Bitcoin Forum

http://bitcoinism.blogspot.com/2013/11/is-it-time-to-boycott-all-us-bitcoin.html

As of today, the efforts of Bitcoin Foundation and others who have told us that Bitcoin should be altered to make it more acceptable to the regulatory apparatus has finely bore fruit. A group of investors announced Coin Validation (http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/), a service designed to remove all possibility of financial privacy for Bitcoin users.

This service will work by asking Bitcoin businesses to voluntarily (at first) violate their customer's privacy by providing them with a list of every bitcoin address known to be associated with that customer. The list will be used to create a database of "clean" addresses, where clean means tied to AML/KYC information, with the ostensible goal of allowing these businesses avoid "tainted" Bitcoins.

The first thing to note about this plan is that it will in no way remain voluntary. Regulators in the US and possibly other countries are waiting for such a database to exist so that they can require all companies in their jurisdiction to only accept payments from customers whose identities can be fully tracked. So far they have not been able to require this because the technology does not exist, but Matt Mellon, Alex Waters, and Yifu Guo are apparently willing to build it for them. Now you who to thank for selling out your financial privacy.

Countermeasures

Use and create non-US alternatives:

It's virtually certain that every US-based Bitcoin company, as well as any company backed by venture capital firms, as well as any currency exchange which deals with USD is going to sign on to this plan. Bitcoin users who which to retain their privacy should avoid dealing with all of these companies, as well as create alternatives that are based outside the United States and not susceptible to political pressure.

Mobilize the international Bitcoin community:

Non-US Bitcoin users should demand that Bitcoin companies in their countries respect their privacy and refuse to participate in this or any other surveillance scheme.

Use privacy-enhancing technology:

Protocols like CoinJoin (https://bitcointalk.org/index.php?topic=279249.0), if properly implemented and used,  can render the information in this database useless. Anyone who cares about financial privacy should ask the developers of their wallet software to implement this ASAP.

Practice good Bitcoin hygiene by never using the same address twice.

Abandon traditional businesses:

There's no point in lobbying traditional businesses based in the US and other repressive regimes to resist this kind of pressure. They are too vulnerable to pressure (http://bitcoinmagazine.com/6386/trust-no-us-companies-with-the-future-of-bitcoin/) and are going to do whatever the regulators tell them to do.

They are, however, in no way essential to the future of Bitcoin.

The economy of the future is System D (http://www.foreignpolicy.com/articles/2011/10/28/black_market_global_economy). Traditional businesses with their physical offices, corporate charters, bank accounts and licenses are holdovers of a dying paradigm. We should focus instead on creating tools to empower individuals to create censorship-resistant business models (http://bitcoinism.blogspot.com/2013/11/censorship-resistant-business-models.html).

We will not build a bridge to the future by conforming to the past. While it's unfortunate that traditional Bitcoin businesses are trapped in a position where they must cripple the features of the currency in order to be allowed to operate, we as a community must continue to move forward even if it means leaving them behind.

Zerocoin? https://en.bitcoin.it/wiki/Zerocoin
--
From the BitcoinMagazine article: "Some of the proposals which have been suggested in the past include: adding the capability to reverse transactions, confiscation of balances, creating a central authority that can whitelist and/or blacklist addresses, and requiring all users to register their wallets with a government agency. So far none of these have been implemented into the protocol but the pressure to do so is will only continue to increase, especially by venture-funded companies, especially in the USA."

If those things will happen to Bitcoin, I will leave it.

Last I heard it was orders of magnitude too slow.

I think this is what it's going to come down to, I would still happily trade with the U.S if it's in cryptocurrencies which they can't control but paying in paper money? Fuck it, it does seem like that's the way the rest of the world seems to be going now, we now finally have a peaceful way of abandoning a government, lets hope they realise most people don't want anything to do with them.

Lots of comments about this also on reddit:

http://www.reddit.com/r/Bitcoin/comments/1qj7sw/sanitizing_bitcoin_this_company_wants_to_track/

 >:(


Quote from that reddit thread:

Individuals/criminals should be blacklisted, not money.

The thought was flying around for a long time though:

Zerocoin: Anonymous Distributed E-Cash from Bitcoin (http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf):

Document created on Sat, March 16, 2013

but couldn't you just send your coins into a tumbler and throw the trackers off.. track?

If I have understood correctly it´s up to miners/pools which version of bitcoinid they will accept / take in use. I hope all privacy violating possible future versions will be rejected and development will be taken over. There are talented people all over the world to replace the gore dev team if required.  

each miner should be required to send their coin to a known tainted mixer prior to selling on an exchange. all coins are created equal.

this project will probably be independent from the bitcoin protocol, it will track coins, and tell merchant whether or not a coin is "valid"


will one of the devs please say something!


question 1) WHY!?
question 2) you are FIRED!

