Good point. In connection with fraudulent transfer of money, FinCEN would have jurisdiction also. So in one example if a premine was fraudulent or connected with other fraudulent activity, then selling it for real money, would also be within FinCEN's jurisdiction perhaps.

I find that usually FinCEN is taking action when MSB registration and controls are not being done where they should have been. Thus I still think the SEC is the more likely regulatory body for fraudulent investment schemes.

You consider one case and conclude that is the general category. My IQ is more generalized when building a model (actually I am a reductionist who seeks the generative essence because I prefer to remember a concept than memorize cases). The model includes eliding the markers of identity when achieving anonymity on the internet, e.g. eliding (via mixnet obfuscation or Zerocash encryption) the IP address.

You are repeating again your incorrect model that conflates fungibility with eliding. The cash isn't anonymous. The user who transfers the cash is anonymous if the user elides his/her identity in the process of that transfer. That the cash has the property of not automatically carrying the user's identity is incidental, because for example the cash can't turn off the surveillance cameras. You've conflated where the anonymous originates from, i.e. not from the cash.


I can't comprehend your point. Seems discombobulated. Maybe because I am sleepy, or more likely because you haven't communicated clearly.


Firstly I am incredibly sleepy so my prose will lose attention to detail. Secondly "payer" in that context is intended to mean the sending address as opposed to payee which is the receiving address. The use of those terms doesn't have to imply persons.


Non-sequitur because if the blockchain was anonymous, we wouldn't need Cryptonote.


Poor logic. Fungibility might be aided by anonymity but it doesn't guarantee/provide anonymity any more than cash can turn off surveillance cameras.

In other words, anonymity -> fungibility not the other direction on the arrow.

FinCEN guidance doesn't not apply to the Howey test. FinCEN is not tasked with protecting unsophisticated investors from fraud. FinCEN's job is to fight money laundering.

The Howey test is more nuanced than that, and if a group is promoting a coin for investment purposes they may be culpable under the Howey test. I covered this in detail upthread.

All cryptocoins that being primarily distributed to speculators with no significant users of the currency, are at risk IMHO. That includes Monero and Aeon.


FinCEN came down on Ripple for being an exchanger and a centralized administrator that was processing money transfers for third parties without registering as an MSB and applying AML/KYC controls. The sales of XRP for fiat that are violations are because Ripple was also exchanging and also able to remove supply from the market.


I don't see any mention of Ripple being in violation because of sales of coins it gained during the time of distribution whether it be premine or otherwise. The mention of the premine was just a statement of facts, not a statement of a violation. It is the fact that Ripple was acting as an exchanger and centralized administrator that tainted any sales of XRP they made.

Disclaimer: I am not a lawyer and am merely offering my opinion for argumentative purposes. Readers, consult your own attorney.

Ah yes again those are features I am aware of. I am getting sleepy.

That is an improvement over Bitcoin's fee structure.

But those features don't address the centralization of mining that is required to handle the propagation without causing issues with the orphan rate that make mining more profitable for well connected miners.

The hindrance with Bitcoin scaling is not just the fees to pay for larger blocks.

Also scaling block size doesn't do anything for achieving instant transactions (and I know you weren't claiming it does but I view scaling and instant transactions as related from a design perspective).

No but you are conflating them...


Correct. Well summarized.


Conflation. It may very well be that to protect her anonymity it is also necessary to encrypt the message for one reason or another, e.g. writing style correlation or other meta-data correlation. Anonymity always requires at least some privacy, e.g. her name was also elided or encrypted, else she'd not be anonymous.


Correct. Well summarized.


Slight implied conflation. Privacy doesn't require being non-anonymous to those who you don't grant access to your data. But you are correct that privacy is orthogonal to anonymity. A good example is encrypted email could be private but from the IP address and meta-data, it isn't very anonymous.


Encryption can indeed make you anonymous, but it doesn't have to. What do you think Cryptonote is? It is encrypting the UTXO payer (but not the IP address or other meta-data correlations).


Seems you are conflating fungibility with the state of being elided. Fungibility has to do with being substitutable. If elided information is what makes fungibility, then vacuous would be the ultimate fungibility which makes no sense because fungible items have to existential.

Hey i am getting sleepy. Too many hours of discussions again. I really need to stop this. But even sleepy, you are not going to get away with lapses in logic in spite of being very articulate. You are smart, but I am not stupid.

Are you referring to block chain compression or some variant of pruning?

Afaik, Monero can't handle very high TX/sec for the reasons which are same propagation versus orphan rates issues that plague Bitcoin if the block size is increased too much.


My point was the two have the same target market demographics of speculators.

