wife problems? I extract it from a snake, and I think you'll see the benefits of it immediately. (p.s. The oil also makes you immune to covid and meetings!)
Ah yes, the tired old free-marketeer. You're the reason we need regulations over self-destructive things. Society gets to make that call sometimes.
Fortunately, Bitcoin fixes this. "Society" has no ability to seize bitcoin or censor its transactions. Soon enough, it won't be able to even detect them.
The mob does not always make the right decisions, especially when they have nothing at stake. Public servants usually have nothing at stake and it is very easy to be wrong when spending other people's money as opposed to your own.
Or, if you really think not, would you instead be interested in buying some of this oil that will cure not only your aging but also your wife problems? I extract it from a snake, and I think you'll see the benefits of it immediately. (p.s. The oil also makes you immune to covid and meetings!)
I'm all for people being able to sell these non-products, and for people to buy these non-products if they wish for them. While they might not have any meaningful real effect, they can often have a placebo effect which can be beneficial to the purchaser. People are, and should be free to make their own judgements with their money. You can't shelter everyone all the time. If some are no longer able to make sound judgements, they should have support from relatvies with their finances rather than the government.
The current governments around the world are a great example of snake oil salesmen. They've managed to sell everyone an iatrogenic "lockdown" which is harmful their health, with claims that it is for their benefit, with no evidence. Who regulates the government? Who is going to hold these policymakers to account for the excess preventable deaths they've caused which are a result of the lockdowns, as opposed to the mostly unpreventable deaths which were a cause of nature (if we assume the virus is of natural origin)?
There is a cure for Statism at least. It is called Bitcoin.
Chinese society likely could censor, given the prevalence of mining in that country and their government's love of interference.
What are they censoring? All transactions? They can only do self-harm in this manner because they must expend large amounts of electricity, perpetually, in order to keep up their censorship, and they don't know what they're censoring. This is assuming that they do indeed have the ability to 51% attack Bitcoin, and that the rest of the world is unable to use the nuclear option of changing their software clients to bypass the 51% attack. (Mining is not the ultimate arbiter of the correct chain - individuals are the ultimate arbiter via their choice of software client). A nuclear option would make all of their hardware immediately useless and eliminate any influence over Bitcoin they may have.
And various governments can and have seized bitcoin. This is a fairy tale.
They can seize Bitcoin if you leave your private keys on an unencrypted machine, or if you leave your 12 word written phrase lying around at home.
They can't seize your seed phrase or passphrase from your head, which can deterministically generate your bitcoin wallet on any machine. They can't seize it from an encrypted disk either, unless you reveal to them the keys to decrypt it.
In the UK they may be able to force you to hand over keys for decryption or threaten you with 2 years of jail time. Not in the USA.
The point was that, Bitcoin can be made unseizable because it is merely information. This is very unlike dollars, gold, or other physical commodities which can be seized by force, or threat of force, which has been done before - EO 6102. An attempt to try and emulate EO 6102 for Bitcoin would result in a very different outcome.
A country with a majority of miners can censor transactions from addresses it chooses to blacklist. Just as miners can choose to include transactions with fees they like, so can they exclude transactions from addresses they are under pressure to exclude.
Authorities in more countries than the UK have seized bitcoin. You make the classic mistake of looking at where the system is hardest and declaring it secure, instead of looking at where it is softest, the user and their systems.
They can't seize fiat if they don't know where I buried it either. Bitcoin is no more secure than that.
Like I said, these are fairy tales you tell yourself about security.
They can't seize fiat if they don't know where I buried it either. Bitcoin is no more secure than that.
They don't need to seize fiat because they can just print it. They can't print Bitcoin.
And you are right in regards to users being the weak point. Anybody who genuinely cares for the security of their money will use a brain wallet, or at least a 24-word seed phrase coupled with a brain-passphrase.