I'd like to see any curent and future government seized Bitcoins banned from ever becoming confirmed transactions on the blockchain.

Of course this won't happen now as regulation is going to start hitting hard and what 'the government' say goes.

In this case we're talking about the most over zealous government in the world - the US Government.

Those SR coins should never be allowed to move wallets again.

if all coins are blacklisted, it defeats the system being introduced. of course, no one can really be forced to do anything without the $5 wrench...

One did:

Just one of many attempts that are sure to follow to co-opt Bitcoin.

I trust that the Bitcoin community is smart enough to see through this one (and the many that will follow).

let the little men in their little silos hatch their little schemes. who cares. if this thing does get implemented than we will need to mix our coins with a system like coinjoin. if the government is able to put enough pressure on merchants to force them to reject mixed coins, than i will still mix my coins anyway even if it makes them worth less and then i'll just buy my toilet paper and shaving creme on the silkroad 8.0 with mixed coins.

>visiting, reading, or even copying what reddit says ever

Seriously?

I had to log in just to quote / +1 / bump that...

Carry on.

Lol. Yes. I vote that we start forcing people to submit.

ForeignPolicy.com is blocked as long as don't i don't sign up for an account.
here's a quick pdf capture of the linked article "The shadow superpower": http://document.li/2TrW


this is a serious issue. it was just a question of time until some people start getting on their knees for integration by trading honour and trust for individual wealth & power and start disrupting the technology.
i'm curious about future developments next year in that regard.

ok every CALM DOWN and take away the sniffing glue away from your noses

its seems 99% of people are reading "opinions" of what coinvalidation is about, and not reading the fact that it is just the writers opinion as oppose to the facts given directly from coinvalidation. this is known as chinese whispers.

so here goes, please remove tin foil hats and anything producing hallucinatory fumes... read twice and take regular breathes of fresh air to ensure the information is absorbed...

coinvalidation HAVE NOT personally talked much about what their system is, anyone trying to describe it as the abolishment of anonymity are totally wrong.

coinvalidation is a company (not the government) but a business advice company offering bitcoin businesses information on how to PROPERLY comply with AML/KYC in regards to sections of their business involving FIAT.
EG Exchanges
EG companies that convert BTC into FIAT for wages/stock/profit (tax purposes)

coinvalidation is NOT requiring identification of all bitcoin users. only the users that want to withdraw FIAT from legitimate exchanges above the AMLKYC thresholds.

coinvalidation is NOT about red flagging addresses with silk road taint.

now take 3 breathes of fresh air... relax... and now go back to your tinfoil hat conspiracy theories and glue sniffing activities about a new topic.

Did Kashmir Hill fabricate the quotes in her article?

You're probably right.  So much fear and speculative hyperbole in these forums. 

First it's coin validation, then its...


I don't like the sound of it.

Just a matter of time before all BTC owned by US residents are seized as "criminal proceeds", as we all commit 3 felonies a day (http://www.amazon.com/Three-Felonies-Day-Target-Innocent-ebook/dp/B00505UZ4G/), on average. Would make the rest of the world's BTC worth more if all innocent US BTC owners got fucked into oblivion, though.

fear and speculative hyperbole were also often heard words when discussing the scale of web observation by US some years ago...
look how that turned out.
US authorities will try to get their hands to any early branch of this young economy if they can't get to technology's roots.
Bitcoin presents among other things a huge shift of wealth over time and therefore the existing financial structures will logically make attempts to preserve status quo within this new system.

I personally like to keep a roll of tinfoil at hand at this point and watch out for any signs of outgrowth during the regulation process.

Here's a quote (second paragraph):

This sounds to me like she directly interviewed the people involved.

If franky1 is correct about the nature of Coin Validation, then it means that she fabricated the article out of whole cloth.

On the other hand, franky1 is on my ignore list so I presume that happened for a good reason.

>having a hardon for hating reddit
really?

Why?  Most large holders are probably already known and since they have a lot to lose they wouldn't want to rock the boat.  Smaller holders won't care since not a lot is at stake for them.

A few points:

1. The Bitcoin Foundation is in no way associated with these jokers (neither is DATA, as far as I know).
2. No sane US merchant will cooperate unless they are required to by law. You don't turn away customers, or make them jump through extra hoops to pay you.
3. All merchant associations (BF,DATA, etc.), especially those whose members are mostly US based, will be the ones most hurt by this system becoming legally required.