I will link from that point in the comparison table to this post so readers can find your elaboration, and the extended discussion.


Giving away coins for free, thus not a MSB. Not a centralized virtual currency, because the protocol is decentralized PoW (with a twist). Also not an unregistered investment security, because not being sold to nor significantly obtained by investors.

Note it has been brought to my attention that most of the Auroracoins were dumped to speculators. Obviously I don't plan to repeat the mistakes in their marketing. Remember marketing is very nuanced. You have to get the details right. Just one detail can totally change the outcome.

ArticMine is correct that anyone that transferring money or money equivalents that is not for their own personal use is a MSB in terms of the FinCEN guidance. Period.

Any obfuscations Dash or BitShares try to claim won't help them escape culpability.

However I don't agree with ArticMine's claim that only the FinCEN has jurisdiction. FinCEN's jurisdiction is w.r.t. to money transmission, and the SEC has an orthogonal jurisdiction w.r.t. the Howey test for illegal unregistered investment securities (which was covered in detail upthread).

There was discussion in this thread relevant to legal issues of IPO or mining distribution and also w.r.t. to harvesting developer funding from mining. I have moved that discussion to a pre-existing thread on such legal topics.

I have deleted the posts from my thread because they now are quoted in the other thread. No posts have been lost. Let's continue the legal discussion at the other thread.

Moving the discussion that was in my coin's thread over to this more appropriate legal discussion thread. Let's continue this discussion here. Some of the following posts may be deleted from my coin's thread.

I already updated the table to link to our discussion and added "potentially improving". So hopefully it is clear to readers that the characterization is contested to some degree.

I somewhat agree with you that "spyware" is a bit harsh and doesn't imply that the mixing might work in some scenarios, except in another sense I think it is unfair if I don't draw attention to the fact that it can be the opposite of anonymity and actually increase the odds of intercepting user data in clear text in certain attack scenarios. For example, it provides prefiltered list of those who are attempting to be anonymous— which is one example of why multiple rounds won't help in some scenarios of "privacy".

I disagree with the probability miscalculation that says many mixers assures the probability of unmasking is reduced asymptotically towards 0. There are patterns that develop and can be correlated. The more visibility, the more correlation. For me to enumerate all scenarios would require writing a research paper.

When all the masternodes are hosted, it is not crap to say the NSA can probably get access trivially. When most are hosted on one cloud provider (something I read, don't know if it is true), then even an employee could potentially get access trivially.

You simply can't get anonymity without cryptography. The masternodes see everything in clear text. Dash is more likely to be spyware than anonymity. In fact, I've conjectured the wild speculation that Evan hasn't been worried about SEC because he might be on the dole of the NSA (but that is too conspiratorial to assert as likely).

Dark my ass. Dark where the NSA got its fist up the users' buttholes. I have often returned to the wild speculation that Dark(Vader)Coin was really a big data harvesting coin.

The official definition of spyware is any software that exposes your data out on the wire. It doesn't have to actually be intended to do that. Just opening the security hole is sufficient to meet the definition.

Ah yes, I actually knew that at one time. Corrected.

Here is what I wrote:


I don't need to dig in the source. It is a conceptual truth in terms of the way the anonymity has been described (at least the last time I paid attention).

Evan mentioned he was going to improve it for Evolution, but even if he shifts to onion routing across masternodes, that won't entirely absolve the attacks on anonymity from colluding masternodes (although it can improve the statistics on the masternode coverage needed for breaking anonymity). Ditto any mixnet he employs, including if he prefers to implement CoinShuffle.

Instead if he implements Cryptonote then he won't have RingCT's features. If implements RingCT, then he is copying Monero's recent research. Also I doubt he is capable of understanding the RingCT white paper and implementing it. He will probably have to work by copying source code or hiring some expert crypto assistance.

In any case, that won't correct the other flaws in InstantX and mass-scale transactions that are his other big selling points of Evolution. And none of that will correct the fact that masternodes reduces Dash to an inferior proof-of-stake security/politics model.

I will correct the comparison chart to indicate the anonymity may be improving for Evolution.

I have linked to this post in my comparison table for the BitShares column of the Research row.


I've now separated the Research and Development into two rows on the comparison table upthread. I am recognizing the significant Development work done on all those coins.

As for the Research row of the table, I am definitely asserting that Dash's research is abysmal. Recent more detailed study on InstantX has further convinced me of my long-held "helicopter view" intuitions.

As for BitShares, let's discuss more below and I will adjust my perspective as necessary.


I can do all those features better than DPOS and with PoW. The insecurity of PoS has been explained in the prior couple of posts.