The latter technique can be used to create "decoys". You can use the same 24-word seed with multiple passphrases, with each being a distinct wallet. If you keep a small amount in the wallet with no passphrase, it may appear to anybody who seizes your 24-words that you only have a small amount of money - but unless they can torture all of your passphrases out of you, they will not necessarily be able to seize all of your money. And since they cannot know how many copies of your 24-word phrase you have made, they cannot know for sure that seizing the copies they find will prevent you from accessing your coins.
Yep, that's how everyone wants to spend their time and effort these days, in an age of pervasive, easy and free banking... memorizing multiple seed phrases so their anti-state opsec is up to scratch. Better pray you don't screw up on page 63, subsection 5 of the "Big book of keeping your bitcoins safe" or whoops! There go your life savings with no recourse.
Do you coiners ever step back and listen to yourselves?
Banking isn't as pervasive as you think. There are millions unbanked in the USA. Globally, billions.
The level of OpSec suggested is a necessary minimum against an equivalent of EO6102 whereby the government would attempt to seize your bitcoin, presumably so it can issue its own fractionally backed alternative, purporting to be equivalent in value. Fortunately there's a case in recent history which people are all to familiar with and unlikely to fall for the same trick again. Nobody is going to trade in their bitcoin for another government shitcoin, unless they are forced.
If they don't know you have it, and the only place it is stored is in your head, then they can't seize it, and they have no probable cause to commit violence against you.
Personally, I couldn't care less what everyone else does. I only care that my own bitcoin are safe. I'll happily share my knowledge so that other people can secure their money too, but if they don't care, I can't hold their hands for them.
Pretty sure people will take an interest when the dollar begins to hyperinflate and their 401k becomes worthless.
I'm not sure where you get the impression that the dollar is safe. It's an experimental currency which has been around less than 50 years, and over that time it looks less and less likely to have a long term survival.
Bitcoin is not banking the unbanked in any meaningful way, that's just another fairytale.
And the currencies of the western world are going to crash to nothing, while somehow enough internet infrastructure will remain that you and your coiner bros can become the new kings!
At this point you're basically praying for the apocalypse so you can feel superior. It's hilarious.
Nobody is praying for an apocalypse. On the contrary, there have been people sounding the alarm on the reckless policy of the Fed for decades, but since it falls on deaf ears and any reformation of the Fed seems increasingly unlikely, anybody who realizes that kicking the can down the road is not a solution to anything has no real option other than to opt-out of the fiat system and Bitcoin or Gold are the only real alternatives. Bitcoin has several advantages over gold which would make it more desirable if there were a shift back to hard money.
You seem to think that the dollar crashing will crash civilization. There are dozens of cases of hyperinflation hitting over the past century, particularly since the end of the Bretton Woods agreement - they cause temporary turmoil, and those most affected are the poorest, but recovery happens fairly quickly provided the government steps out of the way and deregulates to allow the economy to repair itself.
If you don't want to be one of those most affected by hyperinflation, it might make sense to have a plan in the event that the USD hyperinflates - since there's nothing to suggest it will be any different to other currencies. I'm not necessarily trying to predict the future, but I'm planning ahead for a potential scenario. To me one that looks increasingly plausible and is merely a question of when, not if.
Part of that planning includes being able to transact if there are disturbances in internet infrastructure. This is why you can transmit and receive Bitcoin over satellite and radio already. The internet will quickly heal because there will be a financial incentive to provide it - earning bitcoin in exchange for the provision of bandwith.
Also, in regards to coiners becoming kings - it is likely that people with significant bitcoin holdings will keep a low profile, else they put a target on their heads. Extravagant displays of wealth seem unlikely and foolish.
There will be no apocalypse because the replacement for the dollar is being built already and it will simply absorb the fallout when the dollar fails. There will be some havoc caused, but the transition will likely happen in steps, with the 2017 bull run being an example of one such step - where a large influx of new users happens at once, followed by a bear market, followed by another bull run which exceeds the previous one.
You don't have to have a backup plan and you can believe everything that your government and "experts" spoon feed you, that's fine too.