I realize you don't trust the Foundation. That's fine. You may dislike their conciliatory approach. That's a separate discussion.
However you can bet that they will almost certainly be opposed to a law requiring this system, because of how much it would hurt their members.
And because they've been effective at engaging regulators, they'll be the most able to block any law forcing CoinValidation onto US merchants, whether through lobbying, lawsuits, or other methods.

The guys who will most likely stop this from becoming law in the US are the very people you blame. They've got too much to lose.

Peter Vessenes is the one who got this ball rolling, and he's one of the founders.

Perhaps the current makeup of the Foundation is less inclined this way, but the damage has already been done.

They will be, at least any of them under FinCEN jurisdiction.

Even if we stop this initiative, though, they'll just start over and just not announce it next time. US law allows/requires them to do this.

I very much hope so. I sympathize with the people in the US who have tried to play by the rules and do the right thing just to be allowed to operate, but Bitcoin is more important than any individual business.

He talked about tainting a couple times. That's it. And given that he's a lawyer and not an economist, he probably didn't realize how terrible the idea was at the time. The foundation has never, and likely will never, endorse tainting.


Exchanges are already a lost cause (even the ones outside the US), precisely because they receive tons of Fiat money and integrate directly into the regular financial system. FINCEN has not claimed jurisdiction over regular merchants, who accept bitcoin as payment.


The data gathering aspect, yes. But they can only share the information that they actually know about the buyer. Digital goods merchants probably only know your email address, not your identity. But then again, the NSA can get the info even if no money changes hands at all. Hell they can get your info regardless of where you buy your stuff, because most of the shipping companies are US based, and therefore their shipping records are accessible to the Govt. This is unfortunate, but has little to do with Bitcoin

The really dangerous part of the CoinValidation initiative, is to make merchants reject funds that aren't sent from an address with an associated identity. But that can't be done in secret, because they need to tell you that you need to register and give them a bunch of info.

Again, let's not panic, I suspect that this idea will be killed off pretty quickly. We don't need to start punishing US merchants in advance just because they might decide to cooperate. We can always do it after the fact, and avoid hurting people who are on our side (despite differing tactical approaches).

Im not sure about the validity of this "news" and im not really a supporter of "big brother watching us"....

BUT, IF the US gov do know who ALL addresses belong to, what difference will it actually make? it is not as though US citizens have privacy anyhow.... the gov already knows pretty much all there is to be known about its citizens.
(they currently know where people live, work, play, vacate, how much money people have, earn, save, spend, what schools people went to, how well educated people are, if people have a criminal record, when and where people were born or died, health records, who peoples friends are, what TV channels people watch, and probably a shitload more!)

Other than more loss of privacy, what effect do people think this will have in reality anyhow?.... unless you are laundering money or evading your tax, it is likely to have very little effect on how we use bitcoin.

If the US gov ARE pushing for this "transparency" at least they are not pushing to ban it!

OK, I really hated the tone of this post ... first who the hell are you to come here denigrating and accusing people of sniffing substance, hallucinating and hyperventilating? ... even before you get close to your point (which wasn't exactly clear) that seemed like a veiled apology for this disastrous business model because it has been 'misconstrued' by a naive journalist?

If you have a point, stick to it and cut the ad hominen crap. Point is you don't have a good argument and people are right to be terribly upset at this very bad idea and obvious outright attack on their financial privacy and the future viability of bitcoin.

Already in 1749 the courts recognised the necessity for fungibility of coin as a basic function, yet idiots over 300 years later cannot see that what the govt. is attempting to do to with money is exactly that, break fungibility. Those who do not know history are doomed to repeat it. Bitcoin is an opt out of the current broken monetary system, not the least of which is its recent terrible tracking systems layer, why the hell would bitcoin want to go back down that failed Centralised model path?!

this year, many Americans abroad lost their bank accounts and stock accounts and others because of the New American Laws.  WIth more suppression to the Bitcoins, everyone except American will end up making the profit and Bitcoin continues to glow while, merchants from other countries will eat into the profits that could be made by American and pay tax for it.

It seems, USA is choking his own neck this year

continues grow tex usa gov ::)

Did people seriously think BTC was going to 'go main stream' while still completely flouting AML/KYC regulations?  Libertarian fantasies do not a viable currency make, if you want BTC to remain an underground thing then by all means keep existing in a legal grey area, but don't expect everyone on the planet to be using it 5 years from now.

Bitcoin exposes how stupid those regulations are. I fully expect KYC/AML to be repealed. I also suspect at least a few governments will try to ban Bitcoin first.