Before you posted, I had already edited my post as follows (to replace the underlined portion you quoted):

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I haven't had time to study what changes were made after the initial design was discovered to be flawed (as I told them it was back in 2013) and whether the new design works correctly.

No you are incorrect about my views. I know a peg can work by employing speculation, but it can never be lossless. I wanted to do some more work on quantifying that, but it is not high on my priority list. If BitShares has perfected the math and understanding, then kudos. But I don't assume they have without studying it. And I haven't had the time to study their latest design iteration on BitUSD. You know there is so much garbage released in altcoin land, nobody has enough time to study every shred of it in detail.


The above is not useless in my view, but devil is in the details on assets and programmable block chains, so I can't access that until I am ready to do a deep study. Their work may be trivial or deep. I do not know.


I recently tested the waters a bit on that structure to see if it could really motivate me to work on a new feature for them. I discovered precisely what I am warning you about, that politics will tend to diverge not converge (should I provide a link?). I predict that chaos will reign in DPOS eventually and a dictator will have to take control. I remain somewhat open-minded, but the theory of the power-law distribution seems irrefutable.


I am smirking. Perhaps yeah on "currently exists", but don't ask me to start digging on the flaws because I will probably accidentally blow up BitShares the same as I did Dash (I didn't even plan to find that broken math in Dash, it came out of a discussion about security of my design in my thread). I don't have the time to waste on that though. Otherwise the "currently exists" will always be a valid retort.

I already blew up their claimed 1000+ TX/sec and got everyone to realize it is only about 100+ TX/sec in reality on current hardware.


Smart contract stuff is very interesting. But I am not sure if hard-coded contracts or a programmable block chain is best.

So it is difficult for me to agree that this is research. Unless I study it and find a lot of innovation on math and sort, I will say this is a lot of obvious development that anyone would do if they were enumerating different hard-coded variants of things one could do with a more generalized programmable block chain.

I hope you realize my point is that a generalized paradigm in theory has exponentially more network effects.

So I am bumping up BitShare's development rating significantly, but I maintain their Research level is some where between average and above average. It isn't fundamental Satoshi-level research for crypto (which is the sort of research I have been attempting).


They copied that. I admit their accumulated development is quite high. And I even saw they had a contributor whip up some of that anonymity work very quickly, so it isn't just one guy on the development side. On research side, I think it is less impressive.


I hope you realize now that I don't think it is entirely useless but it is rather my intuitions about priorities and scaling faster.

I think they've gone for the "I'll build every feature" approach. And I am going for the "I'll build the platform and let others build every feature" approach.

But I don't dismiss that they might get traction. We will see. As I said, I haven't entirely dismissed BitShares.

You are missing the point. The stake is an attack.

If you and few others who were Kings before but gave up majority stake, you fork but the users may not follow you. The masses tend to be very apathetic about changing what they are accustomed to.

The majority can change the protocol at-will. Ditto with Satoshi's PoW (but I claim not in my innovation), except it is an unbounded ongoing cost;whereas, with PoS it is a one-time cost. And you can even recoup that cost by shorting the coin if the manipulations will cause a drop in price, or by recouping profits gained from changing the protocol.

As long as the protocol changes don't too much inconvenience the masses, they won't bother to change. For example, adding a small transaction fee that is paid to the new Kings.

You claim we can't attack PoS, but this may be because there is no profit for us to do so, because your PoS coins have no usership nor sufficient non-mirage liquidity to profit from shorting. Go grow the usership and/or the true liquidity of the float, then observe the game theory.

You are also presuming that the majority of stake exists. Instead you may have 10 coalitions of minority stakes all fighting each other. Thus 10 forks and chaos due to being able to spend the coins 10 times.

Forking will almost always be avoided because politically it is devastating. Again the attackers can just short the coin.

A dictator attacker who unifies control (a la Napoleon) by acquiring majority stake would perhaps be cheered (ending the chaos). This is the strategy being deployed right now before our eyes to bring the world to its knees to beg for a NWO one world government to stop the nation-state chaos. The banksters created that chaos on purpose.

Refuted.

Nada on PMs recently. Perhaps one or two many moons ago, but I've forgotten.

The only reply I saw was this one. If you mean my reply to that, then I suppose the answer is no (unless he replied and deleted it before I saw it... we have to consider such possibilities of disappearing money supply and posts).

And a doer. But I use more precision in my doing. I can accomplish with 10,000 LOC (which is roughly what I am approaching now) what Evan couldn't with 1 million LOC.

Evan can dig canals with spoons and I will wait until the backhoe is available.

I haven't studied to see how many LOC of code he wrote. Didn't he start from Bitcoin code base? My code base is original (except where clearly noted in the source code). I've never even looked at the Bitcoin code.


Doer of what?