Comments
We should reject PoW algorithms as generally destructive. When I say destructive, I mean they cause more global harm than they purport to alleviate.
PoW should have been set aside as soon as it was generally understood that the network's energy consumption might be unbounded.
Who is "we"?
You can't "set aside" something which a free market has chosen to accept. If you're upset about PoW, invent a superior replacement which the market would prefer over PoW.
However, I suspect you cannot. I'm doubtful that such thing can exist. Bitcoin is now an essential commodity because there is no replacement for it when it comes to saving money or evading warrantless (illegal) surveillance. The central banks and governments around the world caused this, and they aren't capable of reversing it.
Presumably society.
We have set aside CFCs even though they were accepted by the free market. They were harmful to the environment, creating the ozone hole.
Similarly, PoW mining has an enormous and well-documented ecological cost.
PoS exist.
All transactions and account balances in Bitcoin are public. From meta data and corresponding networks one can figure out where and who the people are (NSA does this too). It is not very private at all.
I doubt that it is a essential commodity and suspect you are overestimating the economic importance of Bitcoin.
Which society?
Some regulations can be enforced. It's going to be a different story attempting to regulate something which can be hidden trivially with encryption, has no physical presence, and can be stored in ones head to prevent seizure.
This is true for plain use of Bitcoin, but there are ways of evading chain analysis, and you can also swap out your Bitcoin for Monero for spending.
It may not be essential to you, but there are plenty who consider it so, and these will only grow as people further distrust their governments and central banks.
Regulate on/off ramps. Watch it wither on the vine. Job done.
How does regulation work for illegal drugs, prostitution, or other black markets, which can overall amount to double-digit percentages of economies?
Bitcoin only needs the black market to be a huge success. If it can avoid any surveillance ramps, that is ideal. It doesn't need to be everywhere.
IMO, the surveillance on/off ramps are going to have a hard problem ahead of them, of their own making. Black markets are only going to accept "cleaned" bitcoins because they won't put themselves at risk of being surveilled. The "cleaned" bitcoins will not be usable on AML exchanges. The "unclean" bitcoin can be cleaned through CoinJoins and such, at the risk of whoever obtained them in their unclean state, but once cleaned, they'll be back on the black markets.
Trading fiat currencies for Bitcoin will happen mainly in person, with cash, to avoid the surveillance.
You will be able to tell, to an extent, whether bitcoin are clean or unclean through their transaction history - a clean coin will be one which originates as the output of a CoinJoin. All transactions on the black markets will be a CoinJoin of some kind.
For most purposes, this won't matter because the majority of trade will be conducted over the Lightning Network, which has sender anonymity, and will very likely get receiver anonymity in the near future. Node operators can use Tor to avoid being surveilled - and the transport protocol used is fully end-to-end encrypted and authenticated.
Since the majority of trade will be happening on the black markets, exchanges which built their castles in KYC land will eventually fail. Nobody will care for "unclean" bitcoin if they are too heavily regulated. There will probably be a premium on clean bitcoin due to the risk involved in anybody who decides to wash unclean bitcoin.
Savers will not care if they have to resort to black markets to protect their wealth from theft or seizure. As long as they can find some local black market vendors who'll trade them for some other goods or fiat cash.
For governments to attempt to stamp out the black markets, the solution involved will be much worse than anything you could imagine being caused by Bitcoin - complete totalitarianism is the only way it could be enforced, and your open internet will be finished long before then. Careful what you wish for.
Very few people want bitcoin for itself, most are in it purely to get rich through speculation, and even those who use it to transact will find it less attractive if it can't easily be converted.
Your Heath-Robinson process of money laundering there is hilarious, and reads like a how-to for lengthy jail terms.
From an outside perspective, it might seem that way. There is a plentiful, and growing crowd who understand Bitcoin as a means of saving and avoiding state interference in their finances. Conversion of fiat to Bitcoin is highly desirable because people want to save over long periods. The conversion of Bitcoin back to Fiat is less desirable because it is trading good money for bad money. People only do the latter when they have a liquidity crisis. The bulk of bitcoin users are HODLers, as can be seen through the UTXO ages on the blockchain. Market speculators are a minor subset of bitcoiners.