... and you lot are delusional if you think KYC/AML laws are compatible with a functional monetary system .... stalemate I guess?

Edit: I guess you at least recognize where the problem lies, BitCoin supplies the mirror, not the solution, for your problems.

Given the US is something of a rogue state at the moment, I'd happily direct my BTC elsewhere, such as the EU.

2020:

Americanwidgetprotectors.com:
Hi Dan there is a problem with the bitcoins you sent for the widget protectors you've ordered from us.

Chinawidgets.co:
Hi Bob
What's the problem - the transaction has been in the blockchain since the weekend?

Americanwidgetprotectors.com:
Hi Dan
Well I'm afraid your bitcoins are blacklisted.

Chinawidgets.co:
?

Americanwidgetprotectors.com:
According to CoinValidation one of the coins ancestors has been identified as a known criminal.

Chinawidgets.co:
That's terrible Dan - what did he do?

Americanwidgetprotectors.com:
Well apparently he failed to pay for his medical bills then was arrested when the they tried to throw him and his family out of his house for rent arrears and he wouldn't leave on time.

Chinawidgets.co:
What a sad story - why didn't he leave?

Americanwidgetprotectors.com:
Oh well his illness made him quadraplegic so he was stuck in his bed. The police arrested him for 'non-cooperation'.
Anyway that's another story - the point is I need some clean coins.

Chinawidgets.co:
Ok well can you send your ones back as I can still use them.

Americanwidgetprotectors.com:
Sorry Dan I can't do that or I'll be charged with passing on stolen goods.
So I'll need some more coins. You could try sending to a fresh escrow address and we can check them that way?

Chinawidgets.co:
That's another few % Dan. And I've lost the coins I sent.
I'm already doing you a favour as I've relatives in the US and I've seen the poverty and trouble you're having on the news.

Americanwidgetprotectors.com:
But you're my last customer! All the others are using African suppliers!

Chinawidgets.co:
Sorry Bob but I've got a family to feed here and bitcoins don't grow on trees.

Americanwidgetprotectors.com:
 :'( :'( :'(
Ok Dan.
They've bounced my visa application for Canada again.
But things are looking up for my Mexican application!

Chinawidgets.co:
That son you didn't know you had been in contact again?

Americanwidgetprotectors.com:
Yep, god bless that Fernando.
Of course he wants some of my remaining bitcoins but hey, it's all family!

Chinawidgets.co:
Good luck Dan

Americanwidgetprotectors.com:
You too Bob

:D You need to post it in the Anecdotes section :D:D:D

This deserves its own post. You should put it on Reddit or a blog or something.

Feel free to share as open source comment, although I'm always happy with an original author credit!

@OP - Resisting is futile, though very entertaining to watch.  ;)

http://www.reddit.com/r/Bitcoin/comments/1qlraj/the_future_of_bitcoin_in_the_united_states/

No opinion on the validity of the news, but I would not put something like this past governments, especially post NSA. And appealing to peoples greed, is definitely nothing new.

If this was implemented though. Would it only apply to US merchants?

Yeah, just like FACTA only applies to US banks  ::) anything that touches a US citizen or passes through US infrastructure, fibres, satellites etc will be caught up in the fucked up dragnet mentality.

If you think this wont go the same way as the NSA surveillance Orwellian nightmare you are naive in the extreme. Tin foil hats or not these guys are out-of-fucking-control and only some serious shit is going to wake the dumbass yanks up to what their government has become ... luckily the bitcoin system is not helpless against such overt (or covert) attacks, malignancy will be expelled like the cancerous growth it is, and there are many options for counter-attack. Make no mistake, this is an attack on bitcoin viability by the demonstrably most aggressive agent working against monetary freedom and peace on the planet.

Idiots like Yifu and Alex proably they have no idea they have been co-opted to work against bitcoin, yet.

Don't be silly. Just because one US company has a potentially bad idea you want to boycott all of America? So you think no other country could do the same thing? Did it work with the RIAA?

i tried to avoid alot of waffle in the last post, but it seems more explanation is needed so, replying to all the people that read a newspaper and take what is wrote as gospel:

STOP, CALM DOWN, RELAX.

now let me explain more detail of what my last post did not explain.
ignore the Forbes newspaper article and peoples opinions on what it means for bitcoin users. because it only causes chinese whispers.

