Time to Boycott all US Companies

[Notanon]

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

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[zachcope]

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

[bee7]

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

[justusranvier]

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

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

[zachcope]

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:
Good luck Dan

Americanwidgetprotectors.com:
You too Bob

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!

[Coinseeker]

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

[justusranvier]

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

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

[aenemic]

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?

[marcus_of_augustus]

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.

[Luckybit]

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, 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, 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 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. 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.

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.

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?

[franky1]

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.

[Luckybit]

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.

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.

[Luckybit]

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

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.

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.

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?!

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.

Why do we need a centralized database? Why not use decentralized methods so that everyone can access the information?

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.

Every currency is tainted.

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.

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?

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.

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).

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

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.

[dserrano5]

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

[franky1]

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?!

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

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?

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

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

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

Will I need to register for Coin Validation separately?
No. Coin Validation works directly with Bitcoin businesses and does not add any
additional hoops for Bitcoin users to jump through.

[Luckybit]

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.

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?

.. 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

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

[seafarer124]

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.

[franky1]

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?

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

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

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.

[exapted]

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.

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" ?

[adamstgBit]

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.

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.