I wasn't talking about money laundering at all. What are you reading? Not sure you know what money laundering means. I'm referring to people taking their legitimate earnings and storing them in Bitcoin for the purpose of avoiding devaulation by inflation and illegal surveillance without warrant.
People pay their income taxes when they earn (Usually with no choice because it will be deducted fromn their wage via a PAYE scheme). They also pay their sales taxes when the purchase any items from outside of the black markets. The Bitcoin saver who merely interacts with this black market as a means of exchanging fiat money for bitcoin is not engaging in illegal activity. It is the black market vendors who provide the services who are.
Consider this: You go to a shop and purchase an item which costs $0.99 (inc. sales tax). The owner of that shop decides to pocket the sales tax and does not pass it on to the tax authority. Have you engaged in illegal activity by purchasing this item? It has nothing to do with you whether the shop owner pays his sales tax - you paid yours.
Ok, it might be possible to dodge sales taxes by purchasing within black markets, but the black market doesn't necessarily provide all the commodities one would want. The most common use case will be converting back to fiat cash to use at local stores, where every purchase has a sales tax.
If money laundering is a concern, then a government would really want to deregulate bitcoin and encourage its use in paying taxes. By utilizing the blockchain and its auditability, they could largely automate the process of tax collection and save significant amounts of money. People will still be paying their income taxes via PAYE, but the process can be fully automated by every participant involved (employer, employee and tax authority).
By attempting to overregulate, they push most of the activity underground, where they are no longer collecting sales taxes on the transactions.
All that stuff about clean coins, joins and mixers. Money laundering.
Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that.
The use of a CoinJoin does not imply money laundering. Launderers can and do use these tools. Merely using the tool does not make you a launderer. If you are suspected of laundering, you can prove your money movements to a law enforcement body which offers a warrant to search them. This is how things should be. Innocent until proven guilty.
CoinJoins are necessary to evade warrantless surveillance, because transactions on the blockchain can be linked to your person when the state obtains parts of that information from KYC exchanges. Since you have a right to secure against unreasonable searches, you have a right to thwart these efforts to illegally monitor your financial activity.
They expect the price to go up because they understand the subjective value of commodities, Gresham's law, and human self-interest. It has nothing to do with regulation. Bitcoin will grow with or without state involvement because it solves real problems that governments and others have created. More people are becoming aware of this, and Bitcoin has propelled some of the issues into the spotlight. The role of the state could slow down or accelerate Bitcoin adoption, but it cannot stop the inevitable - particularly when their own policy of infinite inflation is the major driver of Bitcoin adoption.
As said above, a government would be unwise to attempt to push the activity underground, where they can no longer monitor and collect taxes on it. If the regulatory burden on exchanges ends up making it more difficult for me to obtain bitcoin through a KYC exchange than via the black market, then I will end up doing the latter, and by doing the latter, I might then potentially increase my interaction with the black market (reduced sales tax), hide my earnings (less income tax), hide my profits (less capital gains tax), hide my wealth (bye bye inheritance tax). Isn't going well for the government, who will see a reduced tax income.
The government just wants people to pay taxes. It shouldn't really care much about whether people are using dollars or bitcoin - only that Bitcoin can potentially make it easier for people to dodge tax. The best option for a government is to make it easier to use bitcoin for legitimate services than the black market so as to discourage black market involvement.
A government should be working on ways for it to utilize Bitcoin for the purpose of tax collection, and then encourage its widespread use in retail and in PAYE, such that it can have an almost live view of the economy and can see who is paying their taxes. Any delays in mobilizing such systems will ensure that superior, more privacy preserving systems will instead be adopted, and will give limited benefits to the government.
Cleaning coins and obscuring their origins between black market and AML compliant exchanges does though. You described a great way to get jail time.