now then:
coinvalidation does NOT want identification from every bitcoin USER link: https://coinvalidation.com/PDF_FOR_BITCOIN_USERS.pdf
coin validation wants to advise bitcoin businesses on how to become FIAT compliant, which will only affect bitcoin businesses that exchange bitcoin for DOLLARS, either for customers or for their own internal business needs. link: https://coinvalidation.com/PDF_FOR_BITCOIN_BUSINESSES.pdf

part of this is to build up a database of clean addresses of legitimate and compliant BUSINESSES not users. and a lidt of known black market withdrawal addresses.
this is so that while the "anonymous cash" still is not directly linked to an identity, government can see the source of the cash.
EG is it just 2 hops away from being mined. is it just 2 hops from being sourced from a compliant and legitimate business (clean addresses) or is it just 2 hops from a known black market.

now a bit deeper detail
everyone knows that there are only 12million coins thus far , and that in 2012 silk road transacted more then this amount over the year, meaning a large majority of well circulated coins has at some point been tainted atleast once.

this means that exchanges (being the central points of cashing in-out, profiting, etc, etc) would have alot of their mixed up pot of funds showing up as tainted. this does not make them dirty or illegal.

all coinvalidation want to do is to have a database of fully compliant BUSINESS public keys so that when customers withdraw funds, and use them elsewhere, shops can see that they were sourced from a legitimate exchange, a miner or another legitimate business.

giving the shops the freedom to accept other coins based on the taint level risk
EG if a coin is only 1 hop away from a known silk road address, they can refuse service if they chose to, based on the risk.

it is not about identifying the world population and investigating every user. only those that want to deal with FIAT, which has never changed for decades of government rules

now take your tin foil hats off,
if you actually read the government compliance rules (most established countries rules are very similar) governments do not accept/ reject/investigate every fiat transaction of every business. they request businesses to assess the risk and if deemed obvious as illegally used funds, to then and only then report it to serious crimes departments of government. this puts the onus on businesses to say
"hang on these coins are only 1 hop away from a silk road pubkey" and for the business to then look into the risk of it being a 'serious crime' before sending or not sending info to the government.

EG (A) pawnbroker in detroit. some guy comes in with a $20 bill that literally smells of drugs, he wants to buy a bit of bling. risk level of serious crime: low, requirement for AMLKYC: no
EG (B) pawnbroker in detroit. some guy comes in with a $20,000 of bills  he wants to buy a gold bar. risk level of serious crime: low Requirement of AMLKYC: yes
EG (C) pawnbroker in detroit. some guy comes in with a $20,000 of bills that smelled of drugs and he wants to buy a gold bar. risk level of serious crime: high Requirement of AMLKYC: yes

(A)the pawn broker would accept or reject the $20 based on risk, no ID required, much like any shop selling cigarettes, grocerys, etc.
(B)the pawn broker would ask for ID and other info from the $20k sale, still letting it through after the pawn broker does a quick check that the $20k serial numbers are not blacklisted.
(C)the pawn broker would request ID and check serial numbers of the drug tainted notes and make the decision to either refuse service, to report the customer, or to accept the risk and allow the sale. (third option is ill advised as it could affect the businesses licence status).

the coinvalidation service is not about getting people to write their name and zipcode onto every banknote they use, meaning that coinvalidation is not asking for identity information from every transaction and every public key.

they just want to build up a BUSINESS listing of known legit businesses and illecit businesses thus able to trace back where the funds originated.

KYC and AML are necessary. Bank secrecy enables corruption.
I don't understand how we can have a Bitcoin community which supports the goal of Wikileaks on one hand but on the other hand wants to have completely anonymous money.

You cannot have both. If you want to fight institutional corruption you have to follow the money. If you want anonymous money then you have to accept institutional corruption as the end result.

If there are bad actors then those bad actors should be investigated. That does not mean we should all be forced to get digital ID cards to access our money. A digital signature ought to be enough to prove your identity. There is no reason to have a centralized database.

It could work just fine if the digital signature could be somehow be connected to the Bitcoin blockchain itself.

What if for instance I want to validate that my coins are owned by me and that I'm trusted? I should be able to have a pseudo-anonymous trusted wallet. That wallet should attach my digital signature which is unique to me. It should connect my real world identity to my pseudo-nym without a loss of pseudo-anonymity or privacy.

Having a database with names attached to wallet addresses is absolutely not the way to do it. Having a database of digital signatures with public keys is a way to do it. If you email the owner of the wallet then you can communicate with them to ask them their real world identity in a private way.

I believe Keyhotee might actually solve the issue. It allows for verified trusted accounts. It does not seem to require all the centralization, but it doesn't prevent KYC either from my understanding of it. You can attach your pseudo identity to your real identity. So if you have to access a certain site and be verified it might be possible to do it without having to give out your real name to that site. You would give a public key to that site instead and it would know if your public key is on the whitelist or blacklist. That would be a way of doing it.

The philosophical debate is whether or not it should be done? I think if Bitcoins are going to be worth $100,000 each it will have to be done. At that point the richest people in the world will be large holders of Bitcoins. So all the bribery and other corruption will become a problem at some point and if democracy is to continue to exist then you cannot have anonymous money flowing around by the billions or trillions.

Finally a well reasoned and thoughtful explanation not based in fear.

The problem is that coinvalidation could be a trojan horse. We just don't know the details and part of the reason why is they didn't put a good explanation on their website. The other problem is they named their business coinvalidation. When I see an invalid address it means the address is not accepted. An invalid transaction means the transaction is not accepted by the network. That implies something else.

Why the hell do we need them to do that and why are they doing it in a centralized manner? Why not create a wiki, validation coin or DAC which decentralizes the database so anyone can contribute to or access it? Why do we have to trust some private corporation to guard the database? And these are supposed to be Bitcoiners promoting a centralized database?!

Why do we need a centralized database? Why not use decentralized methods so that everyone can access the information?
Every currency is tainted.

Okay this is fine. Can we access the database as users? Can we be assured that we users are validated by our public key without having to give up our pseudo-anonymity? If we aren't connected to any controversial addresses then what?

This presents problems. How can these coins be exchanged if we do that? As far as I understand it most coins are already clean and purchased from exchanges and not second hand. Sure when you buy coins it does make sense to have to give your information out if you're buying or selling for fiat (tax purposes too).


We will see how they implement that. Maybe coinvalidation should hire you to do public relations because they totally suck at how they presented it. The media of course may have gotten carried away but they presented it as if they are building a database to tie names to wallets. That is a nightmare.

@franky1 how do you know all that? The pdfs don't give any kind of detail.

wiki's can get edited..
secondly coinvalidation are not the law. businesses can use them or ignore them.


imagine it this way.
every transaction is not linked to your identity. meaning your PERSONAL pubkey wont be on the database. coinvalidation database will have all of the MTGOX, BTC-E, BITSTAMP withdrawal pubkeys, if they meet the government compliants requirements for trading FIAT.
so shops selling alpaca socks can see TXID can be tracked back to mtgox,..... for example. and alpaca socks can say great its not 2 hops away from silk road.
.. thats about as simple as the explanation of the service as i can see it happening. from reading into coinvalidation and not from reading chinese whispers from a newsaper article

the main thing people in this thread seem to be going insane over is the forbes article, where people think their personal addresses will apear on some kind of santa clauses 'naughty or nice' list

from the PDF https://coinvalidation.com/PDF_FOR_BITCOIN_USERS.pdf

But if we don't have access to the database as users then how do we know which sites to avoid so as not to have our coins tainted?

I don't trust the news article or your explanation. We need more information and the PDFs on that site only fuel further speculation.

The USA can go stuff itself,  who do they think they are dictating to every human being on this planet.

Who cares about money laundering or know your customer.

There will always be crime and ways to beat the system.

It will be the decent folk on this planet that will make the world a better place, not politicians and banksters.

Bitcoin could possibly be the answer to freedom and people want to be ruled by the establishment.

Grow some balls and stand up to them it could be your last chance.

they will probably have database viewers, so you can see the clean addresses (legit businesesses) but not allow anyone to add-delete the database. afterall we dont want silk road or sites selling illegal weapons editing the database to say its withdrawal address is legit. or scammers saying they are fully SEC compliant... do we?
and secondly its not about taint.. if your going to visit an illegal site that deals in SERIOUS CRIMES. then it is kind of obvious, simply by looking at the products they sell

of course, and thats what makes me feel coin validation will ultimately be useless and that this histeria is not worth the anger its bringing. EG deposit bitcoins into a compliant exchange.. wait a bit for it to be mixed in with other peoples funds(dont trade for fiat). then withdraw the bitcoins. you will now have coins showing as being sourced from a clean address.. you then take it to bitstamp and trade for FIAT, then their coinvalidation checks see the coins are sourced from a clean address and you can easily withdraw funds into your FIAT bank account.

Many of us work towards what we want and attempt to avoid being coerced. That results in two goals that must seem contradictory to you:
"privacy for the weak and transparency for the powerful"

Bitcoin offers advantages to the weak, not the powerful (i.e. the state). So it should be anonymous. Wikileaks is good because it exposes the corruption of the powerful.

The state and extensions/agents of the state should be transparent because they are coercive and we are all paying for them. As customers we generally want a good product - a transparent state. Or do you want to just "roll over" ?