Good luck with that, but it seems that you actually don't, nearly every country now has a variety of monetary controls and monitors flows of cash with a warrant or otherwise. Merely disguising money flows is often enough to get you investigated. See also things like "structuring", a crime involving moving money in such a way as to avoid checks, which is illegal even if no other crime is committed.
The rest of your post is just more nonsense. If people found they couldn't exchange cryptocurrencies for fiat, HODL would be a thing of the past, and black market uses would also drop because people don't want bitcoin for itself. BTC is dead without conversion being available.
There is nothing illegal about keeping your own money private, and requiring that a lawful warrant be issued for you to reveal your full financial activity. The warrant must also be issued with probable cause. It's questionable whether merely using a CoinJoin is probable cause - and given how prolific CoinJoins will be for perfectly legal uses, I can see many magistrates requiring more than just a CoinJoin to issue warrants. Different jurisdictions may have a different opinion, and will see their economies suffer as a result.
In the USA, you are protected from government overreach of your possessions by the fourth amendment. Some places have already declared bitcoin to be property.
If you have no background in Austrian economics it may sound like nonsense. Mainstream economics thinks that economies are influenced top-down. The outside perspective ignores that the majority of hodlers have a very low time preference and treat Bitcoin as a long term saving, perhaps even a pension strategy. No early adopters ever expected Bitcoin to grow as rapidly as it did, but many held on anyway. They don't intend to convert back to fiat because they have a firm belief that they won't need to - enough people will desire Bitcoin in the long run that they won't have much trouble acquiring services or goods in exchange for Bitcoin in future, and their purchasing power may be increased too. (So far, has increased beyond their wildest imagination, before governments have even decided what they want to classify it as. Regulation never had anything to do with it.)
Your belief that Bitcoiners can't wait to convert back to dollars is absurd. If you take a look at the value of a dollar relative to Bitcoin[1], then it's quite clear that HODLers aren't merely investing in bitcoin, they're divesting in dollars. Bitcoin is the escape route from a failing fiat system, and some are just ahead of the curve.
While there is a market for exchange, the market will be filled, whether it is KYC exchanges or black markets. People will mostly chose the one which is cheapest, which is currently the KYC exchanges. Increased red tape will increase the costs of exchange, and the black market will fill the gap.
[1]:https://i.imgur.com/GgPNbyx.png
In the USA you are under constant financial scrutiny, and yes, subject to enforcement on things like structuring. You're a fool if you think otherwise
I am familiar with Austrian economics. It's widely regarded as bullshit, and its adherents generally immature financial larpers with bizarre, extreme views like "inflation is theft".
Us, those not yet in your choir, I presume.
The market can set aside things (un)perfectly well if they turn out not to be adequately useful or worth it, in whatever sense of those words. Driving opinion by means of internet comments can be a perfectly valid, if rather useless, part of such consensus forming.
Whatever your ideology surely you can agree on the basic fact that most active use of BTC is still of a rather transient nature. In and out. This means participants generally (outside of passive saving-speculating) have little inherent need for high prices and the astronomical energy use that goes along.
Coiners of course want practically useful solutions, just not quite as much as they want to get richer.
Glad you purport to speak on everyone's behalf. The misuse of the pronoun "we" is so prevalent that it affects the way people understand the world. "We" is a collective pronoun, but the collective it refers to must have a boundary. In this case, the boundary must be, at maximum, the people reading this thread. At minimum, you are using the plural pronoun when you should be using the singular, because "We" just means "I".
Saving isn't transient. It's a long term goal. The speculating that goes along with it is just a natural market phenomenon. People want to earn by betting on short term future demand.
I'm not all that fussed about getting richer. I'd rather not get poorer though, which is the effect which will be achieved by storing my earnings in dollars, because there is a deliberate and permanent policy of dollar devaluation outside of my control.
Saving is a practical solution, and the only one that Bitcoin needs. People will develop other practical solutions for spending and trading bitcoin because they themselves want to increase their bitcoin holdings, and they want to incentivize others to spend their Bitcoin so that they have the opportunity to obtain more.
Ah yes, the tired old free-marketeer. You're the reason we need regulations over self-destructive things. Society gets to make that call sometimes.
Or, if you really think not, would you instead be interested in buying some of this oil that will cure not only your aging but also your wife problems? I extract it from a snake, and I think you'll see the benefits of it immediately. (p.s. The oil also makes you immune to covid and meetings!)
Fortunately, Bitcoin fixes this. "Society" has no ability to seize bitcoin or censor its transactions. Soon enough, it won't be able to even detect them.
The mob does not always make the right decisions, especially when they have nothing at stake. Public servants usually have nothing at stake and it is very easy to be wrong when spending other people's money as opposed to your own.
I'm all for people being able to sell these non-products, and for people to buy these non-products if they wish for them. While they might not have any meaningful real effect, they can often have a placebo effect which can be beneficial to the purchaser. People are, and should be free to make their own judgements with their money. You can't shelter everyone all the time. If some are no longer able to make sound judgements, they should have support from relatvies with their finances rather than the government.
The current governments around the world are a great example of snake oil salesmen. They've managed to sell everyone an iatrogenic "lockdown" which is harmful their health, with claims that it is for their benefit, with no evidence. Who regulates the government? Who is going to hold these policymakers to account for the excess preventable deaths they've caused which are a result of the lockdowns, as opposed to the mostly unpreventable deaths which were a cause of nature (if we assume the virus is of natural origin)?
There is a cure for Statism at least. It is called Bitcoin.
Chinese society likely could censor, given the prevalence of mining in that country and their government's love of interference.
And various governments can and have seized bitcoin. This is a fairy tale.
What are they censoring? All transactions? They can only do self-harm in this manner because they must expend large amounts of electricity, perpetually, in order to keep up their censorship, and they don't know what they're censoring. This is assuming that they do indeed have the ability to 51% attack Bitcoin, and that the rest of the world is unable to use the nuclear option of changing their software clients to bypass the 51% attack. (Mining is not the ultimate arbiter of the correct chain - individuals are the ultimate arbiter via their choice of software client). A nuclear option would make all of their hardware immediately useless and eliminate any influence over Bitcoin they may have.
They can seize Bitcoin if you leave your private keys on an unencrypted machine, or if you leave your 12 word written phrase lying around at home.
They can't seize your seed phrase or passphrase from your head, which can deterministically generate your bitcoin wallet on any machine. They can't seize it from an encrypted disk either, unless you reveal to them the keys to decrypt it.
In the UK they may be able to force you to hand over keys for decryption or threaten you with 2 years of jail time. Not in the USA.
The point was that, Bitcoin can be made unseizable because it is merely information. This is very unlike dollars, gold, or other physical commodities which can be seized by force, or threat of force, which has been done before - EO 6102. An attempt to try and emulate EO 6102 for Bitcoin would result in a very different outcome.
A country with a majority of miners can censor transactions from addresses it chooses to blacklist. Just as miners can choose to include transactions with fees they like, so can they exclude transactions from addresses they are under pressure to exclude.
Authorities in more countries than the UK have seized bitcoin. You make the classic mistake of looking at where the system is hardest and declaring it secure, instead of looking at where it is softest, the user and their systems.
They can't seize fiat if they don't know where I buried it either. Bitcoin is no more secure than that.
Like I said, these are fairy tales you tell yourself about security.
They don't need to seize fiat because they can just print it. They can't print Bitcoin.
And you are right in regards to users being the weak point. Anybody who genuinely cares for the security of their money will use a brain wallet, or at least a 24-word seed phrase coupled with a brain-passphrase.
The latter technique can be used to create "decoys". You can use the same 24-word seed with multiple passphrases, with each being a distinct wallet. If you keep a small amount in the wallet with no passphrase, it may appear to anybody who seizes your 24-words that you only have a small amount of money - but unless they can torture all of your passphrases out of you, they will not necessarily be able to seize all of your money. And since they cannot know how many copies of your 24-word phrase you have made, they cannot know for sure that seizing the copies they find will prevent you from accessing your coins.