Thank you for bringing more details about this project.
altho your intentions seem ok, I do believe you are on a slippery slope, so dont slip!


I really don't see why do you need to keep a DB of dirty coins, tho, can the businesses just see if the person myself " literally smells of drugs " and make a decision based on that. JUST like he would handle someone buying something with gold.

no, this project should NOT include a DB of tainted coins, you compile the DB and we will retaliate.

Edit: my coins are probably 100% clean, and i do not live in the US, so maybe i shouldn't really care very much about this, but i do, let the FBI do this is they like.

The Bitcoin Foundation needs a structure like The Pirate Party. It's preposterous that all the power is centralized to US based foundation. Also, people need to boycut Avalon.

Everyone should note that franky1 keeps posting damage control in the form of unbacked assertions, never once addressing the actual quotes from the people who are involved in this.

There's also the actions of a one Mike Hearn who is quietly supporting this initiative in the private Bitcoin Foundation forums, where the community doesn't get to see what's going on: http://www.reddit.com/r/Bitcoin/comments/1qmbtu/mike_hearn_chair_of_the_bitcoin_foundations_law/

You're being sold a bill of goods.

"You can still spend or use these coins as normal, the highlight is only informational. To clear it, you can contact the operator of the list and say, hello, here I am, I am innocent and if anyone wants to follow up and talk to me, here's how."

I'm not even a libertarian yet this made me wanna puke.

I had a nightmare last night.  It began like this:


-- Hello, Mr. Hearn?

-- Pleased to meet you.

-- Just have a seat here.  So, are your complimentary Google Glasses comfortable?

-- They're amazing! Took me a while to get used to the left wink button, but I've got it now.

-- Excellent!  So, when the Senator finishes his statement you just need to look at the comment feed on the bottom line, and wink if you feel you can incorporate that into your remarks.

-- And you send $100K to me for each wink, right?

-- The people I'm working for have very deep pockets, Mr Hearn.  They know that you are a very important person in the Bitcoinosphere, and they want to help you make sure that Bitcoin is a success.

-- (insert fawning platitude here...)

And once again why centralize the database around an LLC when a non profit or decentralized method could do the same thing? A wiki can be edited which is a good thing because we don't all agree on which addresses belong on the black list but we probably mostly agree about which addresses belong on the white list. Once again none of this matters for addresses.

Public keys do matter and I would love to have a database of public keys which I can access to know I'm dealing with a legit company and not a scam. I endorse at least that part if that is actually what they plan to implement but based on what is on their site we don't even know what they plan to do. They are vague about it and that is why people are reacting like this. You cannot be vague when you're talking about putting the mark on peoples money. And if that isn't what they plan to do then they need to give an interview or post on this forum for debate.


The problem is we don't know what they are planning because their plans are public enough. There will always be crime and ways to beat the system but that is not what I'm concerned about. I'm concerned about democracy more than I am about crime and people beating the system. If you don't have the ability to follow the money then you cannot have a democracy for long.

Democracy is very important as an ideal just like privacy is.

The state isn't the exclusive place where all powerful people are. All power does not rest within the state.

A lot of Bitcoins are owned by the powerful and a lot of people who aren't powerful now but who own a lot of Bitcoins will become powerful in several years. Just like we would want the ability to know whether or not George Soros, Bill Gates or the Koch bros are influencing politics we would want to know what Satoshi or whomever is influencing. We have every reason to want transparency to be able to follow the money trail of anybody. It should even apply to me if necessary if I ever have a lot of money or I'm considered powerful.

But I don't think it should be used to bully everyone as a weapon of state power. I agree with you that the state should be more transparent but I think "the state" isn't just people working for the government in civilian capacity. If we have an oligarchy then there should be transparency there as well. We need transparency in the state to deal with corruption and we need transparency outside of the state to deal with corruption. There should be no safe havens for people who seek to coerce and corrupt the nation.

So for that reason there should be no bank secrecy. I'm not really a big fan of secrets which can affect the lives of many people. There might be justification for keeping some secrets (national security) and there are necessary secrets but... If you're a person in charge of other peoples lives, who has power over other people, then you shouldn't expect to live a private life where you can keep secrets from the people you rule over. You should expect to have every aspect of your life investigated so that you can be verified/vetted for access.

If you're not powerful then there has to be some line in the sand enforced by law and technological means to protect you from being politically targeted and investigated by the powerful in fishing expeditions. If a powerful person decides to trigger a criminal investigation then they hire private investigators who can watch every thing you do until you commit a crime.

It's not a very fair system. For that reason in order to have democracy and liberty in the system you need privacy to protect the people in the community from political persecution. Any system which can try to link identities to transactions in a database presents a high value target which can be abused if implemented in the wrong way or hacked if not secured.


And contact the operator how? If It cannot be done in pseudo anonymous fashion then it removes privacy from the user. The operator should not have to be trusted with identity information of the user.

If this could be done in automated fashion where I sign the coins tagging it with my digital signature (which is clean) but remain pseudo anonymous to the operator then I would be okay with that. I'll play ball with security checks to access certain sites or financial networks but I should not have to give up privacy to do it. I don't think an operator should be given the power access peoples identities linked to their private transactions is what I'm saying. I'm not against these sorts of databases existing if it were voluntary, decentralized and controlled by the user. If the database were stored in a blockchain or some decentralized network where access is granted by the user then it can work better. The user can connect their public key to their real identity and sign or tag certain things which they want to claim so that if their coins are tainted they can say "these coins belong to me and I'm associated with these addresses which also belong to me", "my digital signature is trusted and I have verified my identity with these different places".

If anything we should be moving away from storing passwords and personal identity information on the web in central databases and instead moving to a system of public keys and digital signatures. If a digital signature has a reputation and history for clean transactions and the user claims ownership of certain addresses voluntarily I would be okay with that.

It should be as simple as the system checking to see if the address I'm using is linked to any transactions being investigated by the authorities. If it is then of course websites will want to block that off so as not to be investigated themselves. But if I'm innocent or if I have nothing to hide then I should be able to claim my transactions which prove my innocence. If they ask for your name and address for every site as we saw Bitfunder trying to do then that isn't going to work. Bitfunder was asking for everyone's name and address so they could block people out based on region.

Right, so if you want to sell me a widget for 1BTC today, how are you going to know how many hops away the coins I pay you with are (from some criminal act)? Perhaps you'll ask me for the address I'm going to send them from in advance. You look on the blockchain. Are you keeping a real time database of which addresses are clean and how clean they are? What if you find that I, or someone one hop away, used CoinJoin and one of the unspent txouts came from 4 different input addresses. Are you going to apply it proportionately to those inputs with a probabilistic weighting? If you're not going to keep your own real time database of dirty coins (plus a full, live blockchain of course), who is? How much do you pay them? Who controls their database (and it better be international, and real time)? What if, between the time I make my order and the time I send out my transaction, it's discovered that 1 of those 4 addresses, 4 hops back, is in fact dirty due to a recent crime?
What if someone who doesn't like me has just sent a transaction to my address with dirty coins and I didn't know, and couldn't control it? Am I again, just screwed?

Is it fair that the bitcoins I bought fair and square suddenly turned out to be unspendable? And we also ignore the enormous extra cost that would be imposed on both of us, costs that would be paid to the corrupt central party holding the database.

These problems are not technical. They are a direct result of the immoral concept of third parties having control of an individual's wealth. This is the kind of system we have today with banks, and it's exactly what we're trying to correct.

Many decades ago, Krugerands became tainted. They sold at below the gold spot price. Then one day, everyone woke up and realized that they were still made of gold. Now they are worth their weight in gold again. I suspect the same thing will happen with tainted coins. Hakuna matata, no worries here.

Matching: https://bitcointalk.org/index.php?topic=333824.0

Im quite surprised that those kind of ideas are put on the table.. This is Anti-Bitcoin, and go against Bitcoin in its essence.  The Bitcoin comunity can do without it, alternative will exist as demand exist.  This is a shame that some are proposing such principle that are SO ANTI-BITCOIN..

If any instance, govt, powerfull entity ask for it to be apply to Bitcoin.. Why would we comply ?  Afterall, Bitcoin are'nt just the best tool to avoid those kind of things (anti-lliberty, anti-privacy stuff) ?

With every day that passes, the idea that there is a bitcoin "community", that "gets it" regarding issues such as privacy, resistance to state control etc. becomes less and less tenable.

There are vast amounts of money to be made by siding with "the authorities", and those who are primarily interested in mass-adoption will not sacrifice one satoshi for such principles.  They are here for one thing only: to make boatloads of money.

https://bitcointalk.org/index.php?topic=333824.0

Unfortunately, the most dangerous enemies of bitcoin are members of the community, and it will be the community's fault if they are allowed to screw it up.

US Companies?  How about US citizens?

The world of reasonable people has to put the rabid dogs in their rightful cage.  They're still living under the "land of the free, home of the brave" BS that they willingly gulp down in large quantities every day.  Their problem, not ours.  Watching this play out will be very interesting indeed.  We all have front-row seats.

As an ex-US citizen, I kinda resemble this remark. Woof.