Yep, that's how everyone wants to spend their time and effort these days, in an age of pervasive, easy and free banking... memorizing multiple seed phrases so their anti-state opsec is up to scratch. Better pray you don't screw up on page 63, subsection 5 of the "Big book of keeping your bitcoins safe" or whoops! There go your life savings with no recourse.
Do you coiners ever step back and listen to yourselves?
Banking isn't as pervasive as you think. There are millions unbanked in the USA. Globally, billions.
The level of OpSec suggested is a necessary minimum against an equivalent of EO6102 whereby the government would attempt to seize your bitcoin, presumably so it can issue its own fractionally backed alternative, purporting to be equivalent in value. Fortunately there's a case in recent history which people are all to familiar with and unlikely to fall for the same trick again. Nobody is going to trade in their bitcoin for another government shitcoin, unless they are forced.
If they don't know you have it, and the only place it is stored is in your head, then they can't seize it, and they have no probable cause to commit violence against you.
Personally, I couldn't care less what everyone else does. I only care that my own bitcoin are safe. I'll happily share my knowledge so that other people can secure their money too, but if they don't care, I can't hold their hands for them.
Pretty sure people will take an interest when the dollar begins to hyperinflate and their 401k becomes worthless.
I'm not sure where you get the impression that the dollar is safe. It's an experimental currency which has been around less than 50 years, and over that time it looks less and less likely to have a long term survival.
Bitcoin is not banking the unbanked in any meaningful way, that's just another fairytale.
And the currencies of the western world are going to crash to nothing, while somehow enough internet infrastructure will remain that you and your coiner bros can become the new kings!
At this point you're basically praying for the apocalypse so you can feel superior. It's hilarious.
Nobody is praying for an apocalypse. On the contrary, there have been people sounding the alarm on the reckless policy of the Fed for decades, but since it falls on deaf ears and any reformation of the Fed seems increasingly unlikely, anybody who realizes that kicking the can down the road is not a solution to anything has no real option other than to opt-out of the fiat system and Bitcoin or Gold are the only real alternatives. Bitcoin has several advantages over gold which would make it more desirable if there were a shift back to hard money.
You seem to think that the dollar crashing will crash civilization. There are dozens of cases of hyperinflation hitting over the past century, particularly since the end of the Bretton Woods agreement - they cause temporary turmoil, and those most affected are the poorest, but recovery happens fairly quickly provided the government steps out of the way and deregulates to allow the economy to repair itself.
If you don't want to be one of those most affected by hyperinflation, it might make sense to have a plan in the event that the USD hyperinflates - since there's nothing to suggest it will be any different to other currencies. I'm not necessarily trying to predict the future, but I'm planning ahead for a potential scenario. To me one that looks increasingly plausible and is merely a question of when, not if.
Part of that planning includes being able to transact if there are disturbances in internet infrastructure. This is why you can transmit and receive Bitcoin over satellite and radio already. The internet will quickly heal because there will be a financial incentive to provide it - earning bitcoin in exchange for the provision of bandwith.
Also, in regards to coiners becoming kings - it is likely that people with significant bitcoin holdings will keep a low profile, else they put a target on their heads. Extravagant displays of wealth seem unlikely and foolish.
There will be no apocalypse because the replacement for the dollar is being built already and it will simply absorb the fallout when the dollar fails. There will be some havoc caused, but the transition will likely happen in steps, with the 2017 bull run being an example of one such step - where a large influx of new users happens at once, followed by a bear market, followed by another bull run which exceeds the previous one.
You don't have to have a backup plan and you can believe everything that your government and "experts" spoon feed you, that's fine too.
Yes, and they've been wrong for decades, over and over and over again.
https://medium.com/@danhedl/pow-is-efficient-aa3d442754d3
This is a totally absurd